What is the Meaning of Financial Freedom?

The definition of Financial Freedom is unique to each individual.   What does it mean to you?  

Financial Freedom is the Holy Grail that many will seek but few will achieve.   That is one of the reasons that our motto is “Enjoy your Journey to Financial Freedom”.  This is not a quick trip.  Don’t wait to get “there” to enjoy your time in this world.  

We do not subscribe to the idea of saving every dollar to retire in 3 years.  You spent half your life becoming a physician for a reason…  There is nothing in the playbook that says you cannot enjoy practicing Medicine while pursing Financial Freedom.  In addition, you can still practice after achieving your goal.

Now with that said maybe the goal is to cut back on clinical hours a little…  There is a great argument to be made that striving for Financial Freedom can improve your overall finances, decrease physician burnout, improve your experience in Medicine and prolong your career (If you want).   Achieving this model allows you to practice medicine on your own terms.  

So how can you reach Financial Freedom?

First, you need to reach Financial Independence.  The good news is that you have already reached some form of Financial Independence.   You are no longer dependent on family for your financial needs and you make a respectable income as a Physician. 

If you do not depend on others for your income and you have funds available after paying your expenses then you have reached Financial Independence.   The goal now is to increase your level of Financial Independence to the point that you reach Financial Freedom….


By increasing your passive income streams while simultaneously decreasing your debt… Now there is actually a lot to unpack here… and this definition becomes more complicated if you are using real estate as your passive income-generating asset. 

In this case, you will likely be assuming large amounts of “good debt” via mortgages but this “good debt” is covered via rental income and actually produces a net positive cash-flow.  There are so many benefits to this strategy that there are countless books, blogs, podcasts and conferences regarding the benefits of real estate.  

In fact, this is our chosen investment asset to speed up our path to Financial Freedom.  (We fully fund our retirement accounts but invest our additional savings in real estate). 

By investing in real estate you can reach a high level of Financial Independence quickly but technically you are not Financially Free… 

In this scenario you have massive amounts of debt and are dependent on rental income to cover your debt and provide you with a source of passive income…. 

Now if you have reached this level you are definitely winning but to reach Financial Freedom you need to move to the next level of eliminating your debt.  

However, there are many great arguments for why you should not payoff your rental property debt…. And honestly I agree with them…

So I have changed my Financial Freedom definition…. “One has achieved Financial Freedom when they have accumulated enough savings and passive income to cover all expenses in excess, while paying off all personal debts, car loans, primary mortgage, second home mortgage (if not an STR), credit card debt and student loan debt.”

I do not include the “good-debt” in this Financial Freedom definition because the debt of rental properties should be considered a business and separate from your personal debt.  If you have a diversified portfolio, including a fully funded retirement, then you will reach Financial Freedom even if your “business” real estate empire crumbles.

The benefit of real estate and the passive income it provides will be to allow you to live as large a life as you are willing to build.  This income should be viewed as in addition to your baseline retirement planning.

On the other spectrum, you can reach Financial Freedom very quickly be down sizing your lifestyle, paying off debt and then living very frugally for the rest of your life.   You can pass on real estate; invest in index funds and in 20 years… Boom Financial Freedom!!!  This form of FF may be perfect for some but I am not looking for that level of Freedom.

Each person has his or her own specific vision or lifestyle goal to add to the basic definition of Financial Freedom.

Some may consider Financial Freedom met when all their debts are paid off and they have enough income from passive investments to allow them to live full time in a fully paid for RV.

A different vision may include the ability to travel internationally twice a year via luxury vacations with little concern for the cost.

To step it up further, one may feel they made it when they own their own private jet and travel anywhere in the world.

Another vision would be the ability to practice Medicine completely on their own terms, full time, part time, or volunteer completely independent of the income generated from their Medical Practice. 

These are vastly different interpretations of Financial Freedom.  Neither is right or wrong.

Take time to think about your definition of Financial Freedom.  Write it down and describe in a paragraph what your life would look like once you have achieved Financial Freedom.  Then start your journey to achieving that goal.

Enjoy your Journey to Financial Freedom

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