What is financial freedom? What can be done to be financially free?

Financial freedom refers to the state in which a person does not have to work hard for money for living expenses. To put it simply, the passive income generated by a person's assets is at least equal to or exceeds his daily expenses, and if it enters this state, it can be called financial freedom. It refers to the family's income mainly from active investment, rather than passive work, which is a state that allows you to work hard for money without living expenses, in short, you can buy what you want, without thinking about its value.

Financial freedom refers to the state in which a person does not have to work hard for living expenses and works for money. That is, when a person's assets generate more passive income than his daily necessary expenses, the person enters a state of financial freedom.

Financial freedom doesn't have to be just when you have a lot of money. Rather, it's your uh consumption. Xiaoyu, or Yuan Xiaoyun, your income.

To put it bluntly, you can live how you want.

You don't have to go to work, you don't have to look at other people's faces.

On March 31, 2021, the Hurun Research Institute released the "2021 Hurun Wealth Freedom Threshold".

According to the report, the threshold for entry-level wealth freedom in China's first-tier cities is RMB 19 million.

It mainly includes a 120-square-meter urban permanent house, 2 cars, an annual family income of 600,000 yuan after tax and a financial investment of 8 million yuan.

The threshold for entry-level wealth freedom in second-tier cities is RMB 12 million.

It mainly includes a 120-square-meter urban permanent house, 2 cars, a family annual income of 400,000 yuan after tax and a financial investment of 5.5 million yuan.

The entry-level wealth freedom threshold in third-tier cities is RMB 6 million.

It mainly includes a 120-square-meter urban permanent house, 2 cars, an after-tax annual income of 200,000 yuan and a financial investment of 2.5 million yuan.

If yesInternational levelThe threshold for wealth freedom is 100 million yuan, equivalent to 50 million US dollars, mainly including a 600-square-meter urban permanent house, a 400-square-meter suburban second house, a 400-square-meter holiday house in the mountains and the seaside, 4 cars, a family annual income of 10 million yuan after tax and a financial investment of 100 million yuan.

This issue has been discussed by several friends.

I think 2 million financial assets, on the right, the so-called financial assets include cash, fixed income wealth management, **, **, insurance policies, etc.

Why 2 million.

I calculated that my family started, I live in Beijing, and the normal expenses of a family are about 150,000 yuan a year, plus insurance and general emergencies, such as a part or something, which is basically enough, provided that I don't buy large goods and luxury goods.

According to my current investment ability, 10% a year is a relatively stable level, if there are 2 million assets, calculated according to the annualized 10%, 200,000 income, then it basically covers the expenses of the family, and even if it is basically financially free.

What is financial freedom.

The criterion for financial freedom is that passive income is greater than daily expenses, that is, financial freedom.

From the perspective of the financial freedom formula, the degree of financial freedom depends on three variables, one is the accumulated financial assets, the second is the ability to make investment returns, and the third is the level of consumption.

To emphasize here, financial freedom is based on your insurance allocation. Today, when social security is very popular, commercial insurance must also be supplemented, otherwise there is a disease and a disaster, and the probability of returning to poverty is 100%.

My philosophy has always been that investment is the spear and insurance is the shield; These two points are indispensable for the accumulation of family finances.

In addition to social security and tax preferential insurance, I also have serious illness, accidental injury, supplementary medical treatment, and cancer insurance.

The investment is mainly based on **, and there are some small side hustles.

Don't look at some data that say that first-tier cities need 19 million to be considered financially free, which includes real estate! Moreover, the proportion of domestic real estate in the family is very high, which is very risky.

That's why I say that 2 million financial assets do not include fixed assets.

Financial freedom is something we all want to achieve. But when it comes to financial freedom, many people think of those corporate executives with an annual salary of one million, or the rich second generation who was born with a golden key, or the big boss with hundreds of millions of assets, financial freedom has nothing to do with us ordinary people.

If that's what you think, you might as well finish reading this article, since you're going to talk about financial freedom, you have to figure out what financial freedom is?

First of all, we have to know a concept, what is an asset?

An asset is something that can help you make money. Here is an example, if the company pays you a salary of 5,000 yuan, and you take 5,000 yuan to buy wine, this is consumption, if you put your salary into **, it is to buy assets, because when you buy wine, when the wine is finished, there is nothing. You can make money and increase your passive income.

Speaking of which, we should have a concept of balance for assets, and once again emphasize that assets are things that can make money, but what we must know is that cash is not an asset, because cash cannot appreciate, but constantly depreciates, so what are the assets in our daily life? For example, real estate, patents, enterprises, etc., which can generate income and have the potential to increase value.

With assets out of the way, let's talk about financial freedom. Financial freedom refers to the state that you do not need to work hard for money for living expenses, simply put, the passive income generated by your assets must be at least equal to or exceed your daily expenses, which is the state that most of us aspire to achieve, if you enter this state, we can call it financial freedom.

Therefore, financial freedom is not the kind of money that can be eaten without going to work for a lifetime, a working family, a monthly family expenditure of 2000 3000 yuan, then his passive income of 3000 yuan can achieve financial freedom, buy a house, rent out can achieve financial freedom. If a gambler can lose tens of millions of dollars a day in Macau, such a person will not be able to achieve financial freedom no matter how much passive income he has. We now know that financial freedom is not about doing whatever you want, but about the freedom to do whatever you want to do when you want to make money.

In fact, this state is very easy to achieve, so have you ever thought about why we don't have financial freedom now? Because we have fallen into the trap of poor thinking, see the next part of the poor thinking that prevents us from being financially free.

Financial freedom refers to the state in which people do not have to work hard to cope with the pressures of life. If a person achieves financial freedom, it means that he has enough time and money to do what he wants. Financial freedom can be achieved if the passive income from one's assets (such as bank interest) is sufficient to meet one's daily needs.

The criterion of financial freedom is usually closely related to a person's level of consumption and desire to spend.

1. Risk management: a necessary condition for achieving financial freedom, a sound risk management method can avoid many unknown risks in the later stage, and will not panic when the real risk comes.

2. Mentality management: Because there are many unknown situations in the market, investors need to have a good attitude to face risks and make appropriate judgments and deal with the risks.

3. Fund management: make reasonable capital investment, pay attention to stop loss, profit and control of the amount of funds that are destroyed.

When people are poor, they always have a lot of excessive imagination about wealth, as if money can solve all problems, in fact, money can solve the problems of the hand, which are some very basic problems. Warren Buffett once said that financial freedom is about allowing us to do what we want to do, not to do nothing.

Clause. 1. A free life, that is, you don't have to appear in places you don't want to go to, meet people you don't want to see, and do things you don't want to do at a time you don't want to go. Going to work based on the needs of life corresponds to the opposite of freedom.

The so-called financial freedom is to accumulate the means of subsistence that I need for my life, and this is what I am currently doing. Frankly speaking, my desire to consume is very low, and there is not much difference between my consumption level when I have a monthly salary of 10,000 yuan and an annual salary of 500,000 yuan, but I am more confident in my heart. Because the income after the increase, except for the necessary living expenses, is basically used for savings.

Clause. 2. Do what you love and are valuable. I like it very well to understand, here is the value, one is valuable to myself, such as reading and sports can allow me to acquire knowledge and health; The second is to be valuable to others, for example, the content I write and share can help you.

It is great that some things can be unified in the realization of self-worth and the creation of social value, which are usually creative acts, the most common being entrepreneurship and creation.

Clause. 3. Spend time with people you like, such as family, lovers, friends, etc. Stay away from people you don't like, I read a sentence before that I think it makes sense, some people don't need to spend a day with them if you don't want to spend your life with them.

The reality is that many times, we are forced to work with people who do not approve, such as colleagues and leaders who are complained by some classmates.