What does Financial Freedom Mean to You?

Ask yourself this question. What is the definition of Financial Freedom to you? Having millions of dollars? Having your dream cars or houses? I bet the list will go on. Now, calm down and think again. What does Financial Freedom really mean to you?

I would like to share my definition of Financial Freedom. For me, it means to have adequate financial resources to fund my requirement on good life. From here, I can conclude that the required financial resources are varied from individual to individual as each of us have different requirement on good life. Have you noted that there are two elements to achieve Financial Freedom? They are “good life requirement” and “financial resources”.

We need to define what are our good life requirements? It could be to have more time with family, less work pressure that lead to better health, to have more time to do what we like to do etc. In short, you want to have more meaningful life. Next, we should review our financial resources required on meeting our “good life”. The higher the quality “good life” we are targeting, the more the financial resources are required.

When all of the above have been identified, we should look at the discrepancy of our current financial resources against your target and generate a plan to narrow the gap. We should consider the 4 elements (i.e. available resources, time, inflation and return) when generating our financial plan. In the next post, I will share in more detail about each element.

Now, you may have your own definition on Financial Freedom, right? And you may realize your Financial Freedom may not need millions of dollars. It is totally nothing wrong with an individual who is having a frugal lifestyle and can achieve Financial Freedom by having a few hundred thousand but not millions dollars. Most importantly, we need to have clear vision on our good life, set it to become our goal and work towards our goal.

For those without a clear vision of goal, the chances on following other people’s goals are high. Please note that you should have your own life but not other people’s. Only you know what you need. So, set your “good life” goal now and make it to become your motive towards Financial Freedom.