Financial security? Is there even such a thing?
Why do people invest their money in the first place? Well, for most, it’s to achieve financial freedom or to get to the level of financial security which they are comfortable with.
But is this even achievable in this 21st century?
For me, I do believe financial freedom is achievable but financial security is not. Why do I said so?
Financial freedom, to me, is when you can still pay off your commitments and live comfortably without working. You can live by just using your retirement fund, your dividends, FD interest rates, etc. You no longer need a steady income from the daily 9-5 job anymore. You can just do whatever you want but this depends on how much you spend on your NEEDs and WANTs. If you lead a simple life without all those luxury stuff, I am sure financial freedom can be achieved easily. On the other hand, if you only want to drive imported cars and only want to stay in multi-million condominium, then financial freedom might not be that simple.
What about financial security?
To be honest, I don’t believe in such a thing. No matter how safe you think your finance is, it is not 100% protected. If you put it in fixed deposit, the bank might collapse (our government does give protection on this but how fast you get the money back is another issue). If you are a millionaire, a terminal illness might rob you off your fortune due to the cost of the medical treatments. If you own a multi-million business, a wrong decision might cause you to lose your business altogether.
Let’s just face it. In this age of uncertainties, there is just no such thing as financial security anymore. Whether you like it or not, there will surely be some risks that your money will be gone. The only thing we can do is to minimize that risk…. maybe by buying insurance… but well, AIG nearly died. No?
So if you’re thinking that financial security is something achievable, I can tell you it’s something very subjective and something quite impossible to achieve. Minimize the risk = yes.
If I were you, I would rather concentrate my attention on achieving my own version of financial freedom. But bear in mind that even if I do achieve financial freedom, it might not be 100% secure.
I know this might not sound appealing to some people who have worked very hard to achieve whatever they have today, but I guess it’s time to face the reality and I believe the recent economy crisis has really shown us that financial security is not really applicable nowadays.
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Comments
@ Damien
Maybe that’s why people like Bill Gates pay 100x more for a sandwich than normal people like us do – ok..maybe the sandwich has some extra bacon. 
After all, what is $100 for him? If you ask people like me to pay $100 for a sandwich, I might burn down your stall 
Security guard? Eh, later the guard become the robber. That kind of thing happens quite often.
To me, you’ve got financial freedom when you’re so rich price tags don’t matter anymore. Theoretically that’s achievable. In reality, I can take it away with one simple act. If you want something I have and if I know you’re worth $100 billion, then I’ll say you can only have it for $500 billion. When I make you cough at the price tag, that’s when I take that freedom away from you.
As for financial security, hire a security guard! LOL.