Financial Independence Definition

definition of financial freedom

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Financial freedom or financial independence as it is also known, means many different things to many different people but to most of us it represents the flexibility to do what we want, when we want and with complete peace of mind.

Doing as we please does not necessarily mean lying on a beach all day sipping cocktails. As pleasant as that sounds, we would sooner or later become bored.

At the other end of the spectrum, being financially independent should not require that we work ourselves to an early grave, ignoring the important things in life as we go.

So what exactly is this elusive concept of financial independence – is it a simple matter to identify and how do we achieve it?

 

Financial Freedom Defined

The definition of financial independence as it stands today in our modern times equates to developing a way of life in which expenses are met without the need for income from conventional work.

This enables an individual to be set free from the shackles of financial worry by having a well designed plan which effectively manages his or her finances.

There is a common misnomer that being financially independent means freedom from debt. This is not necessarily the case as debt can quite effectively be a valid instrument in a financial freedom plan.

There is a further misconception that being free of financial worries requires a person to be wealthy. In many instances, wealthy people may be so highly leveraged (that is, debt out of control) that they are far from being financially independent.

In summary, financial freedom is a principle built around lifestyle and is reliant on the funds available to secure that lifestyle. When looked at in this way, achieving financial freedom is not as difficult as you might think.

How to Achieve Financial Independence

We are all taught from a young age in school that when you work, you get money. This traditional view is continually reinforced throughout our working lives – you commit time to your job and you get your wage in return. This is the classic time for money swap.

However, this traditional view is superseded when we adopt an approach where money works for us. This leads us to make better use of our time but requires a completely different mental approach to what we may have been doing for a large portion of our lives.

So in order to achieve financial freedom, some very basic beliefs about the role and use of money need to be adjusted. Firstly, accept that money is only a means to an end, and that holding large amounts of it without a plan is not freedom at all.

Secondly, we all have our own views as to what money can contribute to our personal satisfaction. We need to understand what that satisfaction entails before identifying the role that money will play in securing it.

The final word on the role of money in financial freedom lies in the old adage that money produces evil. In fact, the Biblical view is that the “love of money” produces evil.

If you believe your financial independence is a worthy and ethical pursuit, which it is, then money is simply viewed as a valid contributor to the wealth creation needed for your successful outcome. When all is said and done, financial freedom is simply a state of mind.

Free Financial Independence E-book

To assist you with further understanding financial freedom and the practical steps to achieve it, we have a free e-book for you for immediate download. You can get it now by filling in the form below and we will send you the access details.

The Financial Independence Fast Facts e-book is twenty three pages packed full of quick tips and helpful advice covering such areas as:

  • defining and achieving financial freedom
  • financial goal setting
  • the link between health and wealth
  • the difference between wants and needs
  • tips for investing and saving
  • how to go about debt consolidation
  • teaching children about money matters
  • retirement planning, and much more.

This great little e-book is completely free and may well set you on the path to financial freedom – sign up now.

financial independence fast facts free ebook

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