Most of us are, at least for a while during our professional lives, on the income improvement treadmill. We’re looking for ways to increase our income, perhaps by delivering more or being effective at work and earning raises and promotions, or maybe looking into side hustles that will bring in income, or working to develop passive income streams.
There’s a lot of good in that approach, because of course during the accumulation phase, you need a wide margin between your income and expenses in order to build up a nest egg.As your income grows and your investments compound, you may find yourself asking, what is all of this for?
This past weekend, my wife and I did something we’ve never done before – we were vendors at a craft show here in Picton, Ontario. For years we’d dreamed of building a business together, but my hectic career in medicine and four young kids at home just wouldn’t allow it, not to mention the fact that a culture saturated with disposable furniture (thanks Ik*a) has made it difficult for woodworkers to put food on the table.
But financial independence changed things, and a little over a year ago we finally did it: we started Mattlin Woodcraft.Just for fun, I did a rough calculation of my hourly rate as a woodworker versus a physician. The results and my reaction to them might surprise you, especially if you’re a high earner. I took a 90% pay cut – and I couldn’t be happier.
For many of us, money becomes the currency with which all work is valued. This is myopic. The value of what we choose to work at spans far beyond the paycheck that is attached to it.I believe we need to ask ourselves a simple question: What is money for?
Whether it’s real or digital, money is just paper. It represents stored value, but you can’t eat it, wear it or live in it, so you have to use it as a tool to create other things that actually do have value.So, what is money for?
Most people think it’s for buying things. We all need to buy things. But once the essentials are taken care of – food, shelter, clothing, some entertainment – additional spending on consumer items doesn’t make us any happier. Why? Because we trick ourselves into thinking that a new phone or car or renovation is important, that buying it will give us lasting contentment.