Not everyone thinks of creating assets and aren’t ready to build assets because financial freedom is an alien concept or it do not exist for some.
They may love their jobs (which hardly is true) and think that’s the only way to secure their future and fulfill their adapted lifestyle and necessities. People work for 40+ hours and try building reputation for getting increase in salary by the end of every financial year. But that doesn’t happen in many circumstances.
The problem is- people don’t find asset creation possible and simple enough.
Moreover the importance is neglected and the process is not known.
We blindly keep on compromising and avoid every opportunity we get everyday to build a secure future .We kick out chance when we don’t have to work anymore because the assets we created will prove to be our source of income rather than depending on some job where we have to spend 40+ hours every week.
The stage of life in simple terms begins like this for being financially independent:
- Getting a job
- Saving money and investing to grow
- Investing in financial assets and creating alternative sources
- Waiting for few years
- Getting accumulated profits
- No need to be dependent on job anymore
#Financial Freedom achieved.
Now before getting to the process, let’s see the benefits you get by building assets
- Not having to worry about unexpected bills,
- Not having to return to work after having kids until you’re ready,
- Being excited about a redundancy instead of worrying about losing your home,
- Being picky about when and where you want to work,
- Having time to volunteer for causes you care about,
- Knowing your children will be provided for – financially at least – if you pass away,
- Not having to panic about a slow month – or quarter, or year – in your own business,
- Treating your superannuation as cream rather than essential means of survival,
- Sleeping soundly at night because you’re not worried about your financial situation, and
- Being able to take some risks – like quitting your job, moving country, launching a start-up – without losing quality of life.
How Should A Common Man Build Assets.
Good thing: It’s interesting and easy.
Sad thing: It’ll take time to fetch you great results.
The three simple steps
Save : Saving in more important than investing. Therefore, put aside 25% of your income to a separate savings account apart from your current/savings account.
Invest: Investing should be the second step rather than just keep on saving and directly buying the assets. Why? It’s so because (i) savings can be spent down easily without a second thought (ii) invested money will multiply much quicker and will allow you to buy assets sooner.
Lock: Normally what we think is to invest and just leave out our money invested. We stop there. Let’s take two scenarios of A and B.
‘A’ invested the money for 5 years and when his money appreciated he took them , putted in savings account. One day he needed 2 lacs all at once. He took out those from the investment savings. He got into habit of putting hands into it and soon got those money over.
‘B’ on the other hand invested for 5 year and bought assets from it. He want 2 lacs all of a sudden. And he will be taking out some from his current/savings account and other sources available rather than selling of the assets he bought.
And that’s the phycology. B is smarter and the winner. Imagine how you spend up all the 10, 20, 50 notes as a child much quicker and thinking hundred times before spending 500 notes. Smaller size of amounts gets ended up faster than the big amounts and assets at once. We are spenders by nature.
Locking up the money by buying dividend paying stocks, property, gold , RD, SIPs all done with one objective. At some point of time, it should be redeemed to ‘buy an asset’.One must equally distribute ones investment.
Before building financial assets:
Assets like property will fetch you passive income, gold value be appreciated and returns will provide re;returns. But before building financial wealth firstly you should start with paying off all the debts and building emergency fund prior to creation of assets. Unless one has achieved the above two goals, venturing into asset building will not be effective.
So before venturing into ‘asset building’, make sure that you are debt free, and also has a big enough emergency fund protecting your back for a short term before you think of long term.