Simple ways of Achieving Financial Freedom
Hi there, I’m Aldrin, an electronics engineer by profession, stock market investor and a financial advisor. I have put together this blog because I want to share with you how we can achieve this so-called financial freedom. For me, its an exciting journey and I just want to enjoy it and share it withall.
What is Financial Freedom
Having financial freedom is like having a pension. There is money coming in that is equivalent to or greater than the current living expenses.
How much I need to be Financially Free
Are you familiar with Robert Kiyosaki’s cash flow? If yes, that’s wonderful. It’s a simple concept of money but very powerful.
This is the easiest way to find out how much you will need to be financially free.
I will be having a separate post on this cash flow to further understand. But for now, what we want to do is to copy how the RICH Income Statement is. We want to have multiple streams of income coming from various assets. If we have this steady flow income that is greater than that of our expenses, then we can say that we are financially free.
How can you apply this to yourself?
Everything comes in balance. Once you know how to apply this cash flow to yourself, you will have an understanding of where to focus on achieving financial freedom.
INCOME: The more the merrier
Higher-income is, of course, is better because you will have the highest possibility to save or invest your surplus of cash. Creating multiple sources of income will help to achieve financial freedom faster. They say that the average millionaire has at least seven sources of income. Buy assets that generate income like stocks, mutual funds or UITFs, rental property and bonds. These are just a few but are awesome to have and it gets you started in the financial freedom track.
EXPENSES: The Lesser, the Easier
I don’t mean that you should be living so poorly. What I’m trying to say is to learn to live within your means and have a sense of balance on your finances. Here’s the truth, income is limited but expenses can be unlimited if you don’t control your spending. Why? Because spending is so easy. If you have a credit card and goes to the mall and you see a lot of shiny things that you want to buy. They are just one swipe away from the card. Avoid unnecessary debt that will slow you down to your goal.
Assets: Money from the money
These are the assets that you buy that generate more money for you. This is where the magic happens. To be able to make money work for you is the best thing that could happen to you. If you stop working these assets will be the ones that will be providing you the steady flow of income. That is why choosing to buy income-generating assets is important.
Liabilities: The money trap
Avoid getting too many liabilities these are money traps. This like my rule of thumb in avoiding liabilities. “If I cant buy it with cash, I don’t buy it.”. Well, there are exemptions to this of course. Like my house and car. But for small purchases, I would like to buy them cash.
Getting Started Toward Financial Freedom
The best time to start is NOW.
It all starts from a single step to move forward. As for me, I will be updating this post as time also learn more. I will be posting more on different topics related to achieving financial freedom.
Join me on this journey and you share yours as well in the comments below.