Why do you want to be financially free?
Why do you want to be financially free?
Over the past few weeks we have had a higher number of people seek advice to become financially free.
During the past 17 years as a Newcastle & Lake Macquarie Financial Planning Adviser, we would generally see people seeking material things; bigger houses, more expensive cars, overseas holidays, or to buy a holiday home.
However, over the past few years we have seen a significant change occurring.
Whether this is the result of the amount of information that is readily available (on the world wide web and being able to get the answers to most questions with a quick search on google) or the change in mindset that is occurring with the next generation that they look at their parents’ situation and want more, I am not quite sure.
Possibly a bit of column A & column B.
What Does Financial Freedom Mean to You?
Financial freedom has to be personal. Dream big and get specific about your goal.
What does financial freedom look like for you? Maybe it looks something like this:
Freedom to choose a career you love without worrying about money
Freedom to take overseas holidays every year without it straining your budget
Freedom to pay cash for a new car
Freedom to respond to the needs of others with outrageous generosity
Freedom to retire a whole decade early
When you have financial freedom, you have options.
What have we experienced?
We have seen the rise in financial literacy and the financial education that many people have who seek advice. They have a greater understanding of the fundamentals and have been able to get themselves to a certain point, through hard work and the answers they have searched online.
However, they are seeking support to get themselves to the next level.
For many the next level is financial freedom.
In the past few weeks, we have had a number of potential clients that have articulated it in their own way, that their number one financial goal is TIME.
They want a financial planner to help them achieve TIME.
They want to get TIME back.
Why?
Most tell our Newcastle & Lake Macquarie financial planning advisors that they have spent far too long, sacrificing their TIME for money.
It is TIME to take back control and spend TIME on what is important to them.
This includes spending time with loved ones, working on things that are aligned to their passions and purpose, and making memories doing things they enjoy.
Thinking about all the clients that we have seen over the past 17 years, ultimately this is what everyone is seeking. Each individual may articulate it differently and have different timeframes to achieve financial freedom, but ultimately this is what everyone is striving towards.
If we look at retirement, this is financial freedom that many are seeking by the time they are 60+
However, the next generation are looking to speed this process up.
It is no longer about working your entire life being trapped in the cycle of working to repay your mortgage, once your mortgage is repaid, retire & receive the Age Pension whilst you are in the waiting room.
Many are now looking at becoming financially free in their 40s & 50s to ensure they have the opportunity and TIME to spend with their loved ones, creating memories and building legacies that will be passed on for generations to come.
We speaking to people who are seeking advice, we talk about the three levels of finance.
Financial Security
Ensures that the basics are covered from other income sources outside of business/employment.
This includes having the financial security that your mortgage repayments, food bills, utilities, car/transport, and insurances are met.
Research suggests that the average Australian requires $41,000 pa to become financially secure.
Financial Independence
Ensures your lifestyle is maintained from other income sources outside of business/employment.
Ultimately, you no longer have to work to have the same lifestyle you have today.
The income from your investments will provide you with the income you need.
For example if you are earning $100,000 per annum & you spend $100,000 per annum just to maintain your lifestyle, your financial independence number is $100,000.
Financial Freedom
Means you are independent. You are free, you have the choice to do as you please and you have control of your time.
You have everything you have today, plus one or two significant luxury items you want in the future and you don’t have to work to pay for them either.
The more you think about; financial security, financial independence, financial freedom, the more you base your decisions about time & money with this objective in mind.
Three reasons to become financially free
Security - once you have your basic needs, shelter, food, water, clothing, education, transports, utilities met, you are safe and secure from several events that would cause significant income loss. Whether that is redundancy, pandemic, illness, injury or even caring for loved ones.
Freedom of Choice - having the choice to retire from work or choose your occupation/working conditions, is very important. This freedom will allow you to choose what you do with your time based on your passions, purpose and enjoyment, rather than the pay packet.
Time is limited - Let’s say you are on this earth for 80 years. Do you want to be spending 65 years of them working? You want to be free for as many years as possible. Even if you love your job, you still may choose to cut down the hours to spend more time with your loved ones or spend time making memories doing the things you enjoy.
Consider your situation.
What is your path to financial freedom?
Do you have a plan?
Are you on track?
Maybe start with the following questions:
What is your mortgage repayment strategy?
How much are you investing today for tomorrow?
How much longer do you want to be trading your TIME for money?
Regardless of your situation, whether you are starting out, accelerating your mortgage repayment strategy, repaid your mortgage, or heading towards retirement, we are here to partner with you to help you achieve financial freedom.
Contact our Newcastle & Lake Macquarie Financial Planning Advisers to arrange a suitable time to discuss your situation and start developing your plan to becoming financially free.
Complete the details below to start your journey on the path to financial freedom: