The Psychology of Money & Early Retirement – Why Most Get It Wrong

F.I.R.E. — Financial Independence, Retire Early — is one of the hottest dreams on the modern worker’s mind. Over the last decade, this concept has had a meteoric rise, sparking endless debates and inspiring millions to chase freedom from the 9-to-5 grind.

There’s no shortage of content telling you what to do. But what often gets lost is the why behind our money decisions — and why so many people, despite high incomes and good intentions, never quite get there. They end up feeding too many noises into their mind, and overcomplicate the entire math behind the decision.

In this two-part series, I want to break this down. This first post is all about the hidden psychology and subtle emotions that shape how we earn, save, and (hopefully) retire early. In the next post, I’ll share a practical, detailed framework to plan your real retirement corpus — not just a vague, oversimplified target, but a clear, adaptable roadmap for the years ahead.

So let’s dive in.

The Moving Goalpost

Let’s start with the question everyone loves to avoid: What do you really need?

When you landed your first paycheck, you probably had clear dreams — a house, a car, a few adventures, maybe a corpus for your kids’ education. But as time goes on, something strange happens: those clear goals fade into the background, replaced by an obsession with net worth.

It’s the classic moving goalpost. You get a raise, you spend more. You hit a milestone, you push it further. There’s always “one more thing” to buy, achieve, or hoard for “security.”

I love a line by Sean Connery from the movie Entrapment (1999): “What can you do with seven billion that you can’t do with four?” The truth is, the number itself is never enough — until you decide it is.

People often ask, “So what’s the right number for retirement?” The honest answer is, it’s not linear, and it’s not the same for everyone. We’ll tackle that calculation in the next post — but remember this, if you keep moving the goalpost, you’ll run forever.

The Neglected Time–Money Equation

Here’s one factor almost no one talks about seriously — your time ROI (Return of Investment)

Especially in Asian countries, we’re conditioned to think of work as endless sacrifice. Long hours, constant hustle — but at what cost?

When you exchange time for money, you’re not just earning more — you’re spending your life. ROI isn’t just your salary today — it’s what you’re missing out on while you earn it. Is your time better spent growing passive income, traveling, building new skills, or simply living?

If you’re lucky enough to be near your target corpus (more on the calculation in the next blog), you owe it to yourself to check if the extra effort makes any meaningful difference to your life. If it doesn’t, maybe it’s time to clock out.

The Overinflated Fear of Inflation

“Inflation will eat your savings!” It’s the perennial doomsday line on every financial news channel.

Yes, inflation matters — but we tend to overestimate its impact and get overly paranoid. Not every price rises at the same rate, and your personal lifestyle inflation doesn’t track the economy’s average CPI (Consumer Price Index) perfectly.

Sticking a flat 7–8% on all your future expenses can distort your plan. Instead, break down your real future spending: what will matter, what won’t, and how your lifestyle might actually simplify as you age.

If you plan smartly, inflation is a variable you can safely manage. This brings us to the next point which is completely overlooked.

The Changing Expense Pattern

Here’s a humbling truth: by the time you can afford certain dreams, you may no longer want them — or be able to enjoy them the same way.

Maybe you dreamed of luxury travel, but your knees say no to steep treks in few years time. That state-of-the-art gaming console might not thrill you like it did in your 20s. Interests evolve — you might discover painting, community work, adopt a pet, or simply peace and quiet.

Your spending will shift too. And while you can’t predict every twist, you can accept that it won’t look like today forever. Don’t over-optimize for a perfect number — give yourself flexibility and rational guardrails.

The Corpus Bell Curve

Watching your net worth grow steadily feels amazing — a paycheck, some savings, a nice upward graph on your investment portfolio. But here’s where most people get stuck: they assume that line should climb forever.

Reality check — money is there to be used. Once you reach your goal, it’s normal to spend it. In fact, your retirement corpus should naturally follow a bell curve: it grows while you’re working, plateaus when you retire, and then gradually declines as you live your life.

If you die with the biggest possible number, you didn’t win — you just deferred living. So ask yourself: Would you rather live rich or die rich? Your choice.

There’s No Substitute for Investing

No matter how clever your plan, one truth stays constant: you must invest. Not just following tips or riding trends — but truly understanding how money grows, where it works best, and how to make it work for you.

A fat paycheck alone won’t get you to financial freedom. Smart, consistent investing will. So if you take only one action, let it be this: invest in learning how to invest. The ROI on that knowledge beats that cool project release and subsequent promotion you’ll ever get.

The Purpose of Life Conundrum

Finally, the big existential fear: Who are you without work?

Society ties your identity to your job. This is a kool aid which corporate life and world feeds us with. Everyone has been brainwashed into thinking that work is the purpose of life, and once you lose it, it is hard to figure out things you never had tried until now. It’s why the first question at every gathering is, “So, where are you working these days?” All they are actually curious (or rather envious!) about is, “Have you made it in life?”

The real question is: Does your work define your worth? The day you unhook your purpose from your paycheck, you get true freedom.

Next Up: Getting Practical

These ideas aren’t just food for thought — they’re the foundation for your real plan. In my next post, I’ll break down how to calculate your retirement corpus properly.

I will explain how you can bucketize both your investments and expenses, map out your future years, and build a detailed, customizable plan (all inside a single excel sheet) — one that reflects your way of life and investment patterns, not just a generic formula.

If you’ve been struggling with that elusive retirement number — stay tuned. Hopefully, you will see the big picture, and maybe, buy back some additional years of your life!