Many people mistakenly equate financial freedom with owning luxury cars, big houses, and expensive products. This mindset, fueled by social media, leads to overspending and debt, not true financial independence. The root issue is a lack of financial literacy. Instead of learning to manage money wisely, many focus on lifestyles they see online, wasting time and money chasing trends.
Financial freedom is about having enough money to cover your expenses without needing to actively work. While human desires are unlimited, true financial freedom happens when your passive income consistently matches or exceeds your monthly expenses. For example, if you need ₹200,000 a month and can generate that through passive income—like investments, rentals, or businesses—you no longer have to work for money. At this point, you’re free from the financial trap and can live without stress. The goal isn’t about endless wealth, but about covering your needs and enjoying life without financial pressure.
Owning a business or property for rental income often requires a significant investment, which can be difficult for middle-class employees. However, there is an alternative that requires less capital—investing in equities. By investing in the stock market, you can potentially earn returns of 15% to 25% annually, allowing your money to grow over time. With consistent investing, you can build a substantial portfolio. Once your portfolio is large enough, you can withdraw 15% to 20% of the returns each year to cover your expenses. In a growing economy, equity investing can be a powerful way to achieve financial freedom.
Now that you understand what financial freedom truly means, you might be wondering how much you need to invest today to achieve that luxurious financial freedom. In my next blog, I will dive deeper into actionable steps, strategies, and the exact calculations to help you reach your financial goals. Stay tuned, as I’ll guide you on how to build a strong investment plan, leverage compounding, and create a sustainable income stream that leads to real financial independence.