What is your strategy to achieve financial freedom?

I need some advice here. I am posting this out of singapore. The greatest enemy we are facing on the road to achieve financial freedom is inflation. The biggest mistake a person could commit is not investing your money or saving or investing but investing in a wrong class of assets. I have once heard

Financial freedom = investable liquid asset/(expenses - passive income)

Investable liquid asset excludes housing, pension fund, n etc. Expenses - your lifestyle you decide now or when you retire. The above formula hit me the hardest is the portion of passive income where if you have enough liquid asset to invest in tool that is generating a passive income on a monthly basis. You could achieve financial freedom when you could generate a passive income of >5000 to cover your expenses of 5000 per month if you have decided to live a lifestyle of 5000

Financial freedom = investable liquid asset/(expenses 5000 - passive income 5000)

The question I always have been struggling is what class of assets could help me to make the passive income. Diff time depends on circumstances n risk/reward ratio certain class of assets might be too high a risks to invest:

Now (28 sept 2013)

A). What is high risks now?
1. Property

B) what is medium risks now?
1.

C) what is low risks now?(or once in a life time opportunity to you)
1. Shanghai index etf

Creating wealth being an employee selling our time has limitation as to how much time you can sell, but creating wealth through investing has no limitation or less limitation if you invest correctly

 

Corrected it for you.

 

Was just about to point that out, and you can follow that closely with Banksters. In fact, I'm not terribly sure that Governments are the biggest evil, banksters may be, because they've got Governments in their pocket doing their beck & call.

 

Marc Faber has an interesting mix.

http://www.zerohedge.com/news/2013-09-13/marc-faber-protecting-wealth-coming-collapse

Also very interesting that he says (elsewhere) that he counts his gold outside of his counting his net wealth. and that his gold is his insurance.

 

Greatest enemies to financial freedom:

1. Low IQ
2. Laziness
3. Broke / Corrupt Governments
3. Inflation

Note if inflation is the only problem and you're convinced it's going to get worse. Simply borrow as much as you can. In a few years you'll pay it back with ease.

 

Interesting observation i am with you guys. i can also relate this to government here not doing a good job in keeping the inflation low, and being the major sponsor to the worst enemy inflation. My take on this is look at how much pocket money we used to receive from our parents 20-30 years ago compare to now. If you were to project the same out to 20-30 years later, letting our money just stay uninvested is a terrible choice we will sure regret.......

 

Great points!!!!!!! Low financial IQ and laziness are my greatest weaknesses and i think it has to do with me being a salary earner as many financial guru has pointed out......i just stopped developing myself in this area until just recently, and the older I get I more lazy I have become. . Hope it is not too late, I still have 20 years before I hit my retirement age.......

 

Good video clip from mr Doom..... Is precious metal low, medium, or high risk to invest more now? I will not put it as low as overall trend now is down still.......

 

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Very difficult question to answer.

Although not without its risks property has performed very well in oz over the last 20 years. How has it done in Singapore?

Shares need lots of research and are subject to moves by the big investors. The days of regular cycles are gone.

Bonds, other fixed interest, cash are obvious choices.

Pms are not the be all and end all.

It is much harder now to retain wealth and purchasing power due to global instability.if there was a perfect strategy everyone would follow it.

 

Property price is at record high now. Buying property now is like heading into a oncoming train. Shares seems to me has top out already except shanghai market. Cash is also unwise with high inflation. Perhaps waiting on the sideline with cash could be a strategy now.....

 

Silverfun, cash has been discussed here a few times - just think of how high inflation is compared to interest rates. Being all in with cash means you're losing your purchasing power through inflation.

 

I second the non-recourse posts. The strategy to avoid excessive tax bills by minimising liabilities through SMSF's and using Real Estate and PM's is a strategy I wish I'd known about 10 years ago.

 

A. Is there any specific opportunity you could see - could be near or far - worth taking a look now? Perhaps Gold stocks.......Anybody out there has come across any most updated analysis on which is the best stocks to own in the gold space?

B. Are u willing to pay $3-4k to attend investment course to improve your financial IQ? Some claim that they can recover such costs easily within a short time........ Do you have similar experience to share? Anybody has attended any such workshop and willing to share with me? i am not looking at some Get-Rich-Quick-And-Sure-Get-Rich scheme here, and know there is non-existence. I fully aware of the risks of investing, and doing investment is trying to get more right bet than wrong, and if u got a wrong one someone will tell u to cut loss quickly to protect your principle.

C. what are some of the crucial criteria one should deploy in picking a right share to "own? Is there any shares that you could see that met the below 10 criteria?

1. Profit/ sales good
2. Receivable healthy
3. Insider trading - is CEO, CFO, chairman started buying aggressively
4. Healthy cash flow
5. Conservative debts
6. Risks are minimum not like property shares is facing risk of cooling measure
7. Roe>15%
8. Sustainable competitive advantage
9. Good value - below it's intrinsic value/nga, buy when there is a temp miss price
10. Wait for uptrend to buy

 

My strategy is to avoid gurus and gratuitous investment advice on internet forums.

So my advice is cash flow positive property leveraged against your gold stack and shares in coke and woolies with every lotto win.

 

Whilst others may have a different view, my advice is to stay away from stocks, of all types.

 

A life of crime seems to work for many, particularly in government and banking....

 

Some simple strategies that I have come across speak about -

Shares -
No more than 5% any one stock
No more than 20% in one sector ie: Mining
Only invest in something that pays a dividend
Only spend dividends, never capital

Property -
Do not over leverage
Look for population growth areas, or areas being re-zoned with higher density
Look at semi rural areas with excess of 30,000 people, look for McDonalds or Woolworths, normally best indicator for towns, don't have them then they think it is too small you should too
Keep away from buying off the plan, these can drag out until they get enough capital etc...
What is the rental return and demand in an area V's stock on the market. The more stock, less demand = waiting longer, lower returns

Precious Metals
You don't hold it you don't own it.
Keep well away from trading silver, as there is a shortfall but no one cares. Yet !
Buy simple, Kooks, ASE's, Lunars and Pandas seem to give a good return
Bars - 1kg Silver, 10oz Silver easiest and quickest to sell without a doubt

Others -
Numismatics only buy quality and rarity
Bit Coins - Some say the are under valued still. Some people have made a lot of money, which means that someone has to have lost money ?
Art, Wine, Classic Cars etc... - Use a SMSF as vehicle for purchasing high asset class materials. Be careful of compliance issues though

Looking forward -
My tips for new markets worth further investigation -
Drones - Will be massive find the leaders, in Retail, Military etc...
eCigs - This will be huge (providing no damage is found in studies) Standard cigs are out and will be within the next 5-10 years. Philip Morris has just released their version of eCigs I believe. It is already a multi billion dollar industry
3D Printers - As above

Not sure if that helps but may give some things to think about, if anyone would like to add or disagree etc... always happy to discuss.

 

Number one should be a useless ex wife, they will drain you faster than anything in this world (you have the ex wife, your lawyer, her lawyer and you have to pay for all three of them)