It isn’t unusual to make use of the phrases ‘monetary freedom’ and ‘monetary independence’ interchangeably. It’s a disservice to each. There is a vital distinction I’ve realised.
Monetary Freedom
is a way of thinking the place you determine to not let cash stand in the way in which of what selections you make. There’s a sure consciousness, an consciousness of what’s essential to you.
You go about decluttering and simplifying your life and constructing it with ‘what’s essential to you and your loved ones‘.
Sure, you continue to have that house mortgage and children going to highschool, however if you see a possibility that can provide you barely much less cash however extra happiness, extra time with household, you determine to go for it.
You don’t go about upgrading your way of life, past some extent, simply because you’ve got more cash. The larger automotive just isn’t essential and the 2BHK is sufficient for the household.
Monetary Independence
alternatively, is having sufficient cash to not get up one other day for locating extra of it. You may determine to no matter you need, with out the cash fear in the back of your thoughts.
Go a world tour, work with social organisations, have lengthy lunches with pals or spend time to write down your weblog/guide. Your portfolio, your wealth is sufficient to present your day after day bills or some other necessities.
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Freedom is inside you, independence is outdoors of you.
Fairly apparently, monetary freedom is extra essential than independence. In reality, freedom has to occur earlier than independence.
The liberty mindset is what means that you can attain your independence. It helps you get off the hedonic treadmill.
Wealth just isn’t about having some huge cash, it’s about having a variety of choices.
Chris Rock
After I see it this fashion, I consider I’m financially free.
What about you?
Do share your ideas.
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References
- Wealth Clarifies by Rational Stroll
- A Video on the distinction by Massive Assume
- Purpose-based planning
