6 Reasons Why More People Don't Pursue Early Financial Independence (FI)
Whether it be via podcasts, websites, events, blogs or local meetups, I find myself constantly digging deeper into the early financial independence mindset and community. And I love it! The message of this group resonates with me, and I want to build upon and share it with everyone that I know. But being so ingrained, sometimes I forget that not everyone is into this movement. If fact, very people are. Only 7.96% of the U.S. population under the age of 50 would consider themselves retired (or more importantly, able to step away from their job).
So this number has me stepping back for a second to ask myself why more people aren’t looking to develop financial independence before the more traditional retirement ages of 60-70.
Here are some of my conclusions.
Lack of Awareness
Simply put, I think a majority of people just don’t know that early retirement is possible. And it’s quite easy to understand why this is the case. Work benefit packages, traditional retirement plans, social security and medicare all cater to “retirement” between the ages of 59.5 to 70. When a person sees these numbers associated with financial autonomy so often, they become embedded in both the memory and subconscious. Early retirement would require that person to retrain their brain to think differently, and then also retrain themselves on how to plan accordingly. Considering this process of thinking and planning run against the grain, it’s easier to just stick to the traditional path.
America is a capitalistic society that thrives on consumption. We love our stuff and companies love to sell us their stuff! The insane amount of money paid for Super Bowl advertising slots proves this point. And I’m as guilty as anyone in having a weakness for material indulgences (automobiles in particular). Consumerism is so ingrained in our culture that when most people come by extra money or receive a raise, the first thing thought is usually how to spend the money rather than how it might best be saved. Consumption really becomes a problem when it forces us to live paycheck to paycheck, not allowing room for investment in our future. As a society we must better learn that every purchase comes with a trade-off; that trade-off being our future financial freedom.
3. Financial Struggles
This might be the most obvious reason mentioned. When a household barely has enough money to put a shelter over their head and food on the table, it’s nearly impossible to save. Just because we live in a prosperous country does not mean everyone reaps the rewards. According to the U.S. Census Bureau, 13.4% of the U.S. population lived below the poverty line in 2017. This is a very sad reality. My hope is that as a growing number of people start achieving early financial independence, more people will also feel compelled to help, mentor and educate those in less fortunate positions.
4. Circle of Family and Friends
We’ve all heard the saying that you are the average of the 5 people you spend the most time with. I believe this to be true! And if you’re spending your days around people who don’t talk about, think about, or plan for their financial future, the odds of financial freedom at an early age are certainly against you. But the great part about today’s world is that you can now surround yourself with amazing thought leaders virtually. If personal finance is of interest to you and you don’t have anyone around you that shares in that enthusiasm, go online. The FI space has some great communities behind the efforts of BiggerPockets, ChooseFI, the Mad Fientist and Mr. Money Mustache, just to name a few.
5. Financial Education
It’s no secret that we have a lack of basic personal financial education in this country, and this is a shame. When people are educated on a subject, they are more readily armed to succeed at it. And the opposite holds true. When financial education is lacking, financial blunders will only continue in perpetuity. The failing financial grades for the American populous speaks volumes to this exact point. Early financial independence is certainly not in the cards when nearly 40% of U.S. households have over $16k in credit card debt. We need to change this culture. The basics of money management should be taught in primary schools, and households should be having open and educational discussions on financial matters.
6. Job Satisfaction
The motivation for a lot of individuals pursuing early financial independence is rooted in a dissatisfaction with working their 9-5 (it was for me!). This could stem from the actual work itself, the environment, the people/clients, or the lack of freedom that job allows. But not everyone is in this camp. There are a lot of people who 100% love what they do. And this is a wonderful thing! Why create a plan for early financial independence if you never plan to stop working? Well, situations can change. That job is not always guaranteed. It’s prudent to properly plan for your financial future even if you would love to never step away.
Are there any other reasons you feel people wouldn’t pursue a path to early FI? Are you not on this path for a particular reason? Please do share! I’m always curious to learn more about everyone’s money motivators.