Getting started on your financial freedom journey is a step by step process that anyone can take. Most people fall off the road because of the lack of self discipline. The lure of getting rich with little effort can be very tempting. However, keep calm and consider these "The 100% Road to Financial Freedom" steps:
[1] Save early, and automatically
From the moment you get your salary, "spend" it on another high savings account. Consider at least RM100, or my recommendation of 20% to 30% of your salary. In 10 months, you will be financially stronger than 75% of Malaysians. In 3 years, you will belong in the top 6% of Malaysians. Soon you will know how it feels like to be not bothered by GST, exchange rate and the economy.
[2] Expect financial emergencies
Financial emergencies such as injuries from accidents, sudden illness, or natural disasters can set us back due to medical expenses or loss of income. In addition to insurance, some experts generally advise savings of 6 months of expenses, but I recommend 6 months of salary (your salary should be more than your expenses right?). This way, you can even hop jobs without worries!
[3] Optimize your tax returns
We tend to forget that we can generate savings while paying taxes. Take advantage of all the tax deductions that are already given to you. Find out more in my article.
[4]Get your money to work
In not too long later, you would have completed your Emergency Fund in accordance to Step 2, preferably consisting of 6 months of salary. Since this is an Emergency Fund, it means it needs to be available anytime you need it, that means no putting it in Fixed Deposits. Put this Fund into a high savings account or a money market unit trust (which gives similar interest to a FD but without the maturity drawbacks). Leave it alone and let it grow.
[5] Setup an Investment Fund
Create a separate bank account to store your funds for investment. This should be separate from your emergency fund in Step 2. Determine how much you want to "gamble" away. Have the expectation that any Ringgit placed in there may never return not be what you expected.
How do you find these steps? I hope they are easy to follow. In my next article, I will continue on what to do with that Investment Fund.
If you would like me to tailor your personal road to financial freedom, reach out to me and I will design one that is most suitable for you.