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If you are like me, you desire financial freedom and have probably read and evaluated various definitions of what constitutes financial freedom, but I don’t believe I’ve seen a definition that includes what I consider to be an essential component: self-discipline.
Most definitions of financial freedom that I have seen cover the ability to have passive income that allows you to do what you want when you want. Given that the human appetite has the capacity to always outstrip available resources (case in point, the United States Congress, and most every other government), individuals will not obtain financial freedom absent self-discipline. The core element of self-discipline is a pre-arranged plan you have developed with yourself and other interested parties as to how resources you received will be allocated and spent.
In previous emails, I have talked about the importance of calculating your daily and monthly burn rate (what it costs for you to live your current lifestyle). We all must fight the temptation of increasing our lifestyle as we perceive our income to have increased. If our spending continues to increase as our income increases, we will rarely, if ever, be able to accumulate the reserves necessary to acquire and pay for assets that will generate passive income.
Back to the definition of financial freedom. Self-discipline has to do with how you master the person looking back at you in the mirror. By engaging in reasonable self-restraint, you can achieve financial freedom and enjoy it, which is what we all want; but if we can’t ever fully attain and keep it, what good have our efforts done?
For those of you who may be starting to have an adverse reaction to this email because you fear I might use the dreaded “b” word – “budget” (there, I did it!) – allow me to remind you that YOU are the one who should be making YOUR budget; and YOU, therefore, are merely trying to live in agreement with what YOU have already decided. If that isn’t an easy form of self-discipline, then I don’t know what is. Just be consistent and true to yourself.
As always, I value your feedback. If you found this article helpful, please share it with a friend.
Until next time,
Jeffery S. Watson
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