My 4 steps to Achieve Financial Freedom

So here's my steps for how I plan to achieve Financial Freedom and quickly as possible!


1) Earn as much money as possible:

a. Finish my degree and find a job in a high paying field. It is much easier to have a high net worth if I have a high income

b. Don’t stop learning once I leave University

c. Work hard

d. Be willing to take reasonable risks

e. Consider being an owner rather than an employee


2) Don’t spend too much money 

a. Start saving early. Keep in mind that every dollar I save & invest in my twenties and thirties is a lot more valuable than one saved in my fifties

b. Realise that buying a house or cars that are too expensive for me will likely keep me from achieving FI.

c. Be prudently frugal and selectively extravagant. Be sure that I am spending my money on the things I value most.

d. If I can’t afford to pay cash for it, I can’t afford it. The only exception is a house (because it will generally appreciate at just over the rate of inflation), and I won't buy it if I can’t afford to put 20% down.


3) Make my money work as hard as I do 

a. Read at least one good basic personal finance book & one good investing book. Something like The Boglehead’s Guide to Investing and The Intelligent Investor.

b. Aim to get the market return on my investments; use index mutual fund investing and value investing as my default strategy.

c. Minimise taxes. Know the basics of tax laws and use them to my advantage.

d. Keep investing expenses low (Eg. Brokerage fees)

e. Understand basic financial calculations and lingo. Understand compound interest, the time value of money, financial risk, and the expected rate of return of my financial assets.

f. Simplify my financial life. Put any bills I have on automatic payment and investments on automatic withdrawal. Minimise the number of accounts I hold and the number of investments you have as much as possible

g. Understand why my savings rate matters a lot when I'm young and very little as I approach retirement. Understand why your investment return matters little when I'm young, and more as I approach retirement, and a great deal during your first decade after retirement. Understand the concept of a safe withdrawal rate

h. See the end from the beginning. If I fail to plan I plan to fail.

i. Have a written investment plan I can refer to when contemplating major portfolio changes.


4) Don’t lose my money 

a. Have a healthy emergency fund at all times

b. Get rich once, get rich slowly. Boring investing is good investing

c. Hire professionals to teach me, not just to do it for me. This includes real estate professionals and investment advisors. Make sure to question and ask about the advice I've received off someone with no conflict of interest in the transaction, realising that no one cares about my financial success nearly as much as I do. If I am reasonably well-educated and interested, I can teach myself to do my own taxes, sell my own house, and invest my own money.