4 steps to Financial Freedom

There are many ways that can lead you to Financial Freedom. All you need is to have a plan and execute it. Without a plan, you can never achieve something you want in life. In fact, in your working environment, your supervisor will always draft out a work plan for you on the start of every new work year, they call it Key Performance Indicators (KPI).

In order to achieve Financial Freedom, you must have a plan. The following are 4 steps that I believe can lead you to Financial Freedom.

1. Save your income

You need to have a saving plan to save a portion of your earned income into a saving account. It is very important to have a saving. In the event, something happens to you and you need a sum of money urgently, you have the money to solve the problem. Here's an example if you save $500 per month, 1 year later you will have $6,000. In 10 years time, you will have $60k of savings. This is assuming you are not promoted and has no salary increment which I don't think it will happen to anyone.

Period	Savings
Year 1	$6,000
Year 2	$12,000
Year 3	$18,000
Year 4	$24,000
Year 5	$30,000
Year 6	$36,000
Year 7	$42,000
Year 8	$48,000
Year 9	$54,000
Year 10	$60,000

2. Lower down your expenses

First of all, you need to keep track of your expenses monthly. Next is to allocate what are the money that can be used for your expenditure, example insurance premium, handphone bills, allowance for parent etc. Then work on the expenses that can be lower down or cut away. Spend on items that you "needs" rather than you "want" if you get what I mean.

3. Work on passive income

Brainstorm on what additional income you can bring in to increase your income? For example, giving tuition or teach swimming lessons. These can bring in extra income to build your saving nests. Having multiple streams of income definitely can grow your savings even faster. So think about it and see what works well for you.

4. Invest for income

The last thing is to invest the savings in the stock market for income. By putting the money in a saving bank only earns you miserable interest. Invest in high dividend yield stock with 5-7% annually can leap frog your net worth substantially. Not forgetting to reinvest the dividend collected annually into the market to compound it even faster. You will see the effect of compounding once your portfolio starts to grow bigger.

In conclusion, if you do these 4 steps diligently, you will achieve financial freedom one day. It is only a matter of time when you will achieve this milestone. There is no right or wrong when you start this journey. Someone who started the journey earlier gets to enjoy the fruits earlier. Those who started late does not mean you will never reach the destination. The key point is to start early. If you never start or is still deciding whether you should start this journey, my advise to you is to do it now.