Route towards Financial Freedom - Breaking down the target into smaller goals

When I started my journey towards financial freedom some years back, I started to record my monthly expenses to see how much I need in passive income to cover these expense. The first finding was scary. The expenses and potential expenses (e.g. medical expenses for aging parents, eventual overseas studies cost for kids etc...) made me feel that I would never reach the state of FF. It seemed to be a number too big to achieve.

Then I started to breakdown the expenses into smaller groups:

1. Essential living expenses - Daily expenses that will stay in any stage of life - food, clothes, utilities bills, telecom bills, property tax, children allowances etc.

2. Children education cost - Essential, but will disappear when they graduate.

3. Allowances for parents - Essential, and will stay as long as they live.

4. Church tithing and offering - Essential, may reduce when retire.

5. Car - nice to have luxury, can downgrade to BMW(Bus, MRT, walk) eventually.

6. Income tax - Must pay now, will disappear after retirement.

I set my first goal to have passive income covering item 1, which was relatively easy to reach. After I hit my first goal, I then worked towards item 2 & 3, and then 4. It took a few years but I finally reach 4. When my passive income was able to cover items 1 to 4, I realised that I was more or less financially free!

Breaking down the target into smaller goals has a few advantages:

1. Smaller goals are easier to achieve, hence the journey is easier psychologically.

2. Success boosts morale, and inspire one to move on.

3. With the breaking down of target, one can separate the needs and wants, and not overly plan.

Happy investing!