Define 'Financial Freedom' and achieve it

Define 'Financial Freedom' and achieve it

What you want to achieve in life would be completely different from what you want.

What does financial independence mean to you? No, not theoretically. What does it actually mean to you? It means different things to different people. While, you and a friend may be of the same age, might even be in a similar job profile- your priorities in life could be completely different. What you want to achieve in life would be completely different from what he/she wants to. While it is great to know the world around you, you must first know yourself. And this step actually requires that you introspect, look inside and figure out what you want to do in life. While money may not buy happiness, it does help us focus on things that matter to us. For example, taking your parents for that religious trip or taking your family for that exotic vacation that you’ve been dreaming of. It could be anything. The idea is that you think about what is important to you and then of course, to get there. But invariably, what we do is invest without knowing when we will need it back or what that investment is for and we get swayed by markets, emotions and other external factors to take action on those investments. Investing is good, but that is the next step. I’m glad you asked what the first step is!

The first step is put a laundry list of all your dreams, all your goals.

The second step is to put a year and an amount to each of these. So far so good. Now the third step and here’s where it gets difficult. Prioritise these based on how important they are to you. Why do you need to prioritise? Because while dreams and aspirations are unlimited, the reality is that the money we have is limited. We can do two things when we do an exercise like this: Either compromise on your goals or compromise on your current lifestyle to ensure that the savings that you need to invest every month are in line with your goals. The inertia to get started is super high because we get intimidated by words like “Financial planning” and “Asset allocation”. These are two terms actually, which if befriended would make your dreams come true. So, invest keeping in mind your goals and you’d be surprised how your investments are working to make it happen for you.

So again, what does financial independence mean to you?

I’ll give you a couple of examples of what it means to different people and may be that’ll help you define yours as well. To a friend of mine, financial independence meant not having to take money from his parents (as he had just started working and his parents partly supported him financially), to another financial independence meant not being broke before the end of the month; to another it meant that his money worked for him(basically that he got a paycheck at the beginning of the month without actually working- his money/portfolio should give him that income) and to another it meant that he didn’t have to look at the price tag before buying an item- be it a suit or a car. So, happy independence day and I hope you soon celebrate a day of your financial independence too.

Happy Investing

Source:Moneycontrol.com