Financial Freedom; The Real Goal

It is very well said that “one needs to find a balance between fun and funds."

Since yester years despite knowing this, we have been slogging day in and day out to achieve wealth, to achieve what people call “financial freedom”. However, a majority of us have been circling the drain. Wondering why? Scroll down to find out what exactly is financial freedom is, why it is important, and what you can do to successfully achieve it.

What is financial freedom?

Wish to buy whatever you like before considering the price? Do you want to fulfill every dream of yours? Want to become debt-free? Do you want to generate passive income? Do you desire to cultivate a good lifestyle? Want your finances to go in sync with your life choices? Well, all these questions can be translated into having financial freedom.

Nobody wants to slog days and nights in a cubicle just to earn money and realize how they have over their finances. Financial freedom is a golden gateway to gaining a good grip on your life. Financial freedom refers to holding an income that will suffice for your life expenses. These expenses are in personal, professional, as well as medical terms. It doesn’t mean holding the wealthiest treasure trove in the world. It means holding wealth that is more than enough for you. Financial freedom doesn’t come overnight. One must plan and execute certain things to gain it.

?Why is financial freedom important?

Every individual has a different reason for dreaming of having financial freedom. This underlying reason is what makes financial freedom so valued. If you haven’t found your motivating factor, then continue to drill. Without a motivating determinant, you are likely to give up on your journey to financial freedom too soon. Some of the reasons that can make financial freedom important to you are:

• It brings in financial stability: Financially free souls are also the ones who are the most financially stable. In the previously uncertain times, this is what most of the population was craving for – self-reliance and financial stability.
• Profiteering and Assets: For a lot of youngsters, especially investors, financial freedom is defined by consistent profiteering and the gaining of assets in the form of houses, cars, etc. A flamboyant lifestyle is what some of them aim to achieve in life via financial freedom.
• Indulging in self-care: For a lot of us, financial freedom is all about dedicating enough time to self-care. Be it a spa or a European tour, financial freedom can make anything and everything more enjoyable when you have enough that you do not have to worry about paying bills.
• Philanthropy: It is well said that “you cannot pour from an empty cup." For a lot of people out there, financial freedom is an enabler of donations, charities, and philanthropy. They need to gain enough in life to donate and spread the benefits of wealth amongst the needy.
• Retirement nest egg: For some, financial freedom can lead to having a solace-full nest egg for their retirement years without looking for an active income source.

Make sure that you lay down the reasons in explicit terms that make financial freedom desirable for you. The more specific and clear the reason is, the swifter your pace will be towards getting financially free.

Financial freedom versus independence

Financial freedom and financial independence are not mutually exclusive. They are linked to financial security. Financial freedom involves holding an account of wealth that’s enough to sustain your ideal lifestyle. On the other hand, financial independence refers to access to wealth that covers your current lifestyle.

So, when your bank balance allows you to undertake miscellaneous expenses such as a vacation, membership of a club, etc. on top of your essentials, then you can be called financially independent. Financial independence encourages you to opt for early retirement without any effect on your lifestyle at present. You need to have enough resources that can sustain you despite your decision to work or to stay voluntarily unemployed in the future.

Taking a step forward from the stage of becoming financially independent lets you become financially free. This implies getting enough sources of passive income generation that your current, as well as ideal lifestyles, become affordable. Do remember that the notion of an ideal lifestyle differs from individual to individual. For some, it could be a staycation in Seychelles, while for others, it could be flying first class all the time. You don’t have to worry about paying bills or your employment status since you have more than enough.

To make sure that you have taken the right road to financial freedom, it’s important to lay out a systematic methodology that guides you.

?HABITS TO FOLLOW TO ACHIEVE FINANCIAL FREEDOM

Just like managing your body weight, managing money to requires self-discipline and perseverance. It doesn’t matter what is your status, your professional affiliation, or the job you are engaged in currently. Just follow these habits that have been cultivated by finance experts, wealthy entrepreneurs, and generous philanthropists over the generations to garner perpetual wealth.

• Go debt-free.

The biggest obstacle in your way to becoming financially free is debt. It is often seen that once a debt is taken, it becomes an unputdownable financial burden. Sooner, you can find yourself trapped in the vicious cycle of debt just because of a desperate monetary choice you had made earlier.

Financial experts have labelled credit card debt as the “most fatal toxin” that can prove detrimental to your body of wealth, all thanks to their high-interest rates. Try to pay back your credit cards. Another concern could be good loans, such as house or education loans. While they do have a low-interest rate, paying them on time is imperative to maintain a good credit score or rating.

• ?List your financial goals.

As aforementioned, you need to lay down a reason or goal that makes achieving financial freedom “worth it” for you. Make sure that your goal includes your ideal lifestyle as well as the expense of having it and the age by which you should achieve it. Point out smaller objectives and label them as milestones so that your journey towards financial freedom is smooth.

• Create a budget.

Are you tempted to splurge? A budget tracking your monthly expenditures and savings can help you stand firm against such temptations. Jot down your savings and expenditures and do a periodic review.

• Initiate investments. Get financially literate.

Well, it’s never too late to start investing in mutual funds or any other financial instrument. Make sure not to get lured by taking a leap of faith. Invest after looking at the maturity, the time horizon, and all the other necessary return-oriented details. With financially literate, we don’t imply you get a degree in finance or money markets. Just keep up with what’s happening in the economy, especially in the market, be it debt or equity, where you have been investing. Keep an eye on your savings and assets. Be prepared for unforeseeable circumstances. Clear your basics and walk through the changing dynamics.

While these may not be a solution to all your grave money matters, they can be helpful in preparing you for your journey towards financial freedom. Most importantly, these habits will keep you consistent and motivated.

?Read this to get a deeper understanding of financial freedom.

Books have always been man’s greatest teachers. They provide you with every piece of knowledge while all they ask you in return is to flip across. If you can learn the art of rearing silkworms or gardening from a book, then why not have financial freedom? Well good news, financial freedom has been one of the most authored topics. Here are a few books that you can lay your hands on to get a better and deeper understanding of financial freedom and how to go about it:

• The Intelligent Investor by Benjamin Graham
• ?Let's Talk Money: You've Worked Hard for It, Now Make It Work for You by Monika Halan
• Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter
• The Millionaire Next Door by Thomas J. Stanley
• The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard S. Marks

This is the right time to stretch your arm for a financial cushion of cash, savings, and lucrative investments. So, what’s stopping you? Cultivate your path to financial freedom for years to come, now.