3 Simplicities to Financial Freedom

Photo credit: Will Lion

1) Live simply

The widely used phrase, "live below your means", advises us to spend less than our earning power. We all have desires and wants but we have to know our limits - not to spend beyond what we can afford. Though it is easier said than done, we still need to have the discipline to control our wants. Not to end up in debt is one thing, to be able to save is another. You need healthy capital in order to invest and grow your money. Even if you are rich, but do not manage your expenditure well, you can end up poor. Hence, live simply and save as much as you can for your financial future.

bigfatpurse - "Seek happiness from the simple pleasures in life."

2) Invest simply

Many people think that successful investors have to analyze complicated annual reports or charts to make good investment choices with extraordinary returns. However, in recent years, an extremely simple way of investing was introduced - index investing. One just needs to buy the index regularly regardless of the market direction, and over a long investment horizon, will be able to achieve a considerable good return that would be higher than most actively managed funds. Investing should be kept simple.

You can read how I do my index investing here.

3) Trade simply

As a trader, are you using too many indicators? Trading system must only consists of a few compatible indicators such that it does not confuse the trader. Too many indicators tends to over complicate the analysis and effectiveness will be affected to a large extent.

Ockham's razor (or Occam's razor) - "plurality should not be posited without necessity".