Financial Independence is a Side Effect
Financial Independence is a Side Effect
Financial independence is a side effect of a life well lived. Or it should be. That’s not to say that I got it right, nor have I found the perfect balance. What it implies, however, is that we have confused our goal with our goal post 
and have settled on success as the end game. While we can satiate our inner needs for decades with such thinking, eventually we end up with a lot of money but many wasted years. Now, as per my last post, I’m not bagging on sacrifice. As one commenter astutely pointed out, sacrifice if embraced can become part of fulfillment itself. Yet if we set our laser vision on financial freedom alone, I think we lose out on an important part of the journey.
As I have shared before, I came upon the realization of financial independence by accident. That is not to say, however, that my decisions were not biased by financial motivations.
In my estimation, I got it right about fifty percent of the time.
Might my path have been better if I knew what I know now?
Career
Financial independence is a side effect of my career as a physician. Upon embarking on this long journey, I had no consideration whatsoever of the economics. The idea of retirement was the furthest from my mind. The practice of medicine was my passion. By pursuing this passion, my W2 wages naturally led me to financial freedom.
I got this right.
However, as my career progressed, I found myself making more and more decisions based on money. While I gladly wrote about how I progressed in salary to 5X my base pay, I am starting to wonder if I am being to self-congratulatory.
This is no more glaringly true than my choice to cover nursing homes without a backup physician. Early on, I found that my partners often couldn’t handle the sick nursing home patients. What ingratiated me most to the facility was my availability around the clock. This led to many more patients, directorships, and related side hustles. This also propelled my salary forward.
But, I gave up freedom. The number of late night and off-hour phone calls were astounding. I often felt unable to leave town for more than a week at a time.
I might have reached financial independence quicker, but probably enjoyed the path much less. Sacrifice is great when it’s about passion. It’s rather unforgiving when you try to take the world on your shoulders and carry it forward.
Financial independence moved from being a side effect to a direct goal of my actions.
Was it worth it?
Investing
Unlike my career, I made many mistakes in this important aspect of my journey. I looked at investing as solely a way to accumulate wealth and reach financial independence. Blinded by the complexities of the market and busy building a burgeoning career, I relied heavily on a financial advisor to make decisions for me. By loosening the reins and abrogating the responsibility of my own finances, I hurt myself in the long run.
What I didn’t realize, at the time, was that financial independence is a side effect of taking responsibility for my own 
financial life. As a responsible and intelligent adult, I should have been much more engaged in planning and plotting. Not so that I could reach some pie in the sky number, but more importantly to create an economic framework. The means for which my family could strive and have the freedom to search for meaning and passion. To create safety and security for those that I love.
The goal should have never been a number, it should have been about being responsible and taking care of my family.
Spending
I have never been one to spend much on material things. With a few notable exceptions, I rarely buy items for myself. Frequently, I have made the mistake of thinking that financial freedom comes from frugality. I now believe that financial independence is a side effect of valuism.
While very aware of both the hedonic treadmill and the stoic treadmill, I think we should spend money on those things we value. For some, that may be objects. For others, it may be experiences. Money is meant to buy things. It’s ok to spend even at the cost of prolonging the road to financial independence.
For many, valuism eventually leads to a reduction in overall spending anyway.
Final Thoughts
I’ve spent a lot of time thinking about financial independence in the last 10 years. Thankfully, it was not a prime motivator in my early career.
Why thankfully?
Because financial independence should be a side effect.
It should be a side effect of picking a passionate career.
It should be a side effect of taking financial responsibility and implementing an economic plan for you and your loved ones.
And it should be a side effect of using your money solely in search of value.
Yes! I completely agree…. Financial independence is actually the wrong metric to measure, yet we focus on it so fiercely. Wealth and financial independence are a byproduct of your productivity.
That’s why FI won’t be enough for me… I am constantly trying to challenge myself, improve, get better every single day… there is no doubt in my mind that with that will come more money.
I know financial independence will come, so I’ve stopped focusing on it as much, i rarely check personal capital these days… the money is still there, it won’t automatically be gone tomorrow. I just focus on myself, and personal development. Cheers!
Yes. A byproduct if you do things right.
Yes! Absolutely agree! We need to do what we love, love what we do. The money will come.
When it does, the responsibility of how to handle the influx is on us, with our choices.
If I only knew this when i was 20!
Feeling the same way!!
Money and thus fi is a tool in my opinion. A tool to deliver your bigger goal.
Yes, I defining what the bigger goal is is actually or true life work.
I love the way you, as a doctor, think in side effects. It seems like what you’re saying is that if you try TOO hard, then that side effect is out of balance. I guess you are searching for the “right” side effect.
What can I say, once a doctor, always a doctor.
Most people don’t enter medicine for the money. With the intelligence and sacrifice needed by these individuals, if they chose another career path I feel every physician would have earned far more financial success in a different field.
There is a point in your career however when finances starting taking center stage. You know that you can’t continue at this pace forever. You also know that after all the years of sacrifice you want to have a life that is more than a bare bones existence.
If day one of medical school you already thinking of FIRE then perhaps this may not be the right profession. But after a few years or so out in the real world I have no problem with thoughts of FIRE creeping in.
Hopefully if you do it right, those FIRE thoughts come and you realize you are ninety percent of the way already. A side effect of a busy career and being reasonable on spending.
I really like the idea of financial independence as a side effect. Its a great way of reminding yourself that life (financial and non-financial) is about choices. If you just focus on making the right choices day by day, you will get where you want to go.
Shifting financial independence from a goal, to a side effect is also great for keeping a healthy perspective. The most important thing in life is not your net worth, but your relationships with those around you. With a young family, I struggle with this everyday. Work more and make more money, or spend more time with them. I don’t want my family to lack for anything, but I don’t want to look around one day and see that my kids grew up while I was off chasing financial independence. There is a balance, and its important to never lose sight of that.
-Ray
Hi Ray,
My husband’s colleagues are all hard core Type AAAA surgeons. And about the only consistent regret they all have was allowing their careers to shadow or omit enjoying their children while they were younger.
You and your wife are blessed with four children. Please enjoy this stage in your life. The money will continue to roll in. It’s just how the math works.
Money can be made in an instant when the right stars align. But you can not turn back the hands of time. Pay attention to what you would regret when you think about working more and more to reach some ephemeral FI number.
Whether goal or side effect, balance is key.
FIRE blogs of course concentrate the focus on FI, but FI is actually a small part of life. I’ll define FI as owning a retirement portfolio of sufficient size to replace your job after some adjustment in spending. In other words it’s a specific thing made up of specific assets. It is not a “number” A retirement portfolio is a product you purchase using time payments similar to a mortgage. The assets it contains are exposed to compounding so time as well as purchase payments are involved.
Let’s say you’re a 30 year old couple who make 60k after tax and you stash 11K per year (18%) in a Roth. In 35 (age 65) years you have nearly 1.4M. That couple is fat FI. They can quit their jobs and pull out 85K per year for the next 35 years from their portfolio product. This is a normal scenario. This couple had an additional 49K/yr available to them during their working life to spend on other things like hamburgers cars etc. The 11K was only one non over riding expenditure. The perversion happens with the RE aspect of FIRE. The normal course of life becomes dominated by early retirement, by sticking it to the man,by a testosterone fueled race to see who can do it fastest. A normal organic life becomes dominated by an artificial number, a number plucked out of thin air based on looking backwards at what happened 100 years ago. It pretends the past will be repeated in the future.
I also stumbled upon retirement. I added up my Medicare wages on SS.gov and realized I had more in the bank than I had spent to live the preceding 49 years of my life. I knew I wasn’t going to live another 49 years so I pulled the trigger. My life was never dominated by a number or a time frame. I merely contributed to my retirement portfolio product. I did tune my product. I tax loss harvested when fortuitous for example. I quit contributing to the IRA’s when I realized the tax bill that was going to generate at RMD and diverted that IRA money into post tax accounts. I streamlined my accounts by putting bonds in tax deferred for example but those are little things that were in no way dominant in my life. I did not obsess. I purchased other things like college education for my kids, and cars and trips for my family without the domination of some “number”. When my portfolio got big enough, and I got old enough that I didn’t want to do it anymore, I realized it was time to quit and live a different “retired” life, so that’s what I’m doing now. My retirement portfolio purchase and the time involved is what made that possible. I didn’t find FIRE blogs till 2 months after I retired. I’m glad I missed the noise in my life during accumulation. I’m glad I missed domination by an artificial number. I’m glad I ran my businesses until I was ready to not run them anymore and do something else. I’m glad I had purchased an adequate portfolio to replace the W2 as Doc G calls it. I won’t judge it, it was good enough.
FIRE blogs are great for advice on investing and understanding the math behind safe withdrawal, etc. Finding Mr. Money Mustache and some of the others gave me a framework to understand RE finances. But in the end, I had to decide what I was comfortable with and how it fit into my own history and preferences. The race to the bottom of early retiring is tiresome and wouldn’t bring me happiness.
That was really good. I found myself thinking , me too, me too, because while not a doc my career path and my outlook on money were very similar to yours. I never planned financial independence but I knew it would be a fact at some point because we only spent on things we valued highly and I made a high income compared to most of my peers. I did not retire as early as most people seem to be targeting but that was because I was working in my sweet spot and it was one of my top two or three hobbies. I have to tell you though, it is really tough on an engineer to admire the thinking of a medical doctor. We really cherish the idea that we are always the smartest guys in the room, and well, I guess not always.
Don’t worry. Your still the smartest people in the room. We just express it better sometimes.😏
Live on less than you make.
Save the difference.
Do it for a long period of time.
Financial independence will eventually occur.
Along with many other side effects.
Dr. Cory S. Fawcett
Prescription for Financial Success
I think the same can go for many things. Live with the right intentions and good things will be the side effects.
Side effect indeed. All those entering the health care field (nurses, doctors, techs, etc) most likely chose their profession based on altruism and the desire to help their fellow man. This is what makes this field unique. It’s based on empathy and altruism first and foremost. Dollar signs are the side product- stuff that comes out of the exhaust pipe. Not the fuel that drives us. My dad is in poor health now. We are in and out of the ER and the ICU more frequently now. Every health care provider we have come across work from their hearts, not from their paycheck. I am proud to be part of our profession. Never forget we are making a difference in our patient’s lives.
Sorry to hear about your dad. Glad he has a good set of Docs and such a son to look after him.
Thanks Doc, I don’t get called “Astute” very often 🙂
I like “valuism”. It’s not word, but sometimes those are the best words. I used “alterna” in one of my posts and I think it worked.
If the new word fits…I like “alterna”. My auto correct does not.