My Answer to a 19 Years Old Boy’s Financial Freedom Question
This is an article that I write to answer a 19 years old boy’s question in richdad forum. He was asking :
I am looking for anyone to point me in the correct direction, my goal is to be financially independent by 25. I just recently joined this forum, I have done some research on recommended books and such, but just do not know what to do. I have no need for inspirational or motivational materials, I have plenty of that. I need a starting point, somewhere to begin my work.
I am thinking high-risk stocks, but do not know much about the stock market. Some friends and I were talking about real estate, but do no know much about that either. I am willing to learn anything. Any books that will go more in depth with these sort of things (i.e. termonology, etc.)? Any other ideas where I could begin?
This is the most common question that a lot of people ask when they want to make a plan to achieve financial freedom. So below is my answer for this question.
The First Step in your plan is ……
I will recommend you to plan anything that you can make excessive cash as your first step in financial freedom planning. At this moment, what I can see is business has the potential to let you make excessive cash, especially the online business. Of course, if you don’t like to start any business, you can do anything that you can to generate excessive cash.
But if you want to retire earlier, just like this 19 years old boy who wants to retire at 25. Then starting a business is must for you because of its potential. It can really make you retire and financial free quickly if you do everything properly. Of course, starting a business is not easy but I can tell you that it is worth to put some hard works into it. What you are doing right now is invest for your future. Furthermore, you don’t have to quite your day job to start your own business, for example, to make money online through blogging, all you have to do is sit down at your spare time and write some articles for your blog. This is the true way to achieve financial freedom – leverage on your spare time.
The Power of Excessive cash
So here are the reasons that why you should start with excessive cash:
- Reduce the investment risks. People always afraid of taking risks when comes to investing. This is because they are worry of losing money. If you are investing using their limited cash or money, losing money is a big risk because it might affect your life and personal finance or even their retirement. But the story will be different if they invest with excessive cash. First you have excessive cash and you can invest in less risk because losing money will not affect you directly. Second you usually have a way to generate excessive cash, so you can always generate back the money if you loss it in investment. By reducing the risks, you will invest differently compare to others and hence you can achieve financial freedom faster.
- Able to afford more and variety of investing options. Investing just like a strategy game where you must plan and use your strategy to make money. So each investment has its own options for you to invest. But some time you need to pay extra or use more money to use difference kind of options. So with excessive cash, you choose whatever you want. At the same time, you also can invest in different kind of investment to diversify your investment portfolio. Don’t put all your eggs in one nest, this is what most investment experts will tell you.
- Afford some big deals which sometime are less risk! Yes, I found this from my customers who are rich. According to them, in some cases, your investment will not risky if you can put a certain amount of money in it. This is what we always call big deal investment. Some of them even can bring higher return and less risky compare to those small deals investment. I also found this theory when I was learning to trade in Forex last few years. In Forex, the more money you invest inside, the lower risks you have to carry. Now you know why those riches can invest not as worry as others.
How to Generate Excessive Cash?
3 ways I will recommend you to do for generating the excessive cash:
- Mange and save your money. This is the most basic and conventional way to let you have excessive cash for investing.
- Start your part time business. If you have a day job, I would recommend you to start a part time business which will allow you to build your business empire while still holding your day job. You can check my post 20 Ideas to start a part time business for more information.
- Start your own online business. This is what I’m doing right now. I want to make money from internet and generate excessive cash for my financial freedom plan. If you want to make money from internet or start an online business, I will recommend you to start blogging. You can download this free ebook for more information. I can tell you that this is the best way I ever found to get started in online business.
Conclusion
Above are just my opinions and thoughts for the 19 years old boy’s question. My recommended path is start generating excessive cash, invest the cash and transform them into passive income, then finally achieve financial freedom. There isn’t just one correct path. Each person has their own path to achieve financial freedom. The most important thing is your passion. If you are not passionate about and love what you are doing, then you may hardly stay focus on it and succeed. The theory is same with business. You must understand your passion and then start a business around it. Then you can stay focus and succeed from it easily.
Do you have any advices for the same question? Why not share it here….
8 reasons why I start Internet Business
In my latest post, How to make a plan to achieve financial freedom, part 3, I recommend that we should start a business or build up some kind of income source to make excessive cash. This is because we need excessive cash to support our life and invest to get more passive income in the journey to financial freedom.
When comes to business, I will recommend you to start an Internet business. Currently I’m running 2 kind of business, one is online and another is offline. So from my experience, I can tell you that I will definitely choose internet business as my main business. Below are the 8 reasons why I say so:
Reason #1 : The Potential of Internet Business
Does Internet Business have a greater potential than other small business? Not really. This has to depend on a lot of factors and vectors around. However, Internet business still has its own greatest potential. A recent report by Forrester Research shows that online spending will grow up to $229 Billion Dollars by 2008. So can you imagine what it would be if you can share 0.01% from this figure?
Reason #2 : The Leverage of Currencies Exchange
US dollar is the most common currency used in Internet Transaction. So the money you make from your internet business is in US dollar too. This actually a great leverage to those people from other country. For example, I’m coming from Malaysia and 1 US dollar equals to 3.4 Ringgit Malaysia. So for every dollar I make, I will make 3 dollar in my country. With this leverage, my internet income can easily over pass the average income in my country.
Reason #3 : Low Start Up Costs
If you ever start a business before, you will know that starting a small business is quite expensive. However, Internet business is different. You don’t need to rent any office space. You don’t need any office furniture or hire half a dozen workers. There will be no salaries to pay and no labor insurance to worry. All you need is a computer that can online to run your online business. Maybe you need to spend another $50 per month to get your own domain name, web hosting or do some marketing for your site.
Reason #4 : Good Profit Margin
Most Internet businesses have high profit margins due to the low direct cost of sales. Let’s take the ebook business as the example. You don’t need any cost for stocking and delivering for your ebook. Like what I said just now, you just need a web hosting that cost you less than $100 per month. You may also need to pay a fairly small percentage of sales revenue for payment processing fees. Generally, you will make a profit of 50-75% in selling an ebook. A traditional small business is really hard to get this level of profit percentage in the sales.
Reason #5 : Global Market
Your internet business is targeting on those internet users all over the world. You can easily target on customers in any country you choose to. This market is getting big as more and more people will online in future.
Reason #6 : Spend More Time in my Home With My Family
I like to stay at home. I love to spend time with my family. So an Internet business will be my choice. The basic requirements of an internet business are computer and internet cable. So I can easily setup an office in my house and I can start making money from my home. I don’t have to run around under the hot sun, get stuck in the traffic jam and wear those formal clothes. Every day I just open my PC, connect to internet and I can start my business. If I finish my works, I can hang around with my family and do whatever I want to. This kind of leisure time is what I want in my life.
Reason #7 : Take More and Longer Vacations
I like traveling and I wish to spend most of my time in this. Recently I bought my new laptop and my internet business becomes portable. I can easily handle all my internet business related tasks easily in anywhere and anytime. So with a laptop, I can travel more and in a longer time since I can handle my business in anywhere. This is some kind of freedom that is hardly available in other traditional businesses and jobs.
Reason #8 : I enjoy it
I enjoy myself in Internet business. First I don’t have to do all the physically hard works. All I have to do is sit in front of my laptop and keep my finger busy with typing. To me this is an easy job and I enjoy this every much. Maybe this is because I am introversive. :-)
Are you making money from internet too? Can you tell me what is your main reason to start an internet business?
Build Your Passive Income from Affiliate Program
Last few months, I shared 5 ways to build passive income from your web site in this blog and Affiliate Program is one of them. Yes, we can make money from affiliate program and in most cases those money is considered as Passive income that we needed to achieve financial freedom. In fact, there are a lot of online marketers make a living, achieve financial freedom and become rich from affiliate program itself.
So today, let us see what affiliate program is and how we can build passive income from it.
What is Affiliate Program?
Affiliate Programs, or Associate Programs, are a kind of agreement between you and the merchant company that they will pay you some commission if you can refer people or traffics to their site. In most cases you only get your money if someone who referred by you purchases something from the merchant site.
In a nutshell, you become the “sales man” for the merchant company and your job is bringing people and sending traffic to their site through an affiliate link. An affiliate link is a link that provided by merchant company to keep track that the traffic is brought by you.
Below is an image that I get from Howstuffworks.com that will give you a big picture on how affiliate program works.
Passive income & Affiliate Program
In order to make money from affiliate program, you have to think and use some ideas to promote your affiliate products or services. Here, indirectly, you are building a marketing empire that going to promote your affiliate program automatically in future. This is the advantages of internet marketing. For every article you wrote, every links you put in forum can generate traffics again and again to your affiliate site. This means that you can make money again and again. Even you stop promoting, you still can earn money through your old works.
Although you may feel that you don’t make any money in starting, don’t worry, you will make some in future. The more you expose your affiliate link in internet, the higher chances that someone will click on the link and purchase through your link. Affiliate program is just a number game and marketing is the way to increase the exposure chances of your affiliate link.
Tips to Get started in Affiliate Program
Following steps are just showing you an overall picture on the process how you can make money from affiliate program. In future, I will write a few series that will cover more information and know how in affiliate program and show you how to make some money from it. At this moment, please read through the 7 tips to get started in affiliate program in general.
- Select a topic or field that you have passion and some basic know how.
- Do some market research and find out what is the problem that most people have and ask in this topic.
- Search and understand your targeted audience especially their problems and demands.
- Search around the net and look for products or services that can help them and they are really demand on this
- Apply to be their affiliate partner.
- Have a marketing plan that will show your expertise to your targeted audience and help them to solve problem.
- Take action to test and improve your marketing plan accordingly.
Above are just the 7 general steps to make money from affiliate program. There are a lot of information and know how you have to learn in order to success in each steps.
Conclusion – Be ready for some hard works
When I was a Tae Kwan Do trainee, my master always encourages us with a statement – No Pain, No Gain. If you read those personal development books, you will find out that most of them are talking about how to take action, feel some pain by making mistakes and improve yourself. This is the ultimate formula to succeed in everything. Making money from affiliate program is almost the same.
From my experience, you will start confusing and feel uncertainty because of information overload. How I know this? Because I have this feelings too as newbie in affiliate program. But don’t worry, I’m working on a series that will guide you through the process of getting started in making money from affiliate program. This is because I know affiliate program is a great start for you to build an income system that will bring you the excessive cash which will help you to achieve financial freedom.
