The Downside Of Financial Independence

The downside of financial independence

There is a downside of financial independence that's worth discussing. The media likes to make it seem that financial independence is the best thing since slice bread. But I'd like to provide more balance.

One of the things I was counting on when I published, Being A Landlord Questions My Faith In Humanity, was readers coming out of the woodwork questioning why I would be so lenient when my tenants were so thoughtless. Most were empathetic to my situation, but some blamed me for my tenant's actions. That's cool. I like to blame TV for my consumption habits.

At the end of the day, I got $216,000 worth of rent over 24 months, a completely redone backyard mostly paid for by them, a professionally cleaned house, and $1,000 of their $17,000 deposit. Things could have been much worse if you read some of the tenant horror stories in the comments section.

My tenants were generally nice guys. They were just clueless. When I sent them the picture of the trash explosion the next day, they immediately called a junk truck to collect everything a couple hours later. They could have just disappeared into the wind since they had their deposits back. But they didn't.

Hopefully my post will encourage people to be more thoughtful. At the very least, it provides some insights for current and future landlords. I always try to highlight the good with the bad on my road towards financial utopia (doesn't exist, sorry).

In this post, I'd like to highlight the downside of being financially independent. I don't know any other landlord who would not have charged a single late fee after eight times of tardiness. But you know I've got a masochistic side, looking for ridiculous situations to share with all of you!

The Downside Of Financial Independence

1) Not optimizing for maximum financial returns.

When you are financially independent, you don't need more money because you already have money. If the counter party isn't financially independent as well, you start feeling a little slimy for trying to optimize your returns.

As a result, you aren't negotiating the best deals. You aren't shopping around to find the best bargains. You're definitely not driving around the block to find a free parking spot. And you're always booking flights late because you value optionality.

Instead of optimizing for financial returns, you start maximizing for peace and harmony. With each late payment, I had a choice of letting it go or laying down the hammer, which might have led to more property damage and further disregard of the lease. I knew they would eventually pay, so I showed kindness.

By forgiving their tardiness, I wanted to build credits for future instances when I couldn't come over in a timely manner to fix something or address an issue. And it worked on two occasions: 1) The kitchen faucet lost cold water pressure for some reason. My master tenant volunteered to meet the plumber, make the payment, and oversee the project. 2) Then my microwave stopped working one day. It was a custom size that was built into the cabinetry. He took it upon himself to go to Best Buy, then to a private party when Best Buy didn't carry such a model to pick one up, pay for it, and install it. His actions saved me at least three hours of time.

My main mantra is to always give as much as possible first. This way, people are more inclined to do right by you in the future.

Related: To Get Rich, Be Willing To Do The Dirty Work

2) People will take advantage of your kindness.

It doesn't matter how rich you are, nobody ever wants to be taken advantage of. Yes, my tenants were taking advantage that I wasn't penalizing them $250 for each time they were late. But the way I saw it was I had $2,000 worth of credit I could withhold from their $17,000 security deposit if they didn't comply with what I asked for before moving out.

They knew this, which is why one of the tenants said the day before move out, “We won't let you down Sam!”

I have a wealthy friend who escaped to Paris for a year with his wife and four kids because he couldn't stand getting hit up for money all the time. He told me, “Every time I open my inbox, I get some random person whom I don't even know asking if I could donate $100,000 to some organization I don't care for. It's maddening I tell you. How about at least getting to know me first?”

Dine And Ditch

One time I met a friend for drinks. He was talking to this startup female founder who was once an ex-beauty pageant queen. She was attractive and she knew it by the way she talked about her relationships with “high powered VCs.”

Both my friend and the founder had to leave, so instead of paying for her own drink, she looked at me and said, “I've got to run. It was nice meeting you,” implying that I was to pick up her tab. Since she Usain bolted, of course I had to pay even though we just met. I'll give her startup a 0.1% chance of surviving with that type of entitlement.

Finally, I get bombarded every day with questions from people who don't bother to make a connection first. I've been asked to give a diagnostic of their entire financial lives. Some have asked whether I can help them with their marriages. Others have asked me to help them with their online business plan. The most common question I get is, “Can I pick your brain?” I'm not sure how anybody thinks that's enjoyable.

To avoid being taken advantage is one of the key reasons for practicing Stealth Wealth. If people know you are financially independent, they'll do everything they can to extract as much time and money from you as possible.

3) You start empathizing too much.

I saw in my tenants a rowdier version of me when I was their age. I remember what it was like to struggle at work, survive layoffs, begrudgingly pay a portion of my paycheck to rent, all while trying to enjoy everything that life has to offer. As a result, I started developing a lot of empathy for them because some of them had issues at work.

Another had back tax problems because he somehow forgot to pay them. While another just couldn't get it together given his parents babied him too much as an adult. I thought I could be sort of a big brother who could provide some guidance.

But empathy doesn't get you anywhere if the other side doesn't care. There's a reason why it's never a good idea to do business with friends or loved ones. For at least the rest of the year, I'm going to work on being a stone cold business assassin. It's not in my nature because I'm always joking around and having a good time.

To be frank, I fear the lion within. I've never backed down from a fist fight or a shouting match when provoked. A part of me longs to snap an oppressor's bones as I once did as a raging young man who always defended his honor. Thanks to the feedback from the community, I've been reminded how overly soft I've become. Time to get fierce and care for no one!

Related: Are You Smart Enough To Act Dumb Enough To Get Ahead

4) You start taking money for granted. 

Do you remember how excited you were as a kid to get a crisp new bill in an envelope for your birthday or Christmas? Those were the best! Unfortunately, I no longer get excited about seeing a $20 bill or even a $100 bill in my wallet. Now, I withdraw thousands of dollars at a time to pay vendors without feeling a thing.

The reason why I've begun to tip more aggressively since reaching financial independence is because I enjoy seeing the joy in others that I once had. I remember getting a $5 tip for just a $5 ride when I gave an Uber ride to this woman. My eyes teared up with gratitude! For the rest of the afternoon I had an extra hop in my step. Then I noticed the best tippers are those who work in the service industry because they know how hard it is to make a buck.

I wish I would be excited by money again. But I'm not. Nowadays, all I get excited about is living life on my terms.

* I just realized while writing this post that I forgot to collect $420 for the two pro-rated and discounted nights after April 30 check out. I accommodated two of the guys because their escrow closing was delayed. I wanted them out on April 30 because it would take five days for the floor guy to refinish everything with four coats of polyurethane. If I cared more about money, I would have remembered to have collected the $420 on the May 2 walk through. 

5) You slowly lose motivation to try harder.

There was a time when I responded to almost every comment. I felt I had to at least say “thank you” to those who took the time to share their thoughts. But now, I respond to only about a third because I've lost the energy to keep up. I feel I've provided enough value over the years to give myself a break. Besides, the time formerly spent responding to comments is being used to write meaty new posts.

I used to have this goal of writing five posts a week from the current three posts a week cadence. More posts, higher growth, and more revenue. Now, I'm thinking about just posting a couple times a week because I don't have this insatiable drive to grow my business anymore. Unless there's a huge tax cut, I don't want to build a Financial Samurai app or create a larger publication with 10 different staff writers. I just want to have my own little lifestyle business that never feels like work.

The people who hit it out of the ballpark have this ridiculous drive. Pity the trust fund kids who went to private school, got jobs through connections, and don't really have to create something of their own. When you have everything taken care of, it's much harder to be your own person. I blame my loss of motivation partly due to my older age, but mostly due to my passive income and steadily declining debt levels.

Related: Debt Optimization Framework For Financial Independence

The Three Generation Cycle

“From rice paddy field to rice paddy field in three generations.” – Japanese/Chinese variation

“Shirtsleeves to shirtsleeves in three generations.” – American variation

“The father buys, the son builds, the grandchild sells, and his son begs.” – Scottish variation

The First Generation comes from a life of hardship. This generation takes the most risks, works the hardest, and makes the most sacrifices to break the cycle of poverty.

The Second Generation grows up a witness to their parents' struggle and understands the importance of hard work. Because of this awareness, they make good financial decisions and build upon the foundation their parents worked so hard to create.

The Third Generation, however, has no recollection of hardship. They only know a life of abundance. Without an awareness of the work needed to build build wealth, the third generation squanders their good fortune their parents and grandparents worked so hard to build.

My great grandparents left China by boat in order to make better lives in Hawaii and Taiwan. They took all kinds of risk, whereas by comparison, I've done nothing close. I fear that a life free of financial worries will dishonor their generations of hard work, frugality, and sacrifice. With consternation, I wonder when my child grows up, will he take his good fortune for granted?

Beware OF The Downside Of Financial Independence

Being financially independent is fine, but unless you have a deep hunger to do something great, it is unlikely you will ever maximize your potential. The downside of financial independence is real. Therefore, a key reminder is to always be mindful of others.

Financial independence can blind you to the world's suffering. Or financial independence can bless you with the time to help other people. Which will you choose?


The Dark Side Of Early Retirement

Once You Have F U Money It's Hard To Tell Others To F Off!

How Does It Feel To Be Financial Independent?

65 thoughts on “The Downside Of Financial Independence”

  1. I think it is natural for priorities to shift as your circumstances do. However, if you do not like the changes in your temperament, noticing that and working to correct those deviations is a grand idea.

  2. Very interesting perspective. I always enjoy reading your articles and this has given me a lot to think about. Thanks again.

  3. I’ve now lost all motivation to become financially independent after reading this. I think I’ll just slave away forever. Just kidding.

    It’s interesting to me that our society has linked working with money. It makes sense. It’s been this way forever. But I wonder sometimes who thought of working for money, jobs, the 40-60 work week. We went from hunter gatherers to farmers where we could settle. Then to industrial jobs and now the knowledge economy. Seems like pretty soon it will be a gig economy where we’ll all be 1099’d for our contribution. Every step along the way, where the economists thought we’d have more leisure time, we haven’t. We instead say no to leisure time in the pursuit of buying more stuff or accumulating more digital dollars in an account. And it’s almost the entire society doing the same thing.

    I think your pursuit to go after more leisure time or balance or whatever you want to call it is great. Valuing time over money OR your autonomy over servitude is key.

  4. Several of these comments talk about generations of wealth. I think about how to motivate my son. He’s 12 now, and recently asked why all “millionaires” act so stuffy and fancy. He was referring literally to Thurston Howell III (yes, we watch old Gilligan’s Island reruns) and to other cartoon depictions of spoiled, rich “millionaires.” I said not all millionaires act that way, really very few do. I assured him that there are probably normal people around our community who are millionaires, but who just don’t show it off. The truth is, obviously, that many people are now millionaires (I am, for example), because a million isn’t as much as it used to be. I want to prepare him for understanding one day how to manage wealth in a modest and sensible way. He should know that having money doesn’t mean you are a jerk, and that it is a responsibility.

    I haven’t inherited any money to get where I am (my parents do fine on pension checks, but will not leave me any assets when they depart), but my son will inherit money some day: he’s our only child, plus my wife’s parents have written their will to give him, their only grandchild, the first $100,000 of their estate payable when he hits 25 years old. So, from grandparents on the one side and likely from us, he will need to know how to manage inherited money.

    I know it’s “never too early” to instill financial awareness, but I am not sure when it is actually appropriate for him to know a ballpark of our asset picture. I’ve seen articles suggest that high schools kids should be told the financial picture, but that seems too early for my taste. We try to convey that our hard work has fortunately created money for the important things (plus some fun things), and that we still need to be careful what we spend, while also being generous to charities, all to create a proper ethic of stewardship, but that seems like enough for now. I just don’t think a 12-year-old, or even any teenager, can act responsibly with more knowledge, such as that his parents are sitting on $6M in assets. It would be a disaster to find out he told friends, even if he didn’t mean to brag. Is graduation from college a good time? Or when one of us dies, putting him in the batter’s box to inherit the money?

    I know you haven’t had this situation yet, but I like your site and wonder whether other readers have good or bad stories in this regard.

    1. For what it worth:
      I went to a nice HS in an are of California that had prominent people’s kids as students. That may be a different picture than you because everyone kinda knew they were well off.
      One good friends dad was a high level executive at a know tech company (my own parents were poor, really poor, when I was young but my dad with a high school education and a first job at 7-11 transferred pathological work ethic into owning multiple stores by the time my highschool enrollment came up) I think handled it the best.
      Many of my classmates haven’t done anything but they’re still doing okay, this one friend has done very well.
      They lived in a nice but normal house, his dad drove an old car. They paid for expensive education but otherwise he was working at blockbuster to pay for “extras” the day he turned 16. (My parents did the same “happy 16th…you’re getting a job”). Classmates had range rovers (one rolled it over 10 days after they got it and had a brand new one the next week) he drove a beat up 15 year old Camry.
      They didn’t let him know the full scope of their assets. His level of knowledge was that he would never really need to worry about everything but if he wanted to have the lifestyle his classmates had he’d have to get it himself.
      They basically laid it out for him after college and when he had his first job. He’s now doing great but even still spends like a maniac in my opinion.
      I think HS is too early for a detailed conversation. I respect his dad (and mine) greatly and think they did it right. HS….suffer like an average kid (and get a job to figure out what you DONT want to be doing the rest of your life) See what you want around you and talk about how to get it. Get into college and on the right track and then gradually have more in depth conversations about what the families financial picture is.

      It’s more about what you model. My family has means and you don’t see many fancy cars or mansions. Same with that friend. Some cousins have much nicer cars and houses than their parents and those were the ones that had everything they wanted growing up and no “fear” of not making it or work experience pushed upon them.

      Hope that helped. I’m trying to do the same with my kids but wife from a different experience disagrees. “They don’t need a job”, “they can stay at home if they want” etc. I think that’s nice for one generation but that’s how you ruin the head start for the next.

      1. That’s really helpful. I basically didn’t grow up with money, or even close to people with money, and I’ve ended up being by far the most financially successful of the 7 kids, so I don’t have lots of models. Yours is good advice. Thanks!

  5. John Dabney

    Sam — your point No. 5 is my biggest problem. Once I got to be financially independent, I gained an even greater respect for the people who are able to maintain the crazy intensity and drive AFTER they are massively independently wealthy and never need to work a day again in their lives. They still have the eye of the tiger into their 40’s, 50’s, 60’s and even 70’s.

    What do you think makes those people tick? I would love to find that magic.

  6. Hi Sam. Long time reader but this is my first post. On generational wealth, I think people, and successful people especially attribute much of their success to hard work. The fact is, random chance plays much more of a part than we would like to admit. If our grandfather worked 18 hours per day to earn his fortune, there are likely 10 other grandfathers who worked the same 18 hours per day but never became wealthy.

    I am moderately successful and sure I work hard. But so do most people. I am successful because early in my career, a hiring manager decided to take a chance on a smartass kid. Had that not happened, my trajectory would be completely different (for better or worse).

    1. I think you’re right. One of the reasons why I try to work a lot is because I know most of everything I have is luck, including this site itself. Therefore, to not work hard would be disrespecting the millions of other people who are not as lucky.

      It’s the same with fitness, investing, relationships, real estate etc. Probably 90% luck.

      Related: Sweat Dreams Of Becoming A Millionaire Again

      1. This is a good point and a good motivator.

        When I feel lazy and unmotivated when I get home from work I think about one of my patients laying in bed. What would they give to have the good fortune and good health to be able to get out of bed and be able to jog a couple of miles. Changes my perspective on what a hassle it is to work out.

        In regards to loss of motivation as your financial situation improves I see it, I feel it and I feel guilty. I want to be an example to my kids and have them see their dad work hard but man….I don’t know. I look back on what I worked in my 20s and early 30s. I couldn’t do it again. I’m slower, more tired and frankly probably not as smart (although experience makes up for that thankfully) as I was 10 years ago. And although I feel guilty I’m happier with that. I don’t want to do 100+hr weeks anymore. I care about going home now, I used to prefer being at work and growing professionally. Now I just want to go home and play with my kids, I feel if I was struggling I would maybe still have that fire.

        I had an interesting conversation at a Christmas party with my wife’s CEO. He made a lot of money. Clearly as salary but in addition you could calculate his take on the IPO. He spent like mad. I mean like mad. Huge house in the hills of California. Exotic cars. He said something that kind of struck me as both sick and amazing.
        “I need to spend it, I need to be on the edge and feel some fear of real loss to keep my drive”. I think it’s true for everyone but question the wisdom of that approach.

        Anyway, don’t beat yourself up…I’m sure your grandparents are proud.

      2. Sam, I respectfully disagree with your assessment of luck. Winning the lottery is luck. Being struck by lightening is luck. Winning the electoral college while losing the popular vote is luck. Success driven by hard work is success. “Luck is where preparation meets hard work.” -Seneca

  7. Adriana @MoneyJourney

    We’re not yet doing amazingly great financially speaking, but we’re definitely doing better than others who refuse to save money for a rainy day. So, in regards to people taking advantage of other’s kindness, we decided to just go ‘stealth mode’ whenever money comes up in any conversation.

    At first I thought it was kinda mean to just stop helping friends out, but in the end we both realized we’re lending money to people who don’t understand or don’t care at all about finances. People who buy 10 pairs of shoes a month and then complain they don’t have enough cash to pay the bills. So, yup.. real eye-opener!

  8. The struggle is real, lol j/k. I can’t wait til I get to that level. For now, I am usually, but not always trying to find ways to earn and save more. On another norte, my family was first generation in the US, so as a result, we grew up with a real appreciation for money and how valuable of a tool it can be – fitting into your Second Generation Cycle. Even though my kid is more fortunate in this sense, I still want him to acquire good saving and spending habits at a much earlier age than me

  9. Your First Million

    Regarding “The Three Generation Cycle,” I completely agree with this. I recently read a book called “Family Fortunes- How to Build Family Wealth and Keep it For 100 years” by Bill and William Bonner (father & son).

    In this book they talk about how a first generation (who is called the wealth creator) needs to set up a family office in order to make the family wealth last and continue to grow over the generations. A family office is like organizing the family as if it were a company or corporation. The family has an “investment committee” who is elected by the other family members to take responsibility of investing the family money.

    There are other people in the family, usually the mothers and/or grandmothers who help raise up the children in a family culture that revolves around the family principles of being successful and building wealth.

    The book goes into much more detail and makes a lot more sense than what I have written here… but they also give many examples of some well known (and not as well known) wealthy families both in Europe and the US.

    It is amazing how some of these families have maintained their wealth for several hundreds of years… passing through many generations. Obviously they know something that most people don’t, and that’s why we have the old sayings about wealth being lost in just 3 generations.

  10. saveinvestbecomefree

    It sounds like you’re just finding your balance post-FI.

    On the one hand, you don’t need to be the hard-charging young buck now that you’re FI. I can tell you don’t like this idea but I would view it as a good thing. You’re much more content and happy now… what if you’ve lost a little of the angst that drove your ambition? I’d say that’s a good trade-off. Plus as you mention here there are actual benefits (including financial) to being less of a driver at times.

    On the other hand, you don’t want to swing too far the other way and get too soft so that people walk all over you or you lose all ambition for the rest of your life. Plus you don’t want to set this example when you have kids since you’ll want them to have ambition. Given all you’ve accomplished, I doubt this would happen but your tenant example shows you self-correcting as you realize you were a bit too relaxed about how you were being treated.

    I’d chalk it up to your ongoing evolution to find the right balance between continuing to look out for yourself but also being ever-more generous with others (but in a helpful, non-welfare type of way).

  11. Today, a guy told me he was hungry and he had asked a bunch of people for help buy no one would help him. After listening to him, I reached in my pocket and gave him $20. He looked at the 20 dollar bill and said, “Really, are you serious?”. I told him, get something to eat and good luck, then walked away.

    1. Next time say to the man, who is looking for easy money, that you have no cash, but you know how he can get $10 per hour. If he is agree, find him some kind of work: to paint, to mow, to repair the old fence, to plant a tree, to clean windows, to distribute fliers, ..etc.
      There is enough space for easy work in our neigborhood, i hope in yours too .. :)

  12. Sam..long time reader first time poster. I enjoy reading your articles and often forward them to my kids, high school and college age. We have over 30 tenants and are guilty of being soft sometimes so don’t beat yourself up. The majority of the tenants are good with a few bad apples. We have been hit with late pays, sob stories , and just plain crooks. Occasionally we want to sell them all off but sleep on it , calculate the cash flow/ appreciation and stay the course. The smartest thing we did was hire a property manager. They take a cut of the rents but we are not bothered by all the calls and issues.
    My hustle had faded as I have aged. I used to work mega hours at my small business scan the internet for properties at night, drive by properties nights and weekends all while changing diapers and caring for young kids. I think back and don’t know how we did it. We have scaled way back. I find myself working fewer and fewer hours. Not worth it to me. We did the hard work years ago so I have no problem enjoying the fruits of our labor.
    Your articles really resonate with me. Work hard, save, invest, hustle and enjoy life.

    I have family in the San Francisco , grew up in the Bay Area and am amazed at the home prices. With the said I would be nervous to rent properties in San Francisco. I have heard of more than a few crafty renters that are long term low rent tenants stay on the lease , move out and sublet pocketing the difference in rent controlled San Francisco. One was quite ticked off when a new owner did a search and found out they didn’t live anyway near the city and forced the cancellation of the lease. The tenant was using their old apartment as a cash cow. Now that is messed up.

    1. Property manager’s advices:
      1. Make a list with 100 points (for example) where will be situated first 100 features of an “new potential” property/premise (floors -living area/shopping floors/parking ..etc.; distance from subway; supermarkets around; traffic; police presence; green areas; buildings’ quality, etc). After that you can hire a company/specialist/or somebody else to make the research for 1-2 days and to fullfill your list, mentioned above. So will save time for your family and will be calm and rest before taking the serious step/buying the aim.
      2. Rule the business with specialist (not alone), give the specialist a big % from the clear income and be happy to give work to another man (of course he has to be a serious man with no wish to steal you place on the market only to be satisfied with enough % in the end of monthly presenting of his management.
      3. Diversification of accumulated! …and use again two points above

      Three simple rules to be happiest man in the neighborhood!

      P.S. If You wanna be a proud and happy father and grandfather teach the child to think and to be humans. (Of course do not forget languages, martial arts, finance, basics of management of people/companies/psychology, love to earth and nature, etc. :) and the cycle of three generations will be broken and our society will be better for all of us!

  13. I try to overtip, too. Mainly because I get enjoyment and emotional satisfaction out of watching the joy on people’s faces. When I got my yard landscaped, I told the laborers that they could pick out anything they wanted from a pile in my garage (clothes, tote bags, weights, stuffed animals). Anything left over would be donated to Goodwill. I couldn’t believe the looks on their faces. They were like little boys at Christmas! They treated my “junk” like precious treasure. I didn’t expect this reaction and was truly humbled.

    I also understand not being motivated to try harder. Being financially independent, I easily walked out on a six-figure salary a couple of days ago because I couldn’t stand the manager. In years past, I would have overlooked abusive behavior and tried harder to kowtow to my boss because I needed the money. No more.

  14. Save Splurge Deny Debt - Cameron

    Interesting read of the new challenges that FIRE creates. I don’t think all are terrible as you are providing even more value to tenants and other by allowing them to be late etc. It seems like you calculated the risk/reward and in the end it worked out. Hardly anything to beat yourself up about IMO.

    When I consider the vision of what I would want out of FI, I would love the ability to help others. It is interesting to see the downside of people taking advantage but I don’t see myself being flashy and inviting these characters. You seem to have that ability to size up people as well, whether it comes from tenants, the founder lady, or seeing the value and hard work of your recent yard workers.

    All great insights as always! Thanks!

  15. Thanks for the article Sam. It’s always interesting to see your perspective, especially when you’re taking the other side of the coin like this. Thanks again for your views from the road less travelled!

  16. Ryan Schaap

    Great post. I agree it’s OK to loosen up once you reach FI, and personally identify with your Uber tip experience. I grew up very working class with a single father who was a cement truck driver most of his career. At 16 I got my first job at a small pizza place and one of the things I did was deliver pizza. Some people tipped well, others not at all. Overall, the tips were great since minimum wage was $3.35 in 1987. You learned who the good tippers were by their address, and I still remember the address of one of the best tippers 30 years later. I went on to work at a grocery store to pay for college, but even then I always tipped well figuring the tip was just part of the bill. I’ve been very fortunate in my life and am often stunned now when 40 and 50 year olds deliver pizza to me. I’ve never had a job that pays tips again, but I always tip well because I remember how hard service jobs can be. If you were lucky enough to never need to work a job that paid minimum wage or for tips, please consider tipping generously if you can afford it. The service provider greatly appreciates it.

  17. Duncan's Dividend

    I love your perspective on money and the fact that you realize you have a very different relationship with it than the majority of people on this rock. I think I’m easier on my tenants than I need to be as well, but I think it’s partly because I feel the same way you do. My tenants before my current ones were a recent college grad and a his sister who was still in college. I understood where they were in life and was probably entirely too nice about it, but at the same time I understood that they literally had no funds in their accounts.

  18. Hi Sam, your thoughts exactly mirror my own evolution over the past 10 years. It’s why I enjoy your articles.

    I have a 10 figure net worth and pretty much subsidize my tenants. The rent I charge is 20% below market rates, could be making tens of thousands more in rent per year but I just let it go. It enabled one of the families to save enough to buy their own home, which they were very grateful for. In return, my tenants treat me great and we have good relationships (meaning we pretty much leave each other alone). I visit properties about once a year and they maintain them immaculately.

    I shared with you some tenant stories, but I forgot the mother of them all. My aunt had a rental property in SF that she rented out to two younger but chronically ill patients who were receiving care at a nearby hospital. One died of his illness and his partner committed suicide in the home. They owned pitbulls that became very hungry after a period of not being fed. The police were not notified until weeks later because no one was aware of what was happening in the property, until the smell permeated the neighborhood. Very sad and disturbing story. Their relatives spent weeks filling 2 dump bins with their trash, and then fought over their remaining possessions in court.

    Eventually my aunt lost that home to a lawyer tenant who moved in a few years later.

    So I think your tenants were fine, no big deal…

  19. Samantha F.

    Great post. Honest transparency of character, thanks for letting us know a bit about the guy behind the money wielding sword. I like your honest stories. It’s a breath of fresh air.

    Extending oneself is always a win-lose to some degree. Unmet expectations in relationships, consciously yielding in traffic with an extra car squeezing himself in, offering a seat up with an unmet “thank you.” It builds us up though, deepens our ability to give without expectation. We live how we would see fit, not what others *think* we should do circumstantially. To me, this is a generosity of another kind. You give without regard to get and call it when it’s appropriate. I personally love this kind of challenge. Kudos to you.

  20. multimillionaire

    Maybe the lesson learned is to use a good set of good guidelines that you feel comfortable with to screen your tenants. And then always hold their feets to the fire when they don’t fulfill their contractual obligations. Similar to portfolio management, do what you plan to do and don’t let them slip an inch.

  21. That’s a powerful reminder. It is so easy to think “oh I’m not effected by money”, but there are always little things. Even just looking for parking spaces or booking more convenient direct flights.

    Framing financial independence as a time freedom is huge. Not as many people are going to be pumped to get rich and donate their money. But if you don’t have to work, can you donate your time? Sure!

  22. Florian Munteanu

    Hi Sam,

    I think calling it a downside may be too much. It is merely the fact that you have other priorities. Such priorities put emphasis on human relationships and you can afford to be generous when trying to build these human interactions (even when they are not with people who you would consider close to you).

    It goes back to one of your other posts where you mentioned that as you get wealthier you become less arrogant and more forgiving and tolerant rather than the opposite. Your post now expresses almost the same thing, but with a rather critical eye; you should just consider the fact that this level of tolerance and understanding is indeed the very same positive aspect.

    And yeah, you are going to leave some small cash on the table every now and then, because the cost (time/effort) vs. benefit (additional small cash) is not positive. But that is something that frees you from mundane tasks that you don’t want to care about.

    I would say at the end of the day you are happy to have this optionality, right Sam? Therefore, not a downside. Great article though, always very interesting and entertaining.


  23. Overall pretty good points, but I don’t thing they are only related to when someone is already financial independent.

    I’m far from reaching FI… But don’t maximize returns, because I balance it out with living in the now. Although others might use it, I want to be kind and empathize with others because I believe it makes the world a little better every day. The joy of getting little money isn’t as impressive as it used to be, but has been replaced by the joy of getting comments on the blog and receiving dividends every month for doing nothing. And my motivation? Since pursuing FI I’ve lost a bit of my motivation to get the most out of my job. While I loved it before, I don’t as much anymore.

    But that’s ok. I don’t worry about it.

    No matter at what time, place or level you are in life, everyone will probably experience these kinds of things. The best part? I will keep pushing to try influence the things I can change for the better in my life and learn along as they go by.

  24. Hi Sam,

    I couldn’t agree with you more on all points. Optimizing my finances has definitely taken a back seat the more money I’ve accumulated. I keep 20 years of living expenses in cash. How’s that for not optimizing!?

    On your second point, I do try not to let people take advantage of my generosity but being generous does kinda go hand in hand with being taken advantage of.

    Your third point of being to nice, I see that as one of the benefits of FI. It is so much easier to give people breaks when it doesn’t financially hurt you.

    Number 4 is so true but it can be applied to anything. If every time you open the refrigerator and it’s always full you will definitely take it for granted.

    Number 5 is where I have a little different philosophy than you. The reason I worked so hard is so that I Don”t have to anymore. I don’t feel guilty about it either. Being fat, content, and lazy is my reward for working when my friends were playing.

    Your last point of generational wealth also holds true for me. My dad started a company and struggled to stay a float. I took it over and through luck and hard work it has become very successful. As far as my daughter squandering mine and my wife’s wealth, that’s an easy one. We plan on doing that ourselves before we die!!

    In a very selfish way I hope you continue to pump out articles. In my opinion Financial Samurai is truly the best site on the web.

    Thanks, Bill

  25. Abundance is a killer of working harder. You really have to possess a mindset very special to keep on hustling, working hard, and thrive.
    Also, in my opinion, having long term goals is essential to a good health.

    Having said that, I prefer the problems of one day being FIRE, to the problems of not having enough money.

  26. I don’t think of 1-3 as downsides at all. I think of those as just being a better human being and putting good karma out there. Sometimes you will run into folks that will take advantage of you, but in the long run I believe the ROI will far outstrip the downsides. As you can tell, I firmly do NOT believe that nice guys finish last.

    5 is only potentially a downside. If motivation leaks entirely out of your life, that is a huge downside. If motivation simply switches teams – you are motivated by something else, something different, then all is still right with the world. You can still grow and contribute, and thus live a satisfying life.

  27. Jack Catchem

    Hmmm. Makes me think about an article on Hermit Crabs I read recently. The crabs use shells made by others, but a small shell limits their growth and they will occasionally conduct a hostile takeover of bigger crab’s shells.

    The scientist then did a hilarious experiment with tiny weights and pulleys and determined the smaller crabs looking to move up were physically weaker than the crabs in the bigger shell.

    Hypothesis: the cramped crab wants the big shell more than the crab living in luxury. Stay sharp, Samurai!

  28. High Income Parents

    First off you are much nicer than I am with my tenants but I never thought about building up credit so that your tenants could help you out in the future. That helps me see another perspective.
    As far as the financial independence and losing the drive maybe it’s time to move on to something else that will motivate you besides finance and money if that exists.
    It’s pretty hard to stay motivated and energized about any one topic once you’ve mastered it and achieved the goals you want to achieve.
    Maybe there is a next chapter in your life and you just need to find it or maybe you need a sabbatical and then you’ll come back with renewed vigor.
    I don’t know any high achieving people that accomplish a huge goal like you have that are content with that once the goal is accomplished. They all seem to move on to the next big idea or goal.
    I think it’s great personally because it keeps your mind sharp and your energy high.

  29. Hi Sam,

    I believe what you are describing is your passion for the chase. When you were chasing FIRE and blazing a trail during your accumulation phase you were very passionate and it showed in everything you did. I find it funny how we feel when we are in the zone and how we do get soft when we are through the pace and at the next tier. It is human nature to adjust to the latest and greatest and make this the new norm. I think your disdain for people asking to “pick your brain” is partly due to the fact that people want to to know what the “magic” was and once they hear it is hard work and consistency they are less interested and this can put the fire (pun intended) out. I get this in my professional career and business. Many people think I won the lottery or had some sort of cash infusion from a wealthy family member to get to where I am at today and don’t want to believe it was hard work and perseverance as that is less sexy to them. You may want to write a piece on the sociology of the “new norm and how you feel today” and how this can erode your long term plan?

  30. – Maximizing peace and harmony seems way more important then maximizing a paycheck. Granted you have to be at least financially comfortable, but after that peace and harmony is key. Otherwise what is the point of FIRE.

    For me FI would mean more time with my family and bring more harmony in our home.

    As for you, it sounds like you may be having a child soon? That is what the latest post implied. Your FI will be much appreciated when you can spend time with your child and wife. Those moments are fleeting and priceless.

  31. Fantastic article. On a side note, I saw your article posted on Yahoo Finance today and am shocked by all the negative comments by the haters on there. Shocking how different those comments are vs. those i see on FIRE type blogs.

    Anyway, I have an interesting situation where I didn’t actually see the three generations you think of. When my dad’s parents emgirated to the US in the 1920’s, they had a life of hard work and hardships, saved a bunch of money, died and left their kids some inheritance.

    My mom and dad were TERRIBLE managing their finances. Although my dad had managed to learn some frugal tips from his parents that I am thankful for, they bought stuff brand new they couldn’t afford and even had credit cards and ending up basically losing their house, before it was even popular to do so. This made my life a life of hardship, and I became deep into a scarcity mentality and saved every dime I could and invested it. Now I am 41 and retiring on July 5th, with severance, thanks to your book.

    I think it’s important that not every situation is the same. I suppose I am better off for my parents struggling because my life wouldn’t be as prosperous and easy if I had it easy growing up.

    1. That’s cool. Which one did you see on Yahoo?

      The Dark Side Of Early Retirement


      The Fear Of Running Out Of Money In Retirement Is Overblown

      As you can tell from the articles, they are two different points at different stages. The one constant = hate and disdain, which is really fun for a writer to stoke :) Sociologists, pay attention! You will learn how to better deal with people if you can publish on a platform with lots of readers.

      I am so pumped about your retirement on July 5th! Perhaps you would like to write a guest post about your journey, how you managed to get the severance, and some fears and lessons you learned. It is SO FUN to work the final months of work when you know the end is near. Like the two weeks before Christmas as a kid. YAHOOOO!

      1. “Switch the style up. And if they hate, then let ’em hate. And watch the money pile up!” – Kanye

  32. The Alchemist

    Your notes about the generation cycles are spot on. Speaks to the whole “entitlement” phenomenon so often discussed these days. Kids raised with money, even at the middle class level, have no clue what it means to NOT have things that they consider “basic”— they take them for granted. It’s not necessarily their fault because it’s all they’ve ever known, but unless parents make a point of educating them about how fortunate they are, they’ll grow up feeling that the world owes them everything.

    What’s genuinely concerning about it is that this attitude really blossomed in the U.S. in the generations following WWII. Life got “too easy”, relatively speaking, so a lot of kids grew up not being very “hungry” (both literally and figuratively). No reason to struggle, no reason to fight, no reason to work very hard. Life’s continued to be pretty easy for the majority of Americans, certainly on the wealthy coasts. That may be changing now, however, especially for those only slightly down the economic ladder.

    I went to get my hair cut at the local Great Clips this weekend. The gal working on me asked how my weekend was going, and I mentioned how lovely the weather was and how sorry I was that she had to be inside and working on such a beautiful day— when was her day off? “No days off, work every day,” she replied with a smile, in heavily accented English. I felt positively ashamed.

    That franchise is owned and operated by a Vietnamese family. On another occasion there the male stylist doing my hair he spoke of working his other job at a car parts place, and in between also working to remodel his house. These folks work SO hard, because they clearly know what it means to not have much, and they are taking full advantage of the opportunities available to them in the U.S. It’s humbling, and really makes you stop and think.

    With regard to the wealthy always being a target of leeches and sycophants, I’ve seen first-hand what that can do, having been directly acquainted with a scion of one of the founding families of Silicon Valley. To say it makes people weird is an understatement, but one can understand why!

  33. Hi Sam,
    I see nothing wrong with 1-4. There is of course an aspect of holding a deadbeat tennet to the fire. But there is also the aspect of “Money is not everything” and treating people how you want to be treated. We don’t know what the situation is for the other people. It might have been partying this time, but it could be medical or any number of major problems the next. Sometimes being flexible and empathetic is the right approach and will bring you personally more happiness. Only item 5 would be a question regarding hard work. That being said, as someone in the first gen, I would say that you’ve already busted tail and built something. There is a big line between being born to consume all of your parents money and never work a day in your life versus building a business and passive income then living off the proceeds. If my grandchildren were to work 10 years and built up an inflation adjusted few million in net worth on their own I would feel they had not squandered their opportunities.

  34. I think it’s important to enforce late fees, penalties etc. Not necessarily because of the money. But you want businesses matters to be separate from friendship. Things can get complicated real quick! For the losing energy when you reach FI, I suppose I can understand that. At that point, I’d say it’s important to find new things you may be passionate about. Since you’ve reached FI, it may be easier and you can use the money as a tool to indulge in new hobbies and activities.

  35. The Tepid Tamale

    Some good wisdom in here:
    – The Three generations is so, so true. We have to make sure our children are trained on how to properly handle money. I really wasn’t trained on this, which is crazy!
    – “Financial independence can blind you to the world’s suffering. Or financial independence can bless you with the time to help other people. Which will you choose?” – If you are reading this on the internet, odd are good you are already in the top 10% of ‘wealth’ in the world. The quest to move to Financial Independence, and the the top .1% can consume you, while you could be really helping the other 90%. A GREAT reminder.

  36. Sam, I think you did very well with your tenants. I’m a bit soft on my tenants too, but they are great people who usually pay on time. They take care of the interior pretty well. I think tenants just don’t really care about the exterior too much. Yesterday, I went to scrub down the deck. It was green and slippery. If I left it, they would just live with it. But if someone falls down, then it’d be a problem for me too.
    Anyway, I think all your points are valid especially the last one. I’m not that motivated to make money. I just need a bit to help fill the gap. It’s not the main driver anymore. I’m down to 2 posts per week… Life is a lot easier to manage now. It’s just about right for me.

    1. Howdy Joe, I think your greatest motivation should be to try to make as much money as possible so your wife can join you in your early retirement! When I left into thousand 12, I was determined to replicate my day job income so that my wife could stay home and play too.

      She is three years younger than me, and we made a pact that when she turned 34, she could retire as well if I was able to make up for all the lost income. It was a fantastic motivator for both of us to be free!

      1. Dood, el Farbe

        “When I left into thousand 12” (“When I left in 2012”) – Sam, just out of curiosity, are you trying out a new speech-to-text app?

        Mine works pretty well most of the time, but occasional it tosses out some real doozies!

  37. Ha ha Sam! Thanks for this-first of all, don’t be too hard on yourself-we all go thru different”seasons”where we have more or less energy to fight the small stuff. I think being generous to your tenants was a clear win, because you managed to come out ahead-and that cash difference you would have gotten is really insignificant for the headache of having angry tenants.

    Also as you practice stealth wealth it becomes your choice to pursue these type of “small change” deals. Also don’t put sooo much pressure on yourself as far as number of postings go-some times we are so busy with our “hustles” that we can’t read 3x a week postings!! One well thought-out and researched one is enough!! We always have the archives!!!!

  38. It sounds like points 1-4 are just you being more generous and kind to others. Hardly a negative character trait to grow. I get how it can be viewed as irresponsible or weak but I don’t see it that way.

    And, even though I read it all the time here I am still amazed at the rental prices.

  39. I think working in the service industry is a great job for a first job. I worked in the industry from high school through college and it made me work harder in school. I remember how rude customers were and the crappy hours and told myself after college I would never work in the industry again unless absolutely necessary.

    Now that I have a job that pays well and I’ve lowered some of my debt recently, I find that I tip more. Even if I get crappy service, I try to tip well. You never know if the person just had a bad day for a variety of reasons and sometimes a nice tip may perk them up.

    Also, a lot of folks don’t realize wait staff typically make most of their money from tips. I don’t know what the rules are now, but back when I was in the industry, wait staff at a chain restaurant made about $4 per hour (in the Midwest) and then received tips. However, their tips were taxed at 10%. If they didn’t receive good tips, they worked for scraps.

    As Sam stated, you’d be surprised what a nice 20% tip will do for someone’s day.

  40. I’m not a millionaire nor am I wealthy, but I understand the points that you laid out, especially being taken advantage of. I don’t have a lot of money to begin with, but people have tried to use me financially. Most of the time they failed. They mistake my kindness for gullibility, and I hope they learned their lesson.

    Part of the reason why you feel like you don’t care about money that much anymore may be because you have reached your financial goal, which is financial independence. If you have another big financial goal (I.e. paying off the mortgage on your house and rental property), it may motivate you to save more. Just my 2 cents.

    1. Unfortunately, I’m still not motivated w/ the goal of paying off a mortgage b/c it can be easily done selling property. I haven’t been very motivated by money since 2012.

      But, I will be HIGHLY motivated to take care of someone who cannot take care of themselves yet e.g. a baby, a child, a parent in need.

  41. Financial Coach Brad

    “Nowadays, all I get excited about is living life on my terms.”

    AMEN to that!

  42. Ms. Conviviality

    My husband manages a quadraplex for his friend where my husband keeps half the rents. His friend appreciates my husband’s help because the rental is in a not so nice part of town and had been vacant for 8 months at one time. None of the units have been vacant since my husband started managing it. The tenants are usually late with rent because they are living paycheck to paycheck. An example, my husband would pick up rent and the tenant was short $20 so he’d have to come back the next payday for the rest. My husband could charge the $50 late fee but he doesn’t because $50 is significant to these people and would only put them deeper in the hole. The landlord doesn’t mind the waived fee because he’s still collecting his usual rental income. My husband’s empathy for their situations has made his job easier. Rents might not be on time but at least they let him know exactly when he can get the rent. The tenants are living in this not so nice neighborhood because that’s what they can afford but they’re decent people trying to take care of their families. For the past three years now, we have bought toys to give to all eight kids in the building. The first year we did it, the 3 year old boy opened the gift (Ninja turtle action figure) as soon as he got it, ran over to bear hug my husband’s legs and said “This is the best Christmas ever!”

    1. That is AWESOME you guys have been buying the kids little gifts! I’ve done the same for my good tenants (holiday wine, etc). It makes a big difference, optimizing for harmony when people are involved.

      I’m not sure I could be a landlord renting to people living paycheck to paycheck who have a difficult time coming up with the last $20.

      It’s much harder imo than renting property out to a 26 year old who has a $250,000 a year pay package from Airbnb, or another 20-something year who drives a BMW X5 SUV his dad bought him. For those guys, I’m happy to charge what market can bear.

      Related: Why The Rich Should Pay Higher Rents: An Airbnb Employee Explains

      1. Ms. Conviviality

        Agree that low income housing requires more work to maintain tenants. The landlord had constant evictions and vacancies for this property since he stuck to charging the late fee and sent out eviction notices after a week of no payment. He had put a lot of hard work into acquiring his properties so it is difficult for him to not get the monthly payments he deserves. Naturally, his frustration showed in his communication with tenants. It is easier for my husband to understand that the ultimate goal is to keep the units occupied and to work with the tenants because if the day should come when they can’t continue paying the rent, they will hopefully kindly leave the place in good condition and not try to get a few months of free housing while an eviction is taking its course. I do agree that late fees have their purpose and should be enforced for most rentals but when the rental has tenants that are working minimum wage hourly jobs without the benefit of paid sick days to take care of a child or the car unexpectedly needs repair so the tenant can continue getting to work, on time rent payments are impacted.

  43. “I don’t know any other landlord who would not have charged a single late fee after eight times of tardiness.” I actually think there may be more of us than people think – because we’ve also done that. People might laugh to know that we never raised the rent on our tenant of 22 years too. But it was win-win. She never called and we cashed rent checks – and she paid for the house 3 times over. Getting greedy was never worth it to us. Small gains in rent can be wiped out so quickly with turnovers and new tenants.
    We are part of the second generation. My father moved here from Germany in his 20’s and worked incredibly hard his whole life. I will be a beneficiary of my parents hard work. We are working hard too, but a different kind of hard. And our biggest challenge is working with our kids to help them continue to grow our family’s wealth for generations to come.

    1. I wonder though… is not raising the rent easier than asking for a penalty payment? I think it is, because not raising the rent requires no action. Confronting a tenant about tardiness, and then asking them to pay and risking the conflict of not paying or begrudgingly paying is much harder.

  44. I think you may be being too hard on yourself with feeling like you may be dishonoring your great grandparents. You worked on finance for years, you have a successful business that generates tons of income. If anything you are enjoying the fruits of your labor which is where most people like. Each dollar that you make doesn’t have the same utility value that it once did and you’ve come to realize there is more to life than just money. I think you definitely get it at this point!!!

    1. I think one thing we can do to not feel bad about being wealthy is to help the (extended) family members who are in need. It could be financial, education, or emotional. We can help other people in the community as well, but to me family comes first since they’ve helped me so much over the past years.

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