What Everyone Should Know About Achieving Financial Freedom

I believe that achieving financial freedom is possible for everyone! And in many cases I believe that many of us could find financial freedom tomorrow!

Do you believe me?

Why or why not?

It did not say that you could be “rich” by tomorrow, or that you could retire tomorrow, or that you would be making millions of dollars a year, or that your net worth would mysteriously shoot to stratospheric levels.

No, what I said was I believe that many of us could find financial freedom tomorrow!

The first place to start is to determine what financial freedom means to you.  This seems like a logical place to begin, actually defining what the term means.  With this definition we can then compare our circumstance to see if we have achieved financial freedom yet, and/or figure out what steps we need to take to achieve it.

I don’t think many of us spend the time to actually think about what financial freedom means to us…let alone develop our personal definition.  I know I didn’t for many, many years.  I only had a vague idea of what I was after.  In my case the vague idea was a specific dollar amount based upon the financial spreadsheets and personal finance budgets I maintained for my family.

However, while I had a specific dollar figure…that kept changing based upon my increased success by the way, I had not considered most of the other aspects of my life.

For example, if I wanted $1,000,000.00 in the bank…if this was what I needed for financial freedom this was only true for a limited set of assumptions.  What if I wanted to live in a “Mansion”, with a butler, and maids, and a chef…and throw in a driver while we are at it, well I probably would need much more than a million bucks for this lifestyle.

In contrast, what if I wanted to live in small town USA somewhere in the middle of the country, would I still need $1 million?  For this example lets assume the answer is NO.  So I could actually achieve “financial freedom” a lot sooner than I anticipated and would need less than a cool million.

Let’s try this example…the majority of financial “experts” and personal finance models say that you need 80% of your current income when you retire.

Says who !!

If we take these messages as facts it will have a profound impact on when we retire and when we achieve “financial freedom”.  It took me many years to see the mistake I was making by using the financial models without question.  Each time I received a promotion and made more money, the amount of income I needed in retirement increased as well.

It went from 80% of $1,000 or $800, to 80% of $2,000 or $1,600.  Every time I became “more successful” financial freedom became more elusive.

Finally I began spending some time thinking about what the “financial experts” were saying, and what financial freedom meant to me.  I knew the amount of money I was putting out to maintain our home, there was a cost to our beautiful 3,500 sq. foot home that I knew first hand because of the home budget we maintained.  I also knew that there was NO WAY I needed this size house after the kids were gone (could easily be argued that I did not need it now), and that moving to a smaller home would significantly reduce our expenses.  I would now need less money to achieve financial freedom!

Hopefully, you get my point.  Financial freedom is a personal choice and there is not a one size fits all formula or advice that will work.

Our current lifestyle involves a lot of travel.  Over the past year I have researched and read about a lot of people that spend most of their year traveling.  Many of these couples and families spend less than $25,000 a year to maintain their lifestyle.  My guess is that if you ask these folks whether they have achieved financial freedom the answer would be yes.

They don’t need all of the possessions, all of the consumer goods, and all of the “normal” trappings of western society to make their lives whole.  They live exciting, adventurous, fun, and balanced lives, but choose to spend their time, energy, and money in other areas.

I do not assume to think that this lifestyle is for everyone, my point is that you need to spend the time thinking about it and developing your own personal definition of financial freedom.  You may come to realize that with only a few small changes, or in our case one large change, you can achieve financial freedom.