Philosophically, i.e. beyond the banal meaning (passive income > expenditure)?
Let us take the feelings of the financially non-free as a yardstick.
One of the strongest feelings is envy.
Envy is often expressed in the equation exchange = casino.
The feelings of the envious here range from moral outrage to sheer hatred of speculators.
It is true that the mathematics of financial risks are not very different from probability calculations, for example in poker.The outcome is uncertain, we place more or less good bets.
The outrage is probably fuelled by the observation: stock exchanges are not about Monopoly money or poker chips, but about real capital.
Capital is property rights.Machinery, equipment, patents — jobs in short. Or to real estate assets, energy and water suppliers, food manufacturers.
So this is about what is the substance for all of us.Work, housing, food.
None of us would come up with the idea of putting such things at risk unless we are drunk or crazy.
This is exactly what a speculator thinks.The first rule is: Avoid losses. The second rule is: Never forget Rule 1.
In order to obtainhis capital according to this rule, the speculator places bets.Inflation alone brings with it a permanent decline in value. Within this set of rules, on this playing field, the speculator tries to increase his capital cautiously by making more or less good, more or less aggressive bets.
If capital is increased overall, it means for the financially free: more jobs, more or cheaper products, housing, electricity, food.The basis of the pyramid of needs.
For the financially free, it also means: more Monopoly money or poker chips, new games, new luck.
So the financially free has turned the necessities of life into a game.He turns the pyramid of needs upside down, from our point of view. To many, if not most, of us, this seems perverse in the literal sense. The financially free can exchange his Monopoly money in dollars or euros if necessary.
Because his life is a game, he doesn’t stop if he has “enough” by our conventional standards (e.g. more passive income than spending).
The financially non-free avoids the risk.Or at least he likes to imagine it. He prefers to invest in a property rather than a stock. Because real estate does not make up prices on a daily basis and the value therefore appears stable.
The financially free, on the other hand, seeks the risk on a daily basis (under Rule No 1).
To feel his freedom physically and not just to imagine it.
Luck be a lady tonight!