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My journey towards financial freedom has taught me a number of things. One of the key lessons I’ve learnt is to take small risks in life with my money and to be less attached to it. What do I mean by this?
Life is full of risks. When we get up in the morning, do we know if we’re going to be hit by a bus (*touch wood*) or to be able to get home safe and sound? In our quest for financial freedom, we are seeking to live within our means, to save and invest, to grow and protect our means.
Risks and Opportunities (Different Sides of the Same Coin?)
The saving and especially investing part of the financial freedom journey entails risks. When you take some of your savings and invest it in the stock market. You risk the amount being invested becoming zero if the company collapses due to fraud, irregularities or mis-management. You also take a risk (or opportunity) that the amount being invested grows by more than the low 0.1% to 0.5% interest that is being paid on savings and even fixed deposits.
Opportunity is the flip side of risk. To be safe, avoiding risks and parking your savings in fixed deposits, treasury bills or savings is not a wrong strategy. It is a strategy that can work if you keep on working and conscientiously saving until you have enough and have hit your own goal of financial freedom (e.g. to have $1 million investible savings by certain age).
I too am relying on this strategy, except that the amount I park in fixed deposits, treasury bills and savings is lower because I invest (and also speculate) in equities for the higher return. In return, I have to accept the higher risks associated with investing in shares. Read more...[caption id="attachment_2083" align="alignright" width="150" caption="Photo by Shermeee"][/caption]
My journey towards financial freedom has taught me a number of things. One of the key lessons I’ve learnt is to take small risks in life with my money and to be less attached to it. What do I mean by this?
Life is full of risks. When we get up in the morning, do we know if we’re going to be hit by a bus (*touch wood*) or to be able to get home safe and sound? In our quest for financial freedom, we are seeking to live within our means, to save and invest, to grow and protect our means.
Risks and Opportunities (Different Sides of the Same Coin?)
The saving and especially investing part of the financial freedom journey entails risks. When you take some of your savings and invest it in the stock market. You risk the amount being invested becoming zero if the company collapses due to fraud, irregularities or mis-management. You also take a risk (or opportunity) that the amount being invested grows by more than the low 0.1% to 0.5% interest that is being paid on savings and even fixed deposits.
Opportunity is the flip side of risk. To be safe, avoiding risks and parking your savings in fixed deposits, treasury bills or savings is not a wrong strategy. It is a strategy that can work if you keep on working and conscientiously saving until you have enough and have hit your own goal of financial freedom (e.g. to have $1 million investible savings by certain age).
I too am relying on this strategy, except that the amount I park in fixed deposits, treasury bills and savings is lower because I invest (and also speculate) in equities for the higher return. In return, I have to accept the higher risks associated with investing in shares. Read more...
[/caption]
My journey towards financial freedom has taught me a number of things. One of the key lessons I’ve learnt is to take small risks in life with my money and to be less attached to it. What do I mean by this?
Life is full of risks. When we get up in the morning, do we know if we’re going to be hit by a bus (*touch wood*) or to be able to get home safe and sound? In our quest for financial freedom, we are seeking to live within our means, to save and invest, to grow and protect our means.
Risks and Opportunities (Different Sides of the Same Coin?)
The saving and especially investing part of the financial freedom journey entails risks. When you take some of your savings and invest it in the stock market. You risk the amount being invested becoming zero if the company collapses due to fraud, irregularities or mis-management. You also take a risk (or opportunity) that the amount being invested grows by more than the low 0.1% to 0.5% interest that is being paid on savings and even fixed deposits.
Opportunity is the flip side of risk. To be safe, avoiding risks and parking your savings in fixed deposits, treasury bills or savings is not a wrong strategy. It is a strategy that can work if you keep on working and conscientiously saving until you have enough and have hit your own goal of financial freedom (e.g. to have $1 million investible savings by certain age).
I too am relying on this strategy, except that the amount I park in fixed deposits, treasury bills and savings is lower because I invest (and also speculate) in equities for the higher return. In return, I have to accept the higher risks associated with investing in shares. Read more...
