Creator: Dexter and Meiko, bloggers at UpstartInvesting.com
Purpose: A framework for guiding your investment decisions and achieving your financial goals.
Manifesto
What’s a financial manifesto?
It’s a bold statement on your financial goals and objectives. It must state actionable items that will guide you in your investment decisions.
1. Know what you want to really achieve.
Most of us do not really know what we want. The truth is we know what we really don’t want. We don’t want to be poor. We don’t want a monotonous job. You have to be specific with your intentions.
In my case, I want to be financially free by the age of 40. My plan of actions will over a 20-year period will be the following:
- Establish an emergency fund equivalent to a year’s worth of expenses.
- Attain a 10% return on my long-term investments.
- Find multiple sources of income.
2. Write your financial manifesto clearly.
Your manifesto must be related to your goals. Each specific goal should have at least one manifesto. If you have no idea what to write, you can look at the manifesto of other people.
For my specific goals, the following are my manifestos:
- a. Establish an emergency fund equivalent to a year’s worth of expenses.
- I will regularly save every month until I achieve this goal.
- I will use this fund only in cases of emergency.
- I will always replenish after I have made withdrawals.
- b. Attain a 10% return on my long-term investments.
- I will only make investments that I understand.
- I will look at the “downside” first before looking at my returns.
- I will be conversative in my actions and will not risk my capital in exchange for juicy returns.
- c. Find multiple sources of income.
- My day job will not only be my source of income.
- I will start a business/venture that I love.
- I will construction a portfolio of passive investments (i.e., dividend-paying stocks and fixed income) to supplement my long-term investments.
After writing them down, you have to make your manifestos visible so that you can see them everyday. For me, I have them in my cork board.
3. Make your financial manifesto public.
It’s a good way to share your financial manifesto with other people. Choose someone who geniunely believes in you. There will be better accountability when other people know your manifesto and there would be a good chance that you’ll stick with it. And lastly, don’t forget to make a regular review of your progress.
Source
Authors’ Website: http://www.upstartinvesting.com/whats-your-manifesto/