In each of those financial planning classes somebody asked me this question. It is quite an easy question to answer, but a difficult answer to understand.

For different people it means different things.

If you wish to own a Mercedes having a spare Rs. 80 lakhs to buy and Rs. 50,000 per month to spend on it is a part of financial freedom. Financial freedom is not an amount of money but a state of mind. If you have enough money which allows you the freedom of when to wake up, what to wear, whom to say ‘It is a pleasure meeting you’, to decide what to do with your time, to listen to whatever music you desire, to decide on whether to play scrabble with your daughter, chat on the net, whenever you want, travel wherever you want, or just decide to do nothing….that is financial freedom.

If you do things that give you pleasure (making money is incidental), and it does not matter whether the work involves money or not….that is financial freedom.

If it means you do not have to ask anybody for anything – being it the fees for your children, or a ‘loan from a friend’ to pay the EMI, or …..that is financial freedom.

If all your expenses (for today and tomoro) come from a passive source – dividends, capital gains, interest, annuity, royalty, trail commission for work done in the past, you have financial freedom. If your expenses for the whole year is Rs. 300,000, and you have an income of Rs. 15 L, you are financially free. In such a case you are WEALTHY – ┬áif your sources are much more than your income and for getting his opportunity.

Many people who live on a day to day basis and have no source to turn to (any thing other than your own money is turning) is not financially dependant. If you are dependant on your salary to pay your bills you are not independant. If you are dependant on your DAD to bail you out of financial trouble, or pay for your ‘unpayable’ bills, you are financially dependant on your BOSS or you DAD. You are not financially independant.


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  1. I know a guy who has a passive income of 20lakhs + a salary of around 19 lakhs.

    monthly expenses come to around 40K as he lives with his parents and covers expenses for himself and his own family.

    Could you call him wealthy?

  2. Hi. Is there a specific post on passive income ? Tried searching the for it. Will do on Google as well but would prefer an Indian opinion. Most of us are dependant on salaries as we don’t have a business or a practice.Maybe it is time to do so , considering layoffs or even the untenable daily pressure.

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