I’ve temporarily changed my theme due to some technical issues after I had upgraded to an updated version of WordPress. Will post under the new theme until I get the thing sorted out.

Be well and prosper.

Here’s wishing you and your loved ones a Merry Christmas and a Happy New Year 2011!

Be well and prosper.

Here’s wishing you a Happy National Day 2009!

Be well and prosper.

Flickr image "Epiphany 3" by Felipe Venancio

The ultimate paradox of financial freedom has been revealed to me.

All this while, I’ve been reading, researching and writing about financial freedom. It took a recent episode of moving my net worth from one asset class to another that an epiphany struck me.

What is this ephiphany that Panzer encountered?

Financial freedom is in the mind

Financial freedom first and foremost has to begin in the mind. It’s where you conceive the very idea that you can take control of your finances by living within your means, saving and investing, growing your means and protecting your means.

As I started with this idea, and implemented it in the various posts I’ve outlined in this blog, I started to gain new insights about myself. For instance, tracking where every single dollar I earn and spend helped me modify some of my habits when it comes to spending. It has allowed me to evaluate where money (that represents life energy) goes and how that either adds value or subtracts value out of my life.

I also started some projects on growing my wealth. My blog monetisation efforts have given modest returns but they are positive returns. While I’ve managed to beat fixed deposits returns for the past 6 years since I started managing my own money, I’ve also under-performed for 2009 year-to-date and I hope I can end the year with a positive return.

Throughout all these experiences, I realised one thing.

I am already financially free.

Financially free

Huh? What is Panzer talking? Is he smoking a banned substance and high?!

No, what I’m saying is this.

I am not financially free using my traditional definition of being in a position where passive income from investments exceed my living expenses. I still need to get up and go to work in the mornings to make bread for my family.

But what I’ve realised is that in my current situation, my income exceeds my living expenses. My current career suits me as I look forward to go to work in the present environment. Because even if passive income exceeds living expenses, we can never predict if our life is taken away or our health is taken away. Thus, ultimately, happiness in life is wanting what you already have.

That means, in many respects, I already have a form of financial freedom.

Wanting what you have

For too long, I’ve waited to be happy only if I’ve achieved this or that and only if I’ve managed to hit financial freedom. It is still a goal I am striving for, but I realise that enjoying the process towards financial freedom. Being able to enjoy and appreciate what I have, does wonders towards my sense of well-being.

The target of financial freedom drives me. But the awareness and consciousness that being grateful for where I am now is also important liberates me from being dependent on achieving financial freedom to be happy.

A 42 year old successful CEO recently passed away at the OSIM International Triathlon. By all accounts, he had a good life. But it was taken away all so suddenly. Going forward, I’ll try to take each day at a time and to want what I already have.

I may or may not achieve my goal of being financially free with property investment (which I’m still considering and evaluating suitable properties) or perhaps go back to equities or even stay sidelined and wait for the big “correction”.

Whatever it is, health, family and happiness is important.

Financial freedom is a journey. If you enjoyed the journey, you won’t fret too while having your eye on the destination.

Be well and prosper.

Panzer has managed to squeeze some time to bring you the Friday roundup of personal finance blogs. Find out what international bloggers in the US feel about the credit crisis and the abysmal performance of the US Stock Market.

The Digerati Life talks about “Best Places for Your Money When the Stock Market Tanks”. Wise Bread shares how we can adapt by “Breathing Easy on the Financial Roller Coaster” that has been the current status of financial markets. Free Money Finance reminds us of the “Importance of Being Earnest (In Saving)“. Such a critical principel of personal finance in that you have to spend LESS than you earn so that you can save and invest.

Ultimately, money is an intangbile thing as The Baglady shares with us her thoughts on “The Intangibility of Money“. Money presents bits of paper as well as promises for the discharge of debts. It is intangible until you turn it into goods/services that can make your life better. It seems the credit crisis caused partly by the greed of the financial industry from creating profits out of paper (but no tangible goods that make life better) shows us how quick the house of cards falls when the foundations are so filmsy.

Enjoy the upcoming weekend through learning and growing in personal finance.

Be well and prosper.

It’s coming close to the end of June 2008 and I’ve been recording my inflows and outflows of money dutifully with my Excel worksheet. 83% or so of June has gone and I’ve clocked up 80% outflows of my take-home pay. Scary indeed. This month’s expenditure was boosted by a one-off payment but still that’s life!

The value of recording has been to put my spending clearly in front of my consciousness. No ambiguity, no vagueness, no excuses. I have spent $x,xxx and it is there on paper. It is not about good or bad. It is about alignment to my values, beliefs and whole attitude towards building myself an investible net worth that is condusive for generating sufficient passive income for financial freedom.

I am looking forward to the month-end analysis of how much of my money goes to coffee, gazingpins (a “Your Money or Your Life” reference to those knick-knacks we buy on impulse but never use), and other expenses in my life.

How do you track your daily income and expenditure? Leave a comment and share with the good folks here at fivecentstencents.

Be well and prosper.

Flickr photo by Casetteject.

Are you unreasonable?

When was the last time you were unreasonable at work, in school or at home?

Did you insist on a certain way of doing things, demanded for more than your fair share and your rights or asked for more than was necessary?

Human beings have a capacity to be reasonable and unreasonable. Today’s post talks about how we can turn unreasonableness into an asset for us to grow in financial freedom.

How to be unreasonable to yourself for financial freedom

Being unreasonable to others can get you your way. It may not be the best approach to doing things but sometimes banging tables and raising voices does work. How about applying that to our own financial lives? Bogged down in consumer debt, be unreasonable to yourself and cut spending drastically. Cold turkey and immerse yourself in the PAIN of being thrifty. That’s unreasonable and it hurts but it gives you a kick in the behind for not being able to live within your means! Be unreasonable.

Paying off your loan seems so slow that the interest accumulates and accumulates and your networth grows ever so slowly. Cut out tours and frills for the next 2 years, channel virtually 90% of bonuses and windfalls into making capital repayments for your mortgage. Be unreasonable and deprive yourself of overseas holidays or that nice Rolex you were eyeing. Be unreasonable.

Find that treasury bills and fixed deposits only earn you 0.88% to 1%+ interest. Going by the rule of 72, your investment monies placed in current 3 month treasury bills or fixed deposits will double in 72 years. Hmmm… how many of us are around by then? Be unreasonable and push yourself to learn more about other assets you can invest in for higher returns if you accept some risk. Invest in time away from television, away from watching movies, away from relaxing at home and hit the public libraries, personal finance and investment website for more knowledge. Form a group of like-minded friends to encourage each other to learn and grow and share about financial freedom. In short, sacrifice leisure time to study about investments. Be unreasonable.

Being unreasonable is to break out of your boundaries

To be unreasonable is to do something beyond what is the expected norm. Did everyone grow up programmed to be able to seek the path towards financial freedom? No. We all start with different backgrounds, lifestyles and DNA. What is expected of us and what we expect is largely influenced by our environment in growing up and by the people around us. Challenge yourself to be unreasonable because your eyes have been opened up to the possibilities that exist for you in financial freedom. It can be achieved through hard work, sacrifice and pushing the boundaries of your own knowledge and skills in personal finance through learning and growing and being UNREASONABLE to yourself.

How will you be unreasonable to yourself and push yourself out of your comfort zone in financial freedom today?

Be well and prosper.

Flickr photo by Birdfreak.com.

Mountains are majestic features of nature. Tall, imposing and commanding. They represent the very heights to which the earth can stand out whilst still being of this earth.

Our journey towards financial freedom involves mountains. No, not the beautiful mountain of Grand Teton National Park Mountain Range in Wyoming but rather the personal mountains that each one of you have to climb in order to achieve your goal of being financially free.

To climb your mountain

The height of your own personal financial freedom mountain is determined by how high you set the target. A frugal and simple life does not require you to have a million dollar net worth. You may be able to get by with a nest egg of $250,000, $500,000 or perhaps $750,000. Whatever is the target, you determine how high you want to climb given the time you have on this earth.

For you to climb your mountain, you must first establish how high it is, i.e. what is your projected investment capital required to be able to live off the passive income. You also need to consider how are you going to tackle the mountain. Just as Mount Everest climbers spend months and even years of preparation before they attempt to scale its majestic peaks, you should be well prepared to climb towards your target of financial freedom by reading about personal finance, savings and investments, different asset classes such as treasury bills, equities and related information.

To reach your peak

You climb a mountain by taking one step at a time, ascending towards your target through milestones and checkpoints you have reached over time. One of the ways you can track your progress is to look at the height you have reached over time. Applying similar techniques to your climb towards your mountain of financial freedom means tracking how well you have managed to pay down your unsecured credi t (if any), housing and car loans and accumulated investible savings in cash and CPF.

I track my own personal net worth and more importantly, compute how far off I am from my target over time. I also do what-if analysis to see how long it would take at my current rate to ascend to the peak of my own financial freedom peak.

Knowing how high you have climbed gives you the sense of satisfaction as well as motivation to continue with the journey. The view at the top will be worth it when you look down on what you have overcome to reach that point. I remember when I was in the Singapore Armed Forces (SAF) as a conscript, I climbed up a small knoll in the SAF training areas and whilst it was tough reaching the peak with a signal set strapped to my back, the satisfaction from reaching the top and the excellent view of fellow soldiers trooping up made it worth it.

Are you prepared to scale the Everest of your life?

You want to be financially free. You want to climb the Everest of your financial life. You can do it, if you are prepared for it by living within your means, saving and investing, growing your means and protecting your means.

Be well and prosper.