The Freedom Dial: Choose Your Setting

Building wealth is not complicated.

You save, invest, and watch the numbers grow.  There’s a clear scoreboard and usually a clear target to work towards.

But once you’re in a strong financial position, everything changes.

No longer is it about building wealth.  It’s more like: “How much freedom do I really want? And what does that lifestyle look like?”

The good news is, you have a wide array of options between fully working and fully free.

Think of it like you have a big rattly old freedom-machine, and you can turn the dial up and down to your desired level once you put enough coins in.

In this article, I’ll lay out your options to help you decide what kind of lifestyle you’re moving towards and how to go about it.

But first of all…

Get comfortable with living differently

The main goal with all of these strategies is to slowly untangle yourself from the pressure and demands of full-time work – AKA unlock those golden handcuffs.

I know some of you can’t wait to hand in your resignation and ride off into the sunset, giving work the metaphorical middle finger.  But there’s also plenty of you who feel a bit apprehensive about it.

You’ve spent years building a career.  You’ve got part of your identity tied to it, and a well worn routine that you’re used to.

The more nervous and worried you are about it, the less it makes sense to retire cold turkey, from 100% work to zero.

So, let’s start with the gentler end of the spectrum.  These first few strategies are about adding some breathing space to your current life without cutting ties with work.  And they build on each other, so you can scale up the freedom further to suit your needs.

Let’s start with one that almost nobody thinks of.

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Switch to lower-paid full-time work

By the time your money situation is good, you might have spent a decade or two levelling up in your career – taking on more responsibility, and more pressure, in exchange for more money.

Well, now you can deliberately level down.  Maybe you work the same hours, but with much lower stress.

This could mean a different role, different department, or an entirely new industry.  Your pay will take a hit, but your mental health gets a boost.

You might think this is an odd suggestion.  Why work the same hours for less pay?

The thing is, sometimes people assume they hate working.  But what they actually hate is their current work.  If you change the environment and demands, you might find you actually don’t mind working full time.  So it’s worth asking yourself the following…

If you found the right kind of role, is it possible you’d enjoy full-time work? Some people take the long way round to discover that the answer is, yes.

For others though – and I was in this camp – the question itself is almost offensive.  They definitely want more free time, regardless of the job.

Let’s look at some ideas.

Reduce your hours in the same role

Maybe you’re in a position that demands 50+ hours a week.

You’ve built a great financial position, but you’ve had a few more birthdays and you feel work starting to take its toll.

What if you scaled back to 40 hours? Or 30?

The reason this can work well is because there’s a far lower psychological hurdle to working fewer hours in a familiar role than quitting altogether or starting fresh somewhere new.

You’re just easing off a bit.  And if you’re anywhere close to financially independent, you’ve earned the ability to do that, so take advantage of it.

If reducing your hours in your current role isn’t possible, there’s an even simpler option that almost anyone can use.

Take more leave

Right now you might use your annual leave for two decent breaks a year (or one big one).

But what if you took extra long weekends every month?  Or one day off per week for a few months?

That turns a two-day weekend into a three-day weekend.  You’ve just increased your days off by 50%!

You’d probably start with your least favourite day (Monday?).  On those days you can relax, exercise, read, pursue a hobby, catch up on things, spend time with pets and people you love, or simply take time to ponder your life.

Depending on your leave balance and your employer’s flexibility, this could expand to two or more days per week.  You’re essentially test-driving semi-retirement while still getting paid.  I think that’s a pretty damn good setup!

This is actually what I did.  In my final year of work, I stopped doing overtime and then also started taking extra days off using my accumulated leave.

It was amazing.  I felt more rested, work was more enjoyable (not enough to keep me from quitting though!), and I got to spend more time doing what I wanted.

That’s partly why I had no hesitation about leaving.  I’d already tweaked the freedom dial and absolutely loved it.

The best part about the 3 approaches we’ve discussed so far is how mild they are.  You’re still earning solid income, so there’s no financial concern.  They’re basically risk-free experiments.

At worst, you enjoy life more and feel less stressed.  At best, you start to picture yourself with a different lifestyle and feeling excited about it.

Let’s assume you’re ready to leave your full-time role.  Now things get more interesting, because you’re cranking up the freedom dial, into the official realm of semi-FI.

Negotiate flexible terms

This one will vary by employer, but if you’re seen as valuable, there’s probably more flexibility to do this than you think.  It’s sometimes just the case that nobody has asked for a flexible arrangement before, but it’s becoming more common.

This strategy works especially well if you enjoy your work but crave more balance.  Even better if you’ve become really good at what you do, and you have some ‘leverage’ with your employer.

What does this look like in practice?

Options could include a 3 day week, a job-share arrangement, half-days, working from home more often, or taking extra unpaid leave in exchange for an equivalent pay cut.

Mrs SMA did this at her work (government admin).  When we reached FI, I quit, but she applied for 12 months off without pay.

Before she was due to return, she asked about part-time work, and they created a 2 day per week position under a job-share arrangement.

One of my readers negotiated a mining role into 1 week on, 3 weeks off!  So there’s more flexibility in the world than people assume – just try and come to a mutually beneficial agreement.

Contract or project-based work

Rather than ongoing part-time work, contracting lets you operate in ‘chunks’.

You work for a defined period – say 1-6 months – then take a break before finding another one later.  Depending on your finances, you could take one contract a year, and do whatever you want for the remainder.

This suits people who don’t mind working solidly for a while and then having an extended break in between.  And this works across a surprising range of industries: construction, IT, events, admin, marketing, accounting, education and plenty more.

Contracting has its own psychological and practical appeal.  When you take a job, you’re fully ‘at work’ then once it’s done you’re completely free.  That’s a genuine mental separation that other options don’t come with.

Depending on the industry,  you can do this as a full-time casual employee, a defined term contracted employee, or under your own ABN.

There’s less chance of monotony and more chance of things staying interesting, as each contract/temp position will be a little different.

Pivot to ongoing part-time work

This gives you the structure and ongoing connection to the workforce, without the weight of a full-time career.  And it doesn’t have to look anything like your old job.

If you’ve spent years in a high-pressure environment, you might find enormous satisfaction in something completely different.

Bartending or barista a couple of days a week.  Working in a plant nursery.  Stocking shelves.  Roles like these often come with a type of simplicity and ability to ‘switch off’ when you go home that a lot of jobs don’t.

We dismiss a lot of these roles early in life purely for financial reasons.  But with a strong investment portfolio behind you, the pay matters a lot less.  What matters more at this point, is whether it’s enjoyable, flexible and leaves you with energy for everything else.

There’s also something nice about doing work that is mostly void of politics, performance reviews, and pointless meetings.  For many people, that can feel represent a sense of freedom in itself.

For those who are interested in a more ‘dramatic’ change, there are two alternative strategies which offer something totally different.

Extended time off (mini-retirement)

Mini retirements are kind of like gap years for adults.

You take take six months, or maybe even a few years, to travel, rest, reflect, focus on your health, enjoy life and figure out what you want to do next.

It’s useful for a few interesting reasons…

Stepping away from work for a while can give you a sense of clarity that’s impossible to achieve while you’re working full-time.

It’s only by having total freedom in your life for an extended period that you realise exactly how much of it you want on an ongoing basis.

When you’re busy, you’re too caught in the middle of everything to think about your life objectively.  When you stop, you finally get to observe like an outsider and consider whether all those things keeping you busy are even valuable in the first place.

The single best thing you can do once you can afford to is just enjoy space and time to exist, and think about your life, what you are about, and recalibrate how you want to live going forward.

To the outside, this looks like you’re doing nothing and ‘wasting’ time.  But this exercise is far more valuable than being busy doing a whole bunch of things that mean nothing across your 100 year lifespan (hopefully).

By the way, you don’t have to have reached full financial independence to do this.   In practice, all you need is enough cash to cover yourself for the length of your mini retirement (so $100k if you spend $50k per year).

Of course, factor in any investment income you’ll receive, and even look for ways to reduce costs along the way to stretch it further.  House-sitting is one option worth exploring – several readers have used it to live and travel cheaply, both locally and internationally.  Speaking of which…

Geographical arbitrage (Geo-FIRE)

I’m learning more about this one in recent years as we travel more, and I’m becoming convinced it’s the ultimate financial hack.

(Deep dive article on this topic coming)

You use the wealth you’ve built in a wealthy yet high-cost country and go somewhere where that money goes much, much further.  And this works across whole regions, not just the odd country or two.  Southeast Asia, Eastern Europe, Latin America, even Spain, Portugal and Italy – that’s a shitload of countries to choose from.

The difference in what money can buy compared to Australia is night and day.  Not like a bit more, but multiples more.  For example, from estimates based on my experience, a lifestyle that costs $100k per year in Australia could be had for say $30k in Southeast Asia.

Beyond the finances, you often get access to better weather, interesting cultures and unique experiences that aren’t available at home regardless of how much you spend.

This obviously won’t suit everyone.  But for the curious and open-minded individual who’s open to exploring the possibilities, it’s well worth considering.

It can even be a powerful way to kick off your retirement, when portfolio risk is highest.  Spend a year or two cruising more affordable countries, let your portfolio grow a little more in the background, and return home later with a larger cushion and a broader perspective.

Two more ways to think about your ‘number’

The work drag:

A non-trivial part of your current spending is likely because of full-time work.

Getting coffees.  Lunches or morning teas with coworkers.  Extra clothes.  Driving and/or public transport.  Friday drinks.  Convenience spending because you’re too tired to cook.  And probably some retail therapy, buying stuff to ‘reward’ your hard work and to soothe the stresses caused by said job.

For a lot of people, these costs could amount to $10k per year (or more).

Carefully anaylse your spending and make sure you aren’t working longer to account for expenses which may disappear later.

This means you might be closer to your number than you think, and the thing keeping you from freedom might be the job itself.

The luxury bucket:

Most of us lump all our spending into one annual number.  Housing, food, and utilities are mixed in with holidays, restaurants, and car upgrades.

But I think it’s useful to split your spending (and your FI number) into two styles…

Basic: the absolute minimum you could live on.
Ideal: your preferred level of lifestyle with little luxuries thrown in.

Why?  Well, your basic spending might be $60k a year.  Your ideal spending might be $80k.  The difference in terms of investments required to cover that spending using the 4% rule is $500k ($1.5m vs $2m).

So, instead of working non-stop till you hit your ideal FI number, what if you left once you could cover the basics?  Then you simply do a small amount of enjoyable part-time work to fund the luxuries.

You get freedom sooner, and the framing is more useful: “These extras are costing me extra time, so they better be worth it.”  Done right, you won’t mind your part-time work, since it’s paying for fun stuff like holidays and dining out.

Choosing the right ‘flavour’ of freedom

So, how far should you crank the freedom dial?

It’s a personal choice, and it basically comes down to two things: how much wealth you have, and how much you want to work.

Here’s a few questions to ask yourself:

Would you enjoy keeping a routine and staying in the workforce?  Semi-retirement might be perfect.

Do you prefer working intensely for a while then switching off completely?  Contracting or project-based work might suit you better.

Do you want a complete separation from work?  Full FI or a mini retirement is probably up your alley.

There’s no right or wrong answer, and you can do more than one.  What matters is that you actually think about it, rather than defaulting to the path of least resistance – which, for most people, is staying in full-time work longer than they need to simply because it’s the path they’re already on.

Friendly reminder: Once you’ve saved 10-15 times your annual expenses, or have a paid-off home, you’re roughly at the 50% mark.  From there, your options are wide open and you can begin living more freely without much trouble.

Final thoughts

After speaking with a huge number of people since starting this blog in 2017, I’ve noticed something interesting.

A lot of you – maybe even half – don’t actually want to stop working entirely.  What you really want is a feeling of freedom, choice, and control over your life.

Basically, you want to work on your own terms, do things that feel meaningful and contribute in your own way without the pressure to do so.  All while being able to effortlessly cover your expenses and have time off or go travelling when you feel like it.

It’s a distinct shift from obligations to options.  And as you’ve just seen, there are endless ways you can design and pivot towards a life that energises you, rather than drains you.

To make that happen, you need self-belief and some positive reinforcement – which I’m hoping my content instills in you.

Until finally, all that’s left is to give yourself permission to actually do it.

This article has been adapted from my new book You’ve Got Money, Now What?

If you want to dive deeper into topics like this, you can learn more here.

Resources you might find helpful:

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 Strong Money Australia Book
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