"Financial Freedom" - The magical buzz words, lot of you might have heard yelled at you in radio's or whenever you attend a finance or investment seminars. It is very lightly used these days without any weightage to the actual concept. Let us put some thoughts together to dwell on to understand better.


What exactly mean to be Financially Free?

I know many of you have the answer just right under your collar. Financial freedom means "Earn more so I don't have to count each dollar I spend and not worry about paying my expense every month" Or "Make more money to spend like there is NO tomorrow".

Is that your answer or something close?

If you think you got the right answer, I am sorry to say that you are wrong. It's not just you got the answer wrong, it's just general outlook is not in synch with the reality. When you search google, you will get the first result from Wikipedia as "Financial freedom describes a well-planned lifestyle where one no longer is required to work for income to cover their expenses. ..."

It is not your fault to get it wrong. It's the people who started it all out and echoing everyday so it is easy for them to mold to their own view point.

Like many of you I also thought that is the answer few years ago. We all think if we have more money that will solve all the problems. No, it is not going to solve it. It is actually going to create more problems and even bigger worries.

Financial freedom is not about having or earning more and spending whenever for whatever you want.

According to me, "It is all about being content with what you make now and manage to work within the boundaries instead of stretching it long to get in debt". It is being self sufficient with the money you have and manage to spend wisely for all the expenses and grow it efficiently for the future. That is what I call Financial Freedom.

You might even have million dollars. If you don't manage it wisely, it will vanish in a month. With that million dollar comes great power and lot of responsibility. If you are not responsible enough to manage it, you will fail pretty soon and you still won’t get to sleep well at night.

Let me take a simple example. For a scenario, we assume an average middle class American earns on average of $40,000 - $50,000 a year. If he makes a habit to work with this income limitation and make proper planning to take care of all the expenses and also manage to grow some money(10%) for the future that's what I call financially free. If you don't have debt, you pay off and you have ability to manage and grow your hard earned money, that's simply financially free in its own version.

Our schools or college system, never teach us lot about Money management unless you opt for finance course. If you take one, it will be more theoretical & money lessons can only be learned in a hard way by practical means. But you don't have to learn from your experiences and mistakes, you can also learn from others mistakes. Thats a wise way.

So don't make the mistakes others are making by going beyond your boundary unless you have the guts to pull back otherwise you will be in deep deep debt by inviting trouble. Watch out folks, don't just take the advise of you finance guru's or planners. Give it a thought and dwell on something on your own.