Iâ€™m at the â€œnow whatâ€ stage. We have paid the car off, and a fat savings account. We do not plan to pay off the house because we want to move soon. Not sure that the house will sell for the amount we paid. 401(k) is funded.
This is a great question. We spend a ton of time and energy focusing on getting out of debt, building an emergency fund, funding our retirement accounts, saving for college, paying off our mortgage, etc. But once we get a handle on these things, what’s next?
It’s not uncommon for people to be so focused on their daily lives that they don’t give any serious thought to what the future holds. In fact, if you ask around, you’ll find that a lot of people will flatly state that they’re pursuing “financial independence” without really knowing what they mean.
This is actually an issue that fellow blogger JD Roth tackled about a year ago when he wrote the following about the so-called “third stage” of personal finance:
Iâ€™ve reached a place of financial security. My income is good. I save and invest. I donâ€™t spend frivolously. Now I find myself in the enviable position of having to decide: Should I decrease my workload, or should I use some of my income to invest in the things that make me happy?
Unfortunately, JD didn’t have the answer, and neither do I. In fact, I’ve struggled mightily with this issue. Should we charge ahead toward the finish line (retirement) trying to get there as quickly as possible? Or should we slow down and enjoy the ride?
There are no easy answers. Moreover, just as Matt pointed out when he wrote about financial priorities, the “right” answer will vary from person to person. With that in mind, I’d like to hear your thoughts…
Stepping back and taking a look at the big picture, what are your long-term goals?