You know those moments when you’re sipping a rather expensive latte, looking at that new Asos order in your room, or seeing off your third deliveroo of the week, daydreaming about a life where the jarring alarm clock doesn’t dictate your morning?
A life where Mondays are as sweet as Fridays?
A life where you can choose to work and not be forced to work?
Well, you may or may not have those moments.
But a life where you choose to work and not be forced to, might be closer to reality than you think (if you want it).
I’m talking here about becoming Financially Independent.
Financial Independence means that your passive income every month is enough for you to live off.
So you don’t need a salary to keep you afloat.
Of course, laying idle in bed all day is no life and most people who are financially independent do work.
But they aren’t forced to; and that makes everything in life less stressful and more enjoyable.
There was a great blog post 10 or so years ago by someone called Mr. Money Mustache who laid out the maths behind this financial freedom.
He’s a financial guru who’s been preaching the art of mindful spending and the science of smart saving.
His blog showed that financial independence and freedom is simple and much easier to attain than you may think.
I went back into the archives and extracted the best wisdom from it here.
Here are the 5 things you need to know about financial independence and your future freedom:
1. Know Your Expenses:
Your biggest challenge? It isn’t your salary; it’s your spending.
As Seneca once said, “It’s not the person who has too little, but the person who craves more, that is poor.”
So, before dreaming of that Caribbean beach house, take a glance at your monthly outgoings.
Do you really need that fancy car on lease when a modest car (or bike) can serve the same purpose?
Do you need to get a deliveroo twice a week or could you shop at Aldi and meal prep for the week’s lunches and dinners?
Do you need to buy more clothes or would the many in your wardrobe suffice?
Studies show that spending on items like takeaways and fashion are higher than ever; but when was the last time you considered forgoing this luxury for your future self?
The fact is, sacrificing little things every week and investing that money instead of spending it has a huge impact on your future freedom and future finances.
I’m not a big advocate of tracking sheets and watching over every penny, though.
This sounds like a lot of effort and stress, and the aim in my life is to reduce stress.
It’s more about holding yourself to higher standards; demanding more from yourself everyday, being conscious about spending less and not beating yourself up if you treat yourself every now and then.
If you rid yourself of all luxury and enjoyment your frugality will last 2 weeks at the most.
And the key to financial freedom and spending less is consistency.
If you spend £20 less a week for the next 20 years (and stay consistent), that’s £20,800 you wouldn’t have had.
So, first thing, is to try (really try) and spend less each week.
Then take that money and invest it.
2. The Magic of Saving + Investing:
According to our friend Mr. Mustache, the percentage you save (and invest) has a direct link to how soon you can retire.
Sounds simple? Well, it kind of is.
Let’s say you save and invest 50% of your income; then you could be looking at financial freedom in just 17 years.
Upping it to 65%? That’s 10.5 years.
Imagine, if you start in your 20s, you could be financially independent and choosing to work in your 30s or 40s.
Now, to be honest, the model Mustache uses is a little simple for my liking.
It doesn’t factor in surprise life expenditure costs or inflation on your spending.
It also doesn’t factor in the reality of not being able to save 50% of your income.
In reality, most of us can’t even save 10% after life’s necessities.
On the flip side though, it doesn’t factor in wage rises (which will occur as you grow your career).
So these probably balance out in his model.
And, in truth, if you keep your spending equal as your income increases, this is the real key to becoming financially free.
The point of the blog is to get you thinking and get you acting.
The truth is; saving and investing more of your income every month (as much as possible after necessities) will bring you financial freedom and liberty much quicker.
The principles are 100% correct.
If you can keep your spending low and save + invest more of your income (especially when it increases), you’re on a one-way ticket to freedom.
3. Invest Smartly:
Now, holding onto and maximising savings is good, but letting them work for you? That’s the key.
As you’ll hopefully know by now on this blog, investing isn’t just for the Wolf of Wall Street types.
In fact, everyone needs to know about investing because it really is the key to financial independence and becoming financially confident and comfortable.
With a little knowledge of what to invest in and the wonders of compound interest, even a small sum can grow substantially over time.
Think of it as planting a tiny seed and watching it grow into a money tree.
I’ve spoken about the keys to investing before, so read this article for more detail or watch my YouTube video on Investing.
Briefly, the core tenets are:
- start young
- invest as much of your monthly income as possible
- buy tracker funds every month (world, US, UK) + some bonds
- stay disciplined, contribute every month
- increase monthly contributions when your income increases
- leave it alone for at least 15 years
4. Freedom > Materialism:
Here’s where philosophy and psychology nudge us in the right direction and begin to play a big part.
Did you know that once our basic needs are met, additional income doesn’t significantly boost happiness?
We actually derive far more joy from experiences and relationships over material goods.
And so if you want to be happy in life, thousands of years of philosophy and thousands of research studies in psychology tell you to stop spending on yourself and buying material goods, and start improving your character/wisdom, spending quality time with loved ones and building deep relationships.
These are the things that will make you happy.
Swapping materialistic pleasures for the joy of freedom can be more fulfilling than you ever imagined.
If you don’t believe me, read this study from Harvard about happiness from tracking the lives of people from childhood to their 80s.
An incredible study that tells you everything you need to know about where to prioritise your efforts in life.
Spoiler: it’s not on material goods.
5. The Mindset Matters:
The Stoics were on to something when they advocated for contentment and appreciation of the present.
If you train your mind to be content with less and find joy in simplicity, the journey to financial independence becomes a pleasant stroll instead of an uphill battle.
It’s not about deprivation; it’s about prioritisation.
And there’s actually a lot of joy to be had from being frugal.
I get a kick of joy when I buy a loaf of bread on 30% discount and stick it in the freezer.
Or when I fix something in the house and save spending on manual labour elsewhere (this doesn’t happen often as I’m not great at DIY).
I learnt this from my Grandad. During the second world war (and for many years after), you didn’t get to waste food or spend money on new clothes.
There was no such thing as disposable income.
And yet he was happy.
So the key to all of this is to try and enjoy the journey.
Yes, ideally you will spend less and invest more.
Ideally you will invest in your relationships and loved ones over material goods.
But if, on occasion, you want to treat yourself because you work hard and feel you deserve it. Then go for it.
Life is short, you can’t be miserable.
The point here though, is to realise that happiness isn’t in buying something material, and that there is more joy and more satisfaction to be gained from being frugal, investing and being free with your time as you get older.
Conclusion
Financial freedom isn’t reserved for the elite or the lucky lottery winners.
It’s accessible to anyone willing to look at money not just as a means to buy things but as a tool to buy freedom.
As Mr. Money Mustache rightly points out with his simple maths, the road to financial independence and early retirement isn’t lined with gold—it’s paved with wise choices, smart investments, and a bit of ancient wisdom.
So, next time you’re about to splurge, ask yourself: Is this worth my freedom?
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