Member-only story
The Appeal of Financial Independence
In times of crisis where stock markets are plummeting, unemployment is skyrocketing, and it seems that the most sophisticated financiers are at a loss the idea of financial independence really hits home. Financial independence has been written about a lot, often related to the FIRE movement with too much focus on being able to retire early, but what I think the authors fail to miss is that being in a place of financial independence is a good way to protect consumers.
Let us utilize an example of a typical American scenario. A family of 4 lives just above pay check to pay check because they have a mortgage, car loans, retirement contributions, and living expenses. Maybe at the end of each month they have about 500 dollars left to save as cash. It will take that family months/years to reach a point of being able to save enough in the event that their incoming cash flow is disrupted during a crisis event and sustain themselves long enough.
In an ideal scenario that family should be able to move to a lower cost of living location to increase their monthly cash flow, to build cash reserves, eliminate liabilities such as car loans or mortgages, or acquire appreciable assets that are not retirement accounts. This is often difficult because lower cost of living locations are often distant from well paying jobs in larger metropolitan areas and would require…
