Getting Started, Goals

Writing a Financial Independence Mission Statement

Laying the foundation to build our journey towards FI

Writing a Financial Independence Mission Statement can help to articulate and crystallize the framework for your journey forward

Earlier this week I really enjoyed the latest edition of Paula Pant’s Afford Anything podcast with the New Year’s topic of “One Tweak a Week in 2019”. The action item that particularly resonated with me was the concept of creating your “Why?” in 100 words or less: Why are you so interested in, and committed to pursuing the path towards Financial Independence?

Maybe it could be called a Purpose Statement or a Mission Statement; for the sake of making a decision and moving forward I’ll just go with the latter in this post.

I had never really thought about a Mission Statement outlining my reason and rationale for pursuing FI; ever since becoming familiar with the concept it just felt intuitively aligned with what I wanted to achieve and how I would prefer to live.  

Recently I’ve developed an interest in creating Mission Statements, but I am still trying to follow through on the creation of these. I’m told that Mission Statements can be created for various dimensions of your life: Work, Family etc. Overall, I think it makes a lot of sense because:

When you can clearly articulate what it is that you believe in and are working towards, you have a much higher probability of success.

In a way I guess it shares some similarities to the goal setting I completed for 2019 in my recent post, however I believe this FI Mission Statement should be more of a holistic summary, outlining a long-term and overarching vision. In the true spirit of “just getting started”, let’s take a stab at this:

My Financial Independence Mission Statement:

“We are seeking to increase our savings rate and accelerate our journey towards a life of Financial Independence. Spending less on material goods will simplify our life, be healthier for the environment, and allow us to focus on what matters most. Financial Independence offers the ultimate freedom: The ability to spend your time and efforts focused on the people and endeavors that deliver you the most enjoyment and meaning. This journey should be enjoyed, and will be the result of an accumulation of many positive choices and practices that compound over time, along with our net worth.”

Well, what do you think? Once I got started it became a challenge to squeeze in all these thoughts and concepts into 100 words or less. I feel pretty good that it captures the key elements that are important to me, and I do think this could be something that is pretty durable for the long-term.

You’ll notice there is no mention of escaping from the corporate world or W-2 jobs, and that’s the way I want it. I see FI as something where I’m being pulled towards a life that is more desirable, rather than being pushed away from the grind of regular employment.

There are also no specific goals: savings rates, net worth, date for achieving FI etc. That makes sense for me: the reality is that life will throw us curve balls and these targets will fluctuate over time depending on the circumstances we are facing in that moment. I’m thinking of my Mission statement being the foundation and structure of my journey, much like the constitution is the foundation that sets up the government. My annual goals for the year can serve to capture the more near-term and tactical objectives that I want to achieve.

What about you?

Have you created such a statement for your journey? I’d enjoy seeing and hearing about statements that others have created, and the opportunity to compare and contrast the elements of each.

I think Paula also put out the concept that you could use this Financial Independence Mission Statement as a screensaver on your phone, as a regular reminder of what you’re working towards; She’s full of great ideas!

Save, Savor, and Soar!

Goals, Motivation

Pushing the accelerator on our Financial Independence goals in 2019

It’s time to set some goals and take action.

We’re laying out our financial goals for 2019 to accelerate our journey to Financial Independence (FI)

I want to start by wishing everyone a Happy New Year, and success with your endeavors for 2019!

I’m particularly excited about implementing new goals and ideas to push the accelerator down a little harder for our journey to FI.  The FI Community really did seem to capture a lot of mainstream media attention during 2018, and I’m sure that will be sustained as we see new developments in the near future, such as Scott Rickens’ documentary Playing with Fire.

I’ve thought hard about what specifically I want to achieve this year from a financial perspective, and I think it all boils down to these four key topics:

  • Expand out our Emergency Savings account to 6+ months of living expenses: At the moment it’s sitting at a value between four and five months of expenses, and I want to pad that out further for more peace of mind.
  • Eliminate all of our student loans and consumer debt before the end of 2019

There are several components to these debts:

  1. Paying off the last of our second-hand minivan: Once we’re done with this ~$3,500 of debt, we will have zero car payments outstanding and own two reliable vehicles outright that are meeting our family’s needs
  2. Paying off the new windows for our townhouse: Several months ago, we replaced quite a few windows throughout our townhouse. It was frustrating to pay so much money, but it was badly needed; it’s a convoluted topic worthy of its own dedicated post to explain more.
  3. Paying off my student loans from business school: I’m down to ~$13,000 outstanding and keen to eliminate this before year-end
  • Sustain maximum 401k and 403b contributions, and begin layering in 457b contributions: We’ve just started 403b contributions as I detailed in a recent post, and we’re still adjusting to what that means for our monthly budget. I suspect the 457b contributions may not begin until around September, but let’s see what 2019 holds and whether the elimination of debts can free up some of our cash-flow to get all three accounts funded this year.
  • Contribute $5,000 to my after-tax investment account and building out my portfolio: This account will naturally fluctuate up and down depending on the market, but I’ll be satisfied if I can manage to invest another five grand and grow my portfolio.

So, there you have it, that’s what I aspire to achieve financially during 2019. It feels good to write things out like that and share it; you can keep me accountable and I’ll let you know about the successes and failures as the year unfolds.

I’m also really looking forward to our Hawaii trip planned for July. We’ll follow up soon to discuss how that’s coming together in our efforts to maximize the awesomeness while minimizing our cash costs.

Best wishes with your financial goals in 2019; I hope you’re also feathering those nests and optimizing, so you can also FI and fly free.