5 Common Myths About Financial Independence

Most people go through life working hard and doing everything they can but still end up dying in poverty. The poverty doesn’t end with their children; the cycle includes their children and children’s children and goes on till someone breaks it. It’s a pity that hard work doesn’t guarantee wealth, and a lot of us go through life not knowing that financial freedom is possible. I put it to you that this thinking is informed by several myths about financial independence that we will be debunking in this article.

1. Financial freedom is being wealthy.

This myth causes two kinds of damage: it either makes one greedy and seek wealth at all costs or makes one not even want to try at all because being wealthy seems unattainable. In its truest sense, financial freedom is having enough financial resources to afford necessities, pursue your life’s interests, overcome unexpected losses and generally be in control of your life.

Financial freedom is having enough financial resources to afford necessities, pursue your life’s interests, overcome unexpected losses and generally be in control of your life. Share on X

Nowhere is it stated that being financially independent means having billions in the bank. You can be financially free yet not be a billionaire. The danger of living with the mentality that financial freedom equals being wealthy is that you will never be able to achieve financial freedom. Why because you are either seeking money the wrong way or not seeking it at all.

Fact: Financial independence is being able to live the life you want.

2. Having many professional qualifications will help you to be financially free.

If you have ever heard people saying, “If only I have my master’s or my (insert professional qualification), then I’ll have more money,” it’s because they are operating under this myth. While having professional certifications is admirable and could be instrumental to being financially free, it’s not the end in itself, but rather a means to an end.

While having professional certifications is admirable and could be instrumental to being financially free, it’s not the end in itself, but rather a means to an end. Share on X

Several intellectuals and gifted professionals are still poor not because they do not have certifications but because they lack financial literacy. Financial literacy will help you know how to deploy your resources to gain more.

Fact: Having many professional qualifications will not determine your financial independence.

3. Once you are financially free, you are free forever.

We’ve heard stories of people who were once wealthy and suddenly lost their fortunes. Money is a fickle thing, here today and gone tomorrow. So it takes a prudent and watchful person to make sure it’s always around. In essence, because you’re financially free now doesn’t mean you will always be free. Therefore remaining financially free takes maintenance and judicious planning and deployment of one’s financial resources.

Therefore remaining financially free takes maintenance and judicious planning and deployment of one’s financial resources Share on X

You need to understand that your financial condition is like a baby needing constant care to grow into adulthood. And even as an adult, it needs continuous tending to ensure its survival. When you work towards maintaining your financial freedom, even when unexpected loss comes, you can still recover.

Fact: Financial independence is not perpetual, rather it is maintained.

4. You don’t need to be financially literate to attain financial independence.

It’s sad to see people working hard to get money yet not knowing how money works. They think working for money equals having money when in fact you can work all your life and still die a pauper. The importance of financial literacy to attaining financial independence cannot be overemphasised.

Financial knowledge includes the ability to read cash flow statements, budget and stick to the budget, read bank statements and so on. This knowledge will not only help you understand how money works but also help you deploy your resources better.

Fact: You need financial knowledge to be financially independent.

You need financial knowledge to be financially independent. Share on X

5. Having one source of income is enough to make you financially free.

There is no greater way to be financially doomed than to have only one source of income. When you have just one source of income, no matter how lucrative it is, you’re not yet financially independent. Remember what happens to the proverbial eggs in one basket? When it’s gone, it’s all gone.

Therefore, being financially independent is having multiple sources of income—both passive and active. This ensures that when one source fails, the others can help you stay afloat.

Therefore, being financially independent is having multiple sources of income—both passive and active. Share on X

Fact: You need multiple sources of income to be financially independent.

Now what?

Changing your financial position is very much achievable and it starts with having the right mentality toward financial independence. You cannot think about money the wrong way and expect it to work for you the right way. Changing your financial mindset to be financially free therefore starts with having the right information.

For quality, simple-to-understand information that will make you financially free, order a copy of my book, Financial Intelligence, on Amazon or here. This book contains practical steps to develop a savings culture (no matter what you earn), get out of debt, and build lasting wealth.