DOES FINANCIAL FREEDOM MEAN THE SAME THING AS BEING RICH?

No. In fact most rich people are not financially free because as much as they have high income they have even higher expenses. Some of the income that rich people receive is also not passive income. They have to invest a lot of time and effort to ensure that the income continues to flow in. The income is sometimes also not recurring as big deals come and go.

For a rich person to be financially free, they will have to change their spending patterns to ensure that they build assets that are able to provide them with a passive income stream. There is no financial freedom without passive income.

Financial Freedom vs Retirement

Financial freedom must not me mistaken to mean retirement. Financial freedom has a completely different meaning to retirement. Financial freedom is achieved when one can afford to stop working but does not necessarily mean one has to stop working. While retirement is linked to the person’s age and is governed by the laws of the land, financial freedom is not. Another fact to be highlighted is that most people who have retired due to age are not necessarily financially free. Financial freedom can be achieved at any stage in one’s life. Even a 20 year old can be financially free as long as your passive income exceeds your recurring expenses.

Most people find themselves in jobs that are not their first career choice or they love their job but at some point in the future they would like to pursue other passions that may not be able to provide the same level of financial stability as their current job. Achieving financial freedom means one can stop working for money and start doing what they are passionate about without worrying about the bills.

What would financial freedom allow you to do that you cannot do now because you have to work for money to pay the bills?