Financial Freedom

Financial freedom is not a myth. It is something achievable but required a lot of discipline.

Financial freedom means that you get to make life decisions with being stressed up by the financial impact of that decision. 

For example, you can make the following life decisions such as quit your day job today and will still be able to support yourself financially. 

Do you want that? I'm sure you do. 

Remember, I'm not asking you to resign from your job today. I'm just telling you to be prepared for a worst-case scenario. 

Step 1 

Make a commitment to

1. Minimise the 'wants' expenses 

2. ‎Minimise debts 3. ‎Increase income

and stick with this commitment. 

Step 2 

Doa financial check-up. List down all your incomes, debts and your current monthly expenses. Go one step further by categorised your expenses as 'wants' or 'needs'. 

Step 3 

Start making a budget. For me, an app that tracks all my money (incomes, expenses plus budgeting) is totally essential. Remove expenses for 'wants' or keep it to the bare minimum. 

Step 4 

Keep to your budget and save as much as you can. The keyword here is frugal - spend less than what you can earn 

Step 5 

Save a minimum of 20% of your total monthly saving for emergency funds and pump in the balance 80% into your lowest amount of outstanding credit card. Repeat until all credit cards outstanding have been paid off. 

To bring this one step further, try not to use your credit card to pay for anything. If there isn't any choice, make sure to clear it off at the end of the month. 

Step 6 

Set aside an emergency fund of at least a month of your monthly salary. The best would be to have a saving of at least 3-6 months of your salary. 

Step 7 

Start investing your additional saving into low-risk investments, such as ASB, ASM and ASW. 

Investing is better than keeping your money in the bank. The interest that the bank is giving now is usually less than 1% per annum whereas our inflation rate is around 3%. 

Step 8 

Stay frugal. 

If you are interested in higher-risk investment, you can check out P2P lending. I am making a roll now with Fundaztic (ROI of 57% now). Read about it here.