This is the Monday Medley, a newsletter that goes out, you guessed it, every Monday. I republish it here for sharing and referencing, but if you'd like to sign up you can do so right here:
I've been interested in the concept of financial freedom, financial independence, FIRE, 4-Hour Workweek, whatever you call it, since college.
I was fortunate to meet a lot of recent graduates working the jobs many students were pining for, and to realize they were really unhappy with their work life balance.
I ended up taking a different path, along with numerous other entrepreneurial types who were looking for a different answer to the "I need money" problem than the standard prescription.
I remember when I was in college, I had the number $2,000 written on the whiteboard in my bedroom for a period. I felt that if I could get up to $2,000 a month in semi-passive income, I could live for quite a while on that while I figured out a next step.
I ended up hitting that goal a year later thanks to Stamena. Which, funny enough, still often makes that much 5 years later. But I quickly realized that income level was fairly limiting and set my sights higher.
One thing I've always believed pretty strongly is its more productive to focus on building cash flowing assets than to just hoard money away into index funds. As a simple example, at $2,000 a month or $24k a year, I'd need $600,000 in index funds at a safe withdrawal rate of 4% to get the same income. So what's easier: building a $2k a month side hustle? Or saving $600k?
So I set some other income and net worth goals when I was in Argentina, and I hit them this year. I didn't even realize it though. It wasn't until I was starting my annual review that I realized I'd passed those numbers. They didn't really mean anything to me anymore.
Not because they were small numbers, but because the motivation had changed. At some point work shifted from "pursuing financial freedom" to... well I'm not even sure anymore. If I'm being honest I don't have any kind of deep purposeful mission to my work. No 10 year vision I'm aiming towards. Most days it just feels like I'm having fun with my friends, and that happens to be kinda lucrative.
I'm past "the number" I had set for myself, but I have no intention to take advantage of it. No trips to Bali to chill on the beach for months. I tried not working this year and just exploring stuff, and I ended up having my most productive year ever.
This is the first of the "financial freedom paradoxes." Everyone I know who started down the path of making enough to retire early, who hit their number, has no interest in taking advantage of it. Somewhere along the way the motivation for the game changes, and they're no longer playing to win, they're playing to play.
Not caring about putting the money to work for early retirement also ends up often making these people more financially successful. Mostly because index funds are a terrible way to build wealth, especially early on. They're great when you have 8 figures and want something super low risk. But it's hard to get really wealthy on 7% per year. And when these people don't care about living off the returns on their investments, they can leave them in higher risk assets like their own businesses and often end up doing much better anyway. Diversification preserves wealth. Focus creates it.
So that's the good financial freedom paradox. The people who pursue it in earnest and seem to succeed to the level of their original goals often never take advantage of it. It gets them started on a journey, but then the destination changes.
But that doesn't always happen. There's also the bad version of the financial freedom paradox: constantly shifting the goal post. Or not recognizing when the game has been won.
Not everyone ends up loving their work. Many people end up doing really well in a lucrative field, but still often complain about their work and wish they were free of it. They actually plan to use the financial freedom because they aren't excited or having fun going to work every day.
But, for some reason or another, they never feel like they have enough. Maybe they haven't clearly mapped out how much they need. Or their lifestyle keeps inflating. Or they plan to increase their income before really saving enough to exit.
Whatever the reason is, this can be the huge downside to caring about financial freedom. Sometimes the people who want it most end up working themselves way past the point they have to, because they aren't diligent about accepting when they've won the game.
I'm not completely sure what the answer is for avoiding the second paradox. The first one isn't even a bad thing, it's great if you can find work you love doing where you no longer care about retiring. But how do you avoid losing years of time on work you don't enjoy, to increase a number that doesn't need to go any higher? That's a tougher one.
For me, what's helped so far is trying to force myself to deliberately quit or take a break when I hit different milestones, or when I feel like the game has become "easy". Those stops, often around winter, have been helpful for resetting and figuring out new projects to go after too.
But there's also something a little depressing about realizing you passed through what used to be incredibly important goal without feeling a thing. We all talk about how hitting goals doesn't bring lasting fulfillment, but it's a little different to feel it.
I'm not sharing that to mope or anything, that's an incredibly dumb thing to mope about. More to let you know that if you're slaving away at something you don't enjoy because you think once you hit some financial goal everything will be magical and happy and butterflies... it probably won't be.
It's probably better to figure out how to be happy with what we have now, instead of assuming once we have more everything will be better.
But who knows, maybe that next goal will bring everlasting joy. Only one way to find out.
Nat