8 reasons Financial Independence is for Everyone

Financial Independence isn’t just for the privileged. No matter your background the Principles of FI will help you.

8 reasons Financial Independence is for Everyone

It wouldn’t be unfair to say that Financial Independence is like champagne socialism. Especially FIRE - Financial Independence, Retire Early,

The privileged, white, well-off, middle classes. Sitting on their mountain of wealth. Preaching to those beneath them to enjoy living off unbranded tins of beans.

The reality of the less-well-off is quite different. Like wondering if you are going to pay the electric to heat your home or feed yourself. I know, I’ve been there.

Financial Independence is indeed easier if you have a high income. And can use your privilege to your advantage. But the principles of Financial Independence can help. No matter your income or background.

I’ll tell you why.

On a path to Financial Independence

I grew up upper-working class. I went to a shitty comprehensive school in Birmingham, England. Think more bunking off, weed behind the bike sheds, fights, and smashed windows. Certainly no debating societies or chess clubs.

I met my other half. He lived in Scotland. I used every penny I had saved to move to Scotland & undertake a degree. My other half grew up on council estates. He saved. He was saving when on the dole. When I first moved to Scotland we stayed in a council house with 5 other people. We were living on £100/week.

Nobody in the household worked. Often the choice was between food and paying the electric + gas. The weekly shop was: Bulk-UHT milk. Tea. Unbranded frozen meat & veg. Packet mash. Noodles. Tuna and Crackers. It’s surprising how many people you can feed for £40/week. We had pre-paid gas and ‘leccy. You know, prepaid keys you need to take to ASDA to top up. They’d run out all the time. If the electric ran out, we’d stand around the cooker with the gas on low for heat and light.

The other-MM got an entry-level office job. I got an entry-level job as a programmer. The household had about £25K coming in. From nothing but dole money. We could afford the heating. We could afford meals. We could afford to start saving. Two of the others in the household saw the benefit of work. They both got jobs, there were then four of us working. They still have the same jobs today. 13 years later.

I’ve now had 13 years of continuous employment in software. Work has let me travel all over the world for free. I have flown first class for meetings with clients in Silicon Valley. This is my privilege check.

Check your privilege

We know we are fortunate. We know we are privileged. It’s a function of what we’ve achieved over the years. It wasn’t that way huddled around the gas hob in the middle of a Scottish winter with no money to top up the ‘leccy.

We were not thinking about Financial Independence back then.

Our principles guided us then and they guide us now. We have learnt a few tricks along the way.

Here are 8 Principles of Financial Independence that will help you no matter your income.

They guided us when we had nothing, and they still guide us today.


Principle #1: Develop a healthy scepticism for debt.

Be suspicious of debt. Even ‘lends’ from friends or family.

Debt is a burden. It’s a costly burden you might never escape. Like a gambling addiction, you may end up in an irrecoverable negative spiral.

Develop a healthy, sceptical attitude towards debt. Avoid it. If you can’t avoid it, be conservative. Take on little debt as you can at the lowest rate you can. 0% or close to 0%.

Some don’t agree. They think you should load yourself up with debt. Invest what you have ‘borrowed’ so your investments pay more than the cost of your debts. This is all well and good. If you know how to invest. Or until a crash happens.

It’s easier and safer to avoid debt. There are some exceptions: 0% debt is manageable. Mortgages are manageable. Assuming you have a robust plan to meet the payments.

Debt is something we all face. Figure out your relationship with debt. How much debt is acceptable to you and your situation? What rates are acceptable to you? How to avoid debt in the first place? How to pay down debt? This will help you, no matter your income.

What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?


Principle #2: Relentlessly grow your income

No matter your current income, you can learn to grow more.

The fastest way to Financial Independence is by increasing your income. You can do this no matter your current income level - even if it’s zero.

There are some obvious options if you are physically & mentally capable of work:

If you are in work, these following can be your ‘side hustles’. If you are out of work, they’d be your ‘self-employment’:

Learn a new skill & sell your time online.

In the UK, you can earn £1K tax-free doing this - so why not start? See if it takes off?

Ask yourself:

An increase in income will improve your financial situation. If you are in debt, start overpaying your debt repayments to pay the debt back. If you are not in debt, an increase in income allows you to save & invest for your future goals.

The stock market is filled with individuals who know the price of everything, but the value of nothing.


Principle #3: Measurements over limits

Budgets are bullshit. Seriously. Let me hear you say it: Budgets are bullshit. Again! Budgets are bullshit!.

Here’s what to do. It’s really simple.

Warning: If you can’t use a spreadsheet, go back to #2. about new skills

For the last month do the following:

You should now have a sheet that looks like this:

Item £££
Income £X
Expenditure £Y
Savings & Investments £S

Notice at this point: we have not budgeted. That’s because budgets are bullshit. We haven’t said: ‘you can only spend £10/mo on cheese, and that’s your cheese budget. If you go over it you are a naughty little cheese-fiend’

All we are doing is measuring. Measurements are the lifeblood of change. Measurements sustain change. There is a saying in software: you get what you measure.

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.

Everyone is now faced with four options:

  1. Look to increase your income
  2. Look to decrease your expenditure
  3. Look to increase your savings & investments
  4. Or carry on the way you are, enjoying life to its fullest. Be happy for the rest of the day, safe in the knowledge that there will always be a bit of your heart devoted to it.

If, every month, you measure:

You’ll start to see your financial situation improve for the better.


Principle #4: Compound, compound, compound

If you have started to apply Principle 3, you’ll start to have some money left at the end of the month.

What do you do with this surplus cash? This depends on your situation:

When you save & invest, your money grows. You then reinvest this growth. This is compounding. It’s magical, just look at what £300/mo does at 4% over 10 years.

Get your money working for you, growing your net worth.


Principle #5: Frugality over Lifestyle Creep.

If you are following the principles, you’ll start to see your savings rate increase.

If your income is increasing, one major pitfall is life-style creep. Learn how a car doesn’t have to break your bank. Enjoy four cost-effective holidays a year. Eat healthily, live healthily, and be happy.

I have peers who do this. They take home well over £100K. It’s all gone at the end of the month.

Learn how to enjoy life without material possessions. Embrace the beauty of the environment and the people around you.

It’s up to you how far to take this. Some take it to extremes, others are more moderate. The important takeaway is to live well within your means, but be happy doing so.


Principle #6: Practice building habits.

Habits are hard. It’ll be hard to measure your finances month after month. You’ll do it once, twice. Third time? Boring. Why am I doing this? I don’t have time.

Like losing weight, or cutting down on drinking, or going for a run every other day. Habitual behaviour is hard to start but even harder to stop.

Your health, wellbeing and finances are a function of your ability to build habits.

Practice building habits:


Principle #7: Look after yourself before your wealth.

Health is the greatest gift, contentment the greatest wealth, faithfulness the best relationship

Chasing net worth gains at the expense of one’s well being is very unwise. Look after yourself, your physical health & your mental health above all else.

If you are fortunate enough to be in good health, look after the health of those closest to you too.

Eat well. Exercise. Socialise. Empathise.

Find mechanisms to relax. Find mechanisms to reduce anxiety.

Look after yourself, and those around you. Doing so will be more fulfilling than any material possessions. You’ll find contentment.

It is only when the rich are sick that they feel the impotence of wealth.


Principle #8: Continuously improve.

Rich people have small TVs and big libraries, and poor people have small libraries and big TVs.

It’s all too easy to settle into mediocrity. Long day at work, tired, feet up, watch the game. Saturday night TV with the family. Sat in silence. Scrolling through instas.

We are at our best when we learn. We are at our best when we listen & engage.

Get excited about learning. Learn something new every day. Constantly be reading. Constantly be absorbing. Challenge yourself to improve.

You can do this with incremental steps. Continuous improvement is central to manufacturing and software. Born from the The Toyota Toyota Way*.

Repeat small, incremental improvements and you can climb mountains.

Be careful to leave your sons well instructed rather than rich, for the hopes of the instructed are better than the wealth of the ignorant

Be altruistic and pass your knowledge onto others.

The Principles of Financial Independence are for Everyone

These 8 Principles of Financial Independence act as a guiding light. They will help you no matter your income, financial situation, or privilege.

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