Financial Independence – How It Works

If you spend much time reading about personal finance, retirement, or investing then you might have noticed the phrase “financial independence” used somewhere online, or perhaps in a book. It’s not a very common term, but it sounds like something that would be nice to have! So what is financial independence, exactly?

Simply stated, financial independence is that point when you are no longer required to trade your time for money in order to provide for your basic needs. That’s about as succinct a definition as I can come up with. But when you think about it, even that description invites more questions. Like “What is considered a basic need”, or “How can I become financially independent”?

In my experience, the process of becoming financially independent is as much about changing habits in your life as it is about money. If you think about the word “independence”, by definition that means that there was a captivity or enslavement or a dependence on something, right?

Financial independence takes place when you’ve broken free from your old relationship with how money works, how you use it and think about it, and you’ve developed a positive new relationship. One that is based on sound financial principles, and that spills over into your patterns of behavior and the day-to-day decisions that you make with your money.

For example, in most cultures money is seen as a tool (appropriately) to obtain and achieve the things we need and/or want in life. However, from an early age we see that by borrowing money we can achieve those things more quickly, so it’s easy to develop the habit of taking money away from our future selves and giving it to our present selves. And while there are certainly appropriate ways to use debt responsibly, if we have developed bad financial habits then debt can become our master instead of working for us.

Another obstacle that keeps us from becoming financially independent is our addiction to stuff. To keeping up with the Joneses, having the latest and greatest, and wanting bigger and better. Going through life having a consumerism mindset not only keeps us from gaining wealth and putting our money to work for ourselves, it robs us of our time. Time we could be spending doing anything else besides working for money.

The reason I started this blog was to explain why I am pursuing financial independence, and to talk about the various aspects of the journey I’m on. Here are some articles I’ve written recently that can help you understand the topic better and provide some real-life stories of how I’m working towards it as well.

Financial Independence vs Early Retirement – What’s The Difference?

Two Stages Of Debt

Is Patience Still A Virtue?

How To Become Financially Independent

Manage Expenses To Become Financially Independent

How Much Does Your Job Cost You?

Create Your Own American Dream

Smaller House, Larger Life!

Try To Pretend You Are Someone Else


If you’d like to discuss or inquire into my journey to FI, feel free to leave a comment or use the contact form. Also, you can subscribe for updates via email by clicking this link.