Paradigm Shift: Santa Claus, Stephen Covey, and FIRE

Christmas Tree Ornament Santa Paradigm Shift

If you are under 10 years old or have a strong fixation about Santa Claus, please stop reading now.

That means you, Flora. Oh, wait, you’re 10 now. Hmm. Well, stop reading so that I don’t get in trouble with your mother.

Now before we get going here, let me state that this is not a post about holiday shopping! But keep reading, as this topic is fundamental for one’s journey to financial independence.

Santa Claus and Toys

Regardless of religious affiliation, many people in the United States celebrate Christmas – at least the Santa Claus part of Christmas with the gift giving, decorations, and even a tree.  Such tradition is woven into our society’s culture.

I want you all to picture a son, daughter, brother, sister, niece, or nephew who is closest to the age of 7.

Every December when Christmas rolls around, this 7-year-old is so excited. He knows that Christmas means Santa Claus and Santa Claus means presents! Ok, toys, really. And these toys are often spectacular – grander than other toys received during the year.

If this child has smart (or perhaps manipulative) parents, he also believes that receiving toys at Christmas time is influenced by his behavior. Santa Claus knows if he’s been naughty or nice. And that Elf on the Shelf has been watching as well. This 7-year-old has been trying so hard to behave!

Now I want you to imagine sitting down with this child shortly before December 25th and telling him the truth about Santa Claus. Face to face. What would his reaction be? What do you think would be going through his mind?

Learning the Truth

Do you recall how you learned the truth about Santa Claus?

My understanding came gradually. There were likely comments here and there from classmates or an older sibling that left me wondering. Or perhaps my parents were a little sloppy with their gift purchases or how they hid them. Did they think their closet or under their bed was off-limits when we’d play hide-n-seek?

My younger brother’s realization came more instantaneously. One year my parents decided to place the Christmas tree out on our enclosed back porch, which happened to be visible from my brother’s second floor bedroom where he watched the entire Christmas Eve setup unfold.

Fiona and Finn, our two oldest, likely had a gradual experience similar to mine. But I’ve never really spoken to them about it. With a younger sibling in the house, there is an understanding that Santa doesn’t bring gifts to kids that don’t believe, so Fiona and Finn have policed themselves well.

As for our 10-year old, Flora, I’m not quite sure. She may have one more year of belief in her. If she hasn’t read this post.


Many of us have heard of and hopefully read the popular book by Stephen Covey, The 7 Habits of Highly Effective People. I read this book early on in my career but its message didn’t quite click like I had hoped. However, recently I listened to the audio version of the book and picked up several great principles.

One key concept discussed by Covey is a paradigm shift. During my initial read years ago, I didn’t understand this concept. But now, because of my recent experiences with the concept of financial independence, a paradigm shift seems so clear to me.

Covey states that

The word paradigm . . . is more commonly used today to mean a model, theory, perception, assumption, or frame of reference. In the more general sense, it’s the way we “see” the world – not in terms of our visual sense of sight, but in terms of perceiving, understanding, interpreting.

Covey then goes on to associate a paradigm to a map. “We seldom question their accuracy; we’re usually even unaware that we have them.” He notes that “paradigms are the source of our attitudes and behaviors” and that “the way we see things is the source of the way we think and the way we act.”

A paradigm shift is a change in how we perceive something that influences our attitudes and behaviors.

A paradigm shift is often described as an “aha moment”, when something clicks and a new set of ideas and perspectives are discovered. That “aha moment” can be instantaneous but many shifts are often gradual.

Shifting from Santa

A belief in Santa Claus is an example of a paradigm. Such a theory and frame of reference influences our attitudes and behaviors. Children are excited and hopeful about what Santa may bring them. And how they act can be strongly influenced by their belief in the man from the North Pole.

Learning the truth about Santa is a paradigm shift. It changes our perception of the Christmas holiday, and our associated attitudes and behaviors. For many, this paradigm shift occurs gradually. For others like my brother, there’s an “aha moment” of realization.

The Santa paradigm shift may be dramatic for some, but most handle it well. The presents keep coming and bad behavior isn’t rampant. And, perhaps in an effort to save a little pride, most children quickly shift to an attitude of “I didn’t really think that a chubby dude on a sled pulled by flying reindeer delivered toys to everyone in the world in one night anyway.”

Paradigms and Personal Finance

So what do Santa and Stephen Covey have to do with personal and family finance?

Well, much like a 7-year-old has a Santa paradigm, we all have many grown-up paradigms that influence our attitudes and behaviors. Some of these paradigms are healthy, but some are not. Paradigms or norms that are driven by certain aspects of society can lead us away from freedom and happiness.

I know, I know. The Santa paradigm is pretty black and white, while paradigms that adults encounter are a messy gray with no right or wrong but a lot of “it depends.” However, it’s critical that we understand that there are different paradigms, and the society in which we live strongly influences our perspectives – the extent of which we sometimes don’t realize.

When I was 21, I viewed the life ahead of me through a very common and accepted paradigm. I was on a fairly defined path in which I’d finish up college and find a nice job. I’d meet a special girl and we’d get married. We’d start having children and buy a starter home. I’d continue working 40 to 50 hours per week and climb the corporate ladder, while my wife would focus on the more meaningful work of raising our children. We’d move into a larger home with a yard in an established neighborhood, even if it meant a more expensive mortgage and longer commutes to work. We’d watch our kids grow up excelling in school, sports, music, and other activities. The seasons would pass and our children would leave first for college, likely on our dime, and then into adulthood. I’d wrap up a 40+ year career as I crept into my 60s. And then I’d retire to join my wife in front of the television on our matching recliners, with hopes of grandchildren in our future.

What’s described above seems like a pretty good life, and in many ways it certainly would be. After all, it’s the script that my parents successfully followed, as have millions and millions of others. At the age of 21, it was the only script that I knew. Felicity and I are currently about halfway through that script, and we’ve had a solid run.

But there are some tricky parts of this path that aren’t very visible from the starting line, and are not widely broadcast by others traveling the same route. Commuting hours each work day wears on you as the years pass. With limited time outside of work, it becomes challenging to balance your family activities with all the community, house, and yard work. Personal hobbies? They often take a backseat. And if you start to question whether you want to continue in your current career for another 20 or 30 years, you’re faced with existing financial obligations that make a change less feasible. Stress mounts, and your health, happiness, and fulfillment suffer.

The Shift

Think back to that Santa Claus conversation you had with that 7-year-old.

Now switch roles a bit and think about how you’d feel if a great friend sits down with you and explains that you can work hard for only 10 to 20 years, save and invest your money, and then live with incredible freedom. What would your reaction be?

We live in a world with such abundance and in a society that is structured in a way that allows us to not have to work for money for 50 years. Instead, we can effectively use money saved over a decade or two to live a more meaningful life in which we can have the freedom to do what we want, when we want to do it. We can focus on working on our terms or not working at all. And we can put our full energy into our relationships and passions.

Understanding and embracing the feasibility of financial independence most likely requires us to see things in a new light, and act differently based on that. It requires a paradigm shift. The concept is a real wake up call. For me, having never truly recognized a paradigm shift before, I was blown away by the realization that there were exciting variations to the life script that I had been following. Because our life scripts are a source of how we approach work and relationships, as well as what we do with our time and money, the discovery of the possibility of financial independence at an early age was life altering.

It’s important to understand that a paradigm shift is only the first step in achieving financial independence and its associated aspiration, early retirement. One’s thoughts, attitudes, and behaviors must change based on this new paradigm. From an outside perspective, these changes are likely seen as negatives because they often challenge societal norms. But with a new paradigm, such changes will be powerful and freeing.

Within your new paradigm of Financial Independence, here are a few areas (both philosophical and practical) that you will begin to look at quite differently than most other people . . .

  • Happiness and fulfillment
  • The resource of time
  • The length and impact of your commute
  • Habits for eating out and cooking at home
  • The role of your technological devices
  • The size of your home and what is inside of it
  • Your vacations and hobbies
  • The type and frequency of the activities in which your children are engaged
  • Your definition of needs and wants
  • The type of car you drive, and your feelings about walking, biking, and public transportation
  • Your perspective on convenience and comfort
  • The role and importance of work
  • Saving and investing

If you are new to the concept of FIRE (Financial Independence / Retire Early), I encourage you to absorb all you can from this and other FIRE blogs.  It may be gradual or it may be immediate, but you’ll experience a tremendously rewarding paradigm shift that will change your life.

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