Page 203 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

imagine and one that requires a painful toggling of circadian rhythms
between night and day shifts. After two decades he decided he’d had
COBACOBA
enough, so he stopped. Just quit. Moved onto the next phase of his life.

That stuck with me. Being able to wake up one morning and change what

you’re doing, on your own terms, whenever you’re ready, seems like the
grandmother of all financial goals. Independence, to me, doesn’t mean
you’ll stop working. It means you only do the work you like with people
you like at the times you want for as long as you want.

And achieving some level of independence does not rely on earning a
doctor’s income. It’s mostly a matter of keeping your expectations in check
and living below your means. Independence, at any income level, is driven
by your savings rate. And past a certain level of income your savings rate is

driven by your ability to keep your lifestyle expectations from running
away.

My wife and I met in college and moved in with each other years before we
got married. After school we both had entry-level jobs with entry-level pay,
and settled into a moderate lifestyle. All lifestyles exist on a spectrum, and
what is decent to one person can feel like royalty or poverty to another. But

at our incomes we got what we considered a decent apartment, a decent car,
decent clothes, decent food. Comfortable, but nothing close to fancy.

Despite more than a decade of rising incomes—myself in finance, my wife
in health care—we’ve more or less stayed at that lifestyle ever since. That’s
pushed our savings rate continuously higher. Virtually every dollar of raise
has accrued to savings—our “independence fund.” We now live
considerably below our means, which tells you little about our income and
more about our decision to maintain a lifestyle that we established in our

20s.

If there’s a part of our household financial plan I’m proud of it’s that we got
the goalpost of lifestyle desires to stop moving at a young age. Our savings
rate is fairly high, but we rarely feel like we’re repressively frugal because
our aspirations for more stuff haven’t moved much. It’s not that our
aspirations are nonexistent—we like nice stuff and live comfortably. We
just got the goalpost to stop moving.