Debunking 4 common financial freedom myths

August 1, 2023

As a kid, I remember driving through nice neighborhoods wondering what the people who lived in the houses did.

I pictured them as doctors, lawyers, professors.

And I definitely pictured all of them as millionaires.

But after 6 years of working with dozens of multi-millionaires, I now know I was completely wrong.

There’s a good chance the people who lived in those homes did have an advanced education and went on to become doctors, lawyers, and professors.

But there was a low chance they were millionaires.

More than 50% of millionaires live in a neighborhood where the average household income is below $75,000/year.

Turns out, I was in the wrong neighborhood for finding millionaires.

Most millionaires live in average homes, drive average cars, and shop at average stores.

Some millionaires have never made six-figures, never owned a business, and never received an inheritance.

This revolution changed the way I viewed money forever, so today we're going through the 4 biggest myths on financial freedom.

4 common myths on financial freedom:

1. You have to have a high income.

A high income may make achieving financial freedom easier.

The real fast path to financial freedom is increasing the difference between what you make and what you spend.

So yes, increasing your income helps but only if your spending remains the same.

Someone making $52,000/year and saving $5,000 every year is wealthier than the person who makes $500,000/year and spends $510,000/year.

Income does not automatically equal wealth.

2. Financial freedom means never working again.

Financial freedom is also for people who want to:

  • Take the low-paying job they love.
  • Start their own business.
  • Volunteer 30-hours/week at their favorite charity.

Financial freedom can be about escaping the 9-5 if you hate the 9-5.

But for most people, financial freedom means being able to decide the when's, what's, and how's of your day.

3. Financial freedom eliminates financial stress.

A lot of financial stress is eliminated once your basic needs are met.

Financial freedom will make your life easier but it cannot guarantee a stress-free life.

Some people who crave security believe they will have it when they see their financial freedom number on a screen.

They believe their anxieties will disappear once they reach $1, $2, $3 million...

I’ve worked with a lot of these people.

I’ve been this person.

A financial scarcity mindset is rarely eliminated by reaching a freedom number.

If you struggle with feelings of “never enough”, you’ll struggle to arrive at a freedom number that makes you feel secure.

4. Financial freedom is easy.

The path to financial freedom is simple (spend less than you make and invest), but it is not easy.

Financial freedom requires discipline to not spend everything you make.

It requires decades of consistent investing.

It requires the courage to not interrupt your investments when we hit tough times.

And maybe most difficult of all, it requires you to give up the game of “keeping up” with your peers.

You can use your money to have the nicest car in your neighborhood or the biggest house in your friend group.

Or you can use money to buy back your time and eventually your freedom.

Real wealth is silent.