What most people misunderstand about financial freedom?

In this article we attempt to develop a true understanding of financial freedom, beyond the hype of flashy cars, real estate & fame. We discover what it truly means to have affluence and look at three categories of affluent behaviour.

In this article we look at some of the most common misgivings about the idea of Financial Freedom. We attempt to develop a true understanding of financial freedom, beyond the hype of flashy cars, real estate & fame. We discover what it truly means to have affluence and look at three categories of affluent behaviour.


Most people who are struggling in their finances want to be rich. However, there is widespread misunderstanding or a complete lack of understanding of the concept of Money. What poor people see at riches is usually what is depicted in popular media. Flashy lifestyle, mansions & infinite wads of cash. And the truth couldn’t be farther.

The rich are not trying to be rich. Anyone trying to get rich, is poor.

You can have all the assets in the world, but if you’re trying to be rich, you are actually poor.

If you want to be rich, you must understand what it means to be rich. And as with everything of life, being rich has many aspects. Here I have narrowed them down into three broad categories in order for one to develop an understanding of where she wants to be.

Income negative

The first is the asset rich individual who spends more than he earns from his assets. He has a lot of Assets, so he qualifies as being rich. But he spends more than he earns, and the value of his total monetary equity decreases as time goes by. These individuals are rich on borrowed time. It’s just a matter of time, when your asset pool runs out, and you need to change your lifestyle in order to make the income you need, or adjust to the income you can make. However, if you have assets that will outlast your lifetime, you have nothing to worry about.

Income Positive

This is the Asset rich individual who spends less than the income from his assets. Because he has net positive income from assets, he can easily manage his lifestyle, and he continues to enjoy equity growth. Most such individuals maintain a relatively conservative lifestyle, as compared to their assets. However, you do need a considerable net worth to start with. You also need Asset Management expertise, or must have a trust worthy & competent asset manager. You also need high ability to delay gratification, just so you don’t go down burning your assets.

Equity Positive

This is an individual who is on and upward equity trajectory. She may not be asset rich in the present, but has a lifestyle that she enjoys, pursuing work aligned to her Ikigai, while creating positive Equity. For someone who does not have assets high enough to be in the first or second category, this is the only option for qualifying as being Rich.


Self Awareness Questions

  • Amongst the three kind of rich people, which one do you want to be?
  • Which one is the easiest to be?