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TABLE OF CONTENTS
Financial Freedom Guide for 9-6 Workers
Are you working a 9-6 job and aspiring to build wealth for various life goals like family, travel, or early retirement? Well, it’s time to turn those dreams into reality, and I’m here to make it as doable as possible!
Find Your WHY ❓
Before diving into the practical steps, it’s essential to identify your “WHY.” Determine why you want to embark on this journey. Start by setting clear financial goals in three time frames: short-term, mid-term, and long-term.
- Short-term Goals 🎯
Short-term goals are those achievable within a year. Examples include establishing an emergency fund. The general rule of thumb is saving 3 to 6 months’ worth of expenses. For more efficient saving techniques, consider exploring our dedicated video. - Mid-term Goals 🎯
Mid-term goals have a 1-5 year horizon and could encompass buying a car, making a down payment on a house, planning a wedding, or undertaking home renovations. Aim for at least 3 years’ notice, so you’re ready when the bill arrives! - Long-term Goal 🎯
Long-term goals extend beyond the 5-year mark, think retirement, your kid’s college fund, or paying off your home loan. Add in those family commitments, like medical bills or hiring a nanny for your ancient parents (just kidding, they’re not that old).
Don’t forget to get a medical card to dodge those unexpected “accidents.” Touchwood, but you never know!
Budgeting 📏
Consider adopting the 50/30/20 budgeting rule: allocate 50% of your income to savings, 30% to essentials, and 20% to discretionary spending. But how about flipping it to 50% savings, 30% essentials, and 20% fun?
Invest in yourself with that 50% savings – learn new skills, get shiny productivity tools, or network to get more opportunities. Just don’t fall for MLM schemes or become a supplement pusher. Trust me; they rarely work out. 😉
Good Loan Repayment Practices 💰
Let’s tackle loans with some strategy! Start with the high-interest ones, like credit cards. Pay those off on time – need some efforts, but you’ve got this!
Consider the Debt Snowball Method – pay off small loans first and snowball that momentum into bigger ones. It’s like a satisfying game of financial dominoes. Small wins lead to big victories! 🏆
Increase Your Earning Power 💪
Wealth = (1) Increased income + (2) decreased spending. It’s a simple equation, really.
Want to increase your income? Sell your time. Get a part-time gig or an online side hustle that matches your schedule. It might not be glamorous at first – you could be editing PowerPoints or sorting data. Anything that matches your aptitude + can earn you money!
Alternatively, aim for managerial roles for a fatter paycheck. Learn the skills that count, like communication, negotiation, and networking. Until then, put in the hours, be the hardest worker in the room, and you’ll get there eventually.
Invest 📈
Now, never stop learning about making money work for you.
Start with safe options like Fixed Deposits or money market funds to beat inflation. Then, as your wealth grows, dip your toes into the stock market. I’m not giving financial advice, but check out legit businesses like Apple and Tesla (not saying you have to buy tho 😉), and be a part of them!
All said and done, remember this.
✨Wealth = Increased income + decreased spending
Word of the Week: PPP (Purchasing Power Parity)
Definition: Purchasing Power Parity (PPP) is an economic theory and exchange rate calculation used to compare the relative value of currencies between different countries. In other words, it implies that exchange rates should adjust over time so that the same basket of goods has the same real price in different countries.
Here’s a simple example to illustrate PPP:
Imagine two countries, Country A and Country B, and they both produce and consume apples. Let’s say that in Country A, a basket of apples costs $5, and in Country B, the same basket of apples costs 100 units of Country B’s currency. The exchange rate between the two countries’ currencies is 1 unit of Country A’s currency = 20 units of Country B’s currency.
According to PPP, if the exchange rate is in line with purchasing power parity, the exchange rate should adjust so that the basket of apples costs the same when expressed in a common currency. In this case, the exchange rate should be 1 unit of Country A’s currency = 1 unit of Country B’s currency for PPP to hold.
If the exchange rate is not in line with PPP, it suggests that one currency is overvalued or undervalued compared to the other, and this can have implications for international trade and investment decisions.
Purchasing Power Parity is a useful concept in economics for understanding how exchange rates should ideally reflect the relative prices of goods and services in different countries. However, in reality, various factors, such as government policies, market forces, and economic conditions, can cause exchange rates to deviate from PPP.
Key Economic Dates:
- 29th November: GDP QoQ 1st Revision (Q3)
- 30th November: Core PCE Price Index (Oct), Initial Jobless Claims
- 1st December: ISM Manufacturing PMI (Nov), Fed Chair Powell Speaks
- 2nd December: S&P Global Services PMI (Nov), ISM Non-Manufacturing PMI (Nov)
What I’ve been reading:
Here are the top stories that caught my eye:
- Sam Altman continues as CEO of OpenAI’s
- Malaysians to get 15-day visa-free travel to China
- China Property Stocks Surge, After Beijing Picks 50 Firms to Fund
- Alibaba will put bigger emphasis on cloud business
You’re all caught up!
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Cheers,
Ziet
