I have often been asked if Debt Freedom and Financial Freedom are the same thing. To which i will now reply "No, though closed related, they are not the same".
You can be Debt-Free without actually being Financially-Free. This is what i mean. You may not owe anybody anything, but if you cannot take care of an emergency situation when it comes or cannot "afford" to retire now - you are not Financially-Free yet.
You will be Debt-Free on your way to being Financially-Free.
So my recommendation will be to aim for Financial Freedom which really is financial independence and does not mean living in the lap of luxury. It has more to do with liberty from monetary worries (such as no credit card bills, car payment, or mortgage; expenses being below your income; establishing a steady habit of saving and investing; a healthy reserve for emergencies when they come; being generous with your finances and not necessarily having to work to pay the bills) than "living large".
Thursday, 10 May 2007
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