After having the understanding of financial freedom, stages of life financial cycle one may have to go through, formula of financial freedom, now is time, we start the action to be financial freedom by following below steps:
1. Check up your life financial stages, which stage are you at now.
2. Do health medical check up and understand your current body status.
Your health status determine your stamina and how far you can go, do a healht screening regularly to know your current health situation, make sure you understand your current body status, ensure you follow doctor recommendation on your diet and medication required if any. Remember, if you do not have good healht to back up for your journey to financial freedom, you will never able to achieve or even if you able to achieve it with strong determination but trade with your health status you may not be able to fully enjoy the happiness of being financial freedom.
3. Sum up your net worth-Use the attached file.
The next step is to understand your financial health status, how much equity versus liability you have right now.
3. Identify your current net worth which is passive income generating and none income generating asset and expenses asset.
Continue from step 2, you need to know which asset are generating passive income and at what rate? which asset are not generating and how to improve its yield?
4. Set your goal.
Once you completed step 1 to step 3, you know your body condition, financial health condition, passive income condition if any and expenses.
5. Draft up an execute plan
Draft up your action plan, the priority should be:
i. body condition to maintaince and improve
ii. set your target to increase your net worth by percentage for next 5 years
iii. decide which expenses to strim
iv. set your target for passive income inflow
v. summary of the action plan, you should see your passive income will be gradually increase and at one time exceed the expenses.
6. Invest yourself in financial education
Look up for book, magazine, web and seminar and financial courses to equip yourself to become non-financial idiot.
7. Learn ways to increase income and multiple source of income.
After the necessary basic knowledge of financial, begin to implement your goal via actual action. Refer to ways to increase income, identify which one suit you most and focus on it.
8. Learn ways to reduce expenses
Many people think that you have to be making a lot of money in order to be rich, however, the actual fact is knowing how to make lots of money will not make you wealthy. You can be making RM 30,000 a month, you will still poor if you are are spending RM 35,000 a month because of your luxurious lifestyle.
However, if you are making RM 4000 a month and you keep your expenses low at RM 1500, you can save up to RM 2500 a month and for a period of 30 years, You will have accumulated RM 900,000 saving without counting in the potential interest can be earned from this saving. Thus, controlling your expenses is important to drive you to financial freedom.
9. Believe in your self.
Last but not least, you need to confidence in yourself, confidence that you will achieve your goal with proper planning and execution.
