Set Mini Crossover Points to Spur you towards the Ultimate Crossover Point

The ultimate crossover point is when your passive incomes are finally more than your total expenses. This is when you know you have reach financial freedom. At this point, you will no longer be bound by the need to have a job. You will have this very special reward called choice. Choice to work or just to stay at home the entire day. Choice to travel for an entire year and choice to never work again.

The only problem is that the journey to this crossover point is long and tedious. Different people set different points as spending and saving needs and powers are different. For example, if you spend very little and save a lot, you will reach your crossover point very quickly. And if you spend a lot and save very little, you will reach your crossover point very late in life or never at all. No pain no gain.

However, for the average folks like me who save a decent amount and are not mad spenders, the journey would still be quite a long and arduous one. To keep ourselves motivated and to prevent the thought of giving up, we should set mini crossover points. These are like mini goals to reach, one step at a time.

Here are some mini crossover points to help you generate more ideas.

1. Positive Net Worth - In Singapore, I assume that when we get a house, we will fall into negative net worth. Getting back to positive net worth will require work  but will definitely be a welcomed crossover point.
2. No Debts - Another point to cross would be to have no debts. Student debts, credit card debts or renovation loans.
3. Passive Income to cover certain Expenses - Break your expenses up into different categories. For example, telephone bills, water bills, electricity bills or groceries and such. Every time your passive income cover one of the expenses totally, you have reach a mini cross over point. It feels good to know that at that point, you will never need to worry about paying for that expense again.

Now that you have gotten an idea of mini crossovers, you can come up with a list of your own. I hope this helps motivate and spur you on.

As always, save more, spend less and invest wisely.
P.

The Spine of Early Retirement

I'm sure that most of you are familiar with some of the steps you have to take to reach early retirement, but bear with me as I repeat them once again for the benefit those who do not. These steps are not concrete and you can choose to take them or not to attain your early retirement but I believe that paths are similar to these. Only difference being your personal tweaks, luck and mistakes.

Without further ado, here they are:

• Start as Early as Possible - This applies not only to those seeking early retirement or financial freedom but to everyone. The earlier you start, the more time you have to allow the magic of compound interest to work. What's more, having more time allows for more margin of error. No one is perfect therefore we should always make allowance for mistakes.

• Manage your Consumption - One of the main reasons why most people are not able to save enough for an early retirement is because they spend to much. We are all wired to consume and many of us can't help it but conform. However, there is this rebel within us that does not want to conform, we want to break free from the norm - these are the people that are able to achieve extremely early retirement. Reduce spending now, stop spending money on too much wants, stick with the needs. You do not need that new hand phone just because it has a battery life of 1/2 an hour more than yours or a screen 1/2 an inch bigger than yours. Remember, you choose your enough, not your neighbor.

• .Cut down on Excess Spending -  I know it's often hard to form new good habits, but trust me, this will benefit you. For just 1 or 2 months, track every dollar you spend and at the end of the month, you will be able to see where you have been spending unnecessarily. These are the parts of your spending tree that you must prune away. If you feel comfortable keeping track of your expenses by then, you can continue doing so. If not, try to stick to your current monthly expenses less those unnecessary expenses and do a follow up 6 months later to find out your monthly expense status.

•  Be Frugal - This step is an acquired taste, once you get it, it becomes something you actually enjoy doing. However i urge you to do this is moderation if you are not alone in your journey. Your significant other might not share the same joys as you in being frugal. You have to take baby steps to let them see the benefits of being frugal. What you must do to be frugal is to view money as an extremely precious resource not be to exchanged for something of lesser value. For me, i feel that lesser value means items that bring no benefit or new experiences to your life. Most of the time, these items just bring you momentary satisfaction that last for a month at most. Not worth it.

• Never Trade Early Retirement for Happiness and Family - This is the last and most important key. You should never trade anything in this world for happiness and your family. What is the point of forsaking your happiness and family to gain early retirement? The point of early retirement is to be able to have time for both. Don't be over obsessed with retiring early that you forgo your current happiness or spend so much time tweaking your spreadsheet or monitoring your portfolio that you neglect your family. You have to set your priorities right.. what is most important in your life. For me, its family, for without them life would be quite meaningless even if u have all the riches in the world.

 I know that everyone will make mistakes as to err is to be human or was it to err is human... Anyway, i hope that on your journey to financial freedom or early retirement, you will make more right choices than mistakes. Ponder upon what is most important in your life, keep it close and never ever trade it for anything this world has to offer.

As always, save more, spend less and invest wisely.
P.

Life & Money - Change is the only constant

Everyone should have a plan in life. It's like a lantern that will guide your path and lead you to the destination you have chosen.

Having said that, i also have to say that a plan should not be extremely concrete as throughout the many stages in life, circumstances will change. When this happens, you should be flexible enough to alter your plan and do what is necessary to still arrive at your selected destination. You might have to take a longer time, save more money or take on more risk in order to do so.

What i have said leads to what this post is really about. It's about finding that investment method or strategy that you are comfortable with which will finally lead you to financial freedom or even better yet, an early retirement.

Throughout my short investment journey, I have tried and tested quite a number of investment strategies such as trading constantly, permanent portfolio, lazy portfolio and a few others. I have to admit that part of the reason to this is because i have been heavily influenced by the books and blogs that i have read. I do not know how others view this constant change but i feel that it is a good way for me to pluck a little knowledge from each source and eventually form an investment strategy of my own to carry me to my destination.

There are still many years ahead and I am sure that there will still be many crossroads and forks in my path to an early retirement. Changes that i can control like having a kid, owning a home and increasing my insurance coverage or changes that i have totally no control of like interest rate fluctuations, the economy and natural disasters.

No matter the change, we as humans have to adapt, survive and get out of any good or bad changes stronger.

What investment strategies have you tried so far and how have you tweaked them to achieve your goals and reach your destination? Feel free to share them here.

As always, save more, spend less and invest wisely.
P.