As we celebrate the independence of our country this month, I tend to spend the holiday reflecting on what it means to be independent. Independent from a sovereign nation’s rule is the obvious one. How about independent in our careers? Independent in relationships? How about independence from mobility devices? Independence from other’s criticisms? We could go really deep on this topic…but I think you know where I’m going. The one independence I am hired time and time again to help people achieve. The holy grail of money hacking: financial independence.
Now, let’s make sure we are on the same page here. There are different levels of financial independence, and we are going to stay mainstream with this one. By no means am I forgetting about the freedom from poverty and scarcity (very real to a lot of people) or the freedom to enjoy the bounty of your success without judgement or shame (also very real to a lot of people). But we are going to talk about the financial freedom that most people think of when they diligently save 10-15% of their paycheck for their future: the financial freedom to stop working because you have too, not because you want to.
What I think is interesting about this concept is how for several generations, this financial freedom has been called “retirement” and was reserved for those who had a career spanning 30 years and grew a large enough nest egg to pay all their bills for the rest of their lives. Technology has changed the way most people show up at work and has also provided a new way to become independent from the corporate grind. And this independence has ushered in a new way of thinking about financial independence: why wait until your 60’s to attain financial independence when you can have it while you are working? Same idea, new packaging.
Financial independence, according to Merriam-Webster, means being able to live on one's own income without needing support from others. It signifies having enough money to cover living expenses and potentially other goals, like travel or starting a business, without needing a traditional job to fund those things. Now, define income. Most would say you go to work and a company pays you for your efforts. What if you are the company? And your efforts are compensated in the manner you choose? You are not looking for support from others…you are supporting yourself. Exit stage left the retirement nest egg kicking off passive income and enter the retirement passive income side-hustle. Same independence, can be attained two very different ways. Which is right? Which is wrong? The question should be which is right for you?
Pursuing financial independence is not reserved for just those who have a certain balance or have lived to a certain age. It’s available to anyone who is independent from the constraints of being told what your time is worth by someone else and when / where / how it will be given to you. It’s you being in charge of your money. Your time. Your goals and your life both during working hours and outside of them.
To me, financial independence isn’t about how much money you have… it’s the frame of mind of how you see your money and what you are willing to do to live on what you have. For the rest of your life.