Financial Independence and the Archetypes of Income

With my research into the goal of Financial Independence I have begun to think more and more about the methods through which we earn income. For most of us, the standard protocol that is embedded within us is that of the Salaryman, the individual who earns income by trading labour to someone else and is remunerated accordingly. This archetype is overwhelmingly present in our lives because it provides additional security. But it is not the only way to earn income. Broadening income streams is a key element towards reducing redundancy in our lives.

I see that there are nine different earning archetypes that we may follow as we live our lives:

  1. Salaryman
  2. Rentier
  3. Capitalist/Industrialist
  4. Trader
  5. Craftsman
  6. Artist
  7. Speculator
  8. Farmer
  9. Celebrity

These archetypes have different primary sources of income and as such, different levels of redundancy. The forms are not distinct, an individual may consider themselves to be a Craftsman in terms of the work they produce. But they may be remunerated as a Salaryman. In this case, I would consider the individual a Salaryman because of the impact it has upon their life. Their livelihood is dependent upon a steady paycheck from another.

I believe that understanding the different archetypes gives us options to shift outside of the status quo. It allows us to consider alternative life strategies and how we may go about them. But first, we must have a thorough understanding of the concepts. Please not that these definitions apply to how money and wealth is generated, not necessarily the work that is done.

The way you earn an income, in more primal terms, how you put shelter over your head, clothes on your back and food in your stomach is the single biggest choice we have. The standard “dreamer” advice is to follow your passions, to make a living from doing what you love. This can work, but in reality it doesn’t for most of us. It ignores the fundamental reality of the world. For the majority of us, there is no such thing as a free ride. We have to work for what we earn.

I believe we should reverse this causality. Instead of looking at the world in in terms of doing what we love we should instead figure out how we want to get paid. The majority of people earn a salary. They don’t know any other way to get paid, any other way to create value in the world. This post is an attempt to illustrate alternatives. To move beyond the basis of getting paid for labour.


A Salaryman is any individual who trades their labour for a steady income stream regardless of what their labour is. The defining element of this individual is the stability of their income, it has no major increases day by day or month by month and likewise has no major decreases (beyond the risk of losing the job itself). As such, the Salaryman represents a safe choice for many people, one where the risk is born by another individual. A Salaryman may be able to accumulate capital and transition towards being another class (typically the Rentier but occasionally the Capitalist classes).

The Salaryman is the preeminent method of earning income in the western world today. This is largely true regardless of what the individual himself is doing. A plumber who works for a plumbing company and earns a salary can no longer be considered a Craftsman, neither can a journalist who writes for a major paper.

A defining characteristic is the lack of control that being a Salaryman entails. There may be little autonomy in the work that gets done, an inability to turn down requests from management (more senior Salarymen) and there is continuously a risk of losing ones income through the loss of a job itself. The Salaryman finds unemployment very stressful as there is little to no diversification in income sources.

This lack of control is illustrated through modern society via the fantasies of telling your boss to fuck off whilst traveling the world. Of living an idealised life as a pop star (Artist class) or by yearning for other more nostalgic methods of production such as the Craftsman or Farmer. Within the Financial Independence community most individuals are Salarymen who have chosen the search for FI as a methodology of regaining control over their lives.

The Salaryman has an inherently capped income level, set at whatever she is able to agree with her employer and kept limited by competition from other Salarymen who could also do her role. Note, that whether you work for an investment bank or a non profit you’re a Salaryman. Being a Salaryman has nothing to do with any intrinsic meaning you may or may not find in your work.


A Rentier is an individual who profits off accumulated capital with little to no labour input. An example of this would be landlord who collects rents in return for the service of land or property. An alternative definition of a rentier would be someone who owns shares in a dividend producing company. In both cases, it is the capital that has been accumulated which is generating income, not the individual itself. A Rentier is differentiated from a Capitalist through their relationship with the capital under their control. Whilst a Capitalist seeks to leverage his own labour to improve the return a Rentier is happy taking the market based return for his assets, along with the associated minimal effort.

Rentiers do not have a fabulous reputation throughout history, indeed, the landed gentry who is aristocratic purely through the accident of their birth has been the subject of numerous revolutions. Trust fund babies, who have large inherited assets that have been invested on their behalf are another example of the Rentier class. Inherited wealth is often looked upon with less favour than self made wealth, particularly with respect to tax laws.

That is not to say that to be a Rentier means you have to inherit capital. Historically it has been associated that way but there is nothing intrinsic about it. Indeed, my understanding is that the standard journey towards Financial Independence is to transition from being a Salaryman towards a Rentier through the accumulation of a large enough pool of financial assets. One that is sufficient to maintain a lifestyle off of.

A Rentiers income is inherently proportional to their underlying asset base. As they are not taking an additional role within the economy or speculating they are often unable to increase their earnings beyond the average market rate.


The Capitalist brings together people and capital in order to develop her vision. A key component of this is that the Capitalist bears the risk of failure as well as the spoils of victory individually in many situations through risking of their underlying capital. A Capitalist typically employs Salarymen and promises them a stable income in return for their output on the tasks of the Capitalists choosing.

A further differentiation between the Capitalist and the Rentier is that the Capitalist is required to continuously invest her labour into the process. A Capitalist has an active role in their own income generating activity as opposed to the passive role played by the Rentier. Business owners are the standard example of this class whereas a professional manager (CEO) would not be. In theory the income of this class is unlimited as they will profit from any increases in the value of their underlying equity stakes within the businesses they manage.

Capitalists, like Farmers, Artists and Craftsman are able to bring additional value into the world through the development of new products. There is no minimum capital requirement to join this class, instead it is one of intent. A billionaire can be a capitalist just as easily as someone who has negative net worth, so long as they’re both seeking to build a business that creates additional value.


The Trader, or Merchant is an individual who makes an income through facilitating the economy. Bringing together buyers and sellers of goods, perhaps as an intermediary or directly through transporting goods or services between parties is the hallmark of the Trader. As such, the Trader profits with an increase in the velocity of the economy as they earn the difference between what they sell at and what they buy at. A key concept here is that a Trader does not actually produce the underlying goods and services in question, this would make them a Craftsman. Instead, they bring business acumen, and understanding of consumer desires and reduce the friction costs for buyers and sellers by arbitraging the different prices in goods between markets.

The Trader class has its origins in the merchants that used to transport goods between cities, arbitraging the prices in one with those in another. However, it can be as simple as the individual who owns the corner store and makes a living from selling the conveniences of modern life at a markup to the local populace. On the other hand, it could be a transportation provider who buys goods in one market and transports them to the next. A modern equivalent being the Chinese Daigous. A Daigou, or personal shopper, purchase goods on behalf of Chinese buyers on the Mainland from international markets and arrange transportation back.

If you scrounge flea markets, looking for arbitrage opportunities from sellers who may not know the worth of what they’re selling then you’re a craftsman. Your ability to profit is directly linked to your ability to understand the market value of something and identifying any mismatches. The internet has created a vast new realm of opportunities for traders through auction and trading websites such as ebay. It’s never been easier to become a trader.


A Craftsman produces income through the manufacture or sale of goods and services. Not through the labour that goes into producing them, though this labour may still be required. An example would be the sale of a handcrafted wooden chest by a master carpenter. In this situation, the purchaser does not care how long it took to produce, nor the materials that went into its construction. Instead, they care about the design and quality of the chest itself.

It follows that a Craftsmans income is limited by their ability to produce, not by a specific hourly wage that they have agreed with an employer. A more productive (efficient) Craftsman will be able to generate more income than a less productive one. The core concept of the Craftsman is that they charge per unit of output not per unit of input (labour/materials). This means that output is directly correlated with earnings. The work of Craftsman is often cost prohibitive to copy as items are typically of premium quality and are bought as much as status symbols as for their functional usages.

For the Craftsman income can often vary, yet, they are less exposed to the catastrophic shock of losing their job as they will often have many smaller clients who provide them income. Many Craftsman create non-perishable items which can be stockpiled as well during bad economic times. As such, additional variability in their income should be expected but it is a more resilient income so long as what the Craftsman produces remains in demand by a sufficiently large segment of the population. The income of a Craftsman is typically limited by what they are able to produce. In the case of Dentists, Surgeons who do not have equity stakes in a business their income is limited by the number and type of procedures they choose to do each year.


An Artist is distinct from a Craftsman through the use of royalty payments. This naming convention is contentious so it is worthwhile to expand upon it further. If a Craftsman trades a particular item or service for income (e.g. sculpture, paining, woodworking etc) then an Artist trades the license for a copy of the item itself. A singer who earns royalties every time her song is played or an artist who earns depending upon their book sales are examples of the Artist archetype. An Artist sells a copy, a Craftsman sells the original.

A key component of this archetype is that once an item has been produced it is able to continuously generate income without any further investment or work from its maker. These items are able to generate income through the sales of copies of the primary item. In this way, an artist who designs digital stills that are sold as copies is different from the artist who crafts a singular painting for a specific client. As they are selling many copies the income of an Artist is unbounded. In practice, the income of Artists follow a power law distribution with a few artists capturing the majority of the income earned within the field whilst their compatriots survive at subsistence level.


The Speculator profits from the change in prices of an asset, not from the creation of additional value along the food chain. An example would be a grain speculator who thinks that the harvest in a year will be bad. The speculator could purchase options that would allow them to profit if their prediction comes to be true. They have not introduced any additional value into the world through the action (though, they will be paying an option premium to the seller of the options that may be considered otherwise) but they have still generated profit.

The role of the Speculator within society is complex. Gambling is a form of speculation, as is many forms of financial trading where access to a future income stream is not being bought. This leads to some individuals despising the Speculator, who may appear to get rich from not doing anything. In reality, the Speculator can introduce additional liquidity into the financial markets and help them to operate efficiently which benefits other participants (Traders, Rentiers, Capitalists, Farmers etc). Yet, the public perception of these individuals often remains poor.

To partake effectively a keen appreciation on the prices of particular items must be known as well as how they may relate to underlying value. If an asset is seen to be cheap then the speculator will buy it, regardless of what it is. Likewise, if it is seen to be expensive they may sell the item (potentially naked short selling). Speculators profit through making a correct assessment on true market prices which means their income is often unbounded. On the other hand, their potential losses are also unbounded.


The Farmer is a special class of the Capitalist who earns income through extraction of raw materials from the earth and their sale to others. For the Farmer class which also includes mining the key differentiator is the quality of the particular piece of the Earth which they are extracting material wealth from. A Farmer is often able to increase their income by increasing the amount of the Earth from which they extract resources from but they are often bound by environment and ecological limits.

An example would be the dairy farmer who can only graze a certain number of cows per unit area of land and per unit of labour. For the dairy farmer their role is to optimise the size of the land they are farming as well as the number of cows in order to ensure that their earning is optimised.

One vagary of the Farmer class is that in the modern world they are exposed to the market economy and thus commodity prices. This can make earnings incredibly season, beyond the natural variation caused by external effects such as climate, floods, disease and pestilence. To that end, the Farmer will often work closely with the Speculator to minimise variance in his income by offloading the risk.

A Farmers income is limited by; the patch of land they are extracting from, their productivity in extracting from it and the underlying commodity prices they are able to sell at. They as such bear additional risks not observed by other classes.


The final income earning class is that of the Celebrity. The Celebrity generates income not through what they produce or what they do but instead by who they are. The sponsorship deals that Lebron James has places him firmly into the Celebrity class even though he is technically also a Salaryman through his basketball salary.

For the Celebrity class they are selling an association between themselves and a particular product, often to induce additional sales of that product. The Celebrities earning potential is thus directly correlated with their level of recognition and fame that they possess within society. All things being equal, a more famous celebrity will command higher returns through their association with a product than a less famous one.

The Celebrities income is as such bounded only by the level of their fame and the willingness of society to pay for association to that fame. In many situations the concept of Celebrity can be used to amplify the earnings potential of other classes. As such, a degree of self promotion can be a good strategy regardless of what you do. An example of this would be the “superstar” engineer at Google. They’re still earning a salary, however their fame is enabling them to command a much higher salary than that of their peers. Likewise, a Celebrity can often parlay their fame into royalties in the form of book deals or other associated earning streams.

Income Archetypes as they relate to FI

Now that we have a better grasp of the income archetypes we can use these to improve our understanding of the concepts of FI. In my view the standard approach to FI is to work as a Salaryman and then attempt to transition towards being a Rentier through accumulating sufficient capital to satisfy the lifestyle expenses of the individual in perpetuity.

In thinking about this concept the more I have come to appreciate the value of the other classes in the role of FI. The Trader, the Craftsman and the Artist in particular. To me, the principal benefit of FI from my readings of others who have gone through the process is the freedom that it grants the individual. Indeed, many of these individuals worked jobs they didn’t enjoy and saved a large percentage of their income in order to become Rentiers. At which point they removed themselves from salaried work and the demands that came with it.

But often these individuals are still looking for ways to fill their time. The individual who permanently travels the world is a trope for a reason, as individuals we take a large degree of meaning from our personal creations. By building additional (non salaried) income I believe that an individual who is searching towards FI can often:

  • Achieve the freedom associated with FI earlier
  • Substantially reduce the risk of any market downturn that would impact the Rentiers ability to generate income
  • Find fulfillment in other areas of the community.

In particular, it is the first two points that I find most appealing. Consider the ability of an individual who is able to earn $20,000/year from a particular craft which they enjoy. Under the standard 4% rule this individual needs approximately $500,000 less in financial assets to maintain their lifestyle. On the other hand, they have fully covered their financial needs from their financial assets but are still exposed to a major downturn in the economy. Having a non salaried income generating potential grants substantial resilience, indeed it espouses the concept of Antifragility made popular by Nicholas Nassim Taleb.

For many, FI is more about escaping the life of a Salaryman. This abounds by stories within the FI world and the commonly repeated refrain of “traveling the world” continuously once they have retired.

On the other hand, I believe that FI is a way of derisking your lifestyle (my day job is shining through here). By accumulating a large pool of accumulated capital an individual can theoretically live off the returns (or drastically reduce their workload requirements for monetary purposes). Introducing additional income earning processes such as trading or creating has the double benefit of providing more life fulfillment as well as increasing income.

Importantly, there is no “best” archetype (except for the celebrity archetype, getting paid simply for being who you are is pretty fucking awesome when you think about it). So long as you’re content and motivated then it doesn’t really matter how you get paid. Utilise the money and your time to further your goals (be that FI or any other alternatives) as much as you can.


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