Once you reach your freedom number, your goal should no longer be purely geared towards making more money on an aggregate basis. If you are still working harder than ever, then you suffer from poor income quality. Your goal then is to improve the quality of your income.
Yes, the freedom number is a good place to start — after all, for you to find your freedom, you need to reach your Freedom Number. That’s the first step.
I calculated my freedom number by adding up all of my monthly and annual costs (including living expenses and loan payments), regardless of whether they are recurring or one-time in nature (this is the template that I used).
Freedom Number Is Not Enough
In this blog post, I have talked about how we need to have a new way of thinking about freedom: instead of thinking of freedom as an absence of constraints, we also need to figure out what to do when one day we have attained that freedom.
For example, deciding you don’t want anyone to be your boss isn’t really deciding anything about what you actually, positively want.
Years ago, in a coaching session, my coach asked me why I was learning to trade.
“Freedom! — want all types of freedom – financial freedom, time freedom, physical freedom.” I replied.
“But what do you want to do once you have the freedom?” My coach asked.
For that, I had no immediate answer at the time.
A couple of years later, I have reached my freedom number. The moment came quietly, and without any fanfare. And guess what, I didn’t feel any freer after that.
Reflecting on that conversation with the coach, I now see that not knowing what to do if I have achieved my freedom means that:
- You are not respecting money: you only want to have more of it but you don’t have a reason for having more of it.
- You are not respecting time: you only want to have more of it but you don’t have a reason for having more of it.
- You are not respecting movement: you only want more of it but you don’t have a reason for having more of it.
When you don’t have a reason, or a goal, a plan for the time after you have reached the Freedom Number, and when meeting that goal of freedom number is a big deal, you are not respecting freedom. And because you can not envision your life being changed or improved in any way after finally getting them, you don’t have any motivation to pursue them. It is for this very reason that they will never come into your life — not until after you have figured out why you NEED them in the first place.
Action Plan
After you have a plan for these big things in the future, then here’s the simple daily action plan:
- Break it down
- Take small but consistent steps in all directions every day
- Set your boundary: if you have to, say no more often
So it is paramount that we figure out together what money can do for your life, what time can do for your life, and what having the ability to move about can do your life.
Without having a vision for the future, you would have no idea where to go, and what actions to take, or even how to take actions — you will have no way of actualizing the future.
Only after you have a clear vision for the future will the desired future come.
Case Study: My Vision for the Future
Here’s my markers for self:
I am (to be):
- intellectual — always learn, with an ever-expanding horizon
- wise — the power to see the truth without attempting to fit it into any mould
- kind — love in action
Money can help with the intellectual pursuit. It can allow me to be relaxed about daily financial worries and thus be able to focus on my integrative learning. I can also allow me to learn widely, variedly, and open up my horizons so that I can synthesis better and better.
Time can help me with both doing study and working with others on projects that are interesting, helpful or meaningful. It can also allow me to do a variety of things, such as taking care of families, studying and learning, working with others, and having fun travelling.
Ability to move also mean ability to go to different places and learn about different things from different people. It also means switching between family visiting, learning, and travelling are possible and easier. It definitely means that travelling is possible.
I have previously calculated my freedom number to be USD 4,000 per month. This will give me the ability to live comfortably month-to-month, but without any ability to study, learn, or travel.
A typical travel budget for 3 days is 1,000.
A typical travel budget for 1 week is 2,000.
A typical travel budget for 2 weeks is 4,000.
I would like to take at least 2 trips (all purposes considered) per year. The travel budget should be about USD 10,000 per year.
On an annual basis, I need USD 58,000 (after-tax) per year.
Surprise! Surprise!
Here’s why I am not able to make a move on: I am already there!
My income already can fully contain my freedom number. Of course, there is a flaw — I am working like a dog, I am constantly working. I actually don’t have the time to do much else. My income quality is poor, even though I have reached my freedom number.
And this assessment is telling.
My vision, or my concept of the future, should no longer be purely geared towards making more money on an aggregate basis. Rather, it should be more about growing my own consulting business to be a major pillar of my income.