what is a true freedom on economic living
Economic freedom, as discussed in the sources, is often misunderstood as simply not working and living a life of leisure. However, a more accurate interpretation suggests it means living while engaging in activities one enjoys and excels at, without being constrained by financial obligations, and importantly, while remaining connected to society.
Here are key aspects of economic freedom:
Common Misconceptions and Realities
A common idea, often associated with the FIRE (Financial Independence, Retire Early) movement, involves accumulating significant assets, such as 100 million yen in stocks by age 40, and living off the interest (e.g., 4% interest providing 4 million yen annually).
Another example is "mini-FIRE" (プチFIRE), where someone retires early (e.g., at 55) and lives frugally on a smaller annual income (e.g., 2 million yen for a single person), resembling a reclusive life with minimal social interaction.
The sources suggest that true economic freedom is not about being idle, but about engaging with society through work that aligns with one's passions and strengths.
It is generally possible to accumulate assets of around 100 million yen through planned investment in stocks, particularly given market trends (e.g., the Nikkei average quadrupled between 2011 and 2025, which contributed to the popularity of FIRE). The average lifetime income for a typical salaried worker is 250 to 300 million yen, indicating that significant savings are feasible.
Importance of Social Connection
Humans are social beings who live by interacting with others and society. A life based on extreme frugality, where one avoids spending money on enjoyable things to accumulate assets, might not be the best choice for a fulfilling life.
Living on a "mini-FIRE" budget of 2 million yen might lead to social isolation and loneliness.
While asset formation is not inherently bad, the sources emphasize that once a certain level of assets is achieved, it is better to live by doing what one loves while remaining connected to society. This connection, often through work, collaborating on projects, and sharing objectives, can lead to a sense of purpose and "ikigai" (reason for being).
A Balanced Approach: "Mini-Retirement"
A suggested approach involves having a financial asset income (e.g., 1 million yen per year) and complementing it with part-time work that one genuinely enjoys, aiming for an additional income of about 3 to 4 million yen per year.
This "mini-retirement" allows for a shift in mindset: work is no longer solely about earning money, but about social contribution.
Conversely, high-income jobs (e.g., 8 to 10 million yen or more) often come with significant social and professional responsibilities, leading to pressure and stress. While such work can be enjoyable and contribute greatly to society, it carries the risk of burnout, potentially leading to an empty old age.
Therefore, achieving economic freedom can involve focusing on maintaining social ties and pursuing work that contributes to society, especially with an eye towards one's later years.
