Many of us talk about ‘financial freedom’ as if we all understand that term in the same, explicit way.
We assume that we all have the same definition, but let me tell you, it does not mean the same to everyone.
Some people think it means not having to worry about food or the roof over your head.
This is fine when you are both working and bringing in the income to cover your expenses.
But are you financially free? What happens if one or two of you lose your job?
Some people think that it means having enough money to allow you to retire.
But many of us retire and have to live to a lower standard.
Some people think that winning a lottery will give them financial freedom.
It could if they manage that money right. But if they go buy those big houses, boats, cars and other toys they want, they will soon end up in the poor house.
So what does ‘financial freedom’ or being ‘financially independent’ really mean?
Are they even the same terms?
Robert Kiyosaki, author of Rich Dad, Poor Dad, says that understanding financial freedom and financial independence are in fact two different concepts.
To him, financial independence means you have created assets that generate enough passive income to cover your living costs.
In this case you may not be financially free, because you may need to maintain those assets or keep generating new ones to sustain your income needs.
Being financially independent is important.
No one wants to live paycheque to paycheque, week after week. That is so stressful.
After years of being a retail franchise owner, a corporate trainer and an HR consultant, I realized I had a scarcity mindset all those years and really didn’t know how to create wealth and financial freedom.
It wasn’t until I became an entrepreneur that I discovered Robert Kiyosaki’s cashflow quadrant, studied his strategy and began to understand financial freedom, creating wealth, building assets and multiple streams of income.
So, in a nutshell, I built a wellness lifestyle business, then I took my business profits and bought several rental properties and in just 5 years, I was mortgage free on my personal home and accumulated a large real estate portfolio.
I continue to build month over month cashflow in my business and then invest my money in assets to create wealth to be financially independent.
You have enough wealth to live on without working.
Kiyosaki says that “financial freedom is much more than having money, it’s the freedom to be who you really are and what you really want in life.”
“Money is just a tool for attaining the things that make you truly happy. That is freedom.” – Robert Kiyosaki
It’s all about changing your mindset, from one of scarcity or fear to one of abundance or growth.
Understanding financial freedom is going after and doing what is important in life to you, without fear or constraints.
“Financial freedom is freedom from fear.” – Robert Kiyosaki
So I would say that you need both. You need to be financially independent and you need to have an abundance mindset to have financial freedom.
Do you have both? Do you have financial freedom?
If you want to learn more about my wealth building strategy, I’ll be hosting a free webinar, called Plan & Profit for Financial Freedom on Tuesday, April 9th at 8 pm ET.
So make sure to register, so you can get the replay. Click here to register.