The Paradox of Ego & Financial Independence

In the past few years, I’ve seen a lot of discussion in business circles about the benefits of adopting an “alter ego” to enhance performance.

The idea is that when we adopt an alternate persona, we distance our true selves from the task at hand and can therefore navigate high-pressure and challenging situations more effectively.

The conversation has even popped up in the financial independence community as people map Fi into their identity and work towards a goal that many think is impossible.

They launch blogs, YouTube channels, Twitter, and Instagram accounts, selectively disclosing scattered details about their lives.

Often fragmented, defaulting back to the same language others have used before. They hide, sometimes visible, and others invisible.

The concept is not new.

In 2008, Beyonce created her alter ego, “Sasha Fierce,” to boost her confidence on stage. A few years later, Adele did the same.

In 2016, researchers coined the term “the Batman Effect” to describe how adopting an alter ego (such as a superhero like Batman) helped young children complete tasks, even when given the option to do other, more exciting things.

In 2019, performance coach Todd Herman wrote The Alter Ego Effect, which explores how elite athletes, entrepreneurs, executives, and historical figures have all used alter egos to unleash their “heroic self.”

Evidence shows that distancing yourself emotionally and psychologically from your authentic self can improve your performance on something stressful, unappealing, or difficult.

But as I look at the world around me, especially as I spend time online as a content creator, entrepreneur, and observer, I can’t help but wonder: what alter egos are we adopting in our lives that we may not even realize?

When do alter egos empower us and when do they erase us?

The temptation to pretend to be someone we’re not lurks in basically every corner of our personal and professional lives.

The media loves to point to social media as a villain, and there is plenty of evidence about how social media negatively affects our mental health and self-esteem.

Readers of my book know that I use social media sparingly for this reason. To me, the benefits are rarely worth the tradeoffs necessary to achieve them.

Even colleagues and friends of mine who have been successful using social media have confessed to me how constantly being online and performing for an audience they barely know negatively impacts their mental health.

Even if you’re not on social media, you likely adopt alter egos in some areas of your life.

We’ve long been told to “fake it till you make it” in our careers or to keep our emotions in check at work because if we don’t, people will assume we’re weak or incompetent.

While Covid-19 relaxed a lot of the formality around what is considered professional and appropriate, we still hold ourselves to different standards of appearance, behavior, and speech at work than we do any other time of day.

We adopt these alter egos because we think we need them to succeed. When in reality, we’re just making ourselves sicker.

Studies show that faking positive emotions at work leads us to feel emotionally depleted and energetically drained, and people who behave inauthentically at work—consciously or not–are less effective, less engaged, and generally less pleasant and competent than those who show up as their true selves.

In other words, wearing a mask or pretending to be something you’re not doesn’t just make you less successful in the long term; it also makes you miserable.

When we set aside artifice and embrace vulnerability, we connect more with ourselves and others.

Humans derive meaning from connection. Connection makes us more fulfilled and more successful. Authenticity breeds connection and connection breeds loyalty.

When I first started Millennial Money, one of the main things that differentiated me from other money bloggers was that I held nothing back.

I was open and vulnerable with my audience about who I am, what I’ve learned, and what mistakes I’ve made. I was open about my faults and my doubts and my fears and my desires. I was open about what I believed and didn’t believe.

This was–and still is–rare in the business and personal finance world, where many creators are often focused on showing off how much they know, selling a product, or courting brand partnerships.

But, because it made me different, this vulnerability helped me grow Millennial Money way bigger than any venture I had started before. And I did it without pretending to be someone I’m not.

I’d take this idea a step further to argue that we must not only disassociate with our alter egos (the inauthentic versions of ourselves we present to the world), but also our egos.

Our egos represent the people we believe ourselves to be–the stories we tell ourselves about who we are and what defines our identity.

In his book Atomic Habits, James Clear argues that “your identity emerges out of your habits” and “every action is a vote for the type of person you wish to become.” In other words, who we are is defined by what we do.

I disagree.

Your actions do not define who you are because you are more than your choices. Your identity can easily become a mask, a crutch, or a label you get stuck in.

When we over-identify with a particular aspect of ourselves–a habit, a belief system, a job, an affiliation–we risk becoming trapped by it. I see this in others all the time. People invest so much into trying to become someone they don’t want to be. Or that they’re not.

We may also forget that we are, above all else, all human and lose the ability to connect with others beyond the most superficial version of ourselves.

This is the paradox of ego.

I see the paradox of ego a lot within the FIRE movement. Financial freedom is supposed to be just that–freedom. By achieving a certain level of wealth, you liberate yourself from the financial considerations that most people have to weigh when deciding what to do with their lives.

Financial freedom is supposed to enable life freedom. And, yet, nine times out of ten, whenever I talk to someone who says they have reached financial independence, all they want to talk about is their investments or how they reached FI.

They’ve become so used to spending their precious time and energy focused on their money that they’ve lost sight of why they started this pursuit in the first place.

They have become so focused on the goal of financial independence that they aren’t taking advantage of the freedom they’ve already accumulated.

I spoke about this phenomenon a little bit in an earlier newsletter when I mentioned the detox period that often happens right after you reach financial independence.

To achieve financial freedom, you have to adopt some pretty specific and sometimes strict habits. But these habits should never be more than a means to an end. They are not you.

You are a human being, not a habit.

I encourage you to pay attention to the identities you’ve adopted and see if you can separate yourself from them.

Ask yourself how your goals and actions allow you to be who you are without defining who you are.

This is the space of freedom.