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Financial Freedom



As I was pondering what to write about, I considered several different topics. The coronavirus and political campaigns have certainly dominated recent headlines and both may affect your portfolio in the short-term. But, if you have been reading my articles or working with me for any amount of time, you know what my advice would have been – ignore the short-term noise over which you have no control and focus on your long-term goals. Instead, I thought I would start a series discussing something over which you have direct control. Something relevant and real to your life. Financial Freedom.

Reach into your pocket or purse and pull out your wallet. Grab whatever money you have. Fifty dollars or five dollars, it doesn't matter. Hold it up. Look at it. What you're looking at is the difference between eventual freedom or eternal wage slavery. The difference between being forced to work forever or making work optional. The money you have and the choices you make about what to do with that money will either get you closer to or further from Financial Freedom.

Let's begin by defining Financial Freedom, which can mean different things to different people. It might mean freedom to choose a career you love without worrying about money; freedom to take an overseas trip every year without it straining your budget; freedom to respond to the needs of others with great generosity; freedom to retire a decade early. Consider what Financial Freedom means to you because it is a very personal concept for each of us. If money were not an obstacle, what would your life look like?

There are different levels of Financial Freedom and for most of us, we gradually move from one level to the next.

  1. Not Living Paycheck to Paycheck – This is the level you want to move through quickly when you are just starting out. Building up the emergency fund and paying off short-term debt are your priorities here.

  2. Being Able to Quit your Job (for a while) – Having enough money to be able to walk away from your job, if even just for an extended vacation or sabbatical, can lower your stress level and be quite satisfying. It also allows you the freedom to say, "No" if your employer makes a request you deem inappropriate or unreasonable.

  3. Freedom and Flexibility – Have you ever wanted to move to a part-time or lower-paying job in a field you love? Would you like to try semi-retirement and have more time for volunteering or other hobbies? This level will allow you to do just that.

  4. Basic Retirement – Some people are willing to live a bare-bones lifestyle if it means they can quit their job today. Lots of penny-pinching and sacrifices might mean you could retire now. And for some, it's worth it.

  5. Retire Comfortably – Achieve the standard of living that you would be happy with, possibly the one you currently have. Completely leave the work force and maintain that lifestyle.

  6. Dream Retirement - Want to travel the world? Own multiple homes with luxury accommodations? Dream big.

Where do you fall on the levels of Financial Freedom today? Where would you like to be someday? I would like you to keep those answers at the forefront of your mind when you read my article next month, which will continue the discussion about Financial Freedom and explore how to achieve your own, personal version.

If you have questions or if you would like to discuss your ideas of Financial Freedom with me, you can e-mail me at mhaertzen@wtwealthmanagement.com or call (520) 204-1058.

Sincerely,

Matt Haertzen
Matthew J. Haertzen


References:
Dave Ramsey
"How Do I Achieve Financial Freedom?" Hogan, Chris.

Forbes. April 9, 2019.

"8 Levels of Financial Freedom." Rae, David.



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