You Want to Win, or to be Safe?

On 31st December 1980 (wow ... yes ... in the previous century! ...I am a Centurion ... almost ...hehehe!), I bought a book - "Business as a Game" - by Albert Z. Carr.

At the back of the book cover, it said: "How to succeed in business by really trying. Is life in the executive jungle really a game? Yes, ... and the difference between the men who make it to the top and the also-rans is in mastering the business game's unwritten rules and hidden calculations..."

I read in the newspapers last week-end that there are thousands of unemployed university graduates. A mismatch between what the market demands, and the supply by the universities. So it seems.

However, who are the graduates who managed to get job offers? Yes, those who are are able to adapt.

Yes, those who are versatile. Have multiple talents. Played team games. Got involved in extra-curricular activities like the Boy Scouts or Girl Guides or St John's Ambulance Brigade. Got involved as actors/actresses in the school dramas. Played leadership roles. So, yes ... life is also a game! In this case, your working life ... your "getting a job" life.

In life, do you play to win? Or to be safe?

As an undergraduate, to play to win, you must be the best. Either academically, or (even better) both academically and in extra-curricular activities. You represent 5% of the undergraduates, when you are in this category. 1% when you excel both in and out of the lecture room.

Similarly with life. To be safe is to be mediocre. To be average. Like 95% of the people.

To play to win, you need to be in tip-top condition. To take be an Olympic Champion, you need to train everyday. Four years before the actual day, your training has to start in ernest. Do you want to be an Olympic champion?

Two "investment experts" exchanged letters in The Star newspaper. One said that savings kept in the Employees Provident Fund (EPF) earned better returns, than if they were to be invested in the local stock market.

The other said that investing your savings in the stock market is better than keeping it in the EPF. This expert (surprise, surprise!) represents a mutual fund company which encourages the public to take out their savings in the EPF, and invest in mutual funds.

Both are right. Huh? How can both be right? Surely there is Truth and there is Falsehood? Day and Night? Black and White?

Yes, you are right! And you are wrong! Heard about half-truths? Dusk and dawn? The colour Grey? Well, the two experts used different methods of computing the returns.

However, what may interest you is the conclusion by one of the experts. He wrote, "... based on the Sharpe Ratio, EPF is any time far better than KLCI (local stock market index in "Malaysia - Truly Asia").

"... we are 95% confident that the EPF returns will range from 3.7% to 9.7%. ...KLCI returns will range between - 51.6% and 72%. The lowest return from EPF is positive +3.7% versus negative -51.6% for KLCI".

The moral of the story? If you want to play safe (and average), play the investment (money) game using the defensive strategy. Get a maximum (potential returns) of 9.7%.

If you want to win (be rich!), play the game using the assertive (not aggressive) strategy. Get a maximum (potential returns) of 72%.

In short, life's a game. To play to win, be the best in your field. To play the money game, aim to be a millionaire if you want to win. Winners get a better deal!

I wish you Success in your undertakings and Good Health and Wealth to you and your family. Take care!

P.S. "But, wait!" ... (you scream), ... "I may lose 51.6% of my savings if I follow the so-called assertive strategy". Well, Robert Kiyosaki does not recommend you invest in mutual funds. Or play the stock market, as most of us play it (i.e. lose money ... no, not you, of course ... the other 95% of the players), precisely because of this concern of yours.

P.P.S. "So how?", you may ask. The answer? There is no instant path to wealth. No short investment advice. Read all the articles in this blog (hehehe!).

P.P.P.S. In short, life's a game. Making money is a game. To win the money game, you need to start by targeting an income of at least a million dollars. Passive income!