I have started reading the Gospel of John again. Chapter 1, verses 2-4: "The Word was in the beginning with God. All things came to be through him, and without him nothing came to be. What came to be through him was life, and this life was the light of the human race."
I am living in this world because my physical body dwells in this physical world. Spiritually, I am living in Jesus. My physical body will die one day, but I shall live on forever in the Lord. While in him, he "insulates" me from the world, shielding me from all evil. In him, I conquer the world, since he has conquered it. This is being free in the world and not of it.