Definition: Passive Income > Expenses = Financial Freedom

That says when you have passive income regularly greater than expenses, you reach the financial freedom as auto pilot.


The most important thing is to develop the habit of personal finance management of 5 ways to accelerate the financial freedom:

1. Monitor the flow of money


(a) Don't let go of any money.
(b) Small rivers converge into large rivers.
(c) Use Billing, for example excel, to track the flow of money.


2. Build up an automated deposit system


(a) Automatic deposit: save the money first every month before expenses.
(b) Automatic payment: Set automatic deduction of water bill, electricity bill, and mobilephone bill etc. This will save your time on the road to pay the bill.


3. Learn to budget


Rich people's consumption and saving habits are different from the poors, because they maintain budgeting habits which help them to understand their financial situation.

They do it by:
(a) Observe the income and manage expenses. Then transfer the excess money to investment.
(b) Make Investment and financial automation

* They do budgeting for for reading, travel, entrepreneurship, marriage, etc.

* Personal Financial management by multi-account management and make each fund to do it's purposes.

After receiving income every month, divide the income into 5 propotions:
50% life expenses
10% investment and financial management
10% learning to grow
20% long-term expenditure
10% entertainment

The configuration varies according to the needs of each person. The higher the proportion of investment and financial management, the better.

4. Eliminate debt


Get rid of consumer debt, card debt, car loans, credit loans, policy loans, school loans.

In the low-profit era, should we take the money to invest?
When it comes to borrowing money to invest, it is assuming that investment will make money, however investment does not always make money.

When there is a loan, part of the income per month is subject to bank interest.
That also means that your part of the labor force is the bank's assets.


5. Improve income structure: multiple income



Multiple income is just like example: The aircraft has multiple engines and follows ICAO standards, ETOPS-180 standard means the aircraft can continue to fly for 180 minutes with a single engine, can fly to the nearest airport.

But nowadays, there is no guarantee that a single source of income can support oneself to retirement.

Dependent income: The income source is not autonomy, and it does not depend on his/her own ability to work, but on the company’s ability to survive.

Multiple income: Do not rely on a single source of income, maintain more than two income engines. More source of income, more ability to choose a better life. Besides, multiple engines means multiple insurance. You can do multiple income like:

(a) Establish investment income that is stable and can generate cash

flow, such as: stocks or bonds that will distribute dividends.

(b) Do part time job, side line, or amateur career

The school taught us to find a job after graduation, and work hard until retirement. But following this concept leads to the situation of not being financially free.

Finally, if you can maintain the discipline of these 5 ways of accelaration, you can accumulate wealth assets bit by bit and cycle it positively.