Achieving Financial Security is what everyone would like to achieve. But what exactly does it mean? What do we really need to know and do?
So let me try to simplify this to be easily understood and executed. Financial Security is achieved when your passive income is more than what you need to support your basic needs which includes food, clothing, and shelter, plus your health care needs such as medications, regular check ups, dental care, and hospitalization. On top of this, your passive income must also be enough to pay up cost of education for yourself and or your children.
You must ensure you have enough funds to face up with any emergencies in life which includes home repair, car repair, and many other needs. Normally, we can allocate about 3-5 months of your monthly expenses.
To complete your preparations, you need to make sure you have insurance protection for yourself and for your properties. You must have yourself and your assets or investments such as your home , car, and the contents of your home including your jewelries, furniture, and valuable appliances insured against natural calamities, and burglary. It is highly recommended that we get insurance for acts of nature including earthquake, and flooding especially here in the Philippines where we get a lot of typhoon and earthquake visits every year. Get some insurance against burglary in case your area is high risk for unauthorized intrusion, or in simple terms, if there were any risk of break-in.
Passive Income is what we need to measure versus our needs and versus our active income. Passive Income are income you generate such as Royalty Income, Investment Returns, Rental Income, Management Overrides, and any other source which you are receiving without actually working for it.
You can only achieve Financial Security if your source of income is secured. And the only way you can secure your income is if it is passive income.
If you want to get coached how to achieve Financial Security, just send me an email.
God bless us!
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