What is the freedom of wealth?

Is the calculation formula, as follows:

Financial freedom = (current net assets *× return on investment)/current annual expenditure; However, in the aspect of family financial analysis, considering the income increasing year by year and the time value, it is approximate to regard the current net assets as the product of working years and current savings, then:

Financial freedom = (working years * savings in the current year * return on investment)/annual expenditure in the current year.

The second question is simply understood as that when you are not working, you don't have to worry about money, because the income from your other investments can support your expenses. It is easy to achieve financial freedom by increasing investment income and reducing expenditure as much as possible.

Manage daily expenses

Financial freedom has nothing to do with whether you are young or how much money you have. If you can get enough passive income from other ways besides work to support your daily expenses, you will be financially free.

Age may have nothing to do with financial freedom. Suppose you are 25 years old and spend 1000 yuan a month, and your assets generate 100 1 yuan a month, so you are financially free and can choose what you want to do without worrying about what to eat next time and where to live.

Suppose you are 50 years old, with a monthly income of one million, but you have to spend more than one million a month, then you still can't achieve financial freedom, and you still have to continue to earn one million a month.

This is basically similar to the cause of the baby boomer retirement problem, that is, when the postwar baby boomers, who account for the majority of the population, began to receive pensions one after another, the social security system was predicted to collapse.

If you spend 1000 yuan a month and you can get10/0/yuan of passive income without any effort, then you have achieved this enviable financial freedom. The thousand yuan in this example is called the "critical point".

Once we break through this critical point, we can live without working as long as there is no catastrophe. Of course, if you like your job, you can continue to do it, or you can choose what you really like to do, instead of doing things that you are unwilling but helpless because of life.

A set of property that is rented out for profit is an asset, because it is completely owned by you, and the monthly income offsets the property tax you pay and there is a surplus.