I have two internet obsessions. One is the roaming, globe-trotting nomads of Instagram (some of my favourites are Divergent Travelers, How Far From Home, Goats on the Road). I love gawking at their adventures and planning more of my own. Being free to explore the world has always been one of my main goals and passions. And I’ve never been satisfied with the idea of doing so in traditional “vacations”, the frequency and length of which being limited by virtue of being an employee. This yearning for freedom by way of being location independent seems fairly common amongst my fellow millennials.
However, my second obsession is far nerdier and perhaps less glamorous, at least on its face. It’s the world not of the location independent, but of the financially independent. A small (but growing), weird and wonderful corner of the internet where acronyms like FIRE (Financially Independent, Retire Early, of course) need no explanation, and heated discussions about savings rates and the 4% rule and low cost index funds abound. These amazing and dedicated individuals save early and save often, so they can be free to leave full-time employment and live life on their own terms. The “retire early” part of FIRE is something of a misnomer, as most people I follow stay very active and in many cases even in income-generating activities. The key is they’re free to do so, or not, as and when they like. And perhaps most importantly of all, they’re free to spend their most valuable resource, namely their time, as they see fit.
I find inspiration from both camps, but not always as much overlap. It makes sense. The people that are dedicated to achieving financial independence aren’t spending all their money gallivanting around the world. They’re steady on the grind, paying off their mortgages and accumulating wealth in their various countries’ tax-deferred savings vehicles. And the people who are most mobile might struggle to find consistent ways to save. But it’s left me wondering if there isn’t a third way.
I got clued into the financial independence concept later than I might have liked. In 2015 I first got hooked on minimalism and downsizing my personal possessions. From there, one thing lead to another, I devoured Mr. Money Mustache’s entire oeuvre, and decided to see where I might land if I were just a little bit more badass.
I was a good few years into my career so it was long past time. I was also living in the US where a lot of the relevant literature is from and tailored to. So it was easy to follow the formula others had laid out. Max 401k, max IRA, throw the rest into Vanguard index funds, rinse, repeat. And I had that routine pretty well down. Salaries are decent in much of the US, including Seattle, and living even moderately sensibly (I could hardly call myself frugal!) allowed for all of this to happen pretty painlessly.
There was one problem. I wasn’t happy living in the US and I had known for a long time that I wanted out. But could I walk away from a path that seemed to be all but guaranteed to lead to financial independence in a reasonable time frame? Fear of the unknown could’ve kept me stagnant, but I chose something different. Ultimately, money wasn’t and isn’t the most important thing, and I chose a new adventure here in Ireland instead, accepting the pay cut and higher taxes that came along with it. I knew I was taking a fork in the road to FI, but I did so with eyes open.
But now I’m living in Europe, travelling as much as I can on the weekends, and finally taking stock of how my two duelling obsessions might intersect. I don’t want to give up the freedom of movement, but I do want to feel like I’m moving towards my financial goals as well. I think it’s possible, even if it’s not easy.
I’m still exploring how best to optimise this particular fork in the road, and I’m open to the possibility of taking a few more unconventional turns along the way. A few things are working in my favour, that many others could avail of, if they chose to. As I see it, here are the secret (totally not secret) tips to buoy your financial confidence and embolden you to take your own adventurous fork in the road:
- Be debt free. Easier said than done? Perhaps. But if you’re not currently debt-free, make every effort you can to move in that direction. It gives me a lot of confidence to take (calculated, considered) risks, knowing that I have no fixed monthly debt payments to factor in. Essentially, if I can cover my monthly living expenses, and sock a little extra away, I won’t feel like I’ve moved backwards, at least. I can move around the world without any debt following me around, and it’s incredibly freeing.
- Keep your monthly expenses low. Again, it’s not rocket science. But when you know you can live comfortably on a relatively modest sum, you keep your options far more open. And when you’re more location independent, you can make choices to live in lower cost locations when you need or want to. But the first step towards making this work for you is being flexible. If you aren’t too picky about having the shiniest, fanciest stuff, and if you’re willing to do the harder, better things like walking instead of taking taxis, and cooking for yourself, you free yourself doubly. Firstly, and immediately, you stop wasting so much money right now. Secondly, and forever, you stop being dependent on paying other people to meet your basic needs. I have a lot more to say about this, but as a basic principle, it’s essential. It underpins the concept of being independent in every sense of the word, and makes you a better, more useful, more interesting person.
- Pay attention to taxes. People don’t like doing this, but they should suck it up and learn. If your money can keep growing tax-deferred while you are off taking a few adventurous detours, or if you can maintain a few longer-term tax strategies, like the oft-cited Roth IRA ladder, or carefully managing your tax residency status (more on this to come), you can make strides towards financial goals even in times of potentially reduced income. I’m still exploring the tax efficient options available in Europe, but as a tax person, it’s something that is always factored into my analysis, and I’d like to help others do the same.
- Remember that money isn’t the most important thing. I love personal finance and financial independence bloggers, but if you read enough of them you risk tunnel vision. Don’t feel bad if you haven’t got it all figured out by a particular age or life milestone. Don’t measure your worth by your net worth. But do get educated and empowered, because making your money work for you is a great way to get to focus on the really important things.
I certainly don’t have it all figured out yet, and that’s OK. The more of us that are out there, exploring unique and unconventional paths, the better.