Being Financially Free

Being Financially Free

Recently I’ve been reevaluating my long term and short term goals (I’ll post about those soon enough), and one thing I’ve been looking into more is – what does it mean to be financially free.

Of course, I talk about Financial Independence a lot, and I sometimes use the term Financial Freedom interchangeably with FI. So I decided to hit up the internet and look it up…

…And I found just about every possible meaning you can think of. There is literally no agreement on the difference in meaning between the two terms.

The funny thing is Google doesn’t seem to think there is a difference:

What is the difference between financial freedom and financial independence? What is the difference between financial freedom and financial independence?


I’d say 95% of the time Google is right, so I can say these words are probably synonyms and mean the same exact thing…though people feel there is a difference somehow.

The difference Between Being Financially Independent and Financially Free

I may have written it once or twice – Words have meaning. So I decided to hit up Google to check out the definitions.

Independent: 

1. not influenced or controlled by others in matters of opinion, conduct,etc.; thinking or acting for oneself:

2. not subject to another’s authority or jurisdiction; autonomous; free:

Free:

1. not under the control or in the power of another; able to act or be done as one wishes.

2. not physically restrained, obstructed, or fixed; unimpeded.

…and you can see the definitions are very similar – they both share nearly identical first definitions.

But, there are some subtle differences in #2 – Free is focused more on not being physically fixed, while independent is focused entirely on authority.

The definition of Financial Freedom and Financial Independence

This is how I would define each:

Financial Independence (according to Wikipedia) is generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities. For financially independent people, their assets generate income that is greater than their expenses.

Financial Freedom (according to me) is financial independence with that added ability to be location independent. When one’s assets generate income greater than their expenses, and they also have the ability to move or travel freely.

Being financially free means being unbound physically, not just from your job, but from your location.

I want to be financially free

I want to travel the world with my family and raise my children with a completely unique upbringing. I’m already financially independence, and since I need a term to call my dream, I will call it becoming financially free.

And now to the readers…

What does “Financially Free” mean to you?

By | 2016-11-28T01:04:32+00:00 June 30th, 2016|Categories: Financial Independence|6 Comments

About the Author:

An investor that reached financial independence at the age of 30, Eric has been seen on Forbes, Trulia, WiseBread, TheStreet, and other financial publications.

6 Comments

  1. Finance Solver July 9, 2016 at 1:52 am - Reply

    Financially free means that I’m able to do anything that I want to (within reason) without worrying about the cost. Hoping to one day reach that point, but time will tell. Any particular places you would like to visit?

    • Eric Bowlin July 9, 2016 at 9:05 pm - Reply

      I’d like to get around Asia more. I’ve been to China but would love to visit Taiwan, S. Korea, Japan, and a few others.

      Those are first on my list, but so many places are on my future list!

  2. Rudy SMT July 11, 2016 at 12:11 pm - Reply

    Hi Eric,

    Financial freedom is the way of life. I’m following this philosophy, the only one concern I’ve the education for my daughter.

    You mention your wish to raise your children with a unique upbringing, would be great if you share.

    I was discussing with my wife my unique way to educate my daughter, mainly done by me with a minimal school attendance for socializing.
    I was thinking to make her socializing via blogs with like-minded people, but I got negative feedback from most people having children and going for the conventional root.

    One more point, I calculate that sending my daughter to university would cost about US$ 250000 per 5 years term and personally I think is ridiculous. I explain my wife that is better I teach her to invest the US$ 250000 when she is 18 so she can be Financial Independent immediately, and by the age of 30 have a net worth of half million instead of a Ph.D. or something similar (a piece of paper).

    My wife got pissed.

    What are your thoughts?

    • Eric Bowlin July 11, 2016 at 12:49 pm - Reply

      I think there is always people who will disagree with anything you do. Even if you do something that conforms with one group of people, another group of people will disagree.

      Financial Independence is outside of the "normal" way of life. I still get comments by email, in person, or even on this blog occasionally that try to tell me it’s impossible. It’s obviously not.

      As for college, It’s too complicated to really find an absolute answer, but only think about it in different ways.

      I think education is important, but it’s also important to understand the value of your money. There are a lot of studies that show that children who receive a lot of money from their parents tend to produce less in their lifetime.

      I also believe that well invested money is more valuable than most degrees (I wrote an article about that on this site).

      Education will also create opportunities that never would have existed before.

      …and with school, we can’t forget that our children may have their own goals in life. Some people find more value in helping people, animals, or whatever else they may like. A degree may be the only way for them to find fulfillment in their lives if it provides them the ability to do what they truly find valuable. I wouldn’t take that away from my children if that is the direction they choose in life.

      So college may slow them down from FI, but it may also may provide the education to understand how to get to FI, or to provide fulfillment in life. It’s a conundrum.

  3. Mrs Groovy July 12, 2016 at 12:24 pm - Reply

    I agree with your definition of financial freedom but for me, I’d add that it means being free from all constraints. With independence I still may need to bite the bullet and do freelance work or take other active steps to bring in income occasionally. With freedom that wouldn’t be necessary. To me, freedom requires a larger nest egg, or a higher level of passive income than with independence.

    • Eric Bowlin July 12, 2016 at 12:31 pm - Reply

      I think that is a great point.

      In my head I think of "freedom" as a higher goal than "independence." Being independent maybe doesn’t mean you don’t ever have to work, it may mean you just are not constrained by a job.

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