Introduction – Nature & Definition
Human life needs multiple things for survival and growth such as food, cloth, shelter, vehicles, knowledge, and skills. Generally, the needed items are acquired through spending some money units on it. Apparently, the plentiful availability of money units for buying required things gives financial freedom to an individual; on the contrary, the scarcity of money units for purchasing necessary items may lead someone towards financial dependence/financial subjugation. Realistically, it is livelihood that gives financial freedom to an individual.
A person having livelihoods enjoys financial freedom. What is livelihood? In 1991 Robert Chambers and Gordon Conway provided the first elaborated definition of the livelihood, “A livelihood is a mean of making a living. It encompasses people’s capabilities, assets, income and activities required to secure the necessities of life.” In addition, they proposed the concept of sustainable livelihood, “A livelihood is sustainable when it enables people to cope with and recover from shocks and stresses (such as natural disasters and economic or social upheavals) and enhance their well-being and that of future generations without undermining the natural environment or resource base.” In nutshell, for financially independent people, the livelihood or income from assets or job or business is greater than expenses and the earning stream is stable.
Absence of livelihood means financial dependence. It happens on account of two reasons – personal & interactive. At personal level, the very negation of independent life-pattern is cause of meager livelihood. At interactive level, the utter denial of interdependent life-pattern is reason behind insufficient livelihood. Financial freedom is the state of having sufficient personal wealth/income to buy independently needed items and desired goods/services.
Achieving Financial Freedom
Financial freedom is prerogative of every economic agent. An economic agent is one who is regularly involved in earning activities such as job, import, export, manufacturing, teaching, training and consulting. A successful economic agent designs SMART (Specific, Measureable, Achievable, Realistic and Time bound) financial goals. There are five steps procedure for setting and achieving financial goals:
1. Define exactly what you want in each area of your life; for example, specify the savings for children / old age or income generating assets. The optimistic view towards life is vital for effective specification of financial targets. (Specific Mindset towards Paraphernalia of Life)
2. Go for only the measurable financial targets, for example, it is wrong to chase richness without exact specification of income stream. Write down the necessary actions or work plan in order to realize the measurable goals. Prepare work plan/action plan clearly, meticulously and concisely. (Measuring Mindset towards Execution)
3. Now you have made a list of every-action you might think crucial in attaining your goals. Take actions immediately, it is decisively important. (Attainment is outcome of Proactive Behavior)
4. Realize something every day that moves you towards the realization of your goals. You may encounter hurdles, detractors and limitations. Manage them wisely and maintain momentum and morale during upcoming situations or challenges. (Consistent Behavior towards Realistic Targets)
5. Set a definite deadline for tasks. If it is a long-run goal, break it down into sub-deadlines and organize the items in proper sequence and priority. It is utmost important to follow the maxim, put first thing first. A goal may be unachievable on account of some reasons, revisit the goals to avoid wasted efforts. Abandonment is, sometime, a best strategy towards various surreal targets. Right abandonment saves money, efforts and time for some realizable goals. (Time Efficient Behavior)
Absolute Bases of Financial Freedom
Human beings are epitome of Divine Scheme of Creation. God bestowed us many powers, latent and patent, to enjoy life and to conquer His universe for the benefit of humanity. The ingrained productive capacity of earning is natural gift of God. The natural productive capacity can adopt three routes through proper nourishment, i.e., entrepreneurship, consultancy, and workmanship. Workmanship is the ability of an individual to accomplish an economic work, efficiently. Consultancy is the capacity to provide professional advice/workable idea to someone on economic work, honestly. Entrepreneurship is the ability of an individual to innovate/realize business idea, effectively. The innate productive capacity is wasted or damaged on account of wrong beliefs or heinous crimes, whatever may be the reason, conceptual or practical, the dormant or depleted productive capacity can be regained or replenished through concerted economic efforts and earning skills. The prominent replenishing tools are learning of new earning techniques, application of acquired skills for earning and networking with relevant people or institutions. In nutshell, it is learning, earning and networking during economic struggle. An important dimension of productive skills is investment talent, it is unavoidable for business. However, the investment talent is not natural productive capacity rather it is based on earned capital and offshoot of natural productive capacities i.e., entrepreneurship, consultancy, and workmanship. An effective investor is supportive during multiple financial crises, pragmatic towards business opportunities and precise towards accounting works of a business.
Major Path Hurdles during Financial Struggle
A work for monetary benefits is called economic work; it gives monetary independence to individuals. Economic works are countless. The very selection of a definite economic work depends on personal choice of an economic agent. In addition, the financial Intelligence is required to accomplish multiple economic works, successfully. Financial intelligence is an ability to differentiate between possible economic opportunities and economic threats. Generally, an economic work realizes stipulated money units for personal use. An effective economic work must demands three vital steps – acquisition of financial education, aspiration of financial goals, and application of financial techniques for financial goals. The major path hurdles during an economic struggle are – financial idealism, in-discipline, fear of failure, get rich quick mentality and procrastination.
The road towards financial freedom is dominantly sustainable livelihood. The decisive personality elements of financial sovereignty are moral sense, independent mindset and interactive behavior. The aforementioned personality traits attract financial independence. Financial independence means effective planning, strategic execution and patience in struggle till logical outcome of struggle is not appeared.