What is financial freedom or independence?
Your capacity to settle debts and fulfill any foreseeable scheduled and unforeseen obligations is referred to as your financial freedom or independence.
Having said that, this might have a variety of implications based on the circumstances one finds themselves in and how much of the future materializes at any given time. In other words, if we can say that you are financially stable, we can also say that there is a 90% chance that you will accomplish your goals and live a happy financial life. In this context, it has been assumed that you have a standard set of goals that can be planned and visualized. This can be a vehicle, a home, a marriage, a degree, etc.
But it also assumes that you don't exaggerate your preferences to a larger object or a dream. You can also include more difficult objectives like traveling to the moon, purchasing a yacht, purchasing an island, or relocating to Antarctica, for example. In conclusion, we observe three factors to take into account before defining financial independence.
- Income & Expenses Budgeting
- Financial goals
- unplanned expenditure
The first two may be anticipated and allowed for, but the last one can be problematic if you prepare for it too far in advance. Due to excessive weight or attention on recently emerging ambitions, it might occasionally imperil and rock the boat.
In a sense, the third variant can also suggest that you need a stable mind to maintain financial stability if it should not happen. Sound financial freedom can be achieved in a world of complexity and fragility with the support of good health and a sound mind.
Look for your financial freedom index and you stop worrying and start living
Happy Investing
Composite Edge Team