Hi all. People think that when they are rich, they will be financially free. But that is not true. For example, if you think that having $2million is being rich, I would say well it depends. If you live in California or in New York City, $2million will not buy you a house. Rich people may have a lot of money, but they may have to work hard to maintain their lifestyle. Any change in their situation like a loss in a business or in the stock market could be disastrous. Besides it is more important to keep what you make. If your expenses are equal to or more than your income, you are not rich. On the other hand if you have no debt, no mortgage and your expenses are less than your income.

The other issue is that definition of rich is different for different people. Your earning maybe high, but will it keep coming in if you are not in the picture. I believe that in order to be financially free, you need to have a mixture of active and passive income. Active income is where you earn money for your time. But passive income is income from properties or stock dividends, interest on a money market or Certificate of Deposit or something similar. In other words, you will continue making passive income even if you are not in the picture.

So try to be financially free rather than rich.