Chasing partial financial independence

Financial independence, while aspired by many, may not be everyone’s cup of tea. One of the reasons for this is lack of enough savings – the raw material for financial independence.

This lack of savings, in turn, is often an outcome of stagnant income or income increasing at a steady but minuscule rate (just to match the inflation rate!).

And cutting corners don’t work beyond a point.

Can the two – modest savings rate, but desire to achieve financially independence – coexist?

partial financial independence

Theoretically yes, if

  • You give it enough time (few decades?).
  • Reduce your needs to an extent that you need very less money. (Can you?)
  • Get windfall gains/ paranormal profits from your investments. (What’s the likelihood?)

Given these circumstances, financial independence may be goal too far. Maybe far enough to dissuade many from the pursuit of financial independence altogether.


What is partial financial independence?

Partial financial independence is a life stage wherein your investments can take care of your basic day to day expenses, but this amount is way short of what you may need to take care of your expenses over your lifetime.

(Related – Financial Independence – What is the safe withdrawal rate?)

If may be able to take care of your daily expenses like food, clothing, shelter, occasional indulgences like food, travel, movies etc. But it may not be enough if you are looking to go on a foreign vacation every year, have major planned expense (like kids’ education or wedding or buying a home) in future.

In such case you will need to top up your income with something – That something can be your existing job or something else that you love doing – e.g. teaching, consulting, freelancing, writing, NGO work etc.

The beauty of pursuit of partial financial independence is that it can be pursued by almost anybody with a decent source of income. It can also be a good initial goal in pursuit of a subsequent goal of complete financial independence.

Benefits of partial financial independence

  • One can achieve partial financial independence even with an income that is not too high but savings rate if OK. Of course, you need a somewhat predictable source of income to begin with.
  • Being partially financially independent may provide flexibility in terms of work you in case you hate your routine and are looking for a way out.
  • Partial financial independence may provide some cushion in case you are out of job for some time.
  • Things may eventually get better. Maybe, you can soon achieve complete financial independence in future.
  • You can have significant control over your time. And maybe find ample time to pursue hobbies and interests.
  • If you choose to continue in existing job, you may not fear your boss – because your financial life is not just dependent upon your employment status..

Things to ensure before chasing partial financial independence

  • Have a number in mind. What is the amount X that can give you financial independence? And what is the amount (a % of X) which can give you partial financial independence. What are your assumptions in planning your finances? Are you aware of the returns are you chasing on your investments?
  • Have a plan in place. You can’t just stop working because you have achieved partial financial independence. Remember, you have just achieved partial financial independence, not a complete financial independence. You need to top up your exiting passive income with an active income.
  • Do you some skills and interests in addition to your area of work? After all, you just can’t quit your work and hope do consulting or teaching if you neither have a liking for them, nor skills.
  • Be sufficiently insured – Health insurance & term life insurance (if you have dependents) to begin with. You may want to evaluate more insurance cover, as needed.
  • You should not start falling prey to lifestyle inflation. It can derail even best of your financial plans!
  • Your investments should be generating decent returns. They need to be by and large liquid in nature. Ideally your investments should be a healthy mix of debt and equity. (With objectives of capital protection and capital growth).
  • Some expenses can set your financial plans back. Beware of them.

(You may also be interested in understanding the prerequisites for financial independence)


Financial independence for many is an ideal case scenario. This can be daunting for many people who wish to pursue financial independence, but don’t get started on this “impossible” task.

Partial financial independence may not be able to match the “awesomeness” of financial independence. However, it may be a good first step.

What are your thoughts?


20 thoughts on “Chasing partial financial independence

  1. Getting your savings rate up is hard, particularly as you say if your income isn’t huge and payrises are modest to say the least. Probably a side hustle would help, but finding the time/energy for this is a whole other thing. Partial financial independence seems like a good first step, and puts you in a position where you start to have a lot more options.

    1. Thank you for sharing your thoughts.

      And rightly said about increasing savings rate which is difficult. Side hustle may help. Avoiding lifestyle inflation is important.

  2. This is a really great idea. I’ve been fixated on full financial independence and the ultimate number to hit when I can retire and it just feels so far off (15 years at best on current spreadsheet calculations and assuming no major recessions!). I’ve also been struggling with my real reasons for wanting to retire early. If i’m truthful, it’s probably my job and because I feel trapped by it to maintain my family and house and ridiculous monthly outgoings. Whilst I like the idea of not working at the moment, I’m not sure retiring early would really be good for me and i think i would need something to occupy my mind. If i could cover 1/2 (or even 1/3) of my outgoings with income from my investments, this could open up far more options for me with a new job that i could enjoy or at least give me the options to try something new out.

  3. I’m on board with this line of thinking.

    I spent my 20’s playing music and working whatever jobs I could to supplement my income. More often than not these jobs were minimum wage retail or call center jobs. A few of those jobs were horrible, a few of them were wonderful (working at a record store, working at a music store, delivering pizza), and had it not been for the low wage I would have been happy to stay at those jobs that aligned with my values.

    That’s one of the invaluable lessons of starting your working life at the bottom of the income ladder. It forces you to be frugal, and it forces you to gain control of your situation. Being a poor, traveling musician was one of the best times in my life.

    Partial FI, or Coast FI, whatever you want to call it, is attractive to me. I went back to school in my 30’s to increase my earning power for this very reason. I’ve done everything I can to keep my lifestyle from inflating, and I’d love nothing more than to have enough passive income coming in to pay the major bills while I comfortably work a low pressure, low wage job that aligns with my values and interests.

    Thanks for the read!

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