My Passive Income Journal

Financial Independence

Financial independence is pretty much done to death. Surely there is nothing more to write on the topic of financial independence – or is there?

Here’s my take on financial independence.

So what are we actually aiming to be financially independent from?


Being financial independent means we are not tied to a salary or a boss for our income needs. Instead, we control and manage our own sources of income.


Not only do we manage our own sources of income, this income flows to us regularly without the need for working for it by the hour.


Essentially we are independent from the ubiquitous reliance of swapping our precious life hours for an hourly rate of pay.


Independence equals freedom.


Financial independence also provides us other types of independence too.

For instance –  freedom from bad debt, freedom from circles of people we do not want to associate with (e.g. lazy negative work colleagues), freedom from worry and stress about how to pay for things, free from the worry of losing our job, free from guilt of not providing for our family’s future, freedom from daily being told what to do, freedom from needing to daily commute, freedom from having to wear a work uniform or corporate wear, freedom from office politics,  freedom of when you eat/pee/sleep ….. the list of what we become independent and free from is nearly endless.


Financial Independence – What It’s Not …..

Financial independence is not the following:-


A big fancy home – homes are not true assets as they usually cost us money, not earn us money. We can’t knock a brick out and go and buy a loaf of bread with it.


A flash new car – flash new cars usually lose ½ their value as we drive them off the show room floor. Upgrading a car regularly is a serious money hemorrhage from any budget. Essentially cars are consumer products and are nearly never assets (even rare or classic cars)


Fancy clothes and a flash hairdo – this will cost you serious money season after season. Peacock today, feather duster tomorrow (Byron Tully)

 By all means have all these things and enjoy them, but know that they are not indicators of financial independence nor are they assets.


Speculative investments that earn no income. So many investments available these days are speculative. By speculative I mean that the owner holds them in hope that their price will increase and a profit can be realized by finding a buyer at a higher price. Even some large corporations and firms can fall into this category insomuch that they are not actually producing a sustainable profit and it is only the share price that is soaring because of buyer speculation that gives them perceived value on paper.

Surprisingly, things like precious metals and some types of real estate can also fall into the category of being speculative, as profits are only realized on the hope of selling the asset for a higher price. When the market for these things tank, all is lost until that market recovers (if it ever does).

Discreet Wealth

We are so used of wealth being conspicuous – but in real life, it’s mostly not so. Old money folk are not visible walking down the street, they do not often drive flash cars or live in ostentatious mansions. Old money people are more likely to be wearing good quality neat casual clothes, drive a Toyota or Volkswagen and live in a nice suburb in an older well maintained home. Old money people truly are the hidden millionaires next door.


Aiming for quiet wealth, discreet wealth and a private income is a sign of personal maturity and wisdom.


Old money does not conversationally discuss the details of their wealth or incomes – their lives are now filled with more important things. However I have personally found that if you ask genuine questions about their approach and values, they are willing to quietly share their well-proven methods with you.


The conundrum for me is that I am writing and entire website and journal about this for the world to see – so do I break this rule? I hope not. Writing this website and journal is my way of anonymously sharing with others that are willing to learn and understand. Realistically, those looking for a quick buck will not stay long, nor will the impatient or the self-obsessed ….. so I think it’s OK.


Oh, a word of caution. Another reason to remain discrete about wealth and financial independence is one of personal safety. Flamboyant wealth attracts very undesirable and negative (even unsafe) life circumstances. Additionally, so many people have a huge sense of entitlement that is probably best that your net worth and journey to financial independence be kept private. The grey man theory may apply here.


Freedom and Choices

Personally I feel the best explanation of financial freedom is this – having reliable passive income streams that allow us to live the life we truly want to live


Working for a salary all our life literally makes us a slave to our job and boss. We exchange our life hours for work.


Once achieved, financial independence allows us to live our life as we choose with little effort given to actively producing personal income. We are free to serve society in meaningful ways, free to invent, free to spend time with family and loved ones, free to learn new skills, free to work at a career/profession we love without the need to be motivated by a salary.  In fact, we are free to do whatever we want, whenever we want for whatever reason we want – that’s freedom.


As we mature, how we spend our time will become less about ourselves and more about others – at some point, a self-serving life becomes boring and the need to contribute to society become more important. We will find our choices and desires will gradually change as we move away from the slavery of a salaried job.


Many old money people purposely choose to work in areas of society that positively impact communities – they are not constrained by the need for a salary – it is their life’s work. Some write, some travel, some run orphanages, some are artists, some guide boards and committees in important causes, some become explorers, some champion the natural world, some excel in sport, some negotiate peace deals, some dedicate their life to the underprivileged, some run effective charities and societies, some are ambassadors and some prefer to live a quiet life dedicated to raising and serving their family. They can do this because they are not bound by the slavery of a salaried job.


Ultimately, financial independence may begin as a self-motivated goal, but may well end out serving a higher order purpose.