BiggerPockets

Financial independence means that you do not rely on any one particular source of income. Your basic needs are covered for the rest of your life and you don't have any financial worries. Generally you would like to have multiple sources, or streams, of income. That way if any one of them disappeared you would still be ok. If you depended solely on rental property income you would be in trouble if you had a catastrophic level of vacancies or other problems related to the properties.

8)

To me Financial Independence is two major things: 1. Passive income that exceeds my living expenses and 2. Having achieved the next step in wealth building. IMHO, the passive income could be one stream or multiple. That doesn't matter. The point is it's a step.

Even in the cashflow game, you do not win the game by achieving " financial independence" . Financial independence is a necessary step to winning the game and really only changes the way you can play. What financial independence says is that your are a sophisticated enough investor to take on larger and more profitable projects that are beyond the scope of the financially dependent.

The key is that these new projects are within your control to choose now.

Tim

2 Qualifiers for me:

You have enough income to support whatever lifestyle you wish to live.

You don't have to work for the money.

Landlording is a job. I have enough to live on, but I am working for it. Therefore, I am not financially independent.

Thanks for bringing in a ray of sunshine, Mike! lol :goofy:

Financial independence for me means being able to do what I want, buy what I want, go where I want, and not have to slave 40 hours a week for " the man" .

Originally posted by "marks"

Financial independence for me means being able to do what I want, buy what I want, go where I want,

At this point in my life I realize this is an absolute impossibility. Even if I had $1,000,000 a month coming in tax free, my " wants" would STILL exceed my ability to spend.

If this is truly the definition, then its much easier to achieve by adjusting the wants than the means.

and not have to slave 40 hours a week for " the man" .

Now this I understand. However, my experience is that every job has parts that, well, suck. Flipping houses or landlording is just as much as job as any other, despite what the gurus say. Whether its waiting for a bank, waiting for a contractor, or waiting for a tenant. Sanding sheetrock or filing evictions. There's going to be unpleasant parts.

I guess I'd say financial independence is income exceeding expenses, and not being tied up in knots worrying about the income. That is, the ability to get on with living your live and not worrying about paying the bills.

Originally posted by "Wheatie"

At this point in my life I realize this is an absolute impossibility. Even if I had $1,000,000 a month coming in tax free, my " wants" would STILL exceed my ability to spend.

Yup, that's grandiose.

Originally posted by "marks"

Financial independence for me means being able to do what I want, buy what I want, go where I want,

... with whoever I want, without financial restrictions, and (HERE'S the KEY)
be satisfied and content when I get/have/do it.

Originally posted by "Wheatie"

Getting the spending in control is the tougher task. At least for me.

Losing everything and starting over was one of the greatest gifts to my investing career that I could ever imagine. You learn how to live on dollar amounts smaller than you could imagine so that when opportunities arise that need cash - you can afford to invest.

Losing everything and starting over was one of the greatest gifts to my investing career that I could ever imagine. You learn how to live on dollar amounts smaller than you could imagine so that when opportunities arise that need cash - you can afford to invest.

Similar situation occurred in my life. I basically got ripped off by someone I trusted. It IS a gift. For me it was a clean slate, inspiration to think creatively, and to THINK in general about what I wanted out of life and where I wanted to end up.

I put down Napoleon Hill, and picked up books by Henry David Thoreau and took up a new motto: " We are happy in proportion to the things we can do without" .

I also put down Robert Kiyosaki and started reading Timothy Ferriss-- his book, The Four Hour Work Week is a neo-American-minimalist manifesto. In a nutshell the premise of the whole book is that TIME is the real treasure, that work is a means to an end, and that your career " what you do" isn't as important as " who you are" .

He correctly points out that most people don't actually want to be millionaires, but rather they want what they think only a million dollars can provide.

Way too many " gurus" make a pretty nice living convincing people they've got to make millions and while people have $ signs in their eyes and are looking at the yachts, and sports cars, and big houses in their inspired dreams, they miss the fact that the gurus are taking them for the few thousand bucks they've got.

Why is the genius that can teach you to make $500K a year investing in real estate flying to Chicago in the middle of February and trying to extract $2K from you? Seems to me if I was making $500K a year- I wouldn't be hanging out at some REIA in Chicago in the dead of winter...

While I agree with most of the perceptions of financial freedom, other than MikeOh's opinion that it is just guru nonsense, it really depneds on your individual point of view.

In it's simplest form, financial freedom is the ability to achieve a lifestyle which suites your needs without having to work for income. (Trade hours for money.) To say that there is no such thing as this is ignorant. There are many, many wealthy individuals who do not ever have to work a day in their lives. Although many of them still work in some fashion or another, the point is that it is voluntary and not necessary.

I'm a financial planner and I've told a retired engineer (early 60s) that with his 800k nest egg he would never have to worry about money again and I've told a doctor (early 60s) that his 3.3 million wouldn't last 20 years and more likely closer to only 15. How can this be when the Dr has 4 times as much money and he came into the meeting thinking he was set for life??? The Dr 'needs' 240k/year to live off of (which means withdrawals of 300k-350k from a retirement account) while the engineer needs 60k.

I had a morning meeting with a client (late 60s) who fell out of his chair when we told him that in a couple of years when he is forced to start withdrawing from his IRA that his yearly income would be 100k. That afternoon a different client (early 70s) was very concerned that he didn't have enough money to live on and that he might need to increase his withdrawals from his investment portfolio. His annual income that wasn't enough to live on? $1,000,000

So in speaking about financial independence, I offer a quote from Dante's Paradise Lost "The mind in and of itself is it's own place, and in that place it can create a heaven from hell, or a hell from heaven."