I’ve got a thing for financial freedom. I’ve read many books trying to find the best path to gain such “freedom”; to relieve myself from the corporate work shackle; to spend time doing what I love. Through the journey of finding a path, I got burnt in the share market back in the days but certainly have had some success in properties. So naturally, I went for the property path.
Looking for inspiration during a mundane lunch hour in the city one day, I picked up the book titled “From 0 -130 Properties in 3.5 Years’ by Steve McKnight. Yup, I bought it and read it within a week. But what I realised was the goal was way too lofty. I did the math, it meant 37 properties per year …..we had to buy 9.25 properties per quarter every quarter for the next 3.5 consecutive years! No way could we achieve that. I felt more at a loss rather than inspired.
I did learn a few innovative ways to organise finance to get into properties from the book. But to make it real for our family, what I have done was based on our family situation, I mapped out a plan that will work for us, which is very achievable and will not sound so daunting that we will end up doing nothing. This was the first motivation – I will develop and own a plan that will work for us.
Five years on, we had purchased our family home in the first year and bought three investment properties in the following four years. Not bad and I can certainly see us on the right track towards our financial freedom down the road.
How to set your plan:
Work out how much you would like to live off, as lifestyle can go from basic humble to fancy globe-setter. Next is what age you wanted to achieve financial freedom. Think big, you can set a goal to be when you’re 45! These assumptions will go into your calculation to determine how much money you will need to gain that “financial freedom”. budgetsaresexy.com is a good website to do the math. Be warned though, you may get scared of how much you find out you will need!
Know where you spend your money and set a saving plan. We downloaded an app called iXpenseIt to keep track of all our expenses for the first three months so we knew exactly where we were burning it! With this information at hand, you will be able to work out a solid and achievable saving plan. Sticking to the budget is the first step to test your disciplines required in gaining financial freedom. Bear in mind, instant gratification is your worst enemy! Having the overall goal set in point one will help you focus on day-to-day. I used the app My Net Worth to keep track of how we progress.
Tips on setting plan:
- Be honest with yourself of what you or your family want
- Take into consideration of family situations e.g. children, maternity leave, what schools do they go to (private or public), how many overseas holidays, what car do you want to drive. These impact your family income and the budget required which will vary the timing of how long it will take to achieve your plan
- Create an excel and play with the numbers you have put it based on the assumptions to see what different scenario means financially
Start dreaming up your plan, do your maths in excel and work out your magic numbers now!
By Elise Chang
Elise is a full time working mum in a frantic corporate world. Marketing and Sales is her profession. Yoga and meditation is her favourite exercise. Property investment and interior decoration is her passion. Going to the beach is her no 1 past-time activity with her family.