You ever read a blog post that went something like this…
You might want to think twice before you buy that brand new TV. It would set you back $2,000, and will likely only provide you entertainment for a handful of years. What if you invested that money instead?
If you put $2,000 in to a Roth IRA and let it grow for 30 years, at 8%, you would end up with $20,000.
I repeat, TWENTY-THOUSAND DOLLARS!!!!
Is that TV really worth $20,000 to you? I didn’t think so. Now go give yourself a spanking and put yourself in time out for even thinking that buying a TV was a smart move!
I can’t tell you how many times I’ve read some iteration of the post above. Maybe instead of a TV, it’s a vacation. Or a boat. Or a house. Or probably the most popular topic for an argument like this to appear, a wedding post.
Consider this my permission to flip those other PF bloggers the internet version of the bird and tell ’em to buzz off. Unless of course, your goal is to be miserable for the rest of your life. Then by all means, drink the kool-aid.
Personal finance bloggers commonly confuse the term financial freedom with wealth. THEY ARE NOT THE SAME THING.
Say I had $1,000,000 in my 401k right now. I am literally a millionaire. But am I free?
My 401k isn’t going to pay my cable bill, put groceries on our table, or a car in my driveway for another 30+ years. Yeah, I’m a millionaire, but I’m no more free than the dude that bags groceries down the street at the local Safeway. We both still have to go to work tomorrow.
Do you get it?
You need to be working towards financial freedom, not wealth building.
I think, at 28 years old, I’ve reached that place. My job provides the best work/life balance of anyone I know, I make a reasonable, but still down-to-earth five-figure income. We have a roof over our head. We contribute 15%-20% towards retirement. And we’re content living within our means, no pinching pennies, but we still have to be mindful of our spending. As far as I’m concerned; we’re retired.
It’s a beautiful place to be, and a place I hope you are in, or working towards finding.
Don’t get discouraged by the PF bloggers who talk about how great early retirement is even though they are still slaves to their blog (or their portfolios), who make you feel terrible for buying a new car, or who tell you there is no such thing as saving too much.
Those bloggers suck.
You be the best you you can be. Make a plan. Stick to it. And enjoy the ride along the way…even if that means you end up buying that TV.
You don’t have to be a millionaire to be happy. Promise.