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Declare financial freedom
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July 2, 2001: 6:25 a.m. ET
For most, financial independence is not having to work; others eye buying power
By Susan Price
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NEW YORK (Money.com) - Freedom is just another word for having enough cold hard cash to kiss the alarm clock, the commute, and that ungrateful boss goodbye forever.
More than 60 percent of the almost 8,000 people who answered our special CNNfn.com/Money.com poll said financial freedom means the end of their daily grind. And another 30 percent said freedom is being able to afford everything and anything they want.
What's the price tag? A cool $1 million is enough to satisfy 45 percent of you. But nearly the same number of respondents said they'd need more. In this weeklong special, we'll give you the steps to achieving independence by eliminating debt, retiring rich, building wealth and keeping your tax liability to a minimum.
But true freedom, experts say, comes from knowing exactly what you want out of life.
"A lot of people haven't gotten past saying, 'I wish I had a million bucks,'" said Harry Moran, a certified financial planner in Clifton Park, NY. "But I tell clients to visualize the specific lifestyle changes they really want. And then I can bring in numbers to see how they can get that lifestyle."
One reason financial freedom is so hard to pin down is that our definitions of freedom are very personal.
"Some people not only want money, they want to have more time, or they want to have enough money so they can work for certain charities without endangering their own security," said Kathy Barnes, a certified financial planner with Barnes Investment Advisers in Phoenix.
Steve and Jennifer Judd, for example, who are featured in one of our special report reader profiles later this week, have set their own financial agenda: to find ways to live simply enough so Jennifer can stay at home and raise their two sons.
The New Boston, N.H couple is willing to make the sacrifices – forgoing restaurant meals and vacations – to make that happen on Steve Judd's $48,000 annual salary.
"I think the primary goal is not having to worry, having a buffer, having the ability to make decisions not based solely on money," said Steve.
Although her situation – a six-figure salary and no dependents – is much different, Amy Short has a similar notion of freedom. "It's about not making my career decisions based on my financial situation," said the 29-year-old Chicago lawyer, also profiled in this week's special report.
Because their lifestyles are so dissimilar, the Judds and Amy Short will need different size bank accounts to reach their goals. How much is enough for the rest of us? There is no magic number.
And while most people said a million or so will buy their freedom, the few that said they will never have enough (less than 5 percent of our poll respondents) may actually be closer to the truth.
"Most everyone, no matter how much money he has, thinks if he were just a notch or two above where he is at the moment, he'd be set," said Moran.
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"Most everyone, no matter how much money he has, thinks if he were just a notch or two above where he is at the moment, he'd be set."
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Harry Moran, CFP |
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Fact is, if you were pretty happy with your life before you got wealthy, you are likely to be pretty happy after. And if you're not, wealth might not only prove a disappointment, it may increase your worries. More money often breeds more anxiety.
"The number of dollars is never the issue. It is whether you know what your purpose is. Ideally you'll use your money to serve that purpose. Otherwise you'll spend it all or hide it so you'll never touch it," said Marcee Yeager of Sterling Wood Financial in San Mateo, Calif.
Click here for more financial planning tips from our partners at Money.com.
Kathy Barnes recalled a client who netted about $28 million after selling his business. "He told me, 'Well, there's a sort of freedom to it," Barnes said. "But mostly he felt trapped."
Once money is plentiful, you can finally buy everything you want. But there are strings attached. Those strings may include the demands of family and friends, as well as taxes and estate issues and the nagging fear that you might lose what you finally have gained.
Money worries are particularly acute for those who receive a windfall, whether it's the lottery jackpot or a few million from that proverbial long-lost relative.
"If you earn money, it feels like yours. But if you win money, it doesn't. It just came one day and it can go one day. It creates an enormous amount of confusion and anxiety," said Yeager.
No one suggests that you give up daydreaming, just that you don't let it stop you from making smart decisions.
"Financial independence is really created by spending as little as you can and saving as much as you can to achieve that freedom," said Janet Tyler Johnson, a certified financial planner with Clifton Gunderson Financial Services in Madison, Wis.
In the end, she says it boils down to deciding what you want, prioritizing your goals, and then developing a strategy consistent with your goals. 
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