Friday, August 15, 2008
Did you ever notice that as your pay increases when you work your way up towards the summit of a corporate ladder, so your income tax increases also? Did you hear stories of some top executives, who committed suicide or got into diseases because of so much stress that they faced in their respective companies? Did you hear stories of some children whose life were misled because of lack of guidance since their parents don't have enough time for them? Did you ever notice that the purchasing power of your income decreases over time because inflation eats it up?
"I don't want to be working all my life."
"I want to spend more time to the things that I enjoy"
These are the statements that I put into my mind as I build my path towards financial freedom.
Anybody that seeks financial freedom is definitely familiar with the famous Robert Kiyosaki's book entitled Cash Flow Quadrant.
The very idea of this is to build our income generating assets that could build a huge pile of passive income - income that we earned not from working on a job but by the assets that we have.
I was motivated to build my own path to financial freedom the moment I was awakened about this idea. The steps that I took towards this path are as follows.
1. First, you must have the "Goals". Setting up goals is the first step in achieving financial freedom. It's better to list it. Make a checklist. You want to have this amount of money by this age. You should retire by this age. Etc.
2. Second, you must have the "Will Power". Put it simply, you should have the determination to achieve the goals that you have set for yourself. In my experience, I always go for the idea of "delayed gratification". This is proven although sometimes it's hard to abide by this rule. This is why my favorite success quote goes not only because of what it means but also the contrasting words will-won't and can-can't.
"I will do today what other people won't so that I can have tomorrow what other people can't."
3. Third, if you have the will power, then you should take it into action. There are lots of vehicles that may lead you towards financial freedom.
a.) For starters, you can invest in a Unit Investment Trust Fund or Mutual Fund. You can invest as little as P5,000 for Mutual Funds and as little as P10,000 for Unit Investment Trust Funds.
Of course, before you invest, you must fully understand what are these funds and what are the risk involved on investing in these kinds of instruments.
b.) If you are equippped with at least basic knowledge, then why not try directly investing in stocks? It can be done online nowadays.
I was really inspired by the comment left by Ronnie in one of my articles. He became a millionaire by the age of 24.75. Aside from his job, he grew his networth by investing in the stock market. As of now at age 26, he already have a networth of 2M+.
c.) If you have such capital, then why not invest in a real estate? Buy a property, look for tenants, then the monthly rental income will cover for the monthly amortization in the bank?
Isn't it good to see that even if you don't work, you have these monthly rental income as a cashflow in your wallet? This is the idea of tycoon Henry Sy who owns all SM Malls. Thinking long-term, he invested in malls since definitely there will always be tenants whom he can collect rental income as Filipinos are known as "shopping addicts".
d.) Lastly, you must START AS EARLY AS YOU CAN. Accumulating wealth cannot be achieve overnight. The earlier you started this path to financial freedom, the earlier you can retire and the earlier you can have a comfortable life that you want.
Furthermore, I leave these powerful quotes and quotes from famous entrepreneurs and taipans to help you get started.