"The Harley Davidson - Part Machine, Part Metaphor: Not only is it a metaphor for emotional freedom but also a symbol of financial freedom. A frequent entry on many people's financial freedom wishlist, not to mention the accompanying roadtrip on Route 66. Certainly, riding a Harley on Route 66 is on my 101 Things to Do Before I Die list. Come get your kicks..." ~ Keelan
Financial Freedom
You will have achieved financial freedom when you have accumulated a sufficient critical mass of capital to provide enough income for you to live the lifestyle you desire (accounting for inflation) without ever having to work again for the rest of your life. The keyword here is ‘desire’. This is what differentiates financial freedom from its predecessor, financial independence, which is defined more by what you ‘require’ to live reasonably comfortably.
In essence, Financial Freedom would include having and enjoying all the luxuries in life such as:
- Second Home in the Sun ($700,000) – $3, 500/month
- 35 Foot Boat ($150,000) – $1,500/month
- Mercedes Benz ($100,000) – $1,000/month
- 1 Luxury Holiday ($12,000)– $1,000/month
- Harley Davidson ($20,000) – $400/month
The additional monthly unearned income needed for these luxuries comes to $7,400/month i.e. $88,800/annum. Therefore the total cost of financial freedom is the $51, 600/annum figure needed to achieve Financial Independence (which we worked out in a previous article) PLUS an additional $88,800/annum = $140,400/annum
Again, using the benchmark of an annual 8% return on investment would mean you’d therefore need a critical mass of capital amounting to $1, 755,000 in order to secure financial freedom. So, as you can see it’s a decent sum of money but I believe within the realms of possibility for anyone who sets about achieving it and re-thinking their approach to income generation and financial planning.
About Keelan Cunningham
Keelan Cunningham is an entrepreneur, multiple business owner, author, and personal finance/wealth building specialist. Keelan’s passion is helping people improve their business acumen and personal wealth creation strategies, so they can lead a truly wealthy life in all aspects and with any luck similarly transform the lives of others.
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