Wednesday, March 31, 2010

My Passive Income (Month of Mar 10)

Here is the summary for month of Mar 10:
CPF(OA): $156 (from interest and dividends)
Cash: $1724 (from dividends and other passive incomes)
Total: $1880
Target: $3000
Achievement: 62%

There are no changes in my passive income 1 and 2.

For passive income 3, there is an increase as I have bought the following dividend shares: Cambridge and Singtel.

For passive income 4, there is increase of $40. However since it is still in the building stage, I will be expecting it to go up and down. In my post "Forget about achieving Financial Freedom if you do not have perseverance or refuse to learn.", I have mentioned that it will take time and effort to build up passive income.

I am in the midst of building my passive income 5, currently there is no income from it yet.

Sunday, March 28, 2010

My Other Articles

Time and Money
Do you have both the time and money?

Industrial Age vs Information Age

Are you outdated?.

What does total freedom lifestyle mean to me?
How is it like to be totally free?

Expand your social network
Learn more thing by knowing more people from different trades.

Don't fall for "Get Rich Quick" Scams

Don't help the scammer to get rich instead!

Protect your health and have adequate insurance coverage

Make sure you have done enough for your health.

Singapore Dollar Fixed Deposit Comparison between Major Banks

How much interest do you get?

Money, Values and Happiness

What is the relation between these three words?

How much is your hourly worth?

You may worth lesser than you think after the calculation.

Lifelong Asset Skills

Learning skills that can benefit you for your whole life.

The Pros and Cons of Using a Credit Card

Will credit card really benefit you?

Thursday, March 25, 2010

Time and Money

Time and money are two important things in life. We can categorize people based on the amount of time and money they have into four groups.

Group 1: No time, and no money.
Many low income employees are belonging to this group. People in this group will trade their time for money, as the result they have less time for themselves. They normally need to work for money in order to fulfil their basic needs and not be able to save a lot due to their low pay.

Group 2: No time but has a lot of money.
Self-employed, professionals (high income employees), small business owners are in this group. They are slightly better off than the people belonging to low income employees because they earn more. But one thing to note, they still trade their time for money and have little time for themselves.

Group 3: Got time but has no money.
People who are doing odd jobs or jobless are belonging to this group. As this group of people do not have a stable source of income, they will need to depend some sorts of financial aids from their relatives, friends or government in order to survive. They may have a lot of time, but are consistently worried about their survival all the times.

Group 4: Got time, and has a lot of money.
Big business owners, landlords, investors are in this group. People under this group are not working hard for money, but having money to work hard for them. They use money to make more money for them. They are at the best position to enjoy everything in life as they have both time and money.

Monday, March 22, 2010

My Articles on planning for Financial Freedom

Stop saying you are poor if you want to achieve financial freedom.
It is your mentality that makes you poor.

Don't quit your full time job just to start your own business
Don't forget you got expenses to pay.

What is cash flow diagram?
A diagram that can improve your financial status.

My Cash Flow Framework
A improved version of cash flow diagram.

Keep learning and Increasing your Financial Knowledge
The only way to achieve financial freedom faster.

"SMART" way to set your goal towards financial freedom
Knowing the proper way set your goals will make you acheive your goals easiler.

80-20 Rule for allocating time in building up passive incomes
You just need to spend 20% of your time on something more meaningful to you.

Forget about achieving financial freedom if you do not have preservance
It is not an easy task, but I will never give up.

Never put all your time in one income stream
You are exposing yourself in high risk by doing so.

Failures are just learning experiences
Don't be afraid to fail if you want to be successful.

My Articles on Retirement Planning

Why people don't plan for their retirement?
Are you guilty of not doing it?

Plan for your retirement as early as possible
You will never regret by doing your planning now.

How much will you need to retire?
You definitely need a lot of money.

Retirement planning is not just about gathering enough money for the rest of your life
There are other important things that you must put inside your retirement plan.

Retirement Planning: Learn to be healthy and stay physically active
You will not be happy if you have poor health when you retire.

Retirement Planning: Finding and developing your interest
Find yourself a interest to make yourself more interesting.

Retirement planning: Build up family relationships and bonding
If you don't do it, you will become a stranger to your family.

Retirement planning: Increase your social circle
It is always good to have more friends.

My Income Projection

I have achieved one-half of my targeted passive income!!!
I am getting closer to my target.

How long does it take me to reach a passive income of $3000?
A rough estimation.

Planning to retire in 17 years
Hopefully can be earlier than that.

My Income Projection Chart
Passive incomes make a great difference in the chart.

My Articles on Financial Freedom

What is Financial Freedom?
A very important term to know if you want to retire early in Singapore.

Why I wanted to achieve Financial Freedom?

These are the reasons that motivate me.

What is Debt Free Status?
Are you really in debt?

What are Assets and Liabilities?
Wealthy people will know these two terms.

How to reduce your liabilities to zero?
Sliming your own financial "fat".

How to prevent your money from becoming a liability?
Is your money getting smaller?

What are Good debts and Bad debts?
Debts are not necessary bad if you use it correctly.

What is power of exponential?
Einstein said, "The most powerful force in the universe is compound interest."

Everything in life in gambling
Don't you think so?

Three Stages in Personal finance
Are you still in stage one?

Journey to towards Financial Freedom should be enjoyable
Enjoy the journey and not suffer from it.

What is Rat Race?
You are in the race if you are working for money.

What is Leverage?
Use time of other to help yourself earn money.

The Rule of 72
A simple formula to out find the number of years required to double your money.

My Ways to Create Passive Incomes in Singapore

Rent out your spare room
Why waste your spare room when you can create wealth from it?

Making your investment into a passive income.
Learn how to invest passively.

Setting up home based business
Brainstorming on how to set up an internet business.

Use your talent to reward yourself over and over again
Use your talent to create your own passive income.

Stories for Financial Freedom

Through the Looking Glass
Get out of your own perceived world to find out more possibilities and opportunities.

A Zen Story
Is your cup full of water?

Jack and Jill Story
A very good financial story.

Who Move My Cheese?
Change always happens.

A Mexican Fisherman Story
You may already have the thing you always wanted to have.

The Monkey Experiment: The Habit Virus
We tend to follow what majority want us to do without knowing the real reason.

Saturday, March 20, 2010

Industrial Age vs Information Age

In one of the books from Robert T. Kiyosaki titled "Rich Kid Smart Kid", there is a comparison of ideas between the industrial age and information age. I should like to share what I have read as I found that it is very valid since we are rapidly transiting from industrial age into information age. The below are some of the comparisons:
Industrial AgeInformation Age
Job Security, TenureFree agent, Virtual companies
SeniorityPaid for results
One jobMany professions
Work until sixty-fiveRetire early
Degrees and credentialsCore talents
Old knowledgeNew ideas
Company retirement planSelf-directed portfolio
Work at companyWork at home

For people who are still holding on the industrial age idea might find it difficult in adapting in the information age. In the book "Who moved my cheese", there is a sentence that says "The Quickly You Let Go of Old Cheese, The Sooner You Can Enjoy New Cheese." This means that if you are able to adapt to change quickly, you are able to enjoy the benefits of the change immediately. The question now is whether do you want to change if you are still holding the old industrial ideas?

Monday, March 15, 2010

Through the Looking Glass

"Through the Looking Glass" is a book written by Lewis Carroll. It is the sequel to "Alice's Adventures in Wonderland". In the story, Alice ponders what the world is like on the other side of a mirror's reflection. Climbing up on the fireplace mantel, she pokes at the wall-hung mirror behind the fireplace and discovers, to her surprise, that she is able to step through it to an alternate world. Many things that she sees in the alternate world are totally out of her imagination.

Most of us are basically living in our own perceived world. As we are in our own perceived world, we tend to limit in our imagination. Of course, I'm not saying that living in one’s own perceived world is wrong as long as one is happy with his or her own life. However what if one day our own perceived world is not able to provide our basic needs, for example you are not earning enough to sustain your living expenses? What should one do to prevent that type of situation?

In order not to be trapped in our own perceived world like a frog in the well, what we should do is to open up our mind to find an "alternate world" for ourselves. Only when we are in the "alternate world”, more possibilities or opportunities will come to us.

I am glad to say that I am slowly stepping out of my own perceived world and seeing more opportunities in the "alternate world". For me, life has just started to get more interesting as I found myself doing new things and I am slowly achieving some positive results.

Monday, March 8, 2010

Who Moved My Cheese?

I was just happened to see this book titled "Who Moved My Cheese" in the library and borrowed it without a doubt. It was quite a popular title many years back. I managed to finish reading the book in an hour time. It contains a very short, simple and interesting story to illustrate how the 4 characters in the story react to changes. It is a great book and I will recommend it to all.

After reading the book, I have listed below the main points for the story and how I will use them to aid my plan towards financial freedom.

1) Change Happens
I must understand that ways of creating passive incomes can change over the time.

2) Anticipate Change
I must get ready to change the ways of creating passive incomes.
In my post "Keep learning and Increasing your Financial Knowledge", I have explained that we must keep learning to expose ourselves for more opportunities.

3) Monitor Change
I must review my current methods of creating passive incomes. Are these methods getting outdated? Are these methods still able to produce same amount of incomes as they used to be?
Currently what I did is to review the amount gain from each of my passive incomes every month.

4) Adapt To Change Quickly
If my current methods of creating passive incomes don't work any more, I must abandon them quickely and find out how to use new ways to create new passive incomes.

5) Enjoy Change!
I must learn to work out the new ways to create new passive incomes and enjoy the fruit of my new success.

6) Be Ready To Change Quickly And Enjoy It Again & Again.
I must get ready to change again.

Sunday, March 7, 2010

"SMART" way to set your goals towards financial freedom

Setting goals are important to help to achieve your financial freedom. You can use the "SMART" attributes to set your goals towards financial freedom:

You must know the specific outcome of your goals. In order to do that, you have to make an extensive plan on how you want to achieve your financial independence. A framework must be created so that you know exactly what to do and how to do it. Click here to see my framework.

Goals must be measurable so as to keep track of your performance. The amount of money made in a fixed period of time can be used to monitor the rate of success towards financial freedom. As for me, I calculate the total amount of money make in my passive incomes every month. Click here to see my passive income in the month Feb 2010.

Write down all the things you will need in order to reach your goals. After that, make sure you are able to get all the things needed in order to make your goal achievable. If there are things that are impossible to get, you will have to change your goals.

You must be realistic whereby you are willing and able to work towards your goal. You can only determine how high your goal should be by yourself and no one else. Unrealistic goals can make people give up easily. Also set yourself a realistic time table so that you are able to allocate time to complete the tasks needed to achieve your goal. Click here to see my time table.

Time frame
Setting deadlines are very important. With no time frame tied to your goals, there are no sense of urgency for you to work towards your goals. A fixed time frame will provide you the required motivation to achieve your financial freedom. Click here to see my time frame to achieve my goal for Year 2010.

Thursday, March 4, 2010

What is Leverage?

Billionaire John Paul Getty said, “I would rather have 1% of 100 people’s efforts than 100% of my own”. As highlighted by John Paul Getty, it is better to earn a small amount on the efforts of a large group of people than earning 100% on your own efforts.

Leverage is a financial term that means the ability to generate more and more income with less and less works. If you are just using other peoples’ time to earn money, basically you are leveraging.

Let me quote an example of how leveraging work. In a company, a senior sales manager is training his team of 20 sales executives. After training, for every successful sale that his sales executives make, part of their commission will be given to him. The senior sales manager is leveraging on his sales executives to make money.

However this is not a very good form of leveraging. The reason is once the senior sales manager no longer works in the company, he will not be able to earn any commission.

Today, instead of just leverage on people, you can also leverage on technology. There are many leveraged tools being created which include computers, internet, wireless devices and many more to help us generate more with less. If you want to achieve finance freedom, you will need to understand the power of leverage and learn how to use these leveraged tools. People who do not learn how to use leveraged tools to create passive income may miss the chance to escape from the rat race.

Wednesday, March 3, 2010

How long does it take me to reach a passive income of $3000? (Updated on 3 Mar 10)

On 9 Nov, I have a post titled "How long does it take me to reach a passive income of $3000?". Based on the last calculation, I will need to take 14 years in order to achieve it.

Currently my passive income has managed to reach about $1684. I have made some assumption to calculate the number of years needed to achieve my target of $3000. I shall state the assumptions in this post again:

Assumption 1: I reinvest my passive income and I have a saving of $20000 for my investment yearly.
Assumption 2: My reinvestment gives me 5% return in term of dividends
Assumption 3: Dividends from my investment is constant

It is calculated that I need another 7 years to achieve a passive income of $3000. The main reason why I am able to reduce the number of years from 14 to 7 years is because I have managed to have other sources of passive income. If you see my cash flow framework, there are two methods to achieve my aims faster. Firstly, I must work harder to increase my income from my job. Secondly is to find other income sources.

Have you started your journey towards financial freedom?