Pursue Financial Independence, Not Early Retirement

When I first learned about financial independence, early retirement was my goal.

At the time, I was working too many hours in a toxic work environment. I was burned out and I couldn’t even imagine a work situation in which I’d feel happy and healthy.

Around this time, I actually decided to take a break from work to deal with some health issues. I’m lucky to have had a decent sized F-You Fundand received payment through my company’s disability insurance, so this career break didn’t set us back financially.

I had a lot of time to reflect on what I really wanted out of my life. During this time, I still thought of early retirement as the ultimate goal of financial independence. Because of difficult work situations in the past, I couldn’t fathom being in a situation where I needed to make money and also being happy at the same time.

There were two things that happened that made me realize that making money and enjoying your life were not mutually exclusive.

First, I started this blog and realized how much I enjoyed it. Blogging is hard work. I spend a significant amount of time and energy each week researching for my next post, writing, promoting our work, and engaging with the personal finance community. While I don’t currently make money from this blog, it is something I’ll explore in the future.

Second, I began to work part-time. Initially, I chose to work part-time because it was what my health could handle.

About six months after going part-time, I now have time and energy to pursue passion projects while maintaining my health. I no longer feel constantly frazzled. Working part-time provides me balance and the ability to work toward location independence.

Perhaps not too surprising, I actually enjoy work.

Now that I no longer associate work with misery, I am much less motivated by full early retirement. I now believe that the goal of financial freedom is to build a purposeful and happy life; not to retire early.

Even though I don’t want to retire early, this doesn’t mean I am no longer pursuing financial independence. It’s actually quite the opposite.

I am more excited about our pursuit of financial independence because of the complexity of our journey. It’s no longer as simple as finding a balance between work and no work. It’s a journey of self-discovery, dreaming big, working toward goals, re-engineering our life, diving into entrepreneurship, and so much more.

I now have a greater understanding of and appreciation for financial independence. Too often people critique financial independence because of its association with early retirement. They exclude themselves from the pursuit of financial independence by saying, “I don’t ever want to retire.”

But they miss the point or a very big point. As we have decoupled financial independence from early retirement, we begin to understand other reasons to pursue financial independence.

5 Reasons to Pursue Financial Independence

There are so many reasons why you should pursue financial independence even if you don’t want to retire early.

1. Even if You Love Your Job, Things Can Change Unexpectedly

Just last year, my mother-in-law was re-diagnosed with cancer. This reminded us that our lives are not guaranteed.

This was not the first time that we learned that anything could happen, and we should be prepared. A few years ago, I was laid off from my job. While I was fortunate to find a job just a few days later, there was no guarantee.

Being laid off is a common occurrence, especially for those over the age of 50. Over 50% of people over the age of 50 are actually pushed out of their long-time careers before they are ready to retire. Of these people, only 10% are able to find employment that pays them as well as their previous role. Even if you love your job, the company may not be loyal to you when push comes to shove.

The first reason to pursue financial independence is entirely focused on greater financial security. It’s important to prepare for an unknown future.

There’s a wide range of events that financial independence for which helps you prepare. This includes:

A serious illness or disability to you or a family member that prevents you from working
A change in management or leadership at your employer, making it difficult unbearable to go to work
Your company going out of business or needing to downsize, leaving you unemployed

In life, things can change in an instant. It’s important for us to have financial security if things in our life don’t turn out as planned.

2. Control How You Use Your Time

Pursuing financial independence is not just about preparing for the worst. It’s also about taking control of your life and how you use your time.

As we gain more financial freedom on our journey, we have more freedom to choose how we spend our time. I’ve taken a very deliberate path of working part-time, but there are other popular paths. Others may choose to take summers off. Some opt for a career break or mini-retirement.

It’s also possible to continue with full-time employment, but feel empowered to say no to things that you don’t want to do or would require you to work additional hours. If you are financially stable enough to not need the job (even if in the long-term you’d need to find another one), it provides you with a lot of confidence to set boundariesto preserve your time and energy.

When you have the freedom to decide how you want to use your time, you can focus on activities that energize and engage you, rather than just doing things to pay the bills.

Instead of focusing all of my time on work (preparing for work, working, de-stressing, etc.), I get to spend a lot of my time on things I enjoy, such as writing, reading, spending time with friends, travel, etc.

With a more balanced life, you could choose to spend more time with your family and friends, focus on projects you are interested in, volunteer for a cause you believe in, or even choose to work at a lower paying job that might provide you with more meaning and/or work-life balance.

3. Design Your Ideal Life

Not only do you have the time to do things that you enjoy, but financial freedom also provides you with the ability to envision and design your ideal life.

While we haven’t reached financial independence yet, the pursuit of it has opened my eyes to dreaming big. We’re working toward designing our ideal life.

I love being able to envision what I want in the future, knowing that I could actually make it happen. Within a few years, we could be location independent, choose to be nomadic travelers for a short-time, or spend a few months a year traveling the world.

A couple of years ago, I would have thought about this and become depressed because I thought it wasn’t possible.

When you are pursuing financial independence, the financial freedom you gain along the way provides you with a much wider array of options. It’s very similar to a snowball tumbling down a hill. The further along it is, the bigger your options are.

4. Freedom to Take Risks

A few years ago, I never would have imagined being able to work part-time. While we’ve never had consumer debt or spent frivolously, we’ve largely depended on both our full-time incomes throughout our careers.

Working part-time is very much a risk that we could afford to take because of the financial freedom we have earned to this point. Our freedom is in the shape of assets that we’ve saved and our current cash flow.

Financial freedom provides you with the flexibility to take risks because finances are no longer a barrier. Being an entrepreneur and starting your own business becomes much more possible.

While we are choosing to not take a big leap into full entrepreneurship yet, we are working toward that goal. Our financial stability would give us a much longer window to allow any business to succeed. The flexibility allows us not to worry about failure or focus solely on making enough money.

The financial stability I have also changed the way I act at work. It gives me the confidence to share my opinions and perspectives or push back on assignments without feeling like there is a risk to my livelihood. Without it, I constantly felt like I was sacrificing my own wants and needs for the company.

5. Mindset Shift about Consumption

Our pursuit of financial independence has also forced us to become more intentional with our spending. We’ve thought a lot about what we value, primarily spending money on items that make our lives more fulfilling and meaningful, and what is enough for us.

We are no strangers to understanding tradeoffs and opportunity costs of trading time for money

Questions like these swirl around in my brain:

“Do I really want to move into a bigger house if that means it lengthens my mandatory working career for 5 years?”
“Do I really need this new car if not buying this car would give me the freedom to start working part-time?”
“Does ordering take-out make me any happier than cooking at home?”

Because we understand the tradeoffs and outcomes of our decisions, our pursuit of financial independence has interrupted consumerism. Now that we are more intentional about our decisions and our finances, we are less swayed by advertising.

This doesn’t mean we don’t buy anything. If something has utility but doesn’t bring me joy, I will wear it out or use it up before buying what is most economical. I also try to borrow things rather than buy them, if possible.

For the things that add joy to our lives, we don’t hesitate to spend money, even if we try to do these things as economically as possible. For example, we love to travel, so we’ve begun to pursue travel hackingso we often get our flights and accommodations for free.

We both enjoy photography, so we recently bought a new high-end wide-angle lens for our DSLR camera which will last forever. We want to be able to bike when we are camping this summer with the dog, so we bought a dog bike trailer used off Craigslist.

Having a mindset shift about consumption allows us to really understand the things that make us happy. Despite what advertisem*nts tell us, buying more stuff will not make us happy. For us, being happy is much more about experiencing the world around us, pursuing things that we enjoy, and building strong relationships.

After Brandon, the Mad Fientist, achieved financial independence, he reflecting on this mindset shift, saying, “Feeling like you can buy or do anything, while simultaneously being completely content with what you already have because you know more won’t make you happier, is one of the best benefits of pursuing FI.”

When we no longer want the newest and flashiest gadget because we know these things won’t bring us happiness, our life becomes more fulfilling. This anti-consumerist perspective also helps us to play a small part in reducing waste and alleviating climate change.

Why You Should Pursue Financial Independence Even If You Don’t Want to Retire Early

I threw this question out on Twitter last week, and this was my favorite response.

Pursue Financial Independence, Not Early Retirement - The Fioneers (2024)