What Happened to the Term ‘Independently Wealthy?’

financial freedom switchRecently I heard the term ‘independently wealthy’ twice in a weekend.  To tell you the truth, I had forgotten that term even existed – I can’t think of a single time I’ve read it in the PF blogosphere since everyone uses ‘financially independent’ instead.  I think they mean the same thing, though, right?  They both mean that the person doesn’t have to actively work to sustain her lifestyle.  The money could come from passive income or drawing down (considerable) savings.


I suppose I understand why people who are striving for financial independence through passive income (from a business, real estate, a stock portfolio, etc.) prefer ‘financially independent’ to ‘independently wealthy.’


1) If you’ve read about financial independence and the crossover point much, you know the idea is just that your passive income will exceed your living expenses sustainably and that it can be achieved by either increasing passive income or lowering living expenses (or both).  Many bloggers who are financially independent or are striving for it are keeping their living expenses very low and therefore probably wouldn’t think of themselves as ‘wealthy’ (except perhaps wealthy in the non-monetary sense).  This goes back to the financial hero vs. financial zero/Millionaire Next Door conundrum!  The wealthiest people in terms of net worth or independence can appear very non-flashy.


2) To me, ‘independently wealthy’ also connotes old money or inherited wealth.  I doubt that’s a component of the strict definition but it gives me that impression.  I’m sure that people who are bootstrapping themselves into passive income streams and working on keeping their expenses down would not want it to be assumed that they came into their wealth and lifestyle through familial ties instead of their own hard work.


I do think ‘financial independence’ is a bit confusing, though.  Before I got deep into the PF blogosphere I thought that being financially independent meant not relying on parental financial support – and actually, that’s how Marketplace Money used the term in 2011.  It isn’t really clear what the independence in the term is from.


Do you prefer ‘financially independent’ or ‘independently wealthy?’  Do you think people who are financially independent are wealthy?


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28 Responses to "What Happened to the Term ‘Independently Wealthy?’"

  1. Matt Becker says:

    I like financially independent, mostly for the exact same reasons you already mentioned. I think the word “wealthy” has a connotation that clouds the actually possibility for regular people to achieve that kind of freedom.
    Matt Becker recently posted..3 More Unconventional Reasons to Contribute to a Traditional IRA

    1. Emily says:

      What a great point! That didn’t occur to me.

  2. I like financially independent, because to me independently wealthy means you inherited money and never had to work. It’s funny how we can have so many different meanings for the same terms!
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    1. Emily says:

      I guess I also have a connotation of independently wealthy, if not inherited, as some kind of quickly acquired wealth, perhaps through a windfall. Definitely not what people in the ER/FI community want to be associated with!

  3. E 2 says:

    I think “independently wealthy” is still common outside the PF blogosphere (and I’ve never heard “financially independent” in this context outside of it, I think the “…from your parents!” sense is more mainstream). I suspect all of your reasoning is right but just within a particular subculture.

    1. Emily says:

      Yeah, this is a great example of the PF blogosphere influencing my view more so than the rest of the world. 🙂 Good point!

  4. Renee s says:

    I have always been a saver even when I was a child and my parents would always tell me that I was independently wealthy. They called me that even more when I went to college and had so many scholarships that I was getting PAID to go to school. So if you would have asked me this questions 5 years ago, I would have said that I like the term independently wealthy. Now that I have entered the PF community and have learned SO MUCH, I would say that Financially Independent is a much better term for what I am striving for. I even have started to correct my parents 🙂

    1. Emily says:

      Oh, that’s very interesting that they used ‘independently wealthy’ as encouragement, even though it wasn’t strictly true (I guess parents do that with a lot of terms!). What is your plan for reaching FI?

      1. Renee s says:

        My plan is to max out the ROTH, contribute to my 403b, and invest as much as i can into my taxable account. I was able to save about 60% of my income last year and I am hoping to continue that 🙂

  5. I agree with you that independently wealthy sounds like inheritance or old money. I prefer Financially Independent. I don’t think financially independent people are necessarily wealthy they just live within their means and work if they want to.
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    1. Emily says:

      I wonder, though, why people striving for FI switched to using a different term instead of trying to reform IW? Maybe they really do want the terms to mean something different.

  6. Great post! I remember that term being more popular maybe 10 years ago. I have not heard it in a while, mostly for the connotation reasons you noted. Being “independent” is universally awesome: being wealthy is not, at least when you’re talking to people who aren’t wealthy.
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    1. Emily says:

      Yeah, there has been a lot of hate on “the 1%” recently! Of course, FI people wouldn’t fall into “the 1%” because that is defined by income.

  7. Erin says:

    I prefer a sugar daddy and you can call it what you like! 🙂 I do think that terms and phrasing change over time as they shift in focus. Selfless vs charitable for example. The focus shifts. I think part of the absence of IW is the idea that money shouldn’t matter and follow your dreams and you’ll be happy vs an older idea of building wealth for your grandchildren.

    1. Emily says:

      I agree that IW has more of that generational connotation whereas FI is all about the individual (and how she’s getting there).

  8. I feel like they’re very different. I too get the sense that independently wealthy infers some kind of familial fortune.
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    1. Emily says:

      Where do you think that comes from, though? It’s not in the words themselves. 🙂

  9. It’s an interesting question Emily – financially independent vs independently wealthy. Of the two, I’d say financially independent is more aligned with my goal. My mantra is “freedom through financial independence”. My efforts are not about being wealthy (at least not in the monetary sense) – but being free. Free of the 9 to 5. Free to explore, create and experience as I choose.
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    1. Emily says:

      Do you think that others will view you as wealthy when you achieve that freedom?

  10. […] makes a good point about the term “independently wealthy.” Have you heard it […]

  11. Independently wealthy just seems like you are just rich and don’t have to work. Financially independent makes it sound like you have your stuff together. I don’t hear independently wealthy much anymore, even outside the PF sphere.
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    1. Emily says:

      But how do you get rich and not have to work? I’ve actually read IW once more since I published this post so maybe it’s not as dead as I thought!

  12. I definitely prefer ‘financially independent’, not sure why, but ‘independently wealthy’ just doesn’t quite fit with what I’m trying to achieve.
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    1. Emily says:

      I think I’d like to be both independently wealthy and financially independent, eventually. 🙂

  13. […] from Budget Blonde included What Happened to the Term ‘Independently Wealthy?’ in her writing wrap […]

  14. Ric DeVan says:

    I prefer the term ‘independently wealthy’ for my and my wife’s situation. We worked very hard for the ‘independence’ we will soon have and won’t have to work any time in the foreseeable future. We are in a position where we can pay cash for whatever we want or need, and have taken steps to ensure the ‘wealth’ will last.

    On the other hand, the guy living in a tent on the edge of the park, on his (or his spouse’s) social security, and loving it, is financially independent. He has nothing, wants nothing, and his income covers his needs. He is financially independent but not wealthy enough should he desire a better situation.

    1. Emily says:

      Hmm, very good point about the nuances of the two definitions. Perhaps what society views as ‘wealthy’ creates a breakdown between the two.

  15. […] wouldn’t want to be independently wealthy? Fuggetaboutit! But what does it mean to you? At this point, you might be thinking I’ve had an […]

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