Yesterday’s post introduced the concept of financial resilience: the number of years your current wealth can sustain your lifestyle. 

We ended with an important question:

How many years of financial resilience do you need to safely initiate the active pursuit of liberty and purpose?

Today’s post will attempt to answer this question. 

“Active pursuit of liberty”

By “active pursuit”, I mean that you start to actively mold or change you primary occupation to increase your freedom to pursue your purpose. 

This is inherently risky because it will often clash with what other people want you to do. We therefore need to be careful. 

However, pursuing liberty and purpose in your free time can be started from day one.

Specifically, gradual free time investments in life efficiency and other intangible assets (e.g. skills and contacts) that align with your purpose is a great idea. 

When to start the active pursuit

I waited until my financial resilience reached a full 25 years before really starting to claim my personal liberty. But when I look back now, that was way too conservative. 

It pains me to think of all the progress I could have made and the stress I could have saved if I was brave enough to start earlier… 

If I could do it all over again, I would probably have started very early in my career when my financial resilience was less than 4 years.

Risk mitigation

There are two main ways to minimize risk in the transition to liberty: 

1. Take it nice and slow, making gradual changes over a couple of years without ruffling unnecessary feathers.
2. Only start once you have accumulated plenty of leverage from developing your intangible assets.

With both these elements in place, I think it’s reasonable to start the transition after as little as 1-2 years of financial resilience (depending on the value of your intangible assets). 

Without these elements, 5 years sounds more reasonable. But that will take a long time to achieve for most, so shifting the timeline forward through these risk mitigation strategies is a smart move.   

Other constraints

Two other important things to think about: 

First, make sure that about half of your financial resilience is liquid (e.g. stocks, bonds and cash). 

If your entire net worth is locked up in your house and/or pension, it’s of little use as an insurance policy on your quest for liberty.

Second, make sure to account for any large increases in expenditures over the next five years when calculating financial resilience. 

Perhaps you want to start a family, buy a larger house (with greater interest expenses), or move to a more expensive country within the next 5 years. In this case, your financial resilience should be adjusted downwards. 

Save with a purpose

Most people will advise you to save for a financially secure retirement.

While this is important, it’s not particularly inspiring, especially if retirement is still several decades away. 

My advice is to save for personal liberty.

If you do it well, you could reach 1-2 years of financial resilience quite early in your career, allowing you to officially start your journey to liberty and purpose with most of your life still ahead of you. 

In my view, this is a much more inspirational reason to invest, both in tangible and intangible assets.