What is meant by "financial independence"?

"Financial independence" refers to the state where an individual has sufficient personal wealth to live without having to work actively for basic necessities. It means being capable of meeting one’s financial obligations, such as bills, expenses, and even lifestyle choices, without depending on external resources like loans, credit, or financial support from others.

This concept emphasizes the freedom and security that comes from having enough financial resources to support oneself. Individuals who achieve financial independence typically have developed sound financial habits, created savings and investment strategies, and often have diversified income streams. This mindset allows them to navigate financial challenges without the additional stress that often accompanies financial reliance on external factors.

The other options, while related to financial matters, don't encapsulate the full essence of financial independence. For instance, simply being able to invest in financial instruments, earning a set salary, or managing household expenses efficiently does not necessarily grant a person the freedom from financial obligations or reliance on external sources. Financial independence signifies a broader and more comprehensive financial health and sustainability.