What is True Financial Freedom

Beginner Dec 3, 2020

What is true financial freedom

When you think of financial freedom, what comes to mind? Having enough money to live comfortably without needing to work anymore? Or having enough money coming in to cover your expenses?

While both of these definitions are accurate in the traditional sense. This type of financial freedom isn’t as free as it might appear — after all, it still relies on an ensemble of banks, agencies, and other intermediaries to get anything done, right?

As we’ll soon discuss, true financial freedom is what you are really looking for. This means breaking free of banks and even governments, by taking control of your finances and achieving a level of financial freedom that many people didn’t even know was possible.

At Ledger, we believe true financial freedom isn’t all that hard to achieve, and it’s certainly something everyone could benefit from — let’s take a look at what it means in a little more depth.

Later on in the Ledger Financial Freedom Series, we’ll cover more information about what it means to be truly free, and take a look at some of the ways you can achieve this yourself!

Being Truly Free

Financial independence, also known as financial freedom, is usually described as a state where you simply don’t need to work anymore — because you’ve got enough money coming in from elsewhere to live on for the foreseeable future.

This is the ideal that most people strive for. After all, no longer having to work a meaningless job is certainly something worth aiming for… right? Right. But it’s not the same as true freedom.

Under this definition, somebody that has achieved “financial independence” is actually not as independent as they might think. After all, they’re still reliant on banks, governments, and a bunch of other middlemen to actually access and spend their own money — and often need to pay for the privilege too.

These intermediaries essentially provide a service that “financially independent” individuals are reliant on, and these services can be revoked or come crashing down at any time — potentially leaving them in somewhat of a predicament. Instead, we consider true financial freedom to be a position where you are in full control of your finances… completely unreliant on anyone or anything else.

Does this sound like your situation? Let’s explore it in a bit more depth below to see what financial freedom really looks like.

What True Financial Independence Looks Like

As we previously touched on, the generally accepted definition of financial independence is a state of abundance and freedom from major financial decisions.

But this doesn’t say anything about the control individuals have over their finances, or whether they are free to access, use, and transfer their money as they please. What good is financial freedom, if they need to ask permission to use their own money?

Instead, we think true financial freedom looks more like this:

Ownership

Having true ownership of your funds is something that is often taken for granted. 

After all, many people believe that funds held in a bank are completely safe and can be accessed and used however they please. But this isn’t exactly true. Withdrawal limits, transaction fees, opening hours, and a whole bunch of other issues need to be considered when using a bank. True ownership should mean no restrictions, should it not?

When you truly own your money, these considerations vanish, and you will be free to use your money without restrictions.

Security

Financial security is a topic on most people’s minds. After all, what’s the point of being financially independent if your finances could disappear at the drop of a hat?

For most people, financial security means locking away their funds, or paying for insurance just in case anything goes wrong. Some even go as far as to open a “hedge” — to protect the value of their assets in case the economy starts to struggle, for example. 

But these are all trade-offs. Real security shouldn’t come at an additional cost, it should be built into the foundations of how we think about money and is a critical component of true financial freedom.

Ease of use

Lastly, what good is being financially free if you need to jump through hoops to access your money?

Right now, if you want to make a large withdrawal from your bank, odds are you’ll face a gauntlet of questions before it’s approved. Want to spend your money abroad? Then you’re looking at spending limits, exchange fees, and potentially long delays — at the very least.

Instead, real financial freedom means no restrictions. Spend your money as you see fit, with zero hurdles, and nobody to answer to.

Your way to financial freedom

As we’ll discover through the rest of the Financial Freedom Series, there’s only a few ways to gain true financial independence. But there are a huge number of ways to lose it.

If you’re sick of tackling fees from every angle just to use or spend your own money with your bank, or struggling to pull your money out of that investment you’ve been stuck in all those years, then stay tuned for next week’s article.

We’ll be taking an eye-opening look into how banks, stocks, and hedge funds appear to offer financial freedom — but it’s not quite what it seems on the surface.

Related article

Share this article