Redefining Financial Independence

There are may arguments out there about the best path to reaching FI. Some are enamored with frugality while others preach to the god of W2 wages. There are even catchy monikers to define the different levels of FI. Barista FI, Lean FI, fatFire, and even Boring FI. Although the arguments abound, most in the community have a crystal clear vision of exactly what financial independence is. We have a series of calculations, spread sheets, and online calculators that are meant to answer one simple question. Am I FI or not? But I have to admit that in the process of reading and writing about personal finance, this often commented on phenomenon has undergone a series of permutations. I am continuously redefining financial independence. Refining my beliefs and my preconceived notions.

It’s Not a Simple Equation

So I used to define financial independence by some sort of equation or another. Everyone has their favorite. Whether it is the 4% safe withdrawal rate or the 25X annual spending. Others prefer to call it the point when monthly passive income exceeds spending needs. All these basic mathematical equations are enticing but as my thinking has evolved, my mind has changed about them.

Let’s say that in order to live off 4% of total savings, your whole family has to squeeze into a one bedroom apartment. And you can’t afford a dish washer or washing machine. So you have to wash all clothes by hand. Maybe you are no longer dependent on outside revenue streams, but you spend all day doing arduous household work to support this lifestyle. Furthermore, you all sleep cramped in a single room, and find your angst rising because of lack of privacy and personal space.

Although the economics work out, I think redefining financial independence takes these quality of life issues into account.

This is not financial independence, it’s hell.

It’s Not Absence of Work

Others like to define financial independence as the point that you no longer have to work to survive. There is this dream of lying somewhere on a beach in Mexico most days of the week. As enticing as that sounds, it is just not reality.

Work is the creation of goods or services. When we do this for someone else, we call it employment. When we do it for ourselves, is it any less work?

If you work in a restaurant as a dishwasher, you get paid by the boss for washing dishes. When you go home after a long day and eat a satisfying dinner, what happens? When you are finished with the meal you get up and wash dishes. Exactly like on the job.

So why when you retire from the restaurant, and spend the rest of your life doing your own dishes, are you not doing work?

We work our whole lives. Whether we are providing goods and services for someone else or for ourselves, we will be doing these activities until we die.

Redefining financial independence means letting go of our previous held notions of work and employment.

It Is Living With Meaning and Purpose

Financial independence is the act of extirpating the importance of money from our daily activities. Since work is just providing goods and services, and this is a necessity your whole life, you might as well search for a job that is meaningful.

When you find joy and meaning in the act of providing goods and services, you are financially independent. You have created a perpetual money-making machine.

And barring physical injury or disability, the money-making machine is you.

Final Thoughts

I was financially independent the day I started working in medicine. By becoming a doctor, I was fulfilling my meaning in life. I was providing those good and services that gave me joy (and also earning enough money as intermediary to pay for all those goods and services I couldn’t provide myself). I could have done that forever.

Until I couldn’t. Over the years stress and burnout have taken their toll. Luckily, through frugality and investing, I have saved enough money (an intermediary, potential energy for goods and services) to leave this perpetual money machine and keep myself busy with other life affirming activities.

I am redefining financial independence.

Won’t you join me?