Financial Freedom: What it means and why most people will never achieve it

Andre Alamina, Business & Finance Columnist

Hello and welcome to my first ever column for The Carroll News!

In this weekly column, I am going to be sharing thoughts, ideas and lessons that you can use to help you live a happier and more fulfilled life. That said, the focus of these column will be on a subject that we often think about, but rarely talk about – money.

My columns will teach you how to better manage your money, how to land a great job/internship, or just how to overall be the most successful YOU possible. If any of that interests you, then welcome. I hope you will look to this column every week for your helping of money motivation.

For this first column, I want to write about something I know many people have heard about, but very few really understand: financial freedom.

Financial freedom is a concept people generally have false impressions about.  It has become somewhat of a buzzword in personal finance, with many people using it to describe circumstances and outcomes that do not translate to financial freedom.

Let’s take a moment to clarify what financial freedom really is by first looking at what it is not.

Having a big house and a nice car is NOT financial freedom.

Having a job with a six-figure salary is also NOT financial freedom.

Even being completely debt-free, where you don’t owe a dime to anyone, is NOT financial freedom.

The issue here is that we often tend to conflate being “financially free” with being “rich.” On the surface, this isn’t totally inaccurate, but the misconception about financial freedom is born when people wrongly associate wealth with material possessions and luxurious lifestyles.  Truth be told, if there’s one thing I’ve come to learn about the wealthy (and I mean the truly wealthy) it’s that you’re not going to be able to point them out in a crowd because of their Gucci belts or Maserattis.

The “wealthy” have altogether different priorities.

Being financially free, at its core, is the process of goal-setting, growth and achievement towards becoming the most empowered, fulfilled and successful you possible.

Financial freedom comes when you can live the lifestyle that makes you happy without ever receiving another paycheck.You’re financially free when you’ve successfully achieved freedom of income, time and location, meaning you can do whatever it is you want, whenever you want, wherever it is you choose to do it.

Understanding this core tenent of financial freedom will open your eyes to why people living the most lavish lifestyles can be the furthest away from financial freedom.


I was inspired to write this article after a conversation I had with an intern who worked with me at Lubrizol. He was set to graduate last spring, and while we were having lunch together, he started speaking to me about the apartment he wants to get downtown once he starts working.

I also considered moving downtown after finishing my undergrad at Carroll in 2017. I got a job as a financial analyst and my monthly salary would have more than comfortably afforded me an apartment downtown. Being in the heart of the city is something that was attractive to me, and would be attractive to most young professionals. I considered this move despite it being three times as expensive as my current living situation.

While I could afford this extra cost with my salary, I had no necessity or obligation to upgrade my living standards. Cleveland is a relatively small city, and getting in and out of the downtown area from any of the adjacent suburbs doesn’t take more than 25 minutes.

I reminded myself of my financial priorities and avoided making the kind of decision that causes so many people to never reach financial freedom.

Here’s the scenario.

Too often, people maintain a certain standard of living. It isn’t luxurious, but it’s comfortable. Then, they get a raise, have more disposable income and their current standard of living is suddenly no longer sufficient.

So what do people like this do?

They up-size their homes; they buy a luxury car; they start buying nicer clothing and before you know it, all of that extra income has been cashed in for an unnecessary upgrade to their current lifestyle. Despite making progress professionally and commanding more income, they’ve made zero progress towards financial freedom.

The idea is this: If every time you make more money, you spend more money, you will NEVER get ahead financially.

Sure, you’ll have nicer things, but you’ll have to always be working to maintain them.

Here’s how you should think about these things:

Say your rent or housing payment is currently $600 a month. If you get a $600 raise, choose not to upgrade your standard of living, and instead save that $600. That becomes $600 in rent you will not have to work for in the future.

That is $600 in groceries, insurance and utilities you will be able to pay for whether you are working or not. This benefit is amplified when you factor in things like compound interest from investments in stocks and/or real-estate.   

Over time, if you continue to invest enough of this extra income, you have effectively reduced the number of years you need to work to support your lifestyle to the point where you can quit working completely at age 55, 45, 35 or even 25!

That is when you are truly free.

Now I am not saying you that should never aspire to a higher standard of living. After all, we want to live as comfortable a life as possible.

However, it is important to keep in mind that for every dollar in present consumption you choose to put off in favor of saving,  you have freed yourself of the burden of having to work for that same dollar at some point in the future.

If financial freedom is truly your goal, then you must recognize that it is going to come with sacrifices.

Having the discipline and the foresight to not triple your cost of living immediately after college, or take out a second mortgage to buy that boat you want, is what can make the difference between retiring early, and never retiring at all.