What does financial freedom really mean?
Financial freedom means different things to different people. To some, it’s the freedom to be able to travel the world and do things they’ve always dreamed of doing. To others, it’s knowing they’ll have a roof over their heads and plenty of time to explore their hobbies and interests once the rigours of everyday work have worn down.
We’re going to explore the concept of financial freedom, to help you get a better sense of what it means to you, and ultimately what you can do to achieve it.
How much will you need?
While it’s difficult to put a ballpark figure on the precise figure you’ll need for financial freedom, figuring out how much you will need is a good way to get the ball rolling.
As Equip Super notes, “While every individual’s circumstances and spending habits are different, an often used measure is ASFA's (Association of Superannuation Funds of Australia) Retirement Standard, which suggests that a retirement income of $59,000 p.a. for couples, or $43,000 p.a. for individuals, will support a comfortable lifestyle.”
Aside from having a chance to pursue your passions, financial freedom means not having to worry about day to day expenses, while also feeling confident you will have the ability to cover a large expense if something goes wrong.
Setting goals
If you’re out to achieve financial freedom, setting goals is important. What are the little things you can do on a day to day basis to prop up your savings? What bigger decisions can you make that will put you in a better fiscal position down the years. Financial freedom is all about discipline in the short term, and planning for the long-term so you don’t have to be in a position where finances are a problem in your future.
Stop thinking of it as a “pie in the sky”
It’s one thing to read about the notion of financial freedom, and another altogether achieving it. But you might be surprised to learn that there are plenty of things you can do to make it a reality. Consulting an experience, qualified financial planner is a great way to get your head around the options at your disposal, so the prospect of financial freedom becomes an attainable goal, rather than some far-flung pie in the sky notion.
Equip manages $7 billion of investments for members working across a wide range of Australian industry sectors. This superannuation fund has been providing strong investment performance and has been a reliable provider of retirement benefits for over 80 years.
This article is for general information only. You should seek formal financial advice on your specific circumstances.