You become financially independent, or financially free, when you no longer have to work in order for all of your expenses to be covered by your income. When planning, many typical financial advisors solely look at your saved assets and ask the question: ”How can you get a good rate of return from your assets?” Unfortunately, this is a terribly small-minded and short-sighted approach. You don’t maximize the value of your life by just utilizing your present savings. Instead, I suggest you use your resources, particularly money and time, in order to have the greatest impact on your life. When it comes to your financial future, have your goals in mind, and make decisions based on maximizing your financial potential. Financial independence is definitely attainable. Whatever your age and stage in life, you can make solid progress toward building a passive income stream that will finance your life and your Why at a level beyond what you currently may think is possible. Here's to your future Financial Freedom! To Better Wealth, Caleb Guilliams
DAY 5 - #1 Subject: WARNING: Buying a house - Most people are more emotionally invested in this financial decision than any other one that they make. After all, it’s their home and not just a house. It’s a place where they can relax and feel comfortable being themselves every day, raise their family, celebrate holidays and special occasions, take part in hobbies, entertain, and more. However, there are some important things to consider with this big purchase; how you pay for your house matters. When it comes to efficiently buying a house, you need to look at three areas: How to minimize loss (wealth transfers). How to maximize future growth (opportunity cost). How to have the most security (control). The issues involved in buying a house are essentially between how you pay for it and when you pay it off. When making this decision there are many factors that need to be considered. Payments Potential tax benefits House value Inflation Interest earned vs interest paid Opportunity cost Security At the end of this chapter you will have a better understanding on why efficiency matters as it relates to our house. Here’s to efficient wealth! To Better Wealth, Caleb Guilliams
DAY 6 COMPOUNDING FOR LIFE (AND WHY MOST NEVER ACHIEVE IT!) Albert Einstein has been credited over the years in various financial publications as stating: “Compound interest is the eighth wonder of the world.” Another statement often attributed to him declares: “He who understands it, earns it. He who doesn't, pays it.” What is compound interest? Compound interest is when your interest starts growing on the original principal and on the additional interest. The interest becomes powerful the more time it’s given to grow uninterrupted. Compound interest is simply a function of time and interest rate. The longer your money compounds, the greater the growth.
- Spring '15
- Personal Finance, Caleb Guilliams