The investing community has used the term “financial freedom” multiple times during the past three to four years.
It seems like “financial independence” has become the new slogan every time I communicate with a consumer or an investor on different forums. So I made the decision to elaborate on it today.
Financial freedom: What is it?
Financial freedom, put simply, is having enough money saved up to pay for all of your living expenses for the rest of your life. You’ve accumulated sufficient funds to pay off all of your debts for the remainder of your life. You won’t have to worry about money after that.
A person is regarded to be financially free whenever they have 35–40 times as much money as they need for yearly costs. This is a complex matter, and there are many different opinions on this subject alone. More information on the 30X rule for retirement may be found here.
Let’s get right to it and talk about the top five reasons why I think most people should work towards becoming financially independent early in life (hint: by the time they are 45 or 50 years old).
Five advantages of seeking financial independence:
Benefit No. 1: Purchasing Life Freedom
To earn money, we all work nonstop throughout the day and night. Money pays for all of our expenses. Rent, food, children’s tuition, and medical expenses. Everything.
Even while it may not be everything in life, money is undoubtedly a crucial element!!
Even while it may not be everything in life, money is undoubtedly a crucial element!!
In their daily lives, many people do not feel FREE. Because gaining money becomes their primary goal in life, they end up becoming slaves to it.
• They are unable to refuse their task.
• They are unable to refuse the schedules
• They are able to reject their superiors.
Money always rules their lives and decisions.
• You may have a lot of freedom in life if you have enough money.
• Freedom to choose when to work, who to work with, when to get up, and whether to take extended vacations.
• You may sense freedom there, whatever you want to call it.
You must strive for financial independence if you want to have a great deal of freedom in your life.
Benefit 2: Increasing your professional influence
Many individuals believe the misconception that achieving financial independence will allow them to leave their jobs and retire.
It’s FALSE!
To have greater energy and strength for one’s work or whatever else they actually want to do in life, one must achieve financial freedom.
Most people must perform tasks in life primarily for financial gain and not out of a sense of intrinsic motivation.
• You believe that your company’s new initiative is pretty intriguing, but it doesn’t pay well enough. How do you behave? Ignore it!
• You could think you really love taking chances and trying something new at work, but what if it doesn’t work out and you get fired or don’t get promoted the following year? You disregard it and return your attention to what is “SAFE” for your professional future.
We are always seeking methods to increase our pay, even if that means forgoing things we would like doing if money weren’t a problem!
Your work takes on an entirely new vigor when the financial incentive is removed and you are forced to work just for the pleasure of doing it and becoming excellent. You make progress more rapidly, and you enjoy your work more. This is how things really operate, but for the majority of people, money gets in the way of what they really want out of life.
Benefit 3: More freedom to follow other interests
Financial independence also allows you to follow any long-standing interest that you were unable to fulfil while working a normal job.
What will you do when you get financial independence? I quizzed the workshop attendees. I sometimes get strange reactions, such as:
• I want to teach music.
• Even though I want to own a restaurant, I also want to teach scuba diving.
• Financial independence is the time where one may pursue those new vocations or chances because the pressure of “earning money” has crushed many ambitions.
Benefit 4: Less anxiety and concern about money.
This is an obvious choice.
Right now, ask yourself that question. How many years’ worth of costs would you have if you lost your job and were never to acquire another one?
• 3 yrs?
• 10 yrs?
• or a year?
What about paying off your entire house loan balance as well as covering your children’s high school and college costs on top of that?
Yes, that is extremely awful.
Since we do not have enough money for the future, we are all anxious about it.
The day you have enough money to maintain yourself and your family adequately is the day you truly feel safe and at peace. Money cannot not solve all issues of life, but it does solve MONEY problems:
Benefit 5 : Pass on a strong Legacy and build generational wealth
• Your grandparents worked for money
• Your parents worked for money.
• You now work for money.
Where is your generational wealth? Do you have a family legacy which takes care of atleast the basics of your family?
You’ll observe a variety of families at work to ensure generational riches. They have enough money, whether it comes from a business, stock riches, real estate wealth, or whatever else, to support their family.
However, many families are unable to do so because they lack that mindset. They work and earn money, spend it, and continue the cycle at the family level indefinitely.
There is a strong possibility that if you attain financial independence early in life, you may plant the seeds of generational prosperity, but you must also make sure that you instill in your offspring a healthy attitude towards money.
Conclusion
For the sake of this paper, I retained a very basic definition of financial freedom. In actuality, this subject is rather complex.
Please let me know your thoughts on this essay and if you have any further advantages of financial independence to share.