Archive for January, 2008

What is Financial Freedom?

“Financial Freedom” – The magical buzz words, lot of you might have heard yelled at you in radio’s or whenever you attend a finance or investment seminars. It is very lightly used these days without any weightage to the actual concept. Let us put some thoughts together to dwell on to understand better.

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What does it exactly mean to be Financially Free?

I know many of you have the answer just right under your collar. That is, Financial freedom means “Earn more so I don’t have to count each dollar I spend and not worry about paying my expense every month” Or “Make more money to spend like there is NO tomorrow“.

Is that the answer you got or something close to it?

If you think you got the right answer, please I am sorry to say that you are wrong. It’s not just you got the answer wrong, it’s just general outlook is not syn with reality. When you search google. You get the first result from Wikipedia as “Financial freedom describes a well-planned lifestyle where one no longer is required to work for income to cover their expenses. …”

It’s not just you you got it wrong. It’s the people who started it all out and echo everyday so it is easy for them to mold to their own view point.

Like many of you I also thought thats the answer few years ago. We all think if we have more money that will solve all the problems. No, its not going to solve it. It’s going create more problems and even bigger worries.

Financial freedom is not about having or earning more and spend whenever for whatever you want. According to me, “It’ is all about being content with what you have(earn) now and manage to work within the boundary instead of stretching it long to get in debt“. Its being self sufficient with the money you have and manage to spend wisely for all the expenses and grow it efficiently for the future. That’s what I call Financial Freedom.

You might even have million dollars. If you don’t manage it wisely, it will vanish in a month. With that million dollar comes great power and lot of responsibility. If you are not responsible enough to manage it, you will fail pretty soon and you still won’t get to sleep well at night.

Let me take a simple example. For a scenario, we assume an average middle class American earns on average of $40,000 – $50,000 a year. If he makes an habit to work with this income limitation and make proper planning to take care of all the expenses and also manage to grow some money(10%) for the future that’s what I call financially free. If you don’t have debt you can’t pay off and you have ability to manage and grow your hard earned money, that’s simply financial free in its own version.

Our schools or college system, never teaches us lot about Money management unless you opt for finance course. Yet it will be more theoretical, money lessons can only be learned in a hard way by practical means. But you don’t have to learn only from your experiences and mistakes, you can also learn from others mistakes. Thats a wise way.

So don’t make the mistakes others are making by going beyond your boundary unless you have the guts to pull back otherwise you will be in deep deep debt by inviting trouble. Watch out folks, don’t just take the advise of you finance guru’s or planners. Give it a thought and you will dwell on something on your own.

Money Really Matters – A bite of True facts

Money truly matters to everybody whether it’ 5 year old who wants to buy his favorite toy or 60 year who likes to retire financial free. There is no doubt about it. There is lot to talk about it but we only talk less.

Like this quote,

“Money is the opposite of the weather. Nobody talks about it, but everybody does something about it.”
We deal with money day in and day out but we only talk very less about it. If you look very closely, Money has taken different avatars in different parts of the world. It’s a dollar for ordinary American, YEN for Japenese and a Rupee for a normal Indian. Its stock for trader, Gold for hardcore investor, home for a realtor and lot more avatars. But each one of them has only one sole underlying factor which is to “satisfy our needs”. Thats all about it.

The need for each and every person might vary according to their surroundings but the purpose and perspective towards money doesn’t change. So how one make use of that most commonly wanted MONEY is within each one and the Money itself can’t do anything about it. Don’t you think its a true fact. Just think about it for a second.

Lot of us percieve with a wrong imagination like, if we earn more all our problems should take care of itself and will get solved. Actually I think all the problem just starts there. It is not always about how much you earn, it is about how well you can manage and work with what you make.

Knowledge is Power
, we all know that very well. So if we have proper knowledge to efficiently manage our money, we can be the Kingmakers of our own hard earned money. We don’t have to be Warran Buffet(who hailed as the nucleus of Omaha shaking up the stock market) or Donald trump (successful entrepreneur) to be one. If we manage our own money properly, we are Kingmaker on it’s own version.

Money shouldn’t rule us. We should rule the Money and should put to work for us. As Robert Kiyosaki quoted, “Make your money work for you and not the other way around“. Let me give you a simple example. We eat food every day because our body needs it. We have to eat at least 3-4 times a day to get proper calories for our body to keep moving. Eventually, eating has become a habit for us. We are trained to eat 3-4 times(I know some people eat all the time!!) when we are baby and we continue to do it all our life.

What happens, if you didn’t take a night dinner, can you sleep well that night? Your physical state is going to be messed up and many of us can’t sleep except few who can fast for days. But if you train your body to fast every night, it will eventually manage to coup with it. Similarly, anything needs to praticized to make it accustomed to you, that goes to money as well. If you don’t plan well and don’t manage it properly, it is going to haunt your mental state and keep you restless for life.

Money is an enabler of our dreams. It helps you go where you want go in life. In many people case, first one third of the life goes towards earning education and knowledge needed to find money. Next one third of life goes towards finding/making the money you longed for and last one third of life should go towards using the money to its last. Most of us don’t have control over the first one third because we depend our parents but the rest two third it is all upto us to make or break the life.

So money is part and parcel of your life. We all need money to survive one day or other. It does really matter for all of us. I strongly believe, it is all about how much you make, how you manage and make that hard earned money work for you to secure a better future. Lot of us forget to delve into this basic thought.

Keep pondering on this very own thought and share your comments about what do you feel about Money and try to talk more about it. Talk is cheap so don’t need to speed a lot and take the liberty to talk about all money.

Happy Money talk!!

Vijai’s Networth

It is great to have goals but at the same time numbers speaks more than words. To inspire and get inspired, I am publishing my financial statement.

My goal is to buy few more rental properties before all the foreclosure properties disappear which help me build asset for Retirement. I will continue to save/invest in stocks and MF’s for Kids Education and retirement as well.

Assets 9/13/2011 Change from last month Change %
Liquid Assets $76,526.84 $11,775.45 18.19
Cash (CD&Savings) $76,526.84 $11,775.45 18.19
Lifestyle Assets $393,084.56 $24,140.64 6.54
Investment Assets $67,873.76 -$4,741.09 -6.53
Stocks $3,385.90 -$1,107.10 -24.64
Mutual Funds $33,466.96 -$984.76 -2.86
Kids 529 & Coverdall Savings $27,289.14 -$1,921.98 -6.58
IRA $3,731.76 -$727.25 -16.31
Total Assets $537,485.16 $31,175.00 6.16
Debts & Liabilities
Current Liabilities $3,142.88 $77.88 2.54
Non-Current Liabilities $166,381.53 $34,337.78 26.00
Auto Loan $35,194.78
Total Debts $169,524.41 $34,415.66 25.47
Total Networth $367,960.75 -$3,240.66 -0.87
Updated as of 9/13/2011
House Hold Property 
50% value of Electronics, Sofa, Bed set, Dining, Tools, Computers
Gold Jewels
As of 9/13/2011 – 1 gm 22 carat gold  =  $55.74 1,000.00 $55,739.09
Auto Values (
Honda Car Value (average)
Honda Odyssey

Drop in Stock market has reduced the asset value but still managed to save which compensated little bit of the loss.

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