The Principles of FI

I recently finished reading the Life Principles portion of the book Principles by Ray Dailo.   And as I read, there were many takeaways that I think could be so helpful for those of us on the FI journey. The book is a compilation of principles that Ray has developed for himself in life and at work to make great decisions, create an effective culture, and approach challenges in which he believes anyone can employ to create a meaningful life and meaningful relationships. Below I chose only the Life Principles from the book that I think are key to have while working towards FI and how I think each one should be applied while working towards creating the life we want.


Embrace Reality and Deal with It

This is all about understanding how reality works and dealing with it. As humans, we have a logical mind (consciousness) and an emotional mind (subconsciousness). Both minds can operate independently of each other and we can make decisions using either mind. But in order to make better decisions, we must be able to reconcile our emotions with our logic and only act when they are in alignment. This really hit home for me when I understood this strategy. When I think about when my emotional mind wants to make a silly, materialistic purchase based on reasons that ultimately don’t matter and that I know would be counter to the life I want to create – I experience inner conflict. If I were to succumb to my emotions of making the purchase because I tell myself I deserve it or I love it, yes of course there will be pleasure that I feel after trading my money for the item to make it mine. But this pleasure is only temporary and I will convince myself that I need yet another item to feel that pleasure again. This becomes a toxic cycle that never ends. On the other hand, if I were to respond with my higher self, my logical and conscious mind and instead put that money towards paying down debt, saving or investing it, this will ultimately bring a lasting pleasure that is alignment with the life I want to create. Essentially trading instant gratification for delayed gratification. Both produce pleasure but I’d rather have the kind that lasts longer and will result in more residual benefits.

Use the 5-Step Process to Get What You Want Out of Life

  1. Have clear goals – those of us on the FI journey obviously we have goals and all of us are in different phases. Some of us are focused on saving up a year’s worth of expenses, some are paying off student loans, and the list goes on. Whatever your goals are on your journey, make sure you have prioritized your list and are tackling one thing at a time. Don’t make yourself crazy with trying to do too much at once. If you are paying off debt, focus on paying off one at at a time from smallest to largest balance or highest interest rate to smallest. And always write your goals down.
  2. Identify and don’t tolerate problems – if you do something along your journey that will not get you closer to achieving your goals, confront what happened. Be honest with yourself and don’t be in denial that the problem happened even if you weren’t the cause of it. The point here is to make sure we are always in a state of fine-tuning our process to get and be better. We can only get better by using obstacles as opportunities to improve. This requires us to be and stay aware of what we’re doing and the thoughts we’re having. I try to meditate to increase my level of awareness.
  3. Diagnose problems to get at their root causes – step 2 was the identification and acceptance of a problem, this step is all about understanding the root cause of the problem. You might have gotten in your own way by giving into your emotional mind by convincing yourself that you need to have those new pair of shoes or maybe an illness has fallen on a close family member and you are financially responsible for their care. Either way you can design a plan to safeguard against both instances.
  4. Design a plan – now that you’ve identified and diagnosed the root cause of the problem, its time to design a plan to prevent or lessen the unwanted financial impact from happening next time. Maybe you’ll need to solicit some help from another family member to help absorb some of the medical cost for the ill family member. Maybe you need to practice more discipline to not buy those shoes next time or build in a category into your budget that allows you to spend $50 or less a month on a clothing item of your choice. Maybe the design of your new plan leads you to being more specific about your goals or altering them somehow based on the new information or scenarios that you are likely to encounter in the future.
  5. Push through to get your results – do whatever you need to do to continue executing on your new plan. Maybe keeping up your motivation is a problem – start measuring your progress towards paying off that debt so you can see how how you’re hitting your milestones which can give you just the right amount of confidence you need to keep going. If you’re not working your way to achieving your goals, this is a problem. You must go back to step 2 to figure it out and continue your execution. This process will cause you to be in a constant state of improvement which is great! This is exactly what being on a journey is all about.

Be Radically Open-Minded

Don’t be rigid in your thinking about how to reach your FI goals as there are many paths to take to get there. There are many strategies you can employ to lower your expenses like cutting the grocery bill, biking to work, or washing the dog yourself instead of taking it to the groomer. Different strategies work differently for everybody, there is no one right way to get to FI. Consider that there are multiple ways to getting to your destination. Maybe you like Dave Ramsey’s Debt Snowball Plan but maybe you prefer Mr. Money Mustache’s approach for using a home equity line of credit as your emergency fund. Gain perspective, try different approaches, pull one of Pillars of FI of Choose FI that you haven’t considered before. Remember that you’re looking for the best answer for YOU and not simply what you might think to be the ONLY or RIGHT answer.


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