Weekend Reading (May 27-28) 2022
It's Time For Us To Think Again—The 7 Levels of Financial Freedom—My Coast FI Story and Upcoming Webinar—The Difference Between Being Rich & Wealthy—And Embracing Tension.
The shooting in Uvalde is absolutely devastating.
I want to share some thoughts before we dive into the rest of the roll-up, so brace yourself, I’m starting heavy but plan to finish light.
It feels like our country is stuck in a loop. Every time there’s a mass shooting we have the same argument on repeat—the left says guns are the problem while the right says our mental health is to blame. We argue back and forth until the event fades into the past—rinse and repeat.
But I think there’s one thing we can all agree on: the status quo is broken.
Our inaction is crippling. We need to do better for the youth of our nation. We need to think about the kids—they are bearing the burden of our inability to act.
If we have a problem to fix, why don't we come at it from all sides? What is to stop us from increasing mental health services, awareness, facilities, and accessibility while also implementing tighter gun restrictions?
Why do we have a system where most health insurance providers refuse to cover any mental health services? Why do we have a country where you can buy a gun with little to no screening, at an age where your prefrontal cortex—the area responsible for skills like planning, prioritizing, and controlling impulses—isn’t done developing? What are we doing?
We need to rethink our beliefs and challenge our dogmas. The worst thing we can do is continue showing up to these discussions with our mouths open and our ears closed.
I’m reading a book right now called Think Again: The Power of Knowing What You Don’t Know, by NYT best-selling author Adam Grant, and it feels like something we all need to hear.
The basis of the book is that our most important skill is the ability to rethink and unlearn. We should view disagreements as an opportunity to learn, rather than a threat to our egos. We should seek out ideas that make us think hard instead of opinions that make us feel good. And most of all, we should take action.
Here’s what we can do:
Remember the young victims of the Uvalde school shooting. Listen to their families describe who they were and the lives they lived.
Take a look at the responses of every US senator in the wake of the Uvalde shooting. Find your senator(s), and read their response(s). What do you think? Do you agree, do you disagree? Were they silent?
Tell them how you feel. Here is how to contact your senator.
Okay, taking a breath and shifting gears.
This week I want to share a couple of things I wrote, as well as some work from best-selling personal finance author Morgan Housel and wrap up with some thoughts on parenting from the Daily Dad.
On Financial Freedom
Your Ultimate Guide to The 7 Levels of Financial Freedom, from a Self-Made Millionaire.
The Millennial Money Man believes that money is infinite, but time is not.
By Anders Skagerberg, CFP®
Big things become small if you can break them down into component parts.
That's the goal here—7 Levels of Financial Freedom, one after the next. Remember, good things take time and we often overestimate what we can do in a year, and underestimate what we can do in 10.
Here are the 7 Levels of Financial Freedom: 👇 👇 👇 👇 👇
Clarity: you figure out where you are financially and where you want to go.
Self-sufficiency: you’ve moved out of your mom and dad’s and can cover your expenses.
Breathing Room: You’re saving some money and no longer living paycheck-to-paycheck.
Stability: You have no ‘bad’ debt and six months’ worth of expenses for emergencies.
Flexibility: You have at least two years of expenses saved. You could take a year off work.
Financial Independence: You can live off the income your investments generate.
Abundant Wealth: Money isn’t a concern. You have more than you’ll ever need.”
Each level comes with its own unique set of upsides and downsides on the journey to financial freedom. This article is long from start to finish, but feel free to pop into the specific section that applies to you and your financial independence journey.
My Coast FI Story: Why I Chose to Deliberately Slow Down My Path to Financial Independence
By Anders Skagerberg, CFP®
I'll be joining The Fioneers for a webinar next week to discuss the ins and outs of coast FI.
Presenting always gives me a lot of nervous energy, but I find that it helps if I can jot my thoughts down and get clear about what I want to say.
So, I went ahead and wrote down the ins and outs of my coast FI story, answering the following:
When did I first learn about Coast FI?
What did I do after learning about Coast FI?
What does my career structure look like now? What does that enable me to do with my time?
How do the finances work? Am I still saving? Or only covering my actual expenses?
In the end, every decision we make has an impact on the life we get to live. My challenge to you is to get very clear about the decisions you're making, no matter what they might be.
On The Intersection of Money and Happiness
The Rich And The Wealthy
By Morgan Housel
In this article, Morgan Housel touches on the difference between being rich and being wealthy, and how understanding that difference can be essential to our happiness.
Housel tells the story of the Vanderbilt fortune, and how three generations of Vanderbilts were able to wipe out the inflation-adjusted equivalent of roughly $300 billion in just 50 years. Housel says that in his opinion, the Vanderbilts were rich, but far from wealthy. They were playing a game that couldn’t be won—they were a family “of bitter feuds, fragile egos, and impossible expectations.”
Housel writes:
“Part of this topic is knowing the difference between rich and wealthy.
These definitions are my own, but here’s the distinction: Rich means you have cash to buy stuff. Wealth means you have unspent savings and investments that provide some level of intangible and lasting pleasure – independence, autonomy, controlling your time, and doing what you want to do, when you want to do it, with whom you want to do it with, for as long as you want to do it for.
What I find fascinating are stories like the Vanderbilts, who were the richest people on earth but, by my definition, some of the least wealthy. Money to them was less of an asset and more of a social liability, indebting them to a status-chasing life that left most of them seemingly miserable.”
On Parenting
Teach Them About This Tension
By The Daily Dad
Part of being a parent is helping your children understand the complexities of life.
Embracing that complexity is embracing the tension between different thoughts and opinions. The Daily Dad writes:
“Some situations call for this and some for that. Sometimes you have to stand up for yourself…sometimes you have to ignore the provocation. Sometimes you have to take the risk…sometimes you have to have a safer backup plan. Sometimes you need to zoom out…sometimes you need to zoom in.
Life is about this tension, this balance.”
This is what it takes to be a well-rounded person and we owe it to our kids to help them grapple with this tension. We want them to dream big with their heads in the sky, while also staying humble, with their feet on the ground. To both accept and to challenge, to be able to win, but also be able to fail. It’s complicated writes the Daily Dad, “but then again, so is life.”