I wanted to revisit the topic of financial independence and early retirement as an ode to 2017. It’s been such an incredible year for me and I hope it has been the same for the 8 of you reading this blog.
I’ve had several definitions and iterations of financial independence and early retirement. I love every bit of this concept and never thought it would afford me the freedom that it has. In pursuing financial independence and early retirement I have grasped a better understanding of work, employment, leisure, and productivity.
Traditional definitions of these terms are meant to keep the average worker hostage in this supposedly productive society. There is no law that prevents a healthcare professional to work and live happily on 10 hours of work a week.
Financially independence means I am able to provide for my household overhead independent of a job and create profits on my own terms.
Profits Over Income
It’s helpful to distinguish between profits and income.
Financial independence can be achieved by lowering one’s overhead and by pursuing profit-generating endeavors – profits over income.
The ideal financially independent household will have multiple income streams or, alternatively, be heavily invested in the securities market.
Income from a job is perfectly fine to enjoy. But relying on it creates dependency and allows other entities to control your free time.
The word ‘retirement’ can spark a vision of something dull and depressing. But retirement for a healthcare professional isn’t sitting on your porch with a beer in your hand.
As a healthcare professional productivity is in your blood. We have a hard time slowing down. We need to tinker, think, plan, execute, create, and fix.
Retirement means no longer depending on your medical career or a job to be a productive member of society.
It’s not just about the income that you earn from that job but also the benefits you get. Employment benefits are what healthcare professionals have the toughest time giving up even though they can recreate these for themselves.
There is nothing in the IRS code that allows an employer to offer you benefits that you cannot design for yourself:
- health insurance
- disability insurance
- life insurance
- cash balance plans
Freedom of Time
Retiring early means that you don’t wait until age 65 to develop your financial independence and job independence. You are free to pursue whatever work you want without having to worry about how little it will earn you.
You want to be a drummer? An artist? A writer? An engineer? Then you are free to do that because you retired early.
When you create art and have achieved financial independence and early retirement then you are an artist.
Define Your Retirement
Don’t let the government define retirement for you. It’s not age 65 or whenever they allow you access to your own money – whatever you don’t define for yourself, others will define for you.
Ask any person in their 30’s if they would ever want to end up in a nursing home or spend their last few days suffering away in a hospital and they will resounding say no. But you wouldn’t believe this sentiment by looking at the census at hospitals and nursing homes.
I define my retirement as having freedom over my time and being able to pursue positive work that benefits myself and others. I want to enjoy my time left on this planet but I don’t want to just take, take, take.
Financial Independence and Early Retirement
Financial independence and early retirement go hand-in-hand because one naturally leads to the other. However, since many fear retirement, it’s not necessary to actually retire, at least not in the traditional sense of the word.
I’m in awe how it’s socially acceptable for a professional athlete to work for 5 years and then retire in their 20’s.
We still label them as retired from their sport even though they go on to own successful franchises, endorse products, become consultants, commentators,
Retirement Without Financial Independence
I can stop working a full-time job or piece together a bunch of little gigs in order to support my overhead – but that’s not retirement because I need the income from those gigs.
Alternatively, I might have a healthy sum of money invested in securities that need several more years to grow. That means that my portfolio isn’t mature enough to support my lifestyle expenses but it will be so in the future.
In the meantime I may just need to hold myself over with an occasion gig. It could be something in medicine or unrelated to it.
In my case I have retired from Urgent Care Medicine but I do the occasional telemedicine shift. I earn some money consulting and some money writing. My investments aren’t mature enough for me to start taking profits from them so I am letting them ferment a little while longer.
A Better Healthcare Provider
Financial independence and early retirement means that as a healthcare professional you get to enjoy being better at your role because you are less afraid of job-loss or pressure from management.
Your Own Practice
As a financially independent healthcare professional you also have the option of opening your own practice. If you’re a Nurse Practitioner (NP) then you can own your own practice in certain states.
As a Physician Assistant (PA) or a Registered Nurse (RN) you can own a part of the medical practice in many states and benefit not just from your time invested but also the money you invested.
Having your own practice doesn’t always have to be more work. If you aren’t pressed to earn every last potential penny from it then you can sit back and enjoy working at your own pace and have a bit more leeway to practice your style of medicine.
With your own practice you can choose a niche patient population. While my buddy M. would only have geriatric patients in her ideal practice, I would have young ones with simple complaints like STI’s and rashes.
Employment, Work, Productivity, Leisure
Economists agree that a modern society can be sustainably run with each member putting in as little as 2 hours of productive work in a day.
Our society instead is run by us putting in 80% of unnecessary work at a job for reasons that I haven’t yet fully grasped.
80% of the patients who are in my urgent care do not need to be seen. 80% of the work I do for a patient isn’t necessary work. I spend the majority of my time completing a task involving unnecessary bureaucracy.
Though to be fair, this added layer of bureaucracy is what earns me the higher salary. Looking at other nations where the cost of lawsuits are subtracted from healthcare, doctors earn annual salaries of only $50,000.
Job ≠ Work
But productivity is important. It’s good for my soul and beneficial to others if I can remain productive. My mother is a 70-year-old energetic and intelligent woman but she isn’t able to be productive in this modern society because the volume of work hours trumps productivity.
You can retire and still work. And you can work 60-hour weeks and get very little work done. A job does not equal work (DMV, Comcast, permitting office) – at least not meaningful work. So it’s important that we define productivity for ourselves.
The connotation of leisure is negative, associated with binge-watching TV shows, drinking at a bar, sleeping the days away, and ‘freeloading’ in society.
In fact, leisure is absolutely critical and insufficiently practiced. We have bred a society of men (and soon women) who don’t know what to do with their free time and spread a ton of negativity by constantly pursuing work – which breeds misery – which spills out onto other. Rinse and repeat.
A person should be able to feel productive while still pursuing financial independence and early retirement. Because it means that they will less likely need the government to bail them out. And for those who truly need the services of the gov’t, there will be more to go around.
Leisure can be sitting down and enjoying a book. Going for a walk. Lounging at a cafe and discussing nothing for 5.5 hours.
I can’t imagine a person who genuinely enjoys leisure yet would want to go out and wreak havoc in their community.
One reply on “Financial Independence and Early Retirement”
Great thoughts. Leisure is underappreciated in our society. Great ideas have come from leisure and I am in the camp if it being necessary for creativity.