I just read some tweet about Financial Freedom. She wrote in her tweet
Financial Freedom? It’s a trap. Making your own money isn’t easy. There’re times when you lost & slowly turning into a slave to money.’
I think she get the other concept of financial freedom. I think maybe she has been caught by his friends that join others rich money scheme that give their concept of financial freedom. He/she told her that to get financial freedom than, she must join to other scheme that can give her money. I did not say that statement is wrong, but not necessarily correct. Why I said that? Because in my learning of financial planning (not in college, school or university) financial freedom is not we own more money but how we spend money. Am I right? Or maybe you think it is just a joke?
It’s up to you to believe or not my statement. For me, financial freedom is a target for us to get better financial in the future and not. You can get out from being a trap to become money slave but you still can become the slave to money if you still seek money for your life. That’s why financial freedom is more about how to spend and not how much we own.
I’ve give some basic example, Uncle A is a manager and get paid around $10,000 per month while uncle B is a farmer with average income around $1,000 per month. Who do you think is wealthiest? All of us will say that Uncle A is wealthiest among them. Then, I add some condition, Uncle A own 2 cars and a bungalow house with her wife and 2 children. He get loan to pay his 2 Mercedes Benz and the bungalow. His children also school at the private school and her wife is a secretary.
Uncle B, has own his father house without any loans and he only own 5 acres vegetable farm. He only has a motorcycle that buy in cash while her wife is housewife. He also has 2 children that school in government school. So who do you think get more financial freedom?
What? You still choose Uncle A instead of Uncle B? Why? Because he has more money and can spend it. That’s the perception if the money becomes indicator. If you look at different view you will choose Uncle B. Why I choose Uncle B? Let’s look at the job description, which will have more responsibility on their shoulder. While Uncle B just responsible to work for their family, Uncle A need to ensure the company in the good condition. He must face with upper management and need to manage lower staff. Which one will make high headache and stress? It is hard task for Uncle A and he need to work harder than others. He needs to work overtime and sometimes he will leave his social life. How much time he has at home compared to Uncle B? Maybe Uncle B use his strength and get more sweat than Uncle A but he still have time to spend with his child. Any of you disagree with my statement?
Okay, that’s about social life but the main part is about financial. Uncle A get a big buck but he still need to cut it on the income tax, loan and expensive lifestyle. As a manager he needs to get a rich lifestyle. Need to have branded clothes while Uncle B not really necessary to get any brand in his lifestyle. Even income tax people don’t really want to go to Uncle B house that smelly with vegetable.
Maybe some of you told that the manager get a retirement planning such as EPF (Malaysia) but not Uncle B. It is true that he don’t have that cutting from salary but he still can make saving. Maybe some of you don’t know that new farmer has get incentive from government. It could cut their farm expenses. And there’s a plan from EPF for those who don’t have any monthly salary. This scheme will help them to save. Not just that, he also can increase his income by making more plant such as fruit than just depend to vegetable while Uncle A only get a raise based on the upper management decision. And the scary thing is when the company made a loss. Sure it would have any impact. This contrasts with the uncle of B which is always independently.
The best part is about loans. Without loans, it is half of financial freedom can be achieved. Why? Loans are a biggest trap in finance. If you don’t have any loans and can raise your family in your own standard is enough. Most of us become slave of money not because they want to own more money but because they need to paid more. We just don’t follow the financial rules ; Asset must be greater than Liabilities, income must be greater than expenses, Saving is important than clubbing(okay this is my rules.. hahaha)
That’s the different on my concept of financial freedom. The financial freedom is a must target for everyone. It’s not necessary to become millionaire but it is a bonus to get it. I’m target to get financial freedom about 15 years onward. Hopefully I can achieve it in shorter than my target. How I achieved it? Follow my blog for further planning.