Financial freedom

Definition of Financial Freedom

financial freedom

According to Wikipedia: “Financial freedom is a term generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities”

Financial freedom is a word that came to life some where in the last decades I think. It is a term that came into my life two years ago. Basically it means that there is more money comming in than there is going out.

Financial freedom does not mean that one is free of debt. However, it contends that debt can be defined as an expense. While debt is a constant financial consideration, a person who has acquired financial freedom is allowed to mark debt as a part of his expenses rather than a weight to his financial goals.

Financial freedom is often mistaken for being rich. While we know that rich people have a number of million dollars in account, their overhead long run costs could mean that they are not as financially independent as they seem. Therefore financial freedom is a concept attuned to your lifestyle and the amount of money you have to cover it. In this perspective, financial freedom is not as hard to achieve as first imagined.

Financial Freedom is Time Freedom

For other people, financial freedom is equivalent to having an expanded leisure time. The concept of time is money comes into play. In reality, a financially independent person will see that money is time. Once you are able to develop a sense of time freedom, then that means you are in a positive direction to acquire financial freedom

Financial freedom makes ones finances less of a concern. Defined differently, financial freedom allows someone to take time on activities without trading your free time for income. Financial freedom hinges on tradable assets that compound over time to cover for regular expenses. So, wealth is created which generates more time and money. It allows people to cut their working hours with no loss of income because of money making activities.

Achieving Financial Freedom

Achieving financial freedom requires a different mindset. In my other blog my Dutch followers can read about mindset, sorry. Maybe it’s time to write an English blog as well.  In our classic college education, we are taught to work for money. Therefore, we put in time to work and then we get our wage. This is the famous time for money swap. However, financial freedom removes the concept of time-and-money-swap and allows an individual to make money work for them.

Achieving financial freedom involves a different shift in lifestyle and overall mindset. While it is easy to think about having more time to invest and create a business, most office workers still find that whatever amount of time that they have should be placed in a routine. A critical step in achieving financial freedom is realizing that there are ways to make better use of your time.

To achieve financial freedom, fundamental attitudes about the concept of money need to be changed. Realizing that money is only a mean to achieve an end is one thing. Knowing that no one should be judged depending on the amount of money they own is another. Judging financial freedom as the amount of money held defeats the purpose because in the end, you will not have financial freedom if you are not satisfied with the money that you have. Remember that financial freedom is also a personal perception. This perception is highly related to the level of satisfaction that money brings.

On another side of the coin, we should also remove the negative perception of money. While the saying that “money is the root of all evil” seems relevant, thinking that this is always the case will provide a repellent view about creating wealth. Always put into heart that financial freedom is a healthy endeavour as long as one feels it is ethically sound to make money. In the end, having the right attitude about money will go a long way in dealing with different perceptions of financial freedom. For me, financial freedom is ultimately goal.

Dirk

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