Does Financial Independence Make You a Better Employee?

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Does achieving financial independence make you a better employee?  I’ve seen this debate come up a couple of times and it got me thinking.  Some people have said working without fear made them better at work.  Removing any financial concerns or stress allows room for more focus in other parts of life, including work.  I’ve also heard people say that reaching financial independence but still working caused their tolerance level for crap to go way down since they no longer need the money.  That may or may not be considered good inside your company!   So who is right? Let’s talk through this with my personal story.

When did I last fear financial security?

There were two moments in my career where I felt concerned about my job and in turn financial security.   The first was early in my career when we were tied to a specific area for Mrs. Shirt’s graduate school and an EVP threatened my job.  He was insecure in his job and didn’t like how outspoken I was, so he silenced me with fear of termination.  It was an early lesson in power and corporate politics.  We had few options and I left angry and with the thought of “Never Again!”*

The second I feared financial security was in the middle of 2014.  My wife quit her job and I took my first “management” position within the company. Management is in quotations because shortly after I took the job, two of the three direct report positions were eliminated due to “improving efficiencies” or “corporate restructuring.”  

The job I signed up for immediately became a glorified sales position, but in a new market without any existing business.  When they stacked ranked salespeople, I was suddenly at the bottom after getting very used to sitting at the top.   In addition to this, the position I occupied was being trimmed in other parts of the company and all that together left me more than a bit insecure.  I was working for good people, but they were intentionally pushing me to the edge of my comfort zone and apologetic about the changes in the role.

There were some tough months, but I slowly started working my way back up then a bigger promotion opportunity opened up and that fear moved to the rear view window.  

The Feeling of Financial Independence:

Shortly after moving into the new promotion, my salary had increased significantly and we freed yourself from home ownership (but not for too long)  We paid off the remaining student loan debt and our net worth slowly grew past one million dollars and financial independence looked inevitable.  Once we hit this point, I realized my prior concerns were really for nothing.  We already had a couple of years worth of living expenses saved, we had a modest lifestyle, and I had plenty of employment options if we just reversed an eighty mile move.  I look back and feel dumb for not walking around with a sense of confidence earlier.   It was just a matter of time since we had already reached CoastFI.  

This was a sweet day!

How was I a better employee with Financial Independence?

I worked in banking and specifically for a company that was obsessed with reports.  They could generate report after report after report for a pretty simple business.  They would pay multiple people to produce and manage reports, the best of which would be when someone was paid to take information from report number one and create report number two showing the exact data from report one.   These folks could break down production measurements to weekly or daily in a business that takes months or years from the start to the finish.

What did I do as a Financially Independent employee/boss?  I tossed most of that shit out.   I believe in capitalism and I was employed to produce a return to shareholders.  The higher the return I produced for the shareholders, the more I should be paid.   When I started running a team, this meant the higher the return my team produced, the more we should all be paid.  My division’s income statement and balance sheet were the ultimate scorecard for shareholder return.  It was the accumulation of all the work my team did.  All of the other crap produced in reports eventually fed down to the financial statements.   There were no perverse incentives to justify someone else’s job.  There was no pressure felt to do something unethical (ahem, issue business credit cards to clients who didn’t ask for them and would never use them).  Our business just came down to finding customers who needed capital or had other challenges, solving their problems, then being paid fairly for providing a solution.  

Removing those distractions allowed me to focus on the most important part of being a leader – developing people.  As an individual salesperson, I was ultimately capped on my earnings by how much I could do myself.   When I became a team leader, my earnings determined by how good my team was.  Recruiting and developing people became the most important part of my job.  The better my team was, the better their results were for the company.  When I helped get someone promoted off of my team, that reputation spread then smart and highly motivated people wanted to work for me.   This was a long game that resulted in both financial rewards and personal satisfaction of seeing people that work for me go on to do bigger things.  I was able to play this role confidently thanks to having financial security and other employment options. 

During the early months of working after reaching financial independence, I had a leader who was supportive of running a long term business.  The financial results and client/employee satisfaction were the ultimate scorecard.  We shared similar views and I worked hard for the company.   Financial independence helped make me a better employee and leader for the company.  

So how did Financial Independence NOT make me a better employee?

Reports:  My leadership changed just over two and a half years before I retired early.  Not only did my direct leadership change, but the leadership both one and two levels up changed.   The new leadership *loved* reports.  I swear reports were my EVP’s version of porn.  A new report would come out at 8:30pm, then the EVP  needed to read it and recap it in an email to the team (even though we could have read it ourselves if we wanted to).  How did he spend 3pm on a Sunday?  Looking at a the weekly summary reports and recreating them in essay form and emailing it to the team!   I am a bit of a data junkie, but this was a new level of irritation.  There was some tension when my new leadership realized I didn’t enjoy reports as much as he did.

“Asking for Advice”.  My new boss often wanted to reach out and ask me for advice.   He was eight years my senior and previously a peer of mine in a different market.  There was the awful habit of asking me for my opinion or advice on something, then repeating a pattern of not taking said advice.   This pattern quickly turned into a complete waste of my time, especially since he wasn’t effective in his job.  Why go through the exercise of asking my opinion if you already have your mind made up?  My time is valuable, but after I hit financial independence my irritation with this went to a new level.  Why the hell should I sit here and smile and give you advice that you’ll promptly ignore?

Moving the goalposts:  Corporate America is notorious for changing their goals.   Every year there would be more and more “goals” that creeped into an otherwise easy business.   How many credit cards did your team issue?  How many other people in the company did you refer business to?  (Even if those “other people” sucked really badly in their job)  The prior leader I worked for ultimately measured everyone financial statements regardless of the level of report creep.  The new guy managed through whatever the new report of the month was.  

This all came to a head with around a year left to work.  I knew I was financially independent and probably retiring, so I pushed and was ultimately declined on a long overdue promotion and raise.   I even boldly used leverage I thought I had, saying I would explore other options inside the company.  He really couldn’t afford both the loss of my team’s production or the personal reputation risk to loose another well respected person from his leadership team because they oped against working for him.**  At the same time the way the company decided who did and didn’t get promotions slowly deteriorated.  Some would receive them because their manager just fought harder.  Others would receive them because they knew how to overstate their performance by manipulating reports.  The latter became especially frustrating when some people would get ahead with unethical activity.    

I was furious and beyond myself after this failed – I had accepted this job and was told the long-term goal was growth and profitability of my division.   Now more than three years later I had done my part and the company hadn’t done theirs.   I was done, done, and done with this job some more.  The problem was I still had six more months to work before my annual bonus and a round of deferred compensation would be paid out and was burned out past the point of wanting to go work somewhere else.  

Making it through the final months:

One of the ways I made it through the final months is some advice I received:  I got out a sheet of paper, drew a line down the middle of it, and wrote out the things I enjoyed doing in my job on the right hand side and the things I didn’t enjoy doing on the left hand side.   I then stopped doing the stuff on the left hand side.   When it came time for the stuff on the left hand side to become mandatory, I took an opportunity and lateraled into a different position with less than twelve weeks to go before early retirement date.  (I also took a long vacation!)

When it came time for my performance evaluation for the prior year, which had become a formalized version of report porn with this EVP, I navigated pushing this off until after my notice.   Instead of going through my review, went went out to lunch, I ate a $20 meal on the employers dime, and listening to him ask me for advice that he’ll completely ignore.  I played along and even gave him some good advice which he chose to ignore.   It turned out to be a great thing we didn’t discuss the review.   For my final year, my division earned more money for the shareholders than any peer division had ever earned and I was rewarded with a mediocre rating.  It was clear I made the right decision but also sad to know my peers who made different decisions were going to be treated to this behavior going forward.

So what is the conclusion on becoming a better employee?

I think it depends on who you ask.   I believe the company’s clients, my employees, and the shareholders were better off that I could focus on long term results.  I avoided doing economically unproductive activities while taking care of our core business.   

If my last EVP and his management were reading this, they would probably say financial independence didn’t make me a good employees.  I was not obedient and did not reciprocate their “manage with fear” approach down to my employees.  I would delay rolling out dumb initiatives solely meant to make upper management feel better about their mismanagement and instead focused on accomplishing our long-term goals.   Part of leadership is learning how to “major in the major, minor in the minor.”  I focused on what moved business for the company and helped grow and develop employees.  Almost everything else was an unneeded distraction.  

I’m sure management disliked having a high performing leader willing to ask an occasional and well worded uncomfortable question.  Once I dropped the desire to be promoted to the next level, there was satisfaction that came with occasionally bringing up uncomfortable realities people were trying to ignore.  If I didn’t worry about the political consequences, I could get away with doing that occasionally.   One thing I’ve realized with time is this willingness to ask uncomfortable questions is attractive to strong leaders and scary as hell to everyone else!

Wrapping Up

If I would have continued to work as a financially independent employee, the leadership I work for would be key.  I know my tolerance level for dumb things (and dumb people) declined as I was no longer required to tolerate them for money.   This shortened the list of people (and companies) I would be willing to work for, but then I ultimately decided to grind out my last job for financial rewards.  Unfortunately this decision drove me far past the point of career burnout, burnout that I’m still recovering from nearly four months into early retirement.  

Bonus:  Feedback from the Community

Prior to publishing this I decided to ask the question to my followers on Twitter.  The results were nearly split!

There was some great feedback, including Mr. SSC being offered a promotion once he stopped being politically correct at work!  It sounds like he was working for a confident boss.

*This first EVP who threatened my job was let go from the company for poor performance.  The organization had a long history of not dealing with performance issues at a high level and instead using restructuring to take care of it.  This gentlemen figured out he could meet his numbers entirely through cost reductions.  I estimate he collected $2.5mil in compensation over the course of seven to eight years by shrinking the revenue, employees, and customers in his division.  It was somehow equally brilliant on his part and insane the company let it go on for so long.   It was a sweet day but long overduewhen he received his pink slip.  

** EVP #2 (most recent boss) is likely going to be demoted or terminated in the current round of restructuring.  In his role, all he needed to do was spend 90% of his energy on attracting and retaining the best people then supporting them in customer acquisition and retention.   Instead he spent his time elsewhere and choices have consequences.  Enough people left and the team’s performance deteriorated.  


6 Replies to “Does Financial Independence Make You a Better Employee?”

  1. The examples of how it affected you under different leadership expectations is really striking and a good reminder. How we show up is partly determined by the culture around us.

    I voted in the poll and said yes, because like you realizing I was solid financially helped me worry less about hanging on to my job. I work now for a Board and it’s important for me to be able to challenge them when needed. This has been good for us and the organization. Of course, if the board changes and things go to hell, I also now have the freedom to leave but can work hard to protect those I manage as long as possible. I think all of that makes me a better employee – it certainly lowers my personal stress level.

    Should that happen, I’ll definitely have to think hard about how long I stay for the final financial rewards. We’re coast FI but not all the way there yet!

    1. I appreciate the feedback, I’ve realized there were some things I enjoyed and others I didn’t in the job, but working for someone who helped give purpose in the work and supported what we were doing was paramount.

      I also seem to struggle when I work for someone I don’t think is that intelligent. Its happened a few times in my career

  2. I would have voted “of course” in the poll. I am technically in “coast fi” but I have been much easier going and willing to let things go over the last 6 months. That said, we had a large turnover in our senior management which has made things much more bearable. Probably a lot of variances depending on the situation, but leadership certainly matters.

    Take care, Max.

    1. I’m guessing this turnover was a net positive for you. That’s only happened to me once, it seems all other turnover has left me with a less competent boss.

  3. I would have voted for Yes, FI makes you a better employee, and I think that’s regardless of leadership. With a good leader, you’ll be a better employee b/c you’ll be working b/c you want to and not need to. With a bad leader, you don’t let that stuff get to you b/c you’re already at FI, so who cares? This means you just keep on doing your work, and your toxic boss can bother someone else. Either way, it’s a win for you. I know that when we hit FI, I appreciated office environments more — I found what was fun in them like the water cooler talk, the resources you get with an onsite location (I had been consulting so mostly worked in my home office), and the impromptu snacks since many places seem to always have free food out and about!

    1. Those are all net positives! A lot of this comes down to mindset, can you go in and enjoy the good parts without letting the other stuff bother you.

      I had more than sixteen years invested in a company, it was difficult for me to not let the bad stuff bother me. A slow deterioration of a place I once loved.

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