Defining Freedom For Yourself

This seems like an appropriate conversation for July 4th. 

If you understand what you really value in life, we could say your own definition of what constitutes freedom, then every other aspect of life becomes easier. Quoting our friend Bill from here in Walker, "you can figure it out now or you can figure it out later but if you can figure it out now, you'll be much happier."

Figuring out what is actually important to us is a part of maturing and true to Bill's quote, I bet we all know people who seemed to figure it out early on and others who still haven't figured it out. 

A young man (you can define what you think of as young) might think he wants a Ferrari and a really big house. How much is a big house where you live? The other day I learned that the median home price in Flagstaff runs about $779,000 per a grant application to the foundation where I am a research volunteer. That is an astounding number to me. Anyone living in a bigger city than Flagstaff, ex the southwest and mid-west is probably looking at a bigger number and that is just for a regular house. How much would a "really big house" be? I don't even know, double that? What about a Ferrari? It looks like there are two entry level Ferraris and they both cost about $240,000. If you were to finance one (I realize most people don't) for 5 years at 5%, it would cost $4529/mo. Putting down 20% on a $1.6 million house at 5% would cost $6871/mo for 30 years or $10,122 for 15 years. 

Now imagine thinking you want those things, somehow getting them and realizing you were wrong about wanting those things. That $11,000/month plus all the rest of the expenses is couldn't be more opposite of free. You can see where getting this wrong for lack of self awareness is pretty bad.

Self-awareness then seems like it would important for how we define freedom for ourselves. No judgment on what someone else's idea of freedom should be just that to get to it takes self awareness.

Would most people think of being able bodied as an ingredient for freedom? I'm not being snarky with that question because statistically, most people do not put in an effort to stay able bodied for as long as possible, we do not exercise enough. I don't know how this is not a priority for everyone but I accept that it isn't.

Being an investment advisor and a financial blogger, I am of course inclined to associate some form of financial freedom with overall freedom. Some will think of this as being unambiguously rich or merely comfortable or no debt or any other measure, it's all fair game but things like not having debt or having a robust emergency fund or being on pace to retire are much easier to attain than being unambiguously rich. 

Self awareness, being able bodied and some measure of financial flexibility (might be a more attainable outcome for someone a little younger) are maybe thought of as building blocks to then build our individual ideas of freedom on top of. If you even agree with those three building blocks, from there our respective ideas probably start to diverge considerably. That makes perfect sense, we have the freedom to pursue the things we value. 

The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation.