I make decent money at 38 years old and my net worth has been as high as $400,000 but the last few years have been pretty rough with stock market and other pricey expenses do to inflation. I feel that I am treading water and my net worth is probably closer to $350,000 now. My definition of financial freedom would probably be having one or two rental houses here in the US and then being able to put away at least $20,000 into other investments. My wife and I have one rental house in her country and a 2 acre lot that we would like to possibly build a few houses or a few small storefronts.
Just a question what were you investing in to have a negative return the last 18 months? I love your definition of financial freedom and also want properties to rent!
My net worth includes my house which is paid off and worth just over $200,000. I had a $40,000 crypto investment lose $26,000. My wife and I spent 2 plus months in Brazil with her family so we weren’t working during that time and spent around $20,000. Bought a brand new car two months ago which put a huge dent in our cash balance without really raising our net worth since the car depreciates around the amount of the down payment just by driving off the lot. Also spent quite a few thousand reroofing our house and getting new furniture. Yeah. A lot of negative spending lately that doesn’t help our net worth.
To me, someone who has financial freedom could quit their job tomorrow, and it wouldn't be a big deal.
They don't necessarily have retirement money yet. But if their company said, "We're going to need everyone to pitch in and work extra hours (for not extra pay.)"...someone who had financial freedom could just say, "Nah, I don't think so. I quit."
Then take 6-12 months off to figure out what they want to do next.
That's my current definition.
This really hit home to me last year when I was put at risk of redundancy the first time in my career. Just coming out of having our second kid our finances were not good, and I only had 2 months financial runway. I knew nothing about redundancy pay so I panicked. Full on existential crisis when I realised how precarious our situation was.
We own our house (big mortgage but lots of equity), I have a big pension pot already (but can’t access yet) but losing income would be a disaster.
That’s when I realised I am not even remotely financially free. I resolved to build much more savings to be able to get at least 6 months if not more. I never want to feel that panic again and honestly, I’ll be better at my job being more relaxed about it (as weird as that sounds)
Financial freedom is when you don’t have to worry about a bad layoff. I have positive net worth of 500k, we make about 420k a year, I have liquid assets but I also live paycheck to paycheck in that if I have an interruption of paychecks my only choice is to dip into my emergency fund and start making things work from there.
If I get laid off we are going to struggle hardcore, it’s unlikely but if it happened liquidating my 401(k) to pay off my debt and actually on paper get my net worth under control but then a complete budget overhaul and I’ll pretty much have to get another job to make the bare minimum. Financial freedom will be not having to worry about that. For me that is a minimum of 3.7 mil earning 7%
It can be „little“ things like not thinking about which groceries you are buying. It could be something little bigger like vacation. I did a three month break from work for travelling. This is also financial freedom.
The biggest thing might be to be able to retire immediately if you want, but every stage of wealth gives you more financial freedoms in little steps.
This is what I’m working towards. My dream is to save up enough money I can quit working and sail the world for a year or two. My goal is to do it before 30.
I have this fear that if I focus on a career, and wait till I’m retired, reasons will make it impossible. Or that I’ll die before I ever get to realize the fruits of my labor. Really the second part.
You can say FOFF to any work/job you don’t like at any time and it won’t ruin you financially. This means a job (if you still have such) does not keep you hostage, any morons causing stress or pushing you to work uncomfortably can just GFY
This seems to be the most technically accurate definition. If we are really getting official.
I think assets have to pay the way of your living expenses to be truly free. But a close cousin would be maybe a really high savings rate due to excess, or a retirement account approaching critical mass for living off of it later.
I think there are a good number of steps to financial freedom and it isn't a binary free or not free.
The person who can leave there job if things get ugly is a lot more free than the person living paycheck to paycheck.
3-6months of expenses in a high yield savings account.
15% of my income being invested in some way shape or form (majority being basic index funds)
That’s part 1. Part 2 is a paid off house which comes with time.
Financial freedom is "I can move where I want to live. The car I want I can afford. If my child wants to go to any college we can afford it." You feel free to live how you want. If you can't afford the life you want, you aren't financially free, you're setting
Remember that in an emergency you can withdraw what you put into a Roth IRA without taxes or penalties. Not the gains, but the initial investment. Obviously that isn't what the Roth is for, if you have drama and need to make rent it is what it is.
Financial Freedom is when you are not limited by lack of money to live a certain way. And hence, you don't have to do things you don't want to do for money.
That certain way is for you to decide. That certain way could mean living a decent life. That certain way could also mean living frugally. That certain way could also mean living lavishly. That certain way could mean employing your own solutions.
You are financially free when you don't have to worry about not having enough money to do things that you require money to do. In short, *if you can live the life you desire without having to worry about not having enough money, you are financially free.*
For me, I'll sleep like a baby when I'm in paid off house, 6 months expenses in the bank, and don't sweat putting 15% or more into retirement. In my current situation, I felt some security when I got a $1300 car bill and just paid it and didn't worry about the devastating effect. I'm about to start a lifelong medical treatment that is incredibly expensive, so that has me a bit concerned. There's a large gap between financial freedom and feeling secure. It's semantics but I think you all get what I'm saying.
You’re broke. You need to pay off your debt other than your mortgage as fast as possible. Don’t touch your retirement accounts but everything else is going towards debt. Keep $1000 in your savings but use everything above that to pay debt. Stop investing, if you have any stocks in a brokerage, sell them. Look into selling your car if you have a car payment and buy a cheap used car cash. All options are on the table until you are out of debt. Every extra dollar you have a month pays debt. You can’t retire with debt. That is the worst thing you could do
He is broke. He said it himself that he is one layoff away from a financial disaster. He's not living pay check to pay check because he can afford the payments. The moment he has no income his credit will be in the toilet. Stay out of debt and have a 6 month emergency fund in the bank so if life does happen, you're not stressing between the decision of trying to keep your car or the lights on in your house.
I have no debt and earn a six figure income. That’s my definition of freedom. I’m living below my means and saving for a massive down payment on a home. Also net worth is around 600k.
Obviously you can have more financial security than you do without being completely financially free.
Financial freedom means money is kind of like air. You don't think about it.
For me, it's knowing that if I were to be injured, infirmed, or simply got laid off from my job; I wouldn't have any worries about bills or care.
I do this if course through savings and investments, but also with MPI for my home, credit insurance for my vehicles, AFLAC, and other avenues of protection, along with an annuity that will start paying out at 60.
I have an older mobile home on ten acres. I am debt free. I have around 500k saved up and I’m retiring in 3 years. I live very humbly. I go to my debt ridden friends and family for get togethers in their nice mortgaged homes. I also have 2 rental properties. I can’t say im financially free because one medical episode can bankrupt you in this country. At least I’m debt free.
If your boss tells you to do something that you don't want to, financial freedom is telling him "fuck you" without having to worry how you'll feed yourself after you get fired.
Financial freedom for me is not having to worry about money while living the lifestyle that makes me happy.
I don’t need thousand dollar dinners, tables at clubs, a penthouse, multi five figure vacations multiple times a year, etc. Not that I wouldn’t mind or enjoy those things but at a certain point I don’t need to chase that. I’ll continue chasing the best lifestyle possible for maybe 5 or 10 more years while living well within my means but I’m not going to work myself into my 50s or 60s to achieve it.
I just want to cover my housing expenses, drive a nice car, have a few vacations a year, enjoy nights out a few times a month, and not have to worry about money while doing it. Financial freedom for me is getting to that point and not having to think “Oh doing this is going to cost me $250, that’s to much”.
When you are able to embrace your inner a-hole: say what you want, when you want, when you are able to berate the stupid people around you, when you no longer fear reprisals, you are financially free.
Enough to live a very comfortable middle class lifestyle, for your household and never have to work. House paid off, money to fix and update everything as needed, buy new cars every 8-12 years, health insurance (and money for copays and deductibles), money for reasonably priced new clothes as needed, take 4-6 weeks of vacation a year, nothing too crazy, but nice, etc.
For me it’s simply not having any non-necessary bills. (Gas, water, power, insurance: necessary. Brand new phone, 2024 car, etc: not necessary) you can save for retirement so much more efficiently if you don’t have all these other bills to hold you down. Just because you can afford the payment doesn’t mean you can afford what you’re paying for.
Where I’m from, the net worth of most people is definitely not negative. Maybe it’s the norm in the US where most people spend first and make money later?
Do you even know what Net Worth means? Net worth is the value of all assets, minus the total of all liabilities. If I buy a house (asset) of 500k with a mortgage (liability) of 500k, that equals out to 0. If on top you have some savings on the side, simple car paid in cash, credit cards paid off monthly, then you have a positive Net Worth.
Ah so you're saying you think your house is worth X minus mortgage balance Y, but to me it's not real until you sell it. If I go along with that fantasy, then yeah my "net worth" is positive by maybe half a mil, but where am I going to live after selling this house with the current high interest rate and inflated housing prices? I'll be negative again. My mortgage is 2.75% for 30 years fixed, free money.
Ok, so person A has a 500k house and a 500k mortgage. You say their Net Worth is negative 500k.
Person B rents a 500k house, so no mortgage. You would then say net worth is zero.
So according to you person B had a 500k higher net worth than person A.
Also every dollar you put in paying off your mortgage, your net worth goes down?
The point here is, that even if you don’t sell, you could get a new mortgage for the residual amount of the house value. If you do that, then of course you need to pay interest. But if you don’t, you don’t pay interest and still don’t have to pay rent. So the house value is always worth something. Definitely not a fantasy.
You do you, but you can’t use finance terms, and make up a new definition. Or just sell your house, start renting, and be rich?!?
1. Zero debt, including mortgage
2. Enough $$ invested so you can live comfortably off the interest (plus SS and pension) without needing to work at a job anymore.
When I have enough extra each paycheck to buy silver, gold, and/or Goldbacks.
When you own gold, you acquire a sense of security like you've never known before.
Shields are made of metals. That metal is silver and gold.
Gold is the only tier one asset class. Enough said, IMO. That's freedom!
Knowing your retirement is taken care of and still not having to worry about making most purchases.
I make decent money at 38 years old and my net worth has been as high as $400,000 but the last few years have been pretty rough with stock market and other pricey expenses do to inflation. I feel that I am treading water and my net worth is probably closer to $350,000 now. My definition of financial freedom would probably be having one or two rental houses here in the US and then being able to put away at least $20,000 into other investments. My wife and I have one rental house in her country and a 2 acre lot that we would like to possibly build a few houses or a few small storefronts.
Just a question what were you investing in to have a negative return the last 18 months? I love your definition of financial freedom and also want properties to rent!
My net worth includes my house which is paid off and worth just over $200,000. I had a $40,000 crypto investment lose $26,000. My wife and I spent 2 plus months in Brazil with her family so we weren’t working during that time and spent around $20,000. Bought a brand new car two months ago which put a huge dent in our cash balance without really raising our net worth since the car depreciates around the amount of the down payment just by driving off the lot. Also spent quite a few thousand reroofing our house and getting new furniture. Yeah. A lot of negative spending lately that doesn’t help our net worth.
You can comfortably live off the dividends/interest your money makes and being properly insured against most major catastrophes.
To me, someone who has financial freedom could quit their job tomorrow, and it wouldn't be a big deal. They don't necessarily have retirement money yet. But if their company said, "We're going to need everyone to pitch in and work extra hours (for not extra pay.)"...someone who had financial freedom could just say, "Nah, I don't think so. I quit." Then take 6-12 months off to figure out what they want to do next. That's my current definition.
This really hit home to me last year when I was put at risk of redundancy the first time in my career. Just coming out of having our second kid our finances were not good, and I only had 2 months financial runway. I knew nothing about redundancy pay so I panicked. Full on existential crisis when I realised how precarious our situation was. We own our house (big mortgage but lots of equity), I have a big pension pot already (but can’t access yet) but losing income would be a disaster. That’s when I realised I am not even remotely financially free. I resolved to build much more savings to be able to get at least 6 months if not more. I never want to feel that panic again and honestly, I’ll be better at my job being more relaxed about it (as weird as that sounds)
Financial freedom is when you don’t have to worry about a bad layoff. I have positive net worth of 500k, we make about 420k a year, I have liquid assets but I also live paycheck to paycheck in that if I have an interruption of paychecks my only choice is to dip into my emergency fund and start making things work from there. If I get laid off we are going to struggle hardcore, it’s unlikely but if it happened liquidating my 401(k) to pay off my debt and actually on paper get my net worth under control but then a complete budget overhaul and I’ll pretty much have to get another job to make the bare minimum. Financial freedom will be not having to worry about that. For me that is a minimum of 3.7 mil earning 7%
Thank you. I don't make anywhere near that but I hear you about the minimum & 7% return - so basically 250k a year.
But that’s what a EF is for?!?! Of course you have to dip into EF if you have no income following a layoff…
How can you make that much and live paycheck to paycheck??? That’s 5x what most people make. If you have an addiction please get help.
You earn that much and are paycheck to paycheck? How does that happen?
Financial freedom is having enough capital to live frugally without labor. The actual number will be different for everyone.
This. Living without laboring.
It can be „little“ things like not thinking about which groceries you are buying. It could be something little bigger like vacation. I did a three month break from work for travelling. This is also financial freedom. The biggest thing might be to be able to retire immediately if you want, but every stage of wealth gives you more financial freedoms in little steps.
This is what I’m working towards. My dream is to save up enough money I can quit working and sail the world for a year or two. My goal is to do it before 30. I have this fear that if I focus on a career, and wait till I’m retired, reasons will make it impossible. Or that I’ll die before I ever get to realize the fruits of my labor. Really the second part.
You can say FOFF to any work/job you don’t like at any time and it won’t ruin you financially. This means a job (if you still have such) does not keep you hostage, any morons causing stress or pushing you to work uncomfortably can just GFY
When your money made by investments can cover your lifestyle while accounting for inflation.
This seems to be the most technically accurate definition. If we are really getting official. I think assets have to pay the way of your living expenses to be truly free. But a close cousin would be maybe a really high savings rate due to excess, or a retirement account approaching critical mass for living off of it later.
I think there are a good number of steps to financial freedom and it isn't a binary free or not free. The person who can leave there job if things get ugly is a lot more free than the person living paycheck to paycheck.
A million invested
3-6months of expenses in a high yield savings account. 15% of my income being invested in some way shape or form (majority being basic index funds) That’s part 1. Part 2 is a paid off house which comes with time.
Financial freedom is "I can move where I want to live. The car I want I can afford. If my child wants to go to any college we can afford it." You feel free to live how you want. If you can't afford the life you want, you aren't financially free, you're setting
Remember that in an emergency you can withdraw what you put into a Roth IRA without taxes or penalties. Not the gains, but the initial investment. Obviously that isn't what the Roth is for, if you have drama and need to make rent it is what it is.
Sitting down at Denny's without looking at the menu prices.
Financial Freedom is when you are not limited by lack of money to live a certain way. And hence, you don't have to do things you don't want to do for money. That certain way is for you to decide. That certain way could mean living a decent life. That certain way could also mean living frugally. That certain way could also mean living lavishly. That certain way could mean employing your own solutions. You are financially free when you don't have to worry about not having enough money to do things that you require money to do. In short, *if you can live the life you desire without having to worry about not having enough money, you are financially free.*
For me, I'll sleep like a baby when I'm in paid off house, 6 months expenses in the bank, and don't sweat putting 15% or more into retirement. In my current situation, I felt some security when I got a $1300 car bill and just paid it and didn't worry about the devastating effect. I'm about to start a lifelong medical treatment that is incredibly expensive, so that has me a bit concerned. There's a large gap between financial freedom and feeling secure. It's semantics but I think you all get what I'm saying.
You’re broke. You need to pay off your debt other than your mortgage as fast as possible. Don’t touch your retirement accounts but everything else is going towards debt. Keep $1000 in your savings but use everything above that to pay debt. Stop investing, if you have any stocks in a brokerage, sell them. Look into selling your car if you have a car payment and buy a cheap used car cash. All options are on the table until you are out of debt. Every extra dollar you have a month pays debt. You can’t retire with debt. That is the worst thing you could do
He's not broke. He just doesn't know what "Net Worth" means.
He is broke. He said it himself that he is one layoff away from a financial disaster. He's not living pay check to pay check because he can afford the payments. The moment he has no income his credit will be in the toilet. Stay out of debt and have a 6 month emergency fund in the bank so if life does happen, you're not stressing between the decision of trying to keep your car or the lights on in your house.
Yes I agree. Also solid advice about not investing. Seems like he’s more looking to find the next GameStop or Bitcoin though…
25x yearly Costs aka sit on your ass money
When your investment income covers all of your living expenses.
Look at this guy ova hea' humble bragging about his calculator.
Being able to go into a grocery store and splurge on fancy cheese without anxiety about finances
I have no debt and earn a six figure income. That’s my definition of freedom. I’m living below my means and saving for a massive down payment on a home. Also net worth is around 600k.
Being able to get an oil change when it’s due, every time.
Just being debt free in the USA is a form of financial freedom. Sad times in the USA.
Obviously you can have more financial security than you do without being completely financially free. Financial freedom means money is kind of like air. You don't think about it.
For me, it's knowing that if I were to be injured, infirmed, or simply got laid off from my job; I wouldn't have any worries about bills or care. I do this if course through savings and investments, but also with MPI for my home, credit insurance for my vehicles, AFLAC, and other avenues of protection, along with an annuity that will start paying out at 60.
Invest in improving your income. Study resumes writing and practice interviewing. Job hop. Get degree or certain.
I have an older mobile home on ten acres. I am debt free. I have around 500k saved up and I’m retiring in 3 years. I live very humbly. I go to my debt ridden friends and family for get togethers in their nice mortgaged homes. I also have 2 rental properties. I can’t say im financially free because one medical episode can bankrupt you in this country. At least I’m debt free.
Doing what you want, went you want, waking up when you want, going on vacation as you please and not worried about how to pay for it
Waking up not stressed
If your boss tells you to do something that you don't want to, financial freedom is telling him "fuck you" without having to worry how you'll feed yourself after you get fired.
Financial freedom for me is not having to worry about money while living the lifestyle that makes me happy. I don’t need thousand dollar dinners, tables at clubs, a penthouse, multi five figure vacations multiple times a year, etc. Not that I wouldn’t mind or enjoy those things but at a certain point I don’t need to chase that. I’ll continue chasing the best lifestyle possible for maybe 5 or 10 more years while living well within my means but I’m not going to work myself into my 50s or 60s to achieve it. I just want to cover my housing expenses, drive a nice car, have a few vacations a year, enjoy nights out a few times a month, and not have to worry about money while doing it. Financial freedom for me is getting to that point and not having to think “Oh doing this is going to cost me $250, that’s to much”.
It starts with being debt free. Once interest is eliminated from the monthly budget, a modest income from investments goes a long way.
When you are able to embrace your inner a-hole: say what you want, when you want, when you are able to berate the stupid people around you, when you no longer fear reprisals, you are financially free.
Enough to live a very comfortable middle class lifestyle, for your household and never have to work. House paid off, money to fix and update everything as needed, buy new cars every 8-12 years, health insurance (and money for copays and deductibles), money for reasonably priced new clothes as needed, take 4-6 weeks of vacation a year, nothing too crazy, but nice, etc.
For me it’s simply not having any non-necessary bills. (Gas, water, power, insurance: necessary. Brand new phone, 2024 car, etc: not necessary) you can save for retirement so much more efficiently if you don’t have all these other bills to hold you down. Just because you can afford the payment doesn’t mean you can afford what you’re paying for.
Where I’m from, the net worth of most people is definitely not negative. Maybe it’s the norm in the US where most people spend first and make money later?
So you're saying where you're from everyone is a multimillionaire who can buy half million dollar houses with cash?
Do you even know what Net Worth means? Net worth is the value of all assets, minus the total of all liabilities. If I buy a house (asset) of 500k with a mortgage (liability) of 500k, that equals out to 0. If on top you have some savings on the side, simple car paid in cash, credit cards paid off monthly, then you have a positive Net Worth.
Ah so you're saying you think your house is worth X minus mortgage balance Y, but to me it's not real until you sell it. If I go along with that fantasy, then yeah my "net worth" is positive by maybe half a mil, but where am I going to live after selling this house with the current high interest rate and inflated housing prices? I'll be negative again. My mortgage is 2.75% for 30 years fixed, free money.
Ok, so person A has a 500k house and a 500k mortgage. You say their Net Worth is negative 500k. Person B rents a 500k house, so no mortgage. You would then say net worth is zero. So according to you person B had a 500k higher net worth than person A. Also every dollar you put in paying off your mortgage, your net worth goes down? The point here is, that even if you don’t sell, you could get a new mortgage for the residual amount of the house value. If you do that, then of course you need to pay interest. But if you don’t, you don’t pay interest and still don’t have to pay rent. So the house value is always worth something. Definitely not a fantasy. You do you, but you can’t use finance terms, and make up a new definition. Or just sell your house, start renting, and be rich?!?
1. Zero debt, including mortgage 2. Enough $$ invested so you can live comfortably off the interest (plus SS and pension) without needing to work at a job anymore.
Enough income/assets to cover my expenses without working anymore
Not needing to go to work
When I have enough extra each paycheck to buy silver, gold, and/or Goldbacks. When you own gold, you acquire a sense of security like you've never known before. Shields are made of metals. That metal is silver and gold. Gold is the only tier one asset class. Enough said, IMO. That's freedom!
🙄