Anyone who reads the news knows that money equals power.
We’ve all heard about billion-dollar companies that don’t pay a cent in taxes, the super-wealthy who’re casually dropping US$5.5bil for a 4-minute joyride to space and back, high-profile thieves who never get caught because well, they can afford not to be.
It’s no secret that the more money you have, the more you can sway and persuade, the easier it is for you to get richer and the more indiscretions you can get away with.
But what about the rest of us regular Janes and Joes?
What would having more money than what we need for our everyday living look like for us beyond being able to pay for food, shelter, clothes, transportation and the occasional night out?
What would it feel like?
You don’t need to have a billion big ones to feel empowered, but having a healthy rainy day-FU stash tucked safely away in the bank can serve as a much-needed cushion when life unexpectedly pulls the rug from under your feet (and it usually will, at some point).
So forget about them shoes, bags and fancy cars. Here’s the really good stuff that a healthy stash of cash can buy you:
The power to say “No” to bad romantic partnerships.
I’ve heard too many personal accounts from friends, colleagues and acquaintances about this one to ignore it, and I shouldn’t.
They include accounts of people who forbid their partners from having a bank account or any money of their own; people in abusive marriages who feel trapped because they haven’t worked in over 10 years and their abuser is the family’s sole breadwinner; people who just plain old abuse their partner’s financial position because they can.
Being 100% dependent on a partner who is financially abusive (or any kind of abusive) is a situation no one should have to be in.
Earning your own cash and not being financially dependent on someone else will give you the confidence and resources you need to walk out of situations like these so you can move on in a healthier direction.
The ability to walk away from toxic work environments.
If you’ve been working for awhile, you’ve probably encountered one or two of these.
Having a stash of FU cash tucked away gives you the courage to let your boss know that he can’t bully you into doing something unethical.
It compels you stand up to a supervisor who’s sexually harassing or constantly verbally abusive towards you without having to worry about the consequences.
It lets you know that it’s OK to not want to work in a hostile, fear- and politics-driven environment.
It tells you that you’ll be OK if you’re let go unexpectedly.
No amount of shoes, clothes or cars can give you the peace of mind that comes with having a healthy bank account balance.
It won’t protect you from the harshness of life, but when faced with a difficult work situation, having FU money in the bank certainly makes things easier than not having it.
The freedom to leave unhealthy living situations.
I figured out pretty early on that being able to choose who I live with is very important to me.
And so should I choose to move to my own place and for some reason, get sick of the party-crazy, binge-drinking housemate who’s constantly stealing my food from the fridge, I can ask them to leave without having to worry about covering the rent on my own.
The resilience to recover from unexpected financial setbacks.
These can run the gamut from unexpected car repairs and medical bills (for yourself or your pet) to legal fees from getting a divorce.
Whatever the reason, they tend to hit you without warning and in significant amounts.
The healthier your bank balance is, the more quickly you’ll be able to bounce back from these financial setbacks and get on with your life.
Space to breathe, think, dream or just focus.
Ever feel like taking a break from everything just so you can have the mental space you need to reassess, recalibrate and plan your next moves?
I have, and having this option available to me when I need or want it the most without having to worry about how I’m going to pay the bills is one of my biggest motivations to reach FI.
Saving and investing aggressively has allowed me to gradually build up a healthy stream of passive income from a combination of stock dividends, unit trust fund payouts and fixed deposit interest.
But I’m not done with the building just yet, and maybe I’ll choose to keep building way past FI simply because it’s challenging and fun.
To me, achieving financial independence is freedom and the key to being able to choose my own path in life, and that’s the best kind of power money can buy.
Recommended Tools & Resources
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THE MILLIONAIRE NEXT DOOR by Thomas J. Stanley and William D. Danko
This is the very first book I ever read about money, and one that opened my eyes to what it really means to be wealthy and how the true rich (ie people who have a lot of money and are smart with it) make, manage and use the green stuff.
YOUR MONEY OR YOUR LIFE by Vicki Robin
I consider this mandatory reading for everyone, no matter where you are on your financial journey. If you’ve got questions about how to develop good habits around tricky subjects like debt, earning, spending and your relationship with money, this book’s got the answers.
THE 4-HOUR WORK WEEK by Timothy Ferriss
This isn’t a personal finance book per se, but it is about making money in ways that have nothing to do with working a 9-5 job and introduced me to the idea of mini retirements. If lifesyle design is your thing, this is a must read.
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