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3 Signs That You Are On the Path to Financial Freedom

Financial Freedom should be everyone's main goal in life

Most people, especially when they are young, frequently focus on superficial goals, such as having a nice car, a big house, travelling the world and having nights out on some expensive club. Although all these pleasant things can bring us a sense of self-worth and validation, they are most likely to get us indebted at a very young age. Unless action is taken, the vicious cycle of indebtedness will continue through our whole adult life.

Honestly, that never really was my thing, although I do understand why it can be so tempting. Being financially free has been my main goal ever since I graduated. As I studied for my bachelor's degree in economics, I realized how unfair our system is towards people who work for their money. This realization made me understand that I needed to sacrifice the impressive cars and big houses for something more precious, my financial health. That is when I started to plan for a future where I'd not need a job to maintain my lifestyle. 

Being financially free is about being smart with money as much as it is about psychology, self-control, and planning for the long term. Here are the 3 major signs that you are on your way to a healthy, debt-free financial life:

1: You understand how debts affect your life

Although some debts are necessary and even useful, living in constant indebtedness is bound to make your life miserable. Most people don't realize the trap they are getting themselves in when they start maxing their credit cards. Nonetheless, consumers eventually have a sensation of dread when looking at bank statements, and the anxiety only builds up once most of their salary is being eaten away by a credit card or a mortgage. Then you wonder what might happen if you lose your job tomorrow. 

Living a zero-debt life is better than that, of course, but not necessarily the best option. True financial independence means that you know how debt works and how it affects your personal finances. It means that you are able to evaluate the costs and the benefits that a new purchase will bring, and whether the debt is worth it. 

Once you understand that and can make thoughtful choices, you will be making the first step towards a healthier financial life.

2: You are tired of living from paycheck to paycheck

Some people seem to function in automatic mode. They deal with the problems of today and just count on things to stay as they are. Unfortunately, that is not how life works. Things eventually change, sometimes for better, sometimes for worse. Unless you can plan ahead, you might not be able to keep up with all the changes happening around you. 

Strategic thinking is a fundamental part of being financially free. You want to avoid living from paycheck to paycheck. Instead, you aim to build a lifestyle and finances that have a minimum effect from outside forces.


If you think you are not there yet, it's okay. Building a financial support system from scratch is a monumental task which can take years, or more likely decades. Simply realizing that you need to change your paradigms and think about the long run is already a big step in a world with millions who couldn't care less about what happens tomorrow. 

3: You do not want to work until you are 70 years old

Every once in a while I see this cheesy phrase on a Facebook post or some inspirational Instagram photo with a blurry background: 

Build your own dreams, or someone else will hire you to build theirs.

As cheesy as it might be, there is truth to it. Most people spend their lives working for someone else, building other people's empires. In the 20th century, it was the norm to spend your whole life working in one company and expect to get a generous retirement from it, and live the golden years in peace. So much has changed in the span of a few decades, and the scenario now couldn't be different. Layoffs are so frequent that you can't realistically expect to stay in the same company until you get your retirement. 

And why would you even do that, in a world where work is now possible anywhere with an internet connection? It has never been easier to build a site, start an online consulting business or selling goods online. There are millions of things you can do to stop depending on an employer and start working on your own thing. 

By being your own boss, only you can limit your growth and control your finances. Layoff is no longer a possibility. Eventually, you might feel like scaling up and hiring others, by which time, you will already have a steady source of income that you built from scratch. If you are a well-paid specialist in a company, you can also start investing so that eventually your money will work for you, granting you income and your financial freedom. 

Even though I am formally employed, I always hated the idea of having to work for someone else, so I always have a project in parallel. If you are doing the same, congratulations. You are on your path to financial freedom. 


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