| Real Life Strategies for Building Wealth

freedom fund

Let me ask you a question:

Do you live your life or life keeps happening to you?

Life happens to you at least some of the time? I thought so.

This is the case with most of us; we inhabit a personal space – mental or physical – where our control over the events shaping our lives is fairly limited.

It doesn’t have to be like that. Moving away from ‘life just happens to me’ to ‘I live my life’ is a matter, I’d say, of maturity, confidence, self-esteem and a substantial freedom fund.

Life happened to my sister. I’ll never forget the hot summer day when she broke down in tears and told me what her married life is really like. It was a life of early passion, followed by drink, infidelity and psychological and physical abuse.

‘How long has this been going on?’ – I asked.

‘Over a decade.’ – she mumbled.

‘Why don’t you get out?’

‘I don’t have money to get divorced and how am I going to raise my daughter as a single mother?’

We helped her get out. We paid for her divorce, my parents supported her emotionally and psychologically and we pledged to pay for my niece’s university education (incidentally, one of the best investments we ever made including buying the apartment in Sofia for her to live in).

And if you think that finding yourself in the tight corners of life is exclusively for women, think again.

One of my friends – a man and a very high achiever at that – found himself with nothing but the clothes on his back and the cash in his wallet when he left his wife. He sorted it all out later, as it happens, but living his life was touch and go for some time.

Life used to happen to me as well.

Debt happened to me.

Worrying about how we’ll pay for our modest but fun wedding happened to me.

Heck, life still, occasionally, happens to me. Most of the time though I live my life.

What made the difference?

Many things. I’m older, have more experience, feel more secure and confident and have got to grips with my mortality. Even more importantly, I have choices in life sustained by having a rather generous freedom fund.

Guys, most people will tell you that to ‘take life by the horns’ you need to find yourself, to figure out who you are and what you stand for. This is true. Still, your ability to act on what you find depends on whether you are able to meet the money obligations that come with standing by your principles; in other words it comes down to you having a freedom fund.

Much has been written in personal finance about having an emergency fund; this is money that you keep to be able to pay for life events that may happen to you. A bit has been written about having a ‘f*ck you’ fund.

In my book, positivity rates very highly. So, I won’t be talking to you about starting and emergency fund or building up a f*ck you fund.

Today I’ll ask you to start a freedom fun; this is money that will give you the option to do what you want to do.

You know what the difference is? A freedom fund is about you and your level of control over your life; it is not about what may happen to you or getting your own back.

#1. What is a freedom fund?

A freedom fund is a fund that allows you to do what you want in your life; it allows you to plan and finance life events you value and welcome in your life. Incidentally, a freedom fund would afford you control over the emergencies, the do-dads, in your life as well.

Generally, a freedom fund does ‘exactly what it says on the tin’: it gives you the freedom to live your life on your own terms.

#2. Why do you need a freedom fund

Each and every one of us needs a freedom fund. It doesn’t matter whether you are a woman or a man, whether you have safe job that you enjoy or not. Your freedom fund is the one thing that stands between you and the unpleasantness of life that could happen. Having a freedom fund means that you have a level of control over your life; over what you keep and bring into it.

More specifically, you need a freedom fund because:

Things may change at work

Even if you love your job today employers have a way with changing conditions and doing away with the parts of the job you enjoy.

Employers change their goals, they can change the way in which they go about achieving these goals and this can have a large negative effect on your job and working conditions.

Now, the thing is that whenever your employer, their demands and your job description change you have three possible ways to react.

  • One, you may be completely attuned with the change and fit into the new job description like a hand in a well cut glove. If this were the case you are very lucky.
  • Another way to react, would be to decide that there are other things that matter. In other words, you are not attuned with the change, you have a problem with the new demands of the job but you think that you can still do it because there things on the fringes that still feel right.
  • And last, you can refuse to comply and adjust. In this case you have to leave immediately.

In my experience, when employers change their demands the latter two options are the more likely outcome. If you don’t have a freedom fund this can cause a lot of personal unhappiness and life disturbance.

If you have freedom fund, on the other hand, this can be the best opportunity that life threw you as a curveball.

Things may change at home

Okay, I get it!

You really, really love this guy/girl next to you and you have made public promises to stick by them for the rest of your life. You trust him/her. Until one day he/she gets so mad at you that they hit you.

He/she is apologetic; what’s more you shouldn’t have got him/her so mad, right?

Wrong. Abuse is abuse and you don’t have to put up with it for any length of time.

You don’t have to put up with it particularly and specifically because you don’t have the money to leave the relationship. Now here is where having a personal freedom fund can come very handy.

Oh, and abusers can be men or women.

Life will happen to you anyway

Do know what I mean?

There are life events that are difficult to avoid.

People get born.

People die.

People get married.

Are these emergencies? Not really. These are life events we know will happen (well most of them anyway) but we have no way of predicting when they will happen.

A freedom fund gives you peace of mind; when such events occur it is your choice to decide how to tackle them.

#3. How large should your freedom fund be

A good question but why do you ask me?

The size of your freedom fund is a very personal matter; a matter that only you can settle. How large or small your freedom fund needs to be, among other things, depends on:

  • how expensive is your lifestyle;
  • how long do you take to sort your sh*t out; and
  • your freedom purpose (what is the freedom you want, freedom from what and for what).

I intend to write more about the freedoms we crave and how to calculate how much these cost you. For now, I can only tell you how large is my freedom fund.

I have a personal freedom fund that would allow me to sort out my life were everything to go wrong (e.g. leave job, leave family). This fund is roughly 8 months of my personal living expenses (allowing for accommodation of course).

We also have a family freedom fund. This assumes that I stop working and we stay in the house we live in. We keep approximately a year worth of expenses above our monthly passive income (this is not yet large enough to cover all our expenses).

#4. How do you build a freedom fund

You do it just like you build up any other fund: with patience and persistence. You have to persist with the persistence of a drug addict.

Only caveat is that if you try to save this fund from what you normally bring home every month can be a stretch; and despite all dedication and persistence you may claim other savings and spending will easily take priority.

I’m a great believer in making more money. Build your freedom fund by thinking of side hustle, building it up and keeping at it.

I built my personal freedom fund from my site hustle – all money earned from activities other than my job were directed to build this fund. Our family freedom fund was built by our positive cash flow minus what we keep for investments.

There are novel and imaginative ways to build a freedom fund fast. Some have used GoFundMe.com to garner support and raise funds for their freedom.

While this can, and indeed does, work remember that there are severe limitation. To begin with, you will still depend on the benevolence of others for your freedom and this can be granted or withdrawn. Further, your success would depend greatly on your ability to ‘sell’ your story and not everyone has that. And lastly, you need considerable media savvy because crowd funding is a very noisy space.

In balance, it is better and easier to build your own freedom fund.

Finally…

We all need a freedom fund. You need a freedom fund and you need it now.

So, stop surfing the net and go get yourself a side hustle; save the money from this side hustle; and very soon you’d have your freedom fund.

Start now. Trust me: it feels better than smooth chocolate melting on your tongue; better than running silk velvet through your fingers.

Do you have a freedom fund? How long did it take to build?

(Please don’t be shy and share.)