I believe goals and definitions can change over time so the question really is “What is my current definition of financial independence?”
Today, and probably for 5+ years, FI means paying off my debts. I currently owe $113,000 on my mortgage at a 3.625% interest rate and I owe $3,200 to my parents at a 0% interest rate, so my total current debt is $116,275.
I equate being debt-free to financial independence because most of my decisions today revolve around my debt. An easy example is when I choose to pack lunch instead of eating out. A more complicated example is when I execute on a decision at work even when I personally don’t agree with it. They all relate to me being able to pay down my debts.
I can’t help but feel that once I’m debt-free, I’ll make better decisions. Sometimes, I crave a Proa salad ($21, including service charge and tip) but instead eat just fried gyoza and rice cooked at home. Don’t get me wrong, gyoza and rice is delicious but it’s just not as nutritious as a salad full of greens and veggies. I think once I’m debt-free, I’ll be a better employee, not being afraid to share outside-the-box ideas or take risks because if I fail, it’s ok because I’m done paying my loans.
Another reason FI and debt-free are synonymous to me is because I hate owing people anything. I hate it so much that I stop myself from asking for help even when I should, because I just don’t want to owe any favors to anyone. I know no man is an island, but I find the idea of doing things because I am purely in support of it and not because I owe someone so appealing and perfect.
Lastly, having debt just gives me major anxiety. Prior to being focused on managing my finances, I had accumulated over $15,000 in credit card debt (I say over $15,000 because I forgot the exact amount and am too lazy to dig for my statements.) I’m not exaggerating when I say knowing I owed that much on my credit card on top of my mortgage kept me up at night, gave me daily heartburn and occasional panic attacks. I felt ashamed and angry at myself for being so lazy and dumb. It’s been more than a year since I finished paying off my cc debt and I haven’t allowed myself to be as out of control as I was before, but I still sometimes feel the anxiety building up when I think about how much I still owe and how the future, as much of a good worker that I am, is still unpredictable. I know once I’m done paying off my loans, I’ll feel less anxious and stressed about the future.