Have You Found Your Path To Financial Freedom?

Most of us would dream of growing a money tree, owning a cash cow, or finding the proverbial goose that lay golden eggs.

Thoughts alone are futile if we do not take actions. We need to start searching for those who have found a way to achieving their financial goals and learn from them so that we, too, could find our way to financial independence.

Photo by JESHOOTS.COM on Unsplash

In my search, I have found Brian Halim's blog "A Path to Forever Financial Freedom (3Fs)" to be inspiring and well-written. I have requested for an e-interview with Brian and he has very kindly and generously share his thoughts and insights with us in response to the following questions: 

What got you started on blogging? 

Brian: I started blogging back in 2010 and have since written over 700 articles to date. Blogging has been a very important component to many of my milestones in life. 

The first and foremost blogging has allowed me to pen my thoughts and articulate them in an organized manner such that it will allow for representation and also commitment to everything that I promised to myself. For example, when I purchased a stock with a specific thesis, I’d like to remind myself why I had bought such company in the first place. This allowed me to take responsibility for my own action and also to strictly follow the guidelines which I enforced myself as an investor.

How would you define financial freedom and what is your path to achieving it?

Brian: Mathematically, financial freedom is defined as a crossover point between income and expenses, i.e when my passive income cashflow is able to feed expenses without the need for a day job to depend on it. It is always a bit more prudent to put in a conservative estimate of both the income and expenses so it can survive any external events impact.

My goal to achieve financial independence is through the vehicle of dividend income, that is by buying a list of solid companies which pay out dividend every year.

Is your path to financial freedom workable for everyone as they may not be a Financial Controller with an MBA like you?

Brian: I think everyone should try to work out and achieve financial independence as this is something that would impact everyone. Whilst high paying jobs are a nice boost to the income, anyone with a decent salary to start with should be able to save a decent amount at the end of every month. While initially the amount of compounding will be slow, it will progress and snowballed faster as the capital gets bigger over the years.

Having an MBA definitely does not expedite the path to reach financial independence if that person does not have the traits of saving or trying to grow their money through investing.

How has your achievement been like since embarking on this path to financial freedom?

Brian: I gave myself a stretch target to reach financial independence at the age of 35 knowing this is an almost impossible task to begin with.

There are 4 stop-over milestones ($250k / $500k / $750k / $1m) that I usually try to emphasize since this gives a good chance to take a breather to see where I am in terms of the journey.

So far, it took me 6 years to reach the first milestone, followed by 3 years to reach the second milestone, followed by 1 year and 7 months to reach the third milestone.

Slowly, I can feel the effect of compounding that works in favour of the portfolio.

What would you consider to be the top three investment principles that you have been able to capitalise on?

Brian: My top 3 investment principles have to be:

i)  Know your company well inside out – This means you have to study the level of details on the company really well that it is within the grasp of your hands.

ii) Buy with margin of safety – Buy companies with such a low valuation with many downsides baked in that any small increase will result good double digit percentage gain for you.

iii) Focus on the cashflow – Cashflow is the heart of any company and is the lifeline to any increase in its share price.

How would you define success and happiness?

Brian: Success and happiness is when you can make the people around you, families or friends, live life better at the deeds of your action.

What is the most important lesson(s) that you have learnt about life? 

Brian: Life is a continuous breed of Monday to Sunday with you determining the activities you should lead in that 24 hours.

Dear Readers,

May this conversation spur you to start working on your path to financial freedom, if not already done so.

Click here for A Path to Forever Financial Freedom (3Fs) and gain useful financial knowledge from Brian Halim. 

How To Have More Money (Part 2)

While not every one is born with a silver spoon, so to speak, you can find yourselves within reach of, say, silver accessories, Wencia wristwatches and, taken to the extreme, silver cutleries, by having more money.

Continuing from "How To Have More Money (Part 1)", one way by which you can have more money is: To Pay Yourself From Your Income.

Besides the usual payees such as household operation manager (spouse or parent), telcos, mortgagors (banks or finance companies), grocers and transport providers, you would need to treat yourself as a payee, too, intentionally. You can do this by opening a separate bank account and transferring a fixed sum into this account via internet banking or interbank GIRO every month.

In some countries such as Singapore, employees who are Singapore citizens or permanent residences are required to contribute 20% (subject to some variation depending on their age and income level) of their earned income towards a Central Provident Fund as a compulsory form of savings for their retirement, primarily. Notwithstanding this or other form of provident fund in your respective country, it is prudent and sound financial self-discipline to pay yourself another 10% to 20% every month, if possible.

The magic of growing your money stack is to keep repeating your payment to yourself each month as a priority on par with your other pressing payees. Keep feeding your own bank account and it will feed your purposes well, in future. Start NOW, if you have not already done so.

Notes:

* Money is not the root of all evil. It is the love of money which is the root of all evil.

* Money is great servant but a terrible master.

* You can give without loving, but you can't love without giving.

* "Don’t wear yourself out trying to get rich; restrain yourself! Riches disappear in the blink of an eye; wealth sprouts wings and flies off into the wild blue yonder." (Proverbs 23:4-5; MSG)

How To Have More Money (Part 1)

Firstly, I take it that a writer like me doesn't neeed to have great wealth to write about 'How To Have More Money' just as a priest doesn't need to be dead to know how to conduct a funeral and a pilot doesn't need to own a Dreamliner to fly it.

Having said that, it is an incorrect perception that only the rich and wealthy can have more money. For example, a rich person who lacks the wisdom and financial acumen could well see his wealth dwindling due to unsavvy investments and/or working with incompatible business partners. 

Whether you have a little or much money, one of the way by which you can have more money is: To Spend Less Than What You Earn. It is a simple truth, but it would only bear fruit when followed diligently and consistently over time. The little surplus cash that is set aside monthly will slowly but surely adds up to a sizeable pile over the times and seasons of your life.

Do a financial health check and see whether you are keeping your total money outflows within what you earn for each month. If your total expenses are more than what you earn, then evaluate and decide on which expenditure to forgo or scale down. 

If you have surplus cash each month after settling all your bills, then you are well on your way to having more cash on hand, thereby advancing towards the goal of financial independence.

Notes:

* Money is not the root of all evil. It is the love of money which is the root of all evil.

* Money is great servant but a terrible master.

* You can give without loving, but you can't love without giving.

* "Don’t wear yourself out trying to get rich; restrain yourself! Riches disappear in the blink of an eye; wealth sprouts wings and flies off into the wild blue yonder." (Proverbs 23:4-5; MSG)