I love Maven Money podcast though I know Andy Hart, the presenter can be a bit Marmite. I have been inspired by episode 123 ‘Top 10 Important Truths We Have Had To Unlearn with John Ndege‘. It has made me reflect and write about the received wisdom or unchallenged assumptions I have taken as ‘truths’ – which have ultimately influenced my approach to money, personal finance and FI. These ‘truths’ are quite ingrained and it has been interesting to unpick them and think about how they have driven my thought patterns and behaviour.
You work, stop work and retire
I am not alone on this one, this is the received wisdom of most people I think. We have three phases of life, education, work and then when the government dictates we move into a third phase of our lives – retirement. For me there are two possible images of retirement; a brightly coloured future where we finally have the time and money to do what we want – full of travel and indulging our hobbies and interests – but we are in our sixties! Better pack it all in before we got too old and frail. The other image is something less colourful, a time of continued worry over money – and again we are in our sixties! – with potentially another thirty years of counting the pennies, turning the heating down.
This ‘truth’ had me thinking I had to work full time until at least 67, it seemed dictated to me; out of my control.
Shifting my mindset to FI has challenged this ‘truth’ to realise, I don’t have spend all those productive years working full time, I have choices and I can shape my own future through being more intentional in my present.
Only rich people can retire early
This is linked with the above ‘truth’ for me, only people fortunate enough to have a a wealthy background or a ‘well paid’ job can retire earlier than when the state decides. This ‘truth’ tells me a) I am not in a position to have sufficient wealth to make my own choices and b) it takes a long time and / or difficult choices to become that wealthy.
Shifting my mindset to FI has challenged this ‘truth’ to realise a) there are always people richer than me but I am in a fortunate position and b) with focus it does not take as long as you think and the choices don’t have to be that difficult.
I am apparently in the top 2% of the worlds richest people and I have a higher income than 79% of the UK population. I don’t feel rich but those statistics challenged me to see my situation more objectively. Rather than focus on what I don’t have, focus on what I do have, and how to lever the benefit.
It does take time to accumulate enough wealth to be FI. That is a ‘truth’ but how long depends on when you start, what decisions you make about how much to invest and how much is enough. I don’t see most of the choices I make as negative – as can’t do’s but rather as can do’s, but for a future me.
Having a career and doing well is important
My work and doing well at work has always been important for me. I was the first in my family to go to University and progress to a job in Higher Education. My job has not just been a means to and end but an end in itself, a symbol of achievement.
This ‘truth’ had me too closely associating my self worth with ‘doing well’ in a professional job. Shifting my mindset to FI has challenged this ‘truth’ allowing me to think whatever I choose to do, or not do – is me doing well. I want to live different lives, I want to work in a garden centre, as an estate agent, in the booking office of my favourite cinema! And any of these choices are my choices and my choices are good enough!
Being interested in finance is boring at best and means you are an uncaring capitalist at worst
I found my feelings about this ‘untruth’ difficult to articulate, but here goes. I was brought up in a left leaning house and I had the idea I wasn’t interested in money, I was interested in people, in more important concepts such as education, equality, fairness, art and creativity. Money had to be earned and there was no stigma in that, but investing in the stock market was exploitative and not something I was interested in. This is less an ‘untruth’ more of a misunderstanding, a lack of knowledge or understanding of the relationship between wealth creation and creativity, that the stock market is all around us, in our cupboards, living rooms and on our drives. This ‘truth’ made me think I had to choose between money and my principles and values, which meant I did not engage early with the basics of wealth creation including saving and investing. Though I was never a debt head or an over consumer. So when I did start getting more interested in personal finance I was a little embarrassed about it, it seemed at odds with my values. I felt I / it was boring and a bit crass / low brow… if that makes sense. It sounds odd now I am writing it! Unlearning this truth has opened up a whole new world to me that I find interesting and stimulating, I don’t care if others think it is boring and shifting my mindset to FI has helped me see the obvious, money is the lever to a life truly of my own making and does not contradict any values I have of fairness or equality.
Managing finances and investing is complex
Yes the ‘truth’ is finance and investing is very very complicated, very specialist, not something I can or want to get get my head around. This ‘truth’ has led to avoidance and missed opportunities. It has led to me being in my late 40s / early 50s thinking what the hell have I been doing with my money. I have consumed quite a lot of content on personal finance, largely through podcasts, which has me unlearning this ‘truth’ – the new ‘truth’ is it is embarrassingly simple for normal people like me – of course there is lots of complicated stuff out there – but I am shocked that the basics of budgeting, saving, investing in passive funds for the long term, which is really most of what I need to know, is fairly straight forward!
Am sure I am still working under many an illusion finance wise but what about you, what truths have you had to unlearn, what impact have they had on your journey to FI?