Any fool can learn from their own mistakes; it is the wise who learn from other peoples’ mistakes.
Having been plugged into the FI community for close to a decade, I’ve seen many people work towards FI. It’s a long road, and along the way there are a few mistakes people make over and over again. Mistakes that cost them time and stress – or even derail their FI journey altogether. The good news is that with awareness, these mistakes are completely avoidable.
Burn Out
You’ve seen the studies – crash diets almost always fail. It’s more sustainable to adhere to a set of guiding principles – like get enough protein and eat whole foods – and to lose weight slowly over time. The same applies to FI. I get it; we are excited by the idea of FI and want to commit fully to accelerate the timeframe. So we make huge cuts in our spending – I can survive on beans and rice for 5 years, no problem! – that aren’t realistic to stick with, because, you know, we also want to enjoy our lives now. There is not a one-size-fits all answer here of course. It may take some iterating to find the right balance. But that’s just what you should be aiming for – balance.
So how about instead of slashing all of your entertainment subscriptions – Netflix, Hulu etc- and planning to spend your downtime staring at the wall, you keep your favorite one around. Or if going out to dinner is something you really enjoy, you put it in the budget to do on occasion. A good way to find a sustaining balance is to get clear about the spending that brings you real joy. Then, cut the rest.
Going It Alone
There is an African proverb – “If you want to go fast, go alone. If you want to go far, go together”. We just established above that FI is more of a marathon than a sprint, and takes a longer view perspective to achieve. Well, that means it will be very motivating and helpful to have a community to support you along the way. The benefits are numerous – you can share tips and ideas, hold each other accountable, and have someone to complain to when you’ve eaten beans and rice for the third month straight (just kidding, don’t do that).
There are communities that already exist that you can join – the Bogleheads or a Mr. Money Mustache meetup. However, I think the best way is to build your own. Personal finance can feel like a taboo subject in American society, and for some it certainly is. If you put yourself out there and give it a shot, I think you’ll be surprised at the reception it’s likely to receive. We talk about finances in depth with our close friends, and now they all talk about finances with each other too. The acronym FIRE is fitting – this idea spreads easily.
Analysis Paralysis
There are a lot of opinions out there on the internet, in podcasts, in books and interviews. Combine that with the fact that finances are already an intimidating matter because we lack experience and expertise. Then add in high stakes – with these decisions affecting our very livelihood…and you get stuck. It all feels over your head and so you freeze, preferring to delay action until you “have more information” or “understand it better.” And yet this never seems to quite materialize.
Our advice? Don’t overcomplicate it and do what you can with what you’ve got. The key word here is do. Assess your current financial situation and take the next rational step. I guarantee that things will fall into place and the next move will become clear once you start. It’s like driving in the dark in the rain with your headlights on – you know there is a road there, but you can only see 10 feet in front of you. Just worry about those 10 feet. That’s much more likely to work out for you than to attempt to chart the whole trip in advance and catalog every scary corner and pot hole. Don’t worry – we’ve already got it covered for you on where to start.
The Post-FI “Now What”?
This isn’t a mistake in terms of affecting your trajectory to FI, rather it’s to prevent a crisis in meaning once you’re there. Are you running from something to get to FI (a crappy job, location constraints, stress) or towards something? What do you want your post-FI life to look like – as in the nitty gritty.
A helpful exercise to help flesh this out is to imagine your perfect day – from the moment you wake to turning out the lights at night. What are you doing? Who are spending time with? I’ve seen people who have reached FI underestimate the purpose work gave them or the social connection it provided. Then, once living in FI Valhalla, they end up feeling unfulfilled and isolated. Yikes. I chose to continue to work in a part-time capacity with a lot of flexibility on projects that I care about with people that I like. That, mixed with ample time to hang out with friends and pursue hobbies like rock climbing, has enabled me to create a fulfilling and balanced daily rhythm.
Did any of these mistakes resonate for you? If you think you have a handle on what to avoid, let’s take a look at where to double-down and jump start your journey to FI.
