What Does Financial Independence Mean?

What Does Financial Independence Mean to Me?

What does Financially Independent Mean?

Financial Independence or financially independent means having a net worth providing an amount of passive or near passive income that allows a person to no longer actively work for money if he or she chooses.

We each have different goals and life circumstances. Therefore, each of our journeys to become financially independent will be unique.

This Financial Independence course provides a foundation of knowledge to support the design and execution of your plan to become financially independent. It will provide the “how” to reach Financial Independence.

It is important to determine what FI means to you and why you want to pursue FI.

If we understand the objective, we will better maintain focus during this dynamic journey.

What Does it Mean to Be Financially Independent? 

Financial independence can mean a lot of different things to different people. However, you have to define what financial independence means to you in order to create an action plan to meet your goals. Here are five questions you can ask to help you determine how much you need to become financially independent?

What does your perfect day look like?

One of the problems of chasing financial independence is that people don’t have a realistic plan of what they want to do when they have “all the money that they need.” In some cases, you may not need that much depending on the following:

  • Where do you live?
  • What do you do each day?
  • What you will need?

A great way to discover what life will be like as someone who is financially independent, consider what your average day will look like.  What part of the world will you live? What do you drive? What do your house, condo or apartment look like? What activities do you do in the morning, in the afternoon and in the evening?

How is your current life different from your ideal financially independent life?

There is a great joke in an early episode of the TV show The Simpsons. The family patriarch Homer Simpson is lying on the couch fantasizing what it will be like if he were retired. In his fantasy Home is lying on the couch in retirement. 

You may discover that you don’t need a yacht or a home by the ocean for a life of financial independence. Perhaps all you need is security knowing that your money is making you a passive income to replace your work income and no change in lifestyle is necessary. 

Does financially independent mean not working?

For some people, being financially independent means not working. However, others may imagine a life when they leave their current job to pursue a fantasy occupation such as painting, becoming a musician, or pursuing some other occupation.

If you want to continue working after you are financially independent, then your dream may be more attainable than you think. Sure, being a musician may pay you less than being a marketing executive. However, the fact that you will have some sort of income coming in can assist you in reaching your goal fast. 

Are you willing to lower your lifestyle to become financially free? 

As people gain a higher income, they consider themselves higher status and begin to spend in such a manner: Luxury cars, larger homes, designer clothing etc. However, many early retirees have discovered that lowering their lifestyle has allowed them to retire decades earlier than expected. For example, Mr. 1500 was able to retire from his computer engineering job in less than 1,500 days learning about the concept of FIRE (Financial Independence Retire Early). He did it by ditching the big house, the luxury cars and saving 70% of his income.

Focusing on your three biggest household expenses may provide significant momentum towards your financial goals.

Financial independence may mean making sacrifices. However, sacrificing a BMW and a two-story home for an extra decade of financial freedom may be worth it for you. 

Additionally you may be able to reduce your expenses in ways you never considered. Take advantage of these tips to save money provided by those on their FI journey.

How much will it cost to live your perfect day forever? 

After you have created your average day, you can reverse engineer the cost. After you have determined the annual cost, multiply that number by 25. This will give you a “big number” that can help you declare financial independence. For instance, if your annual expenses are $50,000. Then your big number will be $1,500,000 million.



Take Action:  

  1. Google the term “Financial Independence” and explore some sites that look appealing to you. Note the many different definitions and explanations.
  2. Write the answer to “What does Financial Independence mean to me?” Keep it in a place where you will see it often – perhaps in your wallet or purse or on a dry erase board in your kitchen. Your definition will change over time and this is perfectly normal. This will serve as a reminder that there is an objective we are working towards.
  3. As this is the first lesson in this FI course, we encourage you to join and interact with others who are focused on achieving similar goals as you. We believe you will find the FI Community a positive and generous community that provides motivation along the way. There are hundreds of Facebook Groups and other forums regarding finances. I recommend the The Fiology Community Facebook Group. Request to join and I think you’ll find it extremely helpful. Note: You’ll have to type in the email address you used to enroll in the Fiology Free Financial Independence Course prior to approval. Being a part of The Fiology Community indicates your commitment as both a mentor and a mentee, willing to help each other as we continuously learn. Each week we will focus on a Financial Independence concept and invite all members to participate in the discussion, providing personal experiences, knowledge, and encouragement.
  4. Check out some of the stories shared by those in the Financial Independence Community.

Additional Resources:


“Education is the key to unlock the golden door of freedom.” – George Washington Carver

David Baughier

My passion for helping others led to the curation Fiology. Help me spread the message of Financial Independence by clicking a colorful link above and sharing this post on your favorite social platform. Thank you!


  1. Frogdancer on April 29, 2018 at 8:09 pm

    Great choice to include Trent Hamm’s article. I really enjoy his writing; he goes into depth about concepts and teases them out in a calm, measured way that’s very easy to read.

  2. Jon on November 26, 2018 at 5:59 pm

    Thank you for this. I totally agree that the first step is to define what it means to you to be financially independent. If you don’t know the goal, how do you know if you’re getting closer? So many people just coast through life, doing what they think they’re “supposed to do” and living someone else’s program because they don’t have one of their own. Things improve when you measure them!

    • Fiology on November 26, 2018 at 8:01 pm


      Agree. And I’ll be in touch. I just checked out your website and now I have some reading to do. Appreciate the comment.

  3. […] Fiology:“Having a net worth providing an amount of passive or near passive income that allows a person to no longer actively work for money if he or she chooses” […]

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