Imagine if money wasn’t an issue and you could spend your time doing what you love most. How would your lifestyle change? How would it stay the same? What would you do differently?
For many people, being able to create a life that includes the freedom to choose how to spend their time is the ultimate goal. Unfortunately, we are told that a 9–5 job is the only path to success (or means to survival) and the thought of quitting your job seems impossible. But it’s not. You want to invest. You want to get ahead. You’ve realised you don’t want to work forever.
But in a world filled with Buy Now, Pay Later; inflation; decreasing purchasing power; and housing prices forever on the rise, it can seem impossible. In our book, we teach you how to build wealth by increasing your income, invest to make money passively and build the lifestyle that you want. Now, this isn’t a get-rich-quick scheme, as it takes time and effort to work towards a work-optional lifestyle, but ultimately the goal is to create a life where you don’t have to work forever in a job you hate.
It’s not about doing nothing (because that would be pretty boring). It’s about working towards a life filled with freedom and choice to do the things that you love and that add value. Plus, if you’re doing what you love and are also getting paid for it, it’s not considered work, right? At least that’s what we think!
When it comes to investing, you need to consider risk. And not only the risk of investing but also the huge risk to your financial security if you don’t invest. In fact, if you keep money under your mattress or in an interest-free transaction account at your bank, it loses value over time due to inflation. That’s why it’s important to future-proof your life and try to make your money grow so that you have future opportunities and financial security.
Of course, we all want to live our life now. We want to enjoy life, experience adventures, and buy the things that align with our values and with what we feel we deserve. However, we also don’t want to make it harder for our future selves. By creating financial security for your future self, you may be able to walk away from situations that aren’t ideal for you — a stressful job, an abusive relationship — or pivot to a new career or lifestyle, all because your past self is invested in your future self.
What’s more, you don’t have to pick one or the other. You can enjoy life now, while still planning for your future. There may be some sacrifices in the short term, but we aren’t going to tell you to completely cut back on all of your fun spending and live like a hermit (unless you want to!).
The great thing about investing is that it gives you income regardless of whether you’re working or not. It provides you with an alternative source of money without you having to put effort into it (minus the initial money you invest — often referred to as ‘capital’).
The goal with long-term investing isn’t to strike it rich with some quick trading. Instead, it can be to get an average return on the stock market, to beat inflation or just to keep up with inflation so that your money doesn’t lose value the way it does when it’s in the bank. If you’re in Australia, this is what’s happening with the money in your super fund: how much it grows each year depends on the investments you choose and how the market performs.
Plus, having additional sources of income allows you to reduce your risk in case something were to happen with your main source of income. At least you’d have some money coming in! In fact, most multi-millionaires have at least seven sources of income. How many do you have or wish to have?
All of this provides freedom and choices in the shorter term, if needed. While your goal might be something like having $1 000 000 by age 55, this doesn’t mean you can’t access money along the way if your plans and goals change.
Financial independence
The financial independence movement (FI) focused on living frugally while investing aggressively in order to buy more time and be able to retire early. The idea is that if you invest early and regularly, your money will compound and grow over time, providing you with passive income. That way, you can forgo working and have an alternative income stream — effectively retiring early (if that’s your thing). If time is money, then having more money means you have the freedom to choose how to spend your time because you don’t have to worry about making money.
What the financial independence (FI) movement did for us
Tash: When I first heard about the FI movement, I thought it was a great idea. I was counting and saving every dollar I could, while working 50-hour weeks and trying to finish my occupational therapy degree at university. Having enough money to never have to work again sounded like a dream.
Now that I’ve had the opportunity to have time off and am fully self-employed, I’ve realized that I really value meaningful work, and that I like ‘working’. I just don’t like work that takes over my life and takes away all of my freedom. I now focus on investing consistently, growing my income and spending on things that are in line with my values and bring me joy.
Ana: My number-one priority in my 20s was to travel. I would save up as much money as I could, and then spend it traveling and adventuring around the world. What I realized was that I had a great savings ethic: I was able to set a goal and achieve it financially. However, I didn’t know what to do after I had saved my money — I didn’t know that I could grow my wealth through investing.
When I came across the concept of investing and FI, I realized that my frugal habits enabled me to keep costs low and invest any savings I had. I then focused on increasing my income so that I could invest even more money. The goal for me was to create financial security for myself so that I could spend time with my young family, take a career break if needed and work on the things I feel passionate about. Investing essentially helps me create the life I wanted for myself.
Time is finite. You only have a short time on this earth to live, work and enjoy. Once it’s gone, you can never get it back. Money, on the other hand, is infinite in that you can always earn more, spend more and have access to more. There’s no limit.
Edited extract from ‘How to not work forever’ by Natasha Etschmann and Ana Kresina (Wiley $32.95), available 26 June at all leading retailers. ‘How to Not Work Forever’ breaks down the info and tools you need to keep up with inflation and grow your wealth. Tash (aka @tashinvests) and Ana, money experts and hosts of the popular Get Rich Slow Club podcast, walk you step-by-step through setting your goals and getting started in the sharemarket. They share simple, practical advice that can help you create long-term financial freedom ― the kind of freedom that lets you seize new opportunities and embrace a life that fulfills you.
[Disclaimer: Any information here is general in nature and has been prepared without considering your personal goals, financial situation, or needs. Because of this, before acting on the general advice, you should consider its appropriateness, having regard to your unique situation. You should obtain and review the Product Disclosure Statement (PDS) and Target Market Determination (TMD) relevant to the product before making any financial product decisions. It’s also strongly encouraged to seek the advice of a professional financial adviser.]
