After launching my fifth book, Roadmap to Financial Freedom in 2010, I was overwhelmed by how well it was received. We sold thousands of copies and many readers and attendees at my talk and seminars shared with me that they’ve been inspired by the roadmap concept and are fully committed to achieve financial freedom.
I still often get asked “how do I get started?” The market is flooded with books, audio CD’s, podcasts and YouTube videos offering concepts on how to achieve financial freedom. The choices are overwhelming! With this in mind, I wanted to create my own financial freedom model. I decided to deliver a simple financial freedom model that EVERY Malaysian can understand and act on immediately. The model is by a Malaysian for Malaysians and cuts through all financial jargon and strip the concept to its bare bone. The model is simple to understand yet comprehensive, relevant and applicable for all Malaysians. Most important of all, it provides easy and friendly tools to guide Malaysians to take the necessary steps to achieve their own financial freedom
Thus, the creation of the “YMH Model to Financial Freedom,” a definitive 4 step financial guide designed to uplift financial consciousness amongst Malaysians and empower them to achieve financial freedom.
The YMH Model to Financial Freedom is THE solution Malaysians need now today in light of the government’s Budget 2012 announcement, which has failed to address to the country’s middle-income group, a key demographic in Malaysian’s race to becoming a high income nation.
The lack of commitment to push private sector’s retirement age to 60, the failure to lower personal income tax rate and address the rising living cost for middle income families in urban areas, and the lack of preparation to help this group of people face the possibility of a series recession due to the US and European financial crisis, are but some of the tell tale signs why Yap believes that the Budget 2012 will not support middle income Malaysian families to achieve financial freedom. In fact, middle-income Malaysians may have to help themselves by managing their personal finance like a CFO!
The situation can be best summarised as the poor gets the government help, The rich gets business incentives, while the middle-income group gets nothing!
THE YMH Model to Financial Freedom can be used as a framework for middle income Malaysians to put them on the path to financial success. In addition, the model can also help address some of the most common mistakes Malaysians made while planning for their financial freedom. These common mistakes are;
- No financial goals
- Unaware of where they stand financially today!
- No investment strategy
- Fail to seek professional advice
- Unsure of where to start
Simply put, The YMH Model for Financial Freedom is best summarized as a simple yet comprehensive working, evolving model which supports Malaysian families to take necessary steps to achieve financial freedom. The 4 steps in the YMH Model to Financial Freedom are defined as:
Step 1 : Define A Good Life
An effective financial freedom plan must start by defining what is your “good life”. Why? The main reason for us to achieve financial freedom is so that we can enjoy a ’good life’. Some may say that their financial freedom objective is to be a multi-millionaire or to be rich beyond their wildest dreams. However, they often forget that this is merely a means to an end. What is the point of being rich but not living the life you really desire. We must be very clear of our purpose before starting the journey to achieve financial freedom.
Once that’s done, you need to identify the financial resources to support your goals. For example, if your “good life” requires you to stop working at 50, you need to have enough assets and income to support your lifestyle after 50.
Therefore, one of your financial goals is to be able to retire at 50.
For this, I have developed the YMH Good Life Worksheet to help you develop your “good life” definition and dated personalised financial goals.
Step 2: List Your Asset
Assess your current financial resources by listing all your assets, liabilities, income and expenses. You must know your financial position before you can capitalise on them to achieve financial freedom.
It may sound easy, but I can assure you it is often overlooked. Many people are not aware of the assets they own and as a result, don’t deploy their assets to achieve their financial freedom goals.
For this, I have developed the YMH Financial Wealth Inventory. This will assist you in listing all your assets and will result in a personal income statement, personal balance sheet and detailed asset list.
Step 3 : Optimise Your Asset
The next step is to ascertain whether you have enough resources to achieve your financial goals. Optimising your assets is about matching your current financial resources with your future financial goals and reviewing the outcome. Here you will calculate, analyse and plan your journey to achieve holistic financial freedom. If there is any gap in your plan, you can take measures to bridge that gap.
By optimising your assets, you will know where you stand TODAY and this will allow you to take corrective action if required. Otherwise, your financial freedom efforts are at risk.
For this, I have developed the YMH Roadmap to Financial Freedom, which is designed to show where you stand today on your journey to financial freedom. The tool also helps you to develop a financial freedom action plan to guide you on your next course of action.
Step 4: Grow Your Asset
Today, growing your assets is not a choice but a must. Even if you have enough financial resources, the reality is that you still need to grow your assets to protect them against inflation.
To effectively grow your assets, invest based on your financial goals and risk tolerance, not on the latest trends or ad-hoc advice from investment salespersons. By optimally growing your assets, you will have an array of options to achieve your financial freedom goals.
To help you grow and protect your assets, we’ve developed the YMH Holistic Investing Approach. By using this tool, you can produce your own asset allocation statement, investment action plan and performance monitoring system to help you invest your money based on your financial goals and risk tolerance.
By following the steps under the Model, you will be on track to achieve your financial freedom. You can either apply the Model on your own or engage an independent financial adviser to help you.
To DOWNLOAD some of the tools that i have created for each of the corresponding steps, please visit the FREE DOWNLOADS section at www.yapminghui.com