 by Kelvin WongThere are many different interpretations of financial freedom. Try asking your family and friends what financial freedom means to them and they would likely be giving you different answers. Some people define financial freedom as being very rich. To some, financial freedom is being able to afford anything that one desires. Then there are those who think that being financially free is to be totally debt-free. Still, others see financial freedom as having sufficient money to retire. As you can see here, financial freedom means different things to different people. Now, what does it mean to be financially free to you? What is the real meaning of financial freedom? To me, you’ll achieve financial freedom when your passive income exceeds your expenses. Even if you quit your job today with no more salary going into your bank account regularly, you'll still have passive income to cover your expenses. This is a situation where you’ll never worry about money again. You now have no fear even if you lose your job. You work because you want to and not because you need to. Importantly, note that it is passive income that I’m talking about here, not active income. What is the difference between active income and passive income? Active income is the income you get for performing a service. The salary paid to you by your employer is active income. It requires your active participation. Simply put, you get paid when you work and you’ll be paid nothing if you don’t work. By contrast, passive income is the income that you get on a regular basis without your active participation. An example of passive income is the rent collected from the tenant on an investment property. Being wealthy and being financially free are entirely two separate things. While it is common for one to assume that those who achieved financial freedom are rich financially, the truth is that being financially free has absolutely nothing to do with whether you’re wealthy or not. Therefore, even millionaires are not financially free if their total incomes are unable to meet the expenses arising from their rich lifestyles. Thinking of becoming a millionaire can be daunting but financial freedom is certainly achievable. Many people actually became financially free first before they moved on to become millionaires! Have you been chasing after money without knowing exactly why or how much is needed? I hope that knowing the real meaning of financial freedom would help change your perspective and ultimately your life. Why? Because you’re in control of your expenses and the passive income that you intend to pursue. You can start your journey towards financial freedom now by controlling your expenses. At the same time, begin saving more money to invest in assets for multiple streams of passive income. So, when will you be financially free? You call the shots!
 by Kelvin Wong- Are you running your household like a business? - Have you ever prepare a profit and loss statement for your household? - Do you know the net worth of your household? If your answer is a "No" to any of the above questions, you may want to take steps to run your household finances just like you're running a business entity. Doing so would certainly bring your finances to a healthier level, whatever the state of financial health you may be in right now. Determining the financial health of the company is based mainly on 4 business elements: 1) Assets - what the business entity own 2) Liabilities - what the business entity owes3) Income - money that comes in 4) Expenditure - money that goes out Our households are also operated on these same business fundamentals. We have assets (material things that you currently own), we have liabilities (housing loans, car loans, money owing to credit cards companies, etc.), we have income (salaries, dividends, interests, etc.) and we have expenditure (expenses on food, transport, utilities, entertainment, etc.). When your household income is greater than expenditure, you have profits. However, should your household expenditure exceeds your household income, you incur losses. If you suffer losses, it is time to evaluate your expenses and take steps to eliminate or minimize unnecessary expenditure so that you will eventually reach a profit situation. If your household is in a profit position after doing up the profit and loss statement, congratulations! The next step to take is to determine the overall financial health of your household - whether your household has a positive or negative net worth. In business, net worth (sometimes known as net assets) is simply the total assets minus the total liabilities of the company. Read more in my article Determining Your Net Worth. Start managing your household finances like a business to bring your household towards the next level of financial success!
 _by Kelvin WongSuccessful people always begin with a dream. They dream big dreams and then display great courage to do things that others say cannot be done. Your dreams form the foundation of success. Many people have long forgotten the dreams they used to have when they were kids. As the progress in the journey of life, they are simply too tied up with their work activities so much so that they failed to discover what they really want to pursue in life. They constantly find themselves trap in a routine work system that can potentially rob them of their dreams. Below are some practical steps you should take to pursue your dreams: Learn to dream againWe are born to have dreams. Children often share about their dreams and what they want to be when they grow up. However, we hear of incidents when school teachers caught those dreaming in class and yelled, “Stop dreaming and pay attention in class!” There are also times when their parents shrieked, “Stop dreaming and get on with your homework!” Under such environment where children learn and grow up, dreaming seems to be an unproductive act as they are often told not to dream. As people grow, they are told to forget their dreams and become realistic, because they are living in a “real” world. In the end, many of them get “realistic” and gave up their dreams totally. Write a dream listTake a day off and go to a place where there are no disturbances. Bring along a writing pad and a pen, but leave your mobile phone at home to free you from possible interference. Write down a dream list of what you want to have, what you want to be, and what you want to do. Examples may be: I want to have $1 million dollars in my bank account in 3 year's time; I want to be a millionaire entrepreneur by 30 years old; or I want to spend more time with my family. Dream big dreamsNever set mental boundaries on what you are capable of achieving. Dreams are free anyway so as long as you are dreaming, you might as well dream big dreams. Many people can't realize their dreams to achieve greater success in their lives simply because they limit their own beliefs. Flee from dream killersDream killers are devastating to your success. Yo ur friends, colleagues and even your loved ones can possibly be one of your dream killers. There will be enough people out there who will try to distract you, confuse you, or persuade you to build the life they want, not the life that you want. Stop listening to the people who tell you why you wouldn't achieve your dreams. You just need to believe you can achieve whatever you set out do. Other people can only discourage you temporarily, but you're the only one who can prevent yourself being discouraged permanently! Stop giving excusesHave you realized that kids frequently talk about what they can do, whereas many adults are doing just the opposite? Adults frequently talk about what they can't do, and provide reasons why. Stop giving reasons why you can't achieve your dreams. Many of these so-called reasons are merely excuses. If you continue giving excuses for not achieving, it wouldn't take long before you program your mind to convince yourself that you can't accomplish what you originally set to achieve. Life can be a self-fulfilling prophecy. Your dreams today can create the life you live tomorrow. As Henry Ford rightly put it, “Whether you think you can or cannot, you’re absolutely right.” Take action immediatelyAfter having big and clear dreams, take immediate action to work towards making them come true. Very often, people intend to take action after writing the dream list when their emotions are still high. However, if they don't translate their intentions into action soon, their passion will begin to diminish over time. Weeks later, the passion will grow cold and months later, that passion may be gone forever. Think about this: 5 birds are resting on the fence and minutes later, 3 birds decide to fly off to search for food. How many birds are left on the fence? Did you just say 2? Wrong! There should still be 5 birds on the fence because deciding to fly off is not the actual act of flying off. The birds would not be able to find food until they start to take action by flying away from their comfort zone. Don’t quitTake courage to pursue your dreams and don't quit. Successful people cling to their dreams against all odds. They pursue their dreams no matter what and how long it takes. Hang on to your dreams and take the necessary actions to make them come true. It may not be easy though, but it is definitely worth it!
 _ Instances of credit card debt woes are very common. Careless usage of credit cards is often responsible for a person’s debt crisis. In order to expand their business, credit card issuing companies often issue credit cards without judging the borrower’s credit repayment capacity which will lead to more cases of personal debt crisis. When you are already into unsecured credit card debts and default in making repayments, you will likely receive harassing collection calls from the creditors or the collection agencies. You should not take these calls lightly. You need to explain your financial plight to your creditors and propose to them to offer some relaxations in debt repayment. Sometimes, your creditors may accede to your request.If you still face problem in making the repayments, you can opt for a debt settlement program. In a debt settlement program, you are required to pay single lump sum amount to your settlement company. The amount that you are required to pay in debt settlement program is much less than your total outstanding credit card balances. In some cases, the settlement amount could be reduced by 40% to 60%. By paying the lump sum settlement amount to the settlement company, you would free yourself of the credit card debt. It is important to note that unlike in debt consolidation program, your credit score will be reduced in a debt settlement program. However, your credit score is not reduced by as much as in the case of bankruptcy. In fact, a debt settlement program is a better option than bankruptcy from both the point of views of debtors and lenders.The success of a debt settlement program much depends on the selection of a genuine settlement company. To select a good settlement company, take note of the following factors:AccreditationCheck whether the settlement company has necessary accreditation. If the settlement company is a member of the Association of Settlement Companies, the company would adhere to the rules and standards of the industry.GenuinenessCheck out whether the settlement company has the necessary recognition from Better Business Bureau (BBB). If the company has clean status with BBB, you can be assured about its genuineness.FeesSettlement companies are not allowed to charge upfront fees. You should avoid any settlement company that charges an upfront fee.Selecting a reputable settlement company improves your chances of eradicating your credit card debts. For more information on debt settlement, you can visit: http://www.debtconsolidationcare.com/debt-settlement.html.
 by Kelvin WongIf you want to take control of your financial destiny, you really need to know the difference between assets and liabilities. It is not uncommon for people to get confused when they start classifying what they currently own into assets and liabilities. To many people, houses and cars are considered assets. In accounting practices, houses and cars are also recorded under the assets column of the balance sheet. But are they really "true" assets? Yet, the answer can both be a 'Yes' and a 'No'! According to Oxford Dictionary, an asset and a liability are defined as: Asset - a thing of value, especially property, that a person or company owns, which can be used or sold to pay debts. Liability - a person or thing that causes you a lot of problems or the amount of money that a person or company owes. While the above definitions are clear enough to be understood, they are not so clear when applied in real life. Such definitions alone may not present a complete picture when put through the lens of wealth builders. Therefore, I prefer the following definitions of an asset and a liability: Asset - something that puts money into your pocket. Liability - something that takes money out of your pocket. Given these much simpler definitions of assets and liabilities, it is easier for anyone to classify what they own into real assets and liabilities. Hence, the house that you live in becomes a liability. Even if your residential property appreciates in value over the years, the additional value would remain as "paper profit" unless realized by selling the house. However, the same house becomes an asset if you rent it out to enjoy regular rental income, thus putting money into your pocket. Similarly, a car that you bought for your personal use is considered a liability since money will have to come out of your pocket to maintain the vehicle. But if used to produce income, this same car would then be classified as an asset because money would be flowing into your pocket. Other often termed assets such as branded watches, bags, gadgets, furniture and other luxuries for personal use are really liabilities, though in accounting we put such items under the assets column. This is because not only will these things take money out of your pocket when you buy them, they would also depreciate in value over time and thus taking even more money out of your pocket! I'm sure you've heard of people purchasing the latest smartphone in excess of $500 but only offered a trade-in value of $50 for the same smartphone when they decide to re-contract with the service provider a year later. Is the picture much clearer now? Now that you know the difference between assets and liabilities, set your sight on the ultimate goal of attaining financial freedom by accumulating real assets and minimizing your liabilities. Start working at it today!
 by Kelvin WongMoney seems to be one of the taboo subjects hardly discussed among family and friends. Even married couples tend to shun the money subject because it is deemed to be “sensitive.”I’ve often heard people saying, “Money destroys marriages!” “Money destroys lives!” “Money is the root of all evil!” I beg to differ. I believe that most often, it is the lack of money that destroys marriages and lives. I also believe with absolute certainty that money is NOT the root of all evil!Money is just a medium of exchange and has no power in itself. Can your money in the bank do evil things when left alone? Of course not! It can only earn you interest, no matter how little the amount of interest can be these days.Money is completely amoral. It is neither good nor evil. Take the knife as an example. Is the knife good or evil? Again the knife is amoral, neither good nor evil. If I take the knife to cut fruits for the family to eat, then the knife becomes a tool for good. However, if I take the same knife to kill someone, it would then become an instrument of evil! The same goes for money. Is money good or evil? If I use $5,000 to buy cocaine, the money is used for evil. But if I spend the $5,000 for a holiday with my family, the money has then brought about good by facilitating family bonding. Let’s take a look at what the Bible has to say. In 1 Timothy 6:10 (KJV), the Scripture says, "For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows" So, did the Bible say that money is the root of all evil? Absolutely not! What the Scripture really says is that the LOVE of money is the root of all evil. It is not the money but the person behind the money that determines its characteristics. If you’re a righteous person, you’ll put the money to good use. If you’re wicked, you’ll probably use the money for evil purposes.We need to understand that the world cannot function without money. Everybody needs money to buy food, pay mortgages, pay for utilities, pay for your children’s education, pay medical bills and the lists go on. As the saying of Zig Ziglar goes, "Money is not everything but it ranks right up there with oxygen." Therefore, money is important and plays a significant role in our lives. God wants us to be a good steward of our finances and use money to advance the work of His kingdom. It takes money to feed the poor, print Bibles, set up churches and send missionaries to other parts of the world. God desires to bless us richly so that we can be a blessing to others.
 by Kelvin WongThe world is ever tempting us daily. We're bombarded by advertisements from various media promoting easy credit, glorifying luxurious lifestyles, and encouraging us to give in to our sense of entitlement. You're tempted every now and then to treat yourself with some nice things in life regardless of whether you can afford them. Yes, you often feel entitled. You believe you deserve to pamper yourself with some luxuries because of your hard work. This was exactly how King Solomon (known for his wisdom, wealth and writings) felt when he said: "I denied myself nothing my eyes desired; I refused my heart no pleasure. My heart took delight in all my labor, and this was the reward for all my toil" (Ecclesiastes 2:10). One of the biggest issues that keeps people down financially is the sense of entitlement. Most debt accumulated by people resulted in increased spending due to giving in to temptations or their sense of entitlement. Because of their hard work, people feel they are entitled to items such as high-end cars, luxury watches, exotic vacations, fine dining, and the latest gadgets. Some of these items caused them to incur new debts or delay freeing themselves from debts. They end up getting themselves deeper into the debt hole. You need to be mindful about your sense of entitlement. If you're careless with your money and want everything that your heart's desires regardless of whether you have the money, you could end up in financial ruins. It is important to note that the wise King Solomon, after experiencing everything that the world at that time could offer, realized his mistake and admitted: "Yet when I surveyed all that my hands had done and what I had toiled to achieve, everything was meaningless, a chasing after the wind; nothing was gained under the sun" (Ecclesiastes 2:11). God gave all of us things to enjoy. Nothing wrong with enjoying these things if you have the means to do so. However, we need to be wise stewards of God's resources. Our purpose in life should not be limited to just pursuing wealth and material things, else we'll end up "chasing after the wind and gained nothing!"
by Kelvin WongI am truly inspired by the following YouTube video of a young girl from China performing the piece "Souvenir d'enfance" by Richard Clayderman... Zheng Guigui is a 19-year-old girl from China who has no fingers on her right hand but has taught herself to play the piano in just 3 years! Though disadvantaged with a "fingerless" right hand, Guigui plays the piece beautifully with the sort of lyrical maturity often not found in young people who are new to their musical instruments. She possesses tremendous dedication and willpower indeed. The Scripture says in Philippians 4:13, "For I can do everything through Christ, who gives me strength." This young girl has demonstrated just that! What is preventing you from pursuing and achieving your dreams? The Bible says that with God, all things are possible (Matthew 19:26). Remove any excuses that stop you from facing challenges in your life. Today, start believing in God and yourself. Take the "IM" out of "IMPOSSIBLE" and together with God, make everything POSSIBLE!
 by Kelvin WongWhile dining in a restaurant, I overheard someone who said: "Robert is so successful in his business and he's so lucky to be a millionaire now!" I was wondering what luck has got to do with Robert's success. I believe with absolute certainty that Robert has planned and deliberated his efforts to achieve the success that he enjoys in his business and life. An interesting research conducted in the US has determined that a person who drives 10 miles to buy a lottery ticket is 3 times more likely to die in a car accident while driving to buy the ticket than winning the lottery. Yet, even with the odds of winning the lottery being near impossible, 1 in 4 Americans believe their best chance of becoming wealthy is by buying the lottery ticket. Isn't this equivalent to buying hope? William Arthur Ward quoted that the recipe for success is to study while others are sleeping; work while others are loafing; prepare while others are playing; and dream while others are wishing. Earl Wilson said it well: "Success is simply a matter of luck. Ask any failure." Novak Djokovic won last Sunday's Wimbledon 2011 with victory over Rafael Nadal. Djokovic not only defeated Nadal, who is the defending Wimbledon 2010 champion, but also took over Nadal as the new world number 1 tennis player (ATP tennis singles ranking). Would you say that it is luck that made it possible for Djokovic to achieve this success? Of course not! It is Djokovic years of hard work, self-belief, focus and the never-give-up attitude during that fateful final game that enable him to defeat Nadal to claim his first Wimbledon Grand Slam title. My friends, understand this simple truth - only losers need luck, winners certainly don't!
 by Kelvin WongMost people have held a strong affection for television. A recent Nielson Media Research report shows that the average American spends 4 hours and 35 minutes watching TV per day. So, is watching too much TV really bad for us? Let's dig deeper into what some researchers found. A new study by the Harvard School of Public Health found that prolonged TV viewing will increased the risk of type 2 diabetes and cardiovascular disease. The research showed an increased diabetes risk of 20% and the risk of heart disease and fatality rose to 15% for every 2 hours of TV viewing. Frank Hu, lead researcher at Harvard, believes that people who watch a lot of TV have a higher tendency to eat junk food and prone to sedentary lifestyles. “People who sit in front of the television are not only exercising less, they are likely eating unhealthy foods,” Hu told Reuters. “It’s true that people who watch a lot of TV differ from those who watch less, especially in terms of diet and physical activity levels.” Social scientists have also frequently pointed to studies that show that the content of what we view on TV, not just the act of TV viewing, have undesired results. Specifically, television has been implicated in helping foster a superficial emphasis on money and status. Studies conducted by the Association for Consumer Research found that the more people watch TV, the more materialistic they are. Coupled with the continual bombardment of TV advertisements that glorify luxurious brands and lifestyles, it is no wonder that many are rushing out to spend more than what they can afford. In conclusion, too much time spend watching TV is not only bad for our health, but also our pockets!
|
