Hi, this is Francis Lim. Welcome to my show. In this episode I will let you know what brings me to the survival of my life during low periods.Every one of us have our own dreams. Dreaming of bringing our family to Europe for tour every year; buy the car we always dream of; be a successful boss; doing social work without worry….and so on. But end of the day, it voice down to the capital that needs to achieve our dream. Everyone started to hope that we can be financially free so that we could enjoy our dream life without worries.Sad to say that being an employee, our dream will always be a dream. Please do not mistaken, I am not asking you to quite your job today. When you have constant income, it is easy to accumulate financial cost for your investment. So keep your job.My way of doing, first, we have to know some skill of financial planning which consist of financial management and financial Investment. They are both different. Following are what I have practise in my life, and they have brought me to the survival till today.I practice “Kakeibo” a traditional Japanese family finance management. We have seen Japanese succeeded over the last few century and one of which I personally feel their success reason is their culture of bring financial concept into their home. I am not going into details, you can always google it online. I will just highlight a few points that I feel important to know.“Kakeibo” is actually the Art of saving. It is basically a family financial planning book. Recording the income and expenses, which is exactly the same as the balance sheet we use today in the corporate world (Assets over Liability…..). What they do is to minimise the expenses and optimised the saving.The practise of Kakeibo could help you build a healthy habit and even a good culture in your family.There are 6 ways of saving habit I have cultivated by practising Kakeibo:(rule number one)1) Every evening before bed time, I will take out the change of $5-10 from my wallet and save it to my piggy bank2) Act that you spent more. Example. If I spend $25 in the supermarket today, I will pretend that I have spent $30, and save the $5 difference into my piggy bank.3) Create a shopping list before I go to the supermarket every weekend, this will avoid me from duplicating of purchase or over spending. With this list, I’ll go straight to the location of the shelving, get what I need and go off.4) Set rules to fine myself money. For example, I force myself to wake up 6am every day, so when I wake up late, I will fine myself $20 per hour. This can build a good habit5) If I wish to buy a branded goods, I’ll delay a month to buy it. If one month later I still have the urge to buy, then I’ll proceed to buy. This will eliminate most of my impulsive purchase habit.6) If there is any money return from a friend, I’ll safe them in piggy bank instead of spending it. As this is not my income, it is original your money.In my opinion, try not to lend money to others. If need to, I’ll ensure that there is a good plan for returning.So, with this financial management, I have about 30% more saving than usual. If you are like me, your Cash flow should be healthy. Following are my advice on using the cash flow:1) Do not safe them, the bank interest is much lower than the depreciation rate2) Invest on Medical, hospital and a little of life Insurance policy. To me, the rest are not worth to buy.3) With more cash flow, you can do other investment.InvestmentPeople always ask, why do you need investment? This is my theory, when your cash flow is dead, it will depreciate. And when cash flow correctly, if will grow tremendously. Therefore I always have money flowing around in the market. Instead of deposit into my bank account.Now, there are many type of investment in the market. They are classified as passive investment (also call passive income) or Active Investment. Passive investment do not need to spend too much time on it. And the other which is active investment, you need to spend little time to manage it yourself, like a business.I would like to start with passive income first. There are few ways to earn passive income. Invest in a Business that runs by a partner you could trust. But this is very rare to get.Setup an online store is one of which, but it is very competitive now. However, there are still people who has good earning with this model. BTW, this is not my strength.Next, if you have enough capital, buy property and wait for the value to rise, at the same time collect rental. Choose a good location that always has rental demand, it can’t go too bad.People who has not enough capital to invest on property can buy the shares of the property developer or the share of property Reits. In here, instead of collecting rent from physical property, you can get dividends. This is one of the investment I did.For those who has little money, you can investing on shares that ...
