Unique Advantage Monthly Client Email – November 6, 2023

By Kyle J Christensen, Principles-Based Planner and Founder

The goal is Freedom not Retirement.

Freedom: the absence of necessity, coercion, or constraint in choice or action.  Liberation from slavery or restraint from the power of another.

Retirement: withdrawal from one’s position or occupation or from active working life.  The age at which one normally retires.  A place of seclusion.  

(definitions from Merriam-Webster)

The title of this article might have more appropriately been “Your WHY of Financial Freedom”.  Because ultimately, the reason to become financially free is unique to each person.  

Knowing your WHY, defining it and making it clear, is the first step to achieving it.  The reason is that something that is ambiguous is generally not sufficiently motivating to cause people to take serious and consistent action. Something that isn’t clear, is difficult to measure or take steps towards.  Just saying, “I want to be financially free”, is like saying “I want to travel somewhere.”  Until you make it clear, where you are traveling, why you want to go there, and start laying out how you’re going to achieve it, you aren’t going anywhere.

Ambiguity is defined as being uncertain.  Synonyms for ambiguity are darkness, mysteriousness, obliqueness.  Lack of clarity is a killer for any goal in work and life.  The same is true when it comes to money.  

Why do you need to be clear?  What’s clear is what is motivating.  When you are hungry, you clearly want to eat.  When you’re hungry, you start thinking about what you want to eat (specific), and how you’re going to get it (including the time frame you have to accomplish it).  In fact, sometimes you get so focused on solving the problem of hunger, that you can’t think about or focus on anything else.  When you’re hungry, you have emotional attachment to the objective.  In fact, some people even get ornery (“hangry”) when they are in a state of hunger too long.  When a person’s hungry, they usually don’t let many things get in the way between them and their objective of eating (that’s probably more true for men than women – haha).  

Being clear about your WHY improves your motivation to achieve it.  Why do you need to be motivated?  Because the things that are motivating are what you will accomplish.  Everything else, will be left undone or will only get a half-hearted attempt.  Additionally, financial institutions and the entire retail market is trying to get you to give them your money.  Their constantly tempting you to spend everything you have, everything you earn.  I have a bumper sticker that encapsulates what happens to most people and their money: “Money talks.  Mine always says goodbye.” (No, I didn’t put it on my car.)

There are two primary ways we are motivated to do something.  There are Positive Reinforcers and Negative Reinforcers.  Throughout our lives we are motivated by both for different things.  For example, no one (that I know of) is motivated to complete their tax return and pay their taxes because they view some amazing benefit coming from it (other than possibly getting their money back that they worked for and earned throughout the previous year, and for some reason allowed the IRS to hold onto during that time).  They generally do it because they are avoiding a negative outcome (penalties on late payment of taxes or possibly even jail time).  That’s a Negative Reinforcer.  

By contrast, a person may choose to exercise regularly because they want to look attractive to their spouse.  Or they may want to prepare for an upcoming iron man (which for some is a lifelong dream).  Accomplishing something great.  Becoming something better.  Those are Positive Reinforcers.  I personally lost a bunch of weight (over 40 pounds) in 2014, because I wanted to be able to dunk a basketball again.  A pretty insignificant objective in the whole scheme of life, but it was sufficiently motivating for me.  And yes, I was able to dunk a basketball again (at the age of 38 – in fact, the last time I was able to dunk a basketball was 2018, at the age of 42).  

In the achievement of financial freedom you should think of the benefits (the Positive Reinforcers) and the avoidance of problems (the Negative Reinforcers) that will come with success in your efforts.  The clearer those things are to you, the more meaningful and the more motivating. 

To help you in this effort, write down your answers to these questions (these are not all-encompassing, so please come up with your own questions too):

Positive Reinforcers

• What will you do with your time when you don’t have to work for money anymore?
• Who’s lives will you benefit?  How will they benefit?
• What hobbies and interests will you do more of?
• What important charities or other organizations will benefit from your time and money?  What impacts do those charities and organizations have on people’s lives? 
• How will your family benefit?  Your marriage?  The lives of your children and/or grandchildren?  
• What will happen to your level of stress in life?  How will having less financial stress help you expand not just your lifespan but also your “healthspan” (the length of time in your life that you are healthy and physically active)?  

Negative Reinforcers

• What negative consequences will you avoid by being financially free?  
• How important is it to you to not become dependent on family, charities, and government?
• How will you accomplish what is most important to you if you still have to work for money?
• What will you have to sacrifice if you become dependent on Social Security as a major source of your income in your old age?
• Who’s lives will be affected by you not being financially independent?
• What hobbies and interests will take a backseat to working for money?
• How will working for money the rest of your healthy life affect your happiness and satisfaction/fulfillment?  
• What impact will financial stress have on your health over time?

I believe it’s helpful to use both the positive and negative reinforcers to help strengthen your motivation to achieve success in this endeavor.  

At the end of the day, your money will go to what matters most to you (whether you want to admit that or not).  If consumerism is what you want more than financial freedom, consumerism will win out.  If current lifestyle is what is most important to you, then that’s what will win out.  If financial freedom is what you really want, then financial freedom will win out.

One thing to keep in mind is that money, like gravity, imposes itself in our lives, whether we want it to or not.  Similar to eating bad food and not exercising, we can get away with a poor money mindset for a while.  But, eventually it catches up.  Eventually, as they say, “you have to pay the piper”.  Most people follow the path of least resistance.  This is good for water, but bad for almost everything else.  For most things that we want in life, The Obstacle is the Way (this is a great book that highly recommend). 

It’s much better to strive for financial freedom than simply wave the flag of surrender.  Just as good financial principles lead to a predictable outcome, the avoidance and contradiction to those same principles leads to a predictable, and much less desirable outcome.  

The good news is, you are mostly in control and responsible for your financial future, regardless of where you began.  Making your WHY for financial freedom clear will provide you with the motivation necessary to withstand temptations and overcome challenging periods of time.  Having a clear WHY will provide you with sufficient reason to make the necessary temporary sacrifices of the now for a future with more freedom.  Review your WHY often.  Hold yourself accountable to it.  Share it with your Principles-Based Planner so that he or she can help you be accountable to it.  

Financial freedom is the object of Principles-Based Planning.  It is our desire to help you achieve it and remain there.  We know that principles are the path that leads to it.  It’s not products.  It’s not any particular investment.  It’s not any particular strategy.  As Simon Sinek says in his book, Start with WHY, “HOW’s are your values or principles that guide HOW to bring your cause to life.”