I listened to a podcast recently where Balaji Srinivasan spoke about financial freedom. He summarised something that I have been writing about since the beginning of my PhD.
- Financial freedom is upstream of personal independence.
- Personal independence is upstream of logical independence.
- Logical independence is our ability to think and say what we believe to be true.
Debt keeps us ideologically trapped
If you are in a lot of debt or you do not have savings, the likelihood that you will also be very conformist is high.
Without financial freedom, we cannot call out bad bosses, poor working conditions, sexism, racism etc ad nauseum, without risking loosing our livelihood.
If the punishment for our discontent with burnout, low pay, or unstable contracts can include the loss of our income, we are very likely to remain quiet. This means the market is incentivised to keep workers insecurely employed and poorly waged, because this makes employees easier to control.
Financial freedom: decrease cost vs increase earnings
There are two main strategies for getting out of debt; earn more or spend less. It is usually easier to spend less than to earn more.
Imagine what you would have to do to increase your monthly income by 30%. Now imagine what you would have to do to decrease your monthly expenditure by 30%.
Does one of those options seem more achievable than the other?
Would you be able to decrease your monthly expenditure by 30% if you moved into a tiny house?
This is precisely what tiny house residents are doing, which explains why the word ‘freedom’ comes up so often. Residents are usually trying to achieve financial freedom so that they can achieve time freedom, physical freedom, and freedom of thought.
Financial freedom used to be something associated with high levels of personal wealth. I wonder if tiny houses might be opening up access to financial freedom by providing a way to radically reduce cost of living, without having to relocate to Bali.
I will be very interested to keep in touch with the women I have been getting to know over the last two years to see where their tiny house journeys take them. Hopefully, to early retirement.