Achieving early financial freedom is simple but starting the process is challenging
mutual funds to invest for 5-10 years, not only is the answer straightforward, but the process by which the answer is arrived at is almost self-evident. However, bigger, conceptual problems are not simple to reason. For instance, consider a question like, ‘What should my overall financial strategy be?’ The answer needs to incorporate longterm goals, spending habits, income levels, and family situations into a comprehensive plan that evolves with time.
While specific investment picks can follow the plug-and-play mode, big picture finances need customisation and frequent reassessment.
Such a question can be paraphrased to, ‘Could you plan my entire life’s finances?’. It’s more a topic for consultation than a question, but people ask it anyway. There’s an even more conceptual question that is coming up increasingly: ‘How can I achieve financial freedom by age X?’.
The value of X is generally well short of the usual retirement age. To answer this question, one requires not just financial planning, but a lifestyle overhaul. It involves optimising savings rates, investing aggressively, minimising expenses, and potentially considering non-traditional income sources.
It often requires focusing on this one goal to guide all major life decisions.
The concept of ‘financial freedom’ itself is highly personal and subjective, and cannot have a clear, universally accepted definition. Achieving it by a certain age will mean different things to different people based on their personalities, interests, responsibilities and outlook on life. So, in effect, a question about pursuing early financial freedom is as much about understanding someone’s motivations and aspirations, as it is about numbers.
