Financial Freedom as we understand: a stage in life when we are debt free and have enough money to maintain a good standard of living and also to work on our ‘self-actualization”.
It does not seem a big task. With proper planning and funds management we should be able to get to that stage. Financial planners are the good Samaritans who show us the way to generate and manage our funds to achieve ‘financial freedom’. I am sure here I am making financial planners my friends.
At the same time it is surprising that we don’t see many claiming to have achieved financial freedom and working towards their self actualization and not chasing more money. Why is that more we get more we want? More we amass less content we feel.
The reason is simple. Money can not give the freedom you are looking for. Real Financial freedom means freedom from dependence on money.
If you look at the scenario carefully with the traditional thought process we are turning our dependence on money. Then how can we become free when we are restricted by and dependent on money. All that you want is through money. That means you have to involve in the various activities to make that kind of money, involve with various people, give and take obligations. All that would lead to further binding. As you grow financially, your expectations from money would also grow and there by the bar of financial freedom too would rise. This chase would never allow you to reach a state of financial freedom. May be there is really no actual ‘financial freedom’. This is a bitter truth.
I am sure this would upset my good friend – financial advisors.
Then the next obvious question is – Can ‘financial-freedom’ ever be achieved? The answer is – YES! But for this we need to redefine the term financial freedom or at least understand and accept the concept of financial freedom.
Lets us start with Standard of living. Depending upon the social status, location and circumstances every person defines their standard of living. First everyone works towards maintaining that standard and then improving it. Actually all this is done because we believe that is the way to contentment and happiness. Alas, a fallacy we don’t want to deny.
If you look around I am sure you will find people who have lower standard of living than yours. Does that mean they are not happy? No. I am sure you can find very happy lot in them too. The happiness disappears when we start comparing with some one who has more apparent wealth. We then start to aspire for that standard in anticipation that with that kind of financial wealth we can get the “freedom’ we aspire. If that amount of finance would have provided the required freedom then why is that, those people who have that kind of money, are not ‘financially free”?
I am sure by now all the financial advisors would be up in arms.
The answer to the above is also very simple. As we grow our finances through investments etc, our desires and expectations also grow. Those things which satisfied us in the past no longer hold our interest in the same manner now. So what do we do?
Either find a way to multiply our income and saving exponentially to match for the future rise in expectations or have ceiling on desires. Well we would agree that it is not possible to know how our desires would multiply or our expectations would change depending upon the changing social, economical and financial situations around us. At this rate we may end up working for ever to make that kind of money and not be there to enjoy even what ever we have saved.
On the other hand to have ceiling on desires gives an impression that we need to suppress our desires and not be ambitious. It is actually not so. Let me explain what is meant by “ceiling on desire”.
Ceiling on Desire (COD) is a tool to be happy NOW and not postpone being happy for future. There is a fundamental truth we need to understand – we are basically happy. We do not need any thing or any one to make us happy. Let’s take an example. You love chocolate. You can swear that you could not live without it and can eat any time of the day, every day, for ever. I am sure some of you are already nodding your head. Others who don’t like chocolate so much can take example of anything that echoes such feeling for them. Now back to chocolate lovers. If I give you all your favorite chocolate and let you eat continuously for full day, day after day, will you enjoy it in the same manner? I am sure the answer is ‘no’. Will the joy of eating a chocolate be same as when you started and after eating for an hour or so? The answer is again ‘no’. There is law in economics which explains similar concept – ‘law of diminishing marginal utility”. I am not going there.
Ceiling on Desire concept helps you to identify your actual need. It helps validate your desire and encourages you to focuses your energy in acquiring the right kind and right amount of desires. It allows you to enjoy the things in present. It facilitates the understanding that happiness is not achieved after acquiring certain things instead it is with you always. COD allows you to start the journey with happiness, fill the journey with happiness and end the process in happiness. COD does not hinder growth. On the contrary it fosters our true growth by making us work continuously with joy and contentment. Remember if we don’t learn to be happy in our present state we can never be happy in any stage in life.
I think my friend –financial advisors- must be confused or might even think I am crazy. For financial freedom you need finance. For finance you need work on the investment growth options. The growth in investments also needs to fulfill the growth in the standard of living and rising expectation level of individual to achieve true ‘freedom’. The individual also need to exercise COD to realistically arrive at the achievable targets which a financial planner can help him to achieve.
You may wonder on one hand I am saying there is no real financial freedom, hence don’t chase money. On the other hand I am encouraging the investment. The main point to understand is the focus of an activity. Whether we desire for financial freedom or not we can not help but work to earn money. I do agree that money is important and we need it. But there is a basic difference. And that is in attitude.
In traditional approach the focus is on money. The personal satisfaction and happiness is dependent on that and thus becomes secondary. In the alternate approach, personal happiness is primary and money becomes secondary- just a means to an end.
We need to understand our nature first. It is not necessary that 2 people would be motivated or find happiness in the same manner. We need to understand the factor that drives us. Then aim in nurturing it. Once you understand your own nature you would start smiling. You will realize that you don’t need something to happen to become happy. You will be happy always. Then identify the factors that nurture and assist in the growth of your ‘nature’, foster them. For some of the factors you may need financial assistance. Then work on them keeping COD in mind. Now you are not working to multiply your wealth in order to get happiness but working on your wealth management to maintain and stabilize your happiness. This is where your financial planners can assist.
My dear friends- financial planners- need to be smart & good with human psychology and also have certain qualities to be really successful – be genuine; be courteous; be patient; be understanding; be honest and most importantly be happy.
