SIX STEPS TO FINANCIAL INDEPENDENCE

According to experts, the journey to financial independence begins with SIX simple steps.

If we follow this steps, we will surely be able to be Financially Independent and leave a legacy.

I have a friend who followed this steps and he retired from his job before he reach the age of 35. How is that as a retirement age for you?

So here are the 6 steps.

1. THE DISCIPLINE TO INCREASE CASH FLOW.

Ang sinasabi ng ibang experts dito ay "live below your means". Ang nagiging problema dito, most people will stay on their means at hindi na maghahanap ng ibang paraan. So, best advice na nakuha ko dito ay, increase your means, find ways to increase your cashflow. Use your time wisely. 

Sabi pa nga sa isang seminar na napuntahan ko, you have two options in living below your means. One, shrink the size of your dream to fit the size of your income o sa tagalog pa, kung maigsi ang kumot matutong mamaluktot. O, ichallenge mo ang sarili mo to increase your income to fit the size of your dream.

I'd rather find ways to increase my income as it will help me grow financially and emotionally. Kung magtitiis lang ako sa income ko, makaipon man ako ay kakapiranggot lang ito. Sabi pa nga nila, live life to the fullest. Unleash your potential. Kaya dapat ituon natin ang ating sarili sa paghahanap ng mga paraan para kumita ng mas malaki.

"If you are going to be financially free, you need to learn to have more cash flowing into your pockets" - Robert kiyosaki

If you trying to find extra income email me at arwin_img@yahoo.com

2. MANAGE YOUR DEBT

One of the main reasons we are not growing financially is because of our debt. I don't mean na hindi na pwedeng mangutang. Robert Kiyosaki said, there is good and bad debt. Even big companies have debts. Siguro mas magandang sabihin natin na consumer debt. O ang utang na ang pinaggamitan mo ay pangshopping lang. O ang mga naconsume mo lang. Iyong tipong wala naman babalik sa iyo.

I have debts, I acquired two units of tricycles thru loan. But the income from it is the one paying the mortgage. Utang itself is not bad, kung ang inutang mo ay sure na mababayaran ng iyong negosyo.

Pero kung ang utang ay kailangan bayaran galing sa sahod, dapat maconsolidate ng maaga yan or else the interest from that will eat your earnings up.

If you have multiple debts/loans, pay the ones with the highest interest first until all of them are paid.

Read articles such as this one Four Debt Payment Strategies Every Person Should Know. Or books such as this Risen from Debt.

3. CREATE EMERGENCY FUND

Emergencies are unforeseen events. Ayaw man natin na may mangyaring hindi maganda, hindi natin ito maiiwasan. Pero ang hindi pagiging handa para sa mga ganitong sitwasyun ay kaya natin masolusyunan. By having what others call as rainy day fund or emergency fund.

How much is enough emergency fund? Financial experts agree that 3 months of your monthly financial needs will be ok, pero pag sa pinas na sitwasyun mas maige ang 6 months na monthly expenses ang nakalaan para dito.

Hindi ito dapat galawin unless there is a real emergency gaya ng hospitalization o pagkatanggal sa trabaho. Hindi ito pwede sa mga emergency sale.

Here is a post from another mentor on how to calculate your emergency fund.
fitzvillafuerte.com, just click the link.

4. ENSURE PROPER PROTECTION

Ito ang isa sa pinakamagandang financial instrument na hindi natin ginagamit, lalo tayong mga pinoy. We are so obsessed about the return of the money that comes out of our pocket na hindi natin minamaximize ang gamit dito. Dahil ito sa maling akala natin sa paggamit ng insurance.

Click here for more detailed information about life insurance, this is written by one of my mentors (financial gurus I follow), Mr. Randell Tiongson.

5. BUILD LONG-TERM ACCUMULATION OF PASSIVE INCOME

Passive income means income that you earn even when you are not working. Income from businesses, rentals and the likes. Ito ang income na gustong gusto nating lahat, we can start small. Ang sikreto lang dito ay ang income mo sa from this side should not be spent on non-business. Palakihin at padamihin mo muna ang mga assets mo na magbibigay sa iyo ng ganitong income while you are still actively working.


6. PRESERVE YOUR ESTATE

This is probably the easiest of the six steps. Though not needed if you were not able to acquire assets as you will have no estate to preserve. Noong una kong attend ng seminar about personal finance, I learned that this technique is used lalo na nung mga mayayamang intsik, so just in case they perish, they are sure that their family will be the one to inherit the properties they built. Para naman talaga sa pamilya kung bakit tayo nangangarap na umangat ang estado natin sa buhay, so why not protect what we built.

There you go, the six simple steps to FINANCIAL INDEPENDENCE.

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