When you think about building wealth or financial success, what’s your “freedom number?”
This is the term that financial planner and therapist Prudence Zhu uses for what is often called “financial independence.” It means having enough passive income to live on without having to work and earn money.
Establishing that freedom number as a financial goal can help motivate people to plan and save for the future. Achieving it, however, doesn’t necessarily bring the satisfaction one might expect.
For years, Prudence worked toward achieving her freedom number. Her path wound through three continents and included private equity, an MBA, corporate finance, a CPA, and real estate investing. She tracked the number, planned around it, and in 2021 she reached it. Then something unexpected happened.
Nothing changed.
“That was anticlimactic,” she told me during a recent podcast conversation. The problems she had expected financial independence to resolve were still there, in some ways worse than before. She now had the time and the resources to address them, which made them harder to ignore.
Eventually she concluded that the technical side of financial planning, while essential, was not the whole picture. She began exploring her own internal relationship with money. Now, as a certified financial therapist, she brings both technical and therapeutic skills to her work with financial planning clients.
Prudence discovered two things that I have watched play out for decades in both my own life and my professional practice.
One is that, when we aim for a certain milestone that represents financial success, we often find that the milestone moves as we approach it. At one point, we might see a certain net worth as “enough” for success and independence. Let’s say that number is one million dollars. By the time we reach it, our lifestyle and needs and expectations have most likely changed. It may no longer seem like the bulwark of security it once did. Maybe we should aim for a million and a half or even two million, just to be sure.
A second realization is that financial goals, even those that are ambitious and carefully planned, can only take a person so far. Accumulating a net worth that is objectively “enough” is an accomplishment to be proud of. Yet it does not automatically resolve the anxiety that might make someone afraid to spend money they have. It does not change the beliefs that may drive them to accumulate well past any reasonable need. Broader wellbeing requires doing the internal work to uncover the unexamined money stories from our past. The beliefs absorbed in childhood, about scarcity or safety or what money means, will still shape every financial decision we make.
Hitting a freedom number does not dissolve those stories. If anything, it makes them more apparent and available to examine. Fortunately, it can also give us the financial means to obtain professional help to address them.
Setting and working toward a financial goal that represents your own freedom number is well worth doing. I suggest treating that number as a beginning and a continuing journey rather than a destination. Recognize that achieving financial independence alone is no guarantee of happiness and wellbeing. It is essential to address the internal as well as the financial aspects of the journey.
Some questions to consider are: What stories are still running in the background, shaping decisions about saving and spending and security? What beliefs and assumptions about money may not be serving you well? What would it feel like to have enough? What number might represent enough? And when you think about reaching that number, what will you want to do with the freedom it provides?
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