Roughly speaking, the average human being will live approximately 80 years in most developed countries.
At a very basic level, you can divide up those 80 years into three (3) primary phases of life*:
- Preparation Phase / Years 0-20
- Working Phase / Years 20-70
- Retirement Phase / Years 70-80
* I realize that this is a generalization, there are of course plenty of exceptions
Let’s examine each of these phases briefly…
Excluding childhood, and the fun that comes along with it (hopefully), this is the phase in people’s lives where they begin to prepare for adulthood. This may include going to college, picking up a vocation, and/or learning some other skill to prepare them for the future.
Generally, this phase does not involve making any money, and often involves accumulating some (student Loan) debt. Most people will spend approximately 20 years in this phase.
This is typically the longest phase in most people’s lives. It generally involves dedicating one’s life to a career (or multiple careers), working odd jobs, building a business, applying a trade, and so on. For most people this will be an all consuming period in their life, where they are constantly battling the forces of work commitments and personal ones, with work commitments often taking precedence.
This is the final phase that many look forward to, or at least that’s what they tell themselves during the working phase. Unfortunately many people get to this phase in poor shape, both financially, physically and/or mentally. Those that were wise enough, or had the means, to have saved money for a comfortable retirement will be able to enjoy the fruits of their labor, albeit for a relatively short period of time. Most others will find retirement to be well below their expectations, and certainly not stress free.
The retirement phase will generally last 10 years, the quality of which will be greatly dependent on past decisions and choices.
If the above phases are sounding a bit grim, that’s because they are. At least to me. This general philosophy of trading 50 high quality years for 10 low quality ones seems like a bad deal, certainly for the individual sacrificing their prime years. Don’t get me wrong, I am not advocating for a poor work ethic, or arguing against the concept of hard work. I’m simply pointing out that this 5:1 ratio of sacrificing 5 prime years to earn 1 low quality retirement year, is a poor proposition.
I propose introducing a new phase in life, and I choose to call it the Freedom Phase. This phase squeezes in between the working and retirement phases. It can last as long as one desires, or as long as is practically possible given someone’s individual circumstances.
The philosophy and inspiration behind Max Your Freedom is that we should all aim to maximize the length of time spent in this phase of life.
This phase in life can mean different things to different people. It can mean early retirement during your prime years. It can mean working on your own terms. It can mean volunteering full time or part time. It can mean traveling full time or part time. At its essence, it means you get to choose how your time is spent, with no external factors influencing your decisions. The concept is quite simple, however the execution can be a bit more demanding.
We effectively want to convert a portion of those 50 traditional working years, into freedom years. We also want to maximize the number of freedom years, while striking the right balance between effort and reward.
I am personally targeting 25 freedom years. This would end up giving me a healthy ratio of 1:1 on average. Overall, I’m willing to invest one average year in the hamster wheel for a year of real freedom. This gives me roughly 5 years to make the transition. Thankfully I’m at a point in my career where each additional year invested yields >1 freedom years, so the next 5 years will really accelerate the transition.
To achieve this target, I’ve put my expenses through a deep analysis, and dialed-in my lifestyle. I also eliminated all of my debt (including mortgage, and student loans), to start freeing up some cash for both investing and enjoying life along the way. I’m now hyper-focused on accumulating as many Freedom Years as possible!
Readers, are you investing in some Freedom Years? What do you think is a healthy ratio of work years vs. financial independence years? How many Freedom Years are you aiming for? Share your thoughts and comments below (even if you’re new to this post)!