As first article I’m going to talk about the connections between financial protection and financial management as the 2 activities are quite connected to each other.
As Robert Kiyosaki, one of my favorite authors and entrepreneurs, showed us, there are 4 quadrants where we can produce our income.
E- Employee work. This source of income is the salary that you receive from the company you work for
B- Business owner. The source would be the dividends from the business you started
S- Autonomous work. This is reserved to specialized professions such as Lawyers, Doctors etc.
I- Investor. Here comes the income of your investments in paper assets (stocks, bonds); real assets (properties and real estate)
For the sake of this article let’s assume you are an Employee that has also a small side business.
So.. who are the “enemies” that can attack your precious and hard earned wealth?
The first enemy is yourself.
Emotional spending, unlawful behavior, unhealthy habits.. all these things for sure do not impact positively on our finances.
The second enemy are taxes.
We will never advocate to evade taxes, what we will show on this website will always be legal ways to minimize your fiscal impact.
Keep in mind that double taxations, fiscal unfairness, taxes paid on spendings but not recovered on own bills and related are very common factors from which you need to protect yourself and your business
So.. let’s go to the point.
Which are the 5 tips you can start applying for correct financial management that could lead to early retirement?
Have a track of all your expenses through mobile apps
Take advantage of technology. Now there are simple mobile apps that help you track all your expenses.
You can start by seeing where you spend the most and where you can cut some unnecessary expenses without lowering your lifestyle. The app I personally prefer is called Money + and is available for both Android and IOS.
Save at least 30% of your monthly income
Might seem a bit high but if you plan to retire young and stop working for money having a 30% monthly “investing” power might really make the difference
Reserve another 10% for “emotional spending”
You want to go to spa and you don’t know if it is a right expense? you want that leather jacket but you always believed is pricey? Well, why not taking the needed funds from your “ES Account”? Let’s have some fun 🙂
Relocate your small business in a better fiscal jurisdiction
Do you know that relocating your business does not mean necessary moving everything or expanding abroad? With a simple new free zone or offshore company you can start an activity abroad and benefit of the fiscal treatment in that region.
You can open a branch of your small company in UAE easily and remotely.
Do not invest in what you don’t know
Do not follow the friend’s tip, or the investment done from everyone else. Alternative investments usually are the highest on ROI but do not invest in anything you have zero knowledge about. You have 2 choices: you either study the investment properly or you can follow the advice of someone who has done that investment and got proven results.