The topic that we address in this article is not a few people associate it with science fiction. Many, although they yearn to achieve it, deep down they believe that it is a chimera. And there is something that most ignore: what is financial freedom?
The first thing that comes to mind when talking about financial freedom is the fantasy in which we find ourselves with infinite economic resources with which we can indulge ourselves with all the unimaginable tastes. Sure, a wealth that suddenly assails us and abruptly changes our lives.
The first thing to say is that financial freedom should be the goal of every human being. We perceive it as a utopia to the extent that we do not know how we can take advantage of the capital system and we disdain the planning of our personal finances.
In pursuit of financial freedom
It is well known that we all have a productive stage in which we are at full capacity and then we go through another moment in which our vitality already diminishes. Getting to that moment enjoying financial freedom is the least we should aspire to.
However, it is not a matter of madness to try to bring closer in time that moment in which we do not completely depend on great efforts to have the economic resources that allow us to pay for our lifestyle. Of course this will depend on our clarity of purpose.
And it is that financial freedom refers to the possibility of specifying a personal economic plan in which recurring passive income is received for which our presence and dedication is not necessary.
Passive income
Contrary to traditional income, passive income is income that we receive as a result of assets that are capable of producing money. It is the old mantra of putting money to make money come true.
This does not have to be a dream and an increasing percentage of young people understand the importance of accumulating savings that eventually serve as “seed” capital, which little by little give rise to an investment portfolio.
Focusing on acquiring assets that provide passive income is the strategy that should be on everyone's mind regardless of the activity we develop. Professional preparation should always be accompanied by financial information that illustrates us to make intelligent decisions in this regard.
Financial freedom and lifestyle
Financial independence is achieved when we have assembled so many productive assets that they provide us with sufficient income to preserve the lifestyle that we have adopted throughout our lives. Each one sets the bar at the level in which they feel best.
Each person establishes the standard of living with which they feel comfortable, so a plan to seek economic independence in the medium or long term will always be something very personal.
Ideally, even the returns from passive income provide us with the ability to have surpluses that can be used to reinvest or to indulge ourselves.
However - and as we pointed out at the beginning - financial freedom does not imply infinite resources that allow us to do whatever we can think of. So what is financial freedom really?
When do we reach the goal?
These questions do not have a unique answer and it depends on the resources desired by each person. Financial freedom refers only to the possibility of receiving sufficient income, but it does not quantify it. Definitely. It is not synonymous with absolute wealth.
In principle, public pension systems were focused on solving this dilemma of having sufficient resources to go through the last years of life; however, its formulation already makes its operation unviable in the short term.
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From now on, the smart thing to do is to draw up plans that combine savings and diversified investments from the first day we enter the job market, so that we gradually balance traditional income with passive income.
Achieving financial freedom does not imply complete leisure either, since we will always have to attend to and watch over our sources of resources. What we will have is the freedom to decide how to use our time without the restrictions imposed by being an employee.
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