A lot of my friends share a same ultimate goal – Financial Freedom. “Financial FREEDOM“, sounds nice, doesn’t it? Woo… thanks to all the investment or wealth management educational books available nowadays; this word has become so famous and well known. Everyone wants to achieve “Financial Freedom”, but… sadly not everyone knows what does it means exactly. (Erm hmm… I am not meaning that I know it exactly okie? ) Majority think that it means you can just spend whatever you like without worry, or simply say, rich.

To understand what my friends understood about Financial Freedom, I created a simple survey on this topic, consists of a series of five questions, these survey looks similar to what a direct sales personal would like to use to approach their prospect (I was being asked a few times, “Hei, are you doing some direct sales thingy like Amway or so?”). Well, I just wanted to understand what people understand, and at the same time, I am seeking for an answer for myself too…

These are the questions in the survey, together with some answer (I asked about 11 people only, mostly close to me and always keep in touch, I dare not to approach someone and ask these questions right away, I believe I will be black listed… )
Q1. How do you define “Financial Freedom”?
- Don’t need to work for money to survive.
- Have stable income to cover daily expenses including insurance premium, travelling, entertainment.. etc.
- Free will to make financial decision.
- Passive Income > Expenses.
- No need to worry about income to pay for expenses
- No need to work / flexible working time but still got money
- Earning > Expenses
- No need to think about his and his family daily expenses.
- Means rich, can spend on whatever you like.
- No debt, no loan, got savings.

Q2. Do you want to achieve Financial Freedom?
- Eventually, everybody answer “Yes”. haha..

Q3. How much income per month do you think you need to earn to achieve Financial Freedom? How do you know that you need that amount?
- $10k, Wife does not need to work hard, got 2 children, house, car, insurance.
- RM 50K,
- $5k, simply pick an amount
- $50k, expenses + all necessary (Really luxurious necessary…)
- $3k for now, but it will change from time to time when I get married, got children, inflation… etc
- $20k should be enough, my current expenses is $3k.
- $7k, $1k parent, $500 insurance, $1k saving, $2k housing, $500 expenses, $2k other
- $3.5k, but it will increase with inflation…
- $5k, $5k…
- Answer actually varies from as low as S$3.5k to as high as S$50k!!

Q4. What are you doing now to achieve Financial Freedom?
- Lost
- Doing nothing, maybe lottery…
- Nothing, lazy
- My business
- Improve my financial knowledge, then create business or idea that can bring income.
- Nothing, although regret, but still nothing… ^^”
- Mainly do business, investment, property, direct sales.

Q5. Are you happy with what you are currently earning?
- Some yes, but mostly no.

In my personal opinion, financial freedom is to have a passive income that allows you to live comfortably, live the way you like and enjoy. (Passive income is the consistent income that earned not by working full time, maybe part time counts.) Passive incomes includes the earning from stock market, dividend, property margin or rental, and even those direct sales earning which you worked hard to achieve. When talked about “Living comfortably”, then the topic became very subjective: some said they need to earn S$100k per month to live comfortably, some said they just need S$3k per month. While both are human, why someone needs S$100k to live and other just need S$3k? While you are reading this part, how much do you think you need to earn for your comfortable living style? No idea? Don’t worry, those with S$100k target does not have any idea either, that’s why they think S$100k will be enough for them to live comfortably…

Living comfortably, is just as simple as what you are living as now. Most people will argue on that, because their current living style is not considered as comfortable for them. They worry about their job, they worry about sudden expenses that emptied their all saving, they worry about everything… The problem is on the mind itself, people tend to spend more and more when they earn more and more, and they won’t realize it. I remember a story: In year 2005 when my friend and I just entered our career life, our starting paid is around S$1800 only. Our living standard is consider okie: Afford to buy a PC, can go travel to nearby countries, can eat luxurious food few times a month, can have nice gadget after few months saving.. But after a while we complained, “How good will that be if our salary was S$2500? We will definitely able to save about S$700 per month by maintaining the living standard same as now!” While I was listening to this, I deeply believe that if we are earning S$2500, we will not be able to save S$700, and we will ask for S$3000 or even higher. Why? Our living standard increased, instead of buying a S$1000 cheap PC, now I want a S$2000 better PC, instead of travelling overseas once a year, now I want to travel twice or  more a year. We are in a better life. Why not?

What I really wanted to emphasize is, live according to what you NEED but not what you want, and do not be extravagant. With this in mind, you will have an idea how much do you need to earn every month to achieve financial freedom, that’s why some of the people just need as low as S$3000 for financial freedom. (An incident happened, while I am writing this part, my wife already disagreed with me on this idea, her opinion is some people want more things, they want to eat good food, they want to drive BMW, that is consider as financial freedom to them… ) Hmm… yes, she is right. But, my point is, to have a better chance of success, don’t set an unrealistic target for yourself. Simple mindset game, if you need to walk 100m away to take a free computer, you might not want to go; however, if there is a free PSP just 5m away in front of you, you will think that it’s not hard to walk those 5m so you got your PSP! The idea is, set yourself a realistic target, which you think is comfortable (recommended would be less than S$5000), once you started and finally achieved your first goal, then only set another higher goal for yourself. Yes, you are right… The first step is always the most important, and to make yourself take the first step is to let yourself believe it that you could do it!

Ok, at this point, let’s cool down and ask yourself, how much you NEED? I will share about method that I know to achieve the goal next time…