Steps to Financial Freedom

I just read this book"4 Steps To Financial Freedom" written by SEAH TOH and I thought that some of the contents is quite beneficial to you and me. With reference to his book, I shall share some of my thoughts.

In this model, it explains that we need to maximize our incomes in the order of passive income > portfolio income > earned income in order to create financial freedom.

However, this is easier to say than do. To really make the first step, you need to educate yourself on how to pay yourself first from your earned income. Paying yourself does not mean spending on lavish lifestyle to satisfy yourself!!! It means putting aside savings for your investment accounts first before you start paying off bills and expenses.

Next, you should start educate yourself on how to create your first portfolio income and do some practise on it. Subsequently, when your become experienced, start educate yourself on how to use other people's money to drive your engine for your portfolio income. This is called good debt. There is risk involved and hence you have to be careful about it.

And finally, educate yourself on how to create your first passive income. Generally, passive income will be through real estate rental and network/internet marketing.

Therefore, for young adults like me( I am 20yrs only), my plan now would be paying myself
for my portfolio income. In the meantime, I will also continue to build up my financial knowledge. Next I'll create enough wealth to make a down-payment for a house, and then I'll rent it out. As a result, I will have created passive income through rental and portfolio income through investments.