F.I.R.E (Financial Independence, Retire Early) vs F.R.E.E (Financial Responsible, Enjoying Everyday)
I guess you all might have already heard of the FIRE (Financial Independence, Retire Early) movement in which individuals go for an extreme level of savings from their income so that they will be able to retire in their mid 30s to mid 40s. Though retiring at the age of 45 looks very lucrative but it is one of the extremely difficult paths to follow.
In contrast, FREE (Financial Responsible, Enjoying Everyday) is a path in which we will keep managing our finance responsibly and build the assets in our journey so that when we retire we have achieved financial independence. FREE word/path is actually coined by me and it is mostly my reflection of my journey till now what I have achieved/done for my financial independence and what I will continue to do so.
Before I deep dive into FIRE or FREE, I think explaining Financial Independence and Financial Responsibility is very important as both are very correlated but still different and bring different perspectives with them. In real life, you can not achieve results without covering both aspects.
Financial Independence.
Financial Independence is an end goal where one does not depend on others financially for their lives for their expenses. Income streams generated by a person when the person was working are now generating income that is more than enough to cover the person's expenses.
Financial Responsible.
Financial Responsibility is the medium that will allow you to reach the destination of Financial Independence. If you do not master financial responsibility then you will never achieve financial independence.
Financial Independence != Financially Rich.
One thing is to note that when we talk about financial independence and financial responsibility we are not talking about becoming ultra-rich or even being rich. It is more about having your "expenses" and needs less than your income. So let's say someone's yearly expenses are $1000 and the person is able to build some assets that are now providing an income stream greater than $1000 yearly then the person has become financially independent. In another case, someone has a very high income let's say a million dollars a year but the person is spending the income on luxury cars, high-cost vacations, and maintaining high standards of living where the expenses are almost equal to income then by society standards person is a rich person but still very far away from achieving financial independence. Financial responsibility if followed in the above case can easily lead to financial independence but it finally breaks down to a person's standards of living and control of expenditures.
FIRE (Financial Independence, Retire Early)
Most of the FIRE concepts advocate "extreme" savings and a very minimalist and frugal life so that one can "retire early". Now when someone starts their financial journey they are doing most things wrong (because these lessons were never taught in schools) and once they start understanding the finances then the "saving" requirements to earn financial independence in FIRE will be so high that it can automatically discourage anyone.
I also feel "minimalist" and "frugal" living is good but should we subject ourselves for the rest of our lives to a minimalist setup just to retire early?
FREE (Financial Responsible, Enjoying Everyday)
Financial Responsibility is the key if we want to earn financial independence. Instead of going for a frugal living, the focus is now on generating multiple assets over a period of time that can keep giving me income, and keep auto-compounding their income so that when this plan is executed over a long time frame then it will be able to build multiple assets that are auto compounding themselves and in the end generating the income much more than your needs.
I have created "Hive" as one of my assets to invest and the best part of it while I am increasing my income in Hive, I do "enjoy" here and it does not look like I am working here. My "office" job takes care of my all financial responsibilities (like health insurance, life insurance, retirement fund, etc) and allows me to pay my bills easily so what I earn in Hive is the income that can be left for autocompleting for the long term.
I almost completed my all-layer 2 goals in Hive and not stretching myself more on them. I am focusing now on layer 1 goals. The best part of these goals is that instead of getting "Monday Blues", I actually "Enjoy" being here and I am not thinking of any "retirement" from here even when I will actually achieve financial independence in the future.
It is not necessary that your "FREE" plan should feature crypto and it can be any vocation that can help you earn income.
Other benefits of FREE.
One of the other benefits of FREE is that keeps you motivated and make you excel in time management and boost productivity in the actual job as you will be looking to finish your actual job in the least possible time.
So, what are your FREE activities?
Posted Using LeoFinance Alpha
