LEARN TO INVEST
Financial freedom is not reached by saving religiously for retirement, or buying a house, or buying an annuity. Financial freedom is the art of making money work for you. Financial freedom is attained by investing in high-quality assets that can generate reliable cash flows. Financial rebellion is the rejection of the notion that your company or government pension will fund your twilight years and embracing the freedom that comes with knowing there is a better option. The first step in this journey is understanding one simple formula:
INTRINSIC VALUE OF A FINANCIAL ASSET IS THE PRESENT VALUE OF ITS FUTURE CASH FLOWS
This is the single most important concept of financial freedom. Write it on the top of your laptop or get it tattooed on your arm. Understanding this formula is half the battle. The second step is finding assets that will generate these cash flows. These assets will lock in a flow of high quality and reliable cash flows. In this chapter, we are going to explore the riches of four asset classes: equities, fixed income, real estate, and derivatives.
The secret is to make money work for you and not work for money. The master needs to become the servant and the servant needs to become the master. Inverting this relationship requires you to become a master investor. You need to learn how to invest your capital and the capital of others in high-quality assets that generate a stream of long-term reliable cash flows.
You need to tap into your inner rebel to unlock financial freedom. The American essayist Henry David Thoreau said most men lead lives of quiet desperation and die with their song still inside them. That is, they die without having listened to their internal music, caught in the web of the establishment. You need to transform your relationship with money and liberate that sweet melody that lies within.