Ju and I have been ‘retired’, or better ‘financially independent’ for almost two years, since we were 43, which means we no longer HAVE to work for money, although we sometimes do. In that time, and in the years building up to that point, we’ve come across various reasons not to do what we did. The fact these arguments exist is, of course, no surprise. ‘Retiring’ at 43 or earlier is counter-cultural (at least it is in the UK), there will therefore surely be a number of vocal folks willing to make a case against it.

I welcome constructive criticism, and in the interest of sharing experience, have run through some of the ethical arguments I’ve come across against (and, later down the page, for) financial independence below. I should point out we rarely receive such criticism directly, most folks nod a head towards us when we explain our position and say “fair enough, good for you, good luck to you”.

Argument 1: You’re not paying tax

The argument goes that as soon as you stop working, you are no longer paying tax, and are consuming services which others have to pay for, a parasitic existence.

The counter-arguments could go like this:

• Our income will be relatively low for a few years until our private pensions kick in, so no, we won’t pay much income tax over the next few years. We declare all of our income on UK tax returns though, and have done for years, and any income tax we owe we’ll pay
• We could argue that our above-average incomes generated an above-average amount of tax during our working lives, plus in some ways we were a below-average burden on the state
• Income tax is only one form of taxation. We pay VAT and other forms of duty, for example, just the same as everyone else, and when we do work, we work for ourselves, paying corporation tax and income tax, so we do continue to contribute tax to the UK government
• I could also throw this question in: who keeps working with the sole aim to enable them to pay more tax? I suspect there are few people truly with such a high moral stance, and for the majority of us the thought our contribution to the world purely as some kind of tax-generating human battery is probably not appealing

Argument 2: You’re wasting your education

The argument goes that the state and our parents invested a huge effort and financial amount in giving us an education, all 16 years of it in my case. Stopping work early is a waste of this incredible personal investment.

The counter-arguments could go like this:

• Just because we don’t work (or more accurately don’t have to work), doesn’t mean our educations have been wasted. We’re still us, we still appreciate the opportunities our educations give us, and have the rest of our lives to make the most of them
• A great deal of our education had close to no use in our day to day jobs. I don’t speak French much at work, or do any technical drawing, need to quote Shakespeare, rugby tackle anyone, light a Bunsen burner, or form any partial differential equations. I believe our education had a far wider purpose in turning us into the people we are, it had no single-minded aim to create more cubicle slaves

Argument 3: Your investments are unethical

This argument says that if you’ve invested in such and such a way, you are by nature an immoral person. I’ve seen this argument made against residential landlords (who are pushing up house prices and living as parasites on tenants) and against equity index fund investors (since these funds in turn invest in a large number of companies, some of who sell alcohol, tobacco or arms, for example).

The counter-arguments could go like this:

• Why stop short of calling all interest-bearing investments immoral, as religions have in the past (and some still do) with the sin of usury? If you have your money in an interest-bearing bank account, or pay a mortgage, you too are sinful according to some religious stances.
• We live in a broadly capitalist society. Many of the arguments against investing boil down to an argument in favour of a form of government closer to communism. This political argument is way above my pay grade. As far as I’m concerned we live in a society in which the forms of investing are not only legal but are very widely used (most of the people I know have a pension invested in funds, of which they know nothing about the underlying investments).
• As private landlords we act in accordance with our own moral compass, treating tenants in the way we’d like to be treated. If something needs fixing, it’s fixed as quickly as we can. We rarely increase rents. We did up all 3 properties and lived in them ourselves, so we know they’re all up to scratch. We’ve never asked any tenant to leave. We set up our finances to ensure we don’t scrimp on maintenance or repairs. Our tenants tend to stay with us for years as a result.
• Rather than stopping people get onto the housing ladder, we’ve found we have provided homes to people who can’t buy their own place (people with CCJs, someone recently separated whose money is still tied up in marital home) and those who don’t want to own a home (retired folks who have sold their homes to release the equity).
• Yes, we invest in funds which are in turn invested in large numbers of companies around the world. The companies in the funds will change over time, depending on their market capitalisation. Some of these companies will operate in areas we might consider unethical. Some companies might seem ethical, but act unethically without your knowledge. If this bothers you, then there are ‘ethical’ or ‘socially responsible’ ETFs you could consider.

Argument 4: What if everyone did what you’ve done? The country would collapse.

This arguments goes: if everyone only worked for 20 to 25 years, there’d be too few people working to support the rest of us. Taxation would fall, pensions would fail, and the country would implode.

The counter-arguments could go like this:

• I’m not arguing everyone should do what we’ve done. Lives are unique, and everyone’s sense of duty, values and beliefs vary between each of us. I do believe that there’s something to be said for living more frugally, avoiding waste and in return finding a reduction in stress and battering the Earth a little less, but none of my friends or family have quit work to follow us, so we’re hardly on the verge of personally bringing down society
• Even if everyone did retire after 2 decades of work, just what affect would it have on society? It would must certainly change, but just how it would change isn’t predictable I think, so there is no guarantee the country would collapse. Society could be altered in a net positive way?

And if I can now take to the soap box for a few moments, a few arguments of my own (or more likely nicked from others), this time for the idea of financial independence:

Argument 1: Net happiness

It seems to me that our way of life has very little negative impact on those around us, but has a highly positive impact on us, on our reduction in stress/depression, and overall sense of well-being and happiness. By the measure of happiness, I would argue that our approach to life is an ethically good thing to do.

Argument 2: Reduction in consumption

As a natural by product of reducing our living space, we offloaded much of the stuff we owned, and haven’t since bought it back again. The resources needed to create and dispose of these possessions are no longer being consumed by us, which feels like the right thing to do.

Argument 3: Self reliance

In avoiding spending everything we earned, we’ve built up a personal safety net, which should mean our reliance on the state is much reduced. If we take on work and get laid off, we’re able to pay our bills. If we want paid work but can’t get it, (or think of some way to create it ourselves), we can take care of ourselves.

Argument 4: Opportunity to contribute

This argument is starting to round in on the real crux of this post I think: whether our lifestyle is ethically positive or not is more about what we do with it, than with the lifestyle itself. If we get financially free and then spend the next 40 years sitting about drinking ale in the park, grunting at passers-by and occasionally mooning at people, perhaps we’d be in less of a position to claim the moral high ground than if we contributed in some way, volunteering, writing, teaching. It remains to be seen what contribution we can and will make.

Cheers, Jay