There seems to be some confusion in the blogosphere about what it means to be financially independent. I have seen many blogs and articles talking about financial independence that have different definitions of it. Some I agree with others I don’t.
Let’s look at the definition of financial independence.
Here is the definition from Wikipedia .
Hubby and I are financially independent. It means to us that we have enough money from investments and other passive income to be able to pay all of our expenses for the rest of our lives without working jobs.
To some people it means being self employed and making enough money to pay all of their expenses. Others believe that they are financially independent if one spouse is self employed and the other works for someone else.
I know there are many, many more definitions. But which one is the right one? Perhaps there isn’t a right one. Perhaps it depends on what each of you think it is.
I’ve been around so many decades that I don’t even count them anymore. But I was raised to believe that you became financially independent when you retired. That retirement came when you turned 65. We didn’t like the idea of retiring at 65, so we set up our life goals so that we could retire 10 years earlier than that. We could have set it up for much earlier but our children would not have been able to attend private schools and go to college. Those goals were more important to us than retiring earlier.
Our life goals for financial independence were achieved through saving, frugality, investing, and setting up other streams of passive income.
Hubby was self employed as a consulting engineer for less than a year after he was done with his career jobs. He quickly realized that he had retired to enjoy life not do consulting work. Most of his working career was spent doing two different jobs. I worked part time and full time jobs for less than 17 years. Most of my work was done while my children were in junior high, high school, and college.
Now we are in our 17th year of financial independence and have not had one thought about self employment or even taking a part time job. We have plenty to do each day and we are never bored. But most importantly our planning and working has paid off. We are free from work.
So our definition of financial independence is the same as our definition of financial freedom. Never having to work again because our money pays our expenses year after year. By not working we control our own lives. We don’t have a boss telling us what to do each day. I totally agree with Wikipedia.
I am very curious. What is your definition of financial independence? Are you working towards it? Or have you already achieved it? Please leave a comment and share with all of us.