Financial Freedom Art Gallery

There are days when I go a little eccentric and I just need to express myself through my blog. For those who are wondering where I got all these pictures from, you ought to check out Photofunia. It allows you to do really cool stuff with pictures that you upload.

Today I allowed myself to spend some money buying certain accessories for my house.

I was pretty happy with the results and I would say it was definitely money well spent. Looking at the stuff I bought makes me happy everytime I get home.

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Why You Should Quit Smoking

All smokers should quit smoking. Logically, I guess everyone knows the health reasons why. Today, I will like to show the financial aspect of smoking.

Smoking Raises Your Insurance Premiums

Insurance companies know that smokers have a higher risk of falling ill and perhaps dying young. This is not based on guess work but on actuarial studies where they study statistics and stuff. As such, a male in his 30s who is a smoker will pay a higher premium for insuring himself compared to another guy who is not a smoker.

Overall, this premiums might seem only slightly more but add it up over the years and it could amount to a tidy bit of money.

A Pack of Cigarettes Costs Like A Meal?

If you smoke a pack of cigarettes a day, you would be spending easily $5 over dollars per pack. This is good enough to pay for lunch or dinner!

Why would you want to spend an additional $5 a day when compounded over 30 days, that amounts to $150.

Over 12 months, it is equivalent to $1800!! That is easily half a month's pay for a graduate that just started working.

If you are in your twenties, just invest $150 a month at 8% returns and you will be amazed at how much money you will have when you retire.

Smoking Accessories

Smoking stinks. And I mean literally. That is why smokers often have to buy a pack of cool mints to suck on after they have had their fix so as to make their breath fresh.

This pack of cool mints again costs them $$$.

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Where Did My Money Go Today?

Today, I tracked my spending for the entire family:
The total spending was $42.90

Meals Cost the Most

70% of the money spent today went into food. A breakdown as shown below

Breakfast (takeaway)= $2.70
Lunch (takeaway)= $8.00
Dinner at Ikea = $17.00
Snacks at Ikea = $2.00

Miscellaneous Items

30% of the money went into buying miscellaneous stuff and carparking

A Stool from Ikea = $9.90
Carparking at Ikea = $3.30


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Why People Buy the Stuff They Buy

Choice Overload

I was walking along one of those huge supermarkets today when I made a few interesting observations.

There were a few elderly lady that were simply staring at 1001 different types of can food displayed on the ceiling high shelves.

All of them seemed to be deep in thought and had no idea which to buy. I was standing there and wondering what was going through their heads. What would make them choose one product over another?

Logic Versus Emotions : The Psychology of Buying

Can you remember what was the last item that you bought recently? Was it today? Good!

Now think about the thought processes that went through your head as you made the decision to buy that item.

I believe that certain factors compels us to buy something. However, I believe that LOGIC has nothing to do with it. When it comes to buying stuff, people are totally not logical. Even the most logical person that you know of will become illogical when it comes to spending his money.

I made another interesting observation:

Ever noticed that a 1.5 L bottle of softdrink is sold at say $1.40 while a 0.5L bottle is sold at $1.10 . One just has to pay 30cents more to get 3 times the amount of soft drink.

However, you will most probably find people choosing the 0.5L bottle as it is simply more convenient to carry around. This is especially so if they are not heading home straight and they're just looking for something to quench their thirst.

In the above example, we can clearly see that people buy things based on a host of factors and not based on price and value for money alone. It is what I would term the "psychology of buying".

It is my view that when it comes to buying, people often buy based on emotions and not on logic.
I hope to expand further on this post at some later date.

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How to Achieve Financial Freedom

Over the past one year, I have shared a lot on how one can become financially free. I think I have come to a point where it's difficult for a new reader to find a certain post.

The following are links on certain of my suggestions on how one can become financially free. I hope that you find them useful.

Introduction to Financial Freedom

• My Definition of Financial Freedom - a simple introduction on what I believe financial freedom is and my own personal goals.

• Financial Freedom Number - another method of determining how far you are away from financial freedom is by calculating this number.

• How to Calculate Your Networth - some people do not want to build up passive income and instead look to increase their overall networth. You can find out how much your networth is and compare it with mine.

• Are You Wealthy? - your networth alone might not give you a true picture of whether you are wealthy. The authors of The Millionaire Next Door came up with this method to determine whether you are truly wealthy.

Journey towards Financial Freedom

• Road to Financial Freedom - a 10 part mini-series on the ten steps you can take to kick start your very own journey.

• Four Steps to Financial Freedom - A simple 4 step guide to how anyone can achieve financial freedom

• Contemplative Thoughts - some of my very own personal thoughts on my journey. It also includes some useful articles from elsewhere. Most of them written when I was thinking of giving up.

Increasing Your Income

• Income Investing - a 5 part series on the various investment tools that you can use to increase your passive income.

• Investing in Canadian Royalty Trusts - a short article on what Canroys are and how one can invest in them.

• True Potential of Passive Income - an article off the web that discusses the true potential of passive income

Saving Money

• Top 10 Money Saving Tips - a simple post on how to save money.

• 2 Easy Steps to Build An Emergency Fund - a simple two step strategy one can take to save up for that rainy day.

Other Useful Articles

• 3 Key Lessons From Rich Dad, Poor Dad - a post on three simple lessons I learnt from Rich Dad Poor Dad

• Lessons from Donald Trump - a post on some of the lessons I have learnt from Donald Trump

• Conversation With A Millionaire - my very own conversation with a self made millionaire who is only in his 30s

Free Honeymoon

Is your marriage on the rocks?

A Malaysian state will be offering free second honeymoons for couples that are on the brink of divorce. They hope that these romantic getaways can help save their marriages.

Under this plan, feuding couples stand a chance to spend 3 days and 2 nights on a tropical island off Terengganu state.

To be eligible for this plan, couples will have to apply and then undergo an INTERVIEW before being sent on the honeymoons. (I really wonder what kind of questions are going to be asked at the interview....)

The honeymoon package is worth around S$615 and a successful pilot project involving 25 couples has already been carried out.

This is indeed an interesting proposal. I wonder whether they will start giving out free movie tickets and stuff too. Perhaps free movie tickets to watch Michael Jackson's This Is It movie that will be launched soon?

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2 Easy Steps to Build an Emergency Fund

Today, I will show you 2 easy steps anyone can take to start saving money to build up an emergency fund.

An emergency fund is basically 3 to 6 months of income that you set aside which you can withdraw easily. This means that the fund is most probably in a bank account that you can easily tap into should any emergency arise.

Step #1 - Open Another Bank Account

Yes, you heard me right. Why do you have to open another bank account? It is very likely that if you were to start saving money into the same bank account, you will most probably spend the money without knowing it. The most important thing about an emergency account is to keep it out of sight from us so that we do not spend the money!

Many years ago, I wanted to set aside an emergency fund of 6 months income. It was however only 2 years ago that I managed to do so. The reason for the long delay was that I was simply spending all my money in my only bank account which I had. Whenever it reached a certain amount, I would think to myself: "Hey, I've got lots of money....why not I buy this?"

To cut a long story short, I could not succeed in building up the 6 month emergency fund because I had easy access to the account. I started withdrawing money from the fund as it was not kept separate from my other bank account. This is my BEST advice to you: OPEN ANOTHER BANK ACCOUNT.

You will of course want to make sure that this bank account does not have any high charges and stuff for things like minimum balances.

Step #2 - Deposit a FIXED sum of money EVERY month ONCE you get your paycheck

Keeping a separate bank account is Step 1. For Step 2, it requires a certain amount of discipline. The key is to deposit a FIXED amount EVERY month the DAY you get your paycheck.

The day that you get your pay check credited into your bank account is THE DAY that you must deposit that fixed amount of money into your separate bank account (your emergency fund account). Do not wait for a few days because once you procrastinate, you will most probably not do it and end up not depositing any money at all for that month. This is speaking from my experience.

Let's say that you decide to save $500 per month to build up an emergency fund. All you have to do is simply deposit or transfer the money from your normal banking account straight into the emergency fund account the moment you get your paycheck.

Do this EVERY single month. No excuses.

No lowering the amount too. Every month, you will stick to the amount you have decided and deposit it into your emergency fund the moment you get your paycheck.


SgFinancialFreedom is a blog dedicated to help people achieve their financial freedom. This is done through the sharing of knowledge, information and experience. Find out more about the author and his journey to financial freedom.

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