One of the most important goals for many people is achieving financial freedom. Financial freedom, of course, refers to the state of having enough savings and investments to afford your desired lifestyle. It means working your desired amount of hours and not having to earn a certain amount of money each year. It means pursuing a career that you are passionate about. Although many people desire financial freedom, only a few of them ever achieve it. The biggest hurdle on road to financial freedom comes in form of high expenditure. People may encounter financial emergencies, increasing prices of daily needs, and escalating debt. Even though achieving financial freedom may seem like a laborious task, everyone can pull it off with the right commitment and game plan.
So why should people try to achieve financial freedom? What and how many benefits are enjoyed by financially free people? The answer is a lot. The first benefit of achieving financial freedom is that you get to live a debt-free lifestyle of your choice. Although paying off all of your debts is a difficult task, it is not impossible. This requires a lot of financial management on your part. Make sure to keep track of your bills, loans, and credit cards. Debts should always be paid on a regular without any compromise. Once a person becomes debt free, they can then move towards saving money for future goals.
The second big benefit of financial freedom is practicing the profession of your choice. You work not out of financial necessity but because you want to. Most people tend to work jobs that they don’t like or have a passion for. Your average person works for 8-9 hours a day and sometimes even longer if overtime comes into play. Financial freedom makes you into your boss. Without monetary concerns, you can work for how many hours you like. You can pursue the profession of your choice as you can withstand financial losses. Keep in mind that financial freedom doesn’t mean that you won’t have to work for the rest of your life. It means working the job of your choice which generates enough income to keep you afloat in case of any financial emergency or loss.
Financial freedom also enables you to increase your net worth over time. Even after attaining financial freedom, things like market fluctuations, economic fluctuations, and inflation can create further financial challenges. The ideal way to tackle these challenges is through your savings. Being financially free doesn’t mean overspending on things that you don’t require. You should always spend less than you make. Also by having multiple ways of generating active or passive income (through investments) a person can easily grow their net worth over time despite inflation.
In short, financial freedom is when you are no longer required to give up your time in exchange for earning money. When your income (from active or passive means) is more than you spend, then you are financially free.