Financial Freedom by Dr. Harry Singh

Author Harry Singh believes that dentists should have a ‘financial freedom plan’ that allows people to achieve financial freedom with multiple streams of massive, passive income. Now, hands up: Who wants to do that?

Financial security vs. financial independence vs. financial freedom

• Financial security: The amount of money that covers food, housing, cars, travel and basic entertainment. (At least the Jack Daniels is covered.)
• Financial independence: You’ve accumulated an amount of money so large that you’re no longer influenced or controlled by others to sustain a comfortable lifestyle. This is where you don’t have to work, and you’ve broken free of the shackles of needing to trade time for money.
• Financial freedom: The ability to live the lifestyle you desire—everything you can think of—without having to work or rely on anyone else for money.

Get a pen and paper and work out what figures you would need to achieve each definition; then you can work backward to determine how you’re going to achieve that passive income.

To keep this nice and simple, ‘financial security’ equals a basic essential lifestyle, ‘financial independence’ equals a comfortable lifestyle, and ‘financial freedom’ equals a dream or ideal lifestyle. Once you have financial security covered, financial independence is a stepping stone toward financial freedom.

What does financial freedom mean to you? Does it mean freedom from having to work, yet still being able to enjoy life without certainty over money? Does it mean having your life’s basic costs covered? Having more time to do the things you want to do?

For me, it means being able to drop the kids off at school in the morning and stroll back to the car while other parents are running around like headless chickens so they’re not late for the rat race.

Stop trading time for money.

How to achieve financial freedom
There is a science of getting rich, and it’s an exact science. Certain laws govern the process of acquiring riches, and once these laws are learnt and mastered, anyone can get rich with mathematical certainty.

The formula is: passive income, plus investment income, plus savings, plus simplification.

• Passive income: Income without work; ongoing passive business income (working for you), e.g., property portfolio.
• Investment income: Money working for you, such as doing a joint venture with me on property deals.
• Savings: Always have some liquid cash that can easily be accessed for emergencies or that great deal that comes along and you need to move fast to secure it.
• Simplify: Spend less than what you earn and invest the difference. Cut your coat according to your cloth.

Have a primary source of income that covers your expenses and then build up your passive income in the background until you don’t need your primary income.

That’s what I just did; I did not give up dentistry until I had a well established, proven source of passive income.

No man can serve two masters. Concentrate on one and build up the other in the background.

Buy-to-let property investment
‘Buy-to-let’ is exactly what is says. You purchase a property with the intent of renting it to tenants. Property is a medium- to long-term investment.

Buy-to-let investment may be right if you:

• Prefer investments that feel more tangible.
• Are willing to put your money into property for a long period of time.
• Understand that property prices can and will go up or down, similar to stocks and shares.
• Understand and accept the additional risks that go along with borrowing money to purchase property.

How does buy-to-let investment work?
To purchase a residential property, you can either use your own cash or take out a buy-to-let mortgage with a cash deposit.

Once you have purchased the property, you can possibly earn profit in two ways:

• Rental yield: Tenants pay you rent, minus maintenance and running costs.
• Capital growth: The profit you’ll earn when you sell your property for more than you paid for it.

My 10 secrets to successful property investing for busy dentists (which are available for free on my website, Dental Property Club) absolutely still apply, and you simply need to factor in today’s fiscal challenges.

Harry Singh’s 10 secrets to successful property investing

1. Finding the right location.
2. Realising that property investing
3. is a business.
4. Buying from motivated sellers.
5. Not buying just for capital appreciation.
6. Avoiding new builds and
7. overseas properties.
8. Acquiring the right mindset.
9. Learning the skills needed
10. to succeed in property.
11. Building a power team.
12. Finding deals.
13. Negotiating your way to success.

Let’s place Secret 3 in context as an example. Property investors should be very interested in the reason for the sale of any property, and should look only for motivated sellers. In my experience, this is the difference between property investors who make a lot of money compared to those who achieve average results. Successful property investors look at the circumstances of the people selling the property.

Someone who needs to sell may be open to an offer below the asking price, and you can factor the 3 percent stamp duty hike into the maximum price that you’re willing to pay, thereby avoiding being stung by this new levy. If the seller won’t negotiate down to your carefully calculated (I hope!) figure, walk away. No harm, no foul; it just isn’t going to work for you financially.

As long as you are smart and stick to your guns, property investment will still offer the possibility of being profitable in 2018.