Commandment no. 2: Define your Financial Target at each Phase

Businessman, entrepreneur, and financial adviser Francisco Colayco shares his secrets on personal finance and investing.  This is his 2nd commandment out of 10: Define your financial target at each phase.

People go through 4 stages in his financial journey:

1. Start up Phase - All your income comes from active income (personal effort/sweat).
2. Build up Phase - 20% of income comes from passive income
3. Fine Tuning Phase - Income comes from 50% of passive or investment income.
4. Retirement Phase - All income comes from passive or investment income already.

At each stage, define your financial goals!  Make a balance sheet and define your assets and liabilities.  Remind yourself of your worth everyday.  Each year, aim for your assets to increase.

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