Financial Freedom - my definition

Financial freedom sure sounds good, but what is it exactly? I think it means different things to different people. It's important how each of us define it because it serves as our goal - our light at the end of the tunnel.

For some folks, I think the idea of freedom in the financial arena is so foreign or otherwise unbelievable that they don't have a clue where to begin to define it.

All I can do is tell you what it means to me - my vision.

It's my hope that perhaps my vision will help you shape yours. How you choose to define it is important because it helps create expectations of achieving it, and it helps define how you might go about getting it.

My vision of financial freedom comes in several parts as discussed below.

Debt Free Living

Financial freedom for me has at it's core a life that is free of debt - all debt. No outstanding loans, no credit debt, no home mortgage. I'm talking about having everything paid off - everything that I own, I actually own - no payments to anyone for anything.

This is key. The weight of financial uncertainty is substantially lifted when debts are no longer in the picture.

Savings and Investments

Freedom in the financial arena also means that I have savings and investments. It doesn't have to be a particular amount, but it should be substantial. It should be something that allows me to have flexibility in terms of how much income I need to earn and it should allow me to retire early and according to my own definition of retirement.

These resources also allow me to make purchases and respond to anticipated and unforeseen needs. It's my own financial "safety net" that allows me to maintain my chosen lifestyle, even in the face of economic turmoil.

Revenue Streams

Part of my financial freedom includes regular and dependable revenue streams. These can be from investments, savings or employment. Multiple revenue streams provide assurance that perturbations in one area won't necessarily knock all my income potential off course.

The main sources of revenue should also be self generated. In other words, they should be based on my own initiative rather than being dependent on the initiative of others. Self employment is a good example of self generated income.

A Sense of Freedom to Live

Without using money to define it, let me simply say that financial freedom for me is a state wherein I can enjoy a self directed life with me calling the shots in terms of where and how I spend my time. It's the opposite of having to go to work to pay the bills and "get by" financially.

It's a more relaxed state where I'm free to enjoy myself more and worry less about what day it is and what time it is. It's also a condition that allows me to pick and choose activities based on my interests, and to do so in a manner that is as one might expect from a truly free spirit.

A Frugal Lifestyle

To be consist with how I created and conserved my wealth, my vision includes a lifestyle that continues to incorporate a conservative and frugal approach to utilizing financial resources. There is no sense in acting in a responsible manner in the development of financial freedom and financial security, only to put it at risk by enjoying it in a reckless manner.

So, you now have a glimpse at what I consider to be financial freedom. It's not the same for everyone, but perhaps my view will help shed some light on what you might set your sights on.

Good fortune to you as your put together your idea of freedom in the world of personal finance. Remember to keep your vision reasonable so it's achievable. This will help maintain proper focus and motivation toward achieving it.

May you achieve all your desires.

Done with Financial Freedom, take me back to the Frugality page.