The Purpose of Money

Image source:

Look around you. In our society, we tend to think of money as a medium that we exchange for stuff, where stuff is part essentials and majority junk. But is this really what money is all about? Could we get more than just a bunch of stuff out of our money???

Yes, obviously, or that would be a really dumb introduction to Joey’s first real blog post. As it turns out, money can do more than just buy you stuff. Money can be a tool that gives you freedom, and freedom can be a lot more valuable than stuff.

Money = freedom?

Money is an interesting thing, because it seems like no matter how much of it people make, they never seem to have quite enough. Well, that’s true for most people. A small minority of people actually have so much money that even if they never got paid an additional dollar in their life, they’d never run out. Even if they lived to 120, or even 1,020, or even infinity. These people are what we call Financially Independent. 

The benefits of financial independence are many–as broad as your imagination. Financial independence allows you to have incredible flexibility with your life choices. Do you value time with family, or extended vacations, or other hobbies? Great! Negotiate a pay cut in exchange for a more flexible schedule. Want to start a risky side business? Take a couple years off to spend time with your young children? Devote yourself to monasticism? It’s all up to you if you’ve achieved financial independence!

In fact, financially independent people don’t have to work at all! Some people simply retire and pursue other interests after achieving financial independence. Others go on working anyway. They work because they love their job, not because they are dependent on it. You may enjoy your work even if you’re not financially independent, but you go to work, at least in part, because you have to. You depend on having your job.

Have I convinced you that financial independence is a good thing yet???

A Definition

Before we go on, we should clearly define financial independence so that we have a goal to work toward. Here’s the formula: Take your yearly expenditures (that’s all the money you spend on everything in one year). Multiply that number by 25 (see Formula 1 at the bottom of this post). Once you have that much money, you are financially independent. This is known as the 4% Rule, and we’ll come back to it in future posts.

How do we get there?

Read this blog! Achieving financial independence is a function of learning how to make your money work for you–what I like to call Offense–and learning not to throw it all away on junk that doesn’t actually make you any happier–we’ll call that Defense. The first several of my blog posts will be devoted to the details of playing good Offense and Defense. But don’t worry, this won’t be your typical boring finance writing. We’ll sprinkle in real life examples of epic failures, entertaining commentary of the silly ways most of us think about money, and simple, easy to implement advice that will send you well on your way to freedom.

Notice the boldness of the word simple–as you’ll see, this stuff is not complicated. With a little bit of work and a healthy dose of common sense, we’ll all be rolling in dough and free as a bird in no time!


Formula 1: (how much you spend) x 25 = how much you need to be financially independent.

2 response to "The Purpose of Money"

  1. By: Ray P Posted: April 26, 2018

    You should include an interactive calculator to this post!

    • By: Joey Posted: April 26, 2018

      Haha, you mean for Formula 1? We will look into that, but no promises!

Leave a Reply

Your email address will not be published. Required fields are marked *