To achieve "Financial Freedom" status, your passive
income must exceed your expenses. So in your financial strategy you need to grow your passive income and not to grow
your expenses.
Passive Income - Expenses > 0 = Financial Freedom
Passive income is derived from your Investment Account. In order
to grow your passive income, you need to grow
your Investment Account.
There are two ways to do this. I call this two pronged attack.
First, you make the Investment Account work for you. The other is you work for
the Investment Account.
How to make the Investment Account work for you? You need to
invest it in money making endeavours. Remember Warren Buffett's rule number one
and two? Never lose money. Always remember rule number one!
This is very serious. Never ever squander your hard earned money
in foolish endeavours. You must always take charge. Never trust people fully
with your money. Most especially those who promises the moon and the stars.
As I highlighted earlier, I am not an investment guru. So you
need to read and learn from the experts. The usual suspects when it comes to
investments are properties, unit trusts and stock market.
So learn as much as you can about them. Take action only when you
are fairly confident that you can fulfil Warren Buffett's rule number one -
never lose money. Don’t take too long though and never make that an excuse for
not taking action at all!
As for you working for the Investment Account, maybe you can do
overtime or part-time jobs. Maybe take up some freelance work. You need to grow
the base of your Investment Account as much and as fast as possible.
The second strategy is not
to grow your expense. If you are the frugal kind, this is
actually quite easy. If you are not the frugal kind, this is where you can get
most savings.
So decide whether you want to be "biar papa, asal bergaya" kind or "bersusah-susah dahulu, bersenang-senang kemudian".
Some ideas on how not to grow your expense.
- Stay with your parents as long as possible. I'm
not saying that you should be a parasite. You should contribute to the
household budget but the amount will be a lot less than if you were to set
up your own household.
- Keep using your existing car. Try to stretch its
lifespan as long as possible. Better still if you don't have a car. Just
borrow your parent's or take public transportation. Again, don't be a
parasite if you borrow your parent's car. Fill up the petrol!
- Learn to cook Jamie Oliver style. You can eat
healthy and save money from having to eat at overpriced restaurants.
- Buy clothes that are not "seasonal". Keep
your body fit, so that you don't have to buy new clothes every few months.
- If you have your own house, rent out the unused rooms fully furnished. The rentals might help you get the house for "free".
There are many
other ideas that you can find in the internet.
Start
googling!