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I’ve been pursuing financial freedom for decades. I’ve done the seminars, listened to the podcasts and read the books. I’m not a novice – I started investing decades ago – but somehow, I never seem to get closer to it. Life happens: family grows, medical emergencies, unexpected expenses. Financial freedom (when your investments are cashflow positive and can fund your expenses) never seems to get much closer. I’m tired of trying to get out of the ‘rat race’. What am I missing?
Ahh, the financial freedom dream. It’s one that starts with good intentions: you discover this concept, and you are mind-blown. Who knew that if you invested enough, you could live off your investments, retire early and then do what you really wanted in life?
Financial freedom, where your investment income covers your expenses, is an oft sought after goal. But sometimes it can feel more like a prison. Credit: Simon Letch
You’re excited. You jump on the bandwagon to take control of your finances. You start saving, learning to invest, optimising every dollar. This vision has breathed new purpose into your life. Every decision starts to be one made in service of this goal.
That job you hate? It’s OK, it’ll be worth it when you’re financially free. Vacations? Nice clothes? Fancy restaurants? No one ‘needs’ that. You’re focused on something more important.
You whittle your life down to the bare necessities. You sacrifice, restrict, deprive yourself. You talk yourself out of your desires. You don’t really “need” that anyway. Minimalism, right? You tell yourself this is what financial success takes – discipline, control, focus, delayed gratification.
But somewhere along the way, you start to feel less free. Every small expense makes you cringe. That could have been saved, invested, put towards a future goal.
You see others enjoying their life, carefree. You tell yourself – that’s irresponsible. They don’t know. You’re doing it right. But a part of you yearns to feel that freedom. You lost sight of when this thing that was meant to set you free – become the cage.
Redefining financial freedom
You’ve been sold the idea that financial freedom is a number. Specifically, the point at which your investments cover your expenses, and you no longer need to work for money anymore.
This, you’ve been told, is the peak of the financial mountain top – you’ll be free once you get to the top, and no sooner. Before that, you’re in the ‘rat race’, a slave to the system.
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The problem with this version of financial freedom is it creates an underlying dissatisfaction with the only part of your life you can experience – the now, the present moment. It suggests that freedom is something you’ll experience in the future – when your bank balance permits you to.
Oh, and when you finally get there? You still won’t feel free. You’ll be worried about losing the freedom you worked so hard to attain. You won’t have trained your mental and emotional muscles to enjoy freedom, you’ll have trained them to optimise for financial growth.
So, the thing you’re missing is not a financial skill. You know how to save and invest. But the thing you might be missing is a broader definition of financial freedom; one that incorporates your mental and emotional freedom.
Financial freedom is more than just a number, it’s also a mental and emotional experience. You can have money, and still not feel free. So, while attaining financial freedom takes financial skills – enjoying it takes emotional skills.
Think about it this way. There is a level of financial freedom that is available to you, right now. How often do you savour the financial freedoms you already have? Maybe it’s the freedom from stressing about unpaid bills, the freedom to afford little luxuries with ease, the freedom to buy assets, save money, build wealth. There is so much freedom, right here, in the present moment.
The journey isn’t just something you have to suffer on the way to the top; it is an integral part of your experience to the top.
This is a different kind of freedom in itself because you no longer have to wait until some future point, some specific financial milestone, to give yourself permission to enjoy freedom. You can give yourself that permission now, with whatever you have available to you.
In doing so, you might find that you fast-track your financial progress as well. Why? Because you’re no longer climbing the mountain of financial freedom, constantly wondering “Am I there yet?” Instead, you’re savouring the views all the way up.
The journey isn’t just something you have to suffer on the way to the top; it is an integral part of your experience to the top. Financial freedom stops being an item to tick off your list, and starts being an experience you get to live.
When you pair the financial skills of building wealth, with the emotional skills to maintain and enjoy it – that’s when you get real financial freedom; the kind that doesn’t just give you a richer bank account, but also a richer experience of life.
Paridhi Jain is the founder of SkilledSmart, which helps adults learn to manage, save and invest money through financial education courses and classes.
- Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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