Savings

Asked by Anonymous

Updated on 18 Apr 2019

Has anyone here achieved financial independence, or do you know anyone who has? If so, could you share any tips and tricks to get there? ?

Wiki defines being financially independent as "people have assets that generate income (cash flow) that is at least equal to their expenses." Was wondering if anyone here has managed to achieve that here in SG, or know someone who does. Please share any tips and tricks on how to achieve that?

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Kenneth Lou
Kenneth Lou, Co-founder at Seedly
Level 8. Wizard
Answered on 12 Dec 2018

Hey anonymous,

I have written about this before so maybe I can help give abit of insight here :) I’m also like you on track to FI, one day at a time, with the right mindset and weath machine setup.

Take a look at this image here. Understand and digest it well:

I will choose to focus more on the right side portion - Income Generating Assets (IGA) so the idea as you accumulate your wealth is to attempt to deploy as much here.

STEP: Income Generating Assets

Basically this will be the main bucket to grow your ‘passive income’ overtime. Which will ultimately help you reach financial independence. The most important bucket*. Simply because there are many ways to grow this.

Low effort:

Dividend paying stocks – Basically some stocks termed as blue-chips offer stable dividends to shareholders (eg SingTel, Starhub, M1 telco stocks)

REITs – Real Estate Investment Trusts. A special class of stocks which are high dividend paying around 5 to 10% p.a basically because of the way they are structured

High effort:

Own your own business – Be your own boss. This sounds alot easier than it seems, but can start with something like Dropshipping as a home business (high effort)

Real Estate – This one can also be tough but potentially very high returns (via capital gains) and also Rental yield (2 – 3% yearly) Expensive to get in but in Singapore, it’s almost a sure-win in the long run (due to constraints on land)

Royalties – This is the next level, if you may have found a niche or brand in a certain area which others find value in. Take years of grinding and hustling to get here.

Read the full article here: https://blog.seedly.sg/financial-independence-framework/

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