Write Your Financial Independence Mission Statement

Do you have a mission statement that guides you in your financial journey, or in your life? Mission statements are something that virtually all companies have, but that individuals or families rarely define for ourselves.

Mission statements are something I often help clients write, if not for their organizations overall, at least for whatever process they are undertaking. And though mission statements are sometimes too abstract for their own good, when developed thoughtfully and written well, they provide a compass to help guide a person or an organization when they inadvertently wander off the path.

This past weekend I did something amazing, at least for me: I finally responded to every email in the ournextlifeblog [at] gmail dot com backlog, one day ahead of email debt forgiveness day. The reason I mention this is because I noticed a common theme in many of the notes:

There are a lot of folks who get stuck at some point in the FI journey and don’t know how to move forward. 

Maybe it’s a question of how to apportion funds to investments versus debt. Maybe it’s how much money to keep in cash versus in stocks. Maybe it’s dealing with something bigger like a job loss that makes them feel like they’ll never reach their goals.

Any of us could end up at a crossroads, and while having a map (your financial plan) is helpful, it’s even better if you also have a compass (your mission statement).

The Typical Organization Mission Statement

A basic organization mission statement should answer four questions:

• What do you do?
• How do you do it?
• Who is your audience?
• What is your unique value?

A fictitious company that builds spaceships might have a mission statement that reads:

Rad Spaceships is committed to building the galaxy’s most stoke-inducing rockets for those who know the difference. 

• What do they do? Build rockets.
• How do they do it? With commitment to creating something exemplary.
• Who is their audience? Discerning space travelers.
• What is their unique value? The rockets fuel the stoke.

This mission statement serves two important purposes, one internal and one external:

1. It tells potential customers or other interested parties (news media, prospective employees, potential investors) what Rad Spaceships is all about, and
2. It tells Rad Spaceships itself what it is all about, so that if, for example, one of the top executives has an idea next week for the world’s best surfboard, it’s an easy call to pass on that idea, because it’s not part of their core mission.

A good mission statement is as much about what something is as what it is not.

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Your Financial Independence Mission Statement

Unlike Rad Spaceships or any other company, you are not in this to sell a bunch of stuff, but rather to reach whatever monumental goal you’ve laid out for yourself. So your mission statement should answer different questions:

• What is your goal?
• How will you achieve it financially?
• Why do you want to reach that goal?
• Who ultimately benefits if you reach your goal?

It could read very simply:

“I am on a journey to [GOAL] by [FINANCIAL STRATEGY OR PHILOSOPHY], so that I can [DO SOMETHING AWESOME], to [BENEFIT SELF OR OTHERS].”

Or you could go a step farther, making your mission statement both aspirational and practical, and encompassing the purpose you’ve laid out for yourself. (Like doing consultant-y exercises like this? Then you’ll love our purpose exercise.)

“I am on a journey to retire by 40 by investing in rental properties so that I can have more time to train to run a marathon in all 50 states and pursue personal happiness.”

Retiring by 40 and investing in rental properties are practical, and running 50 marathons and pursuing personal happiness are aspirational.

Ultimately, if you include what you are doing, how you are doing it and why, you’ll have a solid compass to help you make the best decisions for you. (And it’s okay if yours is longer than a typical organization’s mission statement — humans are more complex than most corporate missions!)

When You’ll Use Your Mission Statement

So much of pursuing early retirement or financial independence is just waiting it out, and if you’re automating your saving and investing, you won’t be faced with all that many decisions along the way. The non-decision-making times are not when you need your mission statement, though it’s still a pretty thing you can print out and hang on your wall, next to your giant Your Money or Your Life graph (just kidding).

When the mission statement shines is when you find yourself at a crossroads, or when a big opportunity comes your way.

A good mission statement will help you make decisions more quickly and with confidence, and it will help you avoid decision fatigue from having to make too many choices.

Let’s say your mission is that last one, with investing in rental properties as your core financial strategy. If a great opportunity arises to invest in a friend’s startup as an angel investor, you have your compass already set to “passive income from rentals,” and it’s easier to know that angel investing might not be right for you — not because it’s not potentially lucrative, and not because one of the biggest of them all just quit, but because you’re not an expert in venturing your capital, because it’s not core to your mission.

A mission statement should not be rigid, and it’s not unchangeable, but at a minimum, it gives you a starting point for making decisions that’s not zero. Without a formalized mission statement, it can be tough to separate great opportunities from great opportunities that are right for you, but with one, it’s easy to remember where your expertise lies, as well as to remember what it’s all for.

Our FI Mission Statement

There’s a lot of stuff we know about ourselves: We’re deliberately pursuing early retirement, not just financial independence. We define our purpose as service, creativity and adventure. We want to retire early by 40ish to pursue projects that fit within that purpose umbrella. We’re lazy investors who don’t want to do much research, so we’re all about index funds. But we also care about helping people we love, so we’ve incidentally diversified our portfolio to include a rental property and a personal loan. We’re not super frugal and don’t ever plan to be, but we also don’t need a lot of stuff to be happy — plus we hate waste. We don’t believe in living like misers today to retire sooner, and we think happiness is a choice we make every day. We care a ton about making a positive difference in the world, and really hope to be able to leave a big chunk of cash behind to benefit important causes, as well as donating our time and money along the way. 

It might be easier for me to articulate all of that stuff because I’ve written 250+ posts about it all here, and because we’ve taken the time to define our purpose and think through our financial philosophy in real world circumstances. But even knowing all of that stuff about ourselves, it takes some thinking to boil it all down to the most essential, directional core mission. Here is our current best effort:

The ONLs are saving without sacrificing dramatically for early retirement through index investing and strategic investments in people we care about, to live a mindful life of adventure and purpose now and in retirement, and ultimately to leave the world in better shape than we found it. 

Our mission statement rules out a lot of things that aren’t core to what we’re about. Like we’re just never going to be dividend investors, because that’s a lot of work that we’re not interested in doing. So if someone comes to us with the most kick-ass dividend investing opportunity, it will be easy to pass, because even though it might be a great opportunity for someone else, we don’t have the skills or knowledge to verify that, and we’ll save time by dismissing it quickly.

But our statement also rules a lot of things in: the flexibility to adapt our plans if it allows us to help others, the focus on saving without sacrifice, the life of purpose and adventure.

Just having the mission statement doesn’t automatically get us to our goals, but it gives us direction if we ever start to feel lost.

What’s Your FI Mission Statement?

You know we weren’t going to go through this whole exercise together and then not make everyone share! So share, share away! Anything you find yourself wanting to include in a mission statement that is surprising to you? Anything you find yourself not including that’s a surprise? Does thinking through your approach in mission terms give you any new clarity about choices you’re facing? We’d love to hear all about it!