Understanding Financial Freedom

In several of my articles I have discussed financial freedom or financial independence. For most people this seems to be an abstract and fanciful thought with little meaning in the way of a real or tangible goal.

If you have not read these articles, this is a good time to look through them and think about this concept. When correctly viewed it can make a tremendous difference in our lives.

In brief, what I have tried to show is that real financial freedom is not dependent on great riches. Financial freedom comes from managing our affairs so that we have enough passive income to meet our needs without requiring us to hold down a regular job to provide for our income.

What would it take for you to experience financial freedom? This action step requires only a piece of paper, a pencil, and some reflection. But it may help you to develop a new perspective on your life and your financial goals.

Think about what you really need in order to live happily. Do you really need to live in a multi-million dollar home or would you be just as happy living in a smaller home with far less upkeep?

Do you really need to spend a lot of time traveling the world or would you be happier with occasional vacation trips and more time spent in your garden, reading, visiting with friends, or helping with some humanitarian project?

Write out your thoughts. Figure out how much income you would need to live that life. It may not take as much money to live an independent, happy life as you expected.

List ways you could reduce your cost of living (eliminate debts, reduce clutter like extra cars, etc.). Then reduce your cost of living required by those unnecessary expenses. It is beginning to look more like a real potential now isn’t it.

Finally, think about ways to develop passive income sufficient to meet this required income. You may need to do a little work (read about and study) on the idea of passive income and come back to this step later.

There are many ways to provide for the money you need. The most common are financial investments like an IRA. Others include investments like real estate rentals (these are “passive” only when they are managed by someone else for you).

When you put these thoughts to paper they begin to help shape your life in the right direction. Save your work and come back to it over and over. Keep making adjustments and additions. Think about ways to make it happen sooner rather than later.

Let these thoughts become a driving force in your life. It can change your future and that of your family dramatically.