The first marker on the path to financial freedom starts with knowing where you are currently. The more steps you can achieve, the faster shall be your journey on the path to financial freedom. Some of these steps can be behaviors, tactical and strategic decisions. Your quest for financial freedom can be broken down into 9 essential steps. You can pick your ideal level of financial freedom depending on your current situation and lifestyle. The idea is to save 50 to 75% of your income, which is then used to accumulate assets and helps in generating enough passive income to provide for retirement expenses. The concept of FIRE is around frugality with participants intentionally maximizing their savings rate by finding ways to increase their income or lowering their expenses. FIRE is an abbreviation for Financial Independence, Retire Early, and is a lifestyle that is becoming popular in the West with people in their 20s and early 30s. Level 5 is an interesting one and can be crudely expressed as the FIRE movement. But most importantly not going broke while doing so. Freedom of time happens where your cash flows are sorted in a way that allows you to leave your job to follow your passion or spend more time with your family. This is exactly why financial freedom is nothing but financial control.Īnother noteworthy level is level 4 i.e. Even a super-rich person might be earning and spending to the limits that he would be living under tight financial conditions. ![]() It is an interesting level because living under tight financial conditions need not be limited to the working poor. One of the most interesting levels is the first level, where you are not living paycheck to paycheck. You experience the joys of traveling the world, spending time with friends etc. You have accumulated enough assets and/or passive income streams You adjust or downsize some living standards to retire early You leave rat race to follow your interests & not going to be broke doing it You are earning enough, doing things you enjoy & continue saving Your savings can support a sabbatical or extended vacation ![]() This flow from the conscious attainment of the other freedoms.You have an emergency fund for contingenciesĮnough Money to Quit your Job (for a bit) ![]() Financial Freedom should create time freedom for you.įreedom of Relationship: The final freedom is the freedom to enjoy business and personal relationships of the highest quality. Clients often use their financial freedom to work in charity or public service, while for those with greater wealth we help look at ways to effectively support their families and the causes they espouse.įreedom of Time: Although this is self-explanatory, the best retirements are generally accompanied by the phrase, ‘I don’t know how I ever had time to work’. The level of wealth needed varies for everyone but once it’s achieved it allows you to consider other freedoms.įreedom of Purpose: Is the wealth that’s been accumulated to be used to support a lifestyle of freedom, or support working for intellectual curiosity over pure financial gain? Many want to use some of their wealth to support family, future generations or philanthropy. For a variety of reason they may choose to work in a different capacity after a front- line career, or continue with a commercial focus.įinancial freedom becomes a choice when you achieve what you define as Freedom of Money. This typically means they have accumulated sufficient capital assets to derive their required level of income.īy definition, retirement is a form of financial freedom but this is not always the key driver for Partners Wealth Management clients. Financial Freedom is the point in life when an individual chooses to work for intellectual pleasure or entrepreneurial passion and not because of the need for earnings to sustain their lifestyle.
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