Financial freedom - does it exist?

On the 21st September 2021 I achieved financial freedom.

I sold my business, and the upfront payment hit my bank account. At 37 years old, I had the ability to never work another day, and live a very comfortable life.

Sound like heaven?

It certainly did for 18 year old me.

I remember looking through holiday brochures (remember those?) when I was younger and picking where I would go if I managed to sell a business one day. The majority of my life was focussed on achieving that goal of financial freedom.

But almost 3 years on from that day, has it lived up to expectations? In fact, is there even such a thing as financial freedom, or is it just a myth?

Well here are my findings so far. I hope it can help you focus even harder to achieve it, or maybe even pick a new life mission instead.

The first thing to note is that the money I received allowed me to never work another day, based on the lifestyle I had at the time.

But, answer me this one. If someone gives you a big lump of money, is your aspiration to maintain your existing lifestyle? Probably not. I'd guess that you'd have a dream new home in mind. Want to travel the world a little bit. Treat yourself to a new car, or two.

In the same way that you maybe don't live in the same house now that you did 10 years ago. People like to progress up the status ladder. Footballers aren't living in 3 bed semi's, because they can afford to live in mansions. They're not thinking what house they could buy that would allow them to live for the rest of their life without working after they retire at 35.

Status and lifestyle creep seems to be ingrained in society and I was no different.

I wanted more than just seeing out my remaining 40+ (hopefully!) years without change.

So boom, suddenly a new house is bought (cash, because I no longer had an income and therefore couldn't get a mortgage!). A big old chunk of money gone, and with it, a whole new collection of costs. New house equals more energy costs, much higher council tax, garden maintenance costs. You name it, everything went up.

So within a few months of becoming financially free, I had much higher outgoings and much less money.

As well as the desire to uplift my lifestyle, the other main difference that I quickly noticed was that I was worrying about money. Pretty much all the time.

Now I'm very lucky that prior to selling my business I didn't really worry about money, ever. I earned around £50k salary that more than covered our bills at the time. I knew what was coming in each month and what would be left after the bills. I had a few savings, but nothing that would be impacted by large swings in interest rates or financial markets.

But as soon as I had a lump of money sat in my current account, I felt a huge amount of responsibility.

Fear of losing it, fear of eating away at it, fear of it reducing in value.

I suddenly had lots of money, and more money worries than I've ever had.

*** Warning, privileged problem alert ***

I spent ages signing up to new savings accounts, as in the UK only £85k is protected in the event that a bank goes bust. So I went from having one bank account that I'd had since I was a kid, to loads of banks that I'd never even heard of. This helped me sleep at night a little bit, knowing that at least the money was safe in the event of a global financial crash.

*** Told you ***

But then I felt a different anxiety. Everyone was talking about raging inflation and that the value of the money was eroding every day. So I felt that I needed to do something with it that beat inflation.

I sought advice and put the majority into a relatively low risk investment account. The main bit of advice from the advisor was to not check it everyday because the nature of investing means lots of ups and downs on a daily and weekly basis.

I fully ignored that advice and checked it multiple times a day. As you know, the world has been a volatile place over the last few years, and I was making and losing tens of thousands of pounds daily. More money than I'd ever owned previously was disappearing and reappearing each time I logged in.

The world of investments that I had no control over wasn't for me.

A few months after locking my money away to secure my retirement, I decided to take it all out again. I realised that physical assets that I could actually touch and feel were the way forward for me. Yes they probably fluctuate in value as much as the stock market, but they physically still exist even if their value has reduced.

So we bought a big, old house in Ireland, and we're in the process of renovating it into a holiday rental (check out renovation progress here). The plan is that it's basically a replica of the low risk investment account. Steady capital growth over time and the ability to produce income along the way. But the difference is that I can see and touch it. I can influence the way it changes in value. And most importantly, I can enjoy it.

3 years on from achieving my life goal of financial freedom, and my new life goal is..... achieving financial freedom.

But this time it's different. I don't see financial freedom as a lump of cash in the bank that I can chip away at. Instead it's all about using that lump of cash to create income streams that let me control the lifestyle I lead, rather than the one I can afford before the money runs out.

To answer the question in the title, does financial freedom exist. I think it depends on how you define freedom. I never used to worry about money and now I think about it all the time. In that sense, I have less financial freedom than before. But the ability to invest the money to design the ongoing lifestyle that you want. That is a feeling that’s hard to beat.