Category: Financial Freedom

Financial freedom is one of the most important concepts in our life. However, I had never learnt this in school, neither in university. I guess that most of people don’t really know or even heard of such term before they started working for money. Millions of kids in our world are told by their parents that they must study hard and then get a good job with a decent pay. But, is this the only way of life? Why people must work until 60 or 70 years old? Why cannot we have holiday everyday instead of working days? When people retired at an old age, do they finally make much money or are they too old to work? How much money is enough? As a child, having all these questions in my mind, I felt that life is not so interesting in a foreseeable future, though studying is fun to me in many ways.

In fact, there are a very low percentage of people who actually work in an area which they really like in this world. They are extremely lucky. However, majority of people don’t have this luck. They have to work to make a living. Given choice, they would rather go for vacation, or do anything fun to them, but work. Do they have the choice? Do they have to be super rich to have the choice?

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Base on the definition of financial freedom, it’s obvious that passive income is the key. To build passive come, you need to be either the owner of some property or business, or other assets which can generate regular income.

We all heard of many stories of successful businessman, people like Bill Gates. They become super rich starting with not much capital. Besides financial rewards, it’s really exciting to create a business. However, according to US research figures the surviving rate of start-ups is 29% after 10 years. (Please see the following figure. The data come from a special tabulation by the Bureau of the Census produced for the Office of Advocacy of the U.S. Small Business Administration.)

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Our investment approach is mainly based on the Warren Buffett’s way of investment. We pick up stocks of great companies and buy the shares at reasonable prices with an owner mentality. We believe that a great company will create value for its shareholders in long term. Therefore, we hold the shares for long term and let our investment compound over the years. It’s not a way of getting rich quick. However, with the double digit compound growth rate over a five to ten years or even longer period, it makes wonders.

We believe that this is the best way of investment because value is mostly created by companies and great companies create more values than average companies and they have competitive advantages to fend off the competitors. They create more value with less risk.

Our job is to discover these great companies and buy their shares at reasonable prices. The following is a brief introduction of our approach.

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Welcome to ValueBay.

Since you are here, I guess you are thinking about investment. Let’s start with something really basic. It’s not just about money. It’s about your freedom.

You are trapped by your body

Many people take money matter very seriously simply because we need money to fulfill our needs as human. Your body needs food, cloths and shelter to stay healthy. To fulfill these needs, you need transport to go to market for purchasing and go to work to own money. Further more, to make yourself happy, you need entertainment and you want to own more to improve your living conditions. You cannot accomplish all these by your bare hands. Instead, you need money. You were trapped once you were born in a not so rich family, simply because you need to make a living. You are NOT free, even you are living in a democratic country.

Most of people work for money, not because they really like working. They spend about one third of their adult life working (see the following table). Among them, there are many people actually hate their job, but their still cling to their job due to the fear of losing income. There are also quiet a percentage of people working just to make their ends. These people are basically in a rate race. By looking at the figure of defaults in this crisis, we know there are huge number of people are swimming naked, no matter how big their pay check was. Once they lose their job, their whole world comes down.

STAFF / SOURCE: US DEPARTMENT OF LABOR

In short, if your life solely depends on your income from your job, you do not have freedom even you have all the rights as a human. You only have 2 ways to get your freedom:
1. Dump you body
2. Own your financial freedom

You would not like the 1st option, unless you believed that you would certainly go to heaven. For the 2nd option, you must understand what financial freedom is.