Financial freedom and financial independence are two concepts that are often used interchangeably, but they actually have different meanings. Let’s find out.
Financial Freedom:
- You have enough passive income to cover your living expenses
- You may still choose to work or run a business
- You have the freedom to choose your lifestyle and how you spend your time
- You may still need to actively manage your investments and income streams
Financial Independence:
- You have accumulated enough assets and investments to support your lifestyle indefinitely
- You no longer need to work for money
- You have complete freedom to choose how you spend your time
- You have the ability to leave a legacy or make a significant impact with your wealth
- You may still choose to work or run a business, but it is not necessary for financial security
In summary, while both financial freedom and financial independence involve having enough passive income streams to cover your living expenses, financial freedom allows you to have the option to work, while financial independence means you have complete freedom from the need to work for money.
