Financial freedom: To decide IF you want to work
If work is your hobby, you never have to work a single day in your life!
I had a conversation with a relative of mine who has his own business and enjoys doing it. He is debt free and enjoys a comfortable life. For him, financial freedom is not so critical because he likes what he does and enjoys interacting with his customers. To him, work something that provides well for him and his family and he will continue as long as he can.
I too would like to be in an organisation where my skills are valued, my work is value-creating and where the remuneration package is fair. But it is a challenge to find a job that is able to satisfy on so many aspects of Maslow's hierarchy of needs. For the record, my job isn't that bad and the remuneration is decent for the regular hours I work. I don't need to travel for overseas assignments. I do count my blessings for this current job.
Perspective on work-life changes with parenthood
I realise that as I embark on a new phase of life to that of being a father, my perspective of work-life balance changes. Being a parent means you have dependents to support. Being a parent means you come 2nd to your child and spouse. Being a parent means you no longer can be selfish and think only of yourself because you child relies on you for her every need.
Being a parent means you have to be there physically and emotionally for your child and yet deliver on your job through whatever means available, phone, remote VPN back to office mail servers and the like. As the responsibilities of being a parent dawn upon me, I start to go to work with a renewed vigour, to be early for work as I also need to go home on time to prepare for my daughter's impending arrival and to support my spouse who will be doing most of the actual work in bringing my daughter to this world.
But as I continue with my job as the means to build up my financial freedom, I begin to explore even more ways that I can be financially free but continuing with the fundamentals (which some may have heard ad-nausem!) :
- Live within your means
- Save and invest
- Grow your nest-egg
- Expand your means
Financial freedom means different things to different people. It is for me, the ability to decide IF you want to work. That, truly is what it is all about.
Be well and prosper.
3 comments:
Hi Panzer,
Another good post and it is good to have a constant reminder of our goals. It is good that our goals are aligned on this aspect, except that I do not have any child arriving whereas you do ! Haha. By the way, let me take the opportunity to congratulate you on your soon-to-be-parent status ! It cannot be easy to be faced with the prospect of a radical change in lifestyle but I can see that your goals are firm, so you will be able to achieve financial freedom someday soon.
Come to think of it, not many of my friends use this term "financial freedom". Most of them tend to talk about tomorrow, next week or next month and what they plan to do with their time. But none of them really seriously discuss several years down the road and how they would like to expand their wealth. Some talk of migrating, others about having kids while still others wish to enjoy life by spending on depreciating assets. Yet I would implicitly assume that each of these decisions should be supported by adequate financing, otherwise they may (literally) fall flat on their face !
One thing I have noted is that my friends have a lackadaisical attitude towards investing and treat it as a "if it works, good ! If not, then heck it" matter. Yes, some are very thrifty and save a substantial chunk of their income; but the true way to attain financial freedom is more than saving. It's about using money to grow more money and investing is one of the best methods for this. It may sound preachy but I have realized this the hard way after struggling for 7 years to build a decent savings balance.
Just by investing for the last 3+ years, I have managed to almost triple my total assets, though my mortgage loan still remains my single largest sole liability. Without investing and saving, I think I would not have managed this; thus I would like to provide a living example of how saving, living within your means and investing can help to grow money more quickly.
In a time of falling rates (SIBOR is around 1.44% as I type this), we cannot rely on FD or savings accounts to beat inflation. Thus, I choose to place my money in equities and high-yield instruments to maximise returns. Time will tell if I had made the right decision, but it sure beats being "safe" and leaving my money to rot in a bank account.
To end this long comment, I would like to reiterate that if only more people would be serious about investing and make capital preservation the central tenet in their investing philosophy, then they would discover that they can make money by NOT losing money.
Sorry for the long "essay", but hope that I managed to share something useful for you and your readers.
Cheers,
Musicwhiz
Hi Musicwhiz
Your comment is very insightful! Could I include it as a guest post in my next article? :-) I will credit your article and make copious links back to your blog! ;-)
You have brought up many important points about financial freedom, i.e. most of us spend more time thinking about what iPod to buy or what model of car to purchase vs. how to get the money to fund such acquisitions and its impact on our financial future.
Really it is about spending as much time on personal finance as we would on other aspects of our lives. But sadly, that is lacking in many people. I count myself as being one of those who didn't really seriously think about financial freedom until 2003 or so.
Glad to hear that you managed to triple your investible savings! Kudos to you!
For me, being debt free for my home has been one of the most memorable accomplishments in my life because it gives me a stable base upon which to make future financial decisions!
Be well and prosper!
Hello Panzer,
I posted my response to your comment on my blog as well, but will reproduce it here too for you. :)
Yes, sure you may use my comment as a guest post. Thanks for suggesting it and glad that you find my comments useful :)
Actually, I have to clarify that the part where I mentioned I tripled my assets is because I started out from a low base, so it is much easier to double or triple when your base is low compared to when you have a higher base (like what I have now in the market - S$80K).
Financial freedom should be what we ultimately strive for, and I think if we both conscientiously work at it, we will achieve it much earlier than most other people who would prefer to consume now and save later. They are missing out on the magic of compounding.
Kudos to you for being debt-free ! That is something I hope to achieve in about 7 to 8 years time, hopefully my salary would have scaled up by then so that I can clear the loan faster too.
The key is not to have lifestyle inflation when your income goes up, which is actually much easier to say and much harder to do ! I guess one always has to be mindful of not spending more just because one is earning more, and I constantly remind myself of that and watch my spending carefully.
Regards,
Musicwhiz
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