What is meant by 'financial independence'?

'Financial independence' refers to a state of having sufficient personal wealth. This means that an individual has accumulated enough assets or income that they do not require active participation in a job or traditional employment to sustain their lifestyle. It signifies that they can cover their living expenses, support their desired quality of life, and meet their financial obligations solely through their investments, savings, or passive income streams.

The concept emphasizes building assets and managing resources effectively so that the individual is not reliant on employment income to meet their financial needs. This aligns with the ideals of wealth accumulation and self-sufficiency, allowing for greater freedom in personal choices and time management.

Other options may reflect certain aspects of finance but do not accurately capture the essence of financial independence. For instance, while living without debt can contribute to financial well-being, it does not define financial independence alone. The notion of needing a full-time job is contrary to the very definition of financial independence, and the idea of never experiencing financial difficulties is unrealistic, as financial independence does not guarantee a lack of challenges or unexpected expenses.