3 Major Myths About Financial Freedom


Mythbusting Financial Freedom

It’s early July, and this time each year, we have some time to think about our independence and freedom. We also celebrate and spend time to be grateful for those that helped us achieve that.

Everyone reading this certainly has a lot to be grateful for. But I also know that there are those that might feel a bit trapped in their current life situation.

Some might hear the term “financial freedom” and think it’s a pipe dream; unachievable, or something to think about in the far distant future.

Well, I’ve spent the last five or six years pursuing this seemingly whimsical dream, and I’ve been fortunate enough to see it to reality. Through my experience, I’ve also learned some hard-to-shake misconceptions–myths, if you will–about financial freedom.

See if you relate to any of these myths when it comes to financial freedom:

Myth #1: You Need to Be Debt-Free to Achieve Financial Freedom

Physicians are no strangers to debt. I talk to residents all the time who tell me that they have over $300,000 in debt. The highest I’ve ever heard someone mention is $450,000. It's crazy…

Add in a home mortgage and a few cars and you’re talking debt well into the millions. Buy a rental property and your debt could easily cross the $2 million mark.

But if your goal is financial freedom, then the only way to achieve that is to get rid of all that debt. Right?

Well, not really.

Remember, financial freedom is not necessarily a number. It’s the idea that you can do whatever you want, whenever you want, with whomever you want.

If you have $10,000 in debt payments each month but you have other sources of income that bring in $20,000 each month, you’re still making $10,000 per month. And if you can live your current lifestyle on that amount, then guess what? You’re financially free.

There are those who teach that all debt is bad. Personally, I believe there is good debt and bad debt. I think of good debt as an investment; it helps increase your cash flow or net worth. Bad debt is typically used to buy a depreciating asset–meaning that its value goes down with time.

What falls into each category? Well, the debt that you took on for your education or for your rental property is most  likely good debt. Bad debt is the debt used for cars or luxury goods.

I’m not saying you shouldn’t try to be debt free. There’s definitely a huge mental benefit of not having debt, and I completely get that.  

However, I’m trying to go the more balanced route. I use debt as a tool to achieve my ideal life. If it helps me get closer to that goal, then I’m comfortable keeping the debt. If it doesn’t, then I get rid of it as soon as possible.

Myth #2: I’m Too Young To Be Thinking of Financial Freedom

The path to your specialty wasn’t done overnight. You spent years preparing and pursuing it. It took setting goals, celebrating small wins, and a lot of hard work and persistence to get there.

The same can be said for financial freedom. It is in no way an overnight success. Anyone who tells you otherwise is selling you something.

That process starts with figuring out your outcome, why you want it, and then taking actionable steps in order to get there.

The sooner you start thinking about it, the sooner you’ll reach that goal.

Do you really want to wait until financial independence becomes a necessity? Don’t wait until your job becomes less stable, or life changes, or you’re burnt out.

Do you want to have a long, sustainable career? If so, it’s worth thinking about from the very beginning. That way, you have a clear path to follow.

Myth #3: You Have to Fully Retire to Reap the Benefits of Financial Freedom

As you may know, I am a big proponent of a gradual retirement. That means that as you create other income streams and supplement your income, you can decrease your time at your day job until you find a happy, sustainable balance. 

It’s really replacing one income for another. The thing you gain is time and the choice to do whatever you want with it.

I believe that life should be about more than working yourself to death for 30+ years, retire, and only then learn to enjoy yourself.  

By planning for financial freedom earlier on, you can start to take less hours at your day job, and slowly transition into retirement.

Actually, my hope is that you never feel the need to retire; that you enjoy what you’re doing and do it because it fulfills you and helps you continue to grow and contribute.

Those seem to be the happiest physicians in the hospital – the ones that don’t need to work, but do so because they have a passion for it.

If you’re financially free, then medicine becomes a well-paid hobby.

Ultimately, as we celebrate our freedoms this year, it’s a perfect time to assess where you are in your journey. If you haven’t started yet, then there’s no time like the present. You don’t have to have everything in perfect order to take that first step.

And even if you’ve already reach financial freedom, take some time to celebrate independence day–in more ways than one.

What are some misconceptions you had about financial freedom? Are you wondering if something you are doing is recommended or advised against? Leave us a comment below to share your story!



  1. Certainly doing something is better than doing nothing, so that’s rule 1. Doing something early is better than doing something late, rule 2. It means you need a plan and actual action. The problem? What’s an actual plan and not some bloggy woggy fever dream concocted from the echo chamber. The problem is people do not plan past the retirement date, as if once you made it, well you made it, and if your 50% to “made it” you can start coasting, maybe yes, maybe another fever dream depends on your cash flow, SOR and future unknowns.

    You can actually calculate what your retirement is going to cost from any starting age to any ending age, so from 52 to 92 is 40 years and simply sum up the inflation adjusted payout each year and you know. Do you think a 1.5M portfolio is going to support a 3.6M 40 year retirement at 4% (60K) wr with 2% inflation? That’s what you will need to make 40 years 3.6M, that’s the leverage on your future and the bet you make. If you monte carlo that bet you have a 94.8% chance of success, first failure only 18 years in. If you change the bet and drop to 45K payout (3% WR), survival is 99.6% first failure @ 27 years. That’s a part that’s missing, actual risk analysis.

    What about taxes? You only get to spend what the government lets you keep in retirement. If you use tax deferred accounts, the government has a plan for you to separate you from your money on their terms not your terms. Have you prepared for that? The governments terms are not nice and decidedly meant to maximize your tax burden in a progressive fashion. The code really is written to soak the rich despite the rhetoric

    What about disaster? You may have your passive income empire but what happens when you stroke or get Alzheimer or cancer diagnosis. Do you even know you chance of getting cancer in your life time? If you’re married you need to plan for 2 end of life scenarios not just one. Full time memory care is about 100K/yr in one article I read and the chance of alzin @ 65 is 1/10 rising to 1/3 at 85. The average longevity is 12 years post diagnosis, don’t forget to inflate that cost. Did you stick that in your retirement plan while you’re retiring early? You going to run your passive income empire with Alzheimer? You gonna spend all the dough yourself and leave the old lady eating alpo? Did you know once you kick her taxes can go up 2 brackets and she looses your SS contribution. Nice present from the government you die and the old lady gets taxed into oblivion looses half SS and then she gets Alzheimer.

    My point of course is the story doesn’t end with accumulation, but then gets really complicated and do not think it doesn’t, or somehow you’re going to escape the future. The day you quit is the day all of the risk presently underwritten by your employer gets transferred to you. That risk is real.

    I fully agree about debt. It’s NOT about paying down debt, not at all. It’s not about “good debt” or “bad debt” Those concepts miss the point. It’s about optimized future cash flow. If an investment is going to pay 6% on the average for 40 years, and a loan will eat 4% for 5 years you’d be a moron to cut your 6% accumulation to 35 years so you can “feel good”. 40 years later you’ll have a couple extra mil, and that will feel real good while the debt will be long forgotten. Not a fan of debt though it can pay if you structure it correctly. It’s a business calculation not an emotional journey.

    Enjoyed the post!

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