Unless you’ve been living under a rock for the past 30 years, you’ll be familiar with the terms “financial freedom” and “financial independence” or some variation of the two.

And depending on your perspective, these terms might either fill you with intrigue (and visions of some alternative version of yourself, lounging on a beach or boarding a private jet to some fabulous destination) or with annoyance/dread (i.e. please don’t remind me that I’m broke, struggling and generally hating life).

I totally get why this subject can leave people feeling totally confused, anxious and wondering whether it even applies to them. So what does it all mean? What does it mean to be financially free or financially independent? Why should I care and can I even achieve either of these things?

“Financial freedom? What the hell does that even mean? Never having to pay for anything ever again? Sweet!”

Let me tell you that when I first heard the term “financial freedom”, I had absolutely no idea what it meant. In some ways, I suppose that I was led to the concept because of the difficulties that I was facing at the time. I was a young, recent college graduate.

I’d moved to Chicago and was really struggling in life. I’d left university with about $10,000 of debt (mostly past due university fees and credit cards), to which I promptly added another $7,000 in debt (just to afford living in the city) and I bought a wholly unreliable car, that ended up costing me $5,000 in repairs. I was totally sinking and not enjoying life.

Sound familiar? Anyway, a good friend introduced me to Suze Orman, who was (and still is) a personal finance guru with her own TV show. I was immediately hooked by her style of delivery and easily digestible, tough love approach to money matters. Then she introduced the idea of “financial freedom”.

What the hell did that even mean? Never having to pay for anything ever again? Sounds pretty sweet to me. And also totally wrong.

It was the idea of being in a comfortable financial position, so that the usual burdens of life would no longer be, well…..burdensome.

This was SUCH a foreign concept to me, as I’m sure it is for most people. Never having to worry about money? Well, that’s something for the super rich, right? I’d seen so many people worry about money my entire life, it just seemed like something that came with the territory of being a living, breathing human on planet Earth. How could anyone achieve financial freedom?

What is it?

A quick Google search makes it pretty clear. Investopedia defines financial freedom as “having enough savings, investments, and cash on hand to afford the lifestyle we want for ourselves and our families — and a growing nest egg that will allow us to retire or pursue the career we want without being driven by earning a certain amount each year”. OK, that sounds like a pretty cool place to be.

Who wouldn’t want that? Isn’t that why we all drag ourselves out of bed each morning? To be able to afford the lifestyle that we want?

Absolutely. But it’s the beginning of the sentence that really gets to the heart of this idea of financial freedom: HAVING ENOUGH.

Think about it, if you have enough, then you really don’t need much more. In other words, rolling around in swimming pools of cash is not necessary for financial freedom, because for the vast majority of us, that would be MORE than enough than what we actually need for the lifestyles that we want.

This is a really important idea for me, and I think for most people too. Because it means that we don’t have to stress out or feel that we’re failures in life, if we’re not super-wealthy or earning seven-figure salaries every year. Clearly, that’s not necessary for financial freedom (although it definitely wouldn’t hurt).

This house. This car. If you’re not living this life, then you might as well GIVE UP NOW! Photo by Anastase Maragos on Unsplash

So if financial freedom means having enough, then the starting point must be: how much is enough for me and my family? What is the life that I want to be able to live and how do I get there? For most people, they’re probably able to answer this question. I know that I can now, but for the first several years of my working life, I didn’t have a clue. And the funny thing is, the clues and answers were all around.

For example, growing up, I saw that it was important to own a home and property assets, because they provided a good foundation for a family and provided financial security when needed. I also saw the difficulty that my parents and others around me faced to educate their children, because of the high costs of higher education. So, for me, I had very clear examples of things that I wanted to achieve in my life, that would represent “financial freedom”.

Being debt-free (the ultimate freedom, because not owing anyone means that all my income is mine). Owning a home outright. Having investments that serve as a financial safety net. Being able to afford higher education for my children. The list goes on.

I’m sure that many of these are goals that most people have, and being able to achieve these goals with minimal strain, would represent “financial freedom” for most people. The problem is that most people NEVER sit down and answer this question. So they spend their entire working life with a vague idea of what they want to achieve.

“The problem is that most people NEVER sit down and answer this question. So they spend their entire working life with a vague idea of what they want to achieve.”

To take it even further, “financial independence” means to be totally free to make choices, without being limited by financial capacity or income from a “job”. Typically, this means having access to multiple streams of income to be able to stop working for an employer, retire early, live and travel overseas for extended periods of time and/or enjoy luxury goods and services.

People who fall in this category are generally business owners or investors, whose passive income gives them the ability to not only have enough (as defined by financial freedom), but to have excess financial capacity once their fundamental needs have been met and they don’t have to rely on money from active work to support their lifestyles. Sign. Me. Up.

But why should I care?

Good question. All of the above sounds great, doesn’t it? But I can see how it also seems like a long-shot for most people, because of their history, their current situation, or their outlook on life. In other words, everyone SHOULD CARE about their financial future, but not everyone does. Here’s why I think you should care:

1. You’re gonna be old — If you’re lucky, the day will come when you’re not going to want or be able to work to earn a living. And when that day comes, you will either be thrilled that you cared about financial freedom at some point during your working life, or you’ll be anxious that you didn’t imagine this day coming and you’re not sure how you’re going to survive. I don’t say this to be negative, but to make it clear that EVERYONE will have to face this reality at some point, and it’s definitely better to be prepared.
2. Your family are counting on you — Again, not to be overly dramatic, but it’s important. The people ahead of you and the little people coming after you are depending on you to care. It will affect all their lives. For example, if you’re still having to rely on your parents in order to make major moves in your life (even though you’ve been a working-age adult for 5, 10, 15+ years) then you’re actually taking away from their financial security when they should be trying to protect it. On the other side of things, if you’re having to rely on your kids in order to stay financially afloat, then you’re possibly reducing their future chances for financial freedom. So wake up friends. In reality, it’s not just about you.
3. You can do something about it — This is one of the biggest lessons I’ve learned. It’s absolutely my responsibility to look after my financial future; mine alone and no one else’s. This mindset gives me total power to make the choices and adopt the behaviours that will set me up for the kind of life that I want.

I have been captivated by the lessons and thinking of personal finance gurus such as Suze Orman, Robert Kiyosaki, T. Harv Eker, Wallace Wattles and many others who I’ve studied over the years. Each in their own special way has shared important, life-changing knowledge that millions have used to achieve the financial freedom that we’re talking about.

BUT. If I don’t take action, none of it will matter.

And the good news is that time works in our favour, the sooner we take action. The reason that I am convinced that financial freedom is possible, is because I’ve started to implement the principles that I’ve learned over the years, and I’ve seen my life transform.

I’ve committed to a zero-debt life, and spent years paying off my debt to the point that I have no debt today (except for my mortgage, which I’m aiming to pay off early).

I have become an investor and committed to growing my wealth through owning good, income-producing and capital-earning assets.

I have committed to securing my retirement by maxing out my pension contributions. And I am constantly pursuing opportunities to create multiple streams of income.

The point that I hope I’ve made, is that financial freedom can sound like an airy-fairy, pie-in-the-sky, TV-personality hyped concept that doesn’t apply to everyday people like you and me. But, I believe that not only is it a real thing, it has the power to absolutely transform your life and the lives of your loved ones.

It takes an appetite to learn more. And more importantly, it takes a true commitment to changing your family tree, by adopting the habits and behaviours that will ultimately, over-time, lead to financial freedom. It’s a journey that I’m committed to, and I’m excited to help others go on that journey as well.