A small movement started during the last few years. With the popularity of tiny homes, many millennials have been aiming at becoming financially free early in their life. Compared to status-hungry earlier generations, these young adults are changing what it means to be successful. They would rather buckle down and save their way to becoming millionaires.
Culture is always shifting. Many millennials have seen their parents work very hard and believe the 9-to 5-life is not really for them. They are using their young careers to set themselves up quickly for the lives they would rather live. Being able to retire very early is an accomplishment, but is it right for you? You need to find what will make you happy and attempt to answer this question: What does freedom mean to you?
Your answer will define your own path to financial freedom. You probably fall within three different paradigms:
There are some who like to work. They feel energized every morning by the idea of getting something done. They like their co-workers. They enjoy serving their customers, and they can't see themselves not working.
They like to earn money. They feel the happiest when they work hard but also play hard. They would rather have less time off but splurge on the things that make them happy. They might want to live large and enjoy the finer things in life.
If this sounds like you, you need to make sure that you have a plan to maintain this great lifestyle throughout your life. Many of you tend to spend too much. Once you reach retirement age and decide to slow down a little bit, you will probably want to continue this lifestyle and will need a large amount of assets to supplement your income.
There are some who are not fulfilled at work. They would rather spend time with loved ones. They like a simpler life. To them, relationships are what is most important. They would like to find a way to not need to work for money.
Like our millennials, they are not interested in status and getting more stuff. They know that life is short, and they want to live in the moment. They are more interested in life experiences than anything else.
If this sounds like you, you need to be able to get rid of any expense you don't really need. Being thrifty will enable you to reach your goal fast. If your needed income is lower, you will reach financial freedom that much faster.
Many don't really know if they'll ever be able to retire. They might stress over money. They don't really know what to do. They don't know if they are on track to reaching their goals, and even the thought of looking at their statements stresses them out.
To them, freedom could mean feeling better about themselves. To know that they will be OK. If they were able to be ready for anything that could happen to them, life would be so much simpler and better.
If this sounds like you, you need to have discussions about what you really would like to accomplish. Once your mind is set, create a plan for it. Seeing results, even if they're small, will make you feel so much better.
"Freedom is the oxygen to the soul." — Moshe Dayan
As human beings, we are meant to be free. We are much happier once we are able to live the life we want to live. However, so many of us are restricting ourselves by keeping our need for income.
I challenge you to find out what type of life you are striving for. Learn to quantify your freedoms. Once you know what you need to accomplish, have a plan to make it happen. You will be so much better for it.
(Editor's Note: This column originally appeared at Investopedia.com.)
— By Patrick Traverse, owner of MoneyCoach