Do you seek Financial Independence, Freedom, or Wellness?

While “financial independence” is a popular term, it’s important to consider the spectrum of financial well-being to find what truly motivates you. Let’s break down the key concepts:

• Financial Independence: This refers to the state where your passive income, like investments or rental income, covers your core expenses. You’re no longer reliant on a traditional paycheck, allowing you to choose how you spend your time within reason.
• Financial Freedom: This takes things a step further. Here, you have the flexibility to not only cover your basic needs but also pursue your passions, travel the world, or upgrade your lifestyle without financial constraints. 
• Financial Wellness: This is a broader concept encompassing your overall financial health. It involves managing your money effectively, feeling secure about your future, and having the ability to cope with financial challenges. It’s not just about the numbers, but the peace of mind of knowing that you’re doing the best you can with the money you have today.

Why it matters

Understanding these distinctions can help you set realistic goals. Financial freedom might be the ultimate dream, but it requires significant wealth accumulation, which typically comes with risk. Financial independence is something that we often associate with retirement, but perhaps it’s possible to bring this date forward to empower your life and career choices by making smart decisions over time. Financial wellness is something that may be achieved in a relatively short timeframe by making some smart choices and putting in place a financial plan. 

Finding your path

Here are some questions to consider:

• Do you enjoy working? Perhaps achieving a healthy work-life balance is more appealing than financial independence.
• What lifestyle do you envision? Are you content with a simple life, or do you crave experiences and luxuries?
• What’s your risk tolerance? Financial freedom or early financial independence often involves taking calculated investment or business risks.
• Are you happy to sacrifice now? It may be that you need to forgo certain things in life in the short term to reach your goal of achieving financial independence earlier. Balancing this to ensure you live a full life along the way is key. 

The bottom line

Financial well-being is a journey, not a destination. At Engine Financial Services we can help you develop a personalised plan that aligns with your goals and values. Whether you seek independence, freedom, or simply peace of mind, we can guide you along the way.