What Exactly Defines Financial Freedom?
The year 1985 was the worst of our lives for Kim and me, as well as one of the longest. Anyone who says that money isn’t important obviously has not been without it for long. Kim and I fought and argued often. Fear, uncertainty, and hunger shorten the human emotional fuse, and often we fight with the person who loves us the most. Yet love held the two of us together, and our bond as a couple grew stronger because of the adversity. We knew where we were going. We just didn’t know if we would ever get there.
We knew we could always find safe, secure, high-paying jobs. Both of us were college graduates with good job skills and solid work ethics. But we weren’t after job security. We wanted financial freedom.
Often I hear people say things like, “If I only had a million dollars I’d be financially free,” or “If I only had that high paying job, all my money problems would be solved.” They are shocked to hear me say that it doesn’t take money to be financially free.
Most people define financial freedom as having enough to retire. They work hard all their lives, putting money in a 401(k), they hope they can make their proverbial million dollars or whatever number they have in their head. Often times, because they will not have steady income outside of their savings and investments, these people are advised by their advisors to cut back their expenses in retirement and live below their means.
They work hard all their life just to decrease their quality of life when they’re ready to enjoy the fruits of their labor. It just doesn’t make any sense to me. And it certainly doesn’t feel like financial freedom.
Financial freedom is much more than having money. It’s the freedom to be who you really are and do what you really want in life. And many of us lose sight of this by putting others first and playing many different roles such as parent, spouse, employee, friend, and more. It’s not that those are bad things. Rather they are things that often get in the way of discovering who we want to be in life and going after it. The amazing thing is when you invest in yourself, it pays big dividends not just for you but for all those who love you. They see both your example and experience the joy that comes from realizing your greatest potential.
Find Your Why
Understanding what really motivates you to be financially free helps you overcome your excuses. People use excuses when they don’t want to do something. Of course, they don’t call them excuses; they call them reasons. The “reasons” always sound perfectly rational and acceptable. But in reality, the “reasons” are often really a way of saying, “I’m not going to do that,” or “I don’t want to do that.”
But in order to push past the excuses, you need to find your personal reason why you want to invest. The most important thing you can learn is your personal reason why you want or need to invest. For some, the personal reason why is more free time with family. For others, it’s the ability to travel the world. For still others, it’s to invest more time in their health.
Whatever your reason, it must be compelling enough to keep you going. The following is a system to help you determine your personal why for investing.
Find a quiet place with no distractions—a setting that allows you to get in touch with yourself.
Take your time with this process.
Don’t rush through it.
Your personal reason why may come to you in an instant or you may find you want to think about it over time.
- Ask yourself, “What is my true reason for wanting to be financially independent? Think about:
- What you would do if you never had to work again
- What you would do if you had all the time in the world to spend exactly as you wanted
- How your life would be different if money were not a worry
- Write down everything that comes to mind.
- Ask yourself again, “What is my deep-down core reason for wanting to be financially independent?” Look deeper. Write down everything that comes to mind
- Ask yourself again, going deeper, “What is my innermost, heartfelt reason for wanting to be financially independent?” Write down everything that comes to mind.
It may seem simple and rudimentary, but if you continue to ask yourself the question, again and again, going deep within yourself each time, until your personal reason why is crystal clear, you’ll find surprising answers that will keep you going, even in the face of great adversity.
Change Your Mindset Then Change Your Future
Today, if you’re running into a wall and not experiencing the success you were hoping to, I ask you to take a look at your mindset. How are you viewing the world? Are you falling into old habits and ways of doing things that resulted in the same lack of success in the past?
If so, it’s time to stop being the same person and doing the same things. It’s time to change.
The path from one quadrant to the next is an internal journey. It is a journey from one set of core beliefs and technical skills to a new set of core beliefs and skills. The process is much like learning to ride a bicycle. At first, you fall down a lot. Often times it is frustrating and embarrassing, especially if your friends are watching. But after a while, the falling stops and riding the bicycle becomes automatic. If you fall down again, it’s not that big of a deal because you now know that you can get up and ride again.
There are two statements that kept me going personally. One was my rich dad’s words of advice when I was on the brink of quitting and turning back: “You can always quit. So why quit now?”
That statement kept my spirits higher and my emotions calm. It reminded me that I was halfway there, so why turn back? The distance going back was the same as going forward.
Life is about choice. When we are young, choices are generally made for us. As we grow and mature, we learn to make our own choices, a slow, steady process fraught with both joy and frustration. Now it’s time to make one of the most critical decisions of your life—whether you’ll seek financial freedom or not.
Editor, Rich Dad Poor Dad Daily