FI Series #2: What Is Financial Independence?
What If You Didn’t Have to Work?
Financial Independence (FI) means having enough wealth to support your lifestyle without relying on a paycheck. You can still work—but only if you want to.
Some people use that freedom to retire early. Others shift to part-time work, start a business, or take a sabbatical. The beauty of FI is that it’s not one-size-fits-all. It’s about creating flexibility and designing your ideal life.
What Is Financial Independence, Really?
FI is the point at which your living expenses can be covered indefinitely by investment income, savings, or other passive income—not by a job.
It doesn’t mean you’ll never work again. It means you get to choose how you spend your time.
That freedom might look like:
Taking a career break
Switching to a more meaningful (but lower-paying) job
Traveling for months at a time
Starting your own business
Retiring altogether
Different Paths to Financial Independence
There’s no single roadmap to FI. Your approach can (and should) reflect your goals, values, and desired lifestyle. Here are some common strategies:
Financial Independence with Part-Time Work
You reach a point where you don’t need full-time income—but you still enjoy working or want some extra flexibility. Part-time or seasonal work helps supplement investment income and lowers the total savings you need.
Examples:
Teaching part-time
Working in national parks or hospitality seasonally
Freelancing or consulting in your area of expertise
This approach gives you more freedom now while continuing to build toward full FI. Just keep in mind: it assumes you'll be able and willing to work in the future.
Financial Independence on a Modest Budget
Some achieve FI by keeping expenses low—often under $50,000/year. Living in a low-cost area, owning your home, and avoiding debt can significantly reduce how much you need to save.
Why it works:
You need a smaller portfolio to reach FI
It emphasizes contentment over consumption
It's often more resilient to market ups and downs
Considerations:
A modest budget leaves less margin for big expenses or lifestyle upgrades
May still require occasional supplemental income to cover surprises
Financial Independence with a Higher Spending Lifestyle
Others aim to maintain or enhance their lifestyle in FI, often targeting $100,000+ in annual spending. This allows for generous travel, hobbies, or charitable giving—and requires a larger portfolio to sustain it.
Advantages:
More room for flexibility and comfort
Greater buffer against unexpected expenses or market volatility
Potential challenges:
Lifestyle creep can delay your FI timeline
You’ll need higher savings and investment returns to make it work
Design the FI Path That Fits You
There’s no “right” way to do financial independence. Whether you want to take mini-retirements, slow down gradually, or fully retire early, the key is aligning your plan with your values.
And the best part? You can adjust as life evolves.
🔗 This post is part of the Financial Independence Blog Series.
Build the habits and mindset to make work optional.
📖 Previous: FI Series #1: Why Financial Independence?
📘 Next: FI Series #3: How to Calculate Your FI Number
