The Financial Independence Wild Goose Chase
The Financial Independence Wild Goose Chase
I was sitting across from a new acquaintance at the CampFI Midwest and he was telling me about his next budding venture. He had a brilliant business plan. An idea which no one had capitalized on before. He was in the middle of gathering investors and beginning the long process of due diligence. I probed further. I am always wary of what I call the financial independence wild goose chase.
It turns out that he had no love or passion for this new project. He really dug the idea of building an empire, and he was ready to be financially independent. But the idea, the idea itself, held little excitement for him.
So I asked about his current work situation. It turns out that he owns and operates a growing small business that with just a little work could eventually sell for millions of dollars. He was sure of that. He enjoyed his day-to-day work and felt a real sense of engagement and accomplishment in what he built.
So why ever was he wasting his time with this new venture? Why was he getting caught up in the financial independence wild goose chase?
Stumbling Blocks
I have seen this phenomenon over and over again. For some strange reason, we often ignore the perfectly good revenue generator in front of us. We set off on a financial independence wild goose chase to shoot for the stars with a highly speculative venture.
Our brain stumbles over this concept repeatedly. We all think to reach financial freedom we have to hit a grand slam instead of concentrating on a series of singles.
My acquaintance’s new business was a grand slam, while all he needed was to continue the regular singles he was hitting with his current venture.
He was jumping into a financially risky, speculative, non passion play endeavor to reach a goal post that was pretty much assured if he just held the course.
Why?
Side Hustle or Bust?
I bristle to say that I have been just as guilty. What is a side hustle other than a financial independence wild goose chase? As a physician, isn’t my time better spent practicing medicine? Aren’t I better served by hitting singles everyday in the office instead of building a blog or creating a new business?
I mitigate this effect by using low cost start-up principles, and pursue passion oriented side hustles that bring joy if not economic benefit. But the point holds true. If financial stability is my goal, I can’t beat the security of doing what I have spent so much money and time on learning.
This realization has not stopped me from jumping into new ventures. But it does give me pause. Am I any better off than if I had just put my head down and saw a few more patients each day?
Investment vs Speculation
It seems that while we shun speculation when it comes to the stock market, we tend to be more than willing to speculate in our business ventures. The financial independence wild goose chase fuels big audacious dreams.
Even those who understand the math can’t help themselves from feeling that they have to somehow try to supercharge the pathway. Even once they reach the magic number, they dream of alternate revenue streams, passive dividends, and a never ending accumulation phase.
Final thoughts
It takes a creative, dedicated person to be thoughtful about their financial future and well-being. Many of us in this community understand the math needed to make it to early retirement. Yet we can’t help jumping on the financial independence wild goose chase.
We throw ourselves into crazy, speculative ventures that often have as large a downside as up.
I’m not saying that building new businesses is wrong.
But be sure you are actually investing as opposed to rank speculation. Plenty of world series were won on singles and doubles alone.
Excellent point, which I am acutely aware of. My side hustle (a consulting gig) has taken me away from my family and home for a day, to deliver a lecture on a subject that I have little interest, prepared with little support from the organization. All this to earn less than I would from a simple, regular day at work. I plan on giving 90 days notice at the end of the month.
I think we have to continually question the place of side hustles in our happiness.
The problem is hidden leverage. People become enamored of the “obvious” return but don’t count that return comes only with leverage. The math is 80% of small business with employees survives 1 year. 70% survive 2 years, 50% survive 5 years, and only 30% survive 10 years. To get going you have to lever up and the likelihood of business death may far exceed your levered cost.
I agree. Most businesses die. So if your current one is working, why leave?
My husband used to regularly think that the “grass is greener” phenomenon. It wasn’t until I recommended that he focus only on his clinical career that everything started to work. Life became much simpler. As Vagabond mentioned, I even stopped him from doing any lectures, etc. He worked enough already.
I have often found life is filled with “acres of diamonds”. Everything we ever needed was already there. We just had to recognize it.
Nothing in life is truly free. Once you accept that, life becomes a lot simpler and easier.
I like the “acres of diamonds” metaphor.
I also like the “acres of diamonds” mindset. No need to get on a plane and give a crappy lecture to mine them. 🙂
Who am I kidding? I brought my B game. Lecture in one hour.
too funny, can I get a T-Shirt??
Bahahaha! At least you have a B game Vagabond! I don’t think they even allow me into the game.
Hope you had a great lecture.
First of DocG wanted to say great interview on White Coat today, enjoyed reading it.
I agree that there is not many side hustles/options out there that can match the income that could be generated in your primary medical gig. I do think side gigs do offer some non-monetary rewards that make it worthwhile for some. It can re-ignite a passion that had been dwindling thanks to burnout in medicine (which has been the case for me and how I now feel about blogging). It can also diversify your income streams so that if something happens (disability or termination) you still can rely on some cash flow coming in.
I agree that non economic reasons for a side hustle may be just as important.
It’s sort of like the desire to beat the market. You can be the market with the index, but we all have that drive to be “better” that gets the best of us.
The drive can be quite dangerous.
Indeed! I felt like I had to apologize to my career coach when, after a two year process, I decided my best play was to stick to my old job and just do less of it (rather than a seismic career move in my early 50’s). I felt like I was letting her and everyone down.
She just about laughed at me! I was doing what is best for my true self and that is the only one who needs to be satisfied, she said. We get into the mindset that we always have to do more and be more, and it can be destructive and reductive.
One of my favorite sayings for someone who dwells 3 SD out in the tail: Dare to be average! 4 SD is not kind.
I have gotten further than I ever imagined by being happy with average. Short of a few things that really mattered to me, I have lived a gleefully average life.
I had a brilliant boss who was always looking for a get rich quick scheme to the point it derailed his career eventually. I always followed right behind his meteoric path until he self destructed and then I was given his job. It always confused me why a guy with that much talent took so many risks with his high paying career that he eventually lost it. Now he is in his seventies and still working full time as a consultant and still chasing schemes while I retired years ago and only side gig for fun and definitely only blog for fun. I never was tempted to pursue other income while working because I recognized the chance of making the same amount that way was very low, but I’ve seen first hand that not everyone is wired the way I was and some are driven to pursue making the big score!
Wired that way, and it’s destructive. Human nature is strange.