Material independence

The formula for material independence is:

r × C + I ≥ E

i.e., real interest rate times capital plus any income from activities which (in the absence of financial concerns) we would be doing anyway in pursuit of our own passions—this sum must be greater than or equal to expenses. The variables r C and I are largely not under our own control. We cannot decide how much capital we will inherit. We cannot decide whether the activity about which we are passionate will produce an income. (Although we can certainly deceive ourselves about where our passion lies.) The only variable that is partially under our control is our expenses. The path to independence is frugality.

Even when it is impossible to satisfy the inequality, we might still achieve a partial independence by pursuing some lucrative but undesirable activity for part of our lives. The danger here is that, in our scramble to make up the shortfall, we will soon come to forget where our true passion lies.