Knowing what is financial freedom is pretty challenging to grasp. Most people think of it as merely being rich. They think of not having to work one’s buns off, having as much as a 7 or 8-figure income, going on holiday a lot, and having closets full of, ahem, “designer clothes.”
Unfortunately, this is not what financial freedom means.
And no, it doesn’t define being able to buy all the luxury yachts you want. (Photo by Nick)
Perhaps you have read and heard about people struggling to make ends meet. They are on the news telling reporters how drowning in any debt makes their lives hard. They submit their sob-worthy tales on the papers or websites about being in foreclosure and living off foods bought from food stamps. Many of them tell the chronicles of struggling to find work.
One story from a blog features a photo of a short story written on a manila folder next to a wooden urn. That’s right – a wooden urn. Why? The author photographed it because his or her mother committed suicide because she had no health insurance, no home, and no job.
Another one features a young adult who drove so far away from home to work. Despite her petitions for a raise, she faced competition from somebody who worked half of her time and got paid more than her. Besides facing foreclosure, she wrote on a bridal magazine that even getting married was a mere financial fantasy.
Another story isn’t a story per se, but it clearly (or rather stereotypically, if that’s how you view it) differentiates what rich people eat and what the working poor eat. The latter is represented by a boxed meal that requires just that and ground meat and a package of ready-made ramen noodles. The rich, on the other hand, is represented by a plate of lobster costing a fortune and a similarly-priced beef or lamb dish.
Those are sad but true stories, overall. The authors or interviewees of them who backed them up with rotting teeth and sad faces have one thing in common they lack: financial freedom.
There are a slew of questions that span all stories and interviews: what if they could do something financially that can make them break poverty?
Wouldn’t it be nice if the people who face their dire financial situations choose both food and electricity instead of choosing either because of bills? What if they can still keep their homes while they still save or make a lot of money? What if they can find a way to make and save a lot of money to deal with all the debt and then not let it faze them anymore?
Those questions truly define financial freedom.
Pretend that you’re a person who misses North Jersey and is thinking about moving back. It’s a really expensive region with all the high taxes, tolls, and other hurdles to face.
But let’s say that you have more than enough money, be it a very high 6-figure income or a 7-figure one. You work efficiently enough (not just hard enough) to have obtained that income. It can be from a network marketing business or from royalties paid from music sales.
Well, you would buy a normal home (or even cheaper – a large enough apartment) and pay the mortgages and not worry about it. You would commute to work using either the Parkway, Turnpike, or both and not worry about having to decide between tolls and food. You would still pay those pesky high taxes and still have plenty left over.
With all the leftover money, you can still save it (a good thing). But if you have so much left over, you can save a portion of it and still do frugal things like staycations and thrift store shopping. (If you are shopping at a thrift store whose revenue is set aside to help people like some church mart somewhere, chances are that you’re shopping and giving to charity simultaneously.)
Here’s one story of how one person sought the meaning of financial freedom – living in a sustainable house while leaving his student loan debt behind.
Financial freedom is simply paying what needs to be paid while still having enough or more than enough money to live comfortably. It also means not having to work too much, giving you ample time to spend with your friends, family, and/or religious organization. (And it’s best achieved by gradually getting wealthy.)