If you are an avid reader of finance-related articles posted up on Aspire or many other financial bloggers’ websites, you will discover a common goal that many investors share — financial freedom.
Most will agree that achieving financial freedom means to have sufficient wealth to cover your expenses without having to work for income.
It means that one would have the freedom to choose whether or not they want to continue working since they do not need that income.
If this is such an amazing thing, why do we hardly ever hear anyone talking about it? Do any of your friends tell you that they want to retire by 40?
Chances are, not many people will think of retiring at such an early age because they cannot afford to do so.
Though achieving financial freedom may seem complicated and daunting, it is not impossible.
The truth is that the earlier one starts to work towards financial independence, the higher the chances of achieving such a goal.
Here are three simple steps for youths to take if they are serious about working towards achieving financial freedom before the minimum retirement age of 62.
1. Start work early
According to the Ministry of Manpower’s guidelines on employing young persons and children, teenagers as young as 13 years old can start to carry out light duties in a non-industrial setting.
However, it is more likely that youths will begin working at 16, especially during the long break as they wait for their O level results.
Youths could start working early to gain some real-life experience, even if the family is well-to-do and he/she does not need the extra cash.
It can be as simple as working in the family’s business or picking up some simple part-time job.
Working for money teaches the teenagers how difficult it is to bring home the bacon and combat against a growing sense of entitlement and lack of appreciation for material possessions.
Also, they will learn about the importance of saving, and learn to store away a portion of their income.
Accumulating wealth when they are young will help to build up their emergency fund and war chest, which will come in handy when they spot excellent investment opportunities in the future.
2. Take up internships
If you are a graduate from a junior college, you will have a long break before university starts, lasting up to eight months for the girls, and perhaps a little shorter for the guys who have to serve the nation.
Nevertheless, both groups will have sufficient time to go for internships. Many people may not know what to do with so much time on their hand and end up wasting it by not doing anything.
The truth is that the world is a very competitive and harsh one, especially upon graduation from university.
One may be rejected by multiple companies before they finally land a permanent job, and having more relevant internship experiences on your resume will help you stand out from the rest.
Also, many junior college graduates will not be considering future employment prospects yet. Hence, it is a good time for you to start looking out for opportunities since there will be less competition.
3. Reading up and increasing their knowledge
Youths probably have the most time on their hand as classes end in the afternoon and after completing their schoolwork, they will have some time to themselves.
In comparison, many adults in Singapore are working crazy hours and coming home late, thus not having much leisure time to read.
Youths can take full advantage of the time that they have to do something meaningful to them. They can pursue a hobby or develop a skill.
There are plenty of financial books available in the bookstore and library, and parents can help by choosing the simpler ones for their children.
In fact, the Oracle of Omaha Warren Buffett started to invest when he was 11, proving that there is nothing as “too young to learn about stocks”.
The earlier one starts, the more time they have to learn and read more about finance, the more knowledgeable they become.
No matter if they do invest or not, understanding the financial industry will be advantageous to anyone. Furthermore, reading will help the child gain knowledge and insights which is always beneficial.
So there you go, four tips from us for youths to start working towards financial freedom.
For those who have teenage children, you may want to get them to read this article, and you never know, you might just be nurturing the next Warren Buffett.