What's Your Freedom Number?

Many people have the goal of getting wealthy, but it’s not a good goal.

Not that there’s anything wrong with wealth. I too am working toward my definition of wealth.

But it’s important to have a more comprehensive goal than just wealth. It is not about having the money, it is about having what the money can get you.

The other issue is that having a goal of wealth is too open-ended. How much wealth do you want? If you don’t set a specific number, then will you just be on the grind forever?

You have to stop and enjoy your wealth at some point, right?

You need to figure out what your personal definition of wealth is.

You need to calculate your freedom number.

Your freedom number is the amount of money you need to be able to live the life you want.

Of course, the loftier your goals, the greater your freedom number, and the more assets you will need to own.

Yes, you need to own assets.

What is an asset?

To me, an asset is something that creates income.

Preferably something that once you have set up, takes minimal time from you.

A job is not an asset. It’s not a bad thing to have. On the contrary. Work is fulfilling and will put food on the table. But it is not an asset.

A business can be an asset, as long as it is not just a job disguised as a business.

Investments can be assets, assuming you’re not losing money on them.

Anyway, here’s what you need to do.

Write down clearly how you want your dream life to look. This can take some time to figure out and can be changed at any time as well, but do the best you can. I suggest revisiting it every now and again to realign your freedom number with your dream life.

Once you know what your dream life looks like, calculate how much money you will need.

How much do you need as a lump sum?

And how much will you need as ongoing income?

Break it down further, make a plan, and set yourself time goals to achieve these things.

I don’t bother calculating how much I need to continue my life in retirement years. Doing nothing in retirement will lead to an early death, if not a literal death, then at least from boredom.

Besides, if you have built up your assets then the income will just roll in as needed.

Until you reach your freedom number, delay your gratification and live within your means. Being reasonably frugal on your journey will allow you to reach your life of freedom faster.