To explain why I think financial independence leads to less stress and more happiness, let me tell you a brief story. One day at work my boss called me into an unscheduled meeting:
Boss: “Jason, we are going to have to let go you. The company has decided to go in a different direction.”
HR Woman: “We are prepared to offer you 6 weeks of severance…”
I basically stopped listening after that. I was at this job for only a few months before being let go. When I received their job offer, I was so excited to take the role and have a positive impact on the business. Just after I was hired, the head of my department was replaced and a new management team came in. There was significant turnover in the short time I was there. I found out afterward that many of these changes were not voluntary. That is not an excuse for my dismissal though; if I had made myself indispensable to my employer, they would not have let me go. Despite the challenging environment, I take responsibility for not meeting leadership’s expectations.
My Ego Was Crushed
It felt terrible to be thrown away like that. The experience hurt my confidence more than anything else in my career. On the brighter side, the working environment at that company was horrible and I was glad to be out of it. I had been working 60+ hours a week, including most Sundays. When I called my wife to tell her the news, I felt a sense of relief. I was finally rid of this terrible work situation.
It’s Important to Have an Emergency Plan
When I was laid off, we did not have any children yet and Mrs. WPF herself had a great job. We had no trouble paying the bills for a while on her income. We also had an emergency fund, my severance and unemployment to get us through financially. Our savings plan took a hit while I was out of work, but overall we were just fine. It really does pay to have a savings cushion and a plan for an unexpected hardship.
Life Goes On
I found a new job a few months later and we moved on with our lives. I became a valuable resource in my new company leading to a fantastic relationship with my boss, strong performance reviews and large raises. We also had our first child at this time and for a variety of personal reasons decided to cut $94K from our annual spending so my wife could leave her job and stay home to raise our son. We are blessed to have this option available to us. One of the reasons we felt comfortable making that decision, was that I was employed at a stable growing company and my boss was a mentor, a huge supporter of me and my work.
Remember that Paychecks are not Guaranteed
Something in my head changed though after being laid off. The possibility of losing my job again was always at the front of my mind. This fear became even stronger when we became a one income family. In addition to my earlier firing, I’d survived many rounds of layoffs in my career. I know there always is the possibility of losing my job no matter how well I perform. If I was laid off today, we would not be able to pay the bills without digging into savings. I never want to be in that position.
Unlike what you may believe by reading about my willingness to take a $200K bet, I consider myself a risk averse person. By becoming financially independent, I won’t have to rely on a paycheck to put food on the table. In order to get there, I’m willing to take on calculated risks with investments that have a proven track record in order to accomplish my goals. Especially now, while I have earned income to live on if something goes wrong. My risk aversion drives me to save and invest as much and as efficiently as possible so that I’m not dependent on anybody else for my financial support.
Today, I found out that my boss resigned. Yes, the same one that had been a mentor and a huge supporter of me, so much so that it gave me the confidence for us to become a one income family. I’m going to miss working for her. Today, my job is not nearly as secure as it had been. It’s disappointing, but having savings to fall back on keeps me less stressed and makes me way happier than anything I can buy with that money today. In the end, less stress and more happiness is what financial independence means to me.