10 February 2011

Financial Freedom Plan – The power of Passive Income

Generally, the definition of financial freedom is the time that you are no longer needed to work hard for money. In other words, you have enough passive income to support your daily spending. For example, if you wish to have a passive income of 5,000 per month, or (5,000x12) 60,000 per year, and you are able to generate 10 percent return from your investment. By having a capital of 600,000, you already achieve your financial freedom. Pretty simple, huh? There is why investment is very important and is a must in the journey of financial freedom.

The problem is, for people like me (a zero capital fresh graduate) how to accumulate this amount capital. Actually, it is also not very difficult, but it requires lots of self-discipline and financial education. In fact, self-discipline will help you save the initial capital, and then, by using your financial education, you can, actually, invest and re-invest your money to boost your capital significantly. So, is it possible to achieve financial freedom just using self-discipline? Yes, but it would take a very long time.

I believe there are lots of examples in our life. Look at the people around you who are never splash their money. Their life is pretty simple, but yet not need to worry about the problem of not enough money or downsizing. A simple calculation shows that if you save 1000 per month or 12,000 annually, you need 50 years to achieve the capital of 60,000. Besides, please be reminded that you might also not able to generate 10 percent return of investment (ROI) because you do not have any financial knowledge.

Therefore, financial Education is very important to achieve financial freedom. There are some suggestions to speed-up the journey of financial freedom.

1. Reducing the desired passive income.
2. Increasing the percentage of the return of investment (ROI)! (More financial Education)
3. Increasing the amount of saving per month! (More self-discipline)
4. Start learns and practises investment now! (Self-discipline + Financial Education)

Again, as a person who enjoys his life, I prefer to the option of 2, 3, and 4 only to achieve my ultimate goal. That's all for today. Feel free to give me a comment about this topic or any suggestion about Xaivier Blog. It will be a great support to Xaivier Blog.

Written by: Xaivier Chia

HomepageSitemapSubscribe Feed


No comments:

Post a Comment