A lot of people are now professing that what they really want to achieve in life is “financial freedom”. I have first heard of “financial freedom” from Robert Kiyosaki’s book called Rich Dad, Poor Dad. If we go by how Mr. Kiyosaki defines financial freedom, we can honestly say that not everyone will be able to have it. Financial freedom as explained by Robert Kiyosaki is achieved when we are able to earn from our investments and/or businesses enough money to support our needs without us needing to work at all. The income generated from such investments or businesses is what he called passive income. The earnings from either an investment or a business will come automatically even if the owner does not intervene. This is in contrast to being an employee wherein a person needs to work hard before he earns his salary. To have financial freedom, going by this definition, entails we need to become literate in finance and effective in investing our money. Both of which is not an easy feat to accomplish.
It’s difficult to imagine a world where everyone has become an investor or business owner and no one wants to work for a company anymore. But in trying to attain the financial freedom espoused by Rich Dad, employees are looked down to as being in a “rat race”. Understandably, employees are at a disadvantage compared to the owners of the business they work for. They do most of the legwork but the owners get most of the earnings. But employees are essential for without them the business will not be anything to anybody.
Is It Worth Pursuing?
It probably won’t hurt us to aim for the level of financial freedom that Kiyosaki taught. If we had the resources, the time and the energy to go for it, and if we think it’s really important to fulfill our mission in life, then we can expend our energy for its pursuit. But for most of us employees, we will have to learn to define what financial freedom looks like for us. That is because we do not want to spend every waking hours of our lives chasing for money and forgetting what really matters for us in the process. If a goal to achieve financial freedom will keep you from doing the things you love because it does not earn you more, then we should reassess this goal and make the necessary changes.
Financial Well-Being Instead
I would not urge people to achieve financial freedom but I would advise for everyone to improve their financial well-being. Acquiring the basic knowledge in handling money and good financial planning will go a long way to a healthy financial situation. Every person at their current level of income will benefit from this knowledge. I reckon, for example, that not everyone knows how to analyze his or her cash flow. Understanding where our money is coming from and to where we spend them and by how much can help us know more about our spending habits. This simple idea should serve as a good starting point to assess how well we handle our money and what are the changes we need to implement to make our financial situation better than it was before.
I would not urge people to achieve financial freedom but I would advise for everyone to improve their financial well-being. Acquiring the basic knowledge in handling money and good financial planning will go a long way to a healthy financial situation. Every person at their current level of income will benefit from this knowledge. I reckon, for example, that not everyone knows how to analyze his or her cash flow. Understanding where our money is coming from and to where we spend them and by how much can help us know more about our spending habits. This simple idea should serve as a good starting point to assess how well we handle our money and what are the changes we need to implement to make our financial situation better than it was before.
To learn more on the basics of personal finance that can help you improve your financial health, feel free to read all the relevant posts in this blog. Leave comments to express your views or send me a message if you have questions or suggestions. Thanks!
