I kinda "browse through", Yap Ming Hui's Roadmap to Financial Freedom the other day and I find it pretty interesting. Okay, I am not cheap just thrifty - maybe. Anyway, it kinda reminds me of the process when I use to be hopeful, how I got myself frightened to realize how my hopes in only mere fantasies, how I start to take control of my personal finance and the courage I took to change. Well, it wasn't this book that gets me "enlightened" into that process, in fact I knew about this earlier and I believe many of us do, thanks to insurance agents, mutual fund agents and of course our friends. I always find the first part of their presentations interesting and mind opening regardless of products. Probably we should listen to one of these once a while taking it as some free personal finance education IF you are skeptical enough to the second part of the presentation.
If you wonder what the first and second part is, the first is normally the "Tahukah Anda" or "Don't You Know" part and the second is normally about the products.
Back to the book, it really takes us to look into the details of our own personal finances and I believe most of us who have done that might have realize how disastrous our current status is. What if you don't have the tool? You can actually program it with Excel which is what I'm doing now but yet to finish as I wrote this. Hopefully I can share that soon and don't get myself into a lawsuit. However, I would call it Roadmap to Financial Security rather Financial Freedom. Don't get me wrong, this books does help you to achieve financial security but it just isn't my idea of financial freedom.
Financial freedom to me is the state where I do not have to worry about finding income -- forever. If you look at his roadmap it builds your net worth initially and then reduces it bits by bits according to your expected annual expenses after your retirement. And it is limited until a certain age so basically I would have to assume how long could I live as accurate as possible and pray that I don't live that long or overstay. So it isn't the best idea.
My Strategy: I have thought of a simple strategy that could be added into the latter part of the existing roadmap which will get me into financial freedom. So instead of using my all net worth bits by bits after retirement, I'll use a portion of it say maybe 20%. The rest of my net worth will be invested in an income fund or businesses where I could almost certainly get dividend income quarterly or semi-annually. The amount of dividend has to be enough to support my annual expenses and I could use the 20% as cash reserves or use it for travel and indulgences. With this way I will be able to retain my net worth with minimal possible volatility.
That it just a high level strategy so, I'll leave it to you to work out on the details. I believe each of us has a different roadmap.
This comment is based on my personal thoughts, opinions and my risk tolerance. It should not be considered as an investment advise. Please consult your financial advisor or do some research of your own before making any decision. You might have your own thoughts. I would love to here from you. You can always place your comments here and or email me privately at email@example.com