After publishing\u00a0Why We Keep Spending Even Though We Know We Shouldn’t<\/a><\/strong><\/em>, I realized something important: the real reason I wasn\u2019t willing to spend on a vacation rental this summer is because we no longer have financial freedom. I didn’t think about this fact until after I got a lot of feedback from readers on how I should spend my money.<\/p>\n After buying our latest home, I sold a significant amount of stocks and bonds to pay for it in cash<\/a>. As a result, our passive income temporarily dropped from around $380,000 to about $230,000. <\/p>\n Given our annual after-tax expenses were around $260,000 at the time, we suddenly had a deficit. And by my definition, financial independence means having enough passive income<\/a> to cover your desired living expenses.<\/p>\n <\/p>\n While writing that post, I justified not spending on a vacation rental for the following reasons:<\/p>\n All of those are valid points. But the\u00a0main<\/em>\u00a0reason I didn\u2019t include? I\u2019m on a mission<\/strong> to regain financial independence by\u00a0December 31, 2027, and spending $24,000 on a rental home we don\u2019t need doesn\u2019t help the mission.<\/p>\n If there\u2019s one thing about me, it\u2019s that I\u2019m relentless when it comes to achieving my goals. Whether it was committing to publish three posts a week for 10 years<\/a> after launching Financial Samurai in July 2009, or vowing to be a stay-at-home dad<\/a> for the first five years of both children\u2019s lives, I don\u2019t stop until the mission is complete.<\/p>\n After renting out our house for a year, selling it for a profit, saving more, and reinvesting part of the proceeds, our passive income has rebounded to about $320,000. Hooray for higher yields and interest rates!<\/p>\n Unfortunately, with both kids now in private language immersion school<\/a>, our annual expenses are around $288,000 after tax. That\u2019s about $360,000 gross, meaning we\u2019re still running a ~$40,000 annual passive income deficit.<\/p>\n While I could rebalance our portfolio into more income-producing assets to cover all of our expenses, I\u2019ve long been a believer in growth stocks<\/a> and private growth companies, especially now in the artificial intelligence space<\/a>. I want to let those investments run.<\/p>\n Without a steady paycheck to cushion any financial shocks, the main lever I can pull is\u00a0controlling expenses<\/strong>. So, I made the decision not to spend $24,000 on a four-week vacation rental. At a 4.3% risk-free return, that money could generate $1,032 a year in passive income every year. That’s another step closer to financial freedom. <\/p>\n Yes, having my mom and wife under the same roof for five weeks is a sacrifice. But I also see it as a chance to deepen family bonds, especially between grandparents and grandchildren. Both women are lovely people and I believe in them.<\/p>\n Plus, there\u2019s a separate two-bedroom, two-bathroom unit attached to the house that has gone unused for years. I plan to spend two weeks cleaning and restoring it to livable condition. This desire to make improvements to the property is important for the future.<\/p>\n When I was growing up in Malaysia, I had friends whose entire families of four lived in studio apartments with bunk beds along the walls. By comparison, four of us sharing three bedrooms and one and a half baths is hardly a hardship. If I can successfully clean up the two-bedroom ADU, then we should have more than enough space to co-habitate for five weeks. <\/p>\n Let\u2019s not forget, we\u2019ll be in Hawaii, not Kabul, Afghanistan. To me, it\u2019s as close to paradise on Earth as you can get. I imagine some people might even scoff at the idea that staying in Hawaii for five weeks in a free home could be considered a \u201csacrifice<\/a>\u201d at all.<\/p>\n There are plenty of people who can\u2019t take five weeks off work. Some can’t even take two. And many who do take time off end up staying local to save money. My wife and I are both currently DUPs<\/a> and fortunate to have a free place to stay. This is what my grandfather, may he rest in peace, envisioned when he built the house\u2014for generations of our family to enjoy.<\/p>\n So no, there\u2019s no room service, no pool, Toto washlet, and no 1000-thread-count sheets. Big deal. I\u2019m willing to forgo luxuries to inch closer to our goal of being financially independent again.<\/p>\n Nothing will stop me because I know how amazing it felt to be completely financially free for the 11 years after I left my day job in 2012. I’m sure my wife feels the same way when she engineered her layoff<\/a> in 2015.<\/p>\n Whenever I start feeling dissatisfied about not having the \u201cperfect\u201d situation, I remind myself to think about the alternatives. Doing so always helps me feel more grateful for what I have. Here are our realistic alternatives:<\/p>\n When I lay it all out like this, spending five weeks with family for free in Hawaii sounds pretty great. We’ll be spending the weekends at my Aunt’s beach house or at a hotel to break things up. <\/p>\n Choosing not to spend on a rental house in Hawaii this summer is just one decision to help re-achieve financial independence. Here are some of the choices I made the first time around:<\/p>\n Some of you may not agree with the choices I made, and that\u2019s perfectly OK. You\u2019re not me. Looking back, I\u2019m grateful for most of them because they gave me the ability to negotiate a severance<\/a> and break free at age 34. I just wished I focused on family planning sooner.<\/p>\n The value of financial freedom far outweighs any of the sacrifices I made along the way. It’s not even close.<\/p>\n Here\u2019s what many people may also not realize: for personal finance enthusiasts<\/a> like me,\u00a0saving and investing itself brings joy<\/strong>. The more I save and invest, the more satisfaction I get as a father. So, skipping the $24,000 rental or the $2,000 first-class plane tickets doesn\u2019t feel like deprivation, it feels like progress.<\/p>\n Every night we stay at my parents’ house is another $800 saved. That brings me far more happiness than lounging in a luxury rental, doom scrolling why stagflation<\/a> is a key risk to the president’s latest tariff policies.<\/p>\n In Hawaii, I\u2019d much rather be outdoors\u2014boogie boarding, snorkeling, hiking, playing pickleball or golf\u2014than sitting inside. In fact, the dumpier the place, the more incentivized I am of getting out of the house! <\/p>\n The choices we make in pursuit of financial freedom are\u00a0deeply personal. You can\u2019t tell someone how to spend their money if you wouldn\u2019t spend your own that way.<\/p>\n Some think I\u2019m sacrificing too much. I think I\u2019m receiving a gift\u2014five weeks in Hawaii with my family, free lodging, and a chance to move closer to my financial goal. Sounds like a win to me.<\/p>\n And when I reach my financial freedom goal by December 31, 2027, I won\u2019t look back with regret for not spending $24,000+ on a rental house. Instead, I\u2019ll appreciate the time we spent together, no matter how inconvenient some moments may have been. At the end of the day, being together with family is the most important thing.<\/p>\n Readers, what choices are you making to achieve financial freedom sooner? If you\u2019re already financially independent, do you view these decisions as sacrifices\u2014or simply no big deal? And as we get older, is it natural to lose appreciation for what we have?<\/em><\/p>\n Stay on top of your finances by using\u00a0Empower<\/a><\/strong>, a great wealth management tool I’ve used and trusted since 2012. Empower goes beyond basic budgeting, offering insights into investment fees and retirement planning. Best of all, it’s completely free.<\/p>\n If want to build more wealth than 93.5% of the population, grab a copy of my new USA TODAY bestseller,\u00a0Millionaire Milestones: Simple Steps to Seven Figures.<\/a><\/strong><\/em>\u00a0With over 30 years of experience working in, studying, and writing about finance, I\u2019ve distilled everything I know into this practical guide to help you achieve financial success.<\/p>\nJustifying the Decision To Save<\/h2>\n
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The Choices We Make To Achieve Financial Freedom<\/h2>\n
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<\/figure>\nWhat Are You Willing To Sacrifice?<\/h2>\n
Think of the Alternatives to Feel More Appreciative<\/strong><\/h2>\n
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More Choices I Made to Achieve Financial Freedom<\/h2>\n
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The Joy of Saving and Investing<\/h2>\n
Personal Choices for Personal Goals<\/h2>\n
Suggestions To Achieve Financial Freedom<\/h2>\n