The Fallacy of Financial Independence

I believe financial independence is impossible. Though most people pursue it; I certainly did in my early years of business. However, I now believe something better is possible.

Financial independence is heavily promoted by the financial industry. It’s that place in life where we “arrive”, have enough and are secure. Financial planning tools often identify the dollar value of financial independence based on a person’s desired lifestyle.

Here is the problem; money cannot provide total security.

Trying to find security where it cannot be found will only lead to frustration. We only need to think back to the stock market pullback of 2008. People who thought they had achieved financial independence before that point, suddenly saw their portfolio fall 30-50%. Many seriously questioned their independence and security after that.

As a Certified Financial Planner, I know the value of establishing targets and a plan to get there but we need to understand the limitations.

I believe answering the question, “How much is enough?” is an important step in gaining clarity. It allows us to stop the endless pursuit of more and begin to recognize the most important things in life are not about money or possessions. Our culture promotes the idea “The more we have, the happier we’ll be.” If we stop and look around us, we quickly expose this lie. We are the richest generation that has ever lived but on average we are not that happy. We become our own example that money cannot buy long-term happiness.

Financial independence is not possible; however, financial freedom is. Freedom comes from contentment. Contentment is learned. It is a journey, not a destination. But it is possible. Contentment is never linked to an amount of anything. I expect that you have met content people, some with a lot financially and some with little. I also expect that you dread being around those who are very discontent – some of whom have lots, and some have little.

The Apostle Paul provides a great example of how to become content. He was raised in an affluent Jewish family, went to the right schools, was a leader in his community and achieved great professional success. He also experienced times that were very difficult. He was shipwrecked, abandoned, falsely accused, unjustly imprisoned, and endured many hardships. When he wrote a letter to friends in Philippi, he says “I have learned to be content whatever the circumstances. I know what it is to be in need and know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want.”