What is Financial Freedom?
In previous article , we explored the wealth gap and the reasons why the rich accumulate more and more assets. The truth is that money brings more than just privileges; deep down, every single one of us longs for the peace of mind and liberty that wealth provides.
That is also the reason why the wave of Financial Freedom and the FIRE - Financial Independence & Retire Early movement have taken the world by storm and captured more attention than ever before.
As a Gen Z individual who has persistently pursued the financial freedom journey since 2019, I understand that this concept can sometimes be over-romanticized or misunderstood. Therefore, this article will serve as a practical roadmap to help you answer 3 core questions:
Let's address each question together and start designing your own roadmap to freedom!
1, What defines financial freedom?
First, take a moment to reflect and answer a few simple questions:
What would happen if money were no longer a concern for you?
How would it feel to wake up every morning without worrying about arriving at work on time, or stressing over monthly bills just to "survive" day by day?
Looking further ahead, what if you no longer had to stress about building a retirement fund?
And here is the most interesting question:
What if you could live the life you truly dream of?
You, I, and everyone else all have our own aspirations. Some want to build a business they can call their own. Others prefer researching and inventing things that change humanity. Some love shopping to their heart's content, while others dream of traveling around the world...
By now, you probably get the idea of what "Financial Freedom" actually is, right? The state of financial freedom means owning enough assets to not only cover your basic living needs for the rest of your life, but also live comfortably while pursuing your dreams, no matter what those dreams may be.
In reality, even after reaching financial freedom, we will likely continue to work every day until we leave this world. However, those will no longer be the mundane jobs we endure for 8 hours a day, putting up with grumbling bosses and colleagues just to earn a paycheck for basic survival. Instead, they will be projects driven by pure passion, enthusiasm, and joy. Financial freedom allows us to do the work we want to do, rather than the work we have to do.
2, Why should we strive to achieve financial freedom?
Simply because financial freedom naturally unlocks many other types of freedom.
We all have our own challenges in life. However, take a few minutes to think: out of the biggest problems you are currently facing, how many could be resolved with money?
It might sound a bit pragmatic or hard to accept, but in reality, for the majority of people... most of our biggest burdens can be solved with money (keyword here is most, not all):
If you have enough money, you can walk away from jobs you dislike.
-
If you have enough money, you can live anywhere you want (of course, this involves local immigration regulations, but the biggest reason we are bound to our current location is the job that sustains us).
If you have enough money, you can afford the best healthcare services for yourself and your loved ones.
...
The same goes for me; having enough money might not solve everything, but it definitely smoothens the path toward conquering my dreams.
Furthermore, let's look at life through the lens of the Trifecta of Life (the three vital components of life: Time, Money, and Health). You have probably crossed paths with the illustration below somewhere on the internet, haven't you?
When we are young, we have abundance of health and time but haven't accumulated wealth yet.
As we grow a bit older, we still have health and have saved some money, but worries about family, career, and "adult problems" consume almost all our time.
By the time we reach old age and retirement, when our children are independent and a decent amount of wealth is accumulated, our health is gone.
So, when do we actually get to live for our own dreams and ambitions? In reality, there is a golden window in life (known as the Peak Time of Life Period) where you possess all three components, usually lasting about 10-25 years before old age takes away your health. If we assume a lifespan of 100 years, we only have a modest ~15 years (roughly between ages 45-70) with enough resources to do what we truly desire.
The green area in the chart above represents the Peak Time of Life Period — the phase when we have enough combined resources to live out our dreams. The earlier you achieve financial freedom, the further that green area expands to the left, buying you more time to do what you love.
And if we consider "getting to do what we love" as a fundamental pillar of happiness, then financial freedom is the key that extends this happiness throughout our lifespan. Therefore:
The ultimate value of financial freedom is not the accumulation of assets, but the time bought to do what you truly love !
That is precisely why I am deeply passionate about achieving financial freedom, and why I highly encourage everyone to conquer this milestone!
3, How can we attain financial freedom early?
First and foremost, you must recognize that the journey to financial freedom is a long-term game (if not an incredibly lengthy one). Therefore, there are two non-negotiable skills you must cultivate if you wish to succeed on this path:
-
Personal financial management skills
-
Discipline and perseverance
First, if you play a game without knowing its rules, you are bound to lose. You might win a few rounds out of pure luck; but luck is a matter of probability and will never stay by our side throughout the whole journey. Relying solely on luck gives you a 99% chance of losing the entire long-term campaign. Therefore, master the rules of the game (in this case, financial literacy and skills), embrace minor setbacks (view them as tuition fees or learning opportunities), and persistently plan to win the ultimate long-term campaign.
Note: One of the best ways to acquire financial knowledge and skills is to dive into all of my personal finance articles .
Second, if you want to reach financial freedom early, you must accept sacrificing certain comforts in the present. There is no such thing as a free lunch. To accelerate our journey toward freedom, trade-offs are inevitable. Here are a few examples of what I chose to sacrifice when I committed to this path:
Investing time and energy into mastering personal finance principles and skills
Cutting back on casual gatherings, parties, and impulsive shopping to save and invest as much as possible
-
Stepping outside my comfort zone (Comfort zone) , embracing failures and calculated risks to test out growth and investment strategies, finding what works best
Instead of chasing fleeting desires for a quick dopamine hit, choose sustainability over temporary trends. Choose "enough" to buy your ultimate freedom.
Are these sacrifices worth it? There is no one-size-fits-all answer, as everyone has a different tolerance for trade-offs. But for me, years of being fully free to do what I love in the future is a reward grand enough to justify trading off a little comfort today.
Ultimately, the supreme objective of achieving financial freedom is to bring us a happier life. Because of this, learn to practice gratitude and find contentment in what you already have.
The magic number required for financial freedom is directly calculated based on your daily living expenses. If you are someone who constantly covets everything and is never satisfied, no amount of money will ever be enough to grant you financial freedom. Conversely, if you clearly define what truly brings joy to your life, you will find your destination point on this journey, making it a completely achievable goal.
The more grateful and content you are with what you have, the closer the milestone of financial freedom moves toward you.
Bottom lines
Through this article, you should now have a solid grasp of the concept of financial freedom , the profound value it yields , and how to achieve this state early . I hope this information gives you a vivid picture of the road ahead. If you decide to embark on this quest for liberty, be sure to keep up with my personal finance series .
→ Read the next article: Setting up a Personal Financial System
Thank you for reading my article!
Kim,