Is Money Apathy The New Financial Independence?

Money Apathy

In a previous post I discussed the magic of market apathy.  When your path to financial independence is long-term and you have chosen the right investments, the momentary swings of the stock market lose importance.  While this concept certainly is quite powerful unto itself, the true goal of financial independence is something completely different.  It is neither freedom nor control over time. It’s Money apathy.

The ability to be indifferent to money is what we all strive toward when we start to calculate our safe withdrawal rate.  It is the goal post to which we calibrate all our plans.

But how do we reach this nirvana?

And how is it different from basic financial independence?

Enough

The concept of enough means different things to different people.  To some, enough means saving up 25X current yearly spending.  To others, it may be a solid figure like ten million dollars.  The point being that  sometimes this number is actually uncorrelated with financial independence.

There are many people out there who are technically financially independent but don’t think they have enough.  They worry about sequence of returns risk or use terms like lean FI.  There is both an emotional as well as a fiscal component to financial independence.

I think the true definition of enough is when money apathy sets in.  The market had a good day, the market had a bad day.  Who cares!  The W2 produced a bounty this year, there was no W2 this year.  Who cares!

Money is an Intermediary

One of the quickest paths to money apathy is to realize that money is an intermediary.  It is only as relevant  as the goods and services that you provided in exchange.  That money can then purchase other goods and services that you are in need of.

What happens if providing the goods and services that you exchange for money is pleasurable?  What if your true life’s calling happens to create this work product, and yet you don’t picture it as work at all.  in fact, to you, it is joy.

You now have money apathy.  By living your best life, you create monetary benefits that can be used to fund your lifestyle.  You would no more consider retiring than you would consider quenching the flame that burns inside of you.

You have extracted yourself from the concept of sacrifice.  If you just keep doing what you love to do, you will be provided for.

Perpetual Money Machine

For those not lucky enough to have found a calling which provides for us automatically, there is always the perpetual money machine.  All it requires is basic planning, earning, investing, and a touch a frugality.  Over time you can build an investment portfolio of stocks, bonds, and real estate that spin-off enough cash to fully fund the lifestyle you choose.

This process is simple although not easy.  It may take years of front loading the sacrifice to reach this vaunted plateau.  But once there, true money apathy sets in.  You no longer care if you make a little more or less each year.  Your finances are on autopilot.

Final Thoughts

The goal, in my mind, is not financial independence but rather money apathy.  Enough means more than just financial freedom.  It’s means no longer worrying about the influx and outflux.  The pathway is two-fold.  Either recognize money as an intermediary and find a life calling that naturally provides.  Or build a perpetual money machine.

And when your done with all that, what should you do?

Enjoy life.