Achieving Financial Freedom in Productive Times, Is It Possible?

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Financial freedom might be a wishlist for millennial generations who are currently in their productive age. In a sense, financial freedom is a condition where a person has full control over the money they have and does not let money get in the way of decisions in life. Often financial freedom is associated with early retirement or working only if you want because that person can live off passive income, without installments, and live no longer worrying about money.

Financial freedom is personal and by the personal goals of each person. For someone, maybe financial freedom means being able to travel around the world, while for someone else, maybe financial freedom means being able to pay for their children to the best universities. So, everyone has their version of financial freedom. How about your version of Financial Freedom?

Before reaching a state of financial freedom, generally, people will go through several stages in their financial situation, namely:

• Dependence.
  This is the stage when you still don't have an income and depend completely on other people.

• Solvency.
  At this stage, you begin to be able to meet your own needs, but sometimes you still need help from people.

• Stability.
  At this stage, you can meet all your own needs, pay off some debts, reduce expenses, and start saving. But there is still a possibility that you will still have productive and consumptive debt.

• Debt freedom.
  At this point, you've been able to set aside money for an emergency fund because you've paid off most of the debt. You no longer only have enough money to survive, but also succeed in improving your financial situation for the better.

• Financial security.
  You have started to put in funds for valuable investments that can generate short, medium, and long-term returns. You also start to enjoy the benefits of the investment you make.

• Financial independence.
  You continue to make solid long-term investments until a point of income from investment alone can even cover your current lifestyle needs.

• Financial freedom.**
  This is a condition where your financial condition can meet the lifestyle you want without working. Money can flow from passive income.

• Abundance.
  If your income continues to flow and your financial condition can fulfill the lifestyle you want, it is possible that you can even reach the final financial stage. At this stage, you have an income that even exceeds your own needs. So what needs to be done is to manage wealth or consider a plan to reduce it.

If you plan to achieve your personal goals and have financial freedom before entering retirement age, you can take these steps:

1. Understand your financial position and condition
   Everyone has a financial profile along with their respective risks. So, before planning a plan to achieve financial freedom, you must first know where the starting point is. See in detail how much debt you have, how much savings you have, and how much money is needed to achieve personal goals.
   Whatever your debt is now, commit to paying it off. Not having debt is one of the steps that must be taken to achieve financial freedom. Then, calculate the total assets owned, starting from savings, investments, and others. Also, take into account the monthly salary and additional income that can be received each month.

2. Track every expense
   The next important step towards financial freedom is knowing where the money is going. You can use the FINOO application to make it easier to record daily finances. Keeping track of finances will make it easier for you to know how much money is being spent, in what categories are over budget, how many assets, and how much debt you have. FINOO also has a Dream Saver feature that makes it easy for you to set financial goals, track the progress of their achievements, and know when you will reach those financial goals.

3. Is the current income sufficient?
   Financial freedom is a situation where you no longer think about money for the things you want to do. That means you must have an income that can meet all your needs, pay off debts, and set it aside for savings and investment. If you currently work in an office, try to review whether your current career and income support you to achieve financial freedom? Another alternative is to look for additional income that can add assets.

4. Investments
   The value of money that you have can gradually decrease due to the influence of inflation. To avoid this, investing is the right choice as a way to achieve financial freedom. The choice of investment must also be made appropriately by considering the period, risk, and return given.

Another thing that is also needed to achieve financial freedom is financial knowledge. The more knowledge you have about finances, the more informed financial decisions you can make. Keep learning about finance, from the basics to the specifics through news, books, podcasts, webinars, social media, and other sources of information.