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FINANCIAL FREEDOM
Copyright © 2005 John Hopkins

Financial freedom is a worthy goal, you would surely agree, wouldn’t you?

Contacts over 25 years with the purchasers of real estate have shown me that all, without exception, have a common goal— financial freedom. This will be attained when they have accumulated sufficient funds to provide themselves with their chosen lifestyle and, at that time, work will become optional.

They will be financially dependent. They will be financially free!
Unfortunately, it’s a goal that not many attain.

I can think of at least six reasons why people don’t make adequate provisions for financial independence:

1. They think they need a lot of money to make a start.
2. They don’t know how to approach the task of achieving financial independence.
3. They don’t save sufficiently from their income to fund the necessary investments.
4. They could save, but they start too late in their working lives to achieve the desired result; it’s called procrastination.
5. They save, but don’t achieve sufficient return on their investments.
6. Their efforts are diminished by outside influences like taxation and inflation.

These reasons imply a lack of resolve, of knowledge and of urgency. They underline the necessity of starting on an investment plan, sooner rather than later, with a determination to stick to it. Sound, professional financial advice along the way would also assist individuals in achieving their desired goal.

People commonly underestimate the amount necessary to fund their retirement. Its average span is fifteen years and it is becoming longer. Life expectancy is increasing and the average age of retirement is decreasing. Some believe they can live on and run down capital so that it is exhausted after the costs of the funeral director are paid. That’s not an easy calculation to make. You can run out of funds and live on for some years.

And although not so much of a bogey now, inflation may well again become a factor to reckon with.

It is better to play it safe and keep a sound reserve. What you leave in your will could be looked on as a premium paid to ensure that financial independence is maintained for life.

Investment for financial security is necessary. It should be undertaken as soon as possible. Property can play an important role in its implementation.

Personally owned property will not be the only investment medium which people will use for their funds. Equities and superannuation may be represented, although here too real estate plays a large part.

The personal ownership of property, however, can be an inspirational spur for the further development of an investment portfolio. And it is not as hard to acquire as you might think.