Monday, March 08, 2021

My naive views on financial independence

Last time I was quite naive. Probably still am, but hopefully less so lol. I thought that after reaching financial freedom, I can relax. No need to work, shake legs and spend my passive income and I'll be happy. I calculated my expenses to be $2.5k per month (that's before I have a lot more adult responsibilities like the current me), which works out to be $30k per year. Assuming 5% returns per year, I just need to get 600k capital and I'm settled. And that number just gets anchored in my mind for the longest time.

I am naive because:

1) On paper, having 600k @ 5% per year can settle my monthly expenses, but it just makes my life easier. I still have to work because there's no buffer. I can't sleep well with 100% invested in the market as well. In practice, I need more than 600k, probably 30% cash buffer will be very nice, which means a total of 1 mil is a more realistic figure to aim at.

2) 2.5k is really just good enough for me, at that point in time. I'm at a different life stage now, with more commitments, so 2.5k is just not enough. I didn't account for future life plans back then. Or rather, I didn't know what changes it will make to my expenses to account properly for it.

3) 5% returns per year - this is based on 'average' returns. I am below average because I'm not wizardry material. I know now, but I didn't know back then. I thought I can be Warren Buffett but I am just 我人不肥. I know myself better now and have a more grounded expectation based on data, rather than hopes.

4) Thinking I don't have to work after financial freedom is really naive. On paper, everything is fine but I did not have a more holistic view of financial freedom. In the past, it's all just about money, but progressively, I think financial freedom is more about philosophy. Ultimately it aims to resolve the question of what we are going to do with our lives here. It is more about meaning instead of materialistic pursuits. If we don't have a meaningful outlet to pour our life's best work in, we'll never end up free, regardless of whether materially we are financially free or not. 

Hence, I adapted this FI (financial independence) koan:

On the outside, nothing has changed after FI. We still do the same things as before. But on the inside, everything has changed. Our mindset and attitude are not the same and we will approach the same task with more purpose and meaning. Don't expect life after FI to change drastically on the outside - it's all happening on the inside where no man can see.

Live long and prosper.


Patrick T. said...

I had started to believe financial independence is also a phase in adult development and it's not the last stage. In some strange ways, I also think the "cure" to this may be mid-life crisis.

Anyway for me after 40, I think that my whole FI experience was, at best, a rite of passage. At worst, it was an attempt to fulfil someone else's goals based on their experiences. In any case, I am glad it's over even - even though I am hardly independent financially.

CreateWealth8888 said...

Reaching Financial Independence means as Employees, we don't have to worry over the next office rumours of incoming headcount cut or say No Thanks to added roles and responsibilities for career development by bosses

la papillion said...

Hi patty,

I understand what you mean. I think maybe mid-life crisis forces one to review the purpose of life. FI doesn't solve that part. My phase is not over, but then again, I'm not that super eager to achieve it either. It comes when it comes

la papillion said...

Hi bro8888,

It's true - gives you the option not to work for a living. But I've seen depressed people who are FI too. I'm trying to say in this post that FI isn't a solution for a happy life. I used to think that it is, but I guess I was just being insecure about my own financial situation to want a panadol quick-fix lol

Sillyinvestor said...

FI means if one day, u are out of the game not by choice but by circumstances. U can take a break and contemplate what to do without worrying about rice on the table.

If I could, i wish I could die

1) in my sleep
2) playing a sports
3) working

In that order of preference.

I dun mean working till I die, if work is continue to be satisfying.

But things change, people change, and job change.

FI is an insurance ...

But if big brother up there likes you, u might not need the insurance.

la papillion said...

Hi SI,

Don't die playing sports or during work lah, 惊动小孩!

But I agree with you, FI gives you an option. But like I mentioned in other comments, last time I naively thought it can solve a lot more problems. Like SMOL said, maybe last time using it to escape realities of life. Now I'm more grounded, and realised it won't solve ALL problems. Not meant to be.

education loan said...

Thank you for sharing such a good informative post. study in germany

hiren patil said...

It's a great blog about self improvemnet thanks for sharing the blog to know more about online banking..
Online New Account Opening App

hiren patil said...
This comment has been removed by the author.
Susan Christian said...

Thank you Dr Emu for what you have done for me i would have been nothing today if not for your great spell. i want you my friends who are passing through all this kind of love problem of getting back their husband, wife , or ex boyfriend and girlfriend to contact Dr Emu , if you need his help you can contact him through his private mail: or you can contact him through his website fb page Https://

Unknown said...

Welcome to the future! Financing made easy with Prof. Mrs. DOROTHY LOAN INVESTMENTS

Hello, Have you been looking for financing options for your new business plans, Are you seeking for a loan to expand your existing business, Do you find yourself in a bit of trouble with unpaid bills and you don’t know which way to go or where to turn to? Have you been turned down by your banks? MRS. DOROTHY JEAN INVESTMENTS says YES when your banks say NO. Contact us as we offer financial services at a low and affordable interest rate of 2% for long and short term loans. Interested applicants should contact us for further loan acquisition procedures via

We invest in all profitable projects with cryptocurrencies. I'm here to share an amazing life changing opportunity with you. its called Bitcoin / Forex trading options, Are you interested in earning a consistent income through binary/forex trade? or crypto currency trading. An investment of $100 or $200 can get you a return of $2,840 in 7 days of trading and you get to do this from the comfort of your home/work. It goes on and on The higher the investment, the higher the profits. Your investment is safe and secured and payouts assured 100%. if you wish to know more about investing in Cryptocurrency and earn daily, weekly OR Monthly in trading on bitcoin or any cryptocurrency and want a successful trade without losing Contact MRS.DOROTHY JEAN INVESTMENTS

categories of investment

Loan Offer
Mining Plan
Business Finance Plan
Binary option Trade Plan
Forex trade Plan
Stocks market Trade Plan
Return on investment (ROI) Plan
Gold and Silver Trade Plan
Oil and Gas Trade Plan
Diamond Trade Plan
Agriculture Trade Plan
Real Estate Trade Plan

Mrs. Dorothy Pilkenton Jean
Financial Advisor on Bank Instruments,
Private Banking and Client Services
Email Address:
Operation: We provide Financial Service Such As Bank Instrument

Pedro Santa Cruz said...

<Recording success in Cryptocurrency, Bitcoin is not just buying and holding till when bitcoin sky-rocks, this has been longed abolished by intelligent traders ,mostly now that bitcoin bull is still controlling the market after successfully defended the $20,000 support level once again and this is likely to trigger a possible move towards $40,000 resistance area However , it's is best advice you find a working strategy by hub/daily signals that works well in other to accumulate and grow a very strong portfolio ahead. I have been trading with Mr Bernie doran daily signals and strategy, on his platform, and his guidance makes trading less stressful and more profit despite the recent fluctuations. I was able to easily increase my portfolio in just 3weeks of trading with his daily signals, growing my 0.9 BTC to 2.9BTC. Mr Bernie’s daily signals are very accurate and yields a great positive return on investment. I really enjoy trading with him and I'm still trading with him, He is available to give assistance to anyone who love crypto trading and beginners in bitcoin investment , I would suggest you contact him on WhatsApp : + 1424(285)-0682 , Gmail : (Bernie.doranfx01) or Telegram : bernie_fx for inquiries , Bitcoin is taking over the world