For most of us, there is a positive correlation between age and money. By that, I mean as we age, we tend to earn more. Some quicker than others. Some manage to accumulate wealth along the way. Others spend at an ever-increasing rate, leaving it until it is too late to plan for their retirement and having to work much longer than they had hoped.
Time, on the other hand, is different. The older we get, the more time poor we become. Time poor, both in its absolute and its relative term. We all remember how slow time passed when we were younger. The summer holidays felt like ages. As we got older, our busy lives have made the weeks, months and years feel like they pass by much quicker. Of course, time has not sped up. A day still contains 24 hours. It’s only our perception of it. As a result, the one thing you will learn about me is that apart from my family, time is the most valuable thing to me. I still find my house, car or other material possessions to be useful because they serve a purpose, but they are not even comparable to how precious time is. The journey towards Finacial Independence (FI) will ultimately allow me to create enough passive income to have work become optional. In other words, financial independence means I could retire much younger if I wanted to (late 30s, early 40s perhaps?), but that’s only the start of what would be possible.
“The days are long, but the years are short.” – Gretchen Rubin
FI requires an honest reflection about yourself to determine what it is you value most in life. Do you value your time or your possessions? Do you want to go with the crowd or do your own thing? Do you want the potential stability of a monthly income a job provides, or to have flexibility in life by creating your own passive income stream? There is no right or wrong answer to this and there is definitely no judgement here. Mrs. CC and I have spoken on many occasions how we envy people who have the personality to live a care-free life. We look at these people and admire their ability to live without having to constantly think and plan ahead. So again, there is no judgement here if the path to FI is not for you to embark on now, or even ever. If there are any hints of judgement, then it is not my intention and perhaps I have I not written down my thoughts well enough.
I am not a professional writer. I am here mainly to document our journey for our children and share it with anyone else who is interested. If there is anything that could relate to Policing I will make mention in case there are any other Officers out there reading. As you continue on this site, you will realise that being a Police Officer places you in a good position to achieve FI. There are other occupations which are equally or even better positioned to allow someone to achieve FI. This site will help you make the most of whatever position you’re in. I hope to demonstrate that if it’s possible with my relatively mediocre salary as a Police Officer, then it is possible for most other jobs out there. In case you’re wondering, I am not earning six figures and I am not a Senior Officer. I work on frontline policing.
Growing up, society expects the following from us: study hard and get a career. Yet, this notion of a ‘career’ comes at a hefty price. We are increasingly selling more of our limited time and brain-washed through the media, advertisements and poor financial education that the monetary value and the number of material possessions we have are signs of our success. We live in a time of abundance and waste. Our parents or grandparents used to think about how they can ensure there is a roof over our heads and where the next meal will come from. Nowadays, for most of us in a developed country, it is about how we can pay for that new car, have that bigger house or buy that thing we don’t really need. Throw in consumer debt, coupled with lifestyle inflation or ‘lifestyle creep’ (where your spending increases as your income increases), then what we have effectively done is chained ourselves to our jobs until such a time when we can finally ‘retire’.
Everyone will reach FI. That I can guarantee it. Some reach it only once they die; because lets face it, who needs money once we’re dead (assuming you don’t want to leave a legacy to your family). Others would reach it at ‘retirement’. If we’re lucky, we can retire in our 60s still with a bit of energy and health left in us. What many people don’t know is that it is absolutely possible to become financially independent much younger and not have to take the gamble of whether or not you will still be healthy.
Increasingly, I am reading about and seeing people working until they are much older. Worse, ‘retire’ only to have to take on a different form of work (normally lower pay) because they realise that their pension doesn’t quite cover the lifestyle they had become accustomed to. It’s so strange and sad when I see this happen. To retire with all the wealth of knowledge and experience, only to be compensated less for your time. It makes no logical sense to me at all. In fact, it’s absolutely insane. As you age, surely your time should be more valuable since you have less of it left. It is the basic economic rule of scarcity. Ah, but wait. The traditional rule of supply and demand does not function here. That’s because you’re replaceable. The fact that you have less time to live is not a factor in how much you’re worth. You are but a number, in a world that is getting over-populated and where traditional jobs may no longer exist due to automation and global outsourcing. If you choose to work to keep yourself busy, your mind active or to help society, then that’s a different proposition altogether. However, I would bet that many who work post-retirement are not doing it out of choice.
I honestly believe people fall into this mindset of under-valuing their time due to a poor understanding of how to grow wealth. This is where the education system from a very young age has let us all down. At work, I have become accustomed to how little Police Officers understand how money really works. It came as a complete shock for me to hear during one of our well-being talks that Police Officers are one of the highest users of payday loans. I was not able to find a source for this statistic and the closest thing I could find was a poll conducted by a loan comparison site. However, I have witnessed first-hand how many Police Officers live for their next payday and know very little about their own pensions, let alone how to invest or accumulate wealth. So anecdotally, I can see why a large proportion of Police Officers use payday loans and are so bad with money.
No Work Hate Here
Now, let me be clear. This blog is not a hate work blog, nor is it against finding a fulfilling lifelong career. It is also not about retiring young so that you can sit on the beach drinking cocktails for the rest of your life. Which, if you follow what I explain on this site, then it’s absolutely possible. However, believe me, life will get unbearably boring pretty quickly if you start doing that in your 30s for the next 60 years!
Even if you love your job (just as much as the cop above), FI will give you a backup plan, one that will give you as many backup plans as you want. It is the ultimate backup plan. I know very few people who love their job. I know some who enjoy their job, but most are either apathetic about it or just accepts that it is a means to an end. Bills to pay for and all that jazz. Here’s a hint to know if you love your job or not. If you look forward to your days off and find yourself not jumping for joy making your way to work every day, through the rain, the traffic, and not thinking to yourself that at the end of the rainbow is where your office will be, where a single ray of sunlight is glistening on your sweat-stained office chair, then I’m sorry to break it to you, but you don’t love your job. In which case, to have a job that gives you a sense of security only so you can have half a life is just plain stupid. Cashflow Cop is about placing ourselves in a position to choose to work if we want to. This is because we see value in it, not because we need to and have no choice in the matter. I know for sure that no matter how much time I am able to free up once I achieve FI, I will still wish for more time to spend with my loved ones towards my final days.
By becoming financially educated, I want to show that FI is possible for even the most modest of public servant salaries. You really don’t need to be earning a six-figure salary for this to be achievable, but you do need a stable and above average income to achieve FI extremely early (unless you’re happy eating beans on toast indefinitely). Even if you are considered to be a low-income family, the lessons to achieve FI such as budgeting and maximising income will still stand you in good stead. By changing my mindset and my relationship with money, I can now see the opportunities FI provides. It gives me the flexibility to pursue other more valuable things in my life by potentially reducing the amount of time I spend working. This will free up extra decades to provide me with more time to spend with family, friends or explore the world whilst I am still relatively young and healthy.
FI and Early Retirement are two separate things, although the term ‘FIRE’ (Financial Independence Retire Early) can sometimes confuse this. FI does not have to lead to Early Retirement. However, if Early Retirement is your goal, then FI is a must. I may end up continuing to work once I reach FI. That’s because I can still see the value I am providing as a Police Officer. Wouldn’t it be great though to know that I had control of my life and made that decision myself, rather than feel trapped and continue working out of necessity?
The blog will share with you what I have learnt so far and document our unfiltered journey, its ups and its downs. This will allow you to make an informed decision about whether or not this is for you. There is nothing wrong with deciding that this is not for you, so long as you are aware it exists. I wish someone had told me about FI when I was much younger! I have started to lay the foundations for a Second Generation FI. I’ve invested money for my niece and nephew. My son has his own investment account and a growing pension pot created as soon as he was born. Imagine the compound interest he will receive by the time he decides to withdraw money from it! Apart from a loving family, I think one of the best gifts to give my children is the ability to become financially independent. Don’t confuse this with simply giving them money without providing them with the foundations to grow their wealth, because that is a surefire way of losing your money. I want to show my children that there is another way to live life.
It’s Your Life, Your Choice
“You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you how deep the rabbit hole goes.” (The Matrix, 1999)
Note: by clicking to leave, it will take you to one of my first favourite personal finance book. Hey, it’s worth one last try to see if you can get the same value that I did and see what started me on this path!