Posted by 
Financial freedom is a concept borrowed from "financial freedom" in Western investment and financial management.Financial freedom refers to the state where you don't need to work hard for money for living expenses.Simply put, the passive income generated by your assets exceeds or equals your daily expenses. This is the state most of us desire to achieve. If we enter this state, we can call it retirement or various other names.
Financial freedom has nothing to do with whether you are young or how much money you have.If you can make enough money for your daily expenses from ways other than your job, you will have financial freedom.
In other words, "financial freedom" in the true sense cannot yet rely on wages and bonuses.It refers more to an ultimate goal you obtain through investment and financial management.If you achieve the goals mentioned below, you will achieve financial freedom.
1
No need to work for money first
Most people's work is to "make living", that is, for individuals or families, to provide houses and cars, and to maintain a decent "successful person" life.Once work stops, the "decent life" will become "indecent".So most people are working for "money", although sometimes the boss looks ugly and can only swallow.
If you can work for interest instead of working for money, then you are fortunate to have taken an important step on the road to "financial freedom." "Work for fun" is the first step towards financial freedom.Many entrepreneurs who succeeded in starting a business started by "doing something interesting".Bill Gates and Yang Zhiyuan started their entrepreneurship with interest.At first they didn't know that they would get such a large sum of wealth. Money and wealth were just a windfall from working for their interests.
Even Buffett, who specializes in investment, is not directly looking at "money". His interest lies in "value discovery."Because Buffett's interest is focused on "finding good companies and buying them," he can repeat reading boring figures and statements for decades, and he rarely pays attention to stock prices.
Many of us invest directly with "money". Business models and value analysis are not what they are interested in. The focus of their interest is "stock price = money". A daily limit makes them High, and a falling limit makes them down.They are completely controlled by the price curve that represents "money". Even if they invest, they are "work for money."But in the end you will find that they are getting farther and farther away from "money".
2
The second is to maintain the net cash inflow of property income
In addition to salary income, property income is a very important indicator of achieving financial freedom.That is, it is guaranteed that there will be a net cash inflow when not working.
Property income can come from: rent; stock dividends; bond interest.An important concept in property income is: net cash inflow.
Some people may own a lot of properties, but the monthly rental income is not enough to cover the bank's mortgage payment, and the cash flow is negative.An asset like this is a "liability" on the financial balance sheet, not a real "asset".The same is true as a shareholder of a company. If there is no dividend from the company every year, but only additional investment, then this equity is also likely to be a "liability".
Many private entrepreneurs confuse "business and family", "assets and liabilities", combine company finances with family finances, and mistake "debts" for "assets."If the company's finances go wrong, individuals and families will be dealt with in one go.Maintaining the net cash inflow of property income is actually a very important concept in investment and financial management.When an asset cannot bring you "net cash flow", it is likely to be a "liability".This is a financial proposition that is easy to understand and difficult to do.
3
Need to maintain a certain amount of net assets
If we want to give "financial freedom" a quantitative concept, that is, net wealth.For example, a concept commonly used by asset managers is often mentioned: High Net Wealth Investors (HNWIs), that is: total assets-total liabilities ≥ 100 million US dollars.If China’s national conditions and the purchasing power of the renminbi are taken into account, the net assets in the first-tier big cities will reach 300 million yuan; the second and third-tier cities will be 200 million yuan; a small town with 100 million yuan can be listed as a "high net worth investor "In the ranks.This is the current level. If your goal is set in 20 years, taking into account the factor of inflation (2% per year), this quantitative standard should be: 446 million in first-tier cities; 297 million in second-tier and third-tier cities; 149 million in small towns .
4
Finally, keep a normal and free heart
How many assets does a person have to achieve spiritual freedom?This is really a question that varies from person to person, and there is no standard answer.A true "financially free person" should be a person who has both money and leisure, and maintains an ordinary free spirit.Money does not necessarily make people free; but without money, they must not be free.If you want to achieve financial freedom, you have to go to it, and you have to go to it.
The highest state of financial freedom
You don’t have to be ashamed of thrifty food and clothing, and you don’t need to use a pot belly to prove your wealth; you don’t have to show off your wealth to be respected, because your personality is already shining; your wealth is only for what you love People who love you and those who love you live a comfortable (not luxurious) and dignified life.
In this way, wealth can enable you to achieve true spiritual freedom.This may be the essence of financial freedom.
This article is not original, it is edited and published by this site.
