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What is Financial Freedom ?

 In this fast moving world we are trapped  in a vicious cycle of money i.e we earn money for a better  livelihood and we end up in an unpleasant life we never wished for ourselves and in a race to earn the money. We often wish to get out of this situation and want to enjoy our lives to the fullest. But we neglect the possibility of the situation considering that only rich people can do this as they have enough money for their next three generations. 

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Any person in this world can be free from this money trap and make money work for himself rather than spending time to earn money. We can then spend time with our family, friends and things which we wanted to enjoy in life. This amazing miraculous phenomenon is Financial freedom. 

For this one needs to understand the fact that this is not a get quick rich method or a lottery that leads to financial freedom. It is purely a game of time and money. We often value money more than time and that leads to the trap in a vicious cycle. To achieve financial freedom one has to value time a lot more than money. Then only you will get "free-time" and money will work for you in your "free-time". One thing you will need to do is to set a time when you want to be financially free and this shall practically not be in days or months but decades i.e 10 years from now or 20 years from now. So, how does this financial freedom logic work?

Albert Einstein once said that "Compounding is the eighth wonder of the world" and this will work like a charm for you with time. All you need to do is put a little saving every month in a financial investment instrument i.e Fixed Deposits, Mutual Funds, etc. Time here is your friend and will make the money grow on the money invested. By the time you want to get financial free , you will have enough corpus and you will spend your living expenses on the interest earned on the corpus. For example, if I invest rupees 5000 every month for 20 years on a interest rate of 10%. Your invested value of 12 lakhs rupees will turn roughly to 36 lakhs rupees. If you take retirement from your work after 20 years, you have 36 lakh rupees and 10% interest every year i.e 3.6 lakhs rupees is the amount you get for your annual expenses.

What is Power of Compounding? – Max Life Insurance

As you saw, it is not a magic and everyone can achieve financial freedom with time and money. In fact this was regarded as the most trusted and stable condition till 2000s. In layman words we call this Pension.  The people who get Pension, live today a very comfortable and stable life and enjoy their time happily. Unfortunately after 2000s privatisation and globalisation led for more ambitious earnings and lifestyle. Therefore, Pension sounds boring today to us. In the ambition for a cool lifestyle, we have become slaves to time and it is high time for us to understand ourselves and give a priority for our own time rather than money.

Hope you like this article. Will create another article on How to achieve Financial Freedom?

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Comments

  1. UnknownAugust 12, 2020 at 12:53 PM

    Great! keeep going

    ReplyDelete
  2. UnknownAugust 12, 2020 at 1:33 PM

    I think one needs to have a correct or appropriate work life balance in the present 'time' to enjoy the future 'time'.The key is to have your happiness index/ goal realistically.assessed and planned. Happiness does not necessarily means money...
    You may or may not have money but all without exceptions want is happiness.President Abdul Kalam was happy with a 2BHK house while another president wanted to grab illegally properties..both wanted to be happy...
    Essentially one needs to envision.what is his/her measure of happiness and dovetail and work towards the financial freedom accordingly

    ReplyDelete
  3. UnknownAugust 12, 2020 at 7:48 PM

    Correctly explained power of compounding .
    Great going.
    Keep it up

    Yashvir

    ReplyDelete
  4. UnknownAugust 13, 2020 at 9:10 AM

    I loved this article! Kudos to the writer. So true that pension has gone out of style in present times, but really if you see what people like me and you are trying to do via investing in mutual funds is fundamentally the same concept! Looking forward for more articles from you!

    ReplyDelete

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