What is an unFinanced Life? Part 2

What is an unFinanced Life? Part 2

As we talked about in part one of this post, an unFinanced Life is a lifestyle created by adopting a mindset which uses money as a tool to increase our freedom in life. Part of this involves un-learning traditional finance and adopting un-conventional or un-traditional approaches to money and life. In the last post, we looked at character traits of people living the unFinanced Life. But how does this actually play out? I’m glad you asked, because that’s the subject of this post!

To answer this excellent question, we’re going to interview two fictitious people about their views on money and see what their thoughts are on the subject for each decade of their life from their 20’s to their 50’s.


The Interview of the Average Person

 

What is money and what is your money philosophy?

Money is what we use to buy stuff. And I don’t know what you mean by money philosophy but I guess I’d say it’s better to have more of it than less???

What does money look like in your 20’s…

This is the decade of just having fun. We carry a lot of debt, start our careers, try to hold onto our college lifestyle, and generally spend most of (and sometimes more than!) we make. Some of us may buy houses and get married. Generally, we aren’t saving much. But of course we have the latest gadgets, are willing to pay a premium to live downtown, and our cars might look pretty nice after we ditched the wagons we drove in college and got a new car with low payments. I love showing my parents that our house, cars, furniture, and decor are all as nice or nicer than theirs!

In your 30’s…

We buy lots of toys! Motorcycles, jet skis, boats – you only live once! Our income is increasing and we are starting to get some career traction and we use that to live large. Kids might be the picture and in the back of our minds we still have 30 years until retirement so we are going to use our money to experience as much as we can! We bought a big house to ‘grow into’ and retirement is still a few decades off, so no worries there. I’ve got my employer match going, at least!

In your 40’s…

Kids are getting older and we start thinking about college funding. Our parents are also retired and may or may not need some help from us. We thought we’d be piling away cash but somehow between Club Soccer, the college fund we started too late, our mortgage, car, camper, and boat payments, and helping parents there’s just not much left. We’ve also moved into a bigger house and reset our 30 year mortgage, but that’s ok because rates are so low and our monthly payment is about the same as it was before. More house, same payment!

Career prospects are looking good, and retirement is still 20+ years out so I’ve got time to figure that one out later. I’d love to start a business, but I can’t afford to make my payments if I lose my salary! Darn those golden handcuffs!

In your 50’s…

Wow, college was expensive and now my kid is living at home! I’m getting sandwiched by my kids and parents and really need to start saving some money for retirement. Fortunately, I’ve been contributing to that 401k up to the company match for the last 20 years, I hope that will be enough! Maybe I should meet with a financial planner?

And so on, you get the picture. The traditional approach to money simply doesn’t prepare us for retirement – let alone reaping the benefits of financial independence as we go through life. All it takes is a quick google search for ‘average retirement savings’ to see this.


Interview of someone who is living the unFinanced Life….

 

What is money and what is your money philosophy?

Money is a tool that I use to increase my freedom in life to pursue the things that are most important to me. I view it as a worker and productivity enhancer, and I use it to leverage truly finite resources like my time to help me lead a better life.

My philosophy on money is that it’s not about maximizing wealth so much as its about using money get more out of this one life I have opportunity to live. I understand the difference between utility and vanity and I use that understanding to keep me grounded and live a life that finds joy in each step of my journey.

What does money look like in your 20’s…

This is the foundational period. I understand the importance of getting time on my side because of the nature of compound interest and I will build and begin implementing a sound financial plan now. I’m going to start investing, house-hacking, and even embracing some self-imposed ‘hardship’ in not buying the newest phone, nicest car, or biggest house I can because I know that those things don’t truly bring me happiness anyway. I am learning to appropriately value money and what it can and can’t do for me, and it’s fun to see how much I can sock away into investments each month.

I am not a miser, but I am not frivolous either – I spend tactically in ways that are aligned with my values. The progress toward financial independence might feel slow, but I’m learning to joyfully walk the financial independence path and am starting to see some real results.

In your 30’s…

I’m shocked at how far I’ve come and I’m already starting to feel more free in life. In fact, I feel so free that I may decide to take a risk on that business idea I’ve had since college. If I fail, I’ve already socked enough away in separate investments that I’ll probably still be ahead of the curve. And the skills I’ll learn can help me get another, even better job if I end up needing it. If not a business, maybe it’s a career change, or having my spouse stay at home because that is what is best for my family. Or taking a job that pays less simply because I think I’ll enjoy it more. I might splurge once in a while, but I don’t care.

I’ve learned to value both money and experiences properly and I actually find great joy in spending money because I’m consciously aware of its impact to me and my future – in choosing to spend the money, I get more joy than I would have otherwise because I understand money’s value in my life and made the decision that this [experience / thing / vacation / whatever] was worth it to me.

In your 40’s…

I am, for all intents and purposes, financially independent. Working is now a choice and I find that even though I may still go to work, just knowing that I’m OK without a J-O-B brings me a deep satisfaction. Ironically, I’m also finding more career or business opportunities and have less fear in negotiating better deals for myself (job offers, business deals, etc.) simply because I don’t need it to survive any more. My time is now my own, even if I’m on someone’s payroll. Or maybe I’m going to pursue that dream of starting xyz business.

I have no issue helping my parents out and my kid’s college accounts are funded if they need that money. I’ve also learned many skills over the years and I love teaching those things to my kids and friends. People look at my life and wonder how I’m doing it, because they are just trying to stay afloat, pay the mortgage, and save a little for retirement.

In your 50’s…

Life is good. I’m financially set for the decades to come and fully prepared for “retirement” in whatever form that takes. Not that I see myself doing nothing – I have the time and resources to make a difference in the world and I’m eager get to it….


Of course, this is a purely hypothetical example – but do you see the difference? If your view is that more money = more stuff = more happiness then you probably don’t get it. But if some of this made sense and you want be more like the second person than the first, then keep coming back here to read more. Also, don’t be discouraged if you are looking to adopt the financial independence mindset but its already later in life – the best time to start is now! This example simply used someone starting in their 20’s to illustrate the power of the concept.

This is the last of our ‘foundational’ posts. Up next is a post on understanding market returns. And then there will be a post with a pretty cool financial independence calculator. Sign up for the email list so you know when more posts and resources come out!

What do you think? Leave a comment!

What is an unFinanced Life? Part 1
Understanding Market Returns
unFinance Your Life!

unFinance Your Life!

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