The true meaning of financial freedom

The journey to reaching financial freedom is likely to be a very personal experience. For many people the concept of financial freedom means that you have the wealth and means to enjoy a particular standard of lifestyle without having to be overly concerned about financial responsibilities.

What does financial freedom mean to you?

Simply put, financial freedom looks different for each and every person. So what might be your idea of success, may not resonate with someone else. The key in achieving financial freedom is to give yourself the time and space to consider just what it looks like to you.

Don’t rush the process – you’ll need to think about your plans, involve your family, and perhaps do some research into what your dreams look like in reality; make sure you sanity check as to whether it’s really feasible to buy your dream car or go on holiday every month! It can be useful to be very specific and set goals too – you can always adjust things along the way and it’s likely that your plans will shift as your circumstances do.

There are many things which you might like to consider including:

Property aspirations – do you plan to own property? Both in UK and overseas?

Cash deposits – is it important to have a particular amount in the bank?

Travel – do you want to spend a particular amount of time on holiday each year or periods in which you live abroad or between a couple of locations?

Legacies & charitable donations – are you focused on leaving a particular amount to your chosen beneficiaries? Or do you plan to support a charity or other organisation with a lump sum either during your life or after it?

Financial support – do you want to cover school and university fees for your children, and grandchildren?

Lifestyle – have you always hankered after a particular car, piece of art or been keen to make the most of your life by taking advantage of other experiences?

Tax – are you keen to structure your finances to avoid paying any more tax than you need to? Don’t forget that this area may require the help and support of an expert tax adviser.

And in thinking about financial freedom, it’s important to remember that it might not be about planning for your retirement or later years; you may want more out of each day of your life whether that be by working part-time, spending more time with those you love, or travelling the world before you feel you’re too old to!

How to start on a path to achieve financial freedom

The good news is that it’s never too late to put in place plans to help you achieve financial freedom. Even small steps can help build the foundation for your savings and investments, and it almost goes without saying that it’s always useful to develop good financial habits and never ignore the basics – in short spend less than you earn!

Paying off debt can be the most liberating step in your journey, and this is usually a good place to start to ensure that your financial commitments, such as a mortgage and credit card don’t become the primary focus. This then gives you scope to consider pensions, savings and investments, all in line with your own attitude to risk. And this is an important factor, if your route to financial freedom is particularly ambitious you may need to build more risk into your investment portfolio in the early years, before tapering back.

Having the right investments in place may mean they can do a lot of the ‘heavy lifting’ for you in terms of helping you achieve your goals. Remember too, to stay flexible, and review your goals regularly – at least once a year to check if you’re on track.

Certainly a financial roadmap can help you properly determine personal and financial goals, and it can be useful to work with a financial planner who can support you and help you plan what you want to achieve, and how to get there.

Finally don’t overlook some of those basic fundamental steps so that you protect your wealth for yourself and your family; make sure you have a Will, which is up-to-date and properly reflects your wishes for what you’d like to happen to your estate in the future.

Financial planning is worth it

Striving for financial freedom can deliver much more than just a monetary reward. Eliminating financial worries can bring you significant peace of mind as well as financial stability for you and your family.

Without money worries you may find you have the opportunity to enjoy each day, the benefit of increased time and the advantage of a range of psychological benefits – along with the feeling that all that hard work and planning was worth it!

How we view financial freedom

We understand that financial freedom looks different for everyone. Our experience in supporting clients around the world, and at different stages of their lives, means that we can work with you to help you understand what financial freedom means to you.

Our highly qualified teams are ready to help you build a plan which can help you achieve your goals.

This article is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.

Past performance is not indicative of future results and the value of investments can fall as well as rise. No representation is made that the stated results will be replicated.