Why Most People Will Never Reach Financial Independence

Everyone strives to be financially independent. By “independent,” we mean not dependent on another person or another entity for our financial well-being. When we are children, we are financially dependent on our parents.

At 16, some teenagers will get jobs and achieve a degree of financial independence. Although that is less and less common. Most children remain financially dependent through high school and into college. Parents are chipping in for tuition, room and board, and even living expenses. It doesn’t end at graduation either. Lots of young people get financial assistance from their parents well into their twenties and thirties. Some of them get support even after they are married and have children of their own.

The adult children never achieve financial independence. They remain wholly reliant on their parents, well into adulthood. That’s unfortunate. I will tell you a story.

The main reason I went to the United States Coast Guard Academy for college is because it was free. And that mattered to me. In my senior year of high school, my divorced mother told me point blank that she wasn’t going to pay for college. So, at age 17, I took matters into my own hands. I set myself on a path where I would never be financially dependent on another person again.

Yes, the service academies are free—but not really. The old joke about the Coast Guard Academy is that you get a $200,000 education shoved up your ass a nickel at a time. It was arduous. It was not fun. I went through a lot to get a free education. And I carried a resentment against my mom for years. But you know what? It was the best thing for me.

I have been successful. I am not stupidly rich, but rich enough to have outdoor speakers playing my favorite house music when I am out in the pool in the summer. That makes me feel rich. My success has been entirely my own success. Nobody had a part in it. It is an indescribable feeling, doing it all yourself, without any help. I take a lot of pride in it.

It wouldn’t feel as good if I had parents who were paying for everything along the way. So the goal is to be financially independent. And that’s a good goal because of the feeling you get when you get there. It feels great to do it all yourself. Rutgers University says that financial independence is true independence — you don’t owe anybody anything.

Things are different nowadays. You have a lot of parents who are deeply financially entwined with their children. I see parents do this to their own detriment. They give money to their kids that they can’t afford to give. And in the process, they wreck their own financial well-being.

You ask them why they do this, and I have heard this answer more times than I have seen Ocean’s Eleven. They say: “Well, my kids will be taking care of me when I get older.” That isn’t financial independence. It is financial codependence. In this lifetime, you get one shot to be happy. If you are guilted or coerced into financially supporting your parents in retirement, then you missed your shot.

Codependent relationships are dysfunctional relationships. The term “codependent” comes from the world of addiction treatment. It’s a relationship where nobody experiences the consequences of their own actions. If the child spends like an idiot, there are no consequences. If the parent spends like an idiot, there are no consequences. I am a big fan of people experiencing the consequences of their actions. Otherwise, nobody ever learns.

So what is acceptable? Is it acceptable to pay for your kid’s college education? The answer is: only if you are doing it unconditionally. And even then, it’s not a great idea. But I’m willing to argue that the world has changed. Children are not truly emancipated at 18 anymore—adulthood doesn’t arrive until age 22.

Is it unfair to put a mountain of college debt upon a young person, when financial aid decisions are made based on the parents’ income and assets? It probably is. Pay for college for your kids if you like. Tuition, room and board, books, but not living expenses. And your obligation ends there.

If you’re cutting checks to your 28-year-old underachiever, it’s not just financial stupidity, it’s emotionally unhealthy. The best gift you can give to your children is the ability to succeed on their own.

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