What is Financial Freedom?
Financial freedom...and how do to get there?
Financial Freedom is difficult to define. It is very clear that financial freedom is a very personal goal.
Financial Freedom clearly means that you reach a life free from the stresses and strains associated with ones personal finances. Financial Freedom means a life without any monetary concerns. In essence this means that if you were to stop working and actively engaging in economic activity to earn an income, you would still be able to live a life that you are comfortable with until death.
Financial Freedom to me
For me Financial Freedom means that I need to build a mix of cash savings, bonds, property investment and shares such that the combined income generated would mean that not only would I not have to work again but I could go abroad on several trips throughout the year and look after my family. I'm not quite sure exactly what that figure of investments should be. This is because there will be many factors affecting the relevance and the level of income generated. For example, the income generated will go much further if inflation proves to be low over several decades. Other factors may be the performance of Companies that I have invested in and the level of dividends that they choose to pay.
Financial Freedom is extremely personal to your situation and the lifestyle that you would like to lead. Let me know in the comments below if you believe that you know an actual figure that you would need to be financially free and say how you reached that figure.
How do I reach Financial Freedom?
Funnily enough reaching Financial Freedom is really tough. Even some of the richest people in the world are not financially free. This is because they have extremely high outgoings such that they could not live solely off the income derived from the assets that they already hold.
The key to reaching Financial Freedom is to have the discipline to continuously buy income producing assets. This is achieved by making sure that each and every day you are working towards this goal. During every decision made you should be questioning yourself - will this further my goal of Financial Freedom or hinder it?
Make sure that you save something each and every month. Make sure that you invest your money wisely instead of allowing inflation to eat away at the value of your investments. Make sure that you do not stop until you reach your goal.
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I think you're onto something here Mr Moneybanks, it's a topic I think about ALL the time, as it's such a tricky one to define and get to grips with.
ReplyDeleteOne thing I'd say is that while you're striving towards what you believe to be your financial freedom, remember that the fact you're free to choose and act to strive towards it is financial freedom in itself. I guess I'm trying to say we shouldn't be wishing our lives away chasing gold at the end of the rainbow!
I'm going to be pondering this all day now, it's a tough one you're right!
Financial Freedom is really difficult to achieve. Even if an average income person is also tensed for managing his finance. Quite satisfactory lines you have mentioned here to achieve it but I don't think it's going to be that easy. Bookkeeper! Yes, the person who can help you achieve it is no other than a bookkeeper. Keeping track of your income and expenses along with taxes are what you need to be watchful for. Bookkeeper Studio City, CA.
ReplyDeleteThese kind of articles are always attractive and I am happy to find so many good point here in the post, writing is simply great, thanks for sharing.
ReplyDelete