Financial Freedom Way
We might come up with this title Financial Freedom Way occasionally. We might know what financial freedom is. We might see ads all over the internet promoting their books or softwares convincing you that their systems are gonna work and worth the money they charge. But I'm telling you the truth, most of them are scams. After so many things I've been thru,I personally wrote this hub totally free for you with my own experience about the real way to Financial Freedom. Let's start with a poll.
Do You Think People like Us could Realize the Financial Freedom?
Rich Dad, Poor Dad (By Robert Kiyosaki)
Basically, we need to convert our cash into a money making machine,a worker who works 24 hours a day,7 days a week. You're right! Thru investment. However, this investment is not what we normally know about. To convert all the income(mostly earned thru labor work) into passive income(which means you don't have to do anything to earn it after it is established properly).
The problem is, most of us, the ordinary people are not used to that pattern, which involves many changes of our daily life, like the way we consume, we deposite, we invest,we think. Sometimes, no, most of the time, it'll be a harsh change for us. I've been thru this psychological change many years ago. I understand how that feels. Luckily, I read a series of books recommended by my girl friend, Angela, who is already my wife now. I was tired of that kinda books. But at last, I did read one book of those for a while. Everything changed. I mean everything. It even changed my life. I'm not selling that book to you. Probably you can just borrow that book from a local public library. The volume I is the first one worth reading.
If you don't find it locally, I offered a link to Amazon.com. Only few dollars to get.
the Cashflow Quadrant (By Robert Kiyosaki)
We can learn the basic knowledge from the 1st book Rich Dad, Poor Dad. That's where start to learn the psychological change which is completely different from what most parents & teachers teach you since you are young. Better read it thru.
After read it thru. I recommend you the 2nd book, where you can learn the real thing we are talking about here, Financial Freedom. Get it from a local public library or from the link on the right.
Cashflow 101(For Beginner)
Cashflow 202 (For Advanced User )
Have You Got Used to the Change?
It's not easy for anyone to get used to the big change in a short period. And it's boring sometimes to someone to read books. What everyone loves? Games! I love playing games. What if we can learn the difference thru a game? Luckily, we've got a chance now.
The book writer just asked a game developer to get a PC game published about teaching people how to gain passive income in daily life in order to get to the fast track, which means the Financial Freedom.
There are two versions of game available.
Cashflow 101 (For Beginners)
Cashflow 202 (For Advanced Users)
Each set you bought includes both physical card game & PC game CDs. You can choose either to play with friends using the card game, or play on computers. I'd prefer PC game, in which there're step by step tutorials with voices & animations. I love PC game version.
OK. I just provide the links to Amazon.com on the right for you to buy. After that, I'll talk about them specifically.
What can we get from Cashflow 101
I don't wanna talk too much about this game, 'cause I am not selling it. If you've got any question, please leave a comment.Let's start now.
For a game player with less experience, there's a good tutorial embedded in the game. Don't worry.
See thru the screenshot of Cashflow 101, you can see there are 2 tables and a message box.
- Income Statement: Listing of Specific Record of monthly income & expenses. income -expenses = net monthly cash flow
- Balance Sheet: Listing of Specific Record of total assets & liabilities
- The Box: Record of history of things happened
It's just in the real life.
The main income source is your salary initially.Expenses include taxes,home mortgage payment
What is Rat Race?
First, we need figure out what Rat Race is.Look at the picture on the right. You're more or less the same as him. Working day and night, struggle and struggle for a beautiful life not only for yourself, but also for your wife and kids. While the consequences are, your physical condition becomes even worse, the hope looks even frailer. You earn more than before, and you have more monthly payment,debt,mortgage interest to pay.
Why things are going this way?
Because you are playing the RAT RACE!!!
Running in a circle and never coming out of it!!!
When you graduate from the college, what do you get in hand? Most of the time, debt! School loan. More often, you have to find a job on your own hoping to be utilized well for a high paying. You have to pay the rent, bills for everything, cellphone,electricity,school loan payment and even income tax for the salary you earn.
As for the salary, the more you earn, the higher income tax rate is gonna applied.
This is just a rat race that no way out for you,
Unless... You can accept & apply some changes.
The changes include ways of thinking about things involved in the financial world.
Let's move on to the next level.
Is there a Chance that I Can Lead a Different Life?
I have mentioned above that we have to convert all the cash available into passive income generating machine, which has another name, investment. However, this investment is just different from what you hear about it. This is just a chance for you, an ordinary person, to lead a different life. Let's talk about it in specific words now.
Good & Safe Investment
When you have just received your salary check, what do you usually do?
- Pay the income tax
- Pay the rent
- Pay the school loan payment
- Pay other bills
- Maybe spend some money having some fun or something?
That is just what you usually do. Well, here's something you choose to do to make a difference in life.
- Budge for the minimum expenditure of current month, which of course includes the rent and other monthly payment.
- Forget about the way you spend the money before.
- Cut off all the unnecessary future cost.
- Most importantly, take out 20% or more of your total salary to invest.
I personally use almost half of my salary to invest. If you have a strong mind of changing your life, do exactly what I do. If you cannot live under this condition, go back to your rat race.
Good & Safe Investment Portfolio
- Stock Investment
- Bond Investment
- Equity Investment
- Real Estate Investment
The first two are the basic ones, the last three are what can get you really rich.
This is a big topic. If you're interested in this topic I'd really like you to see a separate hub about stock investment. Click to see.
There would be more related hubs to be added here about Stock Investing. Keep watching!
Unfortunately, this is not my expertise. However, this is just what I am working on at present. I'll write a separate hub about this later. If you are interested in this, I recommend you a book which is already favored by many tycoons like Warren E. Buffett. The name of the book is Security Analysis, by Benjamin Graham. You can find that book from the link on the right on Amazon.com
Equity Investment here I mean dominating a private business by purchasing all or most of its shares. That is to say, you are the director of the board.But first, you must be capable of doing this with enough cash.
We all know that it is not easy to run a business, not to mention starting a whole new business, because only small percentage of people can do that well, plus, we are not willing to do that.
The thing is, if the business you wholy-owned is a proven successful one that can generate substantial free cash flow without having to reinvest on, it must be under a genius CEO who can also get well paid by this business. Win-win game, isn't it?
If the business does make money, while the problem is, it always needs your reinvestment to move on. It made huge profits only on the accounting way. All the profits have been used to invest on its normal operations. If the business cannot generate enough cash flow to support its necessary expenditure like expansion, sell it and forget about it.
Since most of this kinda investment involves huge amount of money, I will talk about it in specific words later.
Real Estate Investment
Real Estate Investment is always hot. But is that kinda deal reliable?
I can tell you, yes! Nothing is ever comparable to Real Estate. That's why it is called REAL Estate.
What I am talking about here has nothing to do with speculating. We do this for a long term passive income. Almost zero risk, relatively high return on investment.
Real Estate Investment is the most important source to gain passive income for ordinary people like us. Here's the most interesting part you wanna hear.
- If you bought a house with a monthly payment of $2000, there's someone asking you to rent your house for $3000 per month. Will you make the deal?