What is Financial Freedom?
This post is part of the Financial Freedom Guide series
What is Financial Freedom?
Financial Freedom is the freedom to make choices purely based on their meaning to you, independent of what others are willing to pay.
It means having enough passive investment income to cover your living expenses for the rest of your life without needing to work. This frees you up to spend every day of your life as you choose, without worrying about how you’ll pay the bills.
Imagine taking on projects that truly excite you. To wake up intrinsically motivated and energized about your day. To experience intense creative flow states.
Imagine the freedom to be anywhere you want in the world. To take a few years to explore the world and experience different places to live. Or to be close to family without worrying about your career.
Imagine getting to spend time with the people you care about. Visit friends and family without needing to wait for that long-anticipated vacation. Be relaxed and fully present as a friend and parent. Raise your kids rather than passing them off to others most of the time.
Imagine waking up naturally with your body’s own rhythm. To live mindfully, sleep peacefully, and not need to set alarms. To eat slowly and consciously, fully savoring your food. To be outside in nature, take walks, smell the roses, and exercise whenever you want.
Sound amazing? Well, it is!
Of course your life won’t magically be amazing as soon as you have enough money in the bank. Living a fulfilling, authentic life requires effort, discipline, and the right mindsets (coming soon - subscribe to encourage us to hurry up). That’s why we set up Sprouting Sense - to share our thoughts and experience on how to both achieve Financial Freedom and live a fulfilling life.
You don’t have to “retire”
Financial Freedom is also often called Financial Independence. Many people naturally connect Financial Independence with the ability to “retire” and stop doing work that isn’t intrinsically motivating. This has led to the popular FIRE - Financial Independence, Retire Early - movement.
It is important to call out, however, that despite the “retire early” moniker, you don’t have to retire from a life of purpose and connection. You are just retiring from the necessity to do work that may not be meaningful to you. Everyone wants do something productive for personal satisfaction and self-actualization - be it taking care of family, creative endeavors, volunteering, gardening, growing a business, a traditional job, or anything else that is meaningful to you. Those who achieve Financial Freedom simply have the luxury not to be driven by the age-old pressures to meet basic physical needs and ensure survival. They have moved up Maslow’s Pyramid of Needs (see below) and tend to focus on nurturing their relationships, personal growth, and self-actualization.
Another amazing aspect of Financial Freedom is that it gives you much greater freedom to try out new things without worrying about financial failure. Many entrepreneurial and creative pursuits can take years to pay off and may fail altogether. Once you achieve Financial Freedom, that’s OK! You enjoyed every moment of the experience, can move on to the next thing any time, and don’t need to worry about paying the bills.
This lets you create things you find rewarding on your own terms, without having to constantly worry about how your work will be received by others. If others like it, that’s just a cherry on top. Freed of all the short-term financial pressures, you may just end up creating a masterpiece, rather than a stale, panel-tested flick on a timeline to please your publisher.
Of course you won’t be fulfilling the stereotypical - and frankly dangerous - trope of the mentally ill, tortured artist. Van Gogh famously sold only one painting in his entire life (to a friend, who wanted to encourage him). Instead, become a financially independent “gentle(wo)man” creative, philosopher, explorer, or other luminary like Bertrand Russell, Charles Darwin, or many of the Founding Fathers.
And if instead of creating masterpieces you’d rather just run a lifestyle business like an artsy coffee or flower shop? Well, as long as it recoups its operating costs, you’re golden. Enjoy!
Are there any downsides to Financial Freedom?
Yes. Achieving Financial Freedom means you become 100% responsible for how you spend your day. You will no longer be able to use many of the socially acceptable excuses for why you are not pursuing your dreams, fully present for your friends and family, or taking care of yourself. Of course you can lie on the couch, eat ice cream, and binge watch Netflix all day - amazing, right? - you just can no longer blame the need to recover from a week of toxic work stress if that doesn’t end up fulfilling you. In fact, if you’re aiming for misery, let me recommend this lovely YouTube video!
With great freedom comes great responsibility - to get out of bed, structure your day, find your own meaning, and pursue your dreams with discipline. You will no longer be able to enjoy the existential comfort of being buffeted by external forces. For some, lack of choice is paradise.
If that’s not you, pursuing and achieving Financial Freedom can be a cornerstone of living a truly intentional and fulfilling life. If nothing else, you’ll know you won’t just wake up one day realizing you have wasted your precious life in pursuits that weren’t actually meaningful to you.
What does Financial Freedom mean to you? What kind of life do you imagine for yourself once you achieve Financial Freedom? What obstacles are in your way? Let us know in the comments!
If you are ready to plan your Financial Freedom journey, see you on the next post:
BONUS
Degrees of freedom
Financial Freedom comes in degrees. You may, for example, have saved and invested enough to be able to:
Partially retire, having to work to earn money but being able to choose jobs you enjoy and perhaps shift down a gear or two towards part-time.
Achieve “lean FIRE” with enough investment income to sustainably cover your living expenses while making some tradeoffs between your lifestyle and freedom. Many people who take this path move to beautiful, low cost of living locations in Southeast Asia, Latin America, or Southern and Eastern Europe - not that you can’t also do that on a bigger budget.
Fully enjoy Financial Freedom with enough investment income not to have to make major tradeoffs between your freedom and a comfortable lifestyle. This is the tipping point at which your investments start to grow quicker than you’re spending them - you’ve reached escape velocity!
Live a “fat FIRE” life of luxury - how’s that yacht? But be careful not to fall into the trap of never being satisfied.
Not know how to spend it all. Your investment earnings become more than you need to sustainably finance even a luxurious lifestyle. If you have to compromise on your health, friends and family, and/or getting to try out new things that you are curious to explore, then what’s the point?
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