If you're new here, this blog will give you the tools to become financially independent in 5 years on a median salary. The wiki page gives a good summary of the principles of the strategy. The key to success is to run your personal finances much like a business, thinking about assets and inventory and focusing on efficiency and value for money. Not just any business but a business that's flexible, agile, and adaptable. Conversely most consumers run their personal finances like an inflexible money-losing anti-business always in danger of losing their jobs.
Here's almost a thousand online journals from people, who are following the ERE strategy tailored to their particular situation (age, children, location, education, goals, ...). Increasing their savings from the usual 5-15% of their income to tens of thousands of dollars each year or typically 40-80% of their income, many accumulate six-figure net-worths within a few years. Since everybody's situation is different (age, education, location, children, goals, ...) I suggest only spending a brief moment on this blog, which can be thought of as my personal journal, before looking for the crowd's wisdom for your particular situation in the forum journals.

I get a couple of mails a week from people in the same situation as me (enough money, what to do now?) and it strikes me that most people(*) pursue a “the grass is greener” strategy when it comes to free choice. For instance, the entrepreneurs don’t want to start yet another company, the computer scientists want to stop programming, the engineers want to do basic science rather than applied, and so on. More traditionally, people who have been working in the same place all their life want to see the world

(*) Here “most” means those who read this blog and actively comments on it. This may (or may not) involve some selection bias.

It is not that these choices are better. For instance, I can not understand why anyone would desire to jump on an airplane and go to resorts (I have done enough of this already, thank you). Or go back to grad school! Rather I suspect it is a desire to achieve an equilibrium between one’s personal values and one’s life.

Now the problem is that this desire for change can lead to an overreaction. For instance, children who are brought up by very religious parents either tend to be very religious themselves or atheists when they become adults themselves rather than becoming middle of the road agnostics. What was ingrained was the fundamentalism but not the manifestation of it. Hence, the idea that one must believe in something remains unquestioned. The target of believing is simply changed. If faith was a problem in the first place, changing faith to something else  will probably cause the same problem further down the line.

Retirement has the same problem. I know several people who in their “retirement” are doing exactly the same as they did in their old job only with less committees and meetings (everybody seems to hate meetings; I suspect meetings were invented so that managers could justify their higher salaries 😛 ). They are not really retired.

What about the rest of us. How do we avoid getting into the same problems in a new way?

Originally posted 2008-05-10 09:05:06.