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On Independence (The Financial Kind)

Happy Independence Day! As a history buff, and particularly a Civil War buff, I’m fascinated with how celebration of the holiday has evolved over time. Originally, the Continental Congress voted for independence from England on July 2, 1776. According to history.com, John Adams felt so strongly that July 2 was the proper date to celebrate Independence Day that he turned down invitations to appear at July 4 events out of protest. (The Continental Congress chose July 4 to commemorate independence because that was the day it formally adopted our Declaration of Independence.)

After the Civil War, some white southerners chose not to celebrate Independence Day, while northerners used the holiday to celebrate the Union’s victory. Some former slaves used the day to celebrate their freedom. The meaning of Independence Day differed among Americans then, and still does to this day. You may even be surprised to learn that the federal government didn’t make it an official holiday until 1941!

In the financial world, another quest for independence has been gaining momentum, particularly among young people. The “Financial Independence/Retire Early” or FIRE movement gets praise or pushback, depending on whom you ask, for the same reason our nation’s Independence Day has supporters and detractors—in short, “independence” means different things to different people.

The Entrepreneur's Guide to Financial Well-Being

The philosophy of the FIRE movement involves frugal living while saving as much money as possible, so a person (or couple) can stop working and retire well before what we typically think of as retirement age. The concept stems from the principles outlined in the 1992 book, Your Money or Your Life, by Vicki Robin and Joe Dominguez, and recently updated in a new version of the book. (This book is a wonderful general resource for people interested in learning more about money, by the way. I read it many years ago, before I became a financial adviser!)

Some people who have tried this approach have been successful, and a few have written books about it. Meet the Frugalwoods is one such example, and a fun read. Others, such as Mr. Money Mustache, blog about their experiences and have large followings. The FIRE movement is not without its critics, however, as a recent article in Inc. demonstrates.

Define Your Financial Independence

If there’s one thing I know about personal finance, it’s that finance is personal. What works for one person may or may not work for another. That’s why, when AMDG Financial works with clients to create a plan for their future, we use our Fiduciary GPSSM process to focus on your situation, goals, and interests and personalize a plan to help you live the life you want.

To me, it’s not about whether the FIRE movement or any other saving scheme works—it’s about whether it works for you. Working with an interpretive adviser (one who considers all of the options and recommends the best one for you) is like working with a seasoned travel agent—one who has flown on all the airlines, stayed at the hotels, eaten at the restaurants, and knows how to help you achieve the best experience on your terms.

One positive aspect of the FIRE movement, however, is that it helps to start the conversation about what financial independence means to you. If you haven’t thought about it yet, perhaps Independence Day would be an auspicious day to start! As always, if we can be of assistance, please let us know. You can click here to begin exploring the opportunity of working with AMDG Financial, or contact us at 734-737-0866. We’d be glad to support you on your journey to financial independence! 

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