Stop Working for the Man: A New View of Financial Independence
Many people don’t like their job, and it’s a shame. We spend such a large portion of our life at work. Why should it be less than fulfilling? Financial independence strategies usually focus on building a portfolio of assets that provides enough income to cover living expenses without losing principle. Once that goal is achieved, it’s ok to leave the corporate world. The safe rate to withdraw money from the investment portfolio is often considered to be around three to four percent. For example, someone who spends $30,000 per year would need a $750,000 investment portfolio to scrape by with a 4% withdrawal rate. That is a lot of money, especially for someone early in their career. Why wait to declare independence?
Take the Initiative: Grab the Rising Sun
What if we define financial independence as relying on only one’s own initiative to pay for life? Then, instead of waiting to be free from corporate boredom, young professionals can harness their creativity and start a new business. Why not save a couple years worth of living expenses as a security fund and take the plunge into entrepreneurship? Find the intersection of a common need and your greatest passion. Make that the cornerstone of your start-up. Grab the rising sun, be lifted by your aspirations, and don’t be afraid to fail. If the first six months are utterly unfulfilling, then find a new corporate job. Your bold business venture might even make you a more appealing candidate.
The Risk of Not Trying
Sure, quitting your job is a risky decision. You would lose the steady paycheck and a familiar routine. Friends and relatives might think you’re crazy. However, the risk of not trying might be even greater. If you sit in that career-track professional job for 30+ years, you’ll likely be able to live the upper middle class lifestyle, but it won’t be on your terms and there likely won’t be much upside. If you work for yourself, taking a chance on that business idea, you could make it big. On the journey your schedule, your projects, and your product would be in your control.
The most successful, innovative companies weren’t founded by meek and fearful people. Step outside of your comfort zone, think boldly, act intently, and you may find tremendous success. Read Zen and the Art of Making a Living for help exploring the possibilities.
The real cost of failure is quite low if you have a security fund and improve your skills during self-employment. Consider starting a business on the evenings and weekends to diminish risk and test your ideas before resigning. Obviously professionals married with children would have more obstacles than someone under 30 with no real responsibilities, but the path of entrepreneurship is open to everyone.
Admittedly, the idea of leaving a job when a job is exactly what millions of people are trying to find might seem silly. It’s not for everyone. If you love going to work or if you have no interest in being your own boss, financial independence without a huge portfolio isn’t for you.
For others, though, financial independence through self-employment is the way to go. Flexibility and freedom increase, corporate nonsense goes away, and personal growth becomes more of a possibility.
I recommend reading Financial Samurai’s post on financial independence for another perspective.
Have you ever considered leaving your job to start a business? Does it seem like a stupid idea?
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