The Journey to Financial Freedom

It seems to me that it’s time to tidy up some of the terms that I’ve been using.

You see, many times people speak with others. They use words that everyone understands. Still, there is not true communication and understanding at the end of the day.

I’ve learned some of those lessons personally. For a number of years I worked in Technical Support, working with a complex million-dollar software package. A large part of my job was getting into the head of my business-savvy and maybe computer not-so-savvy customers; and when they’d found a genuine issue with the software, I’d then have to translate the message to send to the developers in another country. The challenge was not just getting the message of the problem across. I also had to make sure to convey the urgency created by the problem and the business needs of my customer. It was all English, but I assure you that there were misunderstandings!

At the same time, I have to agree with a lesson that Robert Kiyosaki teaches. Although his real father was an educator, including serving as the head of education for the state of Hawaii, he says this lesson came from his rich dad. Plain and simple, his rich dad said that words were important. Sometimes they have very precise meanings. Most of the time, people are rather loose in their use of words. Rich dad repeatedly worked to teach Robert to learn and carefully use words based on their precise meanings.

So why the discussion of misunderstandings and the “correct” meaning of words? Well, let’s talk about “financial freedom” and wealth. Are those two basically the same thing? Are they related, but subtly different concepts? My fear is that I’ll go on talking for years, and while I have one picture in my mind, you’ll have another picture in your mind.

Here’s the thing. Financial freedom and wealth are two very different things. We can use another concept, net worth, while discussing these two. Now, I’m not really that concerned with the academics of these things. I’m concerned with the goal each of us has in our heads, and in our hearts. I’m going to suggest something here, and it’s based on a simple progression.

My suggestion: We must work to increase our net worth, striving to achieve the peace and satisfaction of financial freedom. Once we’ve gotten there, we have a lot of options. The real challenge is to keep working on your increasing net worth. Now, you could stop - there would be no need to go further. If you’re satisfied with your standard of living when you have achieved financial freedom, why not retire? You’ve earned it!

But, I think we can all do a lot more than that. Since there will be no need to work, you will have a lot of time free, or at least under your control. What will you do with your time? After a bit of a breather, I believe we should all take the skills we used to achieve financial freedom and push onwards to achieve a measure of wealth.

So - what DID I just say? Well, here’s my attempt at giving a layman’s explanation of what I just suggested. Here goes.

Financial freedom - Having residual income sufficient to pay all expenses of ones life - without the need to work.

Net Worth - The value of our assets less the value of our debts. (Being debt-free does not qualify you as being financially free. You do still need at least $1 to eat, right? You might need some cleaning supplies. Most of us put fuel in a car. Living is NOT free!)

Wealth - Having an abundance of assets.

Ok, I did look up “wealth”. Here is what mirriam webster.com says “wealth” means:

abundance of valuable material possessions or resources

I think that all is worthy of saying again, in a different way. So here goes, and I’m going to try to be more clear.

We all start with a particular financial situation. The whole world naturally strives for “good” things. But I’ll also suggest that the world is naturally abundant. We should all be working to create wealth, and to share the abundance we experience with others. We should also be generous as we are achieving wealth, and find a way to make a difference in the world. A great way to achieve wealth is to find a cause to contribute to, and become better and better at contributing to that cause - both with our actions, our capabilities and our resources.

So one virtually lifelong mission is to increase the assets we have so that they exceed the debts and expenses that we have. We should continue this and strive to create a situation where we do not have to work in order to maintain our life at an acceptable standard. But stopping there forever, while very good for our inner peace and stress levels, would just be selfish! We can contribute to the world!

True, donating our time is a valuable way to contribute - and when we are financially free, we’ve got complete control of our time. The bills are all taken care of! But, let me suggest something. In addition to contributing our time, if we can also create the wealth necessarey to establish a foundation, or simply donate a couple million dollars - then we can contribute in ways, and maybe in places, that we cannot contribute with our personal donations of time. I feel that the world can be changed for the better if 1 or 2 million people take up this type of cause in the next 10 year.

So that’s my formula for financial success. If you have any comments, let us all hear them!