Personal Finance
Personal Finance is about an individual or a family unit making decisions on how to manage their financial resources based on their understanding of financial principles. This
could include budgeting, saving, investing, insurance, investment, debt servicing, mortgage, financial ratios and more. There is a saying that we are the sum of our choices. Therefore making smart choices about our money will impact our financial future positively.
The overall objective of managing our personal finance well is to achieve financial freedom or financial independence. One simple definition of financial freedom is to be able to maintain our lifestyle after we stop working.
Most of us can’t afford to stop working as we actively trade our time for a monthly income. The desired type of income is ‘passive income’ whereby our income comes from our assets like savings, annuity, investment portfolio or business or investment property.
With our increasing life expectancy, we can expect to live another 15 years to 25 years after we stop working at age 65. If we need $2000 per month to maintain our lifestyle today, we will need $24,000 per annum and multiple it by number of years we are expected to live, the number works out to be quite a substantial amount.
I can’t imagine myself in a situation where I outlive my income and I can’t work anymore due to old age or health conditions. Who will help me pay for my three meals a day plus other expenses like utilities, medical, phone bills and etc?
I imagine myself to retire well and be financial independence so that I can still afford a short holiday every year. I can look forward to spending quality time with my loved ones, relatives and friends. I can look forward to enjoying my hobbies, sports and community works.
If given a choice to choose between the two retirement outcomes, everyone will want a golden retirement. My definition of golden retirement is one that I have good physical/mental health to enjoy and share my wealth with my loved ones and those around me.
Personal finance plays such an important role in our lives that we simply can't afford to ignore it.
Food for thought...
“Take good care of your health and your health will take good care of you”
“Take good care of your finance and your finance will take good care of you”
“It's the ‘younger you’ that will take care of the ‘older you’ during retirement”
The overall objective of managing our personal finance well is to achieve financial freedom or financial independence. One simple definition of financial freedom is to be able to maintain our lifestyle after we stop working.
Most of us can’t afford to stop working as we actively trade our time for a monthly income. The desired type of income is ‘passive income’ whereby our income comes from our assets like savings, annuity, investment portfolio or business or investment property.
With our increasing life expectancy, we can expect to live another 15 years to 25 years after we stop working at age 65. If we need $2000 per month to maintain our lifestyle today, we will need $24,000 per annum and multiple it by number of years we are expected to live, the number works out to be quite a substantial amount.
I can’t imagine myself in a situation where I outlive my income and I can’t work anymore due to old age or health conditions. Who will help me pay for my three meals a day plus other expenses like utilities, medical, phone bills and etc?
I imagine myself to retire well and be financial independence so that I can still afford a short holiday every year. I can look forward to spending quality time with my loved ones, relatives and friends. I can look forward to enjoying my hobbies, sports and community works.
If given a choice to choose between the two retirement outcomes, everyone will want a golden retirement. My definition of golden retirement is one that I have good physical/mental health to enjoy and share my wealth with my loved ones and those around me.
Personal finance plays such an important role in our lives that we simply can't afford to ignore it.
Food for thought...
“Take good care of your health and your health will take good care of you”
“Take good care of your finance and your finance will take good care of you”
“It's the ‘younger you’ that will take care of the ‘older you’ during retirement”