What do you mean by Financial Freedom?
Lets make it more interesting by understanding what it doesn’t mean?
If you have enough money, it doesn’t mean you are financially free. If you are debt free, it doesn’t mean, you are financially free. If you have luxury houses and cars, it also doesn’t mean you are financially free.
What does it mean then?
It means, you don’t have to work for money and your regular expenses are less than your passive income, then you are financially free.
Now a question arises, what is passive income? To understand it better, lets understand about income and types of income.
Income is nothing but an earning in terms of money (or some equivalent value) that an individual receives, usually in exchange for providing a good or service or through investing capital.
There are two types of Income. 1. Active Income and 2. Passive Income. Active income are such type of income for which you need to work. If you work, give your time and energy, then only you will have income otherwise there is no surety of any income. E.g Salary, Small Business and Commission etc. You can see, for any such type of income, you need to work otherwise you will not be paid. Whereas Passive Income are such type of income for which you don’t have to work, still you have income. E.g. Rental Income, Interest, Dividend and Automated Business etc. You can see, for such type of income, you don’t have to work still there is an income. You have done one time investment in a house and you have rental income out of it. You have done investment in Fixed Deposit or in Stock and you have Interest Income or Dividend Income out of it. You have developed an automated business, where a system or people working for you, and you have income out of it. You can see, you are not working still you have income. This is called Passive Income.
So, Financially Freedom means Time Freedom and Money Freedom. It means, you have enough of time to enjoy your money the way you want. It means you don’t have to work for money but money is working for you, So that, your regular expenses are less than your Passive Income.
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