Investment - Savings

I believe most of us believe that the key element to start investment is start with investing in knowledge. I have written about investing in knowledge in previous article(s). What would be the next step or next level of investment after we started some research on knowledge either by reading, listening, attending seminars, etc.?

I also have written on savings which really important before start investing in something halal and legitimate. It is really important for us to have some savings before we start our investment and I believe most of us know the importance of it. What? Not really sure? Then, I suggest to read again on my previous articles on savings Part 1 and Part 2.

My personal opinion before we start invest, we should have our reserve fund for at least 6 months to sustain without any source of income. All these are not something to be developed overnight but it is possible if we practice very “healthy” Lifestyle over the time. Whoever really willing to start with some investments but there is none of savings then it’s like to construct a house without the pillars. How is it possible to have a house without the pillars? So, answer to yourself honestly before you take any further action. Always remember that better to be not-rich than poor! Why?! Spare some time and think about this.

I know there are people will claim that we can’t go far just by saving and I totally agree with this statement. I also believe in that where we can go nowhere just by saving. Again, remember that savings is one of the foundation before we start investing after we invested in knowledge. Why all these are important? Spare some time and read Real Investment.

Loans

Do we need loans in our life? Is it important in our life? Some says, it's not recommended to have loan or many loans. I believe most of us have heard or seen about good debts and bad debts right? So, how to know whether the loan we are acquiring is good or bad? Simple concept on this good and bad debts is on the impacts from these two (2) debts/loans; good debts/loans is something can make us richer and richer, whereby bad debts is something can make us poorer and poorer.

As discussed earlier, there are so many products in banking world and to be more specific; they are so many loan types based on needs and requirement. Sometime due to our knowledge level, we may acquire bad debts. This may happen accidentally or unfortunately. Another rule of thumbs is that it is very to get good debts and it is very easy to get bad debts. Sounds good so far? Let us discuss further in upcoming articles.

Lifestyle

Why lifestyle is very crucial towards achieving our financial freedom? How exactly it affects our process to achieve our goal? How does rich practising their lifestyle and how about the other side? Not clear about the other side? Well, the poor I meant.

 

There are always myths are about the rich and the poor. Rich always are blamed to be too greedy and stealing money from others to become richer and richer. Poor always claim that they are always being discriminated by rich in most of the places. As long we believe that this myths are true then definitely we cant be the rich because we always see the rich is the villain and the poor is the hero.

 

Personally I don't agree with all the myths because I want to be rich and want my family, relatives, friends, and whoever reading this to be rich. Why don't you go back on some history of the rich people where they started with very poor family but ended up with indefinite wealth. No need for me to mention it here because almost all of the top 100 richest person in the universe are from poor family background.

 

 

So, what exactly the main criteria is differing between rich and poor? YES!!! The lifestyle of these two (2) different people is totally different! I believe that some might be thinking that "obviously different because rich spending like nobody business and the poor is spending wisely".

 

If we analyse wisely of this rich people's lifestyle, they have very systematic or proper recording of all their expenses. Why? Spend sometime and read some of my previous articles on Saving, Earning Vs Saving, Levels of Financial Freedom, and lot more. You will find the key elements on how to be rich slowly and steadily. The rich people also practising very systematic book keeping to monitor what is in and what is out. Most of the time, active income from rich people are untouchable or recirculated for investments. Last but not least, rich always allocate some portion of their wealth to be shared with others via charity.

 

How about the poor? Hmmmm.... They don't have proper recording at all, no book keeping, no traceable records, and always rely on active income only for their life. Hence, spend more time to invest on knowledge prior to take action to avoid unnecessary mistakes. Best of luck for us buddies! 

Consistency - Part 2

We have discussed on acquiring knowledge and experience consistently by reading, sharing, and asking. So, now it’s the time to take action! We have discussed about Savings in previous article which is key element before we start develop our investment portfolio. Hence, how it can be done and materialized? And more importantly is consistently!

I believe almost all of us are earning salary or monthly income consistently and why not we reflect it into our saving too! It has very powerful element in order to success with consistent saving. People always emphasizing on steady (or consistent) income but hardly people emphasizing on consistent saving. Hence, again as highlighted in my previous article on Earning Vs Saving where I emphasized on the percentage of saving compared to the actual amount because it shows the CONSISTENCY. Again I would like emphasize here that we must consistently allocate our hard-earned money (steady income) for steady saving to ensure we can expedite to develop our investment portfolio.

Our way forward towards financial freedom is mainly to develop consistency on saving from our consistent active income. By having this steady income, must ensure that we can have consistent saving too on monthly basis. When we can develop our consistent saving automatically we can generate passive income consistently (with assumption no money is spent from saving dividends). As we develop further, there will be consistent passive income higher than our steady active income (please read Levels in Financial Freedom). You’ll see the miracle when we do it consistently from beginning, where financial freedom is just ahead of us and it’s possible to achieve.

If you notice, this CONSISTENCY will actually develop attitude to achieve our goal toward financial freedom. Anything we want to develop must develop from attitude, not specifically only finance subject matter but anything on earth. So, key element to success is attitude which has to be developed from habit which actually CONSISTENCY. Hence, when we can do it consistently you’ll see that you’ll slowly, steadily, and consistently will develop your investment portfolio. Let us start do it consistently!

Consistency - Part 1

How consistency does important to us? How does it affect to our goal to achieve financial freedom? What it does? What are the benefits if we are consistent in doing something good for us?

You may have noticed that I’ve been telling the knowledge is very important to achieve our goal to be free financially. So, how can we get this knowledge CONSISTENTLY? We must align with latest information in investment world on banking products available, portfolio available, etc. And definitely all these are halal and legitimate! In order to equip with latest information or knowledge we have to ensure to read, share, and ask people CONSISTENTLY. When we read we know something new is available in the market or something we know is already obsolete in the market. When we know something new in the market we may want to share with our colleagues and later may ask them whether they are familiar or new to them. If they are familiar with our latest information, things get easier because we have someone can explain further on the information so that easier to digest. When we easily digest the information, then it is easier for us to take action which ultimately will give us the results.

When we develop our consistency in reading, sharing, and asking, we’ll benefit without noticing it. From this consistency we can develop discipline internally to keep on reading to gain more knowledge before take into action. Why is this so important before take action? Huh?! It’s simple because we can see the impacts based on lesson learnt people have shared from the readings. We may share our colleagues and they might have experienced it in reality and could be our benchmark prior to take action.

Since we go on with reading, sharing, and asking consistently we are indirectly gaining experience by reading to others experiences. Experiences are something very precious because they may save you from very big disasters. We must be very thankful if there are people to share their experiences even they are charging us with some amount. I would suggest to get this experience by reading so that we have ample time to digest and later we can ask somebody more familiar. This could be more efficient and economical!

While acquiring the knowledge and experiences by reading, sharing, and asking; you may indirectly have developed passionate and confidence in investment. This leads to develop interest in subject matter which is in this subject related personal finance and investment. It could be a bit difficult at beginning but believe me, you’ll feel the sweetness by doing it CONSISTENTLY!