As promised, I’m sharing Part 2 of 7 Steps to Financial Freedom below.
“Own your own home and make of your home a profitable investment.”
Why is owning our house a good way of managing our money? Well, if you think about it, all of us need a shelter and we can either buy or rent our home. Rentals only serve to fatten the purse of the landlord and is an expenditure which we can’t get back any RETURNS. So, it makes sense to own our home. Besides, having a place to call our own will put confidence in our heart and motivates us to put in greater effort in all our endeavours.
Of course, it should be noted that buying a property is actually a very RISKY decision. Why? Because if you bought at a high price, when prices subsequently drop below your purchase price, you would have negative networth - ie. your asset is less than what you paid for. In some cases, people end up in bankruptcy because of failure to keep up their housing loan repayments.
But owning your house can also be a very profitable investment if you buy at the RIGHT price. If you buy eg. a flat/condo/landed property when you are young, when you grow old, you can actually get money to supplement your retirement income by selling your house and downgrading to a smaller flat/house.
“Provide in advance for the needs of your growing age and the protection of your family.”
The 6th cure simply tells us that: “When we are able and bringing in income, we should provide for a suitable income should one day we retire or be called prematurely to the world beyond.”
Have you wondered why your own savings account seem to “stagnate or yo-yo” while your CPF account seems to miraculously increase all the time? Well, the reason is that for most people, our savings is the residual amount after our spending, while we compulsorily contribute to our CPF account first and only then the remaining 80% is given to us to spend/save.
So, if you think about it, we can also grow our savings if we have create another “CPF account” (another long term savings account), an account whereby we contribute a fixed sum every month before we spend. It’s that simple, but it works!
The 7th and the final cure for a lean purse is:
“Increase your ability to earn: by cultivating your own powers, to study and become wiser, to become more skillful, to so act as to bring yourself respect.”
It simply means: we should first find out what our “POWERS” are ie. strengths/aptitude/skills. Thereafter, we should further cultivate our powers: to upgrade our skills and knowledge, in order to increase our earning ability. Furthermore, it also mention that we should do this in a “respectable” manner, not through unscrupulous means, so that we will earn respect for ourselves.
Think about it, we are the golden goose that will lay the golden eggs ($$$). In order to have more golden eggs, we need to improve ourselves, so that we can lay more golden eggs!
Note: All the 7th cures should be practised in order to reap the greatest benefits. So, even after you have increased your earning power, you should still continue to set aside at least 10% of your income for savings (1st cure) and so on…….
It is also important to know that what REALLY matters is not how much we earn, but how much we put aside to accumulate wealth for us. I’m sure you’ve read about movie stars and people who used to earn millions but had to lead a miserable life in their old age because they never save much when they are earning big bucks.
Please note that the 7 cures are sound principles of financial management and not “7 Ways to Get Rich Quick”. The only place where “Success” comes before “Work” is in the dictionary.
It’s been great sharing with you what I read. I find that by putting my understanding of what I read in writing, it helps me to improve my understanding and also motivates me to put these 7 cures into practice. I hope that you will likewise benefit in one way or another from the 7 cures.
Now you know all the 7 cures….I hope you can use the below platforms to put all the 7 cures into practice to ensure an all rounded financial package for your whole life and your loved ones