I have been blogging more than five months since I posted my
first article through PISO Ni Juan today. I am so happy that with such short
period of time I was able to reach many Filipinos sharing my thoughts and
experiences about personal finance as well as investing with the different
investment vehicles available in the Philippines.
By reading PISO Ni Juan articles, people get informed. Some
people learned from the information they read and share it with their
acquaintances as if it is just another interesting story. Some read the
articles and let it pass by. Some people learned from the information, silently set their long term goal, defined their strategies to attain that goal and made their initial
steps confident that they will attain their target within their time horizons.
HOW ABOUT YOU? Are you willing to take your FIRST BOLD steps towards your financial
freedom?
If yes, welcome and join me now on our journey towards
financial freedom by following these "5 Smart Steps Towards Financial Freedom".
5 SMART STEPS TOWARDS FINANCIAL FREEDOM
STEP 1. Set Your Goal
The first
step towards financial freedom is to get your motives clear by putting a clear
picture on what you really wanted to attain in life. This is what we call Goal
Setting.
Without a
clear target, you will be strayed on your real purpose and will not accomplish
what you wanted in the end. To help you set a clear and realistic target, let’s
use the SMART goal setting method to
define clearly your target.
SMART means the following:
Specific – you must define your intentions
clearly by identifying a specific goal.
Measurable – you must set your goal in
such a way that you can measure the results.
Achievable – you must set your goal in
such a way that it can be accomplished.
Realistic – you must choose a goal that
matters.
Time-bound – you must set your goal to
be accomplished within a given time frame.
An example
of a SMART Goal is “ I will build my retirement fund of P1,500,000.00 pesos
through investing P5,000 pesos a month in XYZ Equity Trust Fund for 10 years”.
STEP 2. Define
Methods and Strategies To Achieve Your Target.
To achieve
your goal, you need to define your strategies and methods to fulfill your purpose.
These will be your vehicles for you to reach your goal. Your strategy can be
investing in paper assets with compounding effect or a rental real estate that
can yield both capital appreciation and monthly rentals.
An example
of paper asset investment vehicles are the following:
- A diversified portfolio of unit investment trust funds funded every month through a Regular Subscription Plan or Easy Investment Plan.
- A mixed portfolio of mutual funds funded on a random basis.
STEP 3. Take
Action.
This third
step is the most critical if you wanted to succeed in your goals or not. Most people
fail because they failed to act. Once you have defined the way you can accomplish
your goal, execute your plans and put it into actions.
STEP 4. Monitor
Your Progress.
Once your
plans are executed, it is worthwhile to track the performance of your
investments. It is handier if you can put it in a spreadsheet file on your laptop
or smartphones. With this you can easily check if your monthly progress is in
line with your long term goal.
STEP 5.
Review Your Progress According To Your Goal.
Based on
your spreadsheet progress monitor, you can check if your progress is aligned
with your long term goal. It is more convenient if you are a little upfront than
behind your target. This means the probability of hitting your goal is more
certain. Likewise, if the trend will continue as such, you may attain your goal
earlier than planned.
On the
contrary, if you are behind your target, you can adjust your strategies and
plans to have it in parallel with your long term goal. If you have invested in
a paper asset, this can be increasing your monthly contribution or adjusting the
composition percentage of your diversified portfolio.