Dear readers, in today’s post, we focus on an evergreen subject: how does one achieve Financial Freedom after the second edition of Singlife Financial Freedom Index reveals that it may take consumers some 30 years to achieve financial freedom, up by nearly three years, compared with a year ago.
What is Financial Freedom?
First, what is Financial freedom? Based on textbook definition, Financial freedom is the state of having sufficient personal wealth to live without having to actively work for basic necessities. It typically encompasses several key elements:
Debt-Free Living: Financial freedom often means being free from debt, allowing individuals to keep more of their income.
Emergency Fund: Having savings set aside for unexpected expenses, which can provide security and peace of mind.
Passive Income: Generating income from investments or business ventures that do not require active involvement, such as rental properties, dividends, or royalties.
Savings and Investments: Building a substantial portfolio of savings and investments that can support one’s lifestyle over the long term.
Budgeting and Financial Planning: Understanding how to manage income, expenses, and investments effectively to maintain stability and grow wealth.
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Lifestyle Choices: Having the freedom to make lifestyle choices without financial stress, such as the ability to travel, retire early, or engage in hobbies without worrying about money.
Control Over Work: The ability to choose work that is fulfilling rather than being forced into a job solely for financial reasons.
In essence, financial freedom allows individuals to have better control over their lives, making choices that align with their values and aspirations without being constrained by financial difficulties.
SingLife Financial Freedom Survey: results
The key results of Singlife Financial Freedom Survey are as follows, extracted from Singlife Financial Freedom Index:
“It may take consumers some 30 years to achieve financial freedom, up by nearly three years, compared with a year ago.”
“4 out of 10 (44%) Singapore consumers surveyed believe they will never achieve financial freedom. Significant roadblocks cited include insufficient income (53%), unforeseen expenses (38%), job insecurity (32%), and debt repayment burdens (28%).”
“Respondents believe they need approximately S$612,045 to be considered financially free, up 8% from S$566,640 in 2023. With lowered median yearly savings of S$20,195 (around S$1,682 monthly), it could now take about 30 years to accumulate enough savings to feel financially free, compared with about 27 years previously. This could be due to inflation and cost-of-living concerns affecting consumer sentiments.”
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How to achieve Financial Freedom?
If you were to ask me, I thought we as a society have moved over the concept of the 5 conventional markers of Success: the 5 Cs: Cash, Condominium, Country Club, Career and Credit Card. We should not have another marker called Financial Freedom to define us on the material front.
The above said, if you are to ask me how one should achieve Financial Freedom, I will emphasize many times the importance of Saving More and Investing Wisely and find opportunities to equip oneself with better skillsets so that one can have more opportunities in life.
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