Why do you care about Financial Independence?

33 Replies

I have to admit that I was drawn to BiggerPockets in a somewhat roundabout way.  You see, I'm not so much interested in Real Estate as a business that I want to get into, but as a means to an end.  That end of course being Financial Independence. 

Now I'm convinced that my job is the best way to continue to earn money, that lifestyle design is the best way to save money, and that Real Estate is the best way to invest my money.  

So I guess I'm only a fan of Real Estate Investing in that it is an awesome path to generating high returns to put me on the path to Financial Independence faster.  If I thought that there was a better chance of generating high returns in Stocks or Bonds, I might be spending my time investing in those assets instead.

I'd imagine there are at least a few people out there that agree with this line of thinking, which brings me to the next question:

Why do it all in the first place - what does wealth accumulation and Financial Independence actually mean to you?

For me, this is an easy answer - I think its about freedom.  At my last job, I remember sitting in a cubicle and thinking to myself, "man, if things go INCREDIBLE for me, in 15-20 years I'll be the CFO of this company!"  Then I realized that if I were to become CFO and reach the pinnacle of the corporate finance world, the only difference would be me spending my days in a slightly larger office, reporting to slightly different people, with a slightly larger salary.  I'd STILL be spending the best part of my day sitting at a desk working for something that I didn't truly care about, and the way that I spent the best part of my day wouldn't truly change.

I lucked out by getting my next job, a job that I currently love and am passionate about, but the fact remains the same - even a job I love would be made that much better if I didn't need the money.

What do you all think?  Why, from a philosophical perspective, do you strive for Financial Independence?  AND Why do you think that some people don't?  

@Scott Trench   Wealth accumulation and financial independence to me means spending more time with my kids, being able to take a vacation when I want to and not when some company approves my vacation time, and being able to buy what I want when I want. I decided to come into real estate both as an agent and investor because my day job was not something I was interested in doing for the rest of my life. In fact I've never had a job that I was interested in doing for the rest of my life until I got into real estate.

I strive for financial independence because to me that's the ultimate American dream. For me real estate as a profession is the only thing I'm truly passionate about and I know it's the best way for me to achieve financial freedom. I've never been fond of the corporate world and I've had some pretty decent jobs in that sector but I've always wanted to work for myself and create my own destiny. Thankfully I'm doing it now.

Thanks @Cierra Seay  !  I think that's a great reason to strive for FI!  It's also very cool that you are passionate about the work you are currently doing.  It's almost like the best of both worlds.

@Scott Trench  - easy for me - its the 'independence' part.

My first job out of college, salaried, 1 hour commute each way.  A project I was not on was late - boss called us in and asked us to all volunteer to work 7 days a week until that project was 'caught up' - advised us that: 'there are other people who want your jobs'.  So basically I was threatened to be fired, or work 7 days a week for my 34,000/yr salary.

I had always been interested in money, that moment I decided: next time someone tells me that 'other people want my job' - I'll be able to say: you better pick up the phone and call them!  Once I had my resume built up I quit for a better job, a year later I quit to go work for myself and have been happily self-employed since.  I don't own any RE other than my home, but I sure enjoy the freedom that my saving and investing has afforded me.

I have had a few similar experiences since then, and each time I have found a way to tactfully quit within 2 weeks of being pressured.  I will not live under someone's thumb, but I've grown up enough to not burn the bridges too badly.  One case is still a great customer of mine, but I took a few years off from doing work for them.

I was working a M-F from 7am - 6pm job and it was very stressful.  Sometimes my day did not end at 6pm (although sometimes I got to start at 8am instead of 7am).  Or I would go home at 5pm to eat, then work again starting at 7pm until 10pm or 11pm.  If I wanted a day off I would need someone else's approval, and it had to be on a day that someone else didn't take vacation.  If I didn't use my vacation days at the end of the year I lost them.  In 2013 I lost 5 vacation days ... 40 hours *poof* just gone and I didn't get compensated for them.  My bonus was dependent on what the department did ... no matter that I met all my goals, if other people didn't meet their goals then no bonus for me.  Enough was enough.

I prefer not having a full time job and making my own hours, as well as deciding what days I want to take off.

@David C.  Very cool - That obviously took both planning and guts!  I was thinking of Financial Independence in the OP as more of "early retirement" or completely passive cashflow, but your post has shown me that financial freedom has more than just that form.  Clearly, you've created a situation where you are able to spend your days doing as you please, and doing business with who you please.  Very impressive.

For a few reasons

I've worked full time since I was 18 at a few different jobs. And after the new wore off, the old would shine through. At the end of the day I was going to a place I would rather not be, to do a job I would rather not do, to earn money to survive... To hope for a eventual future where I can retire for the 8 years before the statistically probable death at 73. A lot of people say that I should just find something that I love to do, my answer to that is that there a lot more jobs cleaning toilets than rubbing oil on bikini models. The reality is that we need people to work jobs that no one wants , so the few of us can do the things we want. I decided I wanted to be that person & after looking at a few options REI is the easiest way to get there. Financial Independence means I could specialize in weaving underwater baskets & never have to care about were my next meal is going to come from.

My husband is active duty military and LOVES his job. He is doing something he has wanted to do as long as he can remember, fly F-18's. So these are long term goals.

Therefore our goal is two parts

Long Term- To have control of our future after the Navy. I have scene many peoples have to follow the money after a life time of following the navy. Therefore our goal is to be able to retire permanently at 42 and 44. 

Short Term- To replace my income so I can quit and be self-employed by running our "empire". This would allow us to have as much family time that the NAVY allows without trying to work around a civilian schedule.

I would like to have what I like to call "F you" money. I'm not exactly financially independent yet, but I have built enough of my business, and I have saved enough money that I get to be way pickier about the clients I work with. I no longer "need" more sales, etc, and that is very liberating. 

Since I own my own business, I also get to decide how hard I'm going to work and when I'm going to work. This allows me to do things with my kids or friends when others are stuck to their desks at work. It also means I don't get paid if I don't work, so I still have to work hard! 

What a great question! I have to start my comment with the concept of "stability". As I was graduating from law school in D.C. many folks around me encouraged me to become a government lawyer for the great level of stability and benefits. It wasn't for me. I also graduated at a time that there were an abundance of lawyers (When is there not?) and very few available attorney jobs. I had to talk the partner of a small firm into creating a contract attorney position for me (I am now one of his best clients). That was my first job. Since then, I've never had a W-2 job in my career. This probably means I am unemployable but also that I've been eating what I hunt for the last 13 years. I have created for myself multiple modest streams of passive and semi-passive income that allow me to not have to work for money. I think the idea of stability is very different for me than most. 

I am not at the point that I am financially independent that I can retire. However, real estate has allowed me to work to challenge myself, to develop my skills, build relationships. I get to choose work that interests me and I can plant seeds that can mature years from now. 

I went down this path to learn about money and how it works, so I can teach it to my children. A few months ago, I realize that at times I was chasing deals just to make more money and really nothing else. I decided to stop that. Don't get me wrong, I am in the business to make money but I've decided to have a healthier relationship with money. Yes, I want to achieve financial independence but I feel that I am fortunate enough to not have to "work for money", so if I don't have a boss telling me to do something I don't want to do, why would I do that to myself? To me, it is about having the choice to not do certain things.

Being financially independant is a way to be happier for me.

Accumulate wealth is about sharing and caring for the others, the community and the environment.

Some people don't strive for financial independence because :

- they don't care ?

- they have fears ?

- they don't know the way and how to ?

- they don't have enough motivation and clear goals ?

- they are enslaved to their work, habits and their environment ?

- they may be happy with their actual life and don't ask the same questions as us ? And that is how the world is and the beauty of human diversity ...........

An excellent question that more people need to consider.

Right now I work as a temp for an auto supplier. I've upgraded both the union and company from dislike to despise. Sure, the bills are getting paid, but I interact with my wife maybe 10 hours one week and 16 the next (13 days working, 1 off). It's been a trying time for us. Over the last month, I've seriously entertained the idea of simply walking away as a result regardless of the negative consequences of that decision.

Being financially independent, to me, means being able to not worry about money coming in while focusing on our relationship. Having once worked as a non-emergency medical transport driver, being financially independent means affording the best nursing care (when I get to that point) possible and not be dependent upon the government paid facilities that honestly scare the blazes out of me.

I got into a Facebook debate with a friend over wealth. Money can't buy happiness, but it buys the time to pursue the happiness. While I'm not looking for Trump or Gates sized wealth, I am looking to buy the time to be with my friends and family more. And maybe (if I can do well enough) open a private school for inner city kids, give them the education needed to go far in this world.

Originally posted by @Dawn A. :

I was working a M-F from 7am - 6pm job and it was very stressful.  Sometimes my day did not end at 6pm (although sometimes I got to start at 8am instead of 7am).  Or I would go home at 5pm to eat, then work again starting at 7pm until 10pm or 11pm.  If I wanted a day off I would need someone else's approval, and it had to be on a day that someone else didn't take vacation.  If I didn't use my vacation days at the end of the year I lost them.  In 2013 I lost 5 vacation days ... 40 hours *poof* just gone and I didn't get compensated for them.  My bonus was dependent on what the department did ... no matter that I met all my goals, if other people didn't meet their goals then no bonus for me.  Enough was enough.

I prefer not having a full time job and making my own hours, as well as deciding what days I want to take off.

 Thanks Dawn!  That job sounded hellish.  I'm glad you found a way out of it and are making your own way - your story is particularly interesting and I'm glad you got a chance to share it on the Podcast!

My very first job in high school was at McDs in a small town outside of Orlando, Fl... and on my very first day, we did some training at the administrative office.  There, I noticed one guy sitting at his desk. He didn't look important, smart, or special.  I found out later that day that he was the owner of not only the location i would be flipping burgers at, but of 6 other locations!!!  That's when I realized that successful people were made up of the same stuff I was made up of.  On that day, the seed of financial independence was planted. 

Financial independence is a step in the right direction.  It's building your very own security ecosystem. That ecosystem will feed you and your family for years to come, as well as other families including contractors, realtors, wholesalers, and... even providing your tenants with a roof over their family's head on those cold and rainy days. 

Financial independence allows a person a lot to give away.

I might be the youngest person so far to make a comment about financial independence but most people look for it no matter the age. For me it's a matter of a vision of things that I would like to do even more so than things I would like to have (sure a car newer than a 01 Malibu would be nice, but my 01 runs).

With the economy being in a state I really don't know how to describe and the "never ending" yet slowly decreasing student loan debt things like being able to travel (Haven't been out of North Carolina much at all), help people navigate the chaos known as credit and having a much broader social life feel like far off dreams. Being only 25, things like that shouldn't feel so unachievable.

I agree wholeheartedly that money doesn't buy happiness, the material goods don't mean happiness in the long run. The relief from financial rat race, the notion of being able to do things for self and/or others without the immediate repercussion of falling back into the debt hole struggling to climb out that a few extra bucks can provide are the things that I think about.

@Seneca Stephens  I think that you might not actually be the youngest person to make a comment about financial independence - I just turned 24 actually and am extremely interested in this.

I think that you are right that material goods don't mean happiness in the long run, but that the relief from the financial rat race, and not having to struggle (or work) at all IS something you can buy - I think it costs about $1 million per family give or take!

At a very safe after inflation 4% return, $1 million generates about $40,000 per year, which is all that I think that I'll ever NEED.  After that level of wealth, everything else can go to luxury spending, which is just icing on the cake, but certainly not worth working a job that you don't like for!

Freedom is something you buy without spending money.

In my terminology, investing is not spending.  When you invest, you keep your money - just in another form.  When you spend, your money is consumed, and it is gone.  The money you keep buys you freedom every day going forward.

Every inch closer to financial independence makes every day better as the power in your work/business relationships starts tilting away from others and toward you.  Once you don't need your paycheck, or need the next deal, you are able to set the terms that you want and that you will enjoy.  You choose who to work with and on what terms.

Things get better long before you are 100% independent.  Once you have a few months of living expenses, the specter of getting fired is less frightening.  If you have a year or more - you are really free enough to quit if you have any kind of marketable skill at all.

Scott - there is extensive research on 'safe withdrawl rates from a diversified portfolio' and 4% is a pretty common result.  But that's never modeled with leverage and real estate, they take the easy way out with stock/bond diversified portfolios.

Hi @Scott Trench

I grew up being well aware of what the opposite of financial independence looked like. Wealth, moreover, lack thereof, determined much of my mother's career decisions and as a result, she is overworked, exhausted beyond measure AND still has to keep going in order to survive. I'd started to feel what that was like personally in high school when I had to get my first job- and I have no regrets. That experience helped the beginning of developing a work ethic and financial literacy that I might not have obtained otherwise. However, at the same time, I've chosen to become a teacher and I do love that work. It is meaningful and fulfilling and gives me purpose. At the same time, remaining a salaried employee for the rest of my life won't bring me closer to fulfilling some of my other personal goals. So I believe that accumulating wealth to develop financial independence will help me do the work that I love (teaching) in a sustainable way (taking sabbaticals, if/when need be), while moving closer to obtaining some longer term goals (homeownership in NYC, further education, travel with loved ones, etc.).

Great question- articulating this is helpful for sharpening my vision!


This is definitely a question I have pondered for the last few years.  When my rental portfolio reached a $4k monthly net (right in line with your $40,000 income benchmark), I began wondering why I was striving so much for early retirement and "freedom."  Like you, I chose real estate as a financial vehicle, not because I am overly passionate about it. Money buys choices, and without real estate, I would most likely be working a job I hate. However, I don't actually know what I want to do, whether in my free time or as a career.  Many people are inspired to provide for their kids.   I don't have kids, although I do enjoy creating financial options for my two very young nephews.  However, some part of me believes that responsibility lies with their parents for the most part.  I think for someone who has hobbies, family, etc, then financial freedom allows them to spend more time and money on those hobbies and family members.  Otherwise, I am still lost on the subject.   However, I have never been poor.  Sure, I've been flat broke, but with a strong network of friends, my lifestyle was always decent.  It doesn't take much imagination to see how coming from poverty would motivate one to want financial freedom, if simply to avoid poverty.  This question has me deep in thought once again.  Thanks for the post.

I'm hoping to get to financial independence for the flexibility.

So much of my life is structured around a full time job and growing up on a farm, this seems unnatural to me.

My goal is to provide my kids with the mindset so they don't end up working for someone else unless they really want to do something they love.

For me it's pretty basic,  I want to know that my kids will always be able to eat, and that their kids and the future generations will be able to eat and have housing and not struggle or worse, fall apart financially.  I want them to be safe.  

A lot of this has nothing to do with money, it has to do with how we parent them and teach them.  But…  money prevents desperation and creates more opportunity and choices.  

There's a lot of talk of the rich getting richer and poor getting poorer.  I think that is totally pessimistic and actually wrong.  But…  if that is what ultimately happens, I want my kids to be on the side that is not stressed out over money, and I want to do as much as I can to help protect their interests.  

For me, it's about my children. I want to be able to spend more quality time with my children before they are grown and have their own lives. I want to be able to pick them up from school and go home and cook them a good meal and help with homework and spend some time getting an update on their day. I want to be able to go to their school activities without having to worry about taking a day off work.

Right now, we get home after 7 (M-F) with me rushing to get them fed and checking over their homework and getting them in bed by 9. I only spend about 2-3 (counting getting ready in the morning) waking hours with my children and that is not enough. On top of that, my youngest is in daycare and while I like for her to get out and mingle with people, I feel that she is there too long.

This is what financial freedom means to me and I am working on building my portfolio in order to quit my job and set my own schedule. Great thread!

Financial independence for me is about:

1. Providing for my wife and kid, but actually getting to see and enjoy them. I don't know if anyone else experiences this, but when you have a stressful job it changes how you act when you're at home. It's hard to leave all the stress/conflict/negativity at the office and not let it bleed into the type of husband and father I am. 

2. Efficiency. I only have so much money, time and attention. I'll take $50k/year passive income over $100k working 60 hours per week. 

For me it's about freedom and options, like you mentioned in the OP.  We just left a great t-giving weekend with extended family.  All 5 of my bro and sister-in-laws described their Monday and rest of the week as crazy hectic with work.  Music programs & assemblies to prepare for, huge kitchen & bath remodels homeowners are waiting on, patients waiting on hold for their PT appts...  Professional people stressed out.  Then they got to me.  "So Steve, anything going on next week?"  I'm still slowly unpacking, enjoying a light snow fall, spending some time here on BP!

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