If you strive to be rich you’ll almost certainly fail. That’s not to say you won’t make a lot of money. If you have the drive and determination, you can be rich. The problem with setting wealth as a goal is that you’ll never get there. Trying to get rich is an elusive goal that almost always ends in disappointment. A better goal, one that will be far more satisfying when you get there, is financial freedom.
I know people who are financially free and yet they are not rich by any common definition of the word. One of the financially free I know is a dive boat captain in Key West who makes less than $40,000 a year. She is financially free because she lives on the boat, makes a minimal investment in work clothing, does not pay rent, has no debt and no commute. In fact, she doesn’t even own a car. Many days she brings dinner home in the form of fresh ocean fish. She does have enough savings to cover an emergency, has good health insurance and an upwardly mobile career path to a job that will eventually pay in the low six figures. Her life is much like one continuous beer commercial and you can frequently find her at the Green Parrot in Key West, crushing beer cans and talking baseball underneath sun-bleached dreadlocks. That’s what financial freedom looks like.
Financial freedom, as I’m defining it, is having a low-stress lifestyle, a career that you love and fits your personality and enough money that you don’t have to worry about money or borrow to cover an emergency expense.
The key to having financial freedom is, as much as possible, avoiding the entanglements that limit your mobility. Mobility is a tactical advantage that allows you to pursue opportunities wherever they arise. Mobility limits the amount of junk you can collect because you have to haul it around. Mobility means avoiding large financial entanglements, like a mortgage and excessive student loans. The number one step toward financial freedom is avoiding being nailed to the ground or trapped in a dead end job by bills.
Matching Your Lifestyle To Your Income
Achieving financial freedom also means living below your means. Very few of the financially free own lavish homes because they see housing as an expense and not as an investment. Another of the financially free I know has no furniture that isn’t inflatable. He works a day job but his home is decorated with a sailboard, scuba tanks and a 40 gallon cooler, which does double duty as a dining room table. Certainly that’s an extreme example but the idea is that the financially free place a higher value on experiences and relationships than they do on accumulating things.
Building Your Own Business
My friend in Key West is part owner of the boat she captains and is working toward someday buying her own boat. The majority of the financially free that I have met either run their own business or are working toward that goal. The majority of the wealthy made their money in business for themselves or in careers with high salaries. The sad fact is that working for wages is the path to financial mediocrity. If you are going to work for wages then at least pick a high-paying career.
Too many people are trapped in careers mismatched to their interests and by entanglements that are a constant source of stress. Avoiding getting into that situation in the first place is your best path to financial freedom. Once you’re mired in the entanglements of fiscal mediocrity it’s much more effort to free yourself.