Financial Freedom – There’s an App For That
This recent article appeared on the Marketwatch.com website, entitled, “How to declare your financial independence”.
The first part of the article talks about the views of Jonathan Chevreau, a Canadian financial writer, about how to reach financial independence. The article rightly points out that financial freedom is not about wealth in the traditional sense, simply it implies freedom of choice regarding work, leisure and retirement.
Later in the article, the author, Richard Eisenberg, starts talking about “a nifty new iPhone app”, called Freedom$, which you can use to calculate your Freedom Score: an estimate of how many years until you’ll achieve financial freedom, purportedly using only your age, your total assets and your total consumer debt.
Wow, just slide this app alongside your daily step counter and you’ve got it covered: good health and financial planning. I consider it worse than useless to offer someone the illusion of such a simple solution.
Achieving financial freedom is a little more involved than plugging a couple of numbers into this app. And it’s not simply about finding your “magic number”. The key ingredient is, what will be your spending needs if you choose to curtail or eliminate your paycheck? What other sources of income do you have or can you develop? But, spending is at the heart of it. You must start there. This requires you to actually look at what you spend and figure out how that will change going forward or how you will alter your spending. Once you know your spending you now have a target. At the point where you can construct the income sources to support that spending, you have financial freedom.
Put that in your app.