Today’s post is a quite unique as I will not be discussing the detailed quirks of stock market investments but will be focusing on a broader topic of finance, more specifically personal finance or what personal finance writers call as “financial freedom.”
What compelled me to write about this subject is that a reader of this blog sent me this interesting email.
Since the message he sent is a bit long, I have only presented parts of the email just to let you understand what his current situation is and how this relates to his questions. Here is his email in relation to his question regarding financial freedom.
“ . . . I’ve been working here in Bahrain for two years now but I must confess that I dont have any idea of what savings and investments are all about. For two years, my financial cash flow is this: all I have to do is to wait for payday then “remit” then whatever is left is to be expended until the preceding payday comes. This was my routine. . .
. . . Until I found Salve Duplito’s account at PDI last quarter of last year. That triggered me to take a pause and evaluate my finances. But what worries me much is that I have 6 months remaining before this year expires . ..
. . . By the end of December 2009, I want to declare myself ‘DEBT FREE’ and have save 10th of my first million. I am praying that I will make it. Sir am I leading my way . . . towards financial literacy? “ – Ferdie
Your letter reminds me of myself years ago when I was still struggling to achieve financial freedom. To see a part of my personal story you can check out the post I wrote a year ago entitled “The financial script of life.”
I appreciate your candor and honesty and that you have finally realized that you need to do something to achieve financial freedom. Actually, your situation does not surprise me at all. Sadly, thousands of OFWs like you end up with nothing after working for several years abroad. I wrote a post about this entitled “Financial Literacy for OFWs.”
With regards to your question if you are leading your way towards financial freedom or financial literacy I would have to say yes. The reason for such is because the first step towards financial literacy or financial freedom is to come to the realization that you have not been managing your finances well and that you need to do something about it.
Once you have come to this realization and that you have strived to determine to do something about it, then I suggest that you follow the steps that I also followed towards financial freedom. I wrote a post about this almost two years ago entitled “6 steps to financial freedom.”
I also suggest that you never stop learning about financial freedom. Until now I read a lot of books and materials on financial freedom. I read about 2 to 3 books a month on finance. I also subscribe to business newspaper (Business world) and a personal finance magazine, Money sense. I suggest you do the same. Drop by from time to time in this blog as I frequently write about financial management and investments. You can click here to read my previous posts on “Financial management and investments.”
Currently I am working my way to financial freedom more specifically Step no. 5 that is, Building long-term asset accumulation. There are lots of ways to do this, some focus on real estate and some focus on businesses. Personally I have chosen “business” as my vehicle of investment. Aside from having personal businesses I heavily invest in the “stock market.” That is why I read a lot about investing in the stock market and I write a lot about the subject in this blog.
As a result I can pretty much say that I have somewhat gained a mastery about the subject. I have not yet written a post on why I consider stocks as the best investment, anyway just drop by form time to time in my blog to be updated on this.
I have to warn you though; there are those who say that stock can make you an overnight millionaire. Others say that the stock market is a gamble and that you end up loosing money instead. Take note that when you buy stocks, you are buying part of a business and just like any business it takes time for your money to grow. That is why I prefer to stay at the value investing-Fundamental analysis side rather than the technical analysis side. I believe that staying in this side of stock market investing will give me a greater chance of not loosing money in the stock market and that I can maintain my financial freedom and buy a lot of acnepril, 🙂
Lastly let me leave you a quote I read somewhere in cyberspace about financial freedom “Knowledge is only potential power. Real power is when you put your knowledge into action! To achieve financial freedom you need to take action!”
God bless you as you journey towards financial freedom.
The Guerilla investor 🙂