Thoughts?

Depends upon what your definition of "financial freedom" is.

I know a guy who's been traveling the world for the last 5 years, living off 2 grand a month in interest payments that some very safe, conservative investments bring in for him.

Everything he owns fits into a backpack, & he spends 11 months a year living a carefree life in various cool spots around the planet. He'll spend a month here, a season there, etc.. Whenever he gets tired, bored, or the itch to go somewhere else, he packs his #$^%# up and goes. He seems happy, & since he's content to live a simple life & doesn't need or want lots of possessions, doesn't feel the need to eat caviar & champagne, he's financially free. BTW, he's not staying in hovels & scrimping by. He dives, climbs mountains, attends festivals, volunteers his time working w/ various non-profits/NGOs etc. His life is one big adventure, albeit mostly in 2nd & 3rd world countries where the purchasing power of each dollar is sign. greater than it is in USA, much of western Europe, etc..

The best definition of "Financial Freedom" I ever heard was "The less a person needs to think about money, the more successful they are." Obviously a person living paycheck-to-paycheck, always worried about whether or not they're going to be able to make the car payment, etc. has not achieved "financial freedom".

However, neither has the uber rich gazillionare, who all s(he) does is work-work-work in a never endless cycle of trying to accumulate more & more money. All that person thinks about is money! Sure, they're eating & sleeping in 5 Star restaurants & hotels, driving one of five different cars, lives in a baller house, etc., but are they truely financially free??

More important, perhaps, is this: is their happiness dependent upon having vast reserves of money?

Ashes to ashes, dust to dust . . .

But to answer your question:

I don't know all five traits, but I would venture to say that the most important trait is this:

The willingness & discipline to live beneath one's means. If you continually spend all that you make, you'll never be financially free. And this strongly correlates to the concept of "financial maturity" which a college professor taught me, which was this:

"Financial maturity is the willingness to forgo immediate wants & desires for greater future rewards."

That was my first reaction as well. What does financial freedom mean?

Only having to work when you want to by my definition.

1. Wealthy parents.

I abhor all definitions that basically consist of repeatedly lowering standard of living and then holding this up as the ideal of someone who unplugs from society. Like living on 24k a year limits your choices so much. Living a Western style life in the 2nd/3rd world costs Western style money. Then average cost for living arrangements here (2nd world) for young people is somewhere around 100-200 bucks a month. The average amount of space is like 120sq feet per person. The first is for young people, the latter for everyone in country. But suffice to say that this isn't how most people from America want to live.

I find arguments like that intellectually disingenuous and some sort of gross projection typically.

That still leads to at least two very different outcomes -- on the one hand you have the personality type that builds insane wealth so they can spend with no concern and on the other you have the individuals who convince themselves that living like a pauper is fine and they also don't have to work since they live a pretty meagre existence. Neither has to work but the traits would be completely different.

I think this question needs to be reworded.

Are you asking about "people who don't need to work because they have enough money coming in" or do you mean "people who have enough money to do what they want in their off time from work"?

If its the 1st, I'd say mostly people who own businessess that can run themselves or with very little effort.

If its the 2nd, well, its mostly people who've saved their money and invested it wisely.

I know plenty of the 2nd, I don't know any of the 1st, but they do exist.

Warren Buffet works, dude. So does Bill Gates. If you don't want to work, you have to save enough to live off the interest or dividend payments of that number. If that's what you are worried about, then I'd say you need 15 million dollars, and be able to never touch the principal.

But thats me.

I think he's basically just asking a general question about successful people.

I really think it boils down to a mix of things, discipline, perseverence and most importantly, comfort in being in uncharted territory. Success by itself is a lonely thing, because you are in a tiny minority. 95%+ of the population works for someone else. Of the remaining 5%, not everyone is financially successful. What's crazy, is that a large percentage of people in that 95% of paycheck earners, think they know more about success than the successful people! A good read, albeit super simple, is Rich Dad Poor Dad.

I think other things like embracing risk for a good return, is also characteristic of someone able to achieve financial freedom. They are also the people that don't just talk about things, they do it. They don't talk about opening a restaurant, they do it. They don't talk about potential RE investments, they do it.

I wouldn't waste my time with Rich Dad Poor Dad.

Internal happiness.

How about enjoys earning money more than enjoys spending it. I bet that would be a pretty successful trait.

I generally find cheap people never amount to much more than upper middle class -- yes I'm sure there are exceptions but on average. The joy of making money is because you are already anticipating what you can do / buy with that money -- without that there is no value in making money.

Eh. Lots of the ultra rich are all about scorecarding.

I assumed he wanted to know traits of successful people (in regards to money).

I read a book called "The Millionaire's Mind", and it listed the top 30 traits (this is based on interviews with several thousand millionares)

I got bored and actually looked it up for you:

http://crowngrp.net/Millionaires%20Mind.htm

Cliffs:

Success Factors: Top 5 factors most often mentioned by millionaires as being very important in explaining their economic success

Integrity: being honest with all people
Discipline: applying self control
Social skills: getting along with people
A supportive spouse
Hard work: more than most people

"Luck" ranked number 27 or 30 success factors

I think you have to adorn the empathy glasses before making a statement like that. This forum is a handful of contributors who are smart... a smaller handful who are successful... and a ****ton of lurkers. Rich Dad Poor Dad has its place in someone's development. Albeit, it's not a helpful book for any major contributor to this forum, they are concepts most of us are already familiar with... but it has some things in it that could be eye-openers. Plus it's like a 2-3 hour read, if you don't get anything from it, oh well.

+1

Kiyosaki's conversational method makes it a really easy read. I was aware of most of the concepts in the book before reading it recently. However, it really motivated me to look into different investment vehicles/income sources (other than poker) and reminded me the value of necessary financial education (hence, I plan to take courses in the fall).

How can you seriously think a financial advice book by someone who endorses Amway is worth reading?

This looks like a homework question.

I agree that we need a definition of financial freedom. This question could tie into the thread about living of of a million dollars for life. If we define financial freedom as not needing to work again and the ability to maintain a desirable lifestyle indefinitely, then the number one trait would have to be frugality - settling for a comfortable existence.

Which is obviously not a popular idea around this part of the internet.

Cheap people never amount to much... because becoming wealthy ALWAYS requires taking a SiGNIFICANT amount of RISK. Cheap people always do some variation on burying money in the ground... and think they are really smart.

And the ONLY compulsory trait is HARD WORK.

And the whole concept of "financial freedom"...
Is a fantasy that young deadbeats indulge in...
Rich people acquire a different set of problems.

"Freedom is just another word for nothing left to lose".

Having a lot to lose can be very stressful...
If you were stressed out poor...
You will just as stressed out rich.

People who burn money also never get rich, moderation, moderation, and moderation in moderation.

The biggest factor that I've seen is that rich people love what they do (you could call them "workaholics"). The big house on the lake, the boats, the cars, etc, all go unused because they are at the computer or out of town on business. I'm pretty sure the rich, lazy fat-cat is a stereotype based around an absurdly small portion of the wealthy.

Because it opens peoples eyes to the concept of the rat race. I know two, otherwise intelligent, people that the book lead to some serious changes in their lives. For me it was re-affirmation that I was doing things correctly. You have to understand that the vast majority of people are born and bred to grow up, complete their highest level of education, and get a job. The average person has no access to information concerning entrepreneurship because 95% of American society has accepted their role as an employee... so most of us have non-entrepreneurial parents, friends, acquaintances etc.

So I'm never going to sit here and argue it's the greatest book ever written. It reads like a 6th grade creative writing project, and most of the specific tips he gives are either bad, or outdated... but the general concepts of elevating yourself from the rat race via limiting liabilities and increasing assets, is pretty good.

millionaire mind gives the goods,

where hard work is 5 and luck is 27..

"the harder I work, the luckier I am."

Luck is when Opportunity meets preparation.

Seeing Opportunities others dont see #12
High iQ #21
Living below my means #24

Obviously there is a major confirmation bias but the wealthy people I know burn money -- or at least they spend in a way that for an objective third party would appear like burning money. I actually think that is pretty much a necessity if you don't luck into a windfall of ending up with some incredibly valuable IP.

I think it is pretty safe to say that making a lot of money is hard -- if it wasn't everyone would do it. That being said being upper-middle-class is pretty easy in North America which is a pretty good lifestyle. To become rich you need something to overcome the natural complacency that comes with just being very comfortable enough that you are motivated to do something hard. I believe that motivation comes from expensive tastes -- by developing them you turn what would normally be a comfortable state into something you find completely unacceptable and in that you draw the motivation to get to the next level. Conspicuous consumption leads to wealth creation and the only reason it has a bad rep is because of the large number of people who behave this way without actually having the requisite skills to then satisfy their new desires.

That is by far the best choice for the vast majority of people. One of the problems with the book is that in recklessly encourages entrepreneurship despite the fact that the vast majority of people are in no way qualified to ever start their own business. Of the people who are capable of starting a business that won't fail the vast majority of those will end up worse off for having chosen that over employment.