If we are going to ask people on the street to defined their definition of "financial freedom", we are going to get different answers. It is almost certain most people will perceived being financially free is to have lots of money to buy whatever they want. Hardship no more. After all, that are the reason we work, or invest, so hard.
But is financial freedom merely an increase of our savings or investment numbers?
Most employees cannot retire comfortably. Many would count themselves lucky if they can have a retirement fund of RM200,000 - RM500,000. This is understandable because most employees' salary would be spent on daily spending. Few has the discipline to save before spend. The common practice is save after spend. The sad fact is most people will spend their savings in their early retirement years. So, we see elderly people continue working even after their retirement years. Because they can't afford to not have income.
If employees can't retirement comfortably, their employers should be able to, right? Most business owners are rich. When business are running good, their wealth accumulates very fast. They should be the lucky one. Not quite actually.
Some business may failed because of poor management; not adapting to change in business environment; or did not save for rainy days etc.
Some successful business owner can't simply close down their business. Not because they can't afford to, but because of their responsibility to their employees. Closing down a business is easy but it would mean a loss of employment to some of the employees, especially the more seniors. Long serving employees are almost like their extended family members.
That's why certain business still continues even the boss is thinking of quitting. However, now we see a phenomenon where more businesses are closing down due to the impending GST implementation. Small businesses owners deem it not worthwhile to carry on the business for many reasons. (I don't know will this create a influx of unemployment to the market.)
Will then be a stock speculator be able to achieve financial freedom? In the first glance yes. But if the fact is he needs to speculate to get income, then apparently it's a no. Maybe certain speculators have a very high success rate. However, I think that activity will require him to have a healthy body and mind, and a high confidence level, or even luck by his side, to constantly punt the market successfully to give him that kind of income. And his time, maybe part of it, will be stuck in front of the computer screen. If his health or mind fails him one day, is he financially free?
Who then can be financially free?
My definition of "financial freedom" is "a state where a person, who has over the years, accumulated a pool of financial assets that is able to generate passive income that is so great that the income is enough to provide for his daily needs and, better still, fight against inflation."?
Financial freedom should be money working for money, no more man working for money.
So, who can retire financially free? An investor it seems. All employees, employers, freelancers can be investors.
Financial assets has to be accumulated along our working years. It can't be created overnight. For a business to grow, it takes time. For a tree to grow, it takes time. For us to keep fit by going to the gym, it takes time.
And it takes persistence. Regardless of good or bad weather, good or bad market conditions, keep on accumulating. Rome is not build in one day. And it can't be fine days everyday.
Every stones or bricks count when building Rome, so does our investment amount no matter how small.
I have a dream to have a portfolios of investments that will generate passive income during my retirement years. I am working on it. My current career is giving me passive income, and it will continuing paying, regardless of my health conditions, for my contract can't be terminated simply based on sales quota. I love my job.
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