The Latest Trend In Strategies For Financial Freedom.

Strategies for Financial Freedom | How to Win the Game of Money

Before we get started let’s do a little mind trick from the top of your head. How long do you think 1 million seconds is how about 1 billion seconds ok hold onto your answer, because it’ll be important for later.

Have you ever wondered how do the ultra-rich invest their money; I mean it must be a little different than most people and you would be right the ultra-rich the billionaire’s the best investors in the world have a set of principles that significantly lower the risks and maximize their results.

For 4 years this guy Tony Robbins hung out with the top 50 investors in the world to tell us the principles they use, that made them so successful and how you can use them. I know that most of you guys are ready to find out where to invest your money to achieve financial freedom.

Where should you invest the money securely?

This because it has been the number one question asked by people even though most of us know at some level that we cannot just put our money in one investment and expect it to make a super-rich at no risk. It’s just not realistic we will need to learn how to protect our investments; because there’s many people out there that are looking to get a piece of your wealth.

Imagine this what if I tell you about an investment opportunity where you put hundred percent of the money you take hundred percent of the risk, but I manage your money and if we make money I take 60% of the gains.

But if the investment loses money you lose money but I still get paid what do you say I bet it took a less than a second for you to know the answer. You will not play in a game that was rigged against you but as Tony Robbins says 90% of American investors hold mutual funds with terms very similar to these.

I know what you’re thinking how do you convince 92 million Americans to these terms, as Jack Bogle says founder of the Vanguard Group is all marketing most people don’t do the math. Now let me rephrase what I just told you in a way that mutual fund brokers try to approach you.

Let’s say that you invested Ten thousand dollars in my fund when you’re 20 years old assuming a 7% annual return when you turn 85 you would have over five hundred and seventy four thousand dollars sounds its good.

But something that I didn’t tell you was that you will have to pay two point five percent in management fees and other charges doesn’t sound like much, but now when you’re 85 you will only have a hundred and forty thousand dollars meaning that you gave up over four hundred and thirty-nine thousand dollars about seventy-seven percent of your financial growth.

In fees and charges are things that the average investor does not pay the attention that it deserves which can greatly affect the investments potential growth in the long term fees that seem small compound over time.

The ultra-rich do anything in their power to keep their fees and charges to an absolute minimum this is one of the biggest motivators to seek as many tax breaks as possible or why they defer their taxes to be paid later because they will not earn as much with after-tax money. Because once the money is out of the investment it cannot earn any more.

What is the price of your dreams?

Let’s discuss about you what is the price of your dreams?. Let’s do a quick exercise to find outlet me ask you how much money will you need to make to be financially secure, financially independent or financially free. You don’t have to be right just take a guess you should write this on a piece of paper since we’re going to use this number later.

The Latest Trend In Strategies For Financial Freedom.

Do you have your number is there a million is the five million is the five hundred million is it a billion dollars okay chances are that your number you just wrote down might look a little intimidating.

Right now but we’ll break it down in just a second; it is important to say that we as humans have a very hard time understanding big numbers we hear the words millions and billions even trillions being thrown around everywhere. That we don’t really understand the magnitude of these numbers now at the beginning I asked you to guess how long is a million seconds and how long is a billion seconds are you ready for the answers?

A million seconds comes up to be twelve days a billion seconds comes up to be thirty two years we’re you close to the answer this is just to illustrate how little we understand the magnitude of these numbers and how the number that you just wrote down might greatly exceed. What you actually need to live the life you desire.

Let’s breakdown your financial security!

Hence let’s break down the cost of your dreams, first let’s look at financial security how much do you spend in living expenses like your mortgage, utilities, food, transportation and insurance.
How would you feel if these five things were paid for as long as you live without having to work to pay them. How would your quality of life be if this happens much better?

I suppose now in the U.S. the average basic expense of a household is a little bit over $34,000. Tony tells us to multiply this number your yearly expense number by 20 and this is the number you will need to be financially secure.

The Latest Trend In Strategies For Financial Freedom.

Now there’s two faces to achieve this goal the accumulation phase is when you save and invest your money to get to your target and the D cumulation face where you enjoy the money making you more money. Without you having to work now when you’re accumulating money you can invest in vehicles with higher return but with a little more risk in the D cumulation phase you are using your investments.
To live without having to work then you switch your investments to a safer more conservative return.

Think about the number you all originally wrote down if you actually do this exercise you’ll be surprised that the dream of financial security is probably a lot closer than you previously imagined, and this is just financial security.

You can do this same process you know the exact amount of money you need to achieve financial freedom; this is not just to cover your basics but to live the lifestyle you want by breaking down. How much your lifestyle spends in a year multiplying it by 20 according to Tony you will have the target number you need in safe investments to be able to afford this lifestyle.

How do I invest my money?

Without having to work now let’s discuss about the actual investment strategies these ultra-rich high performing investors use. Now we’ve all heard you never put all of your eggs in one basket but how important is this really according to David Swanson, an institutional investor who took yells portfolio from one-two over twenty three billion says is extremely important to diversify.

Remember the market crash of 2008 many people lost their retirement funds, their homes, their savings it was a dark time not very much for Ray Dali. The founder of the largest hedge fund in the world lost only three point nine percent that is three point nine percent of his games meaning an average; he still made money.

Smart Investing : Secure Bucket and Growth bucket Dream bucket

To invest You need to have two buckets your secure bucket and your risk growth bucket the near secure investment bucket are investments that do not normally bring very simulating revenant. But you’re also not taking very much risks meaning you won’t lose nearly as much money when the market drops and trust me it will.

These investments are things like money markets bonds, CDs market link CDs which bring higher returns your pension, if you have one low interest annuities be careful with this one they might have lots of hidden fees and the last one security knows every won’t going much detail on how they work.

Now of course you will have to take a look at each individual asset and institution. Issuing it to assess its validity your risk growth bucket is where you take more risks but you can get higher returns notice; how I said can the higher risk is guaranteed but the high return isn’t the most common risk.

Growth assets are equities like stocks ownership and companies mutual fund indexes or ETFs also real estate where you can buy the actual building and use it as a rental property or flip it for a profit or you can buy real estate investment trusts.

Security notes can also be riskier depending on which one you choose now Tony says that many people make the deadly mistake of investing the majority. If not all their savings into their risk growth bucket Swanson says the market will lose 50 to 70 percent at least once in your lifetime. So you do not want most of all of your life savings at risk there are three factors that can help you determine how much risk you want to take.

The Latest Trend In Strategies For Financial Freedom.

Stage in Life

Number one your stage in life how much time do you have ahead of you to make mistakes and recover if necessary. If you’re younger you can be more aggressive since you have longer to recover in case of a loss.

Liquidity

You’re available liquidity if you have a high income and have a good gap between income and expenses you could afford to make more mistakes and still make up for it.

Risk tolerance

Number three your risk tolerance, this all depends on you and what gives you peace of mind. There are people who are comfortable taking more risks than others knowing what kind of risk level you are comfortable with is also very important. Unlike many investors who try to anticipate what the market will do and put their money and other people’s money at risk.

The best investors in the world know that they are likely to be wrong; so they design an asset allocation portfolio to protect them. Even if they are wrong this way they can make money in the long run, even if they lose in the short term.

This is why diversifying is so important as important as these two buckets are there’s a third bucket which is just as important your dream bucket. You put money in this bucket to enjoy to buy yourself your dreams right now that’s the purpose of the original two buckets right to better the quality of your life.

The purpose of this bucket is for you to spend and enjoy so whether that is date nights with your significant other or saving to go to the Bahamas or buy yourself a home.

There’s a couple of ways that you can put money away in your dream bucket you can take a percentage of your income and put it away until you save enough to buy your dreams or when your growth bucket gets a big hit and makes positive growth.

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You can take the winnings and divide them between all the buckets this way you will be excited to keep earning more, saving more and investing more effectively. Because ultimately you are doing this to better your life and achieve that dream that you’re pursuing.

— Susanna tips and tricks

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FINANCIAL FREEDOM

What is financial freedom?  This is a question that many people ask, but it is not always easy to answer. Financial freedom means different things to different people. For some, it might mean being able to quit their job and travel the world. For others, it might mean being able to provide for their family without having to worry about money.

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