Monday, May 30, 2016

What People Misunderstood About Financial Independence

There was an article I read online which depicts on how the norms look at financial independence and what their perception is. You can read it here.

“If only I had a million dollar right now, I would right away resign from my current job”… 

This was what everyone had in mind when they think of financial independence. Right? I can’t say for sure if that is the correct way of looking at things. 

For me, the concept of financial independence comes from understanding the clarity of what money can or cannot do for me. It is about enriching my life through the sustainability of having enough money for the rest of my life so I can do something more for the better of myself, my family or the society. As difficult as it can get with expenses creeping up over the years, I stay committed to my goal of financial independence because it is a concept I believe in – a lifestyle I wanted to commit and sustain. 

To many people, especially outside the circle, financial independence is a taboo that they had never thought of. I mean, most people would think of working as a capacity to complete the most part of their lives. And then now what would they have to do with their spare time when they had essentially no “work” to do to begin? The perception of a human life are often associated in such a way that we interact with challenges everyday and that once these problems are decommissioned, the mind would soon get idle, and that is a recipe for senile. 

These concerns are valid in nature but I’d argue otherwise that these only stems for those with existential crisis to begin with. If a person ties their identities and commit their precious hours to a specific career style, then it’ll become difficult to replace them once the cells are removed. And they will one day because the human bodies are not expected to sustain productivity for a long, effective manner throughout. These are facts that we need to accept and adapt. 

Recently, I had a small trip outside to a neighboring country with my family which I find it interesting to share. The objective of the trip is to purchase some milk powder and diapers which will allow us to save an approximate amount of $50/month. That is equivalent to $600/year mind you. If you had given me the chance to save these money and compound it over 20 years, I can perhaps fund the full education of my children. Well, anyway the true intention of the trip is to allow for some family time together exploring other malls, since it is a Sunday anyway. We would have landed at some other places had we not gone for the trip. 

What surprises me from the trip was there were a couple of friends, including my own wife who find it amusing that we had chosen to go to such length. To them, they felt that it is not justifiable for me to scrimp on that with my career and salary caliber and perhaps what my family did was surprising. I explained to my wife that it is not the amount of money that matters but the behavior which will champion and differentiate us with the other people. The truth is there is a socioeconomic sentiment that surrounds people thinking the rich can afford cars, luxury holiday, branded watch and expensive holidays and financial independence means achieving all that. That is a completely false perception of financial freedom.

Cash vs Conscious Cash Flows

My wife is often worried that our state of resources will not be able to last a lifetime. 

To her, she looks at resources like salary as a form of continuous flow that gives her sufficient comfort knowing these will ensure that our expenses can get paid. In this instance, she looks at cash as a form of resource at a static point in time. Conscious cash flow however, is a state of continuous resource coming in on a perpetual basis so that I'd never had to worry about the source tap.

People misunderstood about financial independence knowing that cash as a form of resource at a static point is what they need in order to sustain their lifestyle. Few people takes the time to build a longer and lasting source which provides them with cashflow because they do not understand the need for financial independence.

What lies behind us and what lies before us are small matters compared to what lies within us. What people have to determine is whether financial independence lies within them.


  1. Hi B,

    I used to go JB to top up petrol and do grocery shopping. But have since stopped. I was always caught in 1-2 hour jam on the way back even though I already avoid the rush hour

    But I agree one can save a lot ... And if time has no other competing uses. Not that j have better use of time la.

    1. Hi SI

      Interesting you used to do that too. I have many friends who drove in the way you do.

      I actually ride a private bus right from my place to the custom which costs about $3.20 per person, and the traffic is relatively clear since they allow special lanes for the bus, so traffic was a breeze, even on Sunday.

      It's just a jalan-jalan session, it's pretty refreshing :D

  2. Weekends and pre- long weekends are terrible. I go to JB on weekdays. Of course by bus and looking at the jam at the car lane when bus lane is still okay. :-)

    1. Hi Uncle CW

      Yeah, the car jam during weekends is really zzz... Luckily they created a special bus lane for people.

    2. I took the CW5 bus :D

  3. B,

    Static point?

    Continuous flow?

    Now we're talking!


    1. Hi SMOL

      Active and Passive - Is that almost the same concept??

      Hahaha, it's still difficult explaining to my wife...

  4. Thinking of going to JB for food and shopping during this Jun sch hols.


    1. Hi Starlight

      Now you are getting me excited as well :D

  5. Actually, JB is risky place for those drive there once we see those posting in FBs.

  6. Financial independence is more than just financial strength, net worth or passive income; otherwise many more HNW would have retire or semi-retire e.g. like what GCTO said to me" "I 67 still working. You 60 want to retire". :-)

    1. Hi Uncle CW

      Very true!!!

      Many real life stories and people around us who have easily achieved financial independence - whatever their version is, but one thing common is it's never just about the money alone.

    2. CW8888,

      Interestingly, my boss said the same thing when I discussed with him my early retirement.

    3. Many years ago, my friend lost his whole car in JB!

      I use to go JB a lot in my younger days alone or with friends, but nowadays lesser n definitely not driving in with family because of safety!

      Heard so many stories of my frd car windows smashed, kena robbed etc.

      But I like to go JB if others are driving me in though!

  7. "What lies behind us and what lies before us are small matters compared to what lies within us. What people have to determine is whether financial independence lies within them."

    i think this is truth nothing but the truth.
    No matter how much wealth a person has, he may still feel not enough.
    His insecurity feelings know no limit.
    That's why he can't stop slotting for more & more $$$ till death do us part.
    Actually, you can look at this behavior as a form of extreme irrationality or "addiction".
    Do you think there is the possibility of such a character in this world?

    1. Hi Temperament

      I think there is such a person who goes for more money after money, perhaps due to his or her childhood of being poor and they vowed to get as much money as possible, whatever the amount is based on their definition. It's sad the money cannot be brought to the other side of the world.

  8. Well done! Fantastic example of husbandry and heading of household. :)