How To Attain Financial Freedom
Written by Simon Wong on May 21st, 2010
Saving is a great way to achieve financial freedom. My mother always tells me that the one who knows how to save money is the one who will become rich. That is so true. I met many people who used to earn a lot of money but they are not rich at all. The low saving rate in America shows that saving is not as easy as you might think.
Very unluckily, the saving rate in America is very low. This low saving rate explains that most of the Americans have to work for their whole lives without financial freedom. In fact, many Americans have the saving concept in their mind. The problem is their saving concept is not 100 percent correct. Most of them save all the money that is left after their spending. For a real saving plan, you should only spend all the money that is left after your saving.
If I ask you to save 20% of your monthly salary, you may find it very difficult. When the money comes to your hand, you want to buy, buy and buy. Therefore, the best solution is not to let the money come to your hand. You may join the monthly investment scheme in the bank. Such scheme requires a fixed monthly salary deduction from your account to be the principle of investment.
Of course, I am not asking you to have 90% of your salary transformed to your investment by the plan. The reason for a monthly deduction is to manifest the monthly compound effect of a small sum every month. For example, if you invest $100 a month and that you will get a 5% (very conservative) return. In 6-month times, what you get can be 8% more than $100 x 6 months x 105%. The 8% difference is only for 6 months. Can you imagine what the number is when it comes to 20 or 30 years for a longer term of investment? You are going to accomplish the financial freedom that you dream of.
Other than saving, you have to learn the world control. To attain financial freedom, you should avoid adding to yourself the financial burden. Control your spontaneous possessive desire which leads most of the people go into a financial problem. If you love to use credit card, you should pay more attention to this point. This is because the interest rate charged by the credit card company is extremely high. When you fail to make you payment, the interest is also counted in the way of compound.
One more advice to you is to always keep your eyes on your financial status. Many people go into financial problem and bankruptcy because they do not know their financial status clearly. When you know your financial status, you will do all possible actions to stop your liability and gain more assets.
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This entry was posted on Friday, May 21st, 2010 at 7:29 am and is filed under Forex. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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