Things I learned about master the game of Financial Freedom?
Starting this semester, I chose a book called Money master the game: 7 simple steps to financial freedom. It really opened my eyes to how I can be free financially in my own life. Tony didn’t merely tell me what to do to receive lots of money. If he did, I would still be poor mentally. Instead, he taught me the great principles that I need to take action myself if I desire to receive financial freedom.
Step 1. Make the decision to become an investor, not a consumer. “You don’t want to own an Apple phone, you want to own Apple,” he says.
You have to commit a certain percentage of your income to save for your financial freedom. Whatever that number is — 10%, 15% — stick to it in good times and bad. Have it taken automatically from your paycheck and put directly into a retirement or savings account. More importantly, you must become a thinker as they make decisions on how to invest your assets.
Step 2. Become an insider on investing. Know the rules of the game. Understand mutual funds and learn what mutual funds beat the market or their benchmark over any 10-year period. Look into the fees you are paying on mutual funds and how that affects your financial future.
He says people also don’t read the fine print on their investments so they don’t realize what fees they are paying. Just like there is compounding growth, there are compounding costs, he says.
If you are only paying 1% in fees, you will probably end up with a lot more in your final nest egg than if you are paying 3% in fees, he says.
He points out that if you had a $100,000 investment and were lucky enough to get 7% annually, paying 1% in fees, you’d have about $574,000 after 30 years. If you paid 3% in fees, you’d only have about $324,000.
“What you don’t know will hurt you in the financial world. But once you know these things, you’ll be able to take advantage of the system instead of having the system take advantage of you.”
Step 3. Make the game winnable. “Most people have a number that’s so big that they never begin the journey,” Robbins says. Figure out how much money you need for financial security and financial independence. Calculate this and come up with a plan. Look for places you can save more.
Step 4. Evaluate your asset allocation. “You have to create a bucket list. You have to learn where to put your money to keep it safe and where to put your money to grow it with some risk,” he says. Put your money in different types of investments, such as stocks, bonds, commodities or real estate. Diversify your investments. This is part of crisis management that everyone should learn.
Step 5. Create a lifetime income plan. Make sure you won’t run out of income for as long as you live. “Income is all that matters. Assets won’t buy your food. They won’t let you travel. You have to focus on income. The investment community wants you to think about keeping your money in assets.” Investment is not a one-time thing, you choose a potential stock, and it grows 500 percent a few years later. You take money out afterward. You should set a lifelong investing plan
Step 6. Invest like the .001%. “That means learn from the very best on earth (Schwab, Icahn, Bogle, Dalio, Forbes and others he interviewed for the book), and what you learn from them apply and you’ll achieve financial security faster than you will any other way.” Many people today try to teach different methods to become rich. If you want to learn, you should learn from the best.
Step 7. Just do it, enjoy it and share it. Make a commitment to be wealthy now, not in the future. “Start where you are, and you’ll begin to find out that there’s more than enough.”
Robbins advises people to educate themselves in investing. It’s worth the time, and it’ll pay off. “You master money, or it masters you,” he says. As you are on your journey to financial freedom, you should enjoy every single step you take. Remember that getting lots of money is never your goal. You don’t just make more and spend less. That is not the correct way to become wealthy. Always thinking like an investor, like Tony shared in the book, compounding interest is probably the best way to invest your money.