If asked, everyone would undoubtedly say that they would like financial freedom. Yet what is financial freedom. The dictionary defines freedom as: 1. not under the control or power of another, 2. not burdened by obligations, debts or discomforts, 3. clear of obstruction, and 4, independence.
In order to fully understand the word freedom we need to break the word down into ‘free’ and ‘dome’. For anyone to be truly free we must live under the dome of being free. So what is this dome? It is the laws, or rules, of being free. Rules and laws govern all areas of our life. Can you imagine driving on a busy freeway if there were no rules? The same is true with every area of our life: our physical life, our spiritual life, our mental health, and our financial life. For example, if we want great health we must live within the laws/rules of great health. We will have to eat properly, exercise, and generally practice a healthy lifestyle. The same is true of our financial life. If we are to become financially free we are required to live within the laws/rules of good financial practices, ie: save, spend wisely, invest etc. All people want to be free but not all are willing to live under the dome, or laws required to be, or remain, free.
With these definitions of freedom it is easy for each of us to create our own definition of financial freedom.
I define financial freedom as: the peace of mind of being debt free and having sufficient financial recourses and assets to live the lifestyle of my choice.
My desired lifestyle is one which requires money, specifically cash, perhaps a lot of money. I expect that your desired lifestyle will also require money. Therefore, to be truly free financially one will want to have a stream of passive income, even multiple streams, which exceed our expenses.
More important than how I define financial freedom is how do you define your financial freedom? Everyone will have different wants and needs so it is important for you to take time and consider what would make you truly free financially. You need to determine the type of lifestyle you desire and what it will require of you to achieve that lifestyle.
There will likely be some common elements for all of us in defining financial freedom. Peace of mind will ultimately determine if we have achieved that freedom but for most of us it will also include being free of most, or all, consumer debt, having quality investments which provide passive income, assets which bring comfort and pleasure to life, and discretionary cash consistent with our desired lifestyle.
Another broad definition of financial freedom is to no longer have to work for a living where you are trading time for money. Rich Dad, Poor Dad author Robert Kiyosake refers to this as getting out of the rat race. Freedom for many is to escape the stress of a job, undesirable working conditions, the commute, and unreasonable employers and employees. Many people simply want the freedom to spend more time with their family, and have the financial resources to enjoy the time spent with their family
Freedom, financial and other, is all about control! If you refer back to the definition given earlier freedom is to be free of the control or power of another, free of burdens, obligations, and debts which control us.
In order to achieve financial freedom we must take control of our life rather than allow life to control us. Either you will control life or life or life will control you! Once we are able to take control of our lives we can then control our financial life. Either you will control money or money will control you! To control money you must manage it!
The difference between rich people and poor people is not intelligence, we all know some very intelligent broke, poor people. One of the major differences is that rich people manage money well and poor people mismanage money well.
One thing everyone can do to begin down the road to financial freedom is to follow the advice of T. Harv Eker, author of Secrets of the Millionaire Mind, and that is to establish a separate Financial Freedom account. “Put 10 percent of every dollar you receive into this fund. This money is only to be used for investments and buying or creating passive income streams”. This is the start of putting money to work for you so that you don’t have to work for money. This is also one of the habits which rich people follow consistently. Rich people know that opportunities are plentiful if you have the cash resources to take advantage of those opportunities. Therefore, they are very diligent in funding, and protecting, their “financial freedom” account.
As with all things of worth, financial freedom comes with a price. T. Harv Eker eloquently states it this way, “Either you are a person who will be stopped, or you are a person who won’t be stopped. You choose. If you want to create wealth or any other kind of success, you have to be a warrior…. Getting rich is not always convenient. Getting rich is not always easy. In fact, getting rich can be pretty damn hard. But so what? If you are willing to do only what’s easy, life will be hard. But if you are willing to do what’s hard, life will be easy.”
While achieving financial freedom may require a lot of hard work it is a simple process if you are committed to your goals, make good strategic decisions, and manage wisely.
As with all areas of our life Financial Freedom is a choice. Chose well.
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