Our Why FI10 min read

(no. 001)

FI

/fʌe/fie/

adjective

First of all, Happy New Year!  The title, “Our Why FI” is not a typo and does not mean I am about to write a review about our Wi-Fi device.  In this inaugural post, I will briefly explain what Financial Independence means to me before summarising my journey so far and then finishing off with what I ultimately wish to achieve from it all.

You do not need to be a Detective to immediately tell as soon as you arrive at this blog that I have some sort of connection with law enforcement.  It is difficult to complete a conversation in the Police Service without an acronym being thrown in.  Here is another one add to your list: FI (Financial Independence).  There is another acronym you need to be aware of, FIRE (Financial Independence Retire Early).  I can’t help but feel that many catchy acronyms are decided upon first and then the words made to fit them.  This is where I feel that the term FIRE has done more harm to the FI movement than good because of the outdated view of the word retirement most people have in their minds.  Retirement does not have to mean lounge around all day and do nothing.  In any case, this blog is not just about retiring early.  It is about setting yourself up financially to open up doors, giving you more choices, gaining control and providing you with flexibility in how you live your life.  You could retire early, but FI means much more than that and the possibilities are endless.

Our life clock starts ticking as soon as we’re born.  We can’t stop it, but we can choose how we use our time.  Understanding how to reach FI sooner will allow us to gain years or even decades of it back.

The definition of FI is somewhat difficult to pin down.  It ranges from simply being debt free all the way to having enough money to sustain the lifestyle you want indefinitely, or anything in between.  FI to me means:

Having sufficient passive income to provide the flexibility to spend more time pursuing what I value most without worrying about needing to work.

From Pocket Money to First Job

When I was younger, I was really good at saving up my lunch and birthday money.  However, when I turned 16 and got my first part-time job in a restaurant, I sort of lost my way.  Being that young and making about £3.80 an hour was a lot of money to me!  I remember only getting £2 a day for lunch.  I say only because it is relative to what I am used to now as an adult.  £2 was a lot of money to my parents, as we (my siblings and I) grew up in a low-income family, living in a council or housing association estate.  If I wanted to keep that as pocket money, it meant I had to skip lunch.  The habit of skipping meals to save a bit of money has stuck with me and is something my wife tells me off about.  So, the £3.80 per hour as my first job was at least a fourteen-fold pay rise to me.  I was loving it. I spent my money on computer games, clothes, gifts and going to coffee shops to study.  I remember saving my money months in advance just to get family presents for Christmas.  Then I turned 18.  My £3.80 an hour was somewhere in the region of £7 an hour now.  With adulthood comes more temptation: alcohol, nights out clubbing and cars.  I didn’t know it at the time, but I had succumbed to lifestyle inflation and I had barely finished puberty.

University Life

My journey through University did not change my ways.  I took on student loans and maxed out credit cards to pay for my tuition fees, accommodation and living expenses.  I continued working part-time, but rather than use that income to reduce the amount of debt I was taking on, I used the extra money to go on holiday and buy expensive electrical goods.  Halfway through my three-year course, I took finance related modules and it interested me enough that I started to save up enough money to pay for a Masters Degree in Finance and Investment at a Russell Group University.  This would be my one redeeming act throughout early adulthood life.  I was able to pursue another degree without taking on more debt.  Now, you may be thinking, what is someone with two degrees in Finance doing as a Police Officer?  Was I crazy to have given up a potentially lucrative career?  More importantly, did the extra degree provide a good return on investment compared to just paying down my student loan?  Those are big topics for another day.

In “The Job”

After my studies, I applied to be a Police Officer and before I knew it, I’ve been in ‘the job’ for over ten years now.  During my time with the Police so far, I’ve worked in various departments and have always remained at the front line of Policing.  I started out my probationary days in uniform on foot, pedal bike and car patrol.  I then moved to a more investigative role, successfully passing all the requirements to gain my Detective accreditation.  I am currently a Detective Sergeant.  Throughout all this, my interest in finance continued though.  However, rather than reading academic books about complex mathematical concepts to understand risk and stock valuations; I was now reading far more practical books.  A turning point for me was reading the book, The Richest Man in Babylon by George Samuel Clason.

I then began to read blogs about personal finance and came across terms like: “Financial Independence”, “Savings Rate”, “Passive Income”, “Safe Withdrawal Rate”, “Early Retirement” and even “Extreme Early Retirement”.  These were concepts not even touched upon in passing during my studies.  My finance degrees were totally worth it (insert sarcasm emoji here).  This was the point of no return for me.  The floodgates had opened and I began to binge read blogs and books after being on duty.  I listened to personal finance related podcasts during my commutes to work.  FI was all I could think about.

Mrs. CC

When I met my wife (Mrs. CC), I lucked out.  Not only was she sensible with money, but we would come to realise that we both had the same values and goals in life.  With our first child born, it has only made us more focused.  We want to be able to reach Financial Independence by the time I am 40, which is in seven years time and by 2025.  The reason is that we want to be able to have more time together as a family, travel the world, do charity work, really be able to teach our children and having the energy to be present.

At the moment, we both work full time.  With Mrs. CC being in the military, she has little to no say in where she gets posted every few years.  With me being in the Police, it is time-consuming and not straightforward to continually transfer Police Forces to be close to where Mrs. CC is posted.  As a result, not only I am working long hours (over time as a Detective is a norm) but also commuting quite a bit.  When I get to spend time at home, there are times when I am so tired, my mind is distracted and I struggle to enjoy the moment.  I am either exhausted or thinking about a case at work.

To me, FI is the answer.  That is not to say I will definitely quit being a Police Officer or that Mrs. CC will stop being a Nurse, but the option would be there to drastically reduce our hours.  Who knows what the future holds.  Although I enjoy my job at the moment, who is to say I will not hate it in 10 years or unforeseen changes in personal circumstances would mean that my family needs me to be there with them full time.  Although there is a possibility that I may choose to keep working once I reach FI, isn’t it great to know I could take whatever opportunity which presents itself without having to worry about how much it pays?  FI will provide space for me to manoeuvre myself in or out of the working environment based on my own terms.  It will give me the ability to do what is best for my family as our situation changes.

The Creation of Cashflow Cop

Having followed the FI community for a number of years now, I wanted to write down my own thoughts on the subject.  I am not a programmer and have self-taught everything I need to know about creating this website.  If you find any bugs or have any feedback, please let me know.  Wordpress themes make things so much easier, but I am still learning.  It continues to be annoying every time I break my site as a result of messing around with a code or a setting.

Cashflow Cop is not here to tell anyone how to live their lives or spend their money.  The blog is here to share with you what I have learnt so far and document our unfiltered journey toward FI; the difficulties we face and the excitement we feel.  If we don’t reach FI, then you will learn where we went wrong and perhaps even be able to avoid repeating our mistakes.  I hope the site will allow you to make an informed decision about whether or not this is for you.  There is nothing wrong with deciding that this path would not suit you.  I will admit, it isn’t for everyone.  In fact, it cannot and must not be for everyone.  If every adult became FI early and choose to no longer work, then where are all the taxes to pay for our vital services going to come from?  Who is going to fill all the job vacancies?  On the other hand, maybe the growing FI movement is a good thing if the predictions about AI and robots resulting in fewer jobs become true.  It’s also definitely better for the planet if we all consumed less.

I will have accomplished what I set out to achieve so long as you leave here knowing three things about reaching FI early: firstly, it exists; secondly, its potential; and finally it’s achievable.  It is so important to discover your why.  We try hard to not allow FI be our final destination.  We see it as a gateway which opens up endless possibilities to whatever we want to pursue in life as a family together.  The journey in itself is something which brings us closer together as we learn more about ourselves and of each other.  I often talk to Mrs. CC about what we value in life and what we hope to achieve.  This helps to make our relationship stronger and see if our goals continue to align.

“No one imagines that a symphony is supposed to improve as it goes along, or that the whole object of playing is to reach the finale. The point of music is discovered in every moment of playing and listening to it. It is the same, I feel, with the greater part of our lives, and if we are unduly absorbed in improving them we may forget altogether to live them.” – Alan W. Watts

Being a husband and now a father has only reinforced to me the importance of achieving early financial independence.  Ultimately, it boils down to having an abundance of quality time with those I care about.

So, what’s your ‘why FI’?

Further Reading

Reaching FI on Blues

Our FI Plan

Living Optimistically Through FI