Financial Freedom DOES NOT Mean Being Debt Free

The middle class belief surrounding the concept of financial freedom is being debt free. Friends, this is simply not true. Subscribe to this belief and you are selling yourself short. Keep reading and I’ll explain with logic why this is true.

Congratulations, you’ve paid off your house and car. Now what? Are you financially free? Just what is it you believe you are free from? You still have to pay for home maintenance, home insurance, property taxes, car maintenance, car insurance, income taxes, groceries, entertainment, cell phones, cable, internet, utilities, medical bills, clothes, gifts, and oh yeah, your children, if you have any. Expensive stuff, especially the latter.

How are you paying these expenses? With your job? I thought we were after freedom! Please explain to me how relying on your job for income makes you free. That is not freedom. With a typical job you have to ask for time off, vacations, and pay raises. You have to attend meetings and seminars against your will, suck up to bosses, climb the corporate latter, and commute long hours in stressing traffic. You still think you’re financially free? I still see the ball and chain around your leg.

Friends, I’m not trying to make you feel bad and I apologize if I come off brash. I promise. I’m here to help. There is a way out. There is a better way.

Financial freedom can only be achieved with income. Passive Income. To be free we need income separate from our jobs. We need enough that we could quit our jobs and live financially secure for the rest of our lives. However, if you love your job, then continue working. By all means, please continue. Our time is too precious to not be doing something we enjoy. I ask only that you build up enough passive income to hedge against the likelihood you will be fired, demoted, or laid off. It’s usually not a matter of will you be laid off, but when.

The truth is that many of the rich, wealthy, and financially free are deep in debt. Good debt, that is. My mentors, whom are multi-millionaires, are millions of dollars in debt. All mostly mortgage debt to be specific. They invested heavily in their financial education and took action. Lots of action. Financial intellects understand how to safely use debt, or leverage, to their advantage. If you are still debt adverse you have much, much more to learn.

Becoming rich, wealthy, or financially free is a state of mind. It is a mentality. You must change the way you are thinking about it. You must change the definitions in your mind. Quit referring to being debt-free as financial freedom. It’s just plain “debt freedom.” And that’s great, if it’s all you desire. Just erase from your mind the delusions of being truly free. Please erase that notion and replace it with this definition:

Financial freedom is achieved when your passive income equals your expenses. If you routinely spend $3000/month then you are financially free when your monthly passive income reaches $3000.

Nearly every day I hear someone conversing about diversifying their stock portfolio. Should I invest here? Should I invest there? Never do I hear anyone ask about income diversification. Never. How does investing in a retirement account send you checks in the mail? How does paying off your house send you checks in the mail? How does paying off your car send you checks in the mail? How can you pay your bills without income? You want to be rich, wealthy, financially free, or safely retired? You’re going to need income. Passive Income.