Passive Income vs. Being Debt Free: Which Provides More Financial Freedom?

The number one thing I hear people say is their "why" is for the freedom they will feel.

The reality is that being debt free actually does accomplish this usually in a much shorter time than building enough passive income to cover your dream lifestyle.

This is something I learned by first putting every thing I had towards things that earned me passive income for over half a decade.

Then, I spent a fraction of that amount invested to pay off 100% of my personal debt.

The fraction towards personal debt actually made me feel more free than the passive income.

With paying off the debt, it's completely done once you do it.

There's a sense of finality with no debt where you don't really ever think of it again.

With investments, although great and necessary, they don't completely give you the finality of being debt free.

Many people think that for them to feel free, they have to have a number like $10,000,000.

Yes, that is one way. Say you're getting 6% in cash flow from that $10,000,000. That's $600,000 a year.

The question then is how long will that take you to accumulate the $10,000,000?

If both these scenarios got you the same outcome of freedom, which would you choose?

A.) Scenario 1

1. Still have all personal debt

2. Have $10,000,000 in investments paying you $600,000 in cash flow/dividends

3. It takes you 30 years to accumulate $10,000,000

B.) Scenario 2

1. $1,000,000 in personal items that's completely paid for. Near $0 in payments

2. Have $1,000,000 in investments paying you $60,000 in cash flow/dividends

3. It takes you 10 years to accumulate $2,000,000

The question is how much is 20 years of freedom worth?

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