Recently, I attended my 40th high school reunion. After the primping and posturing at the 20th reunion and the midlife / mid-career crises of the 30th, this one was very different. With ages averaging 58 years, several of my former classmates had recently retired. One was a firefighter who had access to an early pension, a few had done well in business and/or marriage, and a handful were educators.

In my conversations, classmates discussed how many more years they planned to work or had to work. But the idea of transitioning from work to something else was very much a theme of the weekend. Certainly, by the next reunion — #50, the majority of my classmates will be retired. At age 68, those not retired will either still be working by choice or by necessity. 

Around the time of my 10 year reunion (which I didn’t attend — way too soon), I was a young teacher librarian who was just starting my career in education. Unlike others who fast-tracked to employment, I already had my first ‘mortgage.’ Instead of a house, I had shambled my way into an education career, racking up debts including a B.A., a few trips to Europe, and then a Masters degree.

At that point in my adult life and career, I would have found it certifiably surreal to be chatting with a high school classmate about their pending retirement. And yet, on the first night of our 40th high school reunion, here I was, having a conversation with a former classmate about how, when, and why he decided to retire after 30 years of teaching.

Another classmate with whom I went to elementary school worked as a school district administrator for many years. In addition to reminiscing over our past teachers, neighborhoods, and memories, she talked about her decision to step away from work for a while to enjoy her grandchildren. While she said she might return, I didn’t completely believe her.

And then there was the woman who had the distinction of having been a principal when I was a student AND was an administrator colleague when I was teaching in my former district. Our conversation included talking about colleagues who left (or were shown the door) and who had found new hustles or opportunities to stay connected to education.

All of these educators are examples of financial independence. While they may not have retired or stopped working in their 30s like those who populate the FIRE (Financial Independence Retire Early) community, they were able to chart their own life / work / future course. They are, by my definition, Financially Independent Educators. 

What are the components of financial independence?

Educators LOVE their acronyms. So in the spirit of my lifelong profession, I have coined a new one – F.I.E. The Financially Independent Educator.

At first glance, it might seem counterintuitive to think that teachers, principals, paraprofessionals and other school staff could be ‘independently wealthy.’ After all, we’re underpaid and overworked, right?

A recent Moneywise article entitled, “Here’s what being ‘super wealthy’ in retirement really means…” explored different levels of wealth and what it takes to land in different categories of affluence.

While most educators are unlikely to rise into the 99th percentile of the ‘super wealthy,’ the article cited Dave Ramsey’s National Study of Millionaires which found that “of all the millionaires surveyed, the most common profession was teaching.” (Emphasis added)

According to the article, the people in the top levels “saved early, saved often and saved a lot.”

I learned this lesson the hard way from my parents.

As I’ve shared in other posts, I resolved to become financially independent when my father died and I came face to face with the reality of my parents’ poverty. As I made sense of their financial situation, I made the resolution that when we retired, my spouse and I would: 

• not be in debt, 
• know and grow our net worth,
• plan for the (un)expected,
• have guaranteed income, 
• have financial security and stability, and
• choose how and where we lived.

I would like to say that I had a master plan in place when I began saving decades ago. But that didn’t happen. My path to financial independence is quite different from those who follow the traditional FIRE model — setting aggressive saving goals and making radical changes to their lifestyle to meet their goals.

That wasn’t me. While my wife and I were (eventually) intentional in our financial decision-making, saving, and investing, we didn’t make radical changes to our lifestyle. But we did make some tangible changes in our financial habits and behaviors. Do these things and you’ll be well on your way to financial independence.

Six components of financial independence

1. Know and grow your net worth

Net worth is a relatively simple calculation. For now, you need to know that net worth is simply your assets (money in the bank, retirement assets, home equity) subtracted by your debts (mortgage, student loan, credit cards, etc.)

Net worth is not your income. It’s what happens to your income after you get your paycheck. You cannot be a financially independent educator without knowing, keeping track of, and building on your net worth.

2. Make debt disappear

Debt is a drag on your net worth, cash flow, and financial wellbeing.

Like many educators, my wife and I have a long history with debt. From our first student loans to our home mortgage, not to mention dozens of credit cards opened and closed over the years, we’ve known and lived with debt. At times, we thought we’d never get ahead. But for the last decade, we’ve become debtless. And have kept it that way.

If we can do it, you can too. Some financial writers will argue that there is good debt and bad debt. But at the end of the day, your debt is still the negative drag on your net worth. And it’s someone you have to pay besides yourself.

3. Plan for the (un)expected

Sh!t happens. So does college. And the need for a new roof. Financial independence means having money or insurance in place to cover anything from a blown head gasket on your car to being able to pay for long-term care for you or loved ones. College planning may be expected or unexpected, but it’s an example of needing to plan and save for non-recurring (often significant) costs that will impact your net worth and cash flow.

Financial independence also means saving for experiences and things that make you happy. And being able to pay for those joys in cash vs. putting it on credit.

4. Have guaranteed income in retirement

During their working years, most educators enjoy the rare modern luxury of almost guaranteed employment for as long as they can teach a class or drive a bus. But that income is dependent on being able to work. If circumstances change, the impacts to financial security can be profound, particularly if there is no plan for the unexpected.

In retirement, other income must take the place of a paycheck. While most educators likely have a pension, this is unlikely to be enough. The need to complement pensions and Social Security benefits with other investments helps ensure that whether you are working or not, there is a provision for guaranteed income.

5. Feel stable and secure in your personal finances

Financial uncertainty sucks. Like many of you, my wife and I have lived paycheck to paycheck in a state of artificial affluence. For years. In that state of uncertainty and financial dependence, any unexpected surprise can be devastating. That fear is unhealthy, unproductive, and unnecessary. While our lives and the world around us will continue to throw wrenches at us, by building financial independence, the monetary costs of those surprises can be minimized.

6. Choose your lifestyle both when working and in retirement

While most of us will not be able to retire to a villa on the Riviera, financial independence for educators means having choices in how and where you live, including choosing your own employment path.

Financially independent educators get up in the morning and go to school because it gives them joy, not simply because it pays the mortgage. Others may leave school for their flavor of retirement or to pursue another life path. But financially independent educators, unlike others around them, have some choice and agency in why, when, and how they work and live.

Financial independence > retirement

As an elementary student of New Math (it was a thing in the 60s and 70’s), symbols and sets were a big thing. And I remember graduating from 6th grade still confused by < and >. In case you get them confused, the symbol above means ‘greater than.’

While retirement can be an outcome of financial independence, it is not the same thing. Being an FIE (Financially Independent Educator) will look different for everyone. But here are some ways that I think financial independence is distinct from traditional retirement. Speaking in vaguely New Math terms, retirement is less than, but still a subset of financial independence.

Agency 

Retirement has always felt like something that happens to you. I recall that every spring, there was a ritual in the schools or departments where I worked. We signed a collective card, ate Costco cake, drank non-alcoholic punch, and wished the retiring educators good luck as age, frustration, and/or exhaustion finally added up. For others like my dad, retirement was foisted upon them due to illness. Others lose their positions or have other life necessities which push them into retirement. 

Financial independence is about control and choice, defining what work or retirement looks like for yourself — regardless of your age. When you are financially independent, you are in the driver’s seat. That can mean you continue to spend your days working in classrooms or schools. Or that you choose something different to fill your days.

Future-focused

Retirement is something that can seem both distant and deferred. As I shared above, when I began teaching in 1992, retirement couldn’t have been more abstract. Despite finally landing a real job, my pile of student loans and consumer debt was far more immediate and real.

Attending my first school retirement parties then, I saw retirement as something for ‘old’ educators (like my parents.) Young educators like myself either looked on with envy and/or disbelief that they would ever be able to retire.  

Financial independence moves beyond retirement as something vague and years away to becoming an empowering process of building wealth, less out of a desire for becoming rich than being able to choose a life path rather than having it defined by others.

Financial independence is about saving and planning for who you will be in the future.

Opportunity

Retirement has traditionally meant hanging up your work clothes and handing in your keys once you get to 30 years of service or age 65. But financial independence creates new options and opportunities. As an FIE, you can

• Continue teaching, leading, or supporting the work of schools as you have been, knowing you are showing up to work by choice, not by necessity,
• Explore other jobs or roles in your school or district that might provide new challenges or environments,
• Look beyond your current work setting to explore other adventures either in education or beyond, or
• Hang up the work clothes and retire knowing that your financial independence means you have choice and agency in what the next phase of your life looks like.

Free Range Educator

Some of my former colleagues likely see me as ‘retired,’ whatever that means these days. To be sure, I’m no longer working a 200+ day contract or working in a school or central office.

When I left my school district five years ago, I coined the term Free Range Educator to describe my new role in relation to schools, educators, and students.

Thanks having the six components of financial independence in place, my work is now defined by my own interests, passions, and friendships. Some of it makes money. Some of it is volunteer. But all of it is by choice, not by necessity.

In the several years since I’ve left formal work in a school district to became a Free Range Educator, I’ve

• Started my own educational consulting business,
• Led four different statewide grant projects,
• Presented at dozens of conferences,
• Consulted with national projects and local organizations, and
• Taught for two different universities.

I might have been able to do these things while still being employed full-time as a teacher or administrator. And in some cases, I did.

But I know for a fact that the time, attention, resources, and creativity that I put into teaching my recent graduate education course wouldn’t have happened if I had a day job. In fact, I would have likely passed on the opportunity due to time, pay, etc.

But I did teach the course. And I had more fun teaching than I ever had my 30+ year career in education.

Whether you become a Free Range Educator, pursue a new job, hobby, or vocation, or simply declare yourself retired, becoming financially independent puts these options on the table for you.

You. Can. Do. This.

Now

The six areas listed above help can help define what it means to be a financially independent educator. And prepare for retirement.

1. Give yourself a quick formative assessment on the six areas which above which define financial independence. You can use an A-F scale or Pass/Fail/Incomplete. It’s up to you.

1. Do you know and grow your net worth?
2. Are you comfortable with your level of debt?
3. Do you have money set aside for emergencies?
4. Is your retirement planning on track?
5. Do you currently feel financially stable and secure?
6. Are you able to walk away from your job if you wanted to?

Next

1. After your formative assessment, choose one area that you’d like to focus on first as you build your financial IQ. 
2. Browse the FIRE Me Library for useful articles and then build on that using your favorite search engine or chatbot to find additional articles, resources, and guides.
3. Don’t despair if, at first, you find yourself overwhelmed. Like cleaning out the garage or the storage unit, sorting out your personal finances can be a chore. Know that you will have to build a new vocabulary, look your finances in the eye, and make some changes in your spending and saving.