May 2015

Overcoming the Paradox of Financial Freedom

Author: Kent Thune

Conventional wisdom says that freedom is obtained by financial means. But this is an illusion. In fact, it is the pursuit of money that is among the most enslaving of human endeavors.

Consider this: Hundreds of millions of people are led to believe that one particular financial pursuit, which to accomplish requires the largest financial effort of a lifetime, is necessary to reach the destination of happiness and self-actualization. But this effort is also among the most mentally, physically and emotionally taxing efforts of a lifetime, which has individuals often working in various unsatisfying and stressful jobs and sacrificing meaningful life pursuits for this one financial pursuit; and this effort requires 30, 40 or even 50 years of time, assuming the destination is ever reached—or if it even exists.

This financial pursuit is called financial freedom. The idea of financial freedom is no conspiracy to deceive the masses, but it sure has sold unimaginable amounts of financial products and services. How many books, websites, blogs, magazine articles, media advertisements and financial planning seminars have used the term financial freedom as leverage to sell something (or more accurately, to scare you into buying a service or product you may not need)?

As of this writing, a Google Search for “financial freedom” produces more than 35 million results. What is financial freedom anyway? Who decides the meaning? How can you be free if your idea of freedom is defined by someone else, or not defined at all? Does financial freedom even exist?

In truth, financial freedom is a paradox: The sacrifice required to obtain it is too often the opposite of freedom—it is a kind of imprisonment for a majority of life for the purpose of being free for a minority of life.

For example, the pursuit of financial freedom is embodied in the process of saving for retirement, a destination that can take the majority of a lifetime to reach. However the journey is commonly defined by stressful careers or a combination of jobs that are much more about money than about meaning.

The 19th century existential philosopher, Soren Kierkegaard, observed: “It belongs to the imperfection of everything human that man can only attain his desire by passing through its opposite.”

But do not despair, dear reader: This imperfection, this debilitating human condition, is not necessary! The first step in overcoming the paradox of financial freedom is to distinguish between two types of freedom, which can be described as freedom from and freedom to:

Freedom From: If you seek freedom from something—the freedom from your current life, from the daily grind, or from financial debt, you are engaging in a negative form of freedom, which is commonly described as “escape.” This is a negative freedom, because the underlying motivation is based in fear, as relief from anxiety and uncertainty, and it can have the effect of creating an unpleasant today for the hope of reaching a happier tomorrow. In simple terms, a life of seeking freedom from can paradoxically reduce or remove your actual freedom.

Freedom To: This is the healthy form of freedom, because it is where you use your resources, including money, to obtain the capacity to be creative, to act as the authentic self. When you obtain the means to be authentic, you are enabled to reach the highest form of productivity because your actions are purposeful and meaningful; thus the actions are self-feeding and self-actualizing; therefore, you can be happy by virtue of doing, not because of a certain or pre-defined amount of financial capacity. In different words, instead of using money to escape something to be feared, the money is used to acquire something to be loved—a life of meaning and purpose.

So how do you go about achieving this authentic freedom and still be able to pay the bills? The simple answer is to achieve your “freedom to” as quickly as possible. If we return to the idea of retirement, we can insert something that conventional finance does not commonly teach: Being retired can be best defined as “doing what you love.” Within this perspective, the goal of retirement can be reached quicker and easier by shifting part of financial planning to something that more resembles career planning.

For example, it is nearly impossible for most people to accomplish financial freedom today without at least $1 million in retirement savings. For some, this number may be closer to $2 million, especially if there are little or no other sources of retirement income, such as Social Security and a pension, to supplement the savings.
Instead of feeling anxiety when a financial planner tells you, “Save 10 percent of your income now or you’ll never retire,” you can begin planning and preparing for a life of doing something that you love, which is the essence of retirement. If you are currently years away from the conventional, financially accomplished retirement (or you are in retirement now and looking for supplemental income and/or more meaning in life), you can begin the research and education now to find a career or line of work that is rewarding beyond financial means.

When you love what you do, why would you ever want to stop working? But when you accomplish this, you’re not really “working,” You’re giving your life meaning and purpose—you’re already “retired!”

Therefore, the “new retirement plan” can be the one that includes more than just the traditional savings vehicles, such as Individual Retirement Accounts (IRAs) or the 401(k); it can and must include the goal of doing what you love. Part of this plan is knowing how to qualify or train for this career and how much it will pay. Then you will know how much savings you will need to supplement this income in your retirement.

Some advisors and planners call this “life planning.” Can you see how this aligns or realigns the purpose of your money? In essence, this process will have you place meaning before money and purpose before planning.
This is not to say that there is inherently anything wrong with seeking money or material wealth. Money is not the root of evil, but the desire and pursuit of it is the most common means of losing oneself. You cannot be free or happy if you are not being who you are.

If you are not already “free” in this regard, a quick solution is to remind yourself that freedom is a choice, not a financial goal. Consider the wisdom of Viktor Frankl, a psychoanalyst and Holocaust survivor, famous for writing his epic book, Man’s Search for Meaning, where he reflects: “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.” If Viktor Frankl can find freedom while suffering horrific conditions inside a concentration camp, any human being on earth can do the same.

To “choose your own way” with regard to money and personal finance, you can choose to begin making your money a tool for life, rather than continuing to make your life a tool for money. You can ask yourself, “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.

You have placed meaning before money and purpose before planning.

To conclude, there is no such thing as financial freedom, at least not in the way conventional wisdom defines the term. Freedom cannot be procured by financial means alone. There are financially wealthy people who are enslaved by money, and there are people in financial poverty that are the masters of their lives. The difference between the slave and the master is a matter of perspective and life choice.

Put simply, life is not about making money; it’s quite the opposite: Money is about making a life. It’s up to you to decide how to apply this philosophy, this truth, to your own life planning.

Kent Thune is a money manager and the owner of a Hilton Head Island investment advisory firm, Atlantic Capital Investments. He is also a freelance writer and is currently working on a book to be published later this year. You can follow his musings on mind, money and mastery of life at or follow him on Twitter @ThinkersQuill.

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