Let’s now diverge from the Standard Path and begin walking down the Alternate Path. Over time, this path will give us the option to slip away from the Rat Race and reclaim our life. Although few choose to do so, it’s available to nearly all of us.

Peace of Mind

A small example: I ran the Rat Race for 13 years but took the Alternate Path early on. The reason? Looking back, what drew me to it was being prone to anxiety coupled with a stressful job. In short, I was looking for a way out, and I had two choices – either quit and take a low paying, low stress job and work forever, or stick it out until I was at FI. I chose to stick it out. Maybe it wasn’t the best move but it’s what I did. So, I ignored nearly everyone when it came to money matters, lived modestly, saved and invested an average of 50% of my gross pay, reached FI at age 43, and then walked away from full-time work, mostly because the chronic job stress had built to an unhealthy level, and I need to work on my health and well-being. I also had other things I wanted to do. So now things are different. I won’t bore you with the details of my day-to-day. I simply do things that interest me and that I enjoy. The best part? The former chronic job stress is gone, and there’s no wet blanket of worry to weigh me down and ruin my daily experience. I replaced it with peace of mind instead.

In Return?

In return, I’ve had to forgo owning a house filled with stuff and a new SUV in the garage. I live in a small, quiet place with a few nice things, near the grocery store, library, gym, coffee shop, and local bar. I drive a small, 20-year-old Tacoma. I mostly cook at home but do like going out to lunch for a turkey BLT and iced tea a couple times a week, and spend time with friends, usually at their place or happy hour somewhere. Travel is low key: local or regional travel, hiking and camping, and staying with friends and family. None of this feels like a sacrifice – quite the opposite. My basic needs are met, I have a few creature comforts, some good friends and close family, interesting things to do, and autonomy and peace of mind. These are the things that make me content, happy even, and it doesn’t cost much.

Think for Yourself

Once you’re on the Alternate Path, your friends, family, and colleagues may try and talk you out of it – this is definitely not the Standard Path. Just nod your head and politely ignore them, think for yourself, and show them it’s possible with a few wise choices and making frugality and FI an integral part of your philosophy of life. Head over to www.mrmoneymustache.com and www.jlcollinsnh.com for moral support.

In order to reach FI, you need to enter the Rat Race, play the game, and play it well – but only for a finite period of time. This means working hard while keeping a modest lifestyle and using your job as an engine to reach FI. About the need to run the Rat Race for 15 years? Don’t despair. Knowing it’s only for a finite period of time will provide the drive you’ll need. Living the Standard Path with no end in sight can drain you. It’s entirely different if you only need to work for a set time period and then have the option to slip away.

No Need to Quit Work

If you still enjoy your job once you reach FI, there’s no need to quit. Keep working if you like and pile away the cash or start spending more freely. But keep in mind that things can change in your work world, and quickly. If you reach FI early, you’ll have options if you start to burn out. FI also provides leverage at work. Because you’re financially independent, you’re not afraid to lose your job, so FI allows you to be honest and speak your mind, say no to your boss, pick and choose your projects, work a flexible schedule, go part-time, and generally call your own shots. Your options are nearly limitless when you don’t need the paycheck. This all starts with building a skill set that your employer finds valuable.

Three Things

We can all reach FI at a relatively young age if we’re willing and able to do three things: (1) generate a healthy income by working hard in a practical career; (2) keep our expenses modest; and (3) save and invest a large part of our pay every year (ramp up to an average of 50% or more of gross pay during your career). If you decide to retire early or go out on your own, you’ll also need to get health insurance at HealthCare.gov (the Affordable Care Act exchange).

Reason #2 is usually why it’s so hard for most people to reach FI before they’re 65. Most of us graduate college or trade school and generate a nice income over the course of a career (#1). But then we get married, have kids, and buy a big house in the suburbs with two SUVs in the driveway, a house (and garage) full of stuff, and ever-increasing expenses (the exact opposite of #2). In other words, lifestyle inflation keeps our savings rate at zero, or worse, negative, making #3 impossible.

But everything is a tradeoff. Some people are fine with needing to work a job, even if it’s stressful or unfulfilling, to support a less modest, more expensive lifestyle. More power to them. For others – me included – the real joy in life is to have options, to not have to work a job we don’t like, and maybe stop work or work part-time in order to free up time to visit our friends and family, amble around some trails in yonder mountains, or just sit in a park and read a book. So, if FI is a priority, reason #2 above is critical because it allows for two things: (1) you can save and invest a lot of money, and (2) you’ll need less passive income to cover your modest annual expenses.

The Core Principles

During your working years, you’ll need a certain skill set and road map to get you to FI. I’m writing these posts to provide an overview of these skills, map out the path, call out some pitfalls, and provide some milestones along the way. A peek at the road ahead: (1) get an education in a practical field or learn a trade, then work hard and maximize your income; (2) build a modest, efficient, low-key lifestyle and minimize your expenses – especially the large, recurring ones like housing and transportation – while still having a good life; (3) save and invest the difference; add to a balanced, globally-diversified portfolio of low cost index funds with each paycheck, including all windfalls and tax refunds; (4) take a Rip Van Winkle approach to investing. Don’t fiddle with your investments. Don’t even look at them but once a year if you can – just stay the course.

If you work hard, focus on the above four items (not just one or two, but all of them), and are persistent, the odds of success are high. One day you’ll look up and realize you’ve reached FI, and a whole new world will open up to you…