It is good to build wealth but thoughtfully, financial freedom is one of the most misunderstood and misused terms on the earth.
No one is 100% financially free. "Financial freedom" is often an oxymoron. If one requires a massive investment portfolio to be "free," one is still a prisoner to the market, the bank, and the value of currency. True freedom is the absence of that dependency. We are only free when our survival is no longer a subscription service we have to pay for every month.
How people on the earth define financial freedom
Most people on the earth define financial freedom as having enough income, savings, or investments to cover their needs and desired lifestyle without constantly worrying about money.
This definition is not necessarily wrong but it is limited.
It describes an important form of financial security, but it does not fully capture the deeper meaning of freedom.
How people in Galaxo Dynamo define financial freedom
True financial freedom is not simply about having more money. It is about reaching a state where you need less money to live well and fulfill your life's purpose. The less dependent you are on buying everything you need, the freer you become.
Think about it. No matter how wealthy or influential someone is, if they must continually spend money to meet nearly all of their needs, they remain highly dependent on money. Wealth may reduce financial stress, but it does not eliminate dependence on money.
From this perspective, financial freedom can be understood as the relationship between what you must pay for and what you receive without continual spending. These unpaid benefits may come from nature, family, community, self-sufficiency, productive assets, ownership, or systems that continue providing value without requiring constant expenditure.
In simple terms:
Financial Freedom = The proportion of your life that does not require continual spending.
To illustrate this idea, consider two examples.
Mr. A
• Net worth: $10 million
• Total life needs: 100 units
• Needs that require continual spending: 70 units
• Needs met without continual spending: 30 units
Although Mr. A is extremely wealthy, he still depends on money for 70% of what he needs. By this measure, he is 70 units away from complete financial freedom.
Mr. B
• Net worth: $200,000
• Total life needs: 100 units
• Needs that require continual spending: 20 units
• Needs met without continual spending: 80 units
Although Mr. B has far less wealth, he depends on money for only 20% of his needs. By this measure, he is only 20 units away from complete financial freedom.
From this perspective, Mr. B is closer to financial freedom than Mr. A, despite being significantly less wealthy.
This does not mean wealth is unimportant. Wealth creates opportunities, provides security, and expands choices. However, wealth and financial freedom are not the same thing.
Riches measure your high income
Wealth measures how much you own.
Financial security measures your ability to meet and maintain your financial obligations without stress.
Financial freedom measures how little you must depend on continual spending to live a meaningful, healthy, and purposeful life.
The ultimate goal, therefore, is not merely to accumulate more money, but to reduce unnecessary dependence on money by building systems, relationships, skills, assets, and a lifestyle that continue to meet your needs with little or no continual cost.
The more of your life that can be sustained without constantly reaching for your wallet, the closer you are to true financial freedom.
In other words:
Riches are measured by how high your income is.
Wealth is measured by what you own.
Financial security is measured by your ability to meet and maintain your financial obligations.
Financial freedom is measured by how little you must continually spend to live well and fulfill your life's purpose.
Sunday Jolayemi