The Contrast Between Being Financially Rich and Free

Almost everyone is dying to have a job the moment they finish their studies. Traditional work hours range usually from eight to nine hours. The reason people work aside from being able to supply their personal needs and their family’s is to be able to save up for the future. However, when you ask people about the concept of being rich, a large number may associate the quality of being rich to being free. These are two different concepts and in this article you are going to see the difference of financial freedom and being financially rich.

A Man Who is Financially Rich and Free

Road to Financial Freedom is Different

It is important to know that it does not necessarily mean that you have to be rich for you to become free. If you set your eyes on being rich, it does not automatically follow that you will become financially free.

People are inclined to believing that they need to work hard and do everything in order for them to become rich and be free.

You have to grasp the fact that these two are two different things and cannot be equal to each other. There are rich people but they are not considered as free. Yes, they do have wealth – but that wealth is something that can be exhausted easily once they stop working. The underlying reason for such situation is that they were not able to set it up properly.

Hence, the road to financial freedom differs from the road to riches. Each requires a whole different approach to be attained.

Active versus Passive Income

First, you have to know the meaning of these two terms. Active income refers to the income that a person receives after performing a particular task or giving a certain service. Common sources of active income are salaries, bonuses, and even the income of your business. On the other hand, passive income represents the earnings an individual gets from an enterprise, a property or a partnership where the person does not actively engage or is not actively participating in order to obtain profits.

For this reason, your sources of income must be proportionate to your goals. In order to accomplish your goals, you have to understand clearly your earning methods.

See also: Getting to know fixed income investing

Financial Freedom is a Vehicle to Break Lose from Full-Time Working

Rich people have the money because they work. Once they stop working, they might find their funds insufficient to maintain their lifestyle for too long. The concept of financial freedom revolves around the thinking that you do not have to work any longer for you to receive income. Therefore, you need not to worry about money any longer.

Financial freedom is then regarded to be a lifestyle design. You have to design your life the way you desire to live it.


All individuals must aim to be free instead of becoming rich. The primary goal is to get more money coming in and that can happen by letting your assets work for you instead of working for money all throughout your life. By investing your money, your goal of becoming financially free can be a dream coming true.

Read also: Importance of Financial Investing

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