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Just some thoughts on this term “financial freedom” that has become a much coveted goal in life popularized by Robert Kiyosaki in Rich Dad Poor Dad. Btw apparently Kiyosaki was never as rich as he proclaimed. He got rich after selling his book. Well, some of his ideas are refreshing though.
What is the definition of financial freedom?
I guess to most people, it would be having enough money in your bank to last a lifetime living the same quality of life and thus having the freedom to choose not to work for money.
In the first ever post on this blog, we worked out this amount is probably slightly more than half a million dollars for a conservative guy and $3mn for someone more aspiring. And this amount is highly unreachable with normal jobs since annual salary is about $30,000 to $40,000 on average in developed countries. (Well actually it’s doable given enough time: like 30 years, as we shall see but that defeats the purpose I guess :)
Hence there is a need for passive income (another term from Kiyosaki) to help fund monthly expenditures. However passive income can only come from a few sources:
1. Dividends from stocks
2. Interest from fixed income instruments (bonds, T-bills etc)
3. Rental income from property
4. Pension or annuity payout
5. Cash flow from businesses (which you don’t have to run it)
6. Royalties from books, songs etc
7. Others: sponsorships, fees etc
Read more...[caption id="attachment_3708" align="alignright" width="150" caption="Photo by FreeWine"][/caption]
Just some thoughts on this term “financial freedom” that has become a much coveted goal in life popularized by Robert Kiyosaki in Rich Dad Poor Dad. Btw apparently Kiyosaki was never as rich as he proclaimed. He got rich after selling his book. Well, some of his ideas are refreshing though.
What is the definition of financial freedom?
I guess to most people, it would be having enough money in your bank to last a lifetime living the same quality of life and thus having the freedom to choose not to work for money.
In the first ever post on this blog, we worked out this amount is probably slightly more than half a million dollars for a conservative guy and $3mn for someone more aspiring. And this amount is highly unreachable with normal jobs since annual salary is about $30,000 to $40,000 on average in developed countries. (Well actually it’s doable given enough time: like 30 years, as we shall see but that defeats the purpose I guess :)
Hence there is a need for passive income (another term from Kiyosaki) to help fund monthly expenditures. However passive income can only come from a few sources:
1. Dividends from stocks
2. Interest from fixed income instruments (bonds, T-bills etc)
3. Rental income from property
4. Pension or annuity payout
5. Cash flow from businesses (which you don’t have to run it)
6. Royalties from books, songs etc
7. Others: sponsorships, fees etc
Read more...
[/caption]
Just some thoughts on this term “financial freedom” that has become a much coveted goal in life popularized by Robert Kiyosaki in Rich Dad Poor Dad. Btw apparently Kiyosaki was never as rich as he proclaimed. He got rich after selling his book. Well, some of his ideas are refreshing though.
What is the definition of financial freedom?
I guess to most people, it would be having enough money in your bank to last a lifetime living the same quality of life and thus having the freedom to choose not to work for money.
In the first ever post on this blog, we worked out this amount is probably slightly more than half a million dollars for a conservative guy and $3mn for someone more aspiring. And this amount is highly unreachable with normal jobs since annual salary is about $30,000 to $40,000 on average in developed countries. (Well actually it’s doable given enough time: like 30 years, as we shall see but that defeats the purpose I guess :)
Hence there is a need for passive income (another term from Kiyosaki) to help fund monthly expenditures. However passive income can only come from a few sources:
1. Dividends from stocks
2. Interest from fixed income instruments (bonds, T-bills etc)
3. Rental income from property
4. Pension or annuity payout
5. Cash flow from businesses (which you don’t have to run it)
6. Royalties from books, songs etc
7. Others: sponsorships, fees etc
Read more...
