FI doesn’t lead to freedom if it’s not making you happier. I’ve realized from the last couple of podcast episodes and blog posts of Mad Fientist that in fact, FI can lead you to unhappiness or even depression. Mad Fientist went the ERE way and got into FI in 5 years but he made himself and his wife really unhappy by doing this. He didn’t want to spend a cent, so he isolated himself from other people. He focused only on working to earn more and cutting spendings to reach FI quicker.
Interestingly, even after reaching FI, his life didn’t improve automatically. As he wrote in one of his brilliant blog posts:
"Financial independence isn’t the answer to all your problems and it won’t be the source of all your happiness.
In fact, financial independence is just another shiny object. A new car. The latest smart phone. It’s all the same.
We scoff at normal consumers when they try to find happiness by buying things but are we any better?
I know I wasn’t.
I thought that all my problems would be solved and complete happiness would arrive as soon as I hit my magic number. After all, why wouldn’t it? Once I reached my FI target, I could do whatever I wanted, whenever I wanted. There would be nothing holding me back from true happiness so I decided to do everything I could to get there as quickly as possible.
He also interviewed a guy who developed a depression after reaching FI and went back to work to fix his mental health issues.
He even invited a Ramit Sethi (from “I will teach you to be rich”) to help him to unwind the deeply rooted habits of ultra-frugality because he realized that time is more valuable than money. For example, investing 3 additional hours to find a $10 cheaper ticket flight doesn’t make much sense unless you’re really poor. These 3 hours could be spent on things that make you happier (a walk in nature, playing with your kids, reading, meditating, sports, music, talking to friends, etc, etc).
He has basically built up his savings, but he hasn’t built his life. And FI won’t get you a dream life magically. If you have bad habits that during your free time (weekends, mornings before work and evenings after work) slip you into unproductive in terms of happiness behavior - you’ll have just way more of that post-FI and it will make you even more unhappy than you’ve been before.
Since I experienced a little bit of a burnout (check this forum post and the following discussion) last year, I started thinking more about the meaning of all of this exercise in reaching FI.
I started thinking that FIRE is a means to a more important end - self-improvement, personal development, the good life, happiness, meaning, internal peace, purpose, flourishing, or eudaimonia (as Aristotle was calling it). It’s really important in my opinion to build happiness skills and mental muscles that will allow you to enjoy your early retirement. Otherwise, it will lead you to misery - both the process and the result.
And if your additional savings and investing are not making you a happier person, then down with them. Being rich and depressed is not a better situation than being average but happy.
Alternatively, you can try to re-frame the savings as something positive and contributing to your life, but I think this technique has its limits. Living a hardcore frugal way requires tons of discipline and it’s getting overwhelming and stressful, so eventually you have to slow down and rethink if you don’t want burn out.
I think it’s important to progressively pump up your savings, but it should be balanced with your general well-being and happiness (one example of this for me is a gym membership - it’s expensive but it makes me happier; I just wasn’t able to exercise on my own, it made me miserable). From Ramit Sethi (check out the Mad Fientist podcast interview with him), I learned that it’s important to spend (even extravagantly) on things that make you happy while focusing on savings mercilessly on everything that doesn’t - that might be a longer way to FI, but it’s way more healthy psychologically.