Financial Independence – Building and Living a Dream

26th January 2018
freedom through financial independence

Whenever I talk about retiring, I always envisioned it hand-in-hand with financial independence. Surely the thought of not having any more income when you stop working would be cause for worry, right? That is why I don’t see myself retiring until this very important criterion of self-sustenance is satisfied. While earning an income feels draggy sometimes, at the end of the day most of us rely on it to live. Our survival literally depends on it because money makes the world go round. That is unless you go completely off grid and live off the land. But modern amenities are paid for by cold, hard cash.

But with all the reading and absorbing materials online and on paperback, there are times when doubt seep in. Am I chasing a mythical creature which doesn’t want to be found? All the people who claimed to have achieved financial independence; are they real or some faux persona that was created to tell a story? While the thoughts of doubt are never far, I found it logically possible to be able to achieve financial independence. That is, if you make the effort to plant the seeds so that you can reap the fruits in the future.

Financial Independence: Then and Now

A long time ago, the government gave pensions to people who serve under the public services. When a government employee retires, they get a portion of their monthly salary to live off for the rest of their days. Sounds amazing, doesn’t it? Well, it turns out with no surprise that this model was not sustainable. As such, the pensions scheme was scrapped and replaced by our social security scheme called TAP. This is with exception to the Royal Brunei Armed Forces and Royal Brunei Police Force who are still pensionable.

So most of the workforce nowadays and especially the younger batch will not have automatic financial independence upon retirement. Because TAP is meant to supplement your retirement, the masses will need to take a more active role in investing and planning for the future. But to me, even that is still not a widespread mentality. To plan for it, you need to know what you’re planning for.

What is Financial Independence?

I first encountered the actual term “financial independence” from picking up “Rich Dad, Poor Dad” by Robert Kiyosaki on a whim. I was jobless and had ample time so by pure happenstance, it seems my goal was somehow brought to life by this book. From one book to the next to the internet, I dove into this concept. Fascinated that something like this is even possible. “Work only when you want to, not because you need to” it says. And boy, was I sold. Until I almost paid for “courses” (read: scammed) back in my young adulthood. Fortunately, I was able to take a step back and assess myself.

Financial independence is, put simply, the moment that you can sustain and afford to pay your expenses without needing to work for an income. It is not to be confused with financial solvency where you are able to afford everything you need while working. I found this 8-step chart on talking about a similar topic.

Stages to financial wealth by investmentmoats

These stages really simplify how we can rank ourselves financially. And when you know where you are, you can plan out where you can go from there! We all start off at level 0; being financially dependent on our parents or guardian for necessities. As we grow into a career, we will slowly “level up” our finances to level 1: Financial solvency.

Unfortunately for many people, They maintain themselves at this level. This is what we actually see in a lot of people in Brunei. People who are bogged down with debt and living paycheck to paycheck. In the end, some even fall back to level 0 and become dependent on their kids! Why? Because our education system did not teach us one crucial skill to thrive in the real world. This skill is financial literacy and this is actually one of the core values to build on when I started The Savey Fox!

Why is financial independence important?

You could argue that from the chart above, financial security is enough. Because if you can cover your basic needs, why go for more? My answer is simple: security allows you to survive but independence allows you to live. The key difference is what you can get from the two levels. We need food, water and maybe electricity (for some) for survival. To live as you would like, you’d probably want to pursue hobbies and interests as well. Financial independence should give you the time and monetary leeway to pursue anything; well, as long as it’s within your means!

So going deeper, financial independence actually means freedom to me. And it’s subjective that I value this commodity above all. Being able to break free just seems like a daydream right now. Achievability aside, it’s quite a daunting mountain I’m climbing and at times it feels like I’ve barely made any progress scaling it. Still, it’s good to pace and remind ourselves that these stages do not occur overnight.

Make a plan to achieve financial independence

“If you fail to plan, you plan to fail.” This was a quote that stuck with me for a very long time since I read it. Anything we want to pursue will have a higher chance of success with proper planning. And it’s no different when seeking wealth.

1. The power of habit

I believe habits are the cornerstones of building financial independence (or any goals for that matter). Habit is derived from an action being repeated over and over until it becomes second nature to you. In essence, our achievements may be linked with certain habits. If you like to leave the office earlier to “ambil anak” (Malay for “pick up my kids”) everyday, it’s not likely you’ll get much done. This concept is similar when dealing with your finances; if you make a habit to put away 10% of your paycheck every month, in just 10 months, you’d have a full month’s salary saved up!

2. Investing in income generating assets

It comes as no surprise that there are many ways to invest. The ultimate goal is to have more than you started off with. But when pursuing financial independence, usually people will opt for income-paying assets. This is in comparison to growth assets which you would sell when the price appreciates. These assets are aimed to generate your paycheck when you do decide to retire but do realise that they’re not guaranteed either.

3. Start investing early or as soon as possible

When we invest earlier in income-generating assets, we have the advantage of time. Early on, a good strategy is to reinvest the “income” generated and take advantage of compounding. When done consistently, you’d have grown your assets much more than if you just left the initial amount and did nothing more.

4. Learn to spend wisely

Occasionally, I still fall prey to the urge to buy some knickknack or other unnecessary amusement. But one of the habits I’ve built is to split the cost of an expensive item “pay off” several months ahead (sorry, future-me). Still, managing your spending so that you spend wisely will serve to help especially when you start taking out money from your nest-egg. You wouldn’t want to accidentally blow a hole in the nest and lose all the golden eggs saved up within.

5. Find a side hustle

I’ve seen a lot of Instagram stores crop up recently in a bid to capitalise on the internet to do business. Some entrepreneurs are also setting up websites for the same reason too. More often than not, a lot of working people look for side hustles. Frankly, it’s a good idea to explore what other avenues of income you could generate. The additional money could at least ease your expenses and would be great for giving your wealth building efforts a boost. Who knows, your side hustle could even launch upwards and become your main nest-egg!

6. Plan for foreseeable pitfalls

I personally plan for sudden and huge spendings such as car repair and, to a certain extent, medical expenses. The reason being if this was all it takes to knock me out of financial independence, can I say I’ve achieved it to begin with? So I am putting more into this goal than the “benchmark” for reaching financial independence. I might get there slower, but I think it’s one of the risks worth mitigating. It may not be as important to you, but having a safety net definitely gives a peace of mind.

Maintaining financial independence

So when you have achieved your financial independence, does it mean all the work is done? “Yatta!“? Well, I believe the hard part may be done but there’s still an issue of maintaining it. This is because if you overspent, or your assets didn’t have a good enough performance, you could see yourself coming up short. That means potentially going back into the need to work for an income again! Just imagine celebrities or lottery winners who blow up their accounts quickly; their poor spending habits led them back to their old lives when they could have leveraged it to stay financially free!

One good thing is that if you’ve planned your assets to be allocated in order to withstand different market conditions, you’ll be quite stable. It all falls down to planning your assets to be reallocated when necessary and smart spending.


Financial independence is like a magical dream many people, myself included, chase. Chasing it is not going to bear fruit unless we take the adequate steps to bring it into reality though! Therefore making a plan, focus on it and building a habit will give us a fighting chance for success.

All-in-all, everyone has priorities in life which they want to achieve. A lot of times, it’s not even related to money! What do you value at this point in life?

If you want to be financially-free, you need to become a different person than you are today and let go of whatever has held you back in the past.

– Robert Kiyosaki

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