What is Financial Freedom?
By Rachel Ann Duck
Financial freedom is NOT an illusion or a rhetorical slogan simply to gain emotional appeal. It is concrete and easily computed. It is a goal that can and should be MEASURED and tracked through basic math (yes, math!). And it CAN (and SHOULD) be achieved by EVERYONE.
"Why live an ordinary life when you can live an extraordinary one?" Tony Robbins
“Financial freedom” has been a popular catch phrase in the financial education spheres in recent years.
However, financial freedom is NOT an illusion or a rhetorical slogan simply to gain emotional appeal. It is concrete and easily computed. It is a goal that can and should be MEASURED and tracked through basic math (yes, math!). And it CAN (and SHOULD) be achieved by EVERYONE.
You only must first define a few metrics for yourself. But the basic calculations of financial freedom are the same, regardless of your particular target destination. In the simplest terms, financial freedom is achieved when your passive income exceeds your expenses. The avenues behind “passive income” are many, and we will discuss a few of those in later articles.
But first let’s first wrap our minds around this concept.
You are financially “free” when you no longer have to depend on your unique ability to earn income, whether through active employment or active self-employment, to survive (or THRIVE) financially. This does not mean that you have to, or ever will, want to stop working. It does, however, mean that you are FREED from dependency on a particular job or line of work. And that is incredibly empowering.
Think about it. Whether or not you enjoy or feel passion for your work is NOT the question. You may be a police officer who grew up watching episodes of Cops and yearning for the career and title you now hold. You may be a leading businesswoman who feels immense worth and value from your title and corner office. You may be an inner-city teacher who truly feels it is your life’s mission to impact the next generation.
But regardless of your position, think about the empowerment behind not HAVING to work. By feeling free and secure with or without your job, your dependency is removed. Imagine the FREEDOM.
Check out our next posts for more information on how to calculate that freedom number for yourself.