I love getting discounts. It feels like I got away with something.
Like I somehow tricked the system into giving me something worth more than what I paid for.
I felt that way with my recent electric car purchase, and I get the same discount high off much smaller purchases.
Which got me thinking…
How much of a discount on life would I be getting, if I earned my freedom earlier than most people?
A Ticket to Freedom
Imagine a traditional working span of 50 years. Starting at the age of 20 and ending at the typical retirement age of 70.
If you unwillingly work during that entire 50-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 — a 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…
Work until 70: Full Price Ticket to Freedom
Assuming you get to the age of 70 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 70: Full Price Ticket to Freedom + Late Fees
Should you be unlucky, and either your means or foresight prevent you from retiring after the age of 70, 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 70: 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. The amount of that discount will vary depending on your particular circumstances, but anything is better than paying full price.
As I pointed out earlier. I love discounts, and I always avoid paying full price for as many things as I can manage. I also hate any sorts of fees.
I can't think of any reason why I wouldn't want a discount on my freedom as well.
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 50 years. Those reclaimed years become your freedom years, represented as a discount.
Here's a simple graphic showing what I mean. You can click on it to see the full expanded version.
Naturally, if someone retires at the age of 70, after working for 50 years, they will get no discount on their freedom.
Conversely, if someone were to retire by the age of 25, after only working five years, they would get a massive 90% discount on their freedom. This could be due to an enormous windfall, a lucky break at a start-up, etc…
If you're born into money, financially speaking, your freedom is already free of charge.
There's, of course, a bunch of variation in between. Ultimately, any kind of discount is better than paying the full price.
How to Maximize your Discount
The early bird gets the worm & 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 success in this game. Whether it's minimizing expenses, increasing savings rates, or investing in passive income-producing assets, the formula works best when you start early.
If you're a late bloomer like myself, 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's reasonably difficult to get in the green discount zone without a bit of luck or some extreme measures. Your goal is to try and improve your discount over and above what your freedom would typically cost.
Even a 10% improvement in your discount would help you reclaim five whole years of financial freedom.
What's the Discount for my Freedom?
Since I aim to live life to its fullest, without the constraints of traditional work, I'll be looking for ways to maximize my discount.
Although I started planning for freedom relatively early, it's no longer possible for me to get a higher discount than 60%. Since I'm past 40 years of age and haven't yet achieved financial freedom, those steeper discount levels are sadly behind me.
I believe that the best balance for my household is to try and achieve financial freedom by the age of 45. That gives me a bit less than five years to prepare, and a pretty decent 50% discount off my ticket to freedom.
It also feels like a fair trade-off for me to work 25 years in a traditional working environment, in exchange for 25 years of independence.
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.