For many years people have been taught to “get a job” or “find a career” or asked “what do you want to be when you grow up?”, as if the job or “honest days work” is an end in itself. Few are taught that work or a job is just a means to an end. In this series I will present another perspective, where work is a means of attaining financial independence, rather than an end in itself. The first chapter will focus on defining the concept of financial independence, why it is important, why financial freedom is a means of protecting civil liberties like free speech, and how dependency has been exploited through history due to a lack of self sufficiency. .

What is financial independence?

Financial independence is a self sustainable state which you can reach when your assets generate income which exceeds your expenses. For example this can be the result of owning royalties, dividend paying stocks, high yield bonds, and new exotic digital assets. While most Americans live on credit, rely on government benefits, or both, neither of these survival strategies are sustainable indefinitely. It is also not sustainable indefinitely for most people to rely on being employed or to assume that their labor will be worth enough to support the cost of living.

In the abstract, the pursuit of financial independence is the orthogonal to the pursuit of a self sufficient life, is aligned with sustainable living, and while it merely represents the financial dimension of this, it does not include every aspect of sustainable living. In the abstract, having the ability to sustain yourself indefinitely is the goal of sustainable living, and it involves becoming personally more efficient in how you use the earth's resources, as well as financially efficient in how you spend your financial resources.

Why aim for financial independence?

The current trends we see in the economy should be alarming for most. We see the trend of automation for example which through machine intelligence/AI many jobs humans do today will simply cease to exist in the near future. Millions of taxi and truck drivers for example will likely be replaced by software and self driving vehicles. While this is happening the cost of living remains high, inflation continues, leading to pertinent question of “how do I retire?”.

Financial independence would mean an individual does have as much to fear from the growth of an automation economy. These trends do not have to be interpreted as threatening if an individual is in a position to be self sufficient, and living a sustainable lifestyle. Financial independence is a means to attaining self sufficient, a sustainable lifestyle, and financial security. Financial security and financial sustainability are related, in that just as organizations have to strive to be financially sustainable, the human beings also benefit from this.

To achieve the goal of financial independence may require developing a plan. To achieve the goal of financial independence will require discipline. It may require developing new skills. It may require rethinking old conceptualisations such as “retirement”, “work”, and specifically it requires a more goal oriented purpose driven investment system.

To achieve and maintain financial independence is a lifestyle choice which may include making sacrifices in the name of cost efficiency. As an investor, or as a laborer, you want to get the “most bang for your buck”, to have your dollars go a long way, to minimize losses. An example of this can be compound interest, where you invest over time starting at a young age, until eventually your investments through continuous re-investment begin to compound.

What is retirement?

Retirement is different across cultures and time periods, with different ages considered to be normal retirement ages in different countries and decades. Retirement usually occurs when a person ceases to be employed, but retirement often does not mean the retired ceases to work. The key here is an elderly person can volunteer, can have hobbies, can stay active and do “stuff” without being “employed” according to government records. Hobbies specifically do not generate tax revenue for instance.

Many elderly today must work in their final years because they never achieved financial independence. While it may be true that older semi retired individuals want to work, many of these individuals are unable to follow their hearts and dreams because of financial insecurity as a result of a dependency on an income generating activity. This financial insecurity IS THE PROBLEM. Financial independence is a method, perhaps the main method aligned with capitalism, which can allow one to achieve financial security. From financial security an individual may gain liberty, the ability to easily travel, the lowering of stress associated with bills, even stronger marriages, all can result from being financially liberated.

What about government programs?

Will the government save everyone? Many people think that the government can help the poor and while I do not deny that the government can help, it is not sustainable in it's current form. Additionally, dependency on the government is not any better than any other financial dependency. At any time the government can change it's policies, or become oppressive against those taking benefits. Government programs may be well intentioned, but they don't scale well in their current form.

The point here is not to say that government programs will never scale but that in the current form they wont, and that an individual would be wise to spread their risks. Betting everything on a functioning political process being in place requires “total faith” in that process. If the political process fails then what happens to all who depend on government services to live?

Again, self sufficiency as the ultimate goal of the worker would mean the worker should either want to “work to own”, or “work for self”. If for example the individual factory worker is working to own then they want to own shares in the factory, they want to own the means of production. An alternative is the farmer who wants to sustain off the land she owns. Ownership is the key to self sufficiency in a capitalist environment.

How does this relate to free speech?

In the United States financial transactions are considered protected speech. Generally, money in the form of negotiable instruments are just IOUs and are used to communicate supply and demand. Money has gone digital and the distinction can be made between centralized digital money in the form of bank notes or units of account in a computer and decentralized digital currencies in the form of various crypto-currencies. It must be noted that all of these technologies are just means to an end. They either support you in your goal to achieve financial independence or they do not. This means its not about currency but about asset accumulation while limiting liability. Ownership of property can be facilitated by new technology but the same technology can bring dangers such as the increased risk of theft, extortion, and ransom. Free speech speech is indeed a double edged sword but the sword can be wielded to help bring about universal prosperity, if humanity choose to do so.

Financial_independence | Investing | Dividend_investing | How_to | Passive_income

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