Financial Freedom

I am (re)reading Van Tharp's book "Safe Strategies for Financial Freedom" and looking at it with new eyes. I have had it for a number of years, and truth be told, I still have trouble with some of the ideas in the book. The main idea, however, I have no trouble with, namely, financial freedom (FF) is possible for a large number of people in the US. He casually states that most people can get to FF in five to seven years once they start working on it seriously. Perhaps; but that is beside the point.

First, what is FF? Financial Freedom occurs when your streams of passive income add up to more than your expenses. In order to be FF, you have to start thinking of creating passive streams of income. (Actually, there is a step before that. The very first step is monitoring and taking full control of your expenses so that you are living well below your means and you are spending your money mindfully and wisely.) In fact, this is paradigm shift #1 Van talks about:

Start thinking in terms of your financial freedom number [i.e., the passive income you need to be financially free] rather than how much you are worth.

That's a very powerful paradigm shift and that's all I have been thinking about in the last few weeks. Lately I have been taking advantage of some of the bargains created in the financial sector by the subprime mortgage crisis, and I have made good progress in creating a stream of passive income. In a few years we might actually be financially free!