Saturday, 20 April 2013

Key Ideas towards financial freedom

These are the key ideas which I have learnt and I would like to share it with everyone...

1.   Maintain Cashflow positive at all times.

Cashflow consists of both income and expenses. It is pertinent that cashflow be maintained at all times. Even with considerable cash savings, with a monthly outflow, the monthly cash outflow will eat into the reserves. Evaluate the deal for cash-flow, if you will experience negative cashflow, the deal is likely not for you at this time.

2. Build Passive income - it is forever.

Create cash-cows that will build you passive income and property being as iliquid as it is, would create for you passive income. It is these "drops of water" that forms the Ocean. Do not feel the need to hasten your process. The time will come once your passive income builds up...

3. Reduction in loan does not increase passive income

The difference between active income and passive income is such that passive income works even when you are asleep. So during your growth and expansion phase, there will be decisions to make whether to reduce debts and liabilities with the money saved or to continue to expand. I'll leave it to you to manage that part, however, reducing debts does not mean increasing passive income, it simply means there is an increase in cashflow, however, it also means you still have to work...

4. There are good loans and bad loans - Good Loans give you positive passive income forever

'nuff said. Don't be afraid to take loans. Some will help you to achieve your goals faster. Savings will take you forever if not never to achieve financial freedom.

5. Bad loans takes money out of your pocket every month and should be killed immediately.

Bad loans as the name implied is just about taking money out of your pocket. These includes car loans, credit card loans amongst others.

6. Create multiple source of income

Property is not the only means to earn passive income. EXPLORE! CREATE! Businesses are the real means to great financial success. Be careful though.

7.  Risks can be managed with enough research

Research, research and research! it is more important to location location location. Make sure you know every single details of the deals. That will allow you to mitigate risks and reap rewards later!

8.  All deals can be negotiated to your advantage, if not, you are not forced to buy.

All deals CAN be negotiated. Negotiate deals yourself and learn! instead of relying on group purchases, you can learn more things and be more independent. Knowledge is the true wealth and doing it will only increase your knowledge.

9. Think BIG (from Donald TRUMP)

If you have to negotiate a deal, make it a big one! the amount of time spent negotiating a small deal is the same as one negotiating a big deal. Think BIG!

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