Zhng your way to financial freedom!

Many of you who have Starhub cable vision would have watched this programme on MTV called "Pimp my Ride". In the programme, the host Xzibit visits participants who write in to ask for MTV to pimp or in local Singapore parlance ("zhng" - fix/modify) their cars to their liking. You must be thinking what does "Pimp My Ride" have to do with our journey towards financial freedom?

pimp your ride towards Financial freedom

Singaporeans are also car fanatics and the concept of pimping or zhnging their cars with the latest accessories and gadgets just shy of LTA requirements does ring a bell with some of us. Have you ever thought of how in your quest for financial freedom, do you ever zhng your ride with the latest gadgets and accessories to make your ride towards financial freedom filled with more excitement, fun and entertainment?

Panzer's going show you some of the accessories he uses to jazz up his journey towards financial freedom.

1) microsoft Excel worksheet

This is arguably one of my most powerful zhng's that I add to my home as well as office computer. My one worksheet tracks my personal net worth (assets less liabilities), tracks my profit/loss from investments in stocks and shares, allows me to compute the rate of return for my investments by asset type (e.g. cash, equities) etc. It also lets me see my investment returns for the last 4 years plus allows some simple cash forecasting for how much cash I would need for the next month.

My worksheet also graphs my allocation of net worth between cash/cash equivalents, equities, insurance policies, CPF etc. In order for you to work towards your target of financial freedom, you have to know where you are now.

2) Calculator

I have a 14 digit calculator that I use partly for work but also for quick calculations of returns for investments etc. A calculator is useful for you to do quick and dirty caculations on the fly as you analyse risk vs returns and also do simple additions, subtractions etc. If you are deskbound, calc is also available.

3) Notebook

Instead of using a spreadsheet, you can also carry around a small notebook (paper based not the laptop computer) to write down your expenses or costs if you are starting out on determining how much you spend a month. A note book also allows you to jot down useful stuff like where you can find the best value-for-money bargains for stuff you buy regularly so that you make your dollar stretch. Financial freedom is about living within your means so a dollar saved is a dollar earned. On top of that, you can use your notebook to write down ideas that come to you for financial freedom e.g. ideas for multiple sources of income, ideas for how to save money or invest your money etc.

4) Books on personal finance, investments

Even though I have managed most of my own money for the last 4 years, I still borrow books from the public libraries on personal finance, investments and markets. I read and read and read because I enjoy reading. But even when I may not enjoy the specific topics, I still read to beef up my knowledge to know what I don't know about personal finance, investments and financial freedom. Learning never stops and having books around helps you focus your mind on topics that will help you towards financial freedom.

Reward yourself with Tokens now and then

The journey towards financial freedom is long and challenging. There are no two ways about it. We are talking about taking 10 to 20 years of consistent habits that contribute to us living within our means, saving to invest and investing for returns that bring us closer to our targetted investment capital that yields sufficient passive income for day-to-day living expenses.

As we move forward on our journey, I occasionally reward myself with the percentage of the returns I make. This allows me to plough back 80-90% of my investment returns back but gives me the small luxury of buying myself a nice meal, or a small gadget or a new laptop bag ON OCCASION (not everytime!) when there are some capital gains or dividends. This is a small form of tangible reward to myself and keeps me motivated to continue to invest for more returns so that even a small percentage of that would buy me a fun token to keep from feeling too deprived along this journey.

So do consider zhnging your ride towards financial freedom and be well and prosper.