What is Financial Independence (FI)?

FI Definitions Vary

Financial Independence (FI) is a tricky thing.

Wikipedia (at this moment) will tell you,

“Financial independence is a state in which an individual or household has sufficient wealth to live on without having to depend on income from some form of employment.”

Steve at ThinkSaveRetire reiterates the same basic idea.

“For me, financial independence is simple: it means that you are not beholden to a job to provide for your livelihood.”

While his wife has a slightly different definition,

“To my wife, financial independence is a choice. It refers to the ability to choose the life that we all desire and live it as the person that we all choose to be.”

Steve highlights another blogger’s definition of FI. For Even Steven at EvenStevenMoney,

“Financial Independence to me means reaching a point in your finances that you have the ability to make a choice without money being the primary focus of your decision. If I want to travel more, spend extended time with family, or volunteer to help someone in need, these decisions are made without money as my primary focus.”

And I love the comment he shared from BareBudgetGuy,

“One definition of independent is “not influenced or controlled by” something. So in a way, the more of my energy I give to monetary pursuits, the less financially independent I am. […] When I stop letting money control who I am, I find that I can more clearly see the things that are truly important to me.”

As you can see, definitions of Financial Independence run the gamut. It’s slightly different for each person.

Overall, the general consensus appears to be “having enough wealth to cover your living expenses and emergencies”.

Isn’t That Just Retirement?

If you’re new to the FI community, this may sound like retirement. In the general sense it is.

In our society we define retirement as reaching 60 or 70 years old. You excitedly quit your job (finally free of the rat race)! Your paycheck is replaced by money from retirement funds.

But Financial Independence is more than just “retirement” or reaching a certain age.

The Journey Over the End Goal

Many pursue Financial Independence to achieve early retirement, which is great, but doesn’t quite work for me. I joined the FI movement later in life so my priorities are slightly different.

Financial Independence for me, is about the pursuit of wealth but it’s also about much more than that.

  • It’s about creating a life that is uniquely mine
  • It’s about figuring out what gives me purpose and meaning and pursuing that
  • It’s about finding the path that steers me toward financial independence without sacrificing what’s important to me right now (health, family, leisure, and fun)

I see financial independence as an endgoal – achieving enough wealth to provide a steady income until I pass away – but it’s also about the journey. How can I create a life that fulfills me now while also preparing myself to have a stable, comfortable life once I “retire”?

Pursuing FI is about more than just money or reaching an end goal. It’s about taking calculated risks and finding the courage to live your life in your own, unique way.

The FI Community and You

The FI community and movement appeals to me because we’re all aiming for the same goal (having enough wealth to live off). But we all take our own paths to get there.

Your life will be different from mine. And mine will be different from Sue’s. And Sue’s will be different from yours.

The right answer is the one that’s right for you.

So if you’re curious about pursuing financial independence and want to build a life that’s uniquely yours, this is your community. Welcome and we’re excited to have you!