What is financial freedom?

Allan Johnson of Johnson & Tennent Chartered Accountants
Allan Johnson of Johnson & Tennent Chartered Accountants Janie Kayes

WHAT is financial freedom? For most people, winning millions of dollars in the lotto would be necessary for them to feel financially free - while others would consider themselves free with considerably less resources. 

So the question is: what does financial freedom mean for you? If you talk to financial planners (as I often do), most would agree that people tend to overestimate the amount they need to achieve financial freedom. With some expert guidance, you can calculate the necessary amount with reasonable accuracy. An appropriate plan can then be developed to achieve that end result.

However, the real benefit of this process is the peace of mind that you gain by knowing how much money you need, and having a workable plan to get there.

Defining what financial freedom means to you removes the stress of not knowing where you are heading, and having some vision of the end result provides motivation when times are tough. Of course, having your definition in writing (somewhere you can often refer back to!) is key to maintaining your focus.

If you want to define where you want to be financially, you need to clarify the difference between happiness and wealth - a fine balance. I'm not saying that wealthy people are not happy, some people just need more wealth to be happy than others!

So, what makes you happy? What do you enjoy doing? You need to understand the activities, possessions, relationships and passions that resonate with you - because financial freedom will be having sufficient wealth to enjoy these things as often as you desire.

Clearly, to be able to do that you need a certain amount of wealth, and this is how you should be defining financial freedom - sufficient wealth to enable you to enjoy your heart's desires. Once you know the end result, you need to come up with a definite plan to achieve this result (and don't forget, the timeframe you want to do this in is a big consideration).

You will more than likely need some expert assistance to make sure your plan is viable and to help you keep on track.

You also need to ensure that your plan is written in language you can understand. Don't be afraid to ask for help - it's a lot less painful to learn from mistakes that other people have made, and the time you save in achieving your goal will be well worth the investment.

Now is always the right time to start moving in the right direction - and the first step is to define what financial freedom means for you and start taking giant steps to achieve it.

Topics:  allan johnson budgeting income opinion

Witnesses claim couple were 'thrown' from car after crash

Ambulance generic

The crash happened about 2pm with no injuries reported

Woman taken to hospital after crash

Woman taken to hospital in stable condition

Fuel attracting recreational flyers to Gayndah

FILLING UP: A pilot refuels at the Gayndah airfield.

Reopened aerodrome drawing more planes.

Local Partners

Get help at financial info day

A FREE information day to help anyone in need of financial help or advice is being held today as part of Anti-Poverty Week.

Men's Shed to open soon

MEN'S SHED: Rob Miller and Col Driver at the new Gayndah Men's Shed.

The Gayndah Men's Shed is ready to open

Former Split Enz front man Tim Finn finds new niche

Singer Tim Finn has written the music for theatre production Ladies in Black.

Musician finds his way to theatre

Workshops to show you how to bring puppets to life

STRING SECTION: Two puppet-making workshops will be held in the region.

Ever wanted to know how to make puppets?

Azealia Banks won't take legal action against Russell Crowe

Rapper Azealia Banks

Rapper drops legal action against Russell Crowe

Brad Pitt meets with his kids amid divorce proceedings

Actor Brad Pitt

Brad Pitt has met up with his oldest son Maddox

Pictures of Taylor Swift allegedly being groped are sealed

They could "complicate jury selection".

Bruce Springsteen finds therapy useful

Singer Bruce Springsteen

Singer encourages others to seek help

Kerry Washington wants one more child

Kerry Washington recently gave birth to her second child

Kerry has only just become a new mum again

TRAVEL: Musicals light up Sydney

David Campbell performs in Dream Lover.

We take a trip through one of Sydney's finer scenes

Hit songwriter's Noosa mansion on market

SPECIAL PLACE: The Cintamani estate is going to tender, marketed by Tom Offermann Real Estate.

Is this Queensland's best property?

Kiwi siblings snap up Dotcom mansion for $32.5m

The new toy company owners of the Coatesville mansion want replace any controversy with positivity and fun. Photo / Barfoot and Thompson

The trio paid $32.5 million for the property in June

New $200 million development will create 580 jobs

Cassie And Josh with baby Alfie and daughter Andee. They have bought at new Lennox Head development Epiq.

Majority of new positions will be given to Northern Rivers locals

Cherrabah's mega resort plans axed

PLANS for a massive development at Cherrabah have been scrapped.

What our mayor thinks of the new draft SEQPlan

The plan to use the innovative technology as part of the new Maroochydore CBD was cemented on site today when Mayor Mark Jamieson and Envac Asia Region president Chun Yong Ha formally signed the contract for the $20 million underground waste collection system.

New plan accommodates Sunshine Coast Council's vision for growth.

Dusit Thani finance crisis 'just a small hiccup'

ON TRACK: Springfield Land Chairman, Maha Sinnathamby, Ipswich Mayor Paul Pisasale, Developer Richard Turner and Springfield Land Deputy Chairman, Bob Sharpless, at the recent resort sod turning ceremony.

Property developer says project remains firmly on track