Week 4 - The Savings Equation

Today I want to share with you a very simple equation on what Savings is.

INCOME minus SAVINGS = EXPENSES. This is what Savings mean. Although some of us think of it as: Income minus Expenses = Savings. That's altogether a different mindset.

When we earn our income, the first thing to do is to take and make immediate decision about how much of it we will save... and set it aside immediately. The first amount of money to take off from our earnings is the savings.

Saving for the future does not mean that we are depriving ourselves...it is just delaying gratification.

Are we ready to start saving for investment to a better future? Let's start. It's time to get our act together.

See you again next week.

Week 3- First Investment, Personal Character

Are you thinking of doing some sort of investment? What investment idea could I suggest to you in the first place?

The best first investment would be to invest in ourselves. Hope this suggestion did not disappoint you as this is a very important first step in order to succeed.

To be able to be successful on whatever business venture we are planning to embark on...we must have the right character to start with. Investing in ourselves mean that we must  develop our thinking and maturity to go through this serious business venture to avoid failure.

Many of us are already old enough when we start thinking about investing in business, yet our thinking is still like immature babies.  We must develop a strong sense of strength in our thinking. Understand that we are not able to save the 'world' in what we are doing, nor can the 'world' save us...so it goes to say that we also don't let it influence us so easily.

Having a teachable spirit is the first key. We will humbly learn and not let the 'same mistake' be repeated.

There's so much to learn along the way but let us give serious thoughts on what we have discussed so far, for there is more to come next week. Keep on being encouraged.

Week 2 - Start To Financial Freedom

Not all wealthy people were rich to begin with. If we are to study their success, it was more about the hard work they did - to the best of their ability. There are financial lessons or practices that we can learn from their character:

1.)   Save as much as we possibly can

The first and foremost command is to pay ourselves first. Saving 10 to 20 percent of our income as our payment is a good idea. To do it with an even bigger percentage is even better. What we save can easily raise capital for business and investments.

We must have a long term vision of saving to be prosperous. At one point or another, we could be needing access to a huge amount of funds. Before that happens, we must be ready to save up for it as early as possible.

2.)   Reinvest our profits

In financial planning, we were taught the power of compounding interest. That is, our interest earns additional interest. This same principle can be applied to business and investment. Rather than cashing in on our profit, pour it back into the business for expansion so that the profits will grow exponentially.

3.)   Practice delayed gratification

The richest people are the ones who have overcome tremendous odds to reach the level of their wealth. During that time, they disciplined themselves not to spend on unnecessary expenses till they reached their set goals.

4.)   Pay in cash

Paying in cash in some cases, can sometimes give you the advantage of a discount. No matter how small the discount is, take advantage of it. Besides, the practice of using cash as opposed to credit is that we can be more disciplined in our spending habits and can monitor them closely too.

5.)   Be debt free

Let's pride ourselves in being debt free. As much as possible, never carry any debt at all. If however it is beyond our control, only go for 'good debt' - one that we can leverage on to expand our businesses. And even if we have to borrow money, keep it to the minimum. Bear in mind that money borrowed means there is extra interest to be paid back.

6.)   Create multiple sources of income

It is a reality that no particular business will fare well at all times. Thus, we must be prepared with multiple sources of income to act as a cushion. Additional income means more savings; and more savings mean more money to invest.

7.)   Be reasonable

As we achieve our financial freedom, we will have the ability to share with others. Remember that it's not an idea of complete selflessness nor it is about selfishness. There is always a limit and a balance to everything.

If you really want a start to financial freedom...stay tuned and we will take this journey together. Let's look forward to more encouragement next week. For now, chew on what we have discussed today. See you next week.

Yours

Annie

Week 1 - Creating A Life Goal

Everybody dreams for a good life. We dream of a nicer house, a better car, a trip around the world etc.... After all, dreaming is free, but getting to those dreams has a price. 

The problem with most of us is that we hardly dream with a purpose or a structure. Let's put a financial amount and a time frame to our dream, let's get a more realistic dream.

First, we need to have smart goals and dreams. It should be:

• Specific
• Measurable
• Attainable
• Realistic
• Time Bound

Don't just say I want to be rich. Instead, let's say: I want to have 5 million when I reach 40 years of age

Don't just say I want to travel, instead, let's say: I want to go to Antartica and see penguins within 3 years.

The next thing to do is to take the time to try this out. Many knows the principles but have never taken the time to sit down and try it. 

Work hard for our dreams. Even the smartest dream won't get us anywhere if we don't act smartly.  Get a pen and paper and let's act right now.

This is the first week of the year, and I hope you come along with me and be encouraged as I share with you week by week on ways and ideas to make a life goal a reality. See you again next week! Yours,Annie