Financial freedom is a nice thing to strive for – not having to worry about money would go a long way in reducing stress, increasing happiness, and helping to increase the quality of your life.
Most people think that the only way to reach financial freedom is to either hit the lotto, or create the next big tech sensation that they can sell for a boatload of cash.
But reaching financial freedom isn’t only done by amassing great wealth. There is a different route you can take to help create a more sustainable balance, and accelerate the process.
The reason balance is the word I’m using is because reaching financial freedom is done by factoring in two things:
1 – The amount of money you are bringing in (i.e. – Earning).
2 – How quickly you are spending it.
People are so focused on #1 that they lose sight of how important #2 is. They are so focused on the next raise, the next promotion, or the next big investment that they might be a part of, that they forget if they spent less money, they wouldn’t need more.
AN EXTREME EXAMPLE
Let’s say that you are somehow able to live without needing money.
In this circumstance, you would have NO need to work, and thus already have financial freedom.
Yes, I know, this isn’t realistic for most.
But the point is to show you that reaching financial freedom isn’t about having tons of money in the bank. It’s a balance of having enough to fund your lifestyle without the need to work. And you don’t have to become a multi-millionaire to achieve it.
MR. MONEY MUSTACHE
There is a great personal finance blog called www.mrmoneymustache.com. In one of his posts he talks about this very topic, and created a great chart to illustrate how spending less can drastically increase your ability to reach financial freedom.
In fact, based on his assumptions and chart, if instead of saving just 10% of your income (typical industry norm) for retirement, you increased it to 30%, you would get to retire 23 years earlier!
That’s pretty mind-blowing.
So, the next time you are wishing you had the freedom to stop working, and you are jealous of those who do, don’t just think about how you can make more money.
Think about how much less you can spend, which will help you move closer to that goal a lot faster!