The problem with "financial independence"

The phrase "financial independence" is used a lot by financial planners, particularly on websites and in blog posts, as a way of drawing people towards something they believe they desire.

It's even been suggested by Michael Kitces that we consider replacing the word "retirement" with the phrase "financial independence". It's an interesting proposition.

However there are a few things to consider when using a phrase like "financial independence". Because if you don't, you may end up with a message that simply doesn't cut through.

1. Is there common understanding?

Amongst financial planners, there's a fairly common understanding of financial independence. It's that point where there are enough assets generating enough cash flow (income less expenses) to never have to work again.

But how do your clients understand the phrase?

Let's look at a couple of examples:

  • A partner in a relationship who runs his/her own profitable business and pays his/her own way in the relationship might say they have "financial independence". But it's financial independence from the partner, not from the need to work.

  • A mid-career professional might have enough money saved to take a few years off as a sabbatical or mini-retirement (for The Four Hour Work Week fans). It's something that feels like financial independence. The difference is, it's temporary.

Think about the implications of the disconnect. You're talking about a strategy to save enough funds for 20+ years of retirement, while your client may be interpreting it as an entirely different goal.

Remember, whether right or wrong, when the meaning of a phrase is interpreted differently to how it's intended, the message changes — in some cases, dramatically.

2. Do your clients actually use the phrase?

When you work in a profession for any period of time, you naturally use the terminology from that industry.

However when you’re speaking with clients, there's often a need to change how you word things, so that concepts are communicated simply and clearly.

But even when there's common understanding, if it's not language your clients use, then ditch it for the words they do use.

If they talk about retirement, use the word "retirement". If they talk about having enough money so they have choices, call it "choices money".

I've even heard it described as "F.U." money. And yes, the "F" stands for a word that will make Great Aunt Betty pass you a bar of soap.

It's not dumbing it down. It's about respecting and adapting to your clients' needs.

As a result, your client becomes a whole lot more engaged in the conversation.

And from a marketing standpoint, using your clients' language is also a shortcut to getting inside their minds.

Not in a bad Dr Evil way. But it helps you talk to them in a way that has them nodding their head saying, "yes, that's me; yes, please help me".

3. How does it make your clients feel?

If you're using the term "financial independence" on your website, stop for a moment and consider it from the readers' perspective.

You want the words to resonate. You want the reader to feel.

Imagine the headline:

"Do you dream of financial independence?"

How does that make you feel?


It’s a yes/no question, so it doesn’t inspire much dreaming. It sounds more like something a multi-level marketer or property spruiker might say.

Even if you decide to start with that opener, you need to flesh it out. You need to paint the picture.; add details. You need to help people feel.

Imagine a time when you can choose.

Choose what time you wake up.

Choose where you live.

Choose how you spend your time.

What would you do? Where would you be?

Think about it.

What would life be like if your money took care of itself?

Which one resonates? How does it make you feel?

Take the time to step into the shoes of the people you are trying to reach. Speak their language and you'll connect faster and more deeply.

Words matter.