Did you know that you don’t have to wait until financial independence to be financially free from clinical medicine, the hospital bureaucrats, insurance companies and the rest? Join along and discuss how multiple income streams have provided all the freedom I could ever need and how the thought model can help you find the same.
Today’s thought is this, you don’t have to wait until you’ve saved enough for financial independence to find financial freedom. What do I mean by that? Well, financial independence is a bit of a pot of gold at the end of the rainbow in my experience. It seems that it’s kind of like this magical land that once you arrive, everything’s great, except for you get to the end of the rainbow and that pot of gold isn’t what you expected it to be.
It’s just not really how it works. In fact, I know a ton of people who set their sights on FIRE. When they get there, they find out they were miserable after getting to FIRE, after they have finally achieved their long lasting goal.
I’ve always focused on financial independence and more recently using the term financial freedom, because that’s really what we want. We want freedom from our employed positions, freedom from bureaucrats, freedom from insurance companies or not being able to practice medicine the way that we want. It’s really about freedom.
The Hybrid Method to Reach Financial Independence
A great way to reach financial independence is through multiple income streams or just one very large income stream that is nonclinical for doctors. The most common example is real estate. Let’s say you still need that $100,000 per year. You divide that by 12. And if you divide $100,000 by 12, you’ll realize that you need about $8300 a month. So instead of saving up 25 times $100,000, what you could do is generate enough rental income coming in every month to make up for the $8300 that you need.
That would be a one way to get to financial independence. So you can get there by saving. You can get there by having income streams that are nonclinical. Now you may be replacing one job for another. So that might not feel like freedom to you, but in that area, that way of doing it, you would at least be the boss.
You’d be the one determining your schedule and have the freedom to do what you want. What I do is kind of a hybrid model between the two. I save in a classic financial independent sort of way, but I’ve also built lots of online business income streams of finances. I’ve also built online sources of income streams through several different things.
So really what I’m looking for isn’t this financial independence through saving or the financial independence through income streams. I like to think about it as financial freedom. So how would I define that? If I had to define financial freedom, this is how I would lay it out for you.
The Definition of Financial Freedom
Financial freedom is the ability to work when you want and how you want without physical or time constraints. So in other words, you are free from the shackles of employment. You can work when, how, where, and when you want. That’s financial freedom. Because at the end of the day, so many people retire and then they realized that actually being productive was something they really enjoyed and escaping the rat race isn’t all it was made up to be.
And so I don’t really focus on the retirement aspect of anything because I’m always going to work. I’m an overachieving productive person. That’s what brings me joy in life. And so I know I’m always going to work, but what would really feel like freedom to me is being able to practice medicine or work on my business when, how, where, and the way that I want, basically. I want to be able to do it how I want, when I want, where I want.
The reason that financial freedom is different from financial independence is because financial independence seems like inextricably linked to FIRE. It’s inextricably linked to retiring early.
And so because of that, and because I never really planned on retiring, as strange as that seems, I plan on just working more and more towards the days and the weeks and the months that I love, I’m more focused on my freedom. And so I think that everyone’s goal should be every day to work towards living your ideal day more and more often.
That’s freedom. That may involve work, that may involve even practicing medicine, that may involve golfing. It may involve hanging out with your family and friends, whatever your ideal day is.
What is Your Ideal Day?
And I think it’s actually a really helpful exercise to do this. So what I recommend people do is take out a pen, take out paper and actually write it down. What is your ideal day? And then after you’ve done that exercise, maybe describe your ideal week, your ideal month, an ideal quarter, maybe even an ideal year, you can base it on seasons.
But the reason that I think this is so highly important is because you write it down and you think that you know what that is, and then you go and do it. You write it down. And then the next opportunity you have, maybe you have a nonclinical day, it’s post-call day, it’s an academic day.
Maybe you have a week off for vacation and you try to live that day. And then you’re going to find out very quickly that what you had in your head and what you actually enjoy in reality are very different things.
So you kind of scratch through things and say, “Well, I thought playing golf every day was going to be a great way to really enjoy my life when I’m not working. It turns out, playing golf every day isn’t what it was cracked up to be.” So you scratch that out. And after several iterations, you’ll have your ideal day.
After I figured out what my ideal day was, I started asking myself, “Well, what does my ideal week look like?”
And then I eventually had my ideal week. I wrote it down. I scheduled it all out. Why wouldn’t I want to do this every single day and week of my life? What is holding me back? I don’t want to keep living someone else’s life or living at the requests and demands of other people. And so now I’m working more and more towards my financial freedom. I’m working more and more towards living that ideal day and that ideal week, as often as I possibly can.
How I Use the Hybird Method to Reach Financial Freedom
I started working on multiple income streams and it’s kind of that hybrid way. I’m still saving a lot. My family still saves a six figure sum of money every year. So we’re still heading towards financial independence.
But the other way is through multiple income streams. So I started pulling in money every month that was coming through various ways. And so I’ll give you some examples just to get your mind thinking about possibilities out there for you. I created a blog. I made two podcasts.
So that said, there are lots of ways that the blog and podcasts allow me to make money, which is for example, I wrote a book called The Physician Philosophers Guide to Personal Finance. It’s in Kindle, paperback, audible. I get a check every single month, at the end of the month, from those three sources basically paying me for that book that I wrote a year and a half ago, two years ago.
I created an online course. I sell that course for people so they can design financially free lives for themselves, including, the traditional saving enough and how to get there and designing a life that they want, and how to figure out what their ideal day and week in life is.
I also start a coaching business, and it’s crazy, but it turns out that in order to reach more people and help more people and provide value and help people deal with their life and career decisions and their financial decisions, that it requires a business. And the larger the business gets, the more people you can help.
A lot of the money that comes in through my business ends up going back into the business so I can help more people. And that’s just the way that businesses work, but that’s another additional income stream.
Maybe none of those are for you. The most common example of other income streams that I could pitch out at you are the following. The biggest one is real estate. Real estate by far and away is the most common one out there.
I mean, there are just so many different ways to do this, but I’ll tell you that I am a huge fan of having a hybrid, such that you’re not dependent upon only your clinical income, and God forbid something happens. You still have tons of security, tons of freedom, additional income streams in addition to saving money.
You don’t have to wait until you’ve saved enough financial independence to find financial freedom. Multiple income streams are probably the fastest way to setting yourself free. And when you do that, I encourage you to think outside the box, put multiple pans in the fire and see which ones catch. Don’t let other people tell you what you can and cannot do.
Find your freedom, do it your way and then live your ideal life more and more often every day, every week, every month, every year. And how you do that is start by starting, and how you do that, you start before you’re ready. You start by starting. You start now.
I love this! And I agree completely. Financial independence is a great goal but we need our”why” to make achieving it worthwhile and fulfilling. Financial freedom or financial well being allows us to live on our terms and that’s my true goal!