Financial freedom or independence is generally used to describe a state of having sufficient personal wealth to live, without having to work actively for basic necessities.
*For financially independent people,their assets generate income that is greater than their expenses.
Approaches to financial freedom
Since there are two sides to the asset and expenses equation, there are two main directions one can focus their energy; accumulating assets or reducing expenses.
Accumulating assets can focus on one or both of these approaches;
1.Gather revenue generating assets until generated revenue surpasses liabilities/living expenses.
2.Gather enough liquid assets to sustain all future living expenses/liabilities.
Another approach to financial freedom is to reduce regular expenses while accumulating assets to reduce the amount of assets required for financial freedom. This can be done by focussing on simple living, or other strategies to reduce expenses.
When you look closely at the definition of financial freedom,you will realise that people were more financially free in the past than they are today.
In the 21st century, wealth disparity between individuals, communities, nations and continents is at it’s peak.
What changed you may ask?
1.Change in value systems- what individuals and communities valued in the past has changed.What people value determines their wealth.Our values as individuals,communities,nations and the world as a whole have been changing over time.
2.Change in business systems- our way of doing business has changed drastically with every technological advancement. From barter trade to internet marketing. Barter trade ensured people got what they needed but today’s business as Spencer Johnson puts it in the book ONE MINUTE SALESPERSON, is about buying feelings! People don’t buy goods or services, they buy what they think they will feel by using them!
3.Change in social systems- every society had systems that determined how they lived. For instance, a community had networks that ensured farm productivity year in year out.After initiation,every man or woman knew exactly what his or her responsibilities were,to the family and to the community.Unlike today,these systems enhanced continuity, cohesion and economies of scale.
Here are the benefits of financial freedom http://www.thenewgreenearth.WordPress.com/financial-freedom/benefits-of-financial-freedom
Financial slavery on the other hand living a life of constant lack.Read more on the effects of financial slavery here http://www.thenewgreenearth.WordPress.com/financial-freedom/effects-of-financial-slavery
Here are the strategies of restoring financial freedom http://www.thenewgreenearth.WordPress.com/financial-freedom/restoration-of-financial-freedom