Financial Freedom or Financial Complications

I was having a casual breakfast discussion this morning with some business acquaintances. One of the financial advisors in the group asked me whether everyone would go through Financial DNA. The answer is potentially yes. We have had people with very little wealth and some with over $1billion go through the process, and all of them have been greatly liberated by the personal knowledge they have gained.

This triggered the response from one of them, "Well if I was super wealthy I wouldn't bother, I would be out of here. I would have my financial freedom". Such a comment raises many questions and issues which cannot all be addressed right now. But my response was: "Well do you really have financial freedom with super wealth?". Many wealthy people are in actual fact prisoners of their wealth. It brings a whole new set of financial complications, let alone the personal issues. I mentioned that it is not always a life on easy street with these people. So perhaps financial freedom at this level is not really the dream?

It does beg the question, what is financial freedom? Further, many people these days are also asking "How much is enough?" Dealing with these questions could be a book in its own right. Clearly, there is some level of monetary wealth that can create financial freedom ... where the worry factor goes down. Of course this will be different for all of us. I have had clients that say $500,000 or $1m is enough, and others say $20m is not enough.

But one perspective that could be added in to the equation is your ability to create wealth or income from different sources. I said to the group this morning that it is actually quite powerful to know you have the talents, knowledge and skills to be able to earn revenue in several different ways. If you can get to that point, you will never be in a corner if something goes wrong in your life. How many people really only know one thing? In my mind they may not be that wealthy. So perhaps investing in yourself as you go along through your life and career may add a lot of diversity to your "human capital" which is what actually creates the wealth. Further, along the way you may even enjoy yourself, and also know you will never really be in a financial hole.

So think about what "financial freedom" means to you and how that fits into your quality life formula. Perhaps you will get more contentment when you figure out the answer to this. I do not mean to discourage any one from building super wealth, rather understand the dynamics it may create in your life and ask yourself, will it bring you the life you are after?

Unlocking The Retirement Fear

On the weekend I had an interesting chat with a retired business owner, who I will personalize as Harry. Harry was glancing through my book which a relative had kindly shown him, and he picked up on my section on passion. He mentioned that in his view this was the central issue for people contemplating retirement. In reality, it should be important to all of us as it is foundational to our lives, whatever stage we are at.

More specifically, Harry said that many people had a fear of retiring and/or selling their business because they did not have a passion which would sustain the next phase of their life. I have seen and heard this many times. For some, they have never had the time to stop and think about it, while those who find it easier to retire have generally had plenty of interests along the way through their life. This makes the transition easier as they already know how to do "other things" and be fulfilled. Certainly, working on some life plans for retirement a few years beforehand is very worthwhile even if you are not ready to start doing them because of current commitments. At least your mind is more focused.

From a financial planning perspective, what you want to do in retirement will drive your financial decisions. They are always interrelated and cannot be separated. You can't work out how much money you need without knowing what you will spend it on.

The process of discovering your passion can be difficult at any time and often requires an investment of time. But following a structured process of discovery helps liberate those thoughts in your sub-conscious. This is where that special "aha" moment will come from. Knowing who you are at the deeper core through your Financial DNA discovery is a good place to start.