How to achieve financial freedom through 7 simple steps?

How to achieve financial freedom through 7 simple steps?

Tony Robbins is a philanthropist and #1 New York Times bestselling author. Based on his research and one-on-one interviews with more than 50 of the most legendary financial experts in the world-from Carl Icahn to Warren Buffett. Tony Robbins has created a simple 7-step blueprint that anyone can use for financial freedom. In his book "MONEY Master the Game: 7 Simple Steps to Financial Freedom", he discussed earning more, saving more, meeting the masters, investing the difference, reducing fee & taxes,getting better returns and speeding.

The final secret is to do it, enjoy it and share it. As Wiston Churchil said "We make a living by what we get. We make a life by what we give. This book is not only about money but also about life.

"MONEY Master the Game: 7 Simple Steps to Financial Freedom" is a worthy reading if you want to know more details of the 7 steps.

How to get rich by taking the express train?

How to get rich by taking the express train?

There are many ways to get rich. They are express trains and slow trains. There is a kind of express trains called lever. A lever amplifies an input force to provide a greater output force, which is said to provide leverage.

In our actual life, there are many examples of leverage.
1) Moving a large stone: Before the invention of mechanical tools, ancient people knew to use wooden sticks to shake a large stone by means of leverage.
2) Global travel: After the invention of the aircraft, people can use the help of the aircraft to move quickly and reach the other side of the earth.
3) Development of large projects: It is difficult for one person to develop a large project alone. If many people are hired, large projects can be developed.

To achieve financial freedom, there are also many levers that can be used, such as the following examples.
1) Credit loan: Generally only need to pay 20% down payment, you can have 100% control of a house.
2) Network leverage: Once you post a product's information at Internet, lots of people will be aware the product in a few seconds.
3) Options: You will have the right to buy or sell a stock through purchasing the option of the stock.


When using leverage, be sure to understand the risks. Once you can mitigate the risks, you will be able to get rich quickly.

The author of the following book retired at age 35. If you want to use leverage and retire early, this book is worthy reading.

How to use tax law to protect your wealth?

How to use tax law to protect your wealth?

Taxes steal your life away. Income tax, sales tax, property tax, carbon tax, capital gain tax, interest tax, federal tax, provincial tax, and so on. Some researchers indicate that 25~30% of the wealth is eaten by taxes. Assume the average age of a person in a developed country is 80-year old, the person has to work about 20 years to pay off taxes. Therefore, it is necessary to find a way to protect your wealth.

To protect wealth, most rich people pay little or no tax. Keep in mind, government's responsibility is to improve economy, promote society, provide a good environment for students, reduce patients' medical expenses, reduce workers' public transit costs, job hunting, business startup, investment, market development, high tech innovation, etc. To achieve these purposes, the tax law should benefit the above. Therefore, some incomes related are tax deductible.

To read and understand your country's tax law is a good start to protect your wealth. The following books are worth reading.

 

What is value investing and how to use this strategy?

What is value investing and how to use this strategy?

Wealth is like the water in the sea. When the wind blows: the top of the wave is high, just like the stock price is high; at the bottom of the wave, the water level is very low, just like the stock price is very low. When wind stops, the sea level returns to normal, just as the stock returns to its intrinsic value. It also indicates that price is not able to be always high or always low.

The correct strategy is to buy under intrinsic value, i.e. buy at the bottom of a wave. If you buy a stock, your return of investment should contain dividends, company capital growth, and gain due to price fluctuation. If you buy a real estate, the return of investment should contain rent and appreciation.

To differentiate between intrinsic value and market price, besides the analysis of the company or the real estate, the important recommendations: 1)being unemotional about your investments and 2)taking advantage of other people's emotions. As  Benjamin Graham said " Be greedy when others are fearful and fearful when other are greedy."

Both of the following books are very good and are highly recommended.  

What kind of stocks are safe and have potential to provide steady return?

What kind of stocks are safe and have potential to provide steady return?

Warren Buffett has a clear strategy for making money. He says, "The first rule of investing is don't lose money; the second rule is don't forget Rule No. 1."

Following the above advice, prior to investing stocks, it is recommended to identify what kinds of stocks are safe.Then, to identify which stocks have high return.

Usually, stocks with large cap (above $10 billion) best reserve for the investors who want steady appreciation with great safety.

How to identify these stocks? S&P 500 index (500 companies), Dow Jones index (30 companies) and Nasdaq 100 index (100 companies) are good references. But, I usually identify these kinds of stocks from the 500 larges companies in the list of S&P500.

Once we identify some stocks through S&P 500 index, what is the next step? It should be aware that not all stocks with large cap have good return.All stocks have risk and volatility. Because the growth of a stock is related to management team, market, policy, new technology development, etc. It is difficult to predict the growth correctly. Therefore, I prefer to dividend stocks (dividend yield > 5%) with steady growth instead of high growth stocks without dividend. No matter how the market changes, I can get dividend steadily. This kind of passive income will reduce the loss due to the volatility in stock market. If the price of the stock rises, I can also get the appreciation of the stock. The return of my investment includes the money that I make from the stock's capital appreciation and the money I make from the the stock's dividend.

In summary, the stock of a company with a market capitalization value of more than $10 billion and steady growth dividend may need your attention.

Helping others will make you rich.

Helping others will make you rich.

As long as you are able to provide value to others and help others, you will build your wealth eventually.

There are so many examples. Amazon provides convenience to customers through shopping online and also helps sellers. Microsoft develops software to help customers' office work. Coca-Cola Company makes great nonalcoholic beverage concentrates and syrups.

Therefore, prior to getting rich, think about the questions "what can I provide to others? How can I help others?"

How to become a millionaire?

How to become a millionaire?

Usually, a person cannot be a millionaire overnight. Most millionaires have the following characteristics: thrifty (spending less than earning), good at planning life (saving, reasonable debt), wealth accumulate over time (patience, compound interest, time), and good at investing (keeping study and understanding investment skills).

The following books talk about more about how to become a millionaire. I believe that action is the important thing instead of dreaming only.