What I Misunderstood About Financial Independence

In my rational worldview, everyone wants to achieve financial independence and high-earning individuals are to be a touch envied because they can cross the freedom finish line faster.

People like Mr. Money Mustache are heroes and we are all working towards freeing ourselves from randomly dictated vacation policies, inane office politics, and projects that make someone else more profitable.

Imagine my surprise then when I finally crossed the rubicon and discovered this: that rich, high-earning people don’t necessarily care about financial independence!

While this epiphany was comforting because it reinforced the fact that mindful money stewardship is just as effective at achieving financial independence as a 1% paycheck is, it was also sobering to think about the chasm between a wealthy person’s mindset and a normal person’s mindset.

Those Attractive Golden Handcuffs…

Recently, I was at dinner with a person who married into wealth who we shall call Ally. Thanks to her high-earning partner, they own a 3+ bedroom apartment in a Manhattan building that has most standard amenities expected of city living. Their son enjoys the attention of a nanny and is set to attend private Pre-K at the tender age of two.

Despite this seemingly ideal set-up, it’s not working out for them and they have resumed the search for a house in the suburbs.

Confusion ensued in my head: If they can’t make it work, are we lower-earning brethren all doomed?

Interestingly, Ally was flummoxed by my goal of retiring by 45 and being willing to keep a tight lid on my current expenses. In fact, there was a hilarious moment at the end of dinner when she offered to pay for her share of her celebration dinner as she thought we were “bickering about money” when in fact I had simply been trying to goad hubby into optimizing our savings rate to hit 80% again (Thanks, YNAB!).

We flat-out had to tell her “we’re not poor” as her wallet was waved away. I was also made to understand that daycare makes no sense compared to private pre-K and that we should hire a financial adviser because we clearly don’t have a clue about our finances since we don’t own the stuff they do.

High-paying jobs are great because there is so much that your money can buy and do for you. That fancy watch, the nanny, the luxury car, the real estate—these are wildly seductive purchases that people make to signal their status and belonging to a particular socioeconomic strata they aspire to. What isn’t clear to folks who are in love with their earning power though is the fact that these acquisitions become golden handcuffs.

The human psyche never wants to go backward, and so these belongings chain people down. Someone who has driven a Mercedes for more than 10 years would never consider a non-luxury car option if they are still earning the same amount of money or more when the next car is purchased. This slippery slope is, in essence, the struggle that everyone must reckon with regardless of their paychecks, and it is the number one perpetrator of substandard and/or captive career paths.

Fiscal Epiphanies

This dinner conversation made me realize that the reason why financial independence isn’t a goal for many people, and particularly the rich, is because they haven’t bothered to do the hard work of unearthing their passions and/or interests.

It turns out that Ally’s confusion with my early retirement goal stemmed from the fact that she couldn’t understand what people would do with their time if they didn’t work. Without hobbies or projects to explore, an existential crisis would be triggered for folks whose identities and self-worth are tied to their careers and salaries.

She noted that she is thrilled her husband continues to work, even though by my calculations (he’s in one of the most senior roles at a hedge fund and has been in the industry for nearly two decades), he should have been able to quit already and be a stay-at-home dad pursuing his personal goals. Instead, he’ll continue to toil indefinitely to acquire that house in the suburbs and fund 22 years of private education. If they have another kid, it’s definitely game over for financial independence given their lifestyle inflation.

I also finally internalized that for some people, the ability to throw down thousands of dollars for a birthday party their baby will never recall is a marker of pride, just as crossing the next $50K net worth goal is a milestone for me.

Whereas spending money publicly is their motivation, increasing our net worth secretly so we can be free drives my money actions. When I think about Ally and her husband, it’s clear to me that they wouldn’t know what to do without external validation from an outside employer or the envy of their friends.

In their minds, there is something suspect with you if you walk away from a “prestigious” job and decide to make less than what you currently pull in because you would have to afford less.  I can only surmise that their mindset is tied to the fact that they have a very clear plan for the expenses they wish to continue funding in their lives, so any decrease in earning potential is a threat.

Finally, I came to the liberating conclusion that it’s not my job to convince people of the logic behind financial independence. Whether people choose to remain in servitude to a job that they don’t love is really none of my concern: we all have choices and are capable of freeing ourselves from situations that don’t serve our goals. Yes, workaholics should work but that energy should be used on personally meaningful work—not work that’s done to support materialism.

I also believe that you should responsibly support your family until your child is independent, so, obviously, any early retirement plans should budget for a bit of a potentially suboptimal career path until those hurdles are cleared, but then once the child is in elementary school, the expenses should also settle into a manageable state.

The chasm between Ally and me is vast with irreconcilable differences in values – why even bother trying to explain and show the data for why investing in low-cost index funds beats hiring financial advisors when someone’s world view has already determined that value is derived by spending money?

Be Mindful, Stay Grateful

As depressing as this dinner was for me, it made me even more committed to my goal of financial independence. I haven’t been journaling almost every day these last four years for nothing—I have gained a clearer understanding of the activities that provide meaning and satisfaction in my life, and I’ve got some pet projects I’d like to stew over.

I know that my current job is a means to an end goal and have created a lifestyle that supports my overall master plan, plus I know how I’d use my time in early retirement.

Besides at that point, if we’re lucky, our kid will be in middle school or high school and there are interventions I plan to stage to help him or her discover potential careers, passions, and post-high school paths. I can only really do that with time on my hands as my best energy exists between 11 am and 7 pm.

Meanwhile, I’ll continue to swim in my mindfully chosen socioeconomic lane, pay attention to YNAB, and illicitly enjoy the thrill of jumping over to the VIP lanes every now and again.

Recently we went on a spontaneous but budgeted for date night which didn’t even start out at the restaurant we thought we’d dine at. The unexpected experience of being seated at the chef’s table watching meals be prepared and the flavors of the dishes we tried led us to a first-ever experience in 10 years of being together: a meal in which we ordered 2 appetizers, 2 entrees, 2 desserts, and a half bottle of wine. It was one of the most delightful evenings and a sublime date night experience.

I don’t expect future date nights to match this nor would I want this to become the norm: I simply live for the thrill of a good surprise and that warm fuzzy feeling I get when money is decidedly well spent.


Kim Liao practices conscious spending every day which has allowed her to accumulate an above average net worth during her eight-year career while living in the 7th most expensive city in the world. She blogs about the never-ending quest for financial fulfillment and her goal of retiring at 45 at Stewards of Abundance.


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