How do I become rich enough until I don’t have to worry?

This is a difficult question to answer, yet common. I supposed everyone would want financial freedom, doing our favorite thing of the day while the money still rolling in.

How do we achieve that? Or rather, what are we supposed to achieve. I think Robert Kiyosaki (Rich Dad Poor Dad) says wealth is how many days we could survive without working? So if you could survive with your current lifestyle until age 80, I think you are pretty rich. Based on this formula, you should be able to roughly calculate how money you actually need (take into consideration of inflation, emergency fund, your wanted luxury vacation and etc).

Lets say I need 5 million, what then? I guess there is 2 way, where you could try your very best to earn as much money as you can from now on (maybe become a millionaire by 30 or 40), or create enough passive income which continue to generate income even when you are not working.

I guess the only way to get rich very fast besides hitting the lottery is starting a business, or unless you are a high paying CEO of a very large cooperation. The problem with business is that there is risk, with lots of business folding within the 1st year and lots more closing by the 3rd year. And steady employment might not be able to fulfill your dream. With the Internet today, the cost of doing some business had gone down significantly (thus reduced risk), but it doesn’t mean it is easier to make money (more competitive), but at least everyone has a chance. Almost everyone can be a professional blogger or sell things through eBay at virtually ZERO cost, and probably less than 0.001% could actually gain financial freedom from doing that. Probably it is easier to make money by conventional business (with conventional risk), perhaps it could be supplemented by Internet such as blooming.com.my. There are some Internet successes in Malaysia such as jobstreet.com.my, but you don’t get a handful of them. I still think the fastest legitimate way to make money is to do business.

Then there is the wonderful thing called Passive Income, a mechanism which makes money for you while you are sleeping (a.k.a Money Making Machine). The common thing is investment through share market and property, but you need to have a decent capital in order for the money to roll (let’s say RM 100,000 for start). You could either save every penny you can through employment, or you could try you luck with business first to earn your first pot of gold. To invest wisely you would need knowledge and skill, and you probably don’t have it because you are too busy earning money. If you leave it to the professional, they will take commission from you, and you don’t even know they are good or not. You heard of someone (a friend’s friend) who is good in investment, but you don’t trust your money with that guy? What’s next?

Yes, back to starting a business. But this time your focus is not about just making money, but how to make the business run without your present? This requires some thinking. Let’s say a Kopitiam franchise that run very well with the system you had developed and run smoothly under the management which you handpicked. Perhaps to build a very well known internet portal which earn good money through advertisement? Or become a silent partner in a business investment, given that you have the cash and found someone to entrust it to. Or invest in someone like Warren Buffet 20 years ago, or invested in Google not that long ago.

Either way, you need to make sure your Reserve (Money) + Passive Income could last you for life. After that, you had reached the Nirvana on earth :)

Simple, huh? It’s just an idea, not even a plan.