Monday, 21 December 2015

What Is Financial Freedom?

If you are looking for freedom in a world that was built on money, it makes sense to seek to become financially free first. But what is financial freedom? What does it really mean to be financially independent?

Society's path
For a long time I bought into society’s way to financial freedom: I thought it meant that I needed to accumulate a lot of money - and preferably have it invested in places that can generate passive income (such as real estate). I thought this would be the only way to buy myself freedom and security so that I could live a care-free life, and living happily ever after. However, I soon realized this understanding of (financial) freedom is a hazardous trap. 
Here are some of the reasons why seeking financial freedom through material wealth is an endless uphill battle (and therefore illogical):
1. There is no clear end goal, or a way to evaluate progress, and so some people stay trapped in the game and succumb to the temptation to keep accumulating and hoarding more and more (without ever finding freedom).
How do you know how much money or how many investments are enough to sustain yourself comfortably without having to work for money anymore? We can never be sure how much money we will need until we need it, because it depends on so many (unstable) factors, and so much can go wrong. This is why some people never get to the point where they feel free, even when they have more than enough to support themselves for 10 lifetimes. Hoarding can become addictive, and stems from fear about the uncertain future.
2. Even when you think you are financially free, there are many uncertainties and your status can change at any time (there is no permanent safety). 
Here are some possible bad-news-scenarios for homeowners and investors in real estate:  
- the location of your investment property (which may be popular and valuable now) could deteriorate drastically in the near future
- the area could be struck by natural disasters, or the effects of climate change could make living there impossible
- war may turn your property into ruins
- the property could burn down
- property taxes and income tax could increase so much that renting it out will no longer be sufficiently profitable (**BTW, what is the deal with property taxes anyway? What is the point of owning a property if you still have to pay monthly or yearly fees to be able to ‘own’ it (and why do we accept this as normal)?)
- overpopulation and resulting scarcity could make food so expensive that real estate revenue no longer covers cost of living
- the whole economic system could collapse
Some of these scenarios may seem far-fetched, but with the way things are going these risks are becoming increasingly real and some of them even probable.
3. You are still dependent on an outside source that is outside your control: money.
Getting rich only makes you dependent on money... for absolutely everything. Wouldn't you rather depend on what nature provides instead (and on yourself for getting your needs met)?
4. You are trading in the freedom you have now for future comforts that you may or may not get to enjoy.
We are all born free, even though it may seem we are not. The system doesn't leave much room for freedom inside its realms though, and would like you to believe that you are not free (or at least that it comes with a price: you need to work for it first). We have invented many rules and regulations that try to limit this inherent freedom. But what if we can escape the system? And it turns out we can. It may seem difficult at first, but not as difficult as staying where we are.
"Growth is painful. Change is painful. But nothing is as painful as staying stuck somewhere you don't belong." - Mandy Hale

The hidden cost of material 'wealth'

All possessions complicate life unnecessarily, including money. They don’t tell you this beforehand, but owning things and having money is very expensive, and many rules apply so that many people (and institutions) can benefit from your hard-earned pennies. If you have money or other things that society values, you have to pay taxes and you need institutions to look after it, or get some type of insurance in case something bad happens to it. Of course all of that costs money too. 
Many of these structures and rules in our society seem to have the sole purpose to make 'financial independence' in the traditional meaning very difficult to achieve. And this makes sense, since it is more convenient for society if you have to keep working for a long time, not in the least because you provide the funding to keep all those structures in place. So they want to keep you busy. With the goal of financial freedom in your mind but always just out of reach you are easier to manipulate because you are preoccupied (and thus distracted from more important issues). It also prevents you from considering alternative ways of living, because all the current rules, regulations, norms and values are pointing towards the money-making strategy. Alternatives simply don't seem to exist. Moreover, by being stuck in the monetary system you won't even have the time nor the energy to think about alternatives.
The biggest cost to material 'wealth' is actually hidden in the process of accumulation, measured by the amount of precious time (which could have been spent as quality time with loved ones, as self-reflection or to (re-)connect with nature), stress and burnout, effort, the denial of your own (and others') needs, the resulting mental and physical health problems and the damaging effects of the monetary system (focus on growth, creation of pointless and sometimes destructive jobs, etc) on the environment. Each precious moment of life is one you can never get back and each decision you make has consequences for the earth and everyone and everything that lives here. How much precious time are you willing to waste on something you think you have to do instead of on what you truly want to do? How many decisions are you willing to make that compromise your own moral integrity because 'it is your job' and you 'have no choice'? You always have a choice.

Is it worth it to keep playing society's game?
In most cases, the process of getting enough money for those big investments that may help buy you a little piece of freedom at some stage in the future involves many years of dedicated hard work. And for many it doesn't even pay off in the end. In fact, as was outlined before, the whole accumulation process is one pervaded by uncertainties, hardships and inevitable, unanticipated change. So much can go wrong, and a lot can - and will - change along the way. Therefore many people never get to the point where they get their lives back. They never get to the point where they can once again focus their full attention on what really matters to them, or they have lost the ability to do so due to long-term conditioning.

And even if you do manage to buy and pay off a house, then the costs don't end there. You have to pay taxes, you need to pay for upkeep and if the house is not off-grid you also need to pay for utilities. So buying property is only the beginning of your journey and nowhere near a ticket to freedom. The hidden and ongoing costs of property ownership will keep you in the loop of needing more and more money to make ends meet.
If you want to be able to sustain yourself financially without having any other form of income, you will need to own at least two homes: one to rent out for a steady income and another to live in. And even if you make it to that stage, a lot can still go wrong so that you once again lose your freedom and have to start all over again. For example: What if there is a flood, earthquake, or hurricane and your house gets swept away? Then it is all gone in seconds. Your life savings down the drain. It happens to people all the time, and it could also happen to you. Perhaps you will even be left with a debt. Are you willing to sacrifice your life for that, and all of its precious moments? And we have not even begun to discuss the intricate details of other issues like inflation, devaluation, migration, and climate change. Will the area be livable in the future? Nobody knows. 
In an attempt to cover some of these risks, you might be tempted to invest in more real estate, but before you can do so, you will have to earn more money. And so the cycle continues... you are a slave to money a little while longer, meanwhile never really finding the freedom you were seeking to begin with. Although by then you may have become so used to it that you don't even notice it anymore. You have buried your hopes and dreams, wishes and needs. You are dead on the inside and life has escaped you. Life has passed you by... silently. And you still have no guarantee that you are going to be looked after or that you will be able to live the good life without any worries.

The point is that life will always have uncertainties and it is impossible to plan for later, no matter how hard we try. So perhaps it is not worth it to sacrifice your freedom in exchange for a false sense of security. Which begs the question: Is there another way?
Yesterday's predator can easily become today's prey. And so today's victor can become tomorrow's casualty.

What is financial freedom?

Let's try to look at the meaning of financial freedom from a different perspective and see what it actually entails. Perhaps we can redefine it in a way that makes sense.

Basically, financial freedom means becoming totally free of money; independent of money... So you are financially free if you no longer need money for your survival, because you have found other ways to sustain yourself, for example through foraging or growing your own food. Of course you still have the option to use money, but having alternatives means it is no longer a necessity, but instead just an option among many other options. This is freedom: having a choice. You can choose to opt-out of the monetary system. You don't have to be a slave to money. You don't have to be bound by the system. You don't need a job, unless you choose to go down that path. You are free to go wherever you like and live your life according to your own values, needs and dreams. Isn't that what you always wanted when you were chasing financial freedom by acquiring material wealth? And what is wealth if you don't have time, energy, and most of all: freedom?

No sacrifices needed

You may think that this new perspective of financial freedom comes with a lot of sacrifices; or at least a few. But as it turns out, this is not the case. Of course you will need to commit to being solely responsible for your own survival and stop relying on government handouts. But guess what; you are already solely responsible for yourself, whether you realize it or not and whether you take that responsibility or not. The only difference is that you will get the added benefit of being truly financially free, after you escape the economy trap. Right now, you only get the illusion that someone is looking out for you (in exchange for your life and freedom). That is all.
However, when the shit hits the fan (and it will, probably sooner rather than later), society will not look after you. So it is best we know how to take care of ourselves. The security that society offers is a false sense of security. There are no guarantees. And in the end society does not have your best interest at heart, because society is not a person: it has no feelings and doesn't know you. You are merely a number. Have you noticed?  
Also, when societies do collapse it won't matter how much money you have or how many expensive cars you own. The only things that will matter is whether you are a kind person with a sense of moral responsibility and whether you know how to take care of yourself in the wilderness. Why not focus on those skills instead? It allows you to enjoy the present moment AND build valuable skills for a stable and secure future.

So even though it may seem there are sacrifices to be made, this is not true. In fact, you will gain much more than you could ever dream of. All it takes is some time to adjust and some effort to learn new skills: skills that will save your life in the long run. If there is one thing you need to give up though, it is the belief in (and attachment to) security. Security is always an illusion and in trying to achieve it you almost always automatically go in the opposite direction of freedom. So even though it may seem scary to let it go, it is not, because the 'security' you think you have is relying on unreliable, unstable structures; and therefore is non-existent. It can and it will collapse. Don't wait for it and stop aiming for it. 

If you no longer want to win or lose, then stop playing the game.

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