If you do not know how, then breaking away from the rat race seems like an unachievable dream. If you know how, you can take the 1st step of breaking away from the rat race without taking the big step of quitting your job. Some brave souls would quit their job to start their own business. While starting a business is always a good step, it contains significant risk as most new businesses will not survive its 1st year. If you happen to fall into this category, you will know that a losing business will suck away your hard-earned savings and put you ten steps behind.



A safer 1st step in quitting the 9 to 5 routine is to get involved in some form of investment. Trading time for money will never get you any closer to financial freedom because you have to constantly be working for your income. Some individuals are paid more and some less. Either way, they are trading their time for money. If you have been working long enough, you will understand that this will not get you anywhere but your current work place. Even if you are highly paid, you can only have 24 hours a day. The bad news?.one day you will no longer be able to work or be able to keep up with your current pace. What will happen to your income when that day arrives?

To achieve financial freedom, you must break away from the usual time for money routine. The richest people in the world will always have leverage of time and money. There are numerous investment types that you can consider ? fixed deposits, bonds, real estate, stocks, commodities, mutual funds, options, etc.

So how do you decide which is the right investment for you? This is a very individualistic and personal question that only you can answer as it depends on your goals, risk tolerance, and investing interest/preference. Choose something that you are comfortable with. Below are some possible criteria to consider.

? Liquidity ? Some investments, like watches, rare coins, or even some Real Estate, have a low liquidity. It may take several months to even years before you can sell at the right price due to the relatively low demand for these items.

? Leverage ? Commodities and FOREX are well known for their leverage. Some even provide a 1:100 leverage. Leverage is an extremely powerful investing concept which can provide astronomical gains. However, beware as most leverage in the market is also a double edged sword which cuts both ways.

? Time Period ? How long do you want to be in an investment to realize profit? This relates to liquidity but also your investing goal. Real Estate can take several months to several years before you can sell at a profit (unless of course, you bought it way below market).

? Barrier to Entry ? If you consider starting a business as an investment, then you will find out that it is not easy to break into an industry that already have established players. Most investments require specialized knowledge. The Stock Market provides a good platform because everyone is equal no matter how long you have been in the trading business. If you decide to get into a long position, you have a 50% probability of winning or losing. Stock can move only in 3 directions ? up, down, or sideways. If the selected stock moves sideways, then you are about break-even. You can always increase your chances of winning through fundamental and technical analysis.

? Target Profit ? How much do you need to make per month for you to arrive at your goal? If you cannot forecast your possible gains, do not consider the investment as a viable option. You work hard for your money. You need to understand if your money will be working hard for you before investing.

? Risk ? Investments can be risky. What is your risk tolerance? It is best to always use risk capital or money that you can afford to lose for any form of investment. This is the only way to ensure that you are not in financial ruins.

? Time ? An investment should be making money for you even when you are not working. Is your choice of investment working for you when you are not?

? Compound Interest ? Are you able to add more money to your current investment? The wealthiest individuals got rich because they used their profit for further gains. However, any setback could also mean bigger lost of money. Take caution when compounding. A good investment should provide you an option to compound at a pace that you are comfortable with.

It is best to choose one or two investment vehicle and learn all you can about it. For you to be good and profitable in anything, you have to be a specialist. Doctors are highly paid for their knowledge and skills. Investors, traders, and entrepreneur will have to use their skills and knowledge to get paid. If you do not have enough knowledge and skills when it comes to your investments, what is your advantage? Choose an investment vehicle that suits you best and commit yourself to be the best in your niche.

Copyright (c) 2007 CashFlow Avenue