iSAVvy: Financial Independence — The Highs

You need to grow your money without working to be financially independent. Image from: Image by Tumisu from Pixabay

I am not a financial consultant. What I wrote here is purely my opinion.

The highs are savings, investments, and assets. The easiest to start is savings and start saving as young as possible. Reducing your expenditure equates to savings, as mentioned in the earlier post.

Understand how to invest and pay someone to advise you, like a private financial consultant. Such things are better at the hands of professionals but not impossible to do it yourself nowadays. Just that I am too lazy to monitor my investments. What you invest depends on you but I prefer unit trusts that provide payouts each month. This ensures I can get a steady income without working and easily calculate how much I can receive every month. I am not familiar with others.

Assets should generate income, not lose income. A car is a liability and a house is a liability unless you rent it out. Some assets do require maintenance as well. I would limit getting these assets unless their value is worth the effort to maintain.

You should get insurance only when you have none. Any Investments linked insurance and saving insurance should not be considered. Insurance is safeguarded when you need that big amount of cash for medical bills or upon death.

Breakdown of my finances strategies:

• Housing. Get the cheapest housing. More space means more junk to accumulate. Stay near useful commodities, public transport, malls, food courts and markets. These places save time costs but cost more.
• Savings. You need at least three saving accounts, for expenses, emergency and investment funds. Try saving as much as you can and you will be rewarded when you need them. You keep emergency funds up to one year for big-ticket items that suddenly arise and at least two months for expense funds. Any leftovers will be for investment. 
• Forced savings. Prefer endowment plans. This is forced saving and relatively low-risk, but not so high return investment. Receive a payout at a specific period. 5, 10 or longer depending on different stages of your life by saving every month. 
• Investment. Prefer unit trusts that give monthly returns.  mainly used to pay for annual insurance premiums, food, and anything I want to buy.

I agree that without money, there is little you can do with investment, savings, and assets. Learn to invest or save early gives you a headstart. A good start is looking for a trustable financial consultant to advise you. It pays more than you do it on your own, usually.