This Content Is Only For Subscribers
Charlie Munger once said, I did into intend to get rich. I just wanted to get independent.
We can leave aside rich, but independence has always been my personal financial goal. Chasing the highest returns or leveraging my assets to live the most luxurious life has little interest to me. Both look like games people do to impress their friends and both have hidden risks. I mostly just want to wake up every day knowing my family and I can do whatever we want to do on our own terms. Every financial decision we make revolves around that goal.
Being able to wake up one morning and change what you are doing, on your own terms, whenever you are ready, seems like the grandmother of all financial goals. Independence to me, does not mean you stop working. It means you only do the work you like with people you like at the times you want for as long as you want.
Achieving some level of independence does not rely on earning a doctor’s income. It is mostly a matter of keeping your expectations in check and living below your savings rate is driven by your ability to keep your lifestyle expectations from running away.
Our saving rate is fairly high but we early feel like we repressively frugal because our aspirations for more stuff have not moved much. It is not that our aspirations are nonexistent, we like nice stuff and live comfortably. We just got the goalpost to stop moving.
But everything I have learned about personal finance tells me that everyone without exceptions will eventually face a huge expense they did not expect and they do not plan for these expenses specifically because they did not expect them. The few people who know the details of our finances ask, what are you saying for? A house? A new car? No, none of those. I am saving for a world where curveballs are more common than we expect. Not being forced to sell stock to cover an expense also means we are increasing the odds of letting the stock we own compound for the longer period of time. Charlie Munger put it well, the first rule of compounding is to never interrupt it unnecessarily.
