All of us want to be financially free…or is it? Does a 23 year old in the first day of office want to be financially free? What about the 32 year old?

I do not think that there are any clear answers. There has to be some incident in YOUR life or in the life of somebody very close to you for triggering the ‘financial freedom’ bug. It never comes to some people – I never ever heard my Dad crib about his work – he worked 42 years in one place before he hung his boots. He choose leisure @ 65 years of age.

So what can be the trigger? I have seen the following:

1. Too much debt burden: suddenly you have the urge to break free
2. Too much student debt making the whole deal unfair and almost not worth it.
3. Combining finances with a more disciplined / less disciplined spouse
4. Making a balance sheet in order to make some big ticket purchase – generally the house.
5. A parent (usually) going through a MAJOR crisis like death, ill health, or a financial meltdown

These are all events which are asking you to commit more – financially and physically – and this phase you actually want to get to be more responsible.

Suddenly your phase I is over and you are thrust to phase II.

Phase II is when you realize that many bad habits of the past have to be given up if you want financial freedom. We have a huge ‘social trap bias’ – and that is a killer. You realize that you should live within your means. I see young kids earning Rs. 5L being pushed by peer, parental and social pressure to buy a phone for Rs. 50k and a car worth Rs. 10L. Parents who had ambitions of buying a car suddenly ask their kids to buy a ‘nice big spacious car so that all of them can attend a FAMILY function’. Exactly what you do not want to do. As long as you are in the second phase, you realize that to be financially free, you should not buy any product that will involve borrowing. You learn to live within your means – immaterial of how big/ small it is.

Living in an ‘own’ house, I phone, I-shit, foreign travel, car – especially done to show off is now RANKLING YOU.

This is a very difficult time to go through this and you are also wondering where to invest your money. Well, if you do have a surplus and you have no clue for how long you will NOT need the money, and he amount is small, invest it in a Sensex fund (or Nifty) with the lowest asset management costs. Investing in the market for the long term IS simple and getting started has never been easier. The rules of the game have been relatively unchanged for decades, and technology has made it possible to manager a portfolio from a handheld device!

However in this phase you learn that ‘Personal Finance is more Personal than Finance’. It is also the phase when you get hassled by knowing that there is so, so much to learn!

This leads us to keep improving and learning about personal finance, reading www.subramoney.com , refusing to watch tv, moving towards minimalisation (lesser the expense, earlier the freedom). Now friends start asking you ‘what did you do’ ‘how difficult was it to give up the car?’, ‘how did your children react to selling Santacruz house and moving to Andheri?’  – it is time YOU start accepting that you have put in your 10,000 hours into learning personal finance. Great job, you have almost arrived. It has been my experience that it is best to focus on making ourselves strong before we make others strong. Like what they say in an aircraft.

See your track record of improvements. Involve people around you – but if your mother cannot fathom why you need to live in a ‘frugal almost student days of living style’ let her be. If friends do not know why you sold an asset and rented a flat – show them the mathematical suicide…

any way…you are on your Nirvana path..many others may need the ‘chivda’ packet now and then, but you can see it, and pass it on.