Financial freedom – Happiness

Affirmative action, compounding, Financial Independence, Happiness, travel

You would have seen so many posts from me on compounding and rates of return and long term planning to build a large asset base even with small monthly automatic deductions from your account.

The objective of doing all this is not to stop living today for a better tomorrow. 

The idea of financial freedom that I talk about is to ensure that you are no longer forced to do things for earning money.  I have always wanted to have financial freedom so that I could go out and achieve all the items on my bucket list.

These items on my bucket list are what will give me experiences with my family which will in turn make me happy. I have already shared how I used these principles to travel to different countries.

The end objective of getting Financial Freedom and Financial Independence is Happiness today and in the future. 

If you have to work in a job ,which does not make you happy, just because you don’t have the money then you find another job or use the magic of compounding so that over a period of time at least you are in a position to leave the job and do things which make you happy.

Through intermediate milestones, in accumulating wealth, you use the wealth to get experiences . Wealth is not to be accumulated for the sake of getting to a number. You have to enjoy the journey and be happy through all of it.

Till next time then find reasons to be happy.

Carpe Diem!!!

Prioritizing the top 3 or 4 for your financial freedom

compounding, Financial Independence, Karma, prioritizing

I have spent so many posts on talking about how you can hit financial freedom. Today I will give you the 80/20 of what I think are the key things I have learnt over the last few years.

  1. The compounding equation – Sum = Principal*(1+(Rate of Interest)/100)^Number of years. Since the 80/20 is fractal prioritizing on the Rate of Interest and Number of Years is critical. Compounding works both ways. If you have taken a loan it works against you and if you have invested, it works for you. The earlier you start your journey to utilize this equation the richer you will become, faster
  2. Taxes – Be an honest tax payer, pay what is due and in full. However utilize all the avenues the government gives to save on taxes.
  3. Always look at increasing your earning capability – so that you can hit your goals for financial freedom faster. Scrimping your way to financial freedom is a long arduous journey.
  4. Always give charity. Its good Karma. In some countries the government also encourages you to give charity by giving tax benefits – refer to point 2 above.

There’s so much depth in understanding just these 4 statements that complete books have been written just to cover these topics.

Since the topic is about prioritizing I will keep the post short. Just focus on these 4 statements and keep finding within them the areas where small effort can give huge returns . Again small hinges move large doors.

Till next time then.

Carpe Diem

You cannot have financial freedom – without financial discipline

Affirmative action, compounding, Financial Independence, Human Brain

A few days back I had written a post on why you need discipline and not money to get financial freedom.

I have been sharing with you that I am reading the book The Road Less Stupid by Keith Cunningham. I was introduced to this book by Joe Polish. I had heard him speak a lot about this author in multiple podcasts. So I searched and found an interview where Joe is interviewing Keith.

I liked the ideas that he spoke about in the book and therefore ended up buying it. The ideas and especially the thinking questions are worth pondering on. Today I spent close to about 4 hours on the 3 questions I had listed yesterday in my blog post and did get somewhere with the answers that I got.

Coming back to the headline, while reading the book I had happened to chance on this sentence. It struck me immediately because I continuously keep harping about the need for discipline to reach financial freedom.

This discipline is not possible if you base it on will power. Will power is something which get exhausted very fast on a daily basis. Your brain gets exhausted so fast that the more decisions it has to make the faster the energy depletes. With energy gone you cannot exercise will power.

So you need to put in systems which take the decision making away from you. That’s possible only when you automate the investment process with things like Systematic Investment Plans (SIPs) or the equivalents in your country. You could go with ETFs or Mutual Funds or direct stocks. The item is not important. What is important is to get into automating the process so that there is no concept of using will power. Then let the power of compounding work for you.

Till next time then.

Carpe Diem!!!

Relentless- Part III

compounding, Financial Independence, Habits, Marketing, Uncategorized

Even passive activities can be relentless

Last 2 posts I have been talking about being relentless with respect to Marketing and sales of various kinds

Today I will be talking about how I realised that the systematic investment plans or SIPS are a different kind of relentless activity.

I have mentioned multiple times that you should give a mandate to your your ETF or mutual fund to deduct the amount directly from your account and invest.

On one level this becomes a passive activity because you are no longer involving your brain to make a decision.

However we have also noted that being relentless is a habit which is needed if you want to succeed systematically rather than episodically.

So where’s the paradox.

If you have to become wealthy then you have to invest relentlessly on a regular basis. A systematic investment plan is also a regular, consistent activity a.k.a relentless. The only difference being that you don’t need to tax your brain. You are automating the process of being relentless for your investment.

To that extent it’s an ideal opportunity….you have outsourced your relentless activity to a system….and you can become wealthy on the way

Think about it…..small amounts of money invested relentlessly…taking advantage of the magic of compounding…can get you financial freedom.

Till next time,.

Carpe Diem!!!