Do you want to financial freedom? Most of us want to have enough money and not worried about it. But can we do it?
I just read a blueprint by Rajen Devadason about 5 components for working toward financial freedom. The blueprint is :-
1) Active Income
– We work hard to earn money. The amount we bring in is determined by our active effort; our capacity to toil – to work hard and to work smart.
We work for money, specifically for our active income.
2) Operational Expenses
– Our quality of life, or lifestyle level is set by the amount we spend each mont to maintain our selected lifestyle.
3)Portfolio of Debt
– We all have a collection of liabilities, like family loans, credit card balances and personal, car and property loans.
4)Emergency Buffer Fund
– Life has a way of springing surprises on us. Building an emergency buffer fund, reserve fund or cushion of cash helps deal with such stresses.
– We should manage our cash flow pattern to channel consistent surpluses into a different type of portfolio – a portfolio wealth – that pumps out passive income by way of interest, rent, dividends and distributions. Our money works for us to create this passive income stream.
– So make it a laser-focused goal to wisely manage your personal finances, exercise delayed gratification, curb consumption debt and build cash flow-generating assets within your portfolio of wealth.
– It may take you 10-15 years but the very first month your passive income flow from that portfolio of wealth exceeds your operational expenses plus your regular monthly payments on your portfolio of debt will be the month you attain financial freedom.
Source :- NST by Rajen Devadason