Wait, what? Whats financial freedom? How do I achieve this? Where should I start? Who should I talk too?
Are this the common questions you ask yourself? Well you came to right place! It’s great to have you here. You are taking initiative to expand your knowledge and grow stronger.
Before we start, let me make a short disclaimer. I am not an expert nor a professional in finance but rather an average joe who would love to share the knowledge I have gained so all of us could grow together. Therefore, every sentence here is based on my knowledge. So, please bare with me and let’s progress together.
Lets continue with our topic. What is financial freedom? Well, to put it in laymen term, is when you understand how money works and money doesn’t affect your decision to purchase an item. Let me give you an example, you go a gadget shop and you suddenly realize that your favorite smartphone, Iphone XS is on sale. Usually it costs approximately RM6000 but now that its on sale, it only costs RM4000. In this scenario, can you spend RM4000? Can you cash out that amount instantly or perhaps use your credit card to swipe and increases your monthly commitment?
Mastering financial freedom will remove that question. Rather you will be asking yourself is there any value that it could contribute to my life? Can I use it in any way to improve my current life? Will this cause me to have better control over my life? Can I improve my network?
If you realize the question changes, and nothing relates to cash. This is financial freedom, the ability to control your cash flow and allow you to make right decision financially. Buying a product isn’t an issue but how much value can that product be to your life and those around you.
“When you are financially independent, you have options. You don’t have to wonder if your bank account can handle replacing your hot water heater or buying groceries for a single mom who just lost her job.” —Chris Hogan
There are 5 strong rules you need to follow to achieve financial freedom
- Daily 9 to 5 job isn’t enough
Remember this my friend, you cannot earn your way to financial freedom. You have to find a way to obtain passive income. You have to start investing in stocks, mutual funds, real estate, retirement and etc. Learning all this will take time, but I can guarantee you that its definitely worth it. - Control your debt and spending
Ensure your debt is only 60% of your salary. The other 40% should go into investing into yourself and your family. Control your expenditure. Don’t allow your emotions to control you. - Pay yourself first
You might have heard this or you may not. Let me explain, “pay yourself first” means you saves some cash for yourself first before spending it to pay your debts. We tends to pay debts first and than save which is wrong. Its the other way around. Think about it and you will understand. - Diversity is Master Key
Diversify your cash and asset. Don’t put all your savings into mutual funds or property. “Don’t put all your apples in one basket”. If one apple rots and all the others will spoil too. - Set a goal and build your strategy
Every dream of yours could be achieved when you set a goal and construct the pathway to achieve it. Same goes for financial freedom, set your goal and build it. Take your time but be persistence.
Financial freedom is more than being able to cover unexpected emergencies or increase purchasing power. The fun really starts when you are able to lend a hand to a struggling family and brighten their life. When you are in this position, its not about you anymore, its leaving a legacy behind you! When you start enjoying your life and living your life to the fullest, you will really appreciate all the efforts you have put now. Its definitely worth it. You got this!
VP's Life 