Some people define financial freedom as being very rich. To some, financial freedom is being able to afford anything that one desires. Then there are those who think that being financially free is to be totally debt-free. Still, others see financial freedom as having sufficient money to retire. Hence, financial freedom means different things to different people. What does it mean to you?
Importantly, note that it is passive income that I’m talking about here, not active income. What is the difference between active income and passive income?
Active income is the income you get for performing a service. The salary paid to you by your employer is active income. It requires your active participation. Simply put, you get paid when you work and you’ll be paid nothing if you don’t work. By contrast, passive income is the income that you get on a regular basis without your active participation. An example of passive income is the rent collected from the tenant on an investment property.
Don't have a misconception that it takes a wealthy person to be financially free. Being rich and being financially free are entirely two separate things. While it is common for one to assume that those who achieved financial freedom are wealthy, the truth is that being financially independent has absolutely nothing to do with whether you’re rich or not. Therefore, even millionaires are not financially free if their total incomes are unable to meet the expenses arising from their luxurious lifestyles. Thinking of becoming a millionaire can be daunting but financial freedom is certainly achievable. Many people actually became financially free first before they moved on to become millionaires!
Have you been chasing after money without knowing exactly why or how much is needed? I hope that knowing the real meaning of financial freedom would help change your perspective and ultimately your life. Why? Because you’re in control of your expenses and the passive income that you intend to pursue. You can start your journey towards financial freedom now by controlling your expenses. At the same time, begin saving more money to invest in assets for multiple streams of passive income.
So, when will you be financially free? You call the shots!
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