The Biopsychosocial Model of FI

Jan 1, 2020

A friend of mine was the first person to introduce me to the concept of FIRE (Financial Independence Retire Early). He considered himself a tongue in cheek “top dog” personal financier who would retire before 40. Of course, I always rolled my eyes at this, much to his amusement. The private joke he had with himself is that people could laugh and doubt what he is doing, but come our forties, he would be sitting back relaxing, or doing anything but a job he hated, while we would all still be slaves to our spending.

Sometimes, he would spout a few words of wisdom about certain areas of personal finance, laying a little bait to see if he could get a nibble from anyone around. He had no interest discussing it with someone unless they were genuinely interested in it themselves.

Early 2016, I was sitting at home enthralled in the Playstation game of the month, probably GTA where I escaped into a world that I could do what I wanted and earn ridiculous sums of money. Pure escapism that millions of people use to break the monotony of their working life. My financially savvy friend and then housemate threw out a comment, “Did you know that if you saved 50% of your salary, you can retire in 16 years.”

“Bulls**t!!!” was my highly intelligent response.

He spun around his laptop to reveal the infamous MMM post he was perusing through and pointed to a neatly laid out chart. There it was in plain and simple terms, straight forward math I could do in my head as I read. If I could paint a picture of a light bulb flicking on above head moment, this would be it. I took the bait, and so began a 3-hour discussion about what he understood as the ins and outs of Financial Independence.

Light bulb moment: Can I do this? I’m gonna find out!

Retirement was a later in life concern. I had never considered, much less planned for it. Neither of my parents were retired yet, so why would I need to consider it in my 20s? It was something that I assumed would naturally happen as I progressed in life and climbed the career ladder. Maybe I thought someone from the fairer sex would marry me and then tell me what to do (my mum always seemed like the boss of our house, so naturally I thought it the same everywhere).

All of a sudden, my view of what society has dictated as “the normal path” was completely dismantled by asking what I could do differently. Retirement wasn’t a distant 40 years away, it could only be 15 years away. First my friend peaked my curiosity, now he had my attention.

The take home points from the discussion that evening were:

  1. Spend less than you earn
  2. Invest
  3. If you save 25 times your yearly expenses, you can retire

It seemed like a super simple plan, so why wasn’t everyone else doing it? More importantly, how come I didn’t jump on board immediately and start down the long and winding road to FI?


Human Nature: It is Wonderfully Awful

I spent years, in medicine, trying to get people to change their lifestyle habits in order to be healthier, after all prevention is better than a cure. I was giving people the directions and the means to break their habits, they seemed motivated when leaving the office, and they were all intelligent people so understood the consequences of continuing their path. Yet, year after year, I see the same people coming in with worsening problems due to ongoing bad habits.

There is an approach in medicine called the biopsychosocial model. It is an interdisciplinary model that looks at the interconnection between biology, psychology, and socio-environmental factors. The model specifically examines how these aspects play a role in topics ranging from health and disease models to human development.

The biopsychosocial model was not a new concept to me. Actually, I learned about it during my first week in med school. Being 19 and thinking I knew it all, I didn’t pay much attention to it. Thankfully, I have wised up over the years and realise that psychology and sociology permeate everything in our world.

Considering this, it makes a little more sense why people weren’t breaking their bad habits. They developed over years for various biological, psychological and sociological reasons, but I was focusing solely on the biological aspect. I was giving them the physical tools (medications, information, etc) to help, but neglecting the other pillars of the model. A stool can’t stand on one leg, so how can I expect a person to get better when it only has one of three supports.


The Biopsychosocial Model of FI

A component of this model is how it affect human development. It influences the person we become, physically and emotionally. I decided to adapt it for financial independence. The biopsychosocial model impacted how we got to the point of our current consumerism, frivolity and acceptance of a 40-50 year working life. It only seems fair that the same model will help us reverse our bad habits.

The Biopsychosocial Model of FI

Biological (Tools for reaching FI)


You must consider the biological attributes when it comes to planning for FI. Taking biological in a literal sense, your age is an important component. The younger you start, the younger you can potentially retire. If you save from early 20’s, you can build an immense wealth with the power of compounding interest.

Savings Rate

Mainly, I view the biological aspect of the model at the tools you need to achieve financial independence. In a word: Assets. Essentially, you need to save money, invest it in various things to provide a passive income to cover yearly expenses. This can be done by increasing your savings rate through increasing your income and/or reducing your expenses.

Savings Rate = % of take home income that you save

Personally, I think savings rate is the most important tool on the FI journey. The higher your savings rate, the sooner you will reach financial independence.

Raising Income

The higher your income, the more you can potentially save. Expenses can only be reduced so far, even if you embrace extreme frugality. So if you want to push your savings rate up even further and speed up your path to financial freedom, raising your income is the way to do that. This can be through raises in work, changing jobs (or careers in my case), creating new sources of income from side hustles like blogging.

There are many methods of achieving financial independence at a faster rate, but everyone must decide on the best tools that will help them reach financial independence in a way that will allow them to be happy.



The psychological section can be split into mental health, emotional health, and beliefs and expectations. You need to consider the psychological reasons driving you towards FI, as well as the impacts that the journey as well as destination with have on you psychologically.

Mental Health

I consider this one of the most important parts of the FI journey. It is certainly the leading reason I am chasing it. According to the World Health Organisation, “A negative working environment may lead to physical and mental health problems, harmful use of substances or alcohol…” If you are in a negative work environment, you should strive to rectify that. Financial Independence is a vehicle that can take you out of that environment if you so choose. Dependence on a salary for a livelihood can be an obstacle to change. That change may be a new job, new career, new boss or a new work-life balance. Achieving FI could mean a drastic improvement in your mental health by helping you remove a causative factor.

Another consideration is the negative affects the road to FI may have on your mental health. Saving is a major tool, ideally done by an increase of income while avoid lifestyle creep. But a lot of people chose to reduce expenses. This can be done to a level that still allows a comfortable life, but what if you fall victim to FI tunnel vision? This is where you see nothing but reaching FI and will do whatever it takes to get there. Including reducing yourself to impoverished conditions to save even more. Living like this can lead to mental health problems. It could come in the form of anxiety because of constant stress about or fixation on finances, depression or low mood from lack of basic comforts or isolation due to cost saving measures.

Emotional Health

People who are emotionally healthy are in control of their thoughts, feelings, and behaviours. They are able to cope with life’s challenges. They can keep problems in perspective and bounce back from setbacks. As mentioned above, if you focus too entirely on reaching your destination as fast as possible, you can already be under mental strain, leaving you a limited capacity to deal with that curve ball that life will inevitably
threw at you.

If you do not believe me, think back to a time when you had a terrible day, I mean truly awful, you make it through 95% of the day, taking everything that comes at you, but then one tiny thing happens like you’ve run out of milk and you just lose it, tears, anger, the works. You were emotionally compromised from the day, so you couldn’t deal with a small thing that went wrong.

Imagine that every day, just because you are pushing yourself too hard to reach FI. What happens to you when something more significant than milk goes wrong? When you are emotionally compromised, you may not be in a position to deal with unexpected problems, so it is paramount to ensure emotional well-being, no matter your stage in life.

On the flip side, that could be your situation if you are working in a profession that is sucking the life out of you. When you arrive home in the evenings, you could be triggered at any time. Is FI the way to repair your emotional health?

Beliefs and Behaviours

Beliefs are pre-existing views that typically involve strong personal endorsement for what we consider true and beyond further investigation. Beliefs are powerful because they provide the mental scaffolding for judging, explaining and incorporating new concepts.

The concept of financial independence is new to most people and challenges the status quo. A vital feature of belief is the capacity to influence behaviour and govern the way people think and act. Retiring 20+ years earlier than expected certainly counts as a challenge of what most people believe. However, while we may like the idea of FI, do we all truly believe in it. If you can honestly say yes, great. At the beginning, I would say nearly everyone will have their doubts about whether it can be achieved.

Another key focus should be reading and educating yourself about FI as much as possible. Only through hearing other’s stories, as well as arming yourself with the knowledge required to plan for FI, can you change your ingrained belief that retirement is only your reward for 40 years of working. Belief in your path to FI will ultimately guide your decisions, particularly when you need to make certain sacrifices.

Other people’s beliefs will play a part in your decision making. Family, friends and even strangers who you talk to. You are educating yourself in the ways of personal finance, however, those around you may remain blissfully ignorant. While you work to change your beliefs, it is much harder for you to alter what others believe. General society will push back against you, tell you FI is a pipe dream and will never be anything more. Unfortunately, this is part of trying to reach financial independence. It is something you should be prepared to face and withstand, or simply ignore.



This area pertains to interpersonal relationships and social support. I believe that your social supports are governed by your interpersonal relationships. You need friends and family around you to help guide you, boost you up in trying times and share in your happiness when you reach different milestones in life. So why should financial independence be any different?

To start, finance is a touchy subject for some people, a no-go talking point for others and an uninteresting are for the rest. It can be hard to engage in a conversation about FI when this is the case. You don’t have to share your FI plans with everyone, but it always good to have someone in your corner who you can discuss things with, vent to or just have a moan if needs be.

It is an area that is also a minefield. When you first start out saving and reducing expenses, you might alienate people unintentionally, due to you going out less and limiting your spending. Maintaining relationships does not have to be expensive. Rather than going out, perhaps invite people to your place. Maybe you will discover a love for hosting events. Friendships are valuable. They are also a 2-way street. If you express a desire to reduce costs, and they pressure you to come out, maybe it’s time to reconsider the relationship?

How about when you are nearing your goal of FI? People around you notice a difference. Is it your “No longer give a f**k” swagger that your work friends can sense? Maybe the fact you aren’t working many hours or even seem to have retired. What do you friends and family see? They see the fruits of your labour, without appreciating the years of hard work. This could breed resentment and jealousy that you have retired and they will still have to work another 20 years.



The biopsychosocial model of FI is exactly why it took me a few months to really get started on my way to FI. There are more considerations than just can I do it. I started thinking about all these things and decided on what I would sacrifice, and what I would tell family and friends, what it meant for my job. I swear my mind was racing for months but enough was enough, I needed to at least start saving and let compound interest work for me while I was figuring everything out.

Apply the biopsychosocial model of FI to your situation. Have you considered how financial independence will affect your life, both positively and negatively? Let me know in the comments, maybe add a few suggestions for the model from your own experiences.

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