Today is a guest post from by buddy Eric over at EricBowlin.com. I loved Eric’s story at first read. By the age of 30, he had created a mini real estate empire and became financially independent. He also knows how to live. These lines from his About page put a huge smile on my face:
I sometimes will work for two weeks straight, wake up early, and work tirelessly. Other times I take trips for no reason other than to have a new experience. That’s the great part about independence, we are free to do what we want.
This is good too:
I’m free to travel anywhere I want to travel or live anywhere I choose to live. In 2015 we decided to go on a trip across the country. We literally left the following day. That trip was my first time going to Texas, and my wife and I fell in love with it, so we decided to stay. Three weeks after getting back to Massachusetts, I was already back in the car headed to Texas.
Eric is one guy who’s doing it right. Instead of being dragged around by life, he’s making the most of it.
In today’s post, Eric writes about the fear of financial independence.
Fear of Financial Independence
I’m writing this because Mr. 1500’s recent post really got me thinking about judgement, financial independence, and people’s mentality.
A few months ago one of my good friends told me about a conversation of which I was the subject.
An acquaintance asked him what I do for work. This acquaintance swore that I must be a CIA agent because I “live a life like 007”.
From his perspective I never work, I travel the world and the U.S., and every time I come up in a conversation I’m off doing something else cool.
My life isn’t actually that interesting. It’s just coincidence that I come up in conversation 4 or 5 times a year and I happen to be doing something cool. I probably get mentioned specifically because I’m doing something cool, hence the coincidence.
But the funniest part of it all – my good friend couldn’t really answer the question. He doesn’t really know how or where my money comes from – he just knows that it’s somehow related to rental real estate. To him, it’s like magic that money appears in my account every month.
This got me thinking more about financial independence
It’s strange to me that my best friend couldn’t explain exactly how I make my money. You see, I’ve literally told him exactly how I do it. I’ve even encouraged him to quit what he is doing and just follow my path.
Even after telling them exactly what I do and how I do it, people still don’t get it.
Becoming financially independent is not something magical – it’s really some basic math to figure out exactly how much you need in passive income in order to cover your monthly expenses. There are a lot of ways to get there, but the formula is essentially the same: cut expenses, save/invest, build up cash flow, and retire.
So, why is this still a mystery to just about everybody I know? How can something so obvious to us be a complete mystery to most people?
It’s like teaching my daughter how to add one and one together. It can be so frustrating because it just seems so simple. How many other ways can I explain it for her to understand? Of course I’m patient with her because she is a toddler, but it’s harder to stay patient with adults that don’t understand something I consider basic.
Financial independence is so easy, we get frustrated and judgmental toward people who don’t understand it. At the same time, we get looked at as weird or strange because we have a different view of things.
It reminds me of the number zero. A few years ago I learned that the concept of zero was invented in 5th century AD and didn’t make its way to Europe until the late 12th century. Then some genius actually outlawed it’s use because they didn’t trust where it came from.
Just for one second think about all those Roman colosseums, miles long aqueducts, temples, cathedrals, pyramids etc. The Romans built a 56-mile aqueduct that dropped only a few inches each mile, just enough to keep the water flowing. It’s crazy to think they could do this without even some math that we consider so basic now.
They still found a way to achieve these great things, but it was a probably way harder than it needed to be.
I think FIRE is a lot like the number zero.
Once people developed the concept of retirement, they took the hardest and longest way to get there. Just like ancient engineers who built great buildings, people found a way to reach retirement, but it was definitely the hardest and longest way to achieve it. Sure it wasn’t easy, but they got it done.
But the FIRE community is changing that concept. With some basic concepts and math, people are showing that it’s actually not hard to retire decades earlier than everyone else. It’s not without its detractors though.
Many of the early adopters of zero had to do math in secret because it was banned. Today, many people who challenge the system are ridiculed (just like Mr. 1500 was after the piece on Yahoo). Many choose to hide their financial independence when in public because they see what others have to deal with. Who wants to be told they will get divorced soon and have STDs simply because they are financially smart?
I hide it most of the time because it’s easier, not because I fear anything. It’s really hard for me to explain to my barber that I don’t work, so I just tell them that I work in real estate.
It just means I have to answer a bunch of questions about the state of the economy, real estate, how I’m finding real estate deals, etc. But that’s better than the uncomfortable conversation about FI and the judgements that follow.
It’s so basic that people fear it
I believe that the concept of financial independence is so basic that everyone should understand it, but even really basic things to us now were crazy theories when they were first created. Eventually they may become mainstream, but for now it’s not standard.
It doesn’t help that the concept is really so simple that people don’t trust it. If someone came up to you and said they would give you a simple process guaranteed to make one million dollars, would you believe them? Of course not.
So when I tell people that I achieved financial independence in 5 years, they just don’t believe me, think I got really lucky, or I’m cheating somehow. I have literally met dozens of people (thanks FinCon!) who also have done it in 5, 10, or 15 years and retired in their 30’s or 40’s. But, I’m still the crazy one when I say it’s not a hard concept.
I want to get frustrated at my friends when they don’t want to pursue financial independence. I want to grab them and shake some sense into them, but I know that doesn’t work – I gave up trying to convince them all of my point of view a long time ago.
Instead, I secretly hope they will have an epiphany one day like I did, and when they do I’ll be there to help them. For now, I am just supportive and feel happy for them when they derive happiness from their new gadgets, cars, and widgets.
After all, the number zero was banned at one point of time; I can’t expect everyone to immediately adopt great concepts.
Thanks Eric for the post today. I for one, am not afraid of financial independence, the number 0, or even clowns. I only fear Mrs. 1500’s wrath when I leave the toilet seat up.
Stop by Eric’s fine piece of internet real estate and say “Hi!” sometime soon.
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