My interpretation of Financial Freedom: having enough money amassed that investment growth equals, or outpaces, spending. 

Therefore, by this definition, we are free. Since there is enough treasure compounding in our lair, we can live life forever in the lifestyle we planned for, without needing to work for more money. 

The Financial Freedom ladder:

Of course, there is a ladder to climb up through the ranks of personal finance. Moreover, the biggest switch will be going from a Spending to Saving mindset.

“Work hard, play hard” broke:

Firstly, the bottom ladder rung. We blow all our money on daily or weekly routines and the newest gadgets. Likewise, we have no long-term goals. Instead, life goes from one paycheque to the next and shallow joy is found through instant gratification purchases. Loan and debt repayment requires too much willpower so only minimum payments are usually met (hopefully).

Big-experience broke:

Presently, we are past the instant gratification phase; however, are not yet looking for long-term safety. Thus, build up lump sums of money to then use on big purchases or experiences. Travelling, cars, housing, multi-day events, for example. Most of us are likely in this category. Because that saving mindset has already begun flexing, it is very easy to climb upwards from here. The hardest part is taking a couple years off the big purchases to let the savings become powerful and compoundable. It’s all too easy to save up a good chunk of money and then suddenly feel life needs an “upgrade”; it doesn’t!!

Consciously accountable:

At this stage, a reason for having long-term savings has manifested. The pros of saving vastly outweigh spending on a personal level and we begin cutting expenses so that we may put money aside into investments: we begin growing our worth. Eliminating debts and loans with ≥7% interest becomes our main priority, because that money can then easily be transitioned into investments without altering our lifestyle. 

Future-focused:

Finally, we are in control! Firstly, high-interest debts have been vanquished. Secondly, finances have been organised. Thirdly, a strategy for growth has been decreed in writing for ourselves to uphold. We have analysed our income and expenses and decided to trim parts of our spending that had clogged our arteries of wealth accumulation. Moreover, an amount of income will now be hidden away in investment accounts so that our net worth can actually accrue and compound.

Financially-savvy, fiercely frugal (financial freedom is in sight!):

As our ability to find cost-effective ways to live gets stronger, we get excited about setting new challenges for ourselves. Be proud of seeing our eco-footprint shrinking, the new skills we’ve learned, and our disinterest in chasing the status quo. Our healthy money management skills have us regularly analysing our lifestyle to see where to better allocate our hard-earned money; always looking to slim the expenses and increase the investments. Furthermore, now we get interested in the idea of having multiple income streams…     

Side-Ops:

Deciding to look for side-operations (or side-hustles) that bring in extra money. These promote building new skills, learning new job markets, growing our professional network. Whether beginning as part of someone else’s operation or creating our own, this has potential to grow over time and transform into our main business. There is now extra income flowing our way that can be stashed in our treasure chest, propelling our wealth further than possible through solely the full-time job.        

Full-on self-employed:

Being free from an employer is the initiation into Financial Independence! To presently drop the safety of structured salary for our personal ambitions. We have been working for an employer, building up savings and hustling side-op opportunities. Now, we feel like we have enough saved up to give the side(s) a full-tilt effort, and leave our employer. We have enough money that we have left our employer — or feel confident enough in our abilities and side-ops to leave without a safety net — and there is now no one but ourselves finding strategies for money growth.  

Financial Independence:

The pinnacle of working life. For some, this could possibly be defined the same as what I view financial freedom as. Personally, I think of financial independence as fully supporting oneself through means of self-employment where we are living comfortably, with a meaty, secure portfolio in case anything went very wrong. We are not yet able to support ourselves indefinitely off of investments, but have no need to look for a job outside of our own business, and can do business at our leisure. We are completely independent of external money sources, relying only on working the most appealing offers.  

After smartly staying within prescribed lifestyle means while being financially independent, one can then transcend to a realm of pure paradise. Devoid of stress and brimming in bliss: Financial Freedom! 

Financial Freedom:

Finally, never needing to work again, because the annual expenses we factor into our chosen lifestyle will never exceed the amount of growth our investments or passive incomes amass. We live with boundless peace, joy, and love: resting easy knowing we are in full control of our life. Enjoying every day to the fullest, creating our own agenda of what to get up to. Smell the roses, bask in the sun: we are FREE.