At the end of this month, the nation will gear up for its 58th Hari Kemerdekaan – a celebration of freedom from foreign rule. As we look forward to a welcome weekend break, why not spend some moments and spare a thought on how we can each achieve “kemerdekaan” on a personal level – financial freedom.
Different people have their own ideas of what financial freedom is all about but the generally accepted concept is where one does not have to worry about paying monthly mortgages and has a comfortable nest egg to live on for the rest of his/her life; plus of course the time to do whatever he/she wants to do in life without having to be concerned about bills to pay. Pictures of people strolling on the beach or climbing a summit normally typify the utopic existence.
How far are we from achieving financial freedom? How can we shake off the shackles of unending financial commitments that hamper our desired lifestyles?
A quick search over the web throws up many solutions by those who have achieved their personal financial freedom.
“Save, invest and grow” is trumpeted by Economic Times.
Choosing the right mix depends a lot on one’s personal outlook, risk appetite as well as time factor. For example, if you are young and time is on your side, you may choose a route that is less risky as we all know that “the greater the risk, the higher the returns.” Setting aside a portion for savings on a monthly basis definitely grows the nest egg.
However, do remember that savings left as it is will just remain as it is. The rate of savings may not be able to keep up with the rate of inflation which should be a major source of concern. According to Economic Times, money works on a compounding principle, i.e. returns earning returns. Money that is saved but not invested is a waste of resources, which brings us to the next point – investment.
There are many forms of investment that one can consider. There are commodities, properties, real estate, stocks or shares and more. To buy into properties and real estate may take some time before execution proper can take place. A quicker solution to be considered would be investing in securities, stocks and shares.
Achieving financial freedom at age 40, investor Jason Fieber* is putting his money to good work. In his late 20’s, he was “worth less than when he was a newborn!” Justifying his statement, he explained that he had a negative worth of several thousands in addition to a student loan that needed servicing – a common situation that many can identify with. Fed-up with his predicament, he started researching different investing strategies and after several false starts, found his niche – dividend growth investing.
This style of investing explores the idea of picking stocks or shares that give a steady dividend annually. By analyzing the dividend yield of a particular stock, one can choose companies that pay out dividends that at least match the rate of inflation.
RHB Investment Bank Berhad offers a plethora of tools for investors to use in analyzing and making the right trading decisions for a sound investment strategy. We have an archive of research reports that customers can use to search for their personal analysis. Additionally, you can read other related articles in our Knowledge Centre to further enhance your understanding of dividend growth investing.
Alternatively, check out our Seminars on our event calendar or talk to any one of our Dealer’s Representative to find out more about developing your investment strategy to achieve financial freedom!
http://economictimes.indiatimes.com/markets/stocks/news/three-pillars-to-attain-financial-freedom-save-invest-and-grow/articleshow/48521952.cms accessed on 20 August 2015
*http://dividendmonk.com/april-2013-how-to-achieve-financial-freedom-in-one-decade/ accessed on 20 August 2015
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