I first came across the term FI/RE back in 2018, an acronym for Financial Independence / Retire Early. Since then, it became popular. 

To expand my understanding of it, I delved into various literary works that explore various perspectives of personal finance.

I read ‘The Rules of Wealth,’ ‘The Richest Man in Babylon,’ ‘Rich Dad Poor Dad‘, ‘Your Money or Your Life,’ and ‘The Millionaire Next Door.’

The experience was thought-provoking – prompting me to introspect and reflect on my financial choices and goals.

They gave me a fresh and unique perspective on money and life, offering invaluable insights and wisdom.

I realized the need of a balance between financial independence and the pursuit of fulfilling life for myself.

I could understand wealth building strategies, frugality, investing, and the power of financial education. 

In retrospect, my encounter with this concept and then my exploration of its related literary works proved to be a transformative journey.

They not only equipped me with practical knowledge but also triggered a change in perception – showing me a path to more secured and fulfilling financial existence.

Importance of Managing Your Money

It was an awakening for me to realize the extent of my financial illiteracy regarding the importance of saving and investing. 

The harsh truth is that my saving rate had been very low, and I had failed to prioritize building my wealth.

I have carelessly allowed my salary to evaporate before the month’s end, without any consideration for the future.

This struck me with a sense of urgency and compelled me to reevaluate my financial habits and money mindset.

I realized the need of disciplined saving practices, setting aside a portion of my income for both short-term contingencies and long-term goals.

The past negligence gave a sense of regret, but it also ignited a flame of determination. I resolved to educate myself. 

I must embrace the principles of financial literacy, learn about effective investment strategies, and develop a good retirement plan.

It entails me to taking control of my finances; cultivating better spending habits, adopting a frugal mindset, and seeking out opportunities for growth and wealth accumulation.

I realized how important it is to let my hard-earned money to slip through my fingers only with a purpose or foresight.

I am determined to make amends for my past ignorance, armed with the knowledge of my readings and a vision of a better future.

Three Pillars of Personal Finance

Once I realized, I listed the 3 pillars of my personal finance to avoid more financial mistakes and improve my financial health:

1. Increasing my income (salary, hustles, dividend)
2. Increasing saving rate (budget, smart shopping)
3. Increasing Net Worth (invest, success mindset)

They will be the three important sides of my wealth triangle. How I deal with them will be how I will secure my financial future. 

Increasing my Income

Income will be the main source of capital for people who start everything from scratch without any parental or spouse wealth.

If our income is regular and is from multiple sources, we can improve our saving rates, increase our net worth, and attain financial independence faster.

The salary from a fulltime job is almost 100% of my total income for now. I want to reduce it.

I do not want to depend only on my job and continue on trading my time for money. I want to explore ideas to increase my income. 

So, I invest in dividend stocks, look for MMA opportunities, write website contents, and close small business accounts.

I am also a part-time insurance agent of Royal Insurance Corp of Bhutan. I earn insurance commission income.

Increasing Saving Rate

It doesn’t matter if I earn Nu. 150,000 per month if I save nothing. I’m just wasting valuable time and energy.

Increasing income is as important as increasing the saving rate. It is not how much one earns, it’s how much one saves!

A person who earns Nu.50,000 per month and saves nothing won’t be as rich as a person who earns Nu.25,000 and saves 50%. 

I want to record every day expenses, look at them at month end and see if I can fix budget in some areas.

It’s to curtail wasteful purchases. I also want to preserve my emergency fund only for unforeseen circumstances.

Increasing Net Worth

Net worth is person’ financial safety net or security level. Investing for the long-term or acquiring assets like land plots will increase it.

You can use these assets to play with leverage. Rich people become rich through strategic leverages.

I must have money mindset. I do researches on market trends, and read personal finance books. Wise people tell being rich is a mindset.

My current investment rate is less than the recommended 50%. It will be one of a milestones when I pass it.

Conclusion – Be a Cheerful Donkey

These three are the pillars of my personal finance. How I manage each of them will either build or break my financial goals.

We work hard like donkeys for money. However, no matter what we also must be cheerful. Life is more than money.

I realized proper financial management is the best way to being cheerful and lead positive life. 

Who won’t love to achieve their financial goals?

So Cheerful Donkey will be a journal of my stories, mistakes, and lessons as I deal with these 3 pillars for my financial goals.

If you like personal finance and wants to be part of my journey, you can join in my Newsletter and Facebook. 

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