How do you reach financial freedom, if at all?

In case of the former, the hard work limits your ability to focus on other aspects of life. In case of the latter, your life is limited by how much you can spend, because what you have is never enough.

The term ‘freedom’, thus, evokes a sense of being able to sate unlimited desire, where you have the monetary resources required to afford what you want. Money is no longer a hurdle limiting you from achieving your life’s aspirations.

This state of being is loosely referred to as financial freedom.

So yes, we want financial freedom.

The question is how does one get to it? Is it achievable, or simply a desirable, but elusive, dream?

The answer to that lies in how well you are able to define and stick to the values you choose to live by, and what you are willing to sacrifice in your lifestyle in order to achieve financial freedom.

Assuming that you have a limited corpus of funds and want to reach the point where the pursuit of making money no longer defines who you are, first find what you can fill your time with. In other words, what drives you? What will you do in an alternative reality, where there is no need for you to earn money like you have to today?

It could be helping those less fortunate than you achieve their dreams. It could be travelling to experience the cultures and natural bounty of the world. It could be playing a sport or pursuing your hobby. Or it could simply be about settling down in one place and living off what the earth has to offer. The common strand in these choices is that the outcomes are not defined in monetary terms. At the same time, you need money to survive and fund your lifestyle.

Once you have defined the lifestyle you want, define the time by which you want to achieve it, and quantify the financial impact of following through. What that means is, what will it cost to achieve financial freedom? This is where your lifestyle today becomes key to achieving financial freedom tomorrow.

You will want to continue your lifestyle even after you stop working. But when you achieve financial freedom, you will no longer be working as you are (if you do get paid to do what you want, it is a bonus). Hence, you have to earn, save, and invest from now based on your timelines, such that you can generate a suitable passive income that takes care of expenses. Expenses being not just the  bare necessities, but also the luxuries.

Financial freedom is about having the time to do as you please every day henceforth. Ascertain what lifestyle is manageable once your active income stops, and avoid lifestyle upgrades beyond that point, even if you can afford to.

Start investing early to take advantage of long-term compounding, and take calculated risks to beat long-term inflation. This will create the required financial cushion when you stop working.

But, there’s the rub. Behavioural studies show that most of us thrive in instant gratification. Avoiding the temptation to upgrade your lifestyle with increase in income is extremely hard. It is this that can throw your calculations out of the window. It is this that makes financial freedom seem like a pot of gold at the end of the rainbow. Be disciplined, define a lifestyle, and stick to it. You will find that financial freedom is not a dream, but very much achievable.

Financial freedom is what you want said about your life when you look back on it as you turn 95.

Lisa Barbora is a freelance writer. Views are personal, and do not represent the stand of this publication.