Your Freedom is for Sale. How Much of a Discount Will You Get?

Through word vomit and Excel tables and research overload (oh my) this site has been dedicated to being a resource for 20-somethings on the path to wealth. There is nothing more valuable that you can do with your money at this age than invest it. And today, I brought on someone else to nail this point! Tawnya is part of the two-person duo at Money Saved is Money Earned, which was one of the first blogs I started interacting with on social media. She’s been in the finance game since 2018 and blew me away with this perspective on investing for the future – and of having your freedom for sale. Take it away, Tawnya!

I love getting discounts. It almost feels like I got away with something, like I somehow tricked the system into giving me something worth more than what I paid for. Of course, getting discounts is a great way to work the system instead of being worked by the system.

I’m always looking for ways to use the system to my advantage, which saves me money and helps me get maximum value out of the things I do buy. My dedication to frugalism got me thinking recently about whether I could apply the idea of a discount to my life.

After all, isn’t that what financial independence (FI) is all about? Buying your freedom instead of buying things? How much of a life discount would I be getting if I earned my freedom earlier than most people?

The truth is your freedom is for sale, but it’s up to you to determine how much of a discount you’ll get.

A Ticket to Freedom

What do I mean when I say your freedom is for sale? Think of it this way.

To keep things simple, imagine a traditional working span of 45 years: starting at the age of 20 and ending at the retirement age of 65. For reference, the actual average work-life is about 42 years, with retirement between age 62 and 65.

If you unwillingly work during that entire 45-year period, restricting your independence and happiness in the process, you’ve essentially paid the full price for freedom.

Notice that I say “unwillingly.” That’s to make sure I exclude those individuals who enjoy their work and feel that it does not restrict their ability to enjoy life to its fullest in any way — an increasingly rare and lucky breed of people who probably don’t need to read this article.

Viewed in this manner, what you pay for your freedom will differ depending on when you reach “retirement,” whatever that charged word means to you.

Work until 65:   Full Price Ticket to Freedom

Assuming you get to the age of 65 with no health issues (or get there at all, for that matter) your full-price admission finally gives you entry into the life you’ve been sacrificing for all along.

Work Past 65:  Full Price Ticket to Freedom + Late Fees

Should you be unlucky, and either your means or foresight prevent you from retiring until after the age of 65, not only would you be paying full price, but you’ll also start paying late fees. Those fees manifest themselves as financial and/or health problems.

Stop Work before 65:  XX% Discount off Full Price Ticket to Freedom

You’ve planned and sacrificed during your younger years and have earned a discount on your freedom as a result. Of course, the amount of that discount will vary depending on your particular circumstances. But just like saving money at the grocery store, even a small discount adds up and is better than paying full price.

As I pointed out earlier, I love discounts. I always avoid paying full price for as many things as I can manage. Also, I’m not too fond of any sorts of fees.

I can’t think of any reason why I wouldn’t want a discount on my freedom as well. There are so many things I want to do with my life, and I don’t necessarily want to wait until I’m 65+ to do them.

There are just too many things that could go wrong along the way.

What is a Freedom Discount?

A freedom discount is actually a pretty simple concept. It’s essentially the number of years you’re able to reclaim during a traditional working span of 45 years. Those reclaimed years become your freedom years, represented as a discount.

Naturally, if someone retires at the age of 65, they will get no discount on their freedom.

Conversely, if someone were to become independently wealthy and retire by the age of 30, they would get a massive 77% discount on their freedom after only working ten years. This could be due to an enormous windfall, a lucky break at a start-up, early and savvy investments, etc.

If you’re born into money, financially speaking, your freedom is not for sale; it’s likely free of charge or heavily discounted.

There are, of course, a bunch of variations in between. Ultimately, any kind of discount is better than paying the full price.

Now, before we go any further, I want to clarify what I mean by freedom. The concept of freedom simply means that one has reached a point of financial independence where they could choose to leave their job, stay, switch careers, pursue passions or anything else they want.

For instance, the example above about someone reaching freedom at 30 does not necessarily mean they will “retire” or leave their work. Instead, that they could if they wanted. They have the freedom to choose what they want to do with their life as long as they’re able to live within their means and off the funds they’ve accumulated.

Freedom is synonymous with choice, not necessarily retirement or not working.

How to Maximize your Discount

The early bird gets the worm – and also the best freedom discount. The earlier someone plans out their financial independence strategy, the higher the odds of a hefty discount.

That premature financial awakening is the key to early success in this game. Whether it’s minimizing expenses, increasing savings rates, or investing in passive income-producing assets, the formula works best and is easier to achieve when you start early.

But don’t despair if you’re late to the game or if you’ve hit some financial roadblocks along the way. If you’re a late bloomer, you can recover a lot of lost time by kicking your income and savings rate into high gear.

There are endless ways to maximize your discount, but all of them involve leveraging one or more financial health metrics.

It isn’t easy to get in the green discount zone without a bit of luck or some extreme measures. Of course, there are many larger things outside our control that impact our finances and how fast you may increase your discount. No matter your circumstances, it’s important to focus on what you CAN control and measure success against yourself.

Your goal is to try and improve your discount over and above what your freedom would typically cost. You’re striving to improve your life, even if it’s just a little bit. Even a 10% improvement in your discount would help you reclaim almost five years of financial freedom. It will also help your children and future generations get a head start on their freedom discount.

What’s the Discount for My Freedom?

As a teacher, I’m in a bit of a different category. Every year I get a little taste of freedom during my summer break, and I’m fortunate enough to be able to use that time to pursue my passions, get things done, and travel. Even with my yearly sabbatical, I’m still looking for ways to maximize my discount.

I’ll have 30 years in my career at age 56, but my pension plan won’t allow me full retirement benefits until I’m at least 58. While retiring at 58 will give me roughly a 10% discount on my freedom, I know all too well that lots can happen between now and then.

I’ve seen the impact of illness, injury, and other factors and how they can derail plans quickly. Because you just never know, I’m trying to save as if I don’t have a pension, which should allow me to increase my freedom discount substantially should I choose to claim it.

With that type of balance, I get the full impact of traditional work (the good and the bad) while allowing myself the luxury to explore alternative ways to live in subsequent years.

Final Thoughts

It’s not often in life that you are granted a discount of your choice. Luckily, the most important discount of your life is largely in your hands.

There’s no shame in choosing – or needing – to pay full price for your ticket to freedom. But for those of you who love a good bargain, I encourage you to take a look at your finances and educate yourself about financial independence and how to get there.

Your freedom is for sale. How much of a discount will you get?

Tawnya is an elementary special education teacher by day and co-blogger at Money Saved is Money Earned by night. She holds an Honors BS in Psychology from Oregon State University and an MS in Special Education from Portland State University. She has had a pretty successful writing career, first as a writing tutor at the Oregon State University Writing Center, and in recent years, as a freelance writer. Tawnya and co-blogger Sebastian have a wealth of knowledge and information about personal finance, retirement, student loans, credit cards, and many other financial topics. They teach people how to save money, make money, and understand money.

Cover image credit: Markus Spiske via Unsplash