Which of the following best explains financial independence?

Get more with Examzify Plus

Remove ads, unlock favorites, save progress, and access premium tools across devices.

FavoritesSave progressAd-free
From $9.99Learn more

Prepare for the T-Level Finance Exam. Utilize flashcards and multiple-choice questions with hints and explanations. Get ready to excel on your test!

Financial independence is best defined as a condition where an individual can sustain their lifestyle without being reliant on employment income. This state allows for freedom from financial pressures associated with working for a living, enabling individuals to make choices that align with their personal goals and values rather than being compelled by necessity.

Option C captures this essence perfectly, as it emphasizes living without financial pressure from work. Those who achieve financial independence typically have enough resources—such as investments, savings, or passive income streams—that they are not forced to work in order to cover basic expenses.

The other options do not reflect the concept of financial independence. Dependence on government support, for instance, implies a reliance on external sources for financial survival, contrary to independence. Needing a job to meet basic needs suggests an ongoing financial obligation that comes with employment, while having a set job for life indicates a lack of flexibility that contradicts the freedom associated with financial independence.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy