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Interview with Matthew Seah (Part 1): Financial Freedom.

Wednesday, July 10, 2013

I learned from Robert Kiyosaki that in order to gain financial freedom, we have to be free of debt, able to provide for ourselves and to prepare for a future without having to work for money. 

Many people always find themselves short of cash at the end of each month and it is difficult for them to save any money.
To avoid this problem, I pay myself first by saving a portion of my income before spending any money. At the end of the month, if there is any spending money left, it will add to my savings.
Being prudent with money is something I strongly believe in since young as my mother always advocates the virtues of saving money. My Edusave bursaries and scholarships during my school days all went into my savings account.


Now, I have several accounts and not just one. They are:

Account 1: Emergency fund.

This is money which can support my current lifestyle for at least a year in case something untoward should happen.

Account 2: Opportunity fund.

This is money to take advantage of any investment opportunities in a market crisis.
Account 3: Investment fund.

This is money available to invest on a regular basis. To reduce commission and fees as a percentage of a transaction, I tend to invest only after accumulating more than $9,000 in the investment fund.

Account 4: Gifting fund.

This is money set aside for buying gifts, donating to charities and making offerings.

Account 5: Excitement fund.

This is money put aside for holidays.
As passive income from my investments increases, I will be able to set aside more of my total income for investments. One day, when my investments are able to generate the desired level of passive income, I will set aside 90% for charitable causes, keeping only 10% for my own expenses. This is my goal.

So, how should young people go about increasing our wealth to reach the goal of financial freedom?

We need to seek the right financial education or get a mentor who has walked the path with good results since financial education is not available in school.

If young people have a low level of financial literacy, there is a good chance that their families do too. Therefore, they should not seek financial advice from their family members. Actually, it is not uncommon to meet people who think that investing in stocks is synonymous with gambling. This is due to a low level of financial literacy.
Investing in stocks is like being in partnerships with businessmen. Instead of starting our own businesses and hoping to succeed, we can shorten the time to success by being partners with successful entrepreneurs at the helm and stand to share the profits from their success.

Time is the most valuable resource that any person has in investing because wealth from investing grows by compounding. So, young people have a distinct advantage. Start young.

Related posts:
1. Robert Kiyosaki: 2 are better than 1.
2. Teaching young children financial literacy.
3. Interview with Matthew Seah (Part 2): Value Investing.

10 comments:

SG Young Investment said...

Great post! Thanks for the interview :)

AK71 said...

Hi SG Young Investment,

Matthew is only 25 years old just like you. :)

Part 2 of the interview will be just as good. I promise. ;)

SnOOpy168 said...

Sensible tips. Envy leh. If only I can rewind the clock till when I was 25.

AK71 said...

Hi SnOOpy168,

At 25, I just entered the workforce. In terms of monetary wealth, Matthew has definitely achieved what I did not at his age. In terms of investment knowledge, he is also light years ahead of the then 25 year old me.
I am impressed. :)

Don't envy. Be inspired. Starting later is not the same as starting late. ;)

Cory said...

At age 25, Stocks to me is Gambling ! One of the Top Sin in my memory .....

Yes Matthew has a good head-start.

Matthew Seah said...

Hi everyone,

Pls don't blow my head big big... gonna explode soon haha

AK71 said...

Hi Matthew,

And Part 2 of the interview isn't even published yet. You might not be able to wear T-shirts for a while once that is published. ;p

vansontan said...

Passive income, everyone's dream. But indeed, it's a dream that worth fighting for.

Mavis Seah said...

Proud of him, sharing his knowledge to help others.

AK71 help him to socialise a bit.. lol

AK71 said...

Hi Mavis,

Yikes. I am sorry I have to disappoint you. :(

I think you are in a better position to help him than I am.

Hot potato... -.-"

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