Economic freedom

What is economic freedom? It is the ability to do what you want without having to worry about where to get the money to pay your bills each month. There is no higher purpose or better to invest your money for economic freedom.

Using your money for a monthly income is probably the last thing people think when considering an investment. Usually the focus is on the rate of return and security. While these are important issues, conversion of assets in monthly rent is sometimes a difficult transition. Do you sell assets for cash? Do you put money in a CD and hope that the interest rate will be sufficient for your needs? The flow of payments to trust? How do you finally get the income you need?

In planning the amount of your paycheck, start at the end and work backwards. What is the amount of the monthly check you like? When do we want? And then consider the amount of capital needed to have the monthly payment. What is an average rate of return on different types of investments? How long must gather the necessary resources? What are the mechanisms to get the investment money in your checking account each month?

For example, you may decide you would like an income of $ 5,000 per month. If you are able to get a 6% annual return on investment, you would have $ 1,000,000 in capital. Six percent of annual output allows you to receive monthly income while maintaining their assets. The number of years you have available for the accumulation of assets is an important consideration. What is a reasonable rate of return for the investment risk you are willing to take?

Ultimately, their work is no different to that of acturary hired by a company to establish a pension plan. Your assumptions should be realistic. You can benefit from using the historical experience of the average rates of return in different financial markets over time. If their assumptions are too liberal, which may fall short in reaching their goal, if your assumptions are very conservative, you may experience undue difficulty in collecting assets. His goal is to use reason, experience and assumption of risk is acceptable to produce a result that takes you to the goal of economic freedom.

Two of the most important characteristics of people who come to the monthly income goal: patience and tolerance. The asset accumulation over time requires patience has to stay the course in following a plan. Investing in any asset class requires tolerance to accept the risk of some kind. Actuaries know that the long experience of the past is a good basis for a reasonable assumption, however, actuaries also know that on any given day there is the possibility of being wrong. And one of the biggest risk of all is to do nothing.







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