Financial Freedom: Myths, Truths, and the Role of Online Trading

There's a lot of talk about financial freedom. It's a concept that is often discussed and sometimes used improperly, perhaps to sell a product or service. It's a concept surrounded by beliefs that often don't correspond to reality or don't represent its meaning in a completely truthful way. In this article, we'll talk about financial freedom, trying to provide a clear and honest definition while clearing the field of myths and prejudices. Finally, we'll answer a question that many people ask: can online trading make you financially free?

What is Financial Freedom?

In the end, the concept of freedom isn't even simple to explain and understand. A person is financially free when they have automatic income that allows them, on its own, to sustain their usual standard of living. From this simple statement, it's clear how much financial freedom can be desired and represent a reason for liberation from the condition that the vast majority of people experience every day. A condition that speaks of fatigue, stress, work, and even difficulties in making ends meet. But there's a catch. First of all, not all that glitters is gold. In other words, there are no shortcuts, simple recipes, or secrets to becoming financially free, excluding sporadic strokes of luck or pre-existing financial situations (e.g., being born into a wealthy family). Secondly, one of the biggest obstacles to financial freedom is misunderstanding it, considering it something it's not, resulting in constantly moving in the wrong direction. For this reason, it's worth spending a few words to debunk some myths and present the small truth that corollaries the concept of financial freedom.

Financial Freedom Doesn't Necessarily Mean Being Rich

Many confuse financial freedom with wealth. The two things, to be honest, are not mutually exclusive. In a certain sense, they could be complementary or at least consequential. What is certain is that financial freedom and wealth are two distinct concepts that should not be confused. A person can be rich without being financially free. Likewise, a person can be financially free without being rich. To understand this reasoning, which is quite counterintuitive, we need to refer back to the definition of financial freedom we gave a few lines ago and to some examples. The definition, in fact, doesn't talk about wealth but about the "ability to sustain one's standard of living." Now, standards of living can be varied and not necessarily lavish. So wealth may have something to do with it, but it's not a key element, not a conditio sine qua non. Let's try an example. A manager who works eight or nine hours a day and earns 20,000 euros a month can be considered rich. However, he is not financially free because he has to live to work. On the other hand, a person who doesn't work but has inherited five apartments, which he rents out for 600 euros each, for a total of 2,000 euros, is certainly not rich but is financially free. It's evident: the crux of the matter doesn't lie in income, but in automatic income, as well as in the standard of living. Therefore, only those who have automatic income are financially free, regardless of how much they bring home each month.

Financial Freedom Doesn't Mean Stopping Work

This is another belief that hinders the understanding and achievement of financial freedom status. Financial freedom doesn't mean stopping work. Or, to put it better, whether one works or not is completely irrelevant. Again, these are two elements that certainly don't exclude each other but are not inextricably linked. Again, a person can be financially free and still continue to work. What makes the difference is necessity. A person who is financially free, quite simply, can afford not to work. After all, they have the automatic income to sustain them. The crux of the matter, it's worth repeating, lies entirely here. But there's another reason why financial freedom doesn't necessarily mean stopping work, especially if by work we mean a generic activity that requires time, resources, and skills. Automatic income needs to be managed in some way. In reality, it's only automatic up to a certain point. Obviously, one doesn't act to produce an income (otherwise it wouldn't be automatic) but to keep it automatic. Let's use the landlord example again. It's obvious that they don't materially produce the money, and it comes to them regardless of how they spend their day. However, they must manage the process and ensure that the automatic income remains so. Specifically, they have to deal with the tenant, make their presence felt, possibly go to collect the rent, and fulfill their duties as a landlord. More than working, it's managing. This applies to all types of automatic income. In the end, the mechanisms of financial freedom are always the same.

To Acquire Financial Freedom, You Need to Spend

This is a decidedly counterintuitive statement. How can financial freedom mean earning money without "working," so why do you need to spend? The reason is simple: automatic income is the result of a process. So this process needs to be built. In almost all cases, building an automatic income process means spending money and time. It's not easy at all. To understand the implications, we can return to the worker example. If they're lucky, they inherited the apartments. If they're not lucky, they first had to buy them, modernize the houses, start looking for tenants, draw up a contract, register it, etc. In short, they set up an automatic income mechanism (rent) by spending money and time. This applies to all activities that lead to automatic income.

Why Online Trading CANNOT Lead to Financial Freedom

Having delved into the concept of financial freedom and restored its proper dimension, we can answer the question: can online trading lead to financial freedom? It's a question many people ask, especially those who intend to approach this world with the hope of turning their lives around. However, it's not an easy question to answer, partly because there are elements for and against this thesis. In this first part, we'll analyze the elements against it, i.e., those that would lead us to refute this hypothesis. It's a daily activity. Online trading is not an activity that can be approached sporadically, every now and then. It's not gambling. It's an activity that requires time, study, effort, intellectual energy, and money. Therefore, it goes beyond the concept of "managing automatic income" that we described earlier. In online trading, at least in its basic version, it's necessary to act to earn. So, from this point of view... No, online trading cannot lead to financial freedom. It's difficult to earn. The concept of automatic income has another aspect: simplicity. Those who exploit a system to earn automatically, once set up, only have to manage it. Management, compared to production, is at least theoretically simpler. Well, the concept of simplicity doesn't belong to online trading, at least not in its more traditional variant. In fact, producing profits is really complicated, to the point that only a small part of those who commit, perhaps daily in the financial markets, manage to bring home a substantial gain. Even before approaching trading, moreover, it's necessary to study and undertake an arduous and long training path. It can be considered a job. Some consider online trading a hobby. There's nothing wrong with that. However, if you choose this path, the risk is producing little or no profit at all. The reason? We described it a few lines ago: online trading requires time. For this reason, those who really make money from trading consider it a real job. Now, we've seen that the concept of work doesn't fit well with that of financial freedom. In other words: they can coexist, but not in a perspective of necessity. If an income requires work to be acquired, then this income has little to do with financial freedom.

Why Online Trading CAN Lead to Financial Freedom

Everything would suggest that online trading cannot lead to financial freedom. But there's a catch. A variant of online trading has all the right cards to become an instrument of financial freedom. It's the so-called automated trading. This term refers to the activity of speculative investment conducted through software, which are called Expert Advisors. These, if properly programmed, are able to autonomously manage the operations, i.e., the concrete opening and closing of positions. It's "sufficient" to program the Expert Advisor according to a well-defined strategy, activate it, and enjoy the income. Put like that, it seems easy, but it's not at all: programming an EA requires time, commitment, intelligence, and many checks. However, this activity can be assimilated to the process of creating the system that leads to financial freedom, to the "work" phase that those who want to become financially free must implement. Here, in summary, are the reasons why automated online trading can lead to financial freedom. It can lead to income. As we've already mentioned, trading through Expert Advisors can be a source of earnings, provided it's programmed well. The earnings, in this case, should be considered in all respects as if they were automatic income. The reason is simple: they are produced autonomously by the system. Therefore, they can be a reason for financial freedom. It underlies a process. We've already mentioned it: the way to produce earnings with automated trading software is a real process. It includes the preparation and programming phase, and the operational phase, the latter conducted directly by the software. It can lead to substantial earnings. If everything goes smoothly, the programming and preparation phase has been carried out according to effectiveness criteria, then automated trading can lead to gains similar to or even higher than those of traditional trading. In the second case, it can produce great enrichment, such as to sustain the trader's standard of living. The latter concept represents an essential part of financial freedom. Before engaging in automated trading, it's necessary to carefully choose the tools of the trade. That is, to effectively choose the Expert Advisor. Among the best on the market is EvoForex, which among other things also stands out for its security guarantees and ability to adapt to the characteristics of the trader.