What is True Financial Freedom?

To be truly free, we must alter our perspective regardless of our income.

Master Investor
May 17, 2024

Summary:

There is much more to being financially free than simply possessing money.
If we have the correct mindset, we can actually define our financial freedom.
Wealthy people are not inherently financially free.

People frequently say statements like, "If we only had a million dollars, we would be financially free," or "All of my financial issues would be resolved if I only had that high-paying job."

These kinds of remarks are problematic because they imply that financial independence is the result of owning a large amount of money. It doesn't. It is actually possible to be extremely rich and still remain poor. Even with a large fortune, we cannot truly be free unless we have total freedom.

Consider well-known figures such as Nicole Murphy, the former spouse of actor Eddie Murphy, and Ed McMahon from "The Tonight Show." Each lost every penny of their millions of dollars. Nicole Murphy spent less than four years' worth of her $15 million divorce settlement.

Towards the end of his life, Ed McMahon owed $747,000 in credit card debt and was in danger of losing his Beverly Hills house to foreclosure.

It's not simply an issue for extremely wealthy people, either. We are frequently mistaken about how much money we actually need, even when we believe that having a certain amount will grant us financial freedom.

At least 37% of Americans think they'll need at least $1 million saved up in order to retire safely, according to a USA Today article from back then. The issue with this is that, in many places, a million dollars is only good for a few decades. And it would only endure 11 years in the state of Hawaii. Many would run out of money in retirement long before they died if they didn't know how to invest that million dollars.

The majority's definition of financial freedom

For most people, having enough money to retire is financial freedom. They put a lot of effort into their 401(k) and work hard all their lives in the hopes of earning their imaginary million dollars, or whatever figure they have in mind. These folks are frequently encouraged by their advisors to live within their means in retirement because they won't have a reliable source of income outside of their savings and investments.

They put forth a lot of effort throughout their lives, yet are compelled to compromise their quality of life rather than reap the rewards of their efforts. It doesn't feel like financial freedom, and it doesn't make much sense either.

What actual financial freedom really means

In actuality, having a lot of money has little bearing on our level of financial freedom. Instead, it's about shifting our perspective.

There are two kinds of money problems. Both too little and too much money. Which kind of financial problem are we looking for?

The mindset of abundance against scarcity

There are two kinds of people in the world.

Two types of people: those who think in terms of scarcity and those who think in terms of abundance.

By the former, we meant that a large number of people perceive a world that is sparse. They act out of fear because they believe there isn't enough to go around.

They are unable to make wise decisions and are prevented from achieving great things by fear. They treat people badly out of fear, viewing everyone as a possible adversary out to get what they have. That mentality is a poison to build wealth.

Some believe that there is plenty in the world. We do not believe that there is insufficient for everyone. They actually believe that there is sufficient for everyone to flourish. When there isn't, they figure out how to make enough. These are the individuals who launch companies, make profitable investments, and fully embrace life. We are frequently the kindest and most giving people we will ever come across. Our way of life is one of true freedom

Realizing that there is richness in the world, we begin to ask oursleves, "How can we tap into that abundance?" rather than acting out of fear. We begin to perceive the world and our interactions with it completely differently once we pose that question. We can then pursue financial independence. Why? Because we are not controlled by our fear of losing money. It's up to us to develop and learn. Not only can we get our riches financially, but we can also get it physically, emotionally, and spiritually.

Financial freedom will be determined by our emotional intelligence

We must have a high emotional intelligence level in order to master our emotions and transition from a life driven by fear to one of abundance.

Understand that on the left side of the Cash Flow Circle, is where people trade their time for money. Therefore, money controls their life. There is nothing wrong with being great on the left side of the cash flow circle as an employee and self employed. We need people on those roles. But the issue is that it is harder for the individual to understand how money works, and how to make it multiple through actively sound investing due to a lack of financial education.

We can see on the diagram above and below that freedom is literally achieve on the right side of the cash flow circle being a business owner and an inside investor. It requires financial education and actively applying the data into our lives. As an inside investor (capitalist or master investor) we must receive enough passive income and capital gains income to pay for our living expenses and every expense in our lives. At the end as a wealthy entrepreneur and inside investor we master how to obtain everything for free in our lives.

There are seven seven varieties of intellect

Verbal-linguistic:Individuals with verbal-linguistic cognitive gifts are typically proficient in reading, writing, and word and date memorization. Reading, making notes, and attending lectures are the best ways for them to learn. These folks are primarily left-brained. If this intelligence is robust, school should be pretty easy. The majority of "A" students possess high verbal-linguistic intelligence. Many go on to work as doctors, writers, journalists, and attorneys.
Logical-mathematically:Math is a strong suit for those with this kind of ability. They are at ease with logic, abstractions, and numerical issues. These persons frequently have a dominant left brain. Pupils possessing high intelligence also excel in conventional learning settings and frequently achieve "A" grades. Many become scientists, engineers, physicians, accountants, and financial analysts in the future.
Body-kinesthetic:These pupils frequently possess physical gifts. They typically learn best by doing and moving about. The gym, football field, dance studio, acting studio, woodshop, or auto shop are some of the places where this intelligence is displayed. This kind of intellect is frequently possessed by professional athletes, dancers, actors, models, surgeons, fire fighters, soldiers, police, pilots, race car drivers, and technicians.
Spatial:This intelligence excels in the arts, design, visualization, and puzzle solving. These individuals are typically classified as right-brained dominant. Individuals possessing this particular intellect typically struggle in conventional learning settings. Schools emphasizing art, design, color, and architecture tend to have greater results with them. These pupils go on to work as architects, fashion designers, interior designers, and artists.
Musical:This intelligence can perceive melody, timbre, rhythm, pitch, and other aspects of music. This person can play an instrument and sing well most of the time. This intelligence performs poorly in a conventional educational environment. This kind of individual does best in musical learning contexts, such performing arts schools.
Interpersonal:These folks can communicate. They are typically outgoing and popular, showing empathy for the emotions, motivations, and moods of others. An intelligent person with this kind of gift typically performs well academically, particularly in popularity competitions like student government elections. These folks typically pursue careers in social service, education, sales, and politics.
Intrapersonal:Emotional intelligence is another name for this intelligence. This intelligence is concerned with introspection and self-reflection. Emotional intelligence is the capacity to manage emotions and reactions as well as a thorough awareness of oneself, including strengths and limitations as well as what makes us special. It is essential to have intrapersonal intelligence in high-stress situations. As a matter of fact, success in practically any subject or profession depends on intrapersonal intelligence.

Establishing multi-intelligence networks to create financial freedom

Go out and network. Meet new people daily and make an effort to provide value to them as we build rapport.

Even though it's critical to recognize our skills and shortcomings in terms of intellect, it's even more critical to leverage the strengths of others to make up for our deficiencies. Creating a network of many intelligences is what is meant by this.

Some people, for example, do not do well in school. This is a result of our low logical-mathematical and verbal-linquistic intelligence. Although we could be the best-selling author and a successful financial investor, we may think this strange, but the secret to our success is surrounding ourselves with intelligent people.

We are best-selling authors, not writers. To form our ideas for our financial education here and articles, we continue to collaborate with other entrepreneurs and inside investors. Networks bring us financial freedom when nurture properly.

The one intelligence that every successful person has to possess

This is not to argue that he was incapable of learning accounting or writing more effectively. Though it is not his natural intelligence, we could. As a result, outsourcing to people with certain intelligences is far preferable to trying to create them yourself.

Having said that, everyone needs to develop one of the seven categories of intelligence if we hope to succeed. Intrapersonal intelligence is that.

Being ability to communicate with oneself and regulate one's emotions is a sign of intrapersonal intelligence. When an angry individual tells themselves to "count to ten before we speak," for instance, they are demonstrating intrapersonal intelligence.

To put it another way, he talks to himself before letting his feelings come out. Sadly, outsourcing is not an option for this. It is therefore something we have to nurture.

Success requires intrapersonal wisdom, particularly in difficult situations when one may feel afraid or like giving up. In actuality, a lot of those who prospered during the coronavirus pandemic did so specifically as a result of their development of intrapersonal intelligence. They discovered strategies to flourish in the current environment in addition to surviving. People that are struggling most certainly don't have this kind of intelligence and are succumbing to fear.

Everyone has encountered extremely emotional people.

Highly emotional people frequently say or do things they may later regret because they allow their emotions to rule their life rather than exercising reason.

Those who fail to master themselves suffer greatly and are heartbroken, but the most prosperous individuals we know are those who have developed their intrapersonal wisdom.

Building a team or network with multiple intelligences to help supplement where we are weak is one of the secrets to success in business and life, according to real business mentors, who also happens to be all wealthy people.

Business and life are team sports.

Emotional intelligence and street smarts

Because emotional intelligence, also known as intrapersonal intelligence, is far more significant in life than academic intelligence, someone with street smarts can succeed even if they lack strong book smarts.

We don't learn how to take chances and take chances in life from academic and professional education. It doesn't teach us how to become financially free or how to take calculated risks. And believe us when we say this: we won't achieve financial freedom unless we acknowledge that errors are simply learning experiences and that risk can be controlled.

Similarly, those who are financially successful tend to possess high emotional intelligence despite having lower levels of educational intelligence. Even though their book smarts are lacking, they possess tremendous street smarts. To put it another way, they have the emotional intelligence to overcome fear and take the required risks to develop their financial intelligence and become wealthy.

Emotional, not emotionless

Being emotionally intelligent does not imply being emotionless. Knowing when to let our anger out and when to control it is a sign of emotional intelligence. We understand that while feeling wounded is ok, taking foolish action as retaliation is not.

Many of us have known someone who excels in one area of their lives let's say math but lets their emotions ruin other aspects of them. Another example is addiction. Low emotional intelligence is a common cause of addictions. A person may overindulge in food, drink, have sex, or use products as a way to cope with their frustration, anger, or fear. When they're bored, some people spend money they don't have on buying.

Emotional control is essential for financial success

Evaluate our ability to control our emotions today. When the chips are down, do you know how to effectively communicate how you're feeling? Or do we consistently let our feelings to get in the way of our success?

High emotional intelligence, or high intrapersonal intelligence, is a prerequisite for success in life because successful people are adept at controlling their emotions, particularly under pressure.

The distinction between freedom and financial independence

Financial independence and financial freedom are not the same thing. As we can see by reading this, achieving financial freedom only requires three easy steps:

We build and purchase assets that bring in money.
The money flow from our assets covers our daily costs
We are financially free once the monthly cash flow from our assets equals or exceeds our monthly living costs since our assets are generating passive income and capital gains income for us.

We will be able to achieve financial independence through this, but it won't always grant us freedom. Should we fail to alter our perspective or revert to a scarcity-based, fear-based mindset, It's simple to lose money or investments, or to make poor choices that negatively impact cash flow. Even with a large income, it's possible to become stingy and miserable, which is possibly much worse. That's not what we call freedom. Money is in charge of it.

When it comes to money, the most crucial thing to keep in mind is that what matters is what we can achieve and who we can become with it, not the money itself. To actually be happy, we need more than simply money to achieve our goals. That's what freedom looks like.

Be liberated to express ourselves with financial freedom

Possession of money is only one aspect of financial freedom. It's the ability to live our life as we choose and to be who we truly are. And a lot of us forget this because we prioritize other people and take on multiple responsibilities like that of a parent, spouse, worker, friend, and so forth.

Not that those are undesirable things. Instead, they are things that frequently stand in the way of us figuring out who we want to be and pursuing that. The incredible thing is that investing in ourselves benefits everyone who loves us, not just us.

They witness our example and share in the happiness that accompanies reaching our full potential.

We must transform into a new person and let go of everything that has kept us back in the past if we want to be financially free. To become the most powerful, content, and successful "us" that is possible, one must undergo a process of personal development, progress, and emotional and spiritual fortitude. The real benefit of having financial freedom is that.