A Guide to the Four Pillar Framework

6 min read

I recently received an email from a reader asking for an explanation of how I came up with the name “Four Pillar Freedom.” As I was writing my response, one paragraph turned into two, which turned into three, and before I knew it I had basically written a small blog post.

I figured I would expand on some of the points I made in the email, turn it into a full-blown guide to the Four Pillar Framework, and share it here.

Here’s the (much expanded) email.


Hey #######,

Thanks for reaching out! There’s a short version and a long version of the story behind the name “Four Pillar Freedom.” 

The short version

I discovered that money is a tool you can use to buy freedom in life. Freedom is important because it lets you live the best possible version of your life. In a nutshell, the four “pillars” provide a simple framework to achieve this freedom:

Pillar 1: Philosophy – Identify your “why”

Pillar 2: Psychology – Reduce spending

Pillar 3: Work Ethic – Increase income

Pillar 4: Finance – Grow wealth

The Long Version

If you’re interested, here’s a full-blown backstory and in-depth explanation behind the name “Four Pillar Freedom.” 

I first discovered the concept of financial independence when I stumbled upon an article by Mr. Money Mustache. I loved the idea – save up 25 times your annual expenses, retire in your early 30’s, and live a life of freedom for decades to come.

I became captivated by personal finance. I consumed every article, book, and podcast that talked about money. But it wasn’t long before I began to think “what happens once you achieve financial independence? What are you supposed to do with all that free time? Are you allowed to work after you retire?”

The more I looked for answers, the more I realized very few people were talking about this dilemma. Everyone was simply in a race to stack up a huge sum of money as fast as possible to achieve financial independence. I began to feel uneasy. Was financial independence actually the answer to achieving a good life?

I began to research people who had already achieved financial independence.

I stumbled across the well-known YouTuber Alex Ikonn, who had read The 4-Hour Workweek by Tim Ferriss, started his own online business, and earned enough passive income that he no longer needed a traditional job. He was financially independent.

Yet, in this video, he explains that his life began to feel “meaningless” once he achieved F.I. because he found himself with so much free time and nothing to do all day. It wasn’t until he started to build new things and help people that life started to feel meaningful again. He mentions this at around 13:55.

I noticed this trend in other people as well. 

I read How to Get Rich by Felix Dennis. It was a wonderful book on how one man turned himself into an entrepreneur and became one of the wealthiest men in England. I enjoyed most of the book, but on the very last page I read this paragraph:

I have been very poor and I am now very rich. I am an optimist by nature. And I have the ability to write poetry and create the forest I am busy planting. Am I happy? No. Or, at least, only occasionally, when I am walking in the woods alone, or deeply ensconced in composing a difficult piece of verse, or sitting quietly with old friends over a bottle of wine. Or feeding a stray cat… I could do all those things without wealth.

This man who had spent his whole life building his net worth admitted openly that he was not happy and that he could do all the things that brought him happiness without his wealth.

The Turning Point

This was a turning point for me.

I began to see that money by itself could not provide a good life. So I began to research the psychology of happiness. I discovered that the happiest people in the world all possess three traits: connection, competence, and autonomy. 

Connection – having meaningful relationships and feeling part of a community.

Competence – achieving mastery in certain work.

Autonomy – the freedom to do whatever you want.

At this point, I developed a simple philosophy: Life is about forming meaningful relationships, doing meaningful work, and having control over your time. It just so happens that reaching some level of financial independence helps you do these things more effectively.  

All of this lead to my first pillar of philosophy. I believe everyone needs a philosophy on life – what type of person you want to be, who you want to connect with, and what work you want to put into the world. Once you’re clear on those things, you have a reason to get good with money. 

The path to “getting good with money” is dead simple: spend less than you earn and invest the difference. This naturally leads to the other three pillars.

Pillar II – Psychology

How can I spend less?

The less you spend, the less money you need to be financially flexible. The easiest way to reduce spending is to realize that most of the stuff that makes you happy isn’t actually stuff. Most people find that their greatest sources of joy are family, friends, creating stuff, and spending time in nature. Good news: all of these things are free.

Helpful articles on this topic:

The Joy-Driven Guide to Spending

The Purple-Blue-Red Philosophy of Spending Money

Learn to Want Less

Align Your Spending With Your Unique Nature

You’re Not as Important as You Think and that’s Wonderful News for your Finances

To Keep Housing Costs Low, Recognize There’s Nobody to Impress

Pillar III – Work Ethic

How can I increase my income?

The more you earn, the faster you can accumulate wealth. Here are a few important lessons I have learned that have helped me increase my own income:

Your ego is your enemy. Your ego is what makes you scared to fail. It makes you scared to apply for jobs, ask for promotions, and start your own side hustles because of the fear of failure. Kill your ego by recognizing that you’re not as important as you think and that you’re the only person tracking your own failures.

You must believe you’re capable of learning the necessary skills to demand a higher salary. You must cultivate a growth mindset. Believe that you can grow your knowledge and skills through effort.

Grit beats talent. The people who succeed in the long run are often the ones who simply stick with a task the longest. Be gritty. Don’t quit after the first failure. Don’t let the first rejection letter stop you.

Discipline beats passion. Passion comes and goes. It helps you get started, but it doesn’t help you keep going. Disciplined habits are the key to developing skills that will bring you higher income.

Make time for what’s important. If you want to start a side business, set aside time each day to work on it. Develop positive daily habits that help you inch towards your income goals. Your income won’t magically increase without your help.

Helpful articles on this topic:

How to Make $80,000 a Year at Age 23

An Inside Look at my Morning Routine & the Life-Changing Magic of Discipline

I’m Slowly Building the Life of my Dreams Based on Discipline, Not Passion

How to Increase Your Income: Deep Habits and Wide Randomness

To Make Good Money In Your Early 20’s: Make More Attempts Than Anyone Else

Kill Complaining. Develop Strength.

To All the Complainers

The Danger of Doing Easy Work vs. The Magic of Doing Important Work

The Art of Schedule Shifting: How I Find Time to Blog

Pillar IV – Finance

Now that I have savings, how can I grow those savings?

Individual stock returns follow a power law distribution. A handful of stocks experience astronomically high returns over time. Your odds of picking these stocks are slim. Luckily, you don’t have to pick them. You can invest in low-cost index funds that capture the returns of a huge variety of stocks, including the massive winners.

Systems are the solution to most of your money problems. Set up automated 401(k) contributions, automatic investments, and simple rules to keep your money flowing into the right places. When you have a healthy money system, you prevent yourself from trying to time the market, outperform the market, and incur excess fees.

Recognize that savings often matter more than investment returns. Most people fear investing because they don’t like risking losing their money in market downturns. The truth is, the amount you save often matters more than the amount your investments earn. This is especially true for anyone with a net worth less than $100k. 

Helpful articles on this topic:

Why It’s So Hard To Outperform Index Funds

The Math That Explains Why Net Worth Goes Crazy After the First $100k

My Financial Map: A Detailed Description of How I Manage My Money

FOUR Visuals: Volume 5 (Comparing Savings vs. Investment Returns)

Want to Retire Early? Focus on Your Savings Rate, Not Investment Returns

Here’s How Much Investing Returns Matter Based On Your Portfolio Size

The Dramatic Impact 401(k) Contributions Can Have on Your Savings Rate

Charlie Munger: The First $100,000 is a B*tch

That’s the story behind how I came up with the name “Four Pillar Freedom.”

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Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

5 Replies to “A Guide to the Four Pillar Framework”

  1. Risk of losing money during a market downturn can be minimized by:

    Investing a portion of your income on a regular basis and dollar cost averaging
    Diversifying among and within asset classes
    Looking for undervalued securities, sectors, or industries (less passive)

  2. I love the pillars but my view of work ethic is different, at least it was for me. I think talent destroys grit, just anihilates it totally. I had extreme talent in a niche field of engineering. I avoided working long hours or doing boring tasks whenever I could. I also lacked discipline but I had passion. My innate laziness drove me to find simple or digital ways of getting out of time consuming hard work. It made me a great delegator and the passion made me a great team leader. It also made my employer hundreds of millions and me, millions. But that was fair because the employer had the capital to invest and took the risks, not me. I think you are right in most cases but I think that with enough talent you really don’t need much of a work ethic. I know a lot of tremendously hard workers who are still slaving away while I’m retired, FI and having fun.

    1. That’s an interesting view. I have always held the belief (and still do) that effort matters more than talent. That’s not to say that talent doesn’t matter, but the fact that effort is something you can control appeals to me.

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