“I just want to go home, play with my kids, eat dinner, be with my wife and not have to worry about anything.” This is what my business partner said to me years ago. For him, that was freedom. I wasn’t much different. Spending time with my boys and their sports without having to worry about my job, paying the bills, and all the “stuff” of life was what was most important to me back then.
Now, freedom is a little different for me. How you define it will be different as well. But the bottom line is being able to do what we want to do. Within reason. Free to have the time to spend with family. Free to work how you want, where you want, when you want while still being productive and adding value. Free to take vacation. Free to serve a greater purpose than just work. Whatever it may mean to you.
Freedom for me is taking control of my life. Making my second half of life purposeful…and, having the means to do it. Means is the money and time to achieve my goals, my wants, my purpose.
There was a time when I had to watch every dime. When I couldn’t go out to eat because that was a luxury. I hated that. Going out to eat as a kid was a luxury. It’s not that I love going out to eat but I want the freedom to do it whenever I feel like it and know it won’t impact my lifestyle.
Financial independence creates freedom.
Being financially independent means exactly what it says: You are not dependent on anyone or anything to pay your bills.
How much you make has nothing to do with financial independence. I know plenty of doctors and lawyers who make high six-figure incomes but are deeply in debt and always worried about their future.
Having $1 million net worth doesn’t give you financial independence, either. Most paper millionaires have their net worth tied up in their homes. Which produces no income and they can’t eat it in a crisis.
The Seven Rules for Financial Independence
Here are seven rules I’ve come up with for financial independence. These are good starting places for anyone who is serious about creating a stress-free financial life.
- When it comes to your money, the only person to truly trust is yourself. No one cares more about your money than you.
- You need help with your money (and your entire financial life – money is just one piece of the overall puzzle). The best and brightest people have coaches, and that includes money coaches (aka Financial Advisors or Financial Coaches). Use our guide to choose one wisely.
- You need multiple streams of income/cash flow. If one diminishes (layoff, pandemic, financial crisis, disability) you have others to rely upon. Plus, multiple streams of income compound your ability to save and invest.
- All markets rise and fall. If anyone tells you they can predict the future or know what the market will do over the next 6-12 months, run. They are not telling you the truth.
- If you don’t learn to spend less than you earn, you will never have peace of mind.
- Most of what you buy when your income is above $100,000 is discretionary. Don’t fool yourself into thinking you need a big house or a fancy car. You don’t. It doesn’t mean you can’t have these things, but there is an order and a proper way to get them.
- In making financial projections for yourself (or a business), always create three scenarios: one that shows what things will look like if everything goes as hoped, one that shows what will happen if things are mediocre, and one that shows what will happen if things fall apart.
I’ve designed a financial life using all of these rules.
Two of my children are about to head off to college. At least one is going to be eight hours away. The freedom to travel to every one of his football games is paramount to me. Same for my #2.
By designing a life for financial independence, I have the freedom to live my purpose and focus on what’s truly important to me.
I want a life so good I never want to retire from it.
My coaching program is all about helping you design a life so good you’ll never want to retire from it.
#finishstrong #financialindependence
