Declaring financial independence from your employer

By Nicole Webb 2 March 2019 2 min read

From financial shackles to financial independence.

How do you free yourself from your employer when they are the ones delivering your pay cheque?

You may not be able to proverbially stick it to the man right now, but in time you can break away. And be assured, it will take discipline, budgeting and patience.

But having the financial freedom to walk away from your employer can help you to gain confidence and control.

What is financial independence?

Financial independence means having the freedom to make your own choices without worrying about supporting yourself with money. That could mean turning your model plane hobby into a career, buying that lake house in Italy or retiring earlier.

We lay out the difference between emotional freedom and financial freedom here.

What does financial independence from your employer mean?

Most of us work because we need a steady flow of income. We need enough to pay the mortgage or rent, have food on the table and keep the lights on.

Your dependence on your employer is rooted in this reliance for physical and financial survival.

When thinking about independence from your employer, we’re not encouraging you to flip tables and lead a mass walk out tomorrow.

Instead, we think it’s wise for you to become financially independent enough, so you can walk away when you want, on your terms.

It has been suggested that around 87 per cent of us are disengaged with work, it pays to have an exit plan to help you realise your path to financial freedom.

Grow your rainy day fund

To help you get to the point where you may be able to break that employee-employer nexus, you’ll need a financial cushion.

Establishing an emergency fund can help tide you over if something unexpected comes your way - whether it’s a sudden redundancy, you fall into poor health or you’re sold a lemon with your next gig.

It’s best not to make the mistake of thinking it won’t happen to you.

First you need to determine what will help you sleep at night? Is it a dollar figure? Three months of expenses? Six months’ salary?

Work out what will give you peace of mind and use these tips to help you save.

Longer term growth

Once you have that sorted, it’s time to think about how you can grow your longer term savings, which can get you on the glide path to employee freedom.

Steps to help you reach financial freedom:

  • Start or continue investing
  • Consider chipping more into your superannuation. It’s your long term savings engine, to help give you financial freedom after work life. Generally, you can’t access this money until you retire. It’s also supported by the magic of compound interest, which can help to make it grow faster. Before making further super contributions there are a number of implications you need to consider, so it’s a good idea to seek independent financial advice.

Of course, investing does not always lead to growth and understanding that investing carries risk is an important first step.

That said, it will take time to realise financial independence from your employer, but the peace of mind and confidence this gives you to go it alone, will be well worth it.

Declaring financial independence from your employer