Financial Independence Without Delayed Gratification

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Contentment is important. Learning to be satisfied with what you have, to not feel impugned by sacrifice, is a crucial skill in life satisfaction. Being financially independent doesn’t mean you have to feel sacrifice. It isn’t about delaying gratification. Rather, it’s about being content with what you have, as Financial Success MD shares with us in this post.

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I said, “Joe, how does it make you feel to know that our host only yesterday may have made more money than your novel ‘Catch-22’ has earned in its entire history?” And Joe said, “I’ve got something he can never have.” And I said, “What on earth could that be, Joe?” And Joe said, “The knowledge that I’ve got enough.” Not bad! Rest in peace!”

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A misconception is running around the financial world – that great sacrifice and delayed gratification is required to reach financial independence. This is simply not true.

Worry should be saved for something that matters. The median household income in the United States in 2020 was $67,521, according to the US Census Bureau (that is gross, not net). Imagine the reaction I would get if I told those US households who earn less than the median US income of the great sacrifice I was making by only spending $150,000 a year on my lifestyle.

If I saved that $50,000 a year ($4,167 a month) throughout my 30-year career in medicine and earned an average of only 8% interest compounded monthly over those 30 years, I would have $6,251,730 in savings. If I then took the money out using the 4% rule, I could withdraw $250,069 a year to live on.

We must stop deluding ourselves into thinking we are living a less-than-satisfactory life when we don’t spend all our income and borrow additional money to purchase cars, boats, vacations, and houses. Learn to be content with what you have and you will never feel like saving is a sacrifice.

When I graduated from my residency I was doing just fine on a resident’s salary. My wife also worked and earned about the same income as I did. But we made the conscious decision to live on only one of the incomes, and we saved the other. During residency, we lived in a nice apartment, had two paid-off cars, and took one nice vacation a year. We also had the food and clothing we needed.

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Financial Independence Without Delayed Gratification

A misconception is running around the financial world – that great sacrifice and delayed gratification is required to reach financial independence. This is simply not true.

If I saved that $50,000 a year ($4,167 a month) throughout my 30-year career in medicine and earned an average of only 8% interest compounded monthly over those 30 years, I would have $6,251,730 in savings. If I then took the money out using the 4% rule, I could withdraw $250,069 a year to live on.

We must stop deluding ourselves into thinking we are living a less-than-satisfactory life when we don’t spend all our income and borrow additional money to purchase cars, boats, vacations, and houses. Learn to be content with what you have and you will never feel like saving is a sacrifice.

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