As you become financially independent or retire, you may eventually experience a feeling of emptiness. After years of working hard, saving aggressively, and investing wisely, you may feel disappointed when your toughest financial challenge comes your way. Based on reader feedback since 2009 and my own experience after quitting my job in 2012, I realized that having purpose is essential to living a fulfilling life.
Staying active is key to finding meaning after retirement and financial independence. We’ve talked before about balancing active and passive income in specific proportions, but the true path to fulfillment may be even simpler.
Focus on generating active income to cover your discretionary desires while relying on passive income for essential needs. This approach gives you a triple win: you can maintain your purpose, continue to protect your financial future, and have a more rewarding after-work life.
Active income for what you want, passive income for what you need
Life is full of challenges. Once you get through one, you may find yourself wondering, “What’s next?”
For me, since I left my corporate job in 2012, I’ve remained focused on two things: writing Financial Samurai and raising my family. These activities motivate me to stay healthy and build more passive income. Without them, I would have drifted into a life without a plan and probably never would have meandered back to Southeast Asia.
Despite the demands of parenthood, I am always looking for new ways to stay involved. Especially now that both my kids are in school full-time. Smell. Their absence during the day has created a gap of over 40 hours a week, and I’ve been able to find more purpose as I’ve become a stay-at-home dad since 2017.
Identifying my wants and earning money to pay for them really helped me stay busy. If you are feeling empty, I encourage you to do the same. I call this “tethering.”
It’s wise to use stock market profits to buy fun and practical items when times are good, but spending “discretionary money” is no different than if you worked hard to achieve something. You won’t get that level of satisfaction.
Here are some examples of personal desires that motivated me to actively earn an income.
1) New wardrobe
My athletic jacket is 4-5 years old and I wear it every day so it’s about time for a replacement. Instead of spending $120 on a new jacket, I initially spent $27 to fix the zipper. A year later, the zipper broke again and the jacket fell into even more tatters. what would be my solution?
Earn enough active income to raise new capital. I don’t need a new jacket, but I would like one. To accomplish this, you can teach private tennis lessons at a local park for $140 per hour. Along the way, I meet new people and stay active. The more clothing you want, the more lessons we will provide.
2) New family car
My current car will be 10 years old in July 2025 and has only 59,000 miles on it. It works fine, but the technological and safety advances of newer models are tempting. Safety comes first when driving with your family. Replacing my 2015 Range Rover Sport with a 2025 model would cost a whopping $120,000.
To follow my 1/10 rule for car purchases, I need to earn $1.2 million in gross income minus my current passive income. The difference is about $900,000. This challenge could lead to pursuing additional consulting, expanding Financial Samurai partnerships, or finding a full-time job.
Alternatively, you can keep your current car for $1,000 to $3,000 a year or completely rethink your car preferences. My current car should last me easily for another five years. On the other hand, the well-equipped, all-wheel-drive Honda CR-V for $35,000 seems like a solid choice. Making $50,000 in working income using my 1/10 rule is much more achievable than trying to make up the $900,000 gap as a retiree.
The need to earn money to satisfy your desires naturally leads you to wonder if those desires are really worth it. Now that I think about it, I don’t want to potentially spend 2,000-3,000 hours buying a new luxury car that I don’t need. My time is too precious.
3) First class round trip ticket to Honolulu
As a 47-year-old, I fly Economy Plus with a 30-50% premium over economy (e.g. $750 versus $500). This upgrade took me 22 years after college to embrace.
However, first class tickets cost three to four times more than economy tickets. This seems like a waste since everyone arrives at the same destination at the same time. Plus, they still serve rubber chicken meals in first class, and I don’t drink much alcohol.
If you decide to spend an additional $1,200 to $1,500 on first class to Honolulu, finance it by generating active income. For example, you might take on additional one-on-one personal finance consulting sessions (on average once a month) to accommodate these discretionary requests. Helping individuals overcome financial challenges is already abundant. Having this additional purpose in consulting may motivate you to meet the demand and help more people.
Now I need to decide if saving $750 on a 5 hour flight by just sitting in Economy Plus is easier than doing more consulting.
Leave passive income alone to cover your needs
Connecting your financial desires with your active income not only keeps you motivated, but also strengthens your discipline to distinguish between needs and wants. By challenging yourself, you can enjoy life’s luxuries without guilt while maintaining a strong financial foundation.
Unlike adult children whose parents provide for everything, they will feel a deep sense of pride and satisfaction knowing that they paid for the purchase. This feeling is irreplaceable.
By generating active income to cover your desires, your passive income can continue to grow. Risky assets like stocks and real estate tend to appreciate in value over time, so reinvesting your passive income allows you to enjoy the effects of compound interest, further increasing your long-term financial stability.
However, if you find yourself feeling unmotivated or feeling stagnant in your life, you may want to consider one of the last strategies for building wealth and purpose: self-sabotage.
Self-sabotage can bring new purpose after retirement
Perhaps the biggest risk in retirement is the natural tendency toward inactivity. Without self-control or a compelling reason to stay engaged, we often default to complacency. Why not have flat abs or a always clean house?
This is why intentional self-sabotage can be an effective strategy for keeping yourself motivated and active.
For example, in the second half of 2023, I self-sabotaged myself by buying a house I didn’t need. This decision reduced my passive income by $150,000 per year. During the first 3-6 months after purchase, your finances were more fragile, which made you more anxious about contributing money. But when I learned that my daughter would be starting full-time school next September, I realized there was a void that I needed to fill going forward.
More motivation and purpose to earn
Since then, a lack of liquidity led me to take on part-time consulting for four months, which turned me once again into the early-stage startup world. The experience also made me realize the freedom I’ve enjoyed since quitting my job in 2012.
Self-sabotage also motivated me to complete my new second book, Portfolio Penguin, scheduled for release in May 2025. Writing a book is difficult because there is no one to whip you into writing. It takes a huge amount of self-discipline to transform creative thoughts into logical and interesting stories. Then comes the painstaking process of refining and polishing the manuscript through dozens of editing rounds with multiple editors.
Living paycheck to paycheck for the past six months has inspired me to explore additional business opportunities as a Financial Samurai. These businesses introduced me to new people over drinks and dinners and helped me discover products that I thought would benefit my readers.
Setting a clear goal to “pay off” my house, a huge amount of unnecessary money, by December 31, 2027 has made me feel good again. Without this self-destruction, I might just spend the day playing pickleball and doing little else.
Earn income even after retirement and realize your dreams.
Buddha once said, “Desire is the cause of all suffering.” In personal finance, scarcity is often seen as a negative. But by turning your aspirations into purposeful actions, you can make your retirement something truly special.
Fulfill your desires responsibly and find purpose at every step of your financial journey.
Dear reader, have you ever noticed that your discipline decreases after you retire or achieve financial independence? Why not try actively earning for what you want? What strategies do you use to ensure your investments continue to grow, earn more passive income, and maintain your financial freedom?
Generate more passive income through real estate
In the past, the common way to earn passive income through real estate was to become a landlord, which was quite a hassle. Today, it’s easy to generate true passive income by investing in REITs and private real estate funds. One option is Fundrise, which specializes in private real estate funds focused on residential and industrial commercial real estate.
The outlook for real estate prices remains positive, with potentially lower interest rates, a persistent housing shortage, strong demographics, and a continued strong economy. Fundrise allows you to diversify into private real estate with a minimum investment of just $10.
Personally, I invested over $300,000 in Fundrise to expand my real estate portfolio and gain exposure to private AI companies. Fundrise is also a long-time sponsor of Financial Samurai.
Earn active income when you want it, tap into passive income when you want it is an original post by Financial Samurai. Financial Samurai started in 2009 and is now a leading personal finance site. Join 60,000 other people who are actively building wealth and subscribe to my free weekly newsletter here.
