The Moment I Reached Financial Independence

So far, I have had a good life. How do I know? Because I was the subject of envy.

Not that I care about envy itself nor do I care to compete with anyone about life, but I was surprised when a friend in China said that he envied my life. I told him to have a life like mine you just have to not buy a house, sell your car, don’t get married, and don’t have kids. Of course, I was only half kidding. Additionally, you work until you save and invest enough to cover your expenses, then quit your job to travel, and live a life that you enjoy. Life is really that simple. At least mine is.

I keep my life simple and humble in many ways. This is more than just reducing my possessions. It’s more of a mindset similar to a monk’s. Although, I had thought about becoming a monk, but ultimately that life will be too boring for me. I view myself as having the mental capacity of a monk, but still living in the modern world.

It wasn’t until last year during my Asia travels that I realized I could live off my investments and not have to work, if I don’t spend over $18,000 per year. Due to the substantial stock market returns, by the end of last year my net worth reached what I call my “Die with Zero” number. This number is different from my FIRE (financial freedom, retire early) number that I had tried to reach before. Let me explain.

In the FIRE community, there’s the FIRE number, which is 25 times the annual spending. That number is the amount of money in investments one should save up for and ultimately withdrawal from. You can also calculate the FIRE number by dividing your annual spending by 0.04 (or 4%) since 4% is the safe withdrawal rate in the FIRE community.

For my “Die with Zero” number, I use the 7% withdrawal rate since that’s about the return of the stock market annually after accounting for inflation. So if I spend about $18,000 per year, then divide that by 0.07, my “Die with Zero” number is about $258,000, rounded up. This number is much lower than my FIRE number of $450,000.

Why do I prefer the “Die with Zero” number? It comes from a book I read called Die with Zero. The author basically states that one should die with as close to zero dollars in the bank as possible, having spent or gave all the money away. I like that idea a lot since I came to this planet with $0 and I shall leave the planet with $0. There’s something wonderful about this concept and I feel it fits with my simple living lifestyle.

The $258,000 doesn’t seem like a lot, or maybe it does, depending on one’s point of view. But for me, it is enough. I will be turning 41 years of age in 5 days and I’ve been wondering what I should do with my second half of life. I think I will use my nest egg first to backpack/bike tour the world then settle down somewhere. Depending where I settle, I want to donate my time and money to some worthy cause, most likely in the realm of income inequality. As long as I don’t overspend $18,000 per year, plus inflation, then I will have achieved financial independence.

In my second half life, I want to ask myself the question: If it wasn’t for money and fame, would I still be doing what I’m doing? If the answer is yes, then I know I’ve found something that’s worthy of doing.

For example, right now I want to learn more Python programming. I certainly don’t need to find a job in programming anymore, but I do get the joy of learning something new and useful. I’ve also cooked more recently because I find cooking to be relaxing and rewarding. I’m not going to be a professional chef, but I enjoy the process. I want to learn more Chinese because I want to keep up with my first language. I play the guitar because it gives me joy and is therapeutic. And I write, because it’s meditative and reflective. All these activities, and possibly more, are what I want to focus on rather than having a job in the strict sense. I can even see myself not returning to professional work in my second half of life.

Perhaps that’s what my friend was envying me for: the freedom of choosing what I want to do and not be tied down to a job, a mortgage, a car payment, and a trophy wife. Not that there’s anything wrong with any of these things, but I know they are not for me.

Freedom. Choice. Independence. I feel I’ve reached the end of the road and I can do whatever I want. I’ve dreamed about this moment for a long time and today I’ve realized it. I’ve escaped from the hamster wheel.

This is a thanks to my parents and my grandma, to the teachers who taught me and some I had to forget, to the jobs I’ve had and left, to the many books that gave me knowledge and wisdom, and to all my past experiences that let me to today. I’m grateful for the past ~40 years. The next 40+ more years will be much better I hope. So cheers to life: good health, wealth, friends, and freedom!