4 Strategies (9 Actionable Tips) To Achieve Financial Freedom Faster

1. Save more

Rich people always say “pay yourself first”.

What it means is that you have to dedicate a portion of your income to yourself — your own investment, so that the money grows and provide dividends and returns to you. And all of this starts with saving.

There are three strategies that I personally use with saving:

a. Automatic saving

The best way to save is when you don’t see the money in the first place. Either you set up an automatic transfer from your checking account or set up an automated plan to send a specific percentage of pay check to a separate account or retirement account.

The key to success: you have to make savings automatic.

Your financial future will flow from your ability to save systematically.

b. Prepaying mortgage principal

Besides the automatic plan to save a dedicated amount, if you have a mortgage, you can also consider prepaying your next month’s principal. As the interest of a mortgage is based on the outstanding principle, by prepaying your principal, you could pay off a 30-year mortgage in 15 years in many cases (which means a lot of saved interest!).

c. Deliberate spending

Rethink your current spending: do your expenses, regardless of big or small, bring you the thrill and happiness as they should?

Saving should not be about depriving yourself.

It’s about adjusting your spending habits to mirror your core values and indulge only the experiences that truly matter to you. The deliberate spending allow you to invest in a quality of life that is sustainable and brings you joy.

2. Earn more

There are lots of ways to earn money in this day and age!

For example, online reward programs that provide cash back for purchases and spending. And upload photographs for a commission with your smartphones. For more, you may refer to the 6 free apps that you can earn money with the article:

Extended reading: 6 Free Apps that You Can Easily Make Money with (No affiliate links)

Earning more money is about being more valuable in the marketplace for more people. If you do not have any idea how you may earn more, you can brainstorm with these questions:

• How can I serve more with the same time and skills?
• Who would find my skill beneficial to their lives?
• How good am I in the marketplace? How to become better?

Learn to work harder on yourself than you do on your job.

3. Reduce taxes

There are 3 ways you can consider to reduce taxes.

a. Sit down with a tax advisor

There are legitimate ways of reducing taxes — think property and depreciation, mortgage interest payment, dependent allowance, annuity premium etc. It would be highly beneficial to have a tax advisor to go through your tax with you. The hourly rate could be expensive but the savings in taxes could be worth more than the advisory fees and could benefit you in years to go.

b. Explore tax-deductible investment

Or you may google tax-deductible investments and explore yourself. Governments are encouraging people to buy annuity products in anticipation of the aging population and heavy retirement and medical financial burden, hence the tax benefits. You can speak with the insurance companies — their agent or financial planner would be more than happy to explain to you how this works (just note that they probably get a commission if you buy the plan but you can take this as a learning opportunity).

c. Maximize pension account

To maximize tax benefit, you can also consider making the maximum contribution to your pension account. The investment in pension account are tax-deferred, which means the return would only be taxed later (when we take it out from the account and when you do so, we probably have retired and have lower income for tax purposes). This could mean a significant tax savings over the 10, 20 or 30 years of period when we are working.

4. Get better returns

To achieve financial freedom faster, the fourth way is to get better returns.

Yes, returns are subject to a lot of factors, including the economic markets, investment tools, policy changes, etc.

Having said that, we can take a 2-steps approach to get a better return:

a. Explore different investment tools

There is a saying that “if all you have is a hammer, everything looks like a nail”. When all you know is keeping the cash in banks, you could be losing out on a lot of other tools that can bring you a higher yield of returns within your risk preference.

Knowing more can help you choose the better tools that could provide a better solution. Here is a list of various financial tools that you can look into:

Security bucket investment tools:

• cash
• gold
• bond (treasury bond which includes T-bills, T-notes, T-bonds, TIPS, corporate bonds, municipal bonds)
• certificates of deposit (CDs)
• pension
• annuities
• life insurance policy
• structured notes

Risk and growth bucket investment tools:

• stocks
• high-yield bonds
• mutual funds / ETFs
• real estate
• currencies
• collectibles

b. Leverage with care

Using leverage is not the privilege of investing in real estate, if you explore more, you will find banks and brokerages providing leverage for stocks and funds as well.

Leverage has the effect of magnifying your investment but it can also magnify losses. So it is a double-edged sword and should be used with care.

Note: this is not investment advice. I’m not financial planning professional. Just sharing what is working for me as part of my investing strategy or what I have learned on my investment journey. Please be reminded to do your own research and consider your own circumstances before making any financial decisions. You could also check with your financial professional to understand what would be best for your situation.