What does financial independence mean?

Financial independence refers to the capacity to support expenses without the need for external aid, such as loans or financial support from others. This concept highlights the ability to generate sufficient income or have enough assets to cover one’s living expenses autonomously. Individuals who achieve financial independence can manage their financial obligations without relying on debts or the financial support of family or government assistance.

While investing in the stock market can be a component of a financially independent lifestyle, it is more about the creation of wealth and not directly a measure of independence itself. Similarly, income generated from investments can contribute to financial independence, but it is not the sole indicator. On the other hand, reliance on loans for operations contradicts the notion of financial independence, as it implies a dependency on external financing to meet one’s expenses. Therefore, the correct option accurately reflects the essence of financial independence by emphasizing self-sufficiency in managing financial needs.