These days references to financial independence are seemingly everywhere. You can find countless posts, newsletters and articles loaded with tips on how to retire and get out of the rat race early.
Most people would applaud the search for financial independence, and I am one of them. In my view everyone on the planet is searching for some degree of comfort and security. Ask anyone if they want financial security and close to 100% will say they would rather have it than not. Why else would we have retirement plans, savings accounts and investment portfolios other than to provide a mechanism to reach that goal?
The doctor world is no different. Non-physicians often look at us as a homogeneous group of wealthy professionals. To be fair, we command one of the highest average incomes in the world. However, income does not equal security and happiness. We crave what everybody else desires –– freedom.
Is the Goal Too Big?
Achieving true financial freedom while you are still young is often viewed as on par with climbing Mount Everest or winning the World Series in terms of level of difficulty. It’s possible and some do it, but it often appears to be such a monumental and unobtainable quest that only “special” people achieve it.
Once, in a seminar filled with physicians, I was asked how I attained financial freedom. The question was: “How did you achieve such a big goal and how can any of us expect to reach that level of success? It seems like dream or fantasy for a full-time doctor.”
Success is a journey and not a destination, so the first part of my answer was that I was still on the adventure and trying to improve every day. The second part of my answer was about elephants and baseball.
Elephants and Baseball
Have you ever heard the riddle, “How do you eat an elephant?” The answer is, “One bite at a time.” I approached my financial independence journey by taking small, persistent bites. My initial victories were small, but so were my mistakes. For you sports fans, I didn’t try to win the game with one home run swing. All I did was hit for singles, and eventually I scored enough runs to win the game.
That is how I succeeded. I didn’t set a dated cash flow or net worth target. My one overriding goal was to create passive income. I didn’t care how. I simply created it one bite at a time whenever the opportunity presented itself. Along the way there were small victories and improvements in lifestyle. Almost imperceptibly, my freedom started to emerge.
There is a popular acronym in the physician social media world. It is FIRE, which stands for Financial Independence Retire Early. I love the acronym, and early retirement is certainly what business writer, Jim Collins, would call a “big hairy audacious goal.” The idea is that you will eventually achieve investment income outside of medicine sufficient to cover all your living and leisure expenses. It can be done, and it has been accomplished by many, including doctors.
But, as noted above, achieving true financial independence is such a huge undertaking that it can appear distant and unattainable. This tends to discourage people, and many quit before they get started.
So, what’s the trick?
Give Yourself Hope
Humans thrive on hope. Without hope our resolve waivers. That’s why it helps to embrace partial victories. You must be encouraged that you can win small battles without having to win the war. This will give you confidence to move forward with persistence, which will be your greatest ally and will help you keep your eyes on the prize.
While full financial independence might be your goal, a little relief from financial hassles will lessen stress, strengthen hope and bolster you to keep fighting. The partial, systematic attainment of your goal will create extraordinary opportunities that will change your life and allow you to enjoy the benefits along the way.
Relieve Some Pressure
Over the years I have frequently encountered doctors who truly enjoy their profession but are beaten down by bureaucracy. They don’t want out –– they just want to enjoy their work by focusing on patient care rather than administrative hassles.
I love the FIRE philosophy. It’s a fabulous and worthwhile goal, but there’s a lot of pressure to create enough income to fully replace the typical physician salary. Some doctors just want a little pressure removed so they don’t feel trapped in their jobs. Consider your own situation. If you could run your medical practice exactly as you wanted, could you make it enjoyable and fulfilling?
As soon as you start practicing medicine on your terms and schedule, it can become a fulfilling vocation. If you have passive income sources that pay for a portion of your life, you will be less dependent on your medical income and less inclined to do things that don’t fit your plan. You will begin to have the freedom to make choices. Imagine replacing your mortgage payment with investment income that is paid to you every month whether you work or not. It’s not financial independence but it might relieve some pressure. That could give you comfort, or it might energize you to create more passive income to cover a different monthly payment. Pick any bill you like. If it can be paid by passive income, then it is figuratively a net zero on your cash flow statement.
Over time, if you stick with the process, these passively paid bills add up. Before you know it you have covered all your living expenses with passive investment income that doesn’t require your physical effort to produce. Next, you attack your travel and leisure expenses. The end result is freedom.
Focus on the Journey and Enjoy the Ride
This thought process breaks a big hairy audacious goal into small, attainable tasks. Ancient philosopher, Lao Tzu, said, “A journey of a thousand miles begins with the first step.” With each step you are closer to your destination. When you focus on one step at a time instead of the distant destination, then one day you will look up and find you have arrived. That is the magic of persistence and discipline.
Financial independence creates some control of your environment, which has been the goal of man for ages. On your way to fuller control, you can slowly chip away at the things that don’t fit into your world. As you reach each rung on the ladder, the new you becomes more motivated to reach the next level.
Give yourself permission to enjoy partial financial independence. It makes the journey more fun and it gives you the motivation to keep moving forward. Don’t be discouraged and assume you must be financially free tomorrow. Attack it bite by bite, step by step, and just hit singles. It will keep you motivated and will give you small victories on the way to a life of fulfillment.
Success is created with persistent action. The good news is that you can enjoy the process along the way.
