How to live your best life, long before retirement

Lacey Filipich believes you can live a financially independent and time-rich life, long before retirement. All it takes is education, the right saving habits and a long enough timeline.

Lacey is a chemical engineer, public speaker, volunteer and author who has launched businesses to help people become financially capable and time-rich.

She believes many people are stuck in the same mindset – ‘work your whole life until you’re exhausted and then it’s an end of life retirement’.

But it doesn’t have to be this way. Lacey embraced a positive mindset change early in her life, along with effective saving and investing techniques, which now allow her to enjoy her lifestyle.

Lacey told Bushy on the Get Invested podcast that she’s determined to break the idea that you can’t live your ideal lifestyle until retirement.

“There is this tradition of you working hard for 40 or 50 years, and then you get your reward at the end. Retirement is your reward. Yes, you’re old, but you get that time to be free,” she said.

“Well, that can happen a lot earlier in life. If you’re sensible about how you use your money, you can create a lifestyle where you become time-rich and you then get to decide how you spend your time.

“There’s no rule that says you have to wait till 67 when you can get a pension.”

Lacey said knowledge and education is firstly key to becoming financially independent.

She said currently there is an alarming amount of people who are stuck in a ‘downward spiral’ of spending and not putting enough aside to invest, simple because they’re uneducated.

“There’s a very common narrative that we hear about people relying on a pension or superannuation or retirement, and they just think that the safety blanket is going to be there for them,” Lacey said.

“They don’t think about their money very much and make decisions that are really not helping them. And I just feel that’s a lack of knowledge, not a lack of capacity. It’s not something that’s really hard to do. It’s just that they don’t get told.”

Lacey expanded by saying that a lack of information, coupled with financial stress, can lead to poor decisions.

“You hear two people who go for a payday loan and you go, ‘why would you go for payday lending?’ Oh, because they were so stressed, they had no other option and they couldn’t think about the other options,” she said.

“The more we can do to get them out of that cycle, the better chance they’re all going to be better off.”

She said there are several other steps you can take to achieve financial independence from early on and  ‘intentionally structure your life so that you can afford to have discretion over your time’.

Three basic rules include saving, buying assets and avoiding bad debt. She also said an effective way to evaluate how you spend your money and time, and make changes for the better, is to routinely question every decision you make.

“Every dollar you spend, you had to earn. How many hours did you have to work? And was it worth it? Well, what could you have done with that time otherwise? Which is how I make most of my decisions now,” she said.

“Was it worth spending the time to earn that money? And I think you’d find a lot of the time you go, well, if I could have had three hours back instead of spending that money on that dinner. If I could have had that week back instead of buying online, I probably would have.

“If you can start thinking that way, it makes a big difference. But it’s just a habit building thing. If you want a practical thing to do, try going without something for 30 days. If you really want it afterwards, then have it back. But you might find after 30 days you don’t care and that you don’t need to spend money on that thing anymore.”

She also says a big part of achieving financial independence is delayed gratification.

“The things that I have been most happy about getting are the things that have taken me a long time to achieve,” Lacey said.

“The bit where you’re imagining and you’re daydreaming about what if this happens and what is it going to feel like? I think you get a lot more value out of things … but I just think people are too used to high levels of conveniences.”

She also advised people to have an emergency fund and automate their savings – a practice you can immediately adopt.

“There is no reason why you should be doing saving manually at the end of the pay period. The moment the money comes in or even from your paycheck … do it first, do it automatically and make the savings account hard to get … .you will be surprised how quickly you rack up savings.”

Lacey also raised another important point – that time is so much more valuable than money.

In her early years, Lacey worked tirelessly for many months. After contracting a virus, she was given a ‘positive lifestyle shift’ and realised the importance of taking breaks from work.

“Time is an irreplaceable thing. It’s a non-renewable resource. I can always get more money. I cannot get more time. Time is irreplaceable and it is the greatest asset we have,” Lacey said.

“I think about the number of people who go and spend 40 or 50 hours a week in a job they don’t like and then worry about problems that are facing the world.

“They can’t afford financially to go and work on those problems because they need the money for food and rent, and they get caught in this downward spiral of dependence. And you have to be always earning a wage.

“These frequent breaks from work early in your life, when you can pursue a passion, travel, stay home with your kids, whatever you want to do, you can do it with a low risk approach if you are financially independent.”

But at the end of the day, Lacey said you need to make decisions and take steps that work best for you and your situation.

“Make decisions that work for you. It’s much less about recipe and much more about structure and how you can assess these things.”

Listen to the full interview here.

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