LIVE LIFE "SEMI-HARD"
The Value of FREEDOM – Where 99.9% of financial advisors completely fail in the proper valuation of your financial freedom.
What is freedom? The ability to do what you want when you want? The opportunity to make choices in your life as you see fit? How about the idea that you can live your life while not being under the umbrella of another power? Here are two definitions from the Merriam-Webster Dictionary online: 1. Liberation from slavery or from the power of another. 2. The quality or state of being exempt or released from something onerous.
Men and Women throughout history have fought and died for their freedom and when we think about our retirement we sort of have that same feeling about it. I’ll be free. Free to sleep when I want, free of my boss and my job, free to make my own schedule and do what I want when I want. What is that worth? What is the VALUE of that freedom? If you had to place a dollar value on your financial freedom it would be pretty high. For most of us it has a higher value than nearly everything else in my life except my family and my creator.
Time to get to the point……….
Financial Advice regarding retirement is based on and has always been based on one foundational principle – how to maximize your financial worth and personal wealth in as short a period of time possible to allow you to retire. This formula, this basis and foundation is built on a cornerstone assumption that your freedom and happiness will be earned after working 80% of your adult life. It assumes your life path is a given. It assumes you will work very hard to earn as much as possible, save as much as possible, invest as wisely as possible and hopefully have enough so once you are 10 or 15 years from death you can enjoy those remaining years of our life as your body falls apart. Maybe you will have enough health to play a little tennis, or walk on the beach or go fishing for a few years at least…….maybe…….
They base everything on you being oppressed and living under the thumb of retirement savings for 80% of your adult life.
One of the life expenses that tends to create oppression over our lives is the simple cost of living and the biggest expense in that is your rent or mortgage. But if we break away from the financial advisors cornerstone and decide we could be…would be happier living a much longer period of our life with more freedom then one place to adjust our foundational thought about living costs is in how we value the cost of rent or the cost of a mortgage. Most of us are a slave to the cost of rent, or a slave to the cost of a mortgage. What gets us free from that? How about home ownership with no debt? That gets us a lot closer. Yes you still have taxes and upkeep but a home with no mortgage? That is freedom at a whole new level. Now financial advisors will correctly tell you it is a bad idea to pay off your mortgage if your interest rate is low and you are better to invest extra money to save for retirement. That is of course completely correct if you are buying their cornerstone plan and foundation of maximizing worth in that last 20% of your life and giving up your freedom the other 80%.
The alternative is to get to a debt free point. Pay off that mortgage and be released from the landlord or the bank who currently OWNS YOU! There are lots of ways to attack your living expenses and we will get to those in other posts. I am simply trying in this post to open the idea that yes you wont have as much saved if you pay off your mortgage faster but the opportunity to be free is hands down worth more VALUE than those extra dollars in your IRA. Here’s a hypothetical example: