Career Flexibility That Come With Financial Freedom
There are 3 distinct levels in the financial achievement ladder. There is financial freedom, financial independence and financial solvency. These lie in a continuum of evolving financially. Let me explain what each entails.
This is when you have eliminated or drastically cut down your debt and adopted a way of life that’s not in line with a consumer mentality. You are spending on the things you need and not the things you want. You are trading tangible goods for meaningful experiences. You have realized that ‘money’ isn’t income you earn that you just turn around and spend. To you money is a tool for achieving independence. As someone who isn’t yet financially independent you are still reliant on income from your job, business or work you do on the side. You don’t have a significant amount of money saved except for a solid emergency fund but because of your methodology you are just steps away from financial independence.
This term has gained a lot of traction and I’m using it as it is understood by society at large. Well, not society at large, because let’s face it, mainstream consumers of information have no interest in this discussion. As a financially independent person you have enough assets that generate essentially passive income which supports your day-to-day expenses. You may have:
- real estate that creates rental income,
- an online business that requires very little upkeep,
- a coffee shop that’s run mostly by employees,
- a sizable investment in stocks/bonds which creates passive income.
This is very similar to financial independence except that there are several layers of income streams with even more assets owned. In this stage your expenses likely won’t matter because you have the same mentality as the person who has financial freedom. A few extra travels, a few more meals eaten out and some nicer outdoor gear generally won’t affect your budget. You likely have some real estate investments, a business that is running itself or maybe you are a silent partner in a business, a pension that’s coming in or will soon be coming in, investments in the broad market with strong dividend income AND a large buffer of cash saved away. Essentially, even if Wall Street stopped existing and your real estate investments were destroyed and your business went bankrupt you would still have enough money that you could live off of without it running out until your death.
Financial Freedom And Your Career
The title of this post is ‘advantages of financial freedom’. So what’s so great about FF? FF is the med school and residency of your medical career. It’s the hardest part, everything else will fall into place with a lot less effort. Once you have achieved financial freedom you are no longer (as) afraid of losing your job, you are no longer at the whim of your boss(es). You do the work you enjoy, you take time off when you want and your priority no longer has to be work. You can make $150/hr as a full-time partner in a large medical group or you can work per diem at $100/hr whenever you decide to switch. If your work starts becoming stressful, if you just feel like taking 2 years off to be with your family you are in the position to do so.
I would classify myself as financial freependent. I have almost no student loan debt left and a healthy amount of money stashed away but my investments aren’t quite enough to create a passive income that I could live off of in my current state. And yet I am making the shift to take some time off of work.
I am weighing my options to make the best decision for myself and my job. I wouldn’t say I am burnt out but I don’t feel as challenged or satisfied by my career. This is natural in any job, these sorts of feelings come and go. It’s what we do about them that is important. I don’t feel like I should just ignore it and I don’t feel like I should just plow through them. My options are:
- take a 6 month sabbatical
- switch to per diem status to work pro re nata
- go to 50% part-time status and maintain full benefits
- request 6-12 month leave of absence
- resign and enjoy some time off
I’ll post more about these options later. I just wanted to share with you how liberating it is to know that I can choose between these options without the fear of running out of money or going broke or ending up homeless on the street corner — like mom used to say.
Have you taken any time off during your career?
Where are you on the financial range above? Free, Independent or Solvent?