Saturday, February 14, 2015

Work And Financial Independence Are Not Mutually Exclusive

One of the common arguments I get that’s against the concept of living below your means and investing excess capital in such a way to build passive income and attain financial independence is the thought process that some people just don’t want to stop working. Ever.
“Why save and invest when I love my job? I don’t ever want to stop working, so passive income will do nothing for me.”
This is actually a valid issue to take up.
However, I don’t believe it’s completely rational.

Being Financially Independent Doesn’t Preclude You From Activity (Paid Or Otherwise)

You can look at a lot of highly successful people out there that continue to work long after they’re wealthy enough to stop.
Take Warren Buffett, for instance.
He’s one of my heroes, as evidenced by the fact that Claudia and I are are making a pilgrimage to Omaha this year to see him in person at this year’s Berkshire Hathaway Inc. (BRK.B) annual shareholders’ meeting. This is going to basically end up being our honeymoon, so that’s saying something.
Now, Buffett is worth more than $60 billion dollars. So he obviously doesn’t need a paycheck. But he continues to show up for work every morning. Why?
He does what he does because he enjoys it. He’d rather continue running the company he built from the ground up to his specifications than, say, go golfing for eight hours per day. That’s how he’s wired. And I don’t think anyone can blame him.
As I recently wrote, being financially independent doesn’t mean you sit around all day, staring at a wall. You still have to spend your time in some manner. The key to financial independence, however, is that you can spend your time however you want. You own all of your time, meaning every expenditure of every minute is completely up to you.
You may decide to continue working at the job that allowed you to buy your freedom. Or maybe you decide to take on a totally new career. You could volunteer all of your time to causes that mean something to you. Or you could take the opposite approach of Mr. Buffett and go golfing all day. It doesn’t really matter as long as it’s bringing value to your life and you’re happy with your choices as to how you spend your time.

Work And Financial Independence Are Not Mutually Exclusive

So you can see that once you become financially independent you can still continue to work. The difference, however, is that it’ll be on your terms.
It’s not like becoming financially independent means you hand in some kind of “work card” and you can never have a job ever again. In fact, it’s quite unlikely that anyone intelligent, diligent, enterprising, and persistent enough to attain financial freedom early in life will never earn another dime again via the exchanging of their time for money. In fact, it’s actually more likely that someone that aggressive and hard working will end up continuing to earn money by pursuing their passions once their time is freed up to do so.
Personally, I’m planning on continuing to write in some capacity once my dividend income completely covers my expenses. I can’t quite say as to what frequency or in what medium, but I think there will always be that desire there. I certainly won’t be barred from firing up the laptop and putting an article or book together here and there, even if I don’t have to. But I’ll be doing so because I want to.
Just because the cage door opens doesn’t mean you have to stop running on the rat wheel. If you enjoy the pace, you can stay on for as long as you want/can.

Not Being Financially Independent Means You Still Have To Work In Some Capacity

Here’s where the value of financial independence comes into play.
While financial independence and work are not mutually exclusive as they can co-exist in harmony, you cannot stop working if you’re not financially independent.
See how that works? It doesn’t go both ways.
In my view, that’s one of the biggest reasons to become financially independent. It’s all about options and flexibility. If you want to work, work. If you want to play, play. If you want to relax, relax. If you want to volunteer, volunteer.
However, if you’re not financially independent, those options all disappear. You can’t just take a year off to volunteer for a local cause or travel the world if you can’t pay for housing and food without a paycheck.
It’s simply untethering yourself. Why would you want to be tethered to anything if you don’t have to? Why would you choose to not be free over freedom?


Financial independence is freedom. To purposely avoid freedom is, in my view, not a smart move if only because freedom gives you opportunities, choices, and flexibility that being enslaved to your job doesn’t offer. Not having freedom means your time is not your own and you can’t completely control your own destiny. You go where someone tells you to go, do what they tell you to do, and be who they want you to be.
Now, you may love your job. If so, that’s a fantastic position to be in. I now know what that’s like after quitting my job in the auto industry to pursue writing full-time.
However, it’s only because I was already covering a substantial portion of my expenses via dividend income that I felt comfortable enough to make that move. Only having to go out in the world and make a thousand or so dollars per month meant the hurdle wasn’t that high for me. And that’s what passive income does. It lowers the hurdle for you. It goes from a major jump to a leisurely step. Eventually, it disappears completely. That lowers life’s difficulty level significantly.
Not having that kind of safety net means I probably would have never left my old job in the first place. Furthermore, you may not always love your job. Pulling down 40 or 50 hours per week at the office at 35 years old and doing the same thing at 55 years old are, I’m quite confident, far different. You get worn out over time. And we generally change over time as well. Moreover, you may end up with a boss you don’t like or a new role in the company that you don’t enjoy. Or maybe you end up being let go due to downsizing or something similar. Someone who’s not free might be devastated or forced into a miserable situation. Being free, on the other hand, means you simply have to look at the other 1,000 or so options on your plate.
Being financially independent simply gives you options. It doesn’t mean you’ll never work again. But if you decide to continue working for pay, it’ll be on your terms.
Full Disclosure: None.
What do you think? Plan on continuing to work even after you become financially independent? Why or why not? 
Thanks for reading.

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