Financial Independence is a Lever

Do you love your job? My bet is that most people answer no to this basic question. Yet, one of my parent’s financial legacies to me is that they not only like their jobs, they love them. My mom is an accountant and spent most of her career helping build small businesses. If not for health related issues, I think she would do this forever. She still helps me run my medical practice. My step-father was a healthcare executive and parlayed his C-suite success into a busy consulting practice that keeps him on the road even still today. For them, early retirement was not even part of their thought process. Neither was financial independence. Their W2 wages provided enough. Thinking in these terms, it seems that financial independence is a lever rather than a destination. A tool rather than a goal.

In many ways, the meaning of financial independence really depends on not just your source of income (ie your employment) but also your feelings about your job.

If You Love What You Do…

If you love your job and financial independence is a lever, than maybe you don’t need to exercise that lever. You don’t need to use the escape hatch or to move to Plan B. In this situation, it is more than OK to imagine financial independence as a distant goal that you are in no hurry to reach. I’m not saying to forego all frugality or fail to invest. That would be down right silly.

But the urgency is no longer there.

As I said in a previous post, money is an intermediary that allows us to exchange goods and services for other goods and services. If you enjoy providing your goods and services to your employer more than you enjoy whatever you would be doing in early retirement, than keep working.

If You Feel Meh About Work…

If you don’t love it, but you don’t hate it either, then financial freedom becomes more important. You might want to start building a bridge to FI sooner. Financial independence is a lever and you are itching to pull that lever when possible. Since you don’t hate work, you don’t have to grind it out immediately.

But all things considered, you would rather not be working if you had the choice.

This allows for a retirement glide path. You can take your sweet time planning the ideal asset allocation, stuffing those IRAs or 529s, or waiting for a child to mature. And when the tea leaves read right, you can make the jump.

And If You Despise Work…

Then you are going to want to pull that financial independence lever as soon as possible. You are going to want to frugalize, invest aggressively, and save your heart out. This is the time to develop those side hustles, take advantage of geoarbitrage, and pretty much use every hack and trick in the FIRE playbook.

Spending as little time doing things we despise should be the ultimate goal of our financial journey. Whether that means quitting your job and entering a new profession (even lower paying) or pushing towards FI as fast as humanly possible, something needs to change.

In Conclusion

Financial independence is a lever. It is a tool to be toggled to your specific needs. For those who love their careers, it may never need to be used or attained. For those who are hating every moment on the time clock, it should be pulled quickly.

For the rest of us, it remains a viable pathway to early retirement when all ducks are in order.