Finacial Freedom - What does it really mean

Meaning of Financial Freedom

Financial freedom is an idea that has become linked with wealth creation and its use has increased recently. The term is a description of a lifestyle which is planned around what we want for ourselves, it usually also indicates that an individual is in complete control of their income. Financial freedom carries with it the idea that one can be free of “money worries” as long as there is a source of income that can resource the desired lifestyle. Wealth creation then becomes a method of establishing this financial resource.

The idea of financial freedom does not necessarily mean that you are free of debt. However, it does mean that you will have to redefine debt as one of your lifestyle expenses. If you have debt then it has to be constantly considered. By creating wealth and acquiring financial freedom the focus is moved from debt being a burden and to an expense. This is then reflected in our wealth creation goals.

Financial freedom is often perceived and equated to being rich however this is a misconception. We know and understand that rich can mean having a number of millions in bank accounts. However remember that financial freedom is about having the financial resources to live the lifestyle you desire. For many people their expenses and running costs could mean that they are restricted and not as financially free as first appears. Therefore financial freedom is an idea that is linked to your desired lifestyle. Financial freedom is about your expenses and the amount of money you have to cover them. This view is crucial in wealth creation and in forming wealth creation goals. So depending on your desired lifestyle financial freedom is not as difficult to achieve as many initially think.

Financial Freedom and Time

For many people, financial freedom is about being able to decide how and in what way they spend their time. This is also where the concept of time is money comes into force. In reality, someone who has financial freedom will see that money is time. With this comes the idea of time freedom. In wealth creation this sense of time freedom is a crucial step in acquiring financial freedom.

A crucial element of having financial freedom is that it means less of our time is taken with generating income to meet our expenses. Financial freedom then allows someone to spend time on activities they want to do, without trading your free time for income generation. Wealth creation then is about is about creating financial freedom which in turn generates more time and money. It allows people to redefine what is meant by work and the time spent directly generating income.

Achieving Financial Freedom

Wealth creation and achieving financial freedom is a particular mindset. This is where for many people the invisible barriers and attitudes we have about money kicks in. For many money, and work and wages cannot be separated. The equation is that we put in time at work and then we get our wage. However, wealth creation principles informs us that financial freedom removes the idea of the time-and-money-swap and it gives the idea of making money work for us.

In wealth creation to achieve financial freedom a change in mindset and a detailed thinking through of a desired lifestyle is required. For many people the invisible barrier here is a mindset based on routine and a belief about the amount of time to invest in wealth creating activities. This is why time becomes a vital aspect in changing our attitudes about how we use our time.

Another mindset that quite often needs to change is our attitude towards money. Understanding that money is only a root to achieving an end is one aspect. Making the direct link that the greater amount of money one has the more financial freedom we have is a misconception. If you have a great amount of money and a great amount of expenses the financial freedom achieved may be restricted. It is worth noting here that financial freedom is a personal perception and the lifestyle you desire.

The other attitude and part of our mindset is that money is negative. While we are familiar with the saying that “money is the root of all evil” and it quite often seems relevant, thinking that this is so the case will provide a negative view about creating wealth. This negative attitude towards wealth and money is known as Affluenza. Financial freedom is ultimately a mindset, the good thing is that it is a mindset that we can learn and acquire.