Debt Free or Financially Free ?
Is it more important to be “Debt Free” or “Financially Free” ?
Do you know the difference ? Do you care ? 
Ok, if you are a fan of this blog, you probably do care, and are very interested to know what these terms mean (if not already known or self-explanatory) and what the answer to that question is…
Ok, “Debt Free” this is usually referred to as when you have no revolving credit obligations such as Credit Cards or Personal Loans. Occasionally, having no mortgage and no car loan is also thrown in there too… but, since Mortgages and Car Loans are usually very low interest rates and thus are often considered “Good Debt”… most don’t require having these paid off to be “Debt Free”.
Financially Free is a completely different thing. You are considered Financially Free when you have enough PASSIVE INCOME (income that you dont have to work a job for) to pay all of your bills in perpetuity. In other words, you have enough money coming in from investment income, interest payments, etc. to pay all of your bills and more. Thus, you can quit working and you would still be able to live comfortably.
Is that just another way of saying “Retirement” ?
NO. Retirement is much different… Retirement usually has you drawing down a savings until you die or run through all the money.
Financial Freedom runs on the idea that you will never outlive your money.
So, which do you think is better ?
Mandrake
October 13th, 2008 at 7:37 pm
Interesting.
Lasik Los Angeles