The different types of freedom

What does it mean to achieve financial freedom? How do we know whether we’ve achieved it?

When in pursuit of this goal, I think it’s worthwhile to think of “financial freedom” as a two-part concept. Strictly speaking, there’s no such thing; rather, what we probably mean by the term is “to have the financial means to support a lifestyle of freedom.”

We think that having enough money would allow us to be free. However, let's ignore the financial aspect for a moment and focus on a simpler question: "How much freedom is enough for us to consider ourselves free?" To answer this, we should first define "free" and quantify "enough".

Let's start with the definition. Freedom as a general concept means a host of different but related things. Consider the different types of freedom that can have a meaningful positive impact on our daily lives:

• Location-based freedom. We can choose to live anywhere in the world.
• Time-based freedom. We have full control over how we spend our time.
• Relationship-based freedom. We can choose who we build relationships with.
• Ability-based freedom. We are physically able to do the things we want to do.

I suppose if we are to boil all of the above down to one single thing, we could perhaps call it "decision-based freedom" - the ability to make decisions however we like because we can afford any associated cost.

How much freedom is enough? As with most things, our freedoms exist on a spectrum. For example, with a Canadian passport, I can normally visit 93 countries without needing a visa. However, things get more a lot more challenging if I want to visit North Korea or perhaps some countries in Africa. If I want to play basketball, I can; but if I want to play basketball in the NBA, that's a different story. Having enough money for food, shelter, and other basic necessities is relatively easy; spending over $1 billion on a residence (I read today that an Indian billionaire did this) is not.

I think it's important to clearly define each aspect of freedom and our requirements for each, as they would help us to arrive at specific goals and actionable strategies to achieve them. We may not even need to "retire" or reach some predetermined numerical threshold for financial independence. For the remainder of this post, I'll share my own definitions and perspective on this exercise.

My personal requirements for freedom are as follows:

• Location-based freedom: The ability to not let any non-family reasons decide where I am. Travel-wise, the mobility of a Canadian passport is sufficient.
• Time-based freedom: The ability to fall asleep naturally and wake naturally. Up to two hours of "work" (ie. something I would not do if I had a choice) each day on average is fine, as long as I can decide when to do it.
• Relationship-based freedom: I'll make no concessions here; I want complete freedom in choosing whom I build relationships with - especially my most important ones.
• Ability-based freedom: Health/fitness level in the ~80th percentile for my age. I don't want to ever have to say that I can't do something because I'm "out of shape".
• Decision-based freedom: While it's difficult to predict the future, thus far the biggest costs associated with inevitable decisions that I can think of are those related to my daughter's education. I'd like the financial ability to comfortably send her to an international school and a university abroad.

In short, I think I will have achieved freedom if the above conditions are satisfied. Given this, it seems that I don't need to fully retire; instead, with a sufficiently high hourly wage, it's fine for me to engage in flexible part-time work that I can do remotely with people I like. A tall order to be sure, but certainly more easily achieved than most definitions of complete "financial freedom", which may take 5-10 years (or more) of full-time employment and aggressive saving.

In the context of my current day job, I'd be looking at implementing the following changes in the coming months:

• Stop going to the office regularly. Only work on-site when absolutely necessary during the application peak season.
• Look for ways to reduce work-related time sinks. Begin by reducing daily workload during off-peak months to 1-2 hours.
• Interview all students I will potentially mentor, and have a no-questions-asked refund clause in place, in case I no longer wish to work with someone.

Pursuing freedom is an iterative process; we don't go from zero to one. With clear and quantified goals, we can ensure continuous progress by designing interim milestones. Contrary to those who might make significant sacrifices to achieve FIRE as early as possible and at all costs, we can take a route that recognizes freedom as different for everyone and as something other than money, improving our quality of life gradually as we move towards our personal ideal.

For example, in my case, I may not achieve location-based freedom immediately, but I can first aim to achieve it fully for 6-7 months in the coming year and partially for application peak seasons. I may not be able to cut down my workload to two hours per day on average, but I can aim for one hour of work per day during off-peak months and limit my daily workload during peak seasons to a maximum of 5-6 hours.

In the long run, we may not even be sacrificing higher financial return in exchange for freedom. Most of us trade our time for money, which is a bad tradeoff that gets worse as we grow older. By working remotely/flexibly and working less, we have more time to not only spend with family and work on our own projects, but also to learn new skills that can generate value. In today's world, change is accelerating, and it's not wise to allocate most of our time to jobs that may soon become obsolete.

Ultimately, money is just a medium of exchange, an intermediary to what we truly want. To achieve freedom, first define it in terms other than money. Consciously move towards that definition. You'll likely find happiness in the journey.