The Perils of Pursuing Financial Freedom

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The following is a guest post from Kent Thune, who is a Certified Financial Planner(R) and the author of The Financial Philosopher, where he urges readers to place *meaning before money and purpose before planning*.


What is freedom? What is financial freedom? Is there a difference? Is the freedom that money apparently purchases worth the sacrifices we make to reach this freedom? Can the pursuit of financial freedom paradoxically reduce one’s actual freedom? Can freedom be bought? If not, then what does this say about the pursuit of financial freedom?

The Tail Wagging the Dog

“Life is about life and not the result of life.” ~ Johann Wolfgang Von Goethe

Financial goals are destinations; they’re not life. If you believe that life is about the journey and not the destination, it’s contradictory to believe that life now must be sacrificed for a life bought by money later.

If retirement, for example, is accomplished only upon (or in unison with) the accomplishment of financial freedom what is the purpose of life now? Are you enslaving yourself now for a perceived freedom years or even decades away?

The blind pursuit of financial freedom is often closer to slavery than it is to liberation. The ultimate example of the metaphorical tail wagging the dog is an individual who creates a financial plan and then shapes their life and behaviors to accomplish the plan; whereas the healthy individual will clarify life (non-financial) goals first, and use money as a tool to reach those goals second. The pursuit of financial freedom can actually be liberating if it is not a blind pursuit—if it is a pursuit consciously defined by the individual.

Being a Slave to Language

“Man acts as though he were the shaper and master of language, while in fact language remains the master of man.” ~ Martin Heidegger

Much of what you read and hear about financial planning and all that it encompasses is abstract: The meanings of terms, such as retirement, can be so broad and liquid that they have no real meaning for the individual (you) unless the meanings are transformed into something concrete by the particular individual.

If, for example, your definition of retirement is primarily something like “a time, probably at age 65, when I’ve saved and sacrificed enough to replace 80 percent of my current wages, adjusted for inflation,” you may assume that your definition is not yours—it was formed out of social conventions.

What is retirement? What is financial freedom? Only you can answer this for you. Only you can define terms and ideas for yourself. The only wrong definition of financial freedom is the one that isn’t yours. Don’t allow the federal government or any financial planner, family member, friend, blogger, or any other entity to influence your definition of financial freedom! How can you truly be free if you’re not creating your own path and defining words that define your life pursuits?

The Diminishing Marginal Utility of Money

“Contentment is natural wealth, luxury is artificial poverty.” ~ Socrates

Financial freedom, if one universal idea may be used as a starting point, probably lies at the point at which the utility of money begins to diminish, the point at which the basic sources of physical well-being — food, shelter and clothing — have been met. If for example, $50,000 is all you need to pay your bills (with a little remaining for savings and the small pleasures in life) every dollar you earn above that point diminishes in utility. From this point, 10 times more pay will not make you 10 times happier (but a reduction would certainly be painful).

At this point of diminishing marginal utility of money, financial freedom may arguably be had by (and defined as) the capacity to eliminate the desire for more money, which is essentially defined as contentment. In short, you limit freedom when you chase money that you don’t really need; and freedom may be defined in non-financial terms.

Freedom From vs. Freedom To

“Money often costs too much.” ~ Ralph Waldo Emerson

Financial freedom is often equated to freedom from financial debt, which is an admirable pursuit. Where many people create a potential hazard, however, is that they have no plans for life or money after making that final debt payment. People also make a similar mistake in believing that they are not truly free until they are free of financial debt. Freedom and Financial Freedom are separate ideas.

Twentieth century philosopher Erich Fromm observed that there are two forms of freedom: Freedom From and Freedom To.

Freedom From, according to Fromm, can be a negative form of freedom because it is sought as relief from uncertainty or from restrictions placed on the individual by society (other people) and/or institutions (e.g. government, financial creditors). The pursuit of Freedom From can even paradoxically reduce or remove one’s actual freedom.

For purposes here, specifically with regard to the idea of financial freedom, one must be careful not to seek money only as a means to “buy freedom” from something, such as work, from society, from debt or from whatever it is one wishes to escape, unless Freedom From is attached to (or followed by) a Freedom To something…

Freedom To is the healthy form of freedom because it is the form where the individual obtains the capacity to be creative—to act as the authentic self—to be authentically free. In other words, one has obtained Freedom To if they are enabled to be and act as themselves. You may want, for example, to spend more time with family, working on hobbies, starting that dream business, writing a book, or simply relaxing.

In reality, there is no reason why you can’t have Freedom To without first meeting certain financial goals. In other words, it is important to distinguish between Financial Freedom and freedom. Just because you are in debt up to your ears and you hate your job does not mean you can’t be free. Where many people are mistaken, in my humble opinion, is that Freedom To can only be obtained after Freedom From.

Freedom and Imprisonment are Self-Created

“Most of the luxuries, and many of the so-called comforts of life, are not only indispensable, but positive hindrances to the elevation of mankind. With respect to luxuries and comforts, the wisest have ever lived a more simple and meager life than the poor. The ancient philosophers, Chinese, Hindoo, Persian, and Greek, were a class than which none has been poorer in outward riches, none so rich inward.” ~ Henry David Thoreau

I don’t like the conventional idea of financial freedom because many people are led to the mistaken belief that money buys freedom; that one can only be free, to act as the authentic self, once a certain financial objective has been met.

I know plenty of financially wealthy people living in a self-created prison; and I know several financially poor people who consider themselves free (and happy).

Furthermore, there is never truly freedom from money because money is required as a means of exchange for the things that meet your physiological needs; you will always have some need for money as a tool.

Freedom is a Choice

“Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.” ~ Viktor Frankl

If one believes that freedom is essentially the capacity to act as the authentic self, it is therefore in one’s best interest to seek and find (and act as) the authentic self; and not necessarily seek to acquire a large sum of money, or to seek the help of society, to create the freedom.

You must first ask “What is the purpose of my life?” before asking “What is the purpose of my money?” Once the first question is answered, you have thus answered the second. Making your money a tool for life, and not allowing your life to be a tool for money, is a choice that opens the door to freedom.

“I write to keep from going mad from the contradictions I find among mankind – and to work some of those contradictions out for myself.” ~ Michel de Montaigne

In conclusion, it is my hope that the preceding thoughts are not compressed and categorized as an aimless discussion of semantics or a rant against people who make it there greatest ambition to become debt-free. It is not the idea of financial freedom that is a potential hazard; it is the pursuit of the conventional idea of financial freedom without conscious thought at the individual level.

At a minimum, I hope that these words provoke reflection and introspection, or perhaps a healthy dialogue about freedom and how it relates (or not) to financial freedom. Being more ambitious, I hope that every person reading this blog post will form their own concrete idea of financial freedom… today.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

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  1. The trick to satisfaction is balancing the present against the future. There is no point working so hard and saving so much for the future that you don’t enjoy the present. On the other hand, it is unwise to enjot the present so much that the future is unenjoyable.

    I also think we should keep in mind that for most people, our bodies and minds can only deteriorate as we age, so we should enjoy the pesent while we still have our health.

  2. Great post! I face this dilema myself and trust me, it is a dilema. I feel I am a victim of this trend of sacrificing life today to hopefully ensure a financially free lifestyle at some point in the future. In the meantime I could be wasting my youth on achieving that goal. I think for some that are higher earners it is possible to have your cake & eat it too but for most it is a matter or priorities & what is more important. When I was much younger I lived fast & fun but did not have any money too my name but today I work & save while living a much more boring lifestyle. Although it is not as fun, I feel much happier now due to having some financial security. I am hoping that at some point I will reach a point where I can still save a heafty amount but also take more trips and enjoy my previous sacrifices. Good luck if you are one of the ones facing the same trade off as I.

  3. It’s all good but I don’t see how it’s actionable. How do you strike that balance? How do you know when to quit the accumulating game?

  4. @ Mark & Bill: You both make excellent points that there is a balance that must be found between planning for the future and living in the present. Finding the right balance is, in my humble opinion, the foundation of health in every endeavor, whether it is asset allocation, food diet, work-life, or personal relationships. When energy is placed somewhere, it is taken from somewhere else. In essence balance is allocation: Allocating time, money, attention, and so on…

    @ TFB: You ask good questions: How do you strike that balance? How do you know when to quit the accumulating game? Striking a balance is not something that can be taught; it must be learned; balance is subjective. I will say, however, that consciousness (self-awareness) is crucial to balance. If living for the future is killing your present, this would be an indication that the goal of winning “the accumulation game” is actually causing you to lose in the game of life. Self-awareness will tell you if your balance is healthy or not. Qualitative assessment precedes quantitative assessment.

  5. I enjoyed this post greatly. It is a new perspective that I believe makes much sense and is eye opening towards my behavior towards money. I am very conservative and view money as a tool to live the life I dream. My dream is a family, nice home and being able to do as I please in regards to proving a quality of life that involves vacationing, outdoor activities and being able to go out to dinner and enjoy myself without worrying what I can or can not spend money on (pipe dream I know).

    This dream has that must be fueled by an income stream is as the author states a “Freedom To” to live the life I dream. Although it needs an element of “freedom from” student loan debt and car debt and credit cards that seem to get in the way of my average income. How could I live the life I dream when there are so many financial responsibilities keeping me from starting a family and owning a home?

    Possible I need to lower my expectations in life, and maybe than happiness will show its face in my life.

    In comparison I compare my personality towards financial independence against my brother. He does little thought to finances, and lives the life he dreams regardless of the expense. My view is that he is not financially independent because he is in debt, but surely he does not mind and would tell you he lives a great life and has freedom.

    I might have when on a personal tangent in my reply, but thanks for giving me a new outlook on how I could view money and financial freedom.

  6. @ nycguy: Thanks for sharing your thoughts! You illustrate, especially in drawing the comparison between you and your brother, that freedom is really a state of mind. One of my favorite writer/philosophers is Viktor Frankl, who was a psychologist and concentration camp survivor. He learned much about freedom during the Haulocost. Here are a few quotes from his book, Man’s Search for Meaning:

    “Everything can be taken from a man or a woman but one thing: the last of human freedoms to choose one’s attitude in any given set of circumstances, to choose one’s own way.”

    “A human being is a deciding being.”

    One may be free in any given circumstance. Thanks for commenting…

  7. Freedom from can be a real motivator, and I have excelled by seeing it as such. Freedom to is great too, but at the end of the day… nothing makes me push harder than a quick reflection down freedom from lane.

    At the same time, I agree that you need a little more to be truly happy, or at least content in life. Once you obtain freedom from xyz, you hopefully have an idea of how you want to shape your life. What is the point of obtaining freedom if you don’t have a clear direction or path of how you’d like to see your life unfold?

    @kent: Your quotes remind me of an adage… mind over matter, if you don’t mind then it doesn’t matter. or something like that. when you have nothing else to hold on to then this can be a very powerful tool for preserving your well being. However, under normal situations this can also be a hurdle in disguise. I’m sure we can find prison inmates that will tell you that they are free. When you convince yourself that you are free, in essence you become that. To me, freedom is incomplete without purpose. What good is freedom if you do nothing with it? There should be a clear line between true freedom and delusions of a trapped mind, even though to that individual it will look and feel the same.

  8. Kent,

    Good post and I largely agree with what you wrote. One quote I think you could have used that would have summed up your thoughts neatly is:

    “rich is the amount of things you can walk away from” by Henry David Thoreau.

    Concerning retirement, I think the world is slowly coming the realization that ‘retirement’ in the way it was conceived in the 1950’s is neither possible nor desirable.

    Healthcare costs are too high to afford it, and we live too long now for the possibility of just sitting around jobless for 30 years to be a desired outcome.

    If anyone has yet to read ‘Die Broke’ or the ‘4 Hour Workweek’ I suggest you do. They both talk at length about retirement and how it needs to be re-thought.

    I have no expectation of a traditional retirement, and I thank god that I’ve been able to realize that now while I’m in my 20’s before it’s too late.

  9. This post is very timely for me. I’m 52 and tired of my job and the place I live (though I don’t hate it). In three years, I was planning to work half time so I could live in two places or travel. For me, half time is only 88 days a year. However, I am a public employee and there is talk of the public pension bubble bursting at some point before I retire. This would affect my plans. Do I hang in there, counting on the freedom that my pension was supposed to bring? Or quit this job and move away now to have the change that I feel I really need? With the economy being what it is and my need to support myself, I will likely stay put. But this post has given me much food for thought. Thank you.

  10. @ Frank:

    I like your paraphrase of the adage: “mind over matter; if you don’t mind then it doesn’t matter.”

    I also agree that freedom is incomplete without purpose. This might be called self-actualization. I recently posted on this at my blog:

    “Musicians must make music, artists must paint, poets must write if they are to be ultimately at peace with themselves. What humans can be, they must be. They must be true to their own nature. This need we may call self-actualization.” ~ Abraham Maslow

  11. @ Chandra:

    Thanks for sharing your thoughts and your personal challenges. Not being in your situation, these points are easy for me to say:

    *Your state pension is not the true source of freedom; it is your ability to be, know and act as your authentic self.

    *It appears your first comment, that you are “tired” of your job, summarizes what limits your freedom.

    *Additionally, people in retirement say that money does not provide meaning and purpose; therefore they want to “do something” that is fulfilling.

    My recommendation to you is that you find some kind of work that you enjoy–something that will pay you as much or more as your expected pension. This way, you will be fulfilled, financially secure and free…

    Once again, this is easier said than done; but certainly worth the effort.

    “Everyone has his own specific vocation or mission in life; everyone must carry out a concrete assignment that demands fulfillment. Therein he cannot be replaced, nor can his life be repeated, thus, everyone’s task is unique as his specific opportunity to implement it.” ~ Viktor Frankl

    “What is to give light must endure burning.” ~ Viktor Frankl

  12. My parents earned good money as both were professionals but also spent a lot compared to their peers. There was always tension around money. But both retired at 50 on the basis of their pension. Would I want them to change anything they did? No!

    Now that I am noticing myself in same dilemma/situation as they were, I am choosing a slightly conservative approach & leaving a slight room for redundancy.

    Freedom to make choices comes from understanding the true worth of your human capital/potential in relation to the society and being able to leverage it to live a life that befits your comfort and values.

    I spent considerable amount of time in deciding level of savings I needed – (while still based on projections, I made a choice that I will need lot less from life when I stop working. This I have noticed of my parents.) and the commensurate lifestyle I could afford after I contributed those savings. Moreover, within the lifestyle I could afford, I prioritized things. So a new car was nice but not essential etc.

    TFB, would this be a way to make Kent’s thoughts actionable?

  13. @ KD: I will say only three words in response to your comment:

    Self-awareness is wealth…

  14. thought provoking post…
    Kent nailed it on the head – often the root cause of all problems discussed within is awareness or getting your priorities straight and clear. cut the fat, then automate what remains. automate doesn’t necessarily reflect only removing yourself from the equation to create the balance (freedom), but rather coming to terms and knowing what you are striving for. one can then design or structure life around the few key priorities – lifestyle design as we know it.

    TFB – does that answer your question?

  15. @Chandra,

    Obviously, I’m not in your situation, but I think its best to think of the situation in terms of a specific goal you want to work towards, and devising the quickest way to get there, as opposed to choosing to stay in a place over whether it’s ‘worth the money or not’

    Like Kent said, this is easier said than done, but its always important to think about all the opportunities you are NOT acting on by staying at your current job (assuming you don’t like it there, of course).

    I think looking at that ‘silent evidence’ is the best way of measuring the true cost of staying where you’re at vs. pursuing other alternatives.

  16. Kent and Dani,

    Thank you for your feedback.

    I think my goal is simply to not work full time so that I can do meaningful volunteer work (in my case, on behalf of animals), travel, and live in a place where there are more cultural and social opportunities than I have now. I thought the quickest route to that, while maintaining financial comfort, is to work full time three more years because at 55, I can work half time (only 88 days a year for me). I also have a 5 month sabbatical next year. It seems crazy to walk away when I’m so close. Three years isn’t long considering I’ve been in my career for over 20! (though at different jobs and in different cities). It’s just that I’ve been in my current job 12 years and this is the longest I’ve ever stayed in one place and I’m simply over it!

    Don’t want to turn this into a therapy session so I’ll end here. Thanks again.

  17. Interesting that the one time (in a long time) I pop in and catch up with “the money blog” that I stumble on the most relevant post ever for me…

    Accepting things as they are and also having goals and dreams is a balancing act that isn’t always easy. If economics is the “allocation of scarce resources which have alternative uses”, then no matter who you are there will never be an arrival at (somehow) getting your cake and eat it too. I’ve heard of many rich people who now find a sense of meaningless – who have found that they no longer get the benefit of pride of work now that they have won the lottery or whatever. They have lost a sense of purpose and meaning, while the rest of us, still angling for that “ah-a!” moment in the future when most of our financial goals are met, often fail to see that there are benefits to our present situation too.

    Time is a coin. We should not let others spend it for us. Whether rich or poor we all have the same currency: 24 hours per day. We cannot buy more of it. A sober thought provoking post that gets to the heart of life.

    “If only I pay my car off, and get my condo, save $5000 more, THEN…” – these types of thoughts and goals ought to carefully examined to make sure we are not waiting until everything is perfect before starting to live.

    John Lennon said it best: “Life is what happens while your making plans for your life”.

    (imagine if Lennon put off his love of music for……down the road). Gotta live life, cut your loses, accept your reality and make it happen.

    Finally, one way to tell if you’ve hit the balance right, I’ve discovered, is to use the smile factor. Yes your older and wiser and more mature. But if you’ve lost that zest and fascination with life and are weighed down with endless responsibilities, have a regular inability to appreciate the moment (because your always conjuring up scenarios, tasks, and keep reminding yourself of your glaring weaknesses which need to be shored up to finally (finally!) reach some great goal (education, money, etc.)……then there’s a pretty good bet you are not smiling that much these days.

    Live life, do your best, quit worrying and stop being afraid. You only get one life and it ain’t a trial run to work out the kinks for the next one.

    Best advice by my philosphy teacher (which, at the time I thought was dumb – not anymore): (after analysing Kierkegard’s pontifications for one hour he raps it up with..) “So on that note, I’m going to go to the (name of pub), have some beers and watch the game with my girl, then play some darts and then go home and watch my favorite show: King of the Hill and then call it a night.”

  18. @ Charles:

    Wow! I’m humbled that my blog post provoked such thought and a comment that could be a blog post in itself! Thanks!!

    I like your idea that we are given the same currency–24 hours.

    Also, Kierkegaard is among my favorite philosophers. Here are some of my favorite words of his:

    “It seems essential, in relationships and all tasks, that we concentrate only on what is most significant and important.”

    “The crowd is untruth.”

    It’s quite true what philosophy says, that life must be understood backwards. But one then forgets the other principle, that it must be lived forwards. A principle which, the more one thinks it through, precisely leads to the conclusion that life in time can never be properly understood, just because no moment can acquire the complete stillness needed to orient oneself backward.”

  19. Hi Kent,

    I know it might be late to comment on this blog but just want to add my thoughts. I read your post when you posted and after going thru few para’s I decided to read it more closely when I get good time to concentrate so I can grasp better and finally found the time to read it.

    I have read a lot about financial freedom and money authors and gurus put it differently in different ways and only few puts in the black and out. I would say you are one of the few who shedded the real meaning about having financial freedom. I don’t agree 100% what you say but the thought about putting yourself first than your money makes it clean and simple. I also wrote a post in my blog about financial freedom which some what closer to your thought process.

    I liked my views you shared in this post especially to seek your authentic self before you seek for more money. But don’t you also understand that its all interconnected. Some one would say, I am not happy because Idon’t have money and I am poor and unemployed. If I get money I would be happy to live my ordinary life. I think the financial freedom concept only fits for people who have constant earning and never worry about funds for life but looking for more to save for their retirment. For an ordinary middle/lower class people, there is no concept of financial freedom and only they should live for their own freedom atleast enjoy life. What do you think?

    I am really really very good post and thought provoking after a long time.


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