Being Rich OR financially Independent

Being Rich and Being financially independent are totally 2 different things.

Although you can be rich & be financially independent at the same time.

There are 4 kinds of people in this world.













1. Poor & Financially Dependent.

2. Poor & financially independent although this is uncommon, theoretically it can be done.

3. Rich & financially dependent, this is most common in our society today.

4. Rich & financially Independent.

Which category do you belongs to ?

Example 1: A senior manager in a certain company drawing a monthly salary of $20,000 a month.
Is that consider rich ? Err.. maybe quite well to do, and to some people maybe quite rich but not exactly very rich, but still can afford a nice European car with a nice Condo. Financially independent? not quite, when they bad market hits, he might lose his job. You must be thinking, "when they bad market comes, everybody is affected" I agree to a certain extent. You see a high post manager in a big company usually still have a fixed working hour, example, 830-6? And as his position and influence in the company grows, his income increase, so is his responsiblities.

So is he consider quite rich? YES.

Financial Independence? NO.

Example 2: A business owner owns a few seafood restaurants in singapore. He have 100 manpower working for him with his team of supports running the business for him. Every year he earns about $400,000 dollars on average, factoring in good times and bad times.
No doubt in the first few years there's abit of risks and he work very hard, but once his businesses start rolling and generating income for him, he doesn't have to work that hard anymore, but he still needs to supervise the progress, however he can choose to spend more time with his family and going on a holiday when he chose to.

So is he consider quite rich? YES

Financial independence? YES

The main differences between the 2 fictional characters which i highlight is very obvious.

One work very hard for money and is still doing so.

The other work very hard for money and after he has the money, he made the money work for him instead.

You can be a General Manager of a huge company and drawing a salary of $500,000 a year.

But I can be a small business owner and my business generate $300,000 for me a year.

Financially, you're richer than me, but my income will not have a huge impact regardless i work for 3 months a year or 6 months a year. However, if you were to work only 3 or 6 months a year, i think you will lose your job.

When i talk about business, i mean business with a sustainable business model and is able to make money regardless of your existence.

I've read a book before and it talks about 4 kind of people who are able to achieve financial independent,

1. Entrepeneurs
2. Investors
3. Insurances/Property agents
4. Multilevel network marketing

However, I still believe there's a way to achieve that.

Some people would known it by the "8th Wonder of the world"

It's called the power of compound interests.

Remember your credit card interests? 2% a month ?
Let this idea of compounding interests work for you instead of working against you.

Instead of building up debts and let the banks compound your debts, instead put your money in a medium that is able to compound interests for you, months after months and years after years.

Let your money work harder for you instead !