Financial Management / Money / Personal finance / Time

How to Build a Solid Financial Foundation

Being the finance nut that I am, I am always on the look-out for seminars to enrich my already growing obsession with finance, management and growth.

(A big shout out to fellow writer/blogger Fritz for inspiring me to attend one of these events.)

This seminar I attended was really low key. The modules were simple. In my taste everything was a refresher course. I didn’t mind, I appreciate the fact that I am reminded from time to time. It’s the basics that we shouldn’t forget.

Management mentioned to me that in order to get into the really hardcore stuff, I would have to register as member (but that’s another story…)

What did we discuss? Below are some highlights.

Bad News for Health Care Industry: People are Living Longer
We are now faced with a dilemma; It’s either we die too soon or live too long. Given the growing health awareness of people (healthy lifestyle habits), it is not surprising that the population is living longer and the health care industry is getting paranoid.

The health care industry should keep up with the number of individuals living past their 100th birthday. And to keep up means to sustain such health care needs.

So for HMO holders, you should probably ask your provider: How many more of my birthdays can your company cover for me?

Midlife Crisis and Retirement Crisis
For some, midlife crisis will mean employment instability and insecurity. After that, retirement will mean the cutting off of income (since your not working anymore) hence the financial loss.

Though I am still in my 20’s, personally, I am more wary of retirement than midlife.

Personally, I am targeting to retire by age 80 since I still plan to work even if I’m all grey, wobbly and wrinkly. (Also, I think I’d make a cute and hip grandma, don’t you think?)

Midlife and retirement crisis can all be avoided, IF everything is carefully thought through. And that is one big if.

The speaker mentioned that we go through retirement crisis because of the following:

  1. There is lack of financial planning in our younger years.
  2. We are dependent on someone else to sustain our daily needs.
  3. There is no discipline on our end with money. It’s either we spend more than what we make. For what? To live up to an image. Or, we leave off what needs to be done today (procrastination).
  4. There is lack of financial intelligence.


Focusing on Passive Income:

The speaker mentioned, though active income is vital (salary, business, etc.), we should also focus on building our passive income.

Passive income can be in the forms of mutual funds, bonds, stocks, long term health care, royalty and rental income.

But to do that, you must be strategic on how you spend your spare time.

How about you? How do you spend your spare time?

 

Major Take Away:

How to Build a Solid Financial Foundation:

Investment

Emergency Fund

Manage Debt

Life Insurance

Health Care

Increase Cash Flow

Additional take aways:

Financial freedom is not a dream, it is a DECISION.
Plan for what is difficult while it is easy – Sun Tzu
It’s not what you earn that counts, it’s what you keep.
You provide temporary income for permanent needs

(And a favorite of mine: Poverty is not lack of money. It is mismanaged money.)

Watch out for my next post on The Rule of 72 and the X curve.

So exciting, yes? 😉

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