My wife and I were out with some friends when the topic of FIRE came up. We are open with these friends and we informed them that we hope to be FI in 5 years or less. You could almost see their minds blow. They simply could not wrap their head around the fact it was possible much less why you would want to be FI. (It did not help matters that I referred to it as retiring early instead of financially independent)
After this conversation it got me thinking about why I want to be FI. The first and foremost reason for FI is the security. My job is our family’s only source of income. If for some reason I lose my job then my family needs something they can fall back on. As our investments grow they become the equivalent of someone working full time at Colorado’s minimum wage*. Instead of being a one income family we are now a two income family with the second income is continually growing.
The second reason for FI is optionality. Having a large amount of savings simply allows us to make ch…
A thermometer measures or reflects what the current temperature is. It has one sole purpose, and that is to report what the temperature is. It does not affect its surroundings, it just reports back data. A thermostat regulates the environment. It works actively to regulate the temperature in a set area. It is able to monitor and react to the readings accordingly.
Which are you when it comes to your finances?
A thermometer household is one that simply reads its surroundings. This family spends money on things they think are essential mindlessly. They keep up with the neighbors and shop at the big box stores. They are influenced by media ads and others influences in the environment. Most of society's households are thermometers.
A thermostat household regulates the environment. They will collect data and adjust finances accordingly. They will remove unnecessary spendings and strategize ways to save even more. These households are not only reactive, but proactive as well.
How do we …