Remember the seesaw? That wooden plank set on a metal cross-bar with a T-shaped handle that always found a way to crunch you right in the sweet spot? It was where the big boys on the playground ruled because they could hold the scrawny kids (like me) dangling high in the sky for all of recess, constantly threatening to hop off causing the smaller kid to crash down to the ground. Sometimes I feel like I am back on the seesaw, dangling high above the ground, waiting to crash down to earth, and wanting nothing more than to get off and to enjoy living. This post will allow us to come to a better understanding of how we are in charge of the seesaw we are on, and how we can, with some dedication, make the heavy lift that comes with a goal of FIRE to get off and start enjoying life.
The seesaw is at its base a lever, which, behind the magic of compound interest (to be discussed in a later post), can be one of the most powerful tools in your personal finance toolbox if you know how to use it. The laws of physics provide that you can use a lever to lift extremely heavy items with minimal force, simply by moving the location of the fulcrum closer to the heavy item. In fact, Archimedes is credited with the saying "Give me a lever long enough and a fulcrum strong enough, and I will move the earth."
You may be asking, how can a lever set me on the path to FIRE? Is this guy going to recommend a life of crime using a crowbar (a simple lever) to break into places? To be clear, I am not. I am, however, pointing out that you need to understand the principles of how a lever can be used to your advantage when planning your course to financial freedom.
In my last post, I talked about using simple math to find your number - that is, determining how much money you need saved up to live without working a single day ever again. (https://steemit.com/introduceyourself/@sclazy/what-s-your-number).
Imagine the following: you are sitting on one side of the seesaw and on the other side is FIRE. FIRE is a big, heavy thing to achieve, so currently you are dangling high up in the air with FIRE down near the ground on the other side (flashback to Chuck holding me at his mercy in the first grade). The fulcrum of the seesaw is your number. It is what is needed to be achieved so that you can lift FIRE off the ground and get off the seesaw to enjoy the rest of your life.
There are two ways to move the heavy burden that is FIRE, you can either add more weight to your side of the equation (by increasing your income, not by binge eating cupcakes) or you can move the fulcrum.
Not all of us have the ability to throw a switch and make more money, though that would be nice, but we all have control over how big or how small number is because we control our annual spending. Moving the fulcrum is something we all can do, often with minimal effort. Simply put, if you spend more, the fulcrum moves closer and closer to you, making it that much harder to get down, but if you spend less (and therefore save more) the fulcrum moves closer and closer to FIRE, making it that much easier to get down.
Calculate your number today, find ways to move the fulcrum to your advantage, and get on your path towards financial freedom and FIRE.