High Incomes Don't Guarantee Financial Freedom

One significant insight that people should take from the current federal corruption charges made against Illinois Governor Rod Blagojevich is that a high household income can never be assumed to be a guarantor of  financial freedom.   According to this report, Blago and his wife were struggling to keep their heads above water despite a combined average household income of almost $350,000 per year since 2003.

Incredible, huh?

Financial freedom should never be considered to be synonymous with being “rich.”

Now I put “rich” in quotes because that word means different things to different people.   “Rich” is, afterall, a relative term.  For example, I think any household bringing in $350,000 per year is a rich household.  Obviously the governor, who was recorded making numerous statements about being “strapped” financially, would disagree.

Here is another example:  I know many people who dream of eventually crossing that magic $100,000 yearly income barrier.  But I guarantee you that most households earning incomes of $100,000 – $150,000 per year would tell you they aren’t rich by any stretch of the imagination.

The reality is reaching the six-figure yearly income barrier doesn’t have the same cachet it once had.  Over time, inflation has reduced the buying power of a $100,000 salary.     For example, if you went back in a time machine to 1970 and managed to secure a job paying you a $100,000 salary, that would be equivalent to a $544,440 salary in today’s dollars.  Not bad, for 1970.  In fact, I know a governor who jump on that in no time flat.

Luckily, the happy truth is financial freedom can be achieved no matter what your household income happens to be.  It is a state of mind, as much as it is a state of being.

So while it is possible to earn $350,000 a year and not be financially free, it is also true that you can have a household income of only $35,000 per year and be financially free.    The latter case is much more common than you probably think.

But no matter what your income, it is going to take commitment and discipline from you to get there.  It will require hard choices too.

So are you ready to commit yourself to a life of financial freedom?

Over time, I intend to show you how to reach that happy state.  If you’re interested, stick around — you won’t regret it.

(And neither will you, Governor).

If you liked this article, please be sure to subscribe to my RSS feed.