Strategy to Financial Freedom

The ultimate goal of of the individuals in the corporate rat race is financial freedom. Freedom to do what your hearts desire without worrying about the monthly bills or debt that kept us working day in and day out. Freedom to enjoy your time with your family and freedom to travel as often as you like. It may seems like a dream, but it is achieveable. Below are some strategies that can be used for us to obtain financial freedom.

1. Start a side business as soon as possible.
The strategy is to create as many sources of income as possible. If you depend on just one stream of income only, the possibility of reaching financial freedom will not be as quickly as you want. Making money out of your hobby is the best way to start.

2. Buy at least one property.
Peter Lynch once stated in his book One Up on Wall Street "Before you do invest anything in stocks, you ought to consider buying a house, since a house, after all, is the one good investment that almost everyone manages to make. I'm sure there are exceptions, such as houses built over sinkholes and houses in fancy neighbourhood that takes a dive, but in 99 cases out of 100, a house will be a money-maker."

3. Knowledge is everything.
To win a war, you must know the enemy inside out. To win a game, you must know the rules of the game inside out. To win the game of life, you must know the rules that govern our everday life. By reading books, and I mean real books, not newspaper, magazines and etc. you will gain the advantage of shortcutting your life experience by learning other people's experience who have gone through life before us. By knowing and learning other people's success and mistakes, we can make the right judgement beforehand and therefore leaping ahead successfully.

Knowing the strategies to financial freedom only gives you potential power. You can only be on the road to financial freedom and achieve it when you put knowledge to action. So, to achieve financial freedom, TAKE ACTION !

Story of Personal Finance - An Ant and a Grasshopper

A long time ago,in a land far away, lived two insects - an ant and a grasshopper. These two insects have two distinct personalities and also two different habits in life. During the warm summer days, the ant are busy collecting foods and stockpiling it in their nest. The ant view the summer season as an opportunity for it to collect as much food as they want and also preparing the ant for the winter. As for the grasshopper, it have a different view from the ant. It see the summer season as the time to have fun and laid back for a while. "Why worked so hard?", it said to the ant. "Enjoy the summer, because you definitely will not enjoy winter", said the grasshopper as it happily hopping around. The ant ignore the grasshopper and worked hard as ever in stockpiling it nest. Finally, as the days grew shorter and nights longer, winter finally sets in and the ant is comfortably sitting in its nest knowingly that his foodstock can last the whole winter. But unknown to the ant, the grasshopper was freezing above ground, searching for food that was no longer available abundantly during the summer.

This story is a story of personal finance, and how you view your life during hard times and good times. Always practised delayed gratification and always be prepared for the bad times as whether you are prepared for it or not, it will happen.

The Analogy of a Frog and Personal Finance

If you were to pick a frog and put it into shallow hot boiled water, the frog will instantly leaped from the pot and jump out to safety. However, if you were to pick up the same frog a little later and then put it into a shallow cold water, the frog will not react to it and will be comfortably be sitting there as it is a cold blooded animal. But, if you were to do experiments by heating up the cold pot with a very, very slow fire with the frog still sitting in it. The water will eventually rise up to 100 degrees. As any cold-blooded animal, the frog’s body will adapt to the rising heat and will adjust its blood temperature to the environment. Eventually, when the water reaches boiling point, the frog will die as a result of adapting itself to the environment without even realizing it.

So, what’s personal financing has have to do with the frog story? A lot. People who started off their career start just like the frog in the shallow cold water. The money they received by the end of the month is enough to get by since their requirement for life is low. But, as your career and salary increase so does your desires and lifestyles. As you start to buy your first car, buy your first house, started to use credit cards, your lifestyle will change incrementally but not as fast as your salary increase. As same with the frog, you will not notice that you have a debt problem since the increment is not sudden. And when you realize it, it is too late and you will end up with a huge pile of debt.

There are many paths for us to achieve financial freedom, but the majority of us choose the path of job security. How can we blame them? The education system was shaped to produce workers and not entrepreneurs. Many people realized that as the company their working with starts to prosper, the owner of the company is the one who eventually benefits and the employees usually are not much richer compared to the first day they started working there. The reality is that the boss is not responsible to make you rich, but their responsibility is just to make sure you got your paycheck by the end of the month. It is your responsibility to make sure that you will end up rich and not somebody else.