Blueroselady's Weblog

I wish you abundant happiness, health & wealth

Posts Tagged ‘save

How to achieve financial stability, security, freedom, abundance?

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Criteria of financial stability:
1. liquid assets to cover a min of 6 months of current expenses.
2. have insurance (life, hospitalization).

To calculate expenses, see a previous post on how to make personal income statement.

Let say in 2012 (based on an estimate for the 1st 8 months), my monthly expense is $2,700.
Therefore, I need to keep a liquid asset of ~ $16,000 in my bank account.
Stocks are also considered as liquid asset, but to be conservative and safe, I only consider cash in my calculation.

Tips:
1. Get a term insurance with a much cheaper premium than a whole life insurance. Understand that term insurances are often up to only certain age, e.g. 65 and its purpose is to protect your family (not your retirement).
2. If you want to also get a whole life insurance, try to buy it at younger age and to finish paying the entire premium early. Unlike long-term housing mortgage, which can be protected with mortgage insurance, I hear many cases of people failing to pay for the expensive premium of the whole life insurance hence their policy lapses.

Financial SECURITY means your passive income can cover your BASIC expenses.
Financial FREEDOM means your passive income can cover your CURRENT expenses.
Financial ABUNDANCE means your passive income can cover your DESIRED expenses.

Criteria for basic expenses:
1. housing mortgage, utilities.
2. public transport.
3. food (inclusive for my children) / groceries.
4. all interest payments for debts.
5. all insurance premiums (life, hospitalization, fire).

Let say in 2012, my basic expense is $1,500.
To achieve FINANCIAL SECURITY, I must have passive income of $1,500 per month.

I realize that these components (a) gifts / donations, (b) insurance premiums, (c) dining out, contribute to my non-basic expense in descending order, but I want to keep on giving and enjoying the fruit of my labor, so let us set our target higher.
To achieve FINANCIAL FREEDOM, I must have passive income of $2,700 per month.

To calculate my desired lifestyle, for now I only add 2 items (but the list may grow over time).
I want to be able to give meaningfully and travel the world.
To achieve FINANCIAL ABUNDANCE, I must have passive income of at least $5,000 per month.

I am working smart and hard to have more passive income. Keep on the spirit!

Written by blueroselady

September 18, 2012 at 9:10 am

Tips: finance for women

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BUDGET
Since the first day leaving away from my parents at the tender age of 14, I started budgeting. Recording my expenditure (to be in control so that they do not exceed my income). My income was money sent by my parents. As I made progress in my study, my income include money generously given by my benefactors, part-time work (though lowly paid hourly based salary, I still cherished it!), giving tuition to my juniors.

avoid DEBTS if possible.
Now I only have housing mortgage.
Please try your best to pay your credit card bills.
I only subscribe to credit cards that give annual fee waiver, therefore I do not keep many credit cards.
Be firm to reject the temptations that come with credit card applications.

EMERGENCY
Consider possibilities of emergency.
e.g. of emergency: illness (which troubles me in March 2012!), home repair, vehicle repair, parents health need.

buy a HOME.
I used to rent due to my nomadic life, but the $ I use for paying rent is better spent to pay for mortgage.
Our current home is not really our home, but at least we can sell it in the event of emergency.
Why is it not really our home?
1. It will only be under our name after we finish paying all the 30-years mortgage.
2. At the end of several decades, we have to return it (due to 99-year lease). We cannot give it to the next generation!
Thus, (1) I must not be too attached to our home. Being unattached is a way to raise our consciousness. (2) a dream is to buy a more permanent home.
Home LOCATION is important!
Is it safe (especially for women)?

INVEST in yourself, stocks, bluechips, trusted business partners.
Since the beginning of 2012, I have been actively investing in myself (my intelligence, consciousness, enterprise).
I share my tips to you all my Dear friends, as I want you also to benefit from my growth.
Go for an occasional indulgence.
I always plan for at least 1x trip to a new destination.

RETIREMENT seems so far for me.
Ladies, by all means, I encourage you to plan for your retirement.
If you have tips for me, I would be very happy to listen to 🙂

SAVE for emergency.
Blueroselady, you have to work hard for this!
With my current income, I do not have much to save, but I am trying to find ways to do so.
If you have any suggestion, I am more than happy to learn about it and will be forever grateful to you 🙂

avoid EMOTIONAL SPENDING.
Beware of EXPERIENCED SALESMEN/ SALESWOMEN who will show you a higher-priced item first (the anchoring / 1st thought trap).
Buy products based on their MERITS, instead of popularity.

Note: first written in March 2012.

Written by blueroselady

March 20, 2012 at 6:52 am

Posted in finance, lifestyle

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Tips on how to save money $

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1. The 1-week rule, the 1-month rule.
For items that you need, wait 1 week then ask yourself if you still have to buy it.
For items that you want, wait 1 month.
You may encounter a better bargain.
I have a list of things to buy, for some items, after some time, I realize I do not really need them. I also occasionally annotate the prices, for more expensive or frequently bought items, by different shops to get a better bargain.

2. Give up / cut down expensive habits, like cigarettes, alcohol, and clubbing.

3. Save the electricity.
Turn off lights before you leave.
Increase the air-conditioning temperature, lower the heater temperature.
Use energy-saving electronic product.

4. Hide your credit cards.
Put them in a safe place in your home, not in your wallet where it’s easy to spend them.
I only have and carry 1 credit card, most of time for air-ticket and accommodation.

5. Don’t spend money just to de-stress.
Try something FREE.
Go home and spend some quiet time just to relax and then meditate.
Exercise, go for jogging to de-stress, or maybe just sleep early.

6. Eat at home.
Quality time with family / housemates.

7. Cut down your hand phone bill.
Cancel things that you do not require.

8. Cut down on your vacation spending.
Try budget trip.

9. Turn off your TV.
Less exposure to guilt-inducing advertisements, and also less electrical use.

10. Home entertainment. Invite friends over instead of going out.
Have a cookout or a potluck meal, chit chat, play some cards, watch DVD.

Written by blueroselady

May 3, 2011 at 1:17 am

Posted in family, finance

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