Yes, everybody wants to know Winning Strategies.
However, remember that following proper Process is very important and your winning first stride.
So I'll articulate the best logical step by step planning, starting up by defining your financial objectives which allow you to develop proper Strategies, Tactics & Action Plans accordingly.
Step-By-Step Process For Winning I specify the following 5 steps: 1) Know Where You Want to Go - Set Financial Goal 2) Know Your Risk Tolerance & Optimum Time Management 3) Know the Power of Compounding 4) Know the importance of Diversification 5) Know why you need to Simulate &Monitor See the details for each process: 1) Know Where You Want to Go - Set Financial Goal Firstly, you should clearly identify what you expect from these on-line activities in numerical manner.
Assuming you desire to make Early Retirement, then how quickly you would like to achieve, and how much asset and income do you need for your retirement life, which are essential elements you need to set at the outset.
Each individual's objective is unique fully depending on personal circumstances - age (life stage) / current asset level / current income stability and most importantly your desire of early retirement etc, but the key point here are: - determining where you want to go from where you are now - identifying the gap to be filled.
Realizing the gap and developing action plans to fulfil it is a constructive step to move forward efficiently and constant monitoring to identify any negative variances is the most critical process to achieve your target effectively.
Assuming you are: - 30 with family (spouse + 2 kids) - Your current asset value is $300,000 - Your regular income is $60,000 per annum And you want to: - Retire in 5 years at the age of 35 - Asset value to be at least $1,000,000 - Your yearly income stream to be equivalent at the current level of $70,000 (inflation is built in) This is a simple goal setting in numbers, which I'm sure you can do it within 5 minutes.
Please don't under estimate this exercise, without knowing what you need is something like throwing the ball in the dark, and often you are dazzled with high yield return offer by taking excessive high risk which you usually don't need to take to achieve your objective.
2) Know Your Risk Tolerance & Optimum Time Management Although there is supposed to be no risk of falling into Ponzi Scheme trap, but you need to realize various risk of Unconventional Better Yield programmes regarded as Speculative Investment (please see its details in Risk Management Section for each asset class), typical risk is poor performance of incapable money manager - they may wipe out whole your principal in short period.
Therefore, ask yourself What is the amount you do not want to lose, but if you did, your lifestyle would not be affected yet - this is called "Risk Capital", which is decided based on your risk tolerance.
Surely, it depends on individual circumstances, but as a general guideline, you should not allocate more than 30%+ of your total assets.
Another aspect you need to consider is your time flexibility.
Yes, semi-passive income will provide the easiest way for you to participate in many income generating opportunities (trading / betting) which usually requires high level of skill & knowledge to succeed though, most programme still requires certain time you have to spare in daily basis.
If you have your daily job, you may not want to sacrifice over 30% of your free time for the additional activities in your relaxing time, although many on-line programme offers you a lot of time freedom for your trading / betting, which is obviously a benefit of on-line programmes.
Now, in the above example, say: - Set $100,000 (30%) as a cap for allocating these activities out of your total current assets.
- Limit 2 hours for semi-passive activities that is 30% of 7 hours of your free time = 24 hr - 8 hr (sleeping) - 9 hr (daily job related) You may want to review periodically for the time allocation to make you comfortable allowing you to last long - key success factor.
3) Know the Power of Compounding Albert Einstein once said that "Compound is the most powerful force in the universe or Compound Interest is the greatest mathematical discovery of all time" The compounding is the way that Interest Payments are added to the principal.
This is simply higher interest in the next period for which interest is paid.
This compounding of interest can, over a period of time, mean that the total amount of interest paid is far higher than the simple interest.
Suppose you have $100 with the interest is 10% for 1 year, and if you are allowed to compound, your principal is grown to $259 after 10 years as below, means your interest is $159 - $100 × (1 + 0.
1)¹º = $259 - $100 = $159 while your interest accumulation is only $100 if you don't compound but receive the interest payout every year - $100 x 0.
1 x 10 years = $100 You can see the power of it and the programmes I list here usually allow compound and the beauty is MONTHLY COMPOUNDING that will provide you the exponential growth of your asset, which is a secret of Rapid Growth of your asset allowing you to achieve Early Retirement in Relatively Short Period.
Therefore, you need to be fully aware of the effect of it and consider how you make the best use of it in your planning.
4) Know the importance of Diversification Needless to say, the integral part of portfolio risk management is DIVERSIFICATION.
Here, let me summarize 2 types of new assets programmes specified in the previous article of "How To Achieve Early Retirement With Financial Freedom Vo.
1" as below: (A) add Semi-passive income in Human Asset's part with minimum effort to create multiple income sources - Signal & Alert Service (B) allocate part of your current assets into High-Yield Passive Income Opportunities - Managed Account For both categories, I'm trying to introduce programmes with various range of return though key principle you shouldn't forget here is the fact that Risk Level corresponds to Return Level, means basically there is no such opportunity as "High Return with Low Risk" although Low Return with High Risk could be often found.
Having said so, diversifying with various programme - never ever put all your eggs into one basket, is the essential actions you have to do in the real implementation.
5) Know why you need to Simulate & Monitor So far, I have stated the basic process & key elements you need to consider to create your own unique winning strategies.
Then, let's simulate how you should implement based on the example stated in the early paragraphs.
Let me recap: Assuming you are: - 30 with family (spouse + 2 kids) - Your current asset value is $300,000 - Your regular income is $60,000 per annum And you want to: - Retire in 5 years at the age of 40 - Asset value to be at least $1,000,000 - Your yearly income stream to be equivalent at the current level of $70,000 (inflation is built in) You may want to: - Set $100,000 as a cap for allocating these activities out of your total - Limit 2 hours for semi-passive activities that is 30% of 7 hours of your free time = 24 hr - 8 hr (sleeping) - 9 hr (occupied by daily job) You can construct the portfolio of: - $100,000 = $30,000 for (A) & $70,000 for (B) - In (B), you can be involved in 2 - 3 max programmes that generates average 7% monthly return that brings you $25,000+ income per year which to be put into saving, then $125,000 will be the amount of additional asset in 5 years.
- In (B), you may invest in 3 - 5 programmes with average 4% return per month, and keep compounding, which will become $730,000+ in 5 years (60 months) based on this calculation $70,000 x (1+4%)60 - So when you reach 35: Your asset value will be$1,055,000 = $200,000 (your original asset balance) + $125,000 (from A) + $730,000 (from B), and the assets can be re-constructed into much less riskier portfolio that can produce 5% annual yield target - relatively easy target with very conservative assets by allocating majority of it into risk free asset of10 year US treasury that produces 3%.
Then, from the 1st year of your retirement from the daily job at 36 years old, Your income portfolio can earn: $77,000 = $25,000 (as B activity) + $52,000 ($1,055,000 x 5% return) per year.
- This satisfies your original target.
This is just a simulation but it gives you your numerical guideline of (A) & (B) part respectively to achieve your goal in 5 years.
Obviously, in the real world nothing goes as you plan, that's why you keep tracking the results of your activities and identify the problems when you find any negative variances.
If particular programme's performance doesn't reach your expectation, switching to the other one with fresh start / giving up any loss occurred is a critical action you have to keep doing.
Probably, the most important point is Keeping Certain Flexibility Your Original Target, because when people face any loss or behind the schedule they often fall into the pitfall of catching up by building much more aggressive return portfolio which may eventually result in even worse situation, so whenever you review your progress, the discipline you have to set as a priority should be the above 2) Your Risk Tolerance & Optimum Time Management.
You may feel a bit tiring task but remember 99% of Poor People don't like planning but favour haphazard / hit-or-miss approach.
Conversely, 99% of Rich People don't like hit-or-miss but prefer Well-Prepared approach including Contingency plan.
However, remember that following proper Process is very important and your winning first stride.
So I'll articulate the best logical step by step planning, starting up by defining your financial objectives which allow you to develop proper Strategies, Tactics & Action Plans accordingly.
Step-By-Step Process For Winning I specify the following 5 steps: 1) Know Where You Want to Go - Set Financial Goal 2) Know Your Risk Tolerance & Optimum Time Management 3) Know the Power of Compounding 4) Know the importance of Diversification 5) Know why you need to Simulate &Monitor See the details for each process: 1) Know Where You Want to Go - Set Financial Goal Firstly, you should clearly identify what you expect from these on-line activities in numerical manner.
Assuming you desire to make Early Retirement, then how quickly you would like to achieve, and how much asset and income do you need for your retirement life, which are essential elements you need to set at the outset.
Each individual's objective is unique fully depending on personal circumstances - age (life stage) / current asset level / current income stability and most importantly your desire of early retirement etc, but the key point here are: - determining where you want to go from where you are now - identifying the gap to be filled.
Realizing the gap and developing action plans to fulfil it is a constructive step to move forward efficiently and constant monitoring to identify any negative variances is the most critical process to achieve your target effectively.
Assuming you are: - 30 with family (spouse + 2 kids) - Your current asset value is $300,000 - Your regular income is $60,000 per annum And you want to: - Retire in 5 years at the age of 35 - Asset value to be at least $1,000,000 - Your yearly income stream to be equivalent at the current level of $70,000 (inflation is built in) This is a simple goal setting in numbers, which I'm sure you can do it within 5 minutes.
Please don't under estimate this exercise, without knowing what you need is something like throwing the ball in the dark, and often you are dazzled with high yield return offer by taking excessive high risk which you usually don't need to take to achieve your objective.
2) Know Your Risk Tolerance & Optimum Time Management Although there is supposed to be no risk of falling into Ponzi Scheme trap, but you need to realize various risk of Unconventional Better Yield programmes regarded as Speculative Investment (please see its details in Risk Management Section for each asset class), typical risk is poor performance of incapable money manager - they may wipe out whole your principal in short period.
Therefore, ask yourself What is the amount you do not want to lose, but if you did, your lifestyle would not be affected yet - this is called "Risk Capital", which is decided based on your risk tolerance.
Surely, it depends on individual circumstances, but as a general guideline, you should not allocate more than 30%+ of your total assets.
Another aspect you need to consider is your time flexibility.
Yes, semi-passive income will provide the easiest way for you to participate in many income generating opportunities (trading / betting) which usually requires high level of skill & knowledge to succeed though, most programme still requires certain time you have to spare in daily basis.
If you have your daily job, you may not want to sacrifice over 30% of your free time for the additional activities in your relaxing time, although many on-line programme offers you a lot of time freedom for your trading / betting, which is obviously a benefit of on-line programmes.
Now, in the above example, say: - Set $100,000 (30%) as a cap for allocating these activities out of your total current assets.
- Limit 2 hours for semi-passive activities that is 30% of 7 hours of your free time = 24 hr - 8 hr (sleeping) - 9 hr (daily job related) You may want to review periodically for the time allocation to make you comfortable allowing you to last long - key success factor.
3) Know the Power of Compounding Albert Einstein once said that "Compound is the most powerful force in the universe or Compound Interest is the greatest mathematical discovery of all time" The compounding is the way that Interest Payments are added to the principal.
This is simply higher interest in the next period for which interest is paid.
This compounding of interest can, over a period of time, mean that the total amount of interest paid is far higher than the simple interest.
Suppose you have $100 with the interest is 10% for 1 year, and if you are allowed to compound, your principal is grown to $259 after 10 years as below, means your interest is $159 - $100 × (1 + 0.
1)¹º = $259 - $100 = $159 while your interest accumulation is only $100 if you don't compound but receive the interest payout every year - $100 x 0.
1 x 10 years = $100 You can see the power of it and the programmes I list here usually allow compound and the beauty is MONTHLY COMPOUNDING that will provide you the exponential growth of your asset, which is a secret of Rapid Growth of your asset allowing you to achieve Early Retirement in Relatively Short Period.
Therefore, you need to be fully aware of the effect of it and consider how you make the best use of it in your planning.
4) Know the importance of Diversification Needless to say, the integral part of portfolio risk management is DIVERSIFICATION.
Here, let me summarize 2 types of new assets programmes specified in the previous article of "How To Achieve Early Retirement With Financial Freedom Vo.
1" as below: (A) add Semi-passive income in Human Asset's part with minimum effort to create multiple income sources - Signal & Alert Service (B) allocate part of your current assets into High-Yield Passive Income Opportunities - Managed Account For both categories, I'm trying to introduce programmes with various range of return though key principle you shouldn't forget here is the fact that Risk Level corresponds to Return Level, means basically there is no such opportunity as "High Return with Low Risk" although Low Return with High Risk could be often found.
Having said so, diversifying with various programme - never ever put all your eggs into one basket, is the essential actions you have to do in the real implementation.
5) Know why you need to Simulate & Monitor So far, I have stated the basic process & key elements you need to consider to create your own unique winning strategies.
Then, let's simulate how you should implement based on the example stated in the early paragraphs.
Let me recap: Assuming you are: - 30 with family (spouse + 2 kids) - Your current asset value is $300,000 - Your regular income is $60,000 per annum And you want to: - Retire in 5 years at the age of 40 - Asset value to be at least $1,000,000 - Your yearly income stream to be equivalent at the current level of $70,000 (inflation is built in) You may want to: - Set $100,000 as a cap for allocating these activities out of your total - Limit 2 hours for semi-passive activities that is 30% of 7 hours of your free time = 24 hr - 8 hr (sleeping) - 9 hr (occupied by daily job) You can construct the portfolio of: - $100,000 = $30,000 for (A) & $70,000 for (B) - In (B), you can be involved in 2 - 3 max programmes that generates average 7% monthly return that brings you $25,000+ income per year which to be put into saving, then $125,000 will be the amount of additional asset in 5 years.
- In (B), you may invest in 3 - 5 programmes with average 4% return per month, and keep compounding, which will become $730,000+ in 5 years (60 months) based on this calculation $70,000 x (1+4%)60 - So when you reach 35: Your asset value will be$1,055,000 = $200,000 (your original asset balance) + $125,000 (from A) + $730,000 (from B), and the assets can be re-constructed into much less riskier portfolio that can produce 5% annual yield target - relatively easy target with very conservative assets by allocating majority of it into risk free asset of10 year US treasury that produces 3%.
Then, from the 1st year of your retirement from the daily job at 36 years old, Your income portfolio can earn: $77,000 = $25,000 (as B activity) + $52,000 ($1,055,000 x 5% return) per year.
- This satisfies your original target.
This is just a simulation but it gives you your numerical guideline of (A) & (B) part respectively to achieve your goal in 5 years.
Obviously, in the real world nothing goes as you plan, that's why you keep tracking the results of your activities and identify the problems when you find any negative variances.
If particular programme's performance doesn't reach your expectation, switching to the other one with fresh start / giving up any loss occurred is a critical action you have to keep doing.
Probably, the most important point is Keeping Certain Flexibility Your Original Target, because when people face any loss or behind the schedule they often fall into the pitfall of catching up by building much more aggressive return portfolio which may eventually result in even worse situation, so whenever you review your progress, the discipline you have to set as a priority should be the above 2) Your Risk Tolerance & Optimum Time Management.
You may feel a bit tiring task but remember 99% of Poor People don't like planning but favour haphazard / hit-or-miss approach.
Conversely, 99% of Rich People don't like hit-or-miss but prefer Well-Prepared approach including Contingency plan.
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