Am I now ready to take the risks of investments?
Recently, we started our journey to have a house that we can call our own. For me to be able to have a higher chance to get approved for a bank loan, I grabbed the opportunity to be a full-time employee to the company I’m working for as a consultant. They offered it to me last year but I declined since I’m enjoying the 8% income tax privilege for being just a consultant. But since in the eyes of money lenders like the banks, they preferred that you are employed because it is more secured in terms of benefits, compensations, and the government laws that protect the employees.
Since I’m transitioning to an employee, my tax will change from 8% into a percentage tax, which after I do the computations, a huge amount will be deducted from my net income. With that, I negotiated with my boss to make some adjustments to my salary to at least not affect my net income. Fortunately, it was granted and a few thousand pesos is added to my net income, and a company share is added (I think I really did well with my job, hehehe!).
With the addition of the few amount on my take-home pay, I came to think of something where I can put it as an investment instead of making our expenses bigger. I bought the book “Rich Dad Poor Dad” by Robert Kiyosaki, which is a best-selling personal finance book.
No wonder the book is a best-seller. He got everything right and made me realize that I’m the type of person that is seeking financial security than taking the risk to seek financial freedom.
To be honest, I have this plan to take a master’s degree by next year, well, aside from the prestige that I have a master’s degree, I’m also planning to use it as an investment to get a higher salary and be more competitive. But the book made me realize that I’m just being dependent on my current and soon-to-be employer/s. Trying to climb the corporate ladder by obtaining a master’s degree, get more certifications, and work hard, which in the end will bring more money to my pocket after the government got their share which also becomes higher as my salary goes up.
As an employee, I thrive and work hard to make other people rich then hope that will compensate me more with my contributions. Then when the time I reached my retirement comes, to be honest, I don’t know what will happen. I have insurance, mutual funds, and social security from the government, but to be honest, I don’t know if it will be enough for me and my wife once we got old. Currently, I’m putting my future in the hands of the government and the insurance companies that I’m currently pouring some of my money into.
Then my Consultancy Business, which I initially planned to be a Software Company, but due to insufficient funds and fear of losing, I got stuck in Consultancy Business which I’m the sole owner and operator, so in reality, I’m just a self-employed person whom I don’t have financial freedom because it is a “no-work-no-pay” system.
That book thought me that I should build my asset, which will generate passive income. That eventually will give me financial freedom because there is no need for me to work for money, but it is the money that works for me.
The poor and the middle class work for money. The rich have money work for them.Robert T. Kiyosaki, Rich Dad, Poor Dad
The book gave me a new perspective when it comes to finances. I’m already determined to aim not for financial security but for financial freedom. But I still know very little when it comes to the technicalities of investing, so I’m currently reading more books (as of this writing, I’m reading Robert’s Cashflow Quadrant: Guide to Finacial Freedom). And aside from preparing by learning the technicalities, I’m also preparing myself emotionally. Investing is a risky game, the more risk, the more you can earn. So I should be prepared emotionally as I might lose big time with my future investment/s. But just like what Robert said in his book, there is no rich person (at least those self-made millionaires) that didn’t lose money, it is really part of the journey to financial freedom. But of course, the risk should be a calculated risk, because that made the gambler and investors different. For gamblers, investing is a game of chance, while for investors, it is a game of skill.
Winners are not afraid of losing. But losers are. Failure is part of the process of success. People who avoid failure also avoid success.Robert T. Kiyosaki, Rich Dad, Poor Dad
So, am I ready to take the risk? As of this writing, I think not yet technically and emotionally. But I’m already doing the preparations which I think I need before investing.
In the Rich Dad, Poor Dad book, Robert mentioned that his Rich Dad constantly gives to his charity of choice and to the church. Robert mentioned that rich people tend to give because they believe that if you give, you will also receive. The same as what God promised to us, give from the generosity of our heart, and God will surely provide.