How To Attain Financial Freedom?
“What is freedom? The power to live as one wishes to.”
When we asked the same question that what is Financial Freedom to different people, each one of them answered it differently. Some said having a lot of money in the bank, while others quoted spending time with family, doing things they enjoy, early retirement, etc.
Freedom is “the state of not being imprisoned or enslaved”. We think we are free because we aren’t imprisoned, so we can make our own decisions as we live in a free country.
What is Financial Freedom?
In a similar context, let us look at your Financial Freedom. Are you stable enough to manage your finances, like home loan, car loan & credit card bills? What would happen if you stop paying these? It’s simple – your credit score would plummet & you’d be under huge stress. And once you get in such a situation, your financial freedom gets eroded.
Financial freedom is about following your passion, making choices & decisions that you can pursue without any second thought. Financial freedom means being able to work at your pace, doing things you enjoy, live life at your own terms & maintain your desired lifestyle without a regular paycheck.
For some people, Financial Freedom is retiring early while others feel it’s about working well, grow vertically in career, spend less and save more for a rainy day. Financial freedom does not require that you retire early to a life of leisure, it’s about how you spend your time, money, and energy in a more meaningful way. Having autonomy and independence in your daily routine that allows you to design a better life for yourself.
What does Financial Freedom mean to you?
Ask yourself these questions:
– Do you enjoy your job and find purpose in the daily routine?
– Have you found a meaningful life-work-freedom balance?
– Are you happy with your existing lifestyle?
Mr Raju is a young and energetic lad of 25 years ago. After completing his graduation, he joined as a trainee in one of the real estate firms. With full of enthusiasm, he learned the tricks of the trade-in no time. By the time he turned 28, he started his own firm which dealt in real estate around the town. He worked hard day and night to achieve his dream of being the most successful businessmen in his town. His hard work paid off and in no time he was doing very good business. By 35, his firm grew significantly, he started making more revenue & profits, hired more employees & even opened more branch offices. By 40, he & his wife were blessed with 2 lovely children & his life was sailing perfectly. Now, Mr Raju started feeling that because of his work pressure, he was not able to contribute time for family. So one fine day, he felt that the wealth he has generated would be good enough to take care of his future expenses & decided to take retirement and spend the rest of the time with the family. By the time Mr Raju turned 50, he started experiencing financially insecure. Due to the market recession, his properties were unsold and the wealth he created slowly started eroding & then he started to worry whether he can sustain the same lifestyle he enjoyed for so many years.
In another case, Mr Srinivas aged 35 is an employee in one of the MNC, earning a salary of 1 lakh/month with 2 dependable children. He was not able to save anything after spending money towards monthly household expenses. Suddenly, one fine day he got a job change and along with that even his spouse also got a good job. Now the combined household income raised from 1 lakh to 2 lakhs. Immediately to save the additional flow of money they thought of investing the surplus in the property and bought a good house worth 1 crore. As they did not have that much amount in cash, they preferred to take a home loan and pay 1 lakh in EMI. Now the situation became the same as it was earlier where they were only able to meet the monthly expenses. But, they had the satisfaction that they now have a property worth 1 Cr. Life was sailing smoothly when suddenly Mr Srinivas had a medical emergency and had to spend a lot of amount for the treatment but unfortunately, he could not be saved. The situation demanded to sell their property to clear all the outstanding debts.
What went wrong in their journey to financial freedom?
If we look at the above two cases, even though both look different but if we analyse meticulously, both are the same, where Mr Raju or Mr Srinivas both failed to understand their current financial position and could not foresee the future. In the first case, Mr Raju could have properly planned for liquidity in his assets, rather putting all eggs in one basket of real estate that could have saved him in the time of recession. At the same time, Mr Srinivas had a chance of planning for the children’s future by investing in proper diversified investment and also could have taken adequate cover for the Medical and Pure Term Insurance, which could have saved the property & family would still meet the important financial goals such as Children’s Education.
If Mr Raju and Mr Srinivas had taken due diligence and spoken to an expert before taking life’s most important decisions of retirement or purchasing the property, the situations could have been far different to what we learnt.
The journey to financial freedom is not something that happens overnight. If you want to enjoy financial freedom, you also need to plan and put that plan into action to reach that point to ensure that at the end, it will be worth all of the hard work that you put in.
Changing old habits are always scary, but if you don’t take action now, what does your financial future really look like? All you need to do is take that one step, do one thing that will get you closer to your financial freedom, the key lies in taking action.
What is Investment Advise?
Investment advise means advise relating to investing, purchasing, selling or otherwise dealing in securities or investment products and advice on investment portfolio containing securities or investment products.
What is Financial Planning?
Financial Planning is defined as an analysis of current financial situation, identification of financial goals, developing and recommending financial strategies to realize such goals.
What is Financial Freedom?
Financial freedom is a state of life where one is free from the stress of ‘What if’s’ of life. In simple words, it is when we have planned for all exigencies and are ready for both certainties and uncertainties of life.