Financial Independence and Mental Health

I have talked in the past about the money mind meld. Basically, the realization that I was financially independent came to me suddenly, and hit me like a ton of bricks. I was in no way prepared for the rapid switch in world view, and it took me months, if not years to wrap my head around what post FI life looked like emotionally. Although those striving toward financial independence believe that feelings associated with reaching their goal will most likely be joy and ecstasy, for many of us the reality has been quite different. This does not mean that financial freedom is an unworthy goal. You wouldn’t be here reading if that was the case. There is a relationship between reaching financial independence and mental health, however, that is not always positive.

The best way to avoid these pitfalls is to be aware of them from the beginning . So I thought I would talk about a few that can be particularly dangerous.

Depression

My first realization after stumbling upon financial independence was that I was profoundly depressed. At the flip of a switch, I was suddenly aware that a large part of my life’s purpose was behind me. I had worked hard enough to accumulate a sum of money that should last forever. This conclusion came at a time when I was struggling with medicine and feeling burned out.

Why wasn’t I joyful?

A big part of the answer was that I was lost. I had spent so many decades defining myself either in the identity I had built around being a doctor, or the clarity I found in boosting income and starting businesses. In one fell swoop, none of that mattered anymore.

But who then was I? What gave my life meaning? Why wake up every morning?

Of course I had family and friends. I had trips and vacations. It’s not that my life lacked complete direction. But a singular purpose was missing. My identity was no longer wrapped up in my profession. I had nothing left to strive towards.

Financial independence and mental health are not always synonymous. Dysphoria can be as common as euphoria.

Anxiety

Another common feeling that surrounds reaching financial freedom is anxiety. There are several reasons. The most obvious is that once this sacred goal is reached, there is fear that it will be snatched away. Maybe the market will crash and I will become a victim of sequence of returns risk. Or real estate will plunge. Maybe the cost of health insurance will go so high that I won’t be able to cover my monthly needs.

There is also the one more year phenomenon. Should I retire early or not? This stress often causes anxiety to rise as a careful conservative saver tries to let go of the accumulation phase.

This is part of the reason we are kidding ourselves with the safe withdrawal rate. Why we hold onto jobs too long or start crazy side hustles. There is certainly a component of that in my half retirement.

Anxiety is one of the most difficult connections between financial independence and mental health.

Isolation

We are natural stealth wealth practitioners. We learn early in our path that our friends and family often do not want to hear us proselytize. They don’t understand our proclivity to frugality and don’t want to be judged for their spend thrifty ways. So we stop talking about our habits. We hide our wealth.

And then when we retire early we realize that the dark side of stealth wealth is isolation. We are alone. We no longer socialize at work because we quit our jobs. Our family and friends can’t go out for coffee on Monday morning because they are all too busy working.

Even if they could spend time with us, they think something is wrong. They ask us if we are ill or having a mental breakdown. Their worldview doesn’t include nor understand early retirement.

Final Thoughts

Financial independence and mental health are closely tied but not always aligned. Often reaching this glorious goal post leads to both euphoric and dysphoric emotions. Being aware that depression, anxiety, and isolation are all possible responses to financial independence helps ease the transition.

None of these feelings need to be permanent. Purpose and identity can be rebuilt and depression abated. Anxiety eases when we make these difficult transitions and find that the world doesn’t fall apart around us.

And isolation can be minimized by making new friends and reaching out to this wonderful personal finance community.