Financial Independence Via Self-Employment: How Do We Do It?

Financial independence via self-employment is still possible, and there are a number of pathways to that goal.

The conventional financial industry touts gaining financial independence by playing Wall Street’s game: working a conventional job for decades to accumulate a chunk of money in retirement funds that Wall Street wizards magically squeeze for hefty annual returns in a zero-yield world–in a completely risk-free manner that keeps your nest egg intact, of course.This annual yield on the large sum squirreled away over the decades then (supposedly) enables a spacious retirement home on the golf course, luxury cruises, etc. (Uh, right. Unless stocks and bonds crater, Wall Street’s hedges crumble and the global economy slides into recession–y’know, everything that’s happening now.)

(And never mind many households can’t possibly save enough to accumulate a big nest egg due to stagnating wages and soaring costs of big-ticket expenses like healthcare and college.)

The other pathway to high-income retirement is to manage your career to earn multiple government pensions: in areas with large Department of Defense (DoD) installations, (military and civilian), this often means 20 years in military or civil-service that comes with a pension and healthcare benefits, followed by a second career in another government agency that secures another pension and maybe Social Security, too: this is the classic Triple-Dipper retirement plan.

A similar pathway is to have two workers in the household each retire with a government pension and Social Security, so the household income includes four secure pensions.

The third avenue to financial independence is not so much about retirement–it’s about financial independence during your career/working life as well as retirement. The ideal retirement scenario for the self-employed is simply a reduction in the work you don’t much like and a continuation of the work you enjoy until the end of your life.