Why "Financial Freedom" is a myth and "Financial Health" should be your goal

[Danny Webber]

People peddling "Financial Freedom" in the form of a course/class do not understand the term.

The term "financial freedom" is often used to describe a state of being where an individual has enough wealth to live their life on their own terms without any financial constraints. However, in reality, the term "financial freedom" is an oxymoron, as true financial freedom is almost impossible to achieve.

Firstly, financial freedom implies that an individual has enough wealth to meet their basic needs, maintain their lifestyle, and have a cushion to fall back on in case of emergencies. However, as our wants and desires are unlimited, it is almost impossible to achieve a point where we feel completely financially secure. There will always be a desire for more money, more assets, and more investments, leading to a constant pursuit of financial growth.

Secondly, true financial freedom requires a level of self-control and discipline that is difficult to maintain in the face of the constant temptations of consumer culture. The desire to keep up with the latest trends and acquire the latest gadgets and luxury items often leads individuals to overspend and take on debt, which ultimately restricts their financial freedom.

Furthermore, external factors such as economic downturns, market fluctuations, and unexpected expenses can disrupt even the most carefully planned financial strategies. This unpredictability makes it almost impossible to achieve true financial freedom.

In conclusion, while the term "financial freedom" may be a popular catchphrase, it is an oxymoron as true financial freedom is almost impossible to achieve. Instead, we should focus on developing healthy financial habits, living within our means, and setting realistic goals to achieve financial security and stability.

Why "FINANCIAL HEALTH" is a better goal than financial freedom. 

Financial health and financial freedom are two related but distinct concepts. Financial freedom typically refers to a state in which a person has enough passive income or savings to cover their expenses without having to work actively. On the other hand, financial health is a more holistic goal that encompasses both financial stability and financial security, which are important aspects of overall well-being.

Financial health involves having a sound financial plan that helps you achieve your financial goals and protect yourself against unexpected events that could negatively impact your finances. To be financially healthy, you need to have a good understanding of your financial situation, which includes your income, expenses, assets, liabilities, and overall financial health.

Here are some factors that would make you financially healthy:

Good credit score: A good credit score is important for obtaining credit when needed, such as for buying a house or car. It also helps to get better terms and rates for loans, which can save you money in the long run.

Emergency savings: It's important to have an emergency fund in place to cover unexpected expenses or financial setbacks. Experts recommend having enough savings to cover at least 3-6 months of living expenses.

Adequate insurance coverage: Having adequate insurance coverage, including health insurance, life insurance, and disability insurance, can protect you and your family from unexpected financial hardship due to illness, injury, or death.

Debt management: Managing your debt is important for your financial health. This includes paying off high-interest debt as soon as possible and avoiding taking on new debt that you cannot afford to pay back.

Retirement planning: Planning for retirement is essential for long-term financial health. It's important to save enough money to ensure that you can maintain your standard of living after retirement.

Budgeting: Creating a budget and sticking to it can help you manage your expenses, avoid overspending, and save money.

Overall, financial health is about taking a proactive approach to managing your finances, making smart financial decisions, and planning for the future. It's important to focus on financial health as a long-term goal, rather than just aiming for financial freedom, which may not necessarily lead to overall financial well-being.

By DW

[Karl B.]

I think financial freedom is real. I'm just an outlier who has zero want to buy things I don't need. Also, I enjoy working and buying properties is more like a game of Monopoly to me and I'm more interested in the game of growing my portfolio VS making money to remove from the company to spend on silly things. 

I am financially free. I don't worry about money or paying bills. If you want to call it financial health, I'm financially healthy. I'm sitting on cash and am rooting for a downturn so I can have an easier time buying more deals. 

I know there are others like me on here. Guys and ladies who work hard, live below his or her means, and stack cash, either waiting to reinvest, are currently buying, or are busy working on properties.

The issue I do have with the financial freedom people are when they show airplanes, luxury cars and people dressed up and wearing designer sunglasses in their ads, when they should be showing a dude wearing work boots and dirty clothes standing in front of their pickup truck or work van. 

And I get that some successful investors are smart with money and pay someone else to do the physical work and that's cool too. But these investors likely aren't blowing their money on too many stupid things and if they are, they're stunting their growth. 

I think wanting more assets and investments (the constant pursuit of financial growth as you call it) is a good thing and it simply leads to more financial freedom. Of course, working too hard and not taking the time to enjoy one's success is also a way to inhibit financial freedom. We all need to take the time to go on the occasional vacation or to enjoy a delicious dinner at a private club. I'm guilty of working too much, and I've found I'm happier when I partake in the occasional excellent dinner out. I'm definitely more into having enjoyable experiences VS buying expensive non-essential things but that's just me. 

[Steve Vaughan]

Well, we don't get to be financially free by caving to consumer culture whims every moment.  We prioritize what's important and don't desire the latest and greatest unless it's specific and made a priority in our life. 

Financially free can just mean job optional.  I have said that for years as people looked at me cross eyed when I'd say retired.  Financially Independent best describes what we seek. 

We don't have an insatiable appetite for more more more.  We don't succumb to lifestyle inflation. We define contentment and know what it looks like.   

I see 3 levels of freedom or FI: Skinny, medium and 'phat'.  Phat fire (FU money in every aspect) isn't the whole definition of freedom at all and I agree that's very difficult, if even desired. 

Of course we have reserves and adequate insurance.  And wills and estate / legacy plans.   Nothing will get you more prepared than not having a 'job', pension or corporate benefits as a safety net. 

As someone who's been medium FI for a long time, you really lost me at keeping a high credit score so I can get loans, especially car loans.  

Nah. I'll buy whatever car I want and get a discount with cash.  This shows me your version of 'financially healthy' is normal, as in the same tired vanilla ways generations past have kept themselves working for someone else for 50 years.  @Danny Webber

[Carlos Ptriawan]

Quote from @Danny Webber:

People peddling "Financial Freedom" in the form of a course/class do not understand the term.

The term "financial freedom" is often used to describe a state of being where an individual has enough wealth to live their life on their own terms without any financial constraints. However, in reality, the term "financial freedom" is an oxymoron, as true financial freedom is almost impossible to achieve.

Firstly, financial freedom implies that an individual has enough wealth to meet their basic needs, maintain their lifestyle, and have a cushion to fall back on in case of emergencies. However, as our wants and desires are unlimited, it is almost impossible to achieve a point where we feel completely financially secure. There will always be a desire for more money, more assets, and more investments, leading to a constant pursuit of financial growth.

I got your message, good thing about BP is most influential folks/or experienced investor in this group is already having that financial freedom/health status.

[Danny Webber]

Quote from @Steve Vaughan:

Well, we don't get to be financially free by caving to consumer culture whims every moment.  We prioritize what's important and don't desire the latest and greatest unless it's specific and made a priority in our life. 

Financially free can just mean job optional.  I have said that for years as people looked at me cross eyed when I'd say retired.  Financially Independent best describes what we seek. 

We don't have an insatiable appetite for more more more.  We don't succumb to lifestyle inflation. We define contentment and know what it looks like.   

I see 3 levels of freedom or FI: Skinny, medium and 'phat'.  Phat fire (FU money in every aspect) isn't the whole definition of freedom at all and I agree that's very difficult, if even desired. 

Of course we have reserves and adequate insurance.  And wills and estate / legacy plans.   Nothing will get you more prepared than not having a 'job', pension or corporate benefits as a safety net. 

As someone who's been medium FI for a long time, you really lost me at keeping a high credit score so I can get loans, especially car loans.  

Nah. I'll buy whatever car I want and get a discount with cash.  This shows me your version of 'financially healthy' is normal, as in the same tired vanilla ways generations past have kept themselves working for someone else for 50 years.  @Danny Webber

Imho it is foolish to tie cash assets up when you can get a loan at 6%+/-. You can take the funds available and make double or triple that rate if you know how. Debt with interest is very much a good thing if the resources not allocated in the transaction make you more than the debt load incurred. 

[Tim J.]

Posts like these make me wish there was a "downvote" button