Become Financially Independent with Stoicism

How can an ancient philosophy help you become financially independent? Isn’t Stoicism about not wanting money or caring about it? These are some questions that might come to mind when we mix the topic of financial independence with Stoicism. Stoicism is a philosophy focused on creating a good and peaceful life. That doesn’t align with money and finances, does it? Well, I think that both go well together and even reinforce each other.

We will break this topic down into several parts as we explore it. First, we will examine what being financially independent means. Then we will look at how a philosophy like Stoicism looks at personal finances. In the end, there will be some ways to apply it and this can even help a non-stoic improve their situation. Before all that, I’ll give you a brief introduction of how I got to combine these two interesting topics.

“And if you can’t stop prizing a lot of other things? Then you’ll never be free”

Marcus Aurelius, Meditations, book 6.16

Was this vision the right one?

After discovering Stoicism, I recognized my own inner Stoic had been present all along. But he had been working in the background. The first words of Marcus Aurelius woke him up and from there on Stoicism became a central part of my life. Now, there is no going back. A big part of who I am makes sense to me now. I see myself more as a practicing Stoic than a theoretical one. As I apply it to my life, I try to learn as much as I can about it by reading the texts and discussing the topic with people. I might not get everything to the letter as the ancients intended it. But that is fine for me. My life has improved on many fronts and I am making steps toward my goal of having a peaceful life.

This ties in with the topic of being financially independent. One cause of anxiety has always been money. During my early twenties and into my thirties, I never had a lot of it and it always seemed to go out faster than it came in. Having lived abroad for many of those years and moving around a lot didn’t help with building up a pension fund. This had to become my own responsibility. As I managed to get a job that paid quite well, I knew I had to make this money count. This was the opportunity to help me on my way to financial independence. To allow me to pursue the life that I have envisioned. But was this vision the right one?

Factors to Becoming Financial Independent

The overlap was there between the topic of personal finance and philosophy. It showed me that while I learned about Stoicism, my focus on money changed. Usually, the more money we make, the more we have to pay for it in other ways. Either by massive amounts of stress or by giving up a lot of our time. Before my Stoic awakening, I was focused on the financial aspect and paying the price for it. Now I do continue to learn about personal finance because I find it an interesting topic. Even if it is not my main aim anymore, I do believe it’s an important life skill. That’s why I’m also an advocate for more financial awareness in our school system. 

Our financial well-being depends on a few factors, here are some that are important to me. Let’s start with the offensive part of it, the income. We generate that by exchanging our time and effort for money. We work a certain job and receive a monetary reward for it. In our understanding, it works like this: the more we make, the better off we are. Yet, we are forgetting one important part of this, that the money also goes out of our pockets. Sometimes it disappears even before it has had time to land in our accounts. We need to look at how we handle our money. Better still, we can learn how to make our money work for us. Learning how to invest like a Stoic is one way.

Stoicism brought me back to reality

What does financial independence mean? It doesn’t have to be about being rich or having a lot of money. If you have a million dollars and you spend 100.000 per day, then you’ll last ten days. To be financially independent means that you have enough money coming in to live a good life. You are aware of your money situation, but you have eliminated most of your worries about it. This is what my financial goals are. Stoicism helped me bring them back to that reality.

As I started to invest my money, I had these big mountains of riches on my mind. And I cannot deny that greed played a part in it at that time. That’s when the Stoics marched in, like Seneca:

“Greed is satisfied by nothing, but nature finds satisfaction even in scant measure.”

Seneca, Dialogues and essays, Consolation to Helvia, 10

Their wisdom, together with financial books like; Your Money or Your Life, by Vicki Robin, made me reassess my financial goals. In Vicki Robin’s book, she addresses the concept of ‘enough’. This is what the Stoics discuss as well. Besides that, they have also helped me as an investor, read more about that here. How much do you need to live a peaceful life? And they even go further to say that great wealth can cause you a lot of anxiety. Knowing where your priorities are in life will allow you to get a better picture of your needs.

“He who knows he has enough is rich.”

Vicki Robin – Your Money or Your Life

Remind yourself that you can lose it all

Understanding your ‘enough’ can show you that you are a lot closer to your goals than you think. Many of the things we perceive as needs are actually desires and wants. Stoicism helps us to control these impulses. It makes sure we don’t go all out when we see a sale or some flashing signs with the next new thing. Controlling this, according to the Stoics, will reduce your anxiety and create peace of mind. This doesn’t mean that we cannot have things. The Stoics show us that it is not bad to have things, as long as we don’t pay too high a price for them. We must maintain our personal values and virtues in the process. Then they don’t see a problem with obtaining these luxuries.

What they warn us for, though, is not to get too attached to externals. Even if financial independence is our goal, it is still something we can’t control. Unforeseen things can happen to upset our plans. We must prepare ourselves for these possibilities. Especially when we are relaxing on a tropical beach somewhere, enjoying our time. Reminding ourselves that it could be gone, makes us appreciate what we have and that we will be fine either way. Setting up a good budget will make it all visual.

Stoic principles for Financial Independence

How can we work toward being financially independent, using Stoic principles? First, we must know who we are and understand our priorities. What do we need to live a good life and what are the redundant externals? Take a moment to evaluate your belongings. What could you do without, what makes your life easier but is not necessary, and what is vital for your well-being? Then we need to control our wants. The impulse or social pressure buying of things we don’t need can be harmful. More so if they are done in large quantities or have big price tags. 

Before you get something new, ask yourself if you really need it or if it can wait. Then wait a week or so and see if you still feel the same. Because something is on sale, doesn’t mean you need it. The best way to save your money is not to buy it.

These steps will help us live a consistent life. And when dealing with money, it is important to stay consistent. Money doesn’t do well with big changes. Think long-term, but appreciate what you have now. That’s another thing to remember. Shift your emotions from greed and fear to being grateful and humble. Financial independence isn’t about accumulating vast amounts of money. It means creating the freedom to live a peaceful life. This is where the two come together.