For the longest time, there was an unwritten pact in America. It went something like this: First, you attend school, show up on time, and listen to your teachers so you can get good grades and a reputable college degree. Then, there will be a nice corporate job waiting for you where you show up on time, work for 8-12 hours per day, and get a nice paycheck every two weeks.
You can even learn to climb an imaginary ladder for higher paychecks, bigger responsibilities, and increased time commitments. Finally—and this is the critical promise—if you do all these things, the company will take care of you. You could work there all your working life, get a nice pension, and retire right when you’re old enough not to enjoy most things besides fishing and golfing.
Over the last few decades, that unwritten pact has been shredded and set on fire. You know that college degree that plunged you into that ridiculous student loan debt? That doesn’t guarantee you will be hired right away. And so much for working for the same company all your life. These days, your employer will pink slip you without as much as a thought if that can improve their quarterly performance slightly—your years of service be damned!
But that’s not all that’s changed. We’ve smartened up. We’ve realized that the imaginary ladder keeps you climbing inside the same trap that leads to being overworked and overstressed. We don’t want to wait until we are too old to enjoy wonderful experiences like traveling or pursuing meaningful work. The curtain has been lifted, and we don’t want to trade the best years of our lives so that we can have a few restful and relaxing years toward the end. We don’t want to live to work; we want to work to live. We seek to build work around the lives we want, not build our lives around the work we have to do.
We pursue financial independence because we want to escape the rat wheel. Employment becomes a rat wheel when we need to keep working to pay for and maintain things we’ve made part of our identity. For instance, “People like us live in a house like this, wear clothes made by that company, and drive a car like that.” As we choose to purchase more and more things to solidify that identity, we lose the choice. We’ve gone too far, and now we must pedal to keep the wheel going or everything falls apart. And we risk losing not just our accumulated stuff, but the very identity we’ve adopted.
We slowly come to the realization that the things we own actually own us, and we decide to make a drastic change. We let the pendulum swing the opposite way. Instead of getting rid of our attachment to a ridiculous identity, we feel the need to get rid of “employment” as a badge of dishonor. So we cut our living expenses down, increase our savings rate, and invest the savings into income producing assets. At some point, we reach critical mass and income from our assets meets or exceeds the expenses. We are financially free.
These are all great moves—until we attach to another identity. “People like us don’t work for a living. People who do are suckers. The whole point of employment is to cover expenses, and I’ve already mastered that game.”
And so we start pedaling on a different, shinier rat wheel with its own identity.
I have a major issue with the thesis that the only purpose of work is to provide income to cover living expenses. I believe that work provides two additional benefits that are necessary for a happy and satisfying life. To quote the late great Jim Rohn,“The purpose of life is not to rest, but to be productive.”
Work provides identity, structure, and meaning to life. If you don’t believe me, just pay attention at the next social gathering or holiday party. As people get to know each other, they ask “what do you do” and their counterpart quickly responds with “I am a (fill in profession here) with (organization)”. Furthermore, if you were to take an account of all the conversations you have with the people in your life, you will quickly realize that the majority of them deal with your work and situations related to it.
As many people who have achieved financial independence will tell you, after a period of decompression where you catch up on the deferred rest, there’s usually a void and an emptiness that is challenging to fill. Because if you’re not Jeff the Senior Accountant at Deloitte, then who are you? You quickly realize that through work, you don’t only get the income you need to cover your bills, but also social interaction, praise, goals, and objectives. Or put differently, work provides a system, a structure in which you operate with relatively clear rules for success and failure, rewards and consequences. Now, freshly financially independent, you must create that structure yourself from scratch. It’s no easy task, and it will have you questioning your decision to ditch work altogether.
The problem with most people pursuing financial independence is that they are 100 percent focused on generating the passive income that will cover their expenses. They have made the job they hate the sole culprit of everything they don’t like about their life. If they could only create enough of an income stream so they don’t have to work, they’d be happy and they’d live just like the successful folks on Instagram: traveling to tropical beaches, eating delicious foods, and humble-bragging.
They fail to ask the question, “And then what?” Travel is great, but then what? Trust me, if you traveled all the time for 40 years straight, you’d hate it as much as you hate your current job.
Don’t fall for the same trap. Ask yourself:
There are no easy answers to these questions—they are hard questions that require reflection and contemplation. I believe that the biggest damage we suffer from an existence solely focused on earning money to live is that it keeps us from asking and reflecting on these bigger questions.
If you make the creation of passive income the sole objective of your life, that’s just a shinier version of the rat wheel of employment. By any means, build that portfolio that will produce passive income so you can be financially independent. But as you are doing that, make sure to create and build your future life by asking yourself the hard questions.
What’s the ideal life you’d create if money were no longer an object?