My personal definition of financial freedom

Written on September 13, 2009 – 2:33 am | by Kampung Boy |

It is everybody’s dream to be financially free. Who does not want to be financially free? When people reaches financial freedom, most problems involving money can be solved.

This will definitely kill off those headaches of money not enough every end of the month or have to eat bread for 15 days in a month just to settle debts.


My definition of financial freedom is drop dead simple. Only 2 simple criteria but not easy to achieve.

Here are the criteria :-

Don’t owe anybody money

This is my first rule of financial freedom. When you don’t owe the banks or friends any money you are on your way to financial freedom. Yes, you might have big car and big house but if you don’t own them fully and still paying through your noses you are still not financially free yet.

Release yourself from owing any institutions like banks any money, then you are half way there my friends.

Passive income more then active income

Active income is the income you get when you are working as an employee. To be financially free, your passive income must be more then your active income.

Your passive income usually comes from your investment from stocks, properties and mutual funds.

That’s how i define financial freedom. Sounds simple but trust me, to achieve both of the above criteria is not easy. Good luck to everybody in chasing their dreams of being financially free.

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  1. 4 Responses to “My personal definition of financial freedom”

  2. By Jaclyn on Sep 13, 2009 | Reply

    Hey! First of all, thanks for dropping by at my blog.

    What a great blog u have! I actually spent some time reading through some entries that caught my attention :p

    To me, my definition of financial freedom is exactly the same as yours. Free from any loans/do not owe people money and also when my passive income > my active income. I don’t think I’m that type who’ll buy shares but I’m definitely investing in properties if I’m able to :D

    Likewise, easy to say, difficult to achieve :(

  3. By LOKE on Sep 14, 2009 | Reply

    I think I can achieve the first critetia. The second one is harder.

  4. By Kampung Boy on Sep 15, 2009 | Reply

    Yup i am also having problem achieving the second one. Don’t worry LOKE, we strive towards financial freedom together gether! ^^

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