The weekend of Independence Day (2009), the radio show “Marketplace Money” ran a short piece on what it would be like to be financially independent.  One person described financial freedom as living free of credit card debt.  But the point of the story was more far-reaching – financial freedom was defined as being free of debt and having savings in addition.

This started me thinking of my own background.  My father, a successful self-made entrepreneur, and old-fashioned about money, did not believe in debt, and bought our large suburban home for cash when he was 35.  He taught me that if I didn’t have the money for what I wanted, I should save up until I did, and then buy it.

He also taught me, in my teens, to never leave the house without $100 in cash in my pocket.  “O.k.,” I said, “but why?”  His eyes twinkled but he deadpanned, “You can’t bribe a policeman with a credit card.”  I have never left the house without at least $100 in cash in my pocket, since that day.

A few years later, my best friend, a man who couldn’t understand money much less handle it, told me, “If you can get precisely what you want when you want it, for immediate gratification, then what you pay for it doesn’t matter.”  I believed him too.

Combining these two lessons has led me to a happy life.  I have never had any debt (well, a mortgage once on my ranch in the Sierras, but that was sold long ago), and I have always bought what I wanted when I wanted it, from the cash available, if it was available.  If it wasn’t, I didn’t.  And I don’t remember suffering much from not buying whatever it was.

I know that carrying no debt is not a sophisticated way to handle the use of money.  But I always wanted freedom more than things.  And having freedom from debt, and having that available cash from a buffer zone of savings has offered me an exquisite freedom.  It has allowed me to shift my work focus to meet changing market demands, to escape and live through various recessions, to take a big risk (like building a company in China in the 90s), and to sleep easy at night.

I find I agree with that Marketplace Money reporter: financial independence is the freedom to have lots of options because debt isn’t restricting us. 

Next:  some ideas and tactics to gain financial independence.