“ If your definition of freedom is not having to worry about income in your later years, then considering a retirement product is where you should start. ”

The meaning of financial freedom will differ from person to person – and therein lies the crux of achieving it. As an investor, start by understanding what financial freedom means to you. For some, it will simply mean having enough to meet their current needs. For others, it will include providing for themselves and others in the future. Yet others define financial freedom as paying as little as possible in the form of taxes and fees. Then there are combinations of all of these, where prioritisation of your needs becomes part of the planning.

In this article, I address one aspect of the journey to financial freedom, namely choosing the right vehicles to get there. There are different products available in the industry, ranging from the simple to the very complex. Let’s look at some of the basics.

“Financial freedom is available to those who learn about it and work for it.” – Robert Kiyosaki

Looking ahead and providing for the future

If your definition of freedom is not having to worry about income in your later years, then considering a retirement product is where you should start. These products allow you to save from your pre-tax income (subject to certain annual limits) and offer benefits from the pooling of assets, which generally makes these products cheaper to manage. You are also able to extend the benefits of these products to your dependants. Retirement annuities (such as the PSG Wealth Retirement Annuity) and preservation funds (like the PSG Wealth Preservation Funds) are examples of these products.

What about when life is still moving at full speed?

If you are comfortable with the state of your financial future, or if you place a higher value on shorter-term savings, a voluntary savings product (such as the PSG Wealth Voluntary Investment Plan) or a tax-free savings account (like the PSG Wealth Tax Free Investment Plan) are excellent products to consider. These are great options if you want to save up for a more financially secure future or even to make an expensive purchase. If you are a confident saver with a higher risk appetite, a personal share portfolio allows you to directly access security investments.

Enjoying the rewards of a lifetime of saving

For many, freedom means not having to worry about an income when they reach retirement age. After all, it’s the time to enjoy the benefits of one’s hard work. If this is how you define financial freedom, consider purchasing a living annuity (like the PSG Wealth Equity Linked Living Annuity) or another type of annuity with the proceeds of your retirement savings to help you manage your income withdrawals.

“A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” – Suze Orman

With freedom comes responsibility

Navigating your way to financial freedom comes with the responsibility of understanding what you are investing in, regularly checking if the products you are invested in still match your needs, and taking note of any changes in taxation or legislation that will impact you on your journey. By working with the right road map, doing a regular check-up on your vehicle, and keeping your speed up, reaching financial freedom is a journey worth taking.