It's sad when you read the headline, "NYPD: Madoff investor commits suicide in office". The founder of an investment fund apparently lost $1.4 billion to Bernard Madoff's alleged $50 billion Ponzi scheme. He slashed his wrists.
You may have heard of similar stories. Like the taxi driver who played the stock market in Hong Kong in 1997/98, and got played out by the market instead. He jumped off an apartment.
Of course, the stories of gamblers who borrow from loan sharks (who charge 10% interest per month?), and are unable to pay back (because their 'winnings' on their horse racing bets are invariably 'loosings') is commonplace. These losers will try to disappear into thin air. To avoid a broken leg, or an even worse fate. Their families also suffer, oftentimes in silence.
Is money equal to life? No money, no life? Plenty money, plenty life?
Unless you are still living in a place where you exchange what you have, to get what you want (barter trading), money is thus very important. Although the ending of one's own life, or the ending of another person's life, are extreme scenarios, it does indicate the power of money.
Money is important in our present world economy because it has become the medium of exchange (in economics' lingo). The measurement standard of one's assets and liabilites ( in acccountancy's terms). The indicator of one's wealth or poverty.
The moral of the story? If money plays such an important role in your life, don't you think that it should be your number one priority?
It does not mean that you should be consumed, every waking hour of your life, with the thought of making tonnes of money. Of getting money at all costs.
But it does mean that you should at least learn about how to play the money game. How to manage your existing money. Whether as a student, when you get your $1 as pocket money. Whether as an employee, when you get $1,000 a month.
Some folks live a happy and fullfilling life with an income of $1,000 a month. Others struggle, 'eking out a living' with a salary of $2,000 (or $5,000 or $10,000) a month.
Some folks have a $1,000,000 and are neither happy nor fulfilled. Others have $1,000,000 and are happy and fulfilled.
Money is important. But it is not the be-all and end-all.
How you manage your money will determine whether you have misery, or happiness in your life. $1,000 with good management will become $2,000 in 3 years. $1,000,000 with poor management will become $0 in 3 years.
So, what should you do? T Harv Eker recommends that you go from being a 'know-it-all' to a 'learn-it-all'.
Set aside 10% of your income, and use it to get an education. To buy books, or DVDs, or attend training seminars, that will increase your knowledge. Knowledge to increase your power. The power to act correctly. To act to get the right results. The right results to make you happy.
I wish you Success in your undertaikings, and Good Health and Wealth to you and your family. Take care!
P.S. Read in the papers (7th January 2009) that a 74-year-old German billionaire (ranked the world's 94th richest man, whose assets were estimated by Forbes to be worth $9.2 billion last year (2008?)) also committed suicide (by throwing himself in front of a train) on 5th January. All because his investments were in trouble, caused by the global financial crisis. Don't you think that's similarly tragic?
P.P.S. Associated Press reported that on 27th January 2009, a man in Wilmington, California fatally shot his wife, his five young children (twin 2-year old boys, twin 5-year old girls, and an 8-year old girl) and himself, all because he and his wife had been fired from their hospital jobs. Very tragic, and very sad. Any lesson you can learn from all the cases above?
Showing posts with label T Harv Eker. Show all posts
Showing posts with label T Harv Eker. Show all posts
Tuesday, December 23, 2008
Sunday, December 21, 2008
What Type of Investor Are You?
I was disappointed (and oftentimes wondering) why other people were not interested in investing in businesses or projects. Investments that I had made money from, and also investments that I had not made money from (yet). I understood if it was because of the latter reason, because ... who am I, after all? But the former?
I was enlightened after reading Robert Kiyosaki's Cashflow Quadrant. It appears that there are many kinds of investors in this world. Interesting. Can you identify which kind you are (see below)?
The first kind can be categorised as the "Nothing" investor. De nada. No money to invest. All your income is spent. For some, even the ones who 'look rich', they spend more than their income!
One of my friends told me that he had a neighbour (a senior government servant) who always borrowed $50 cash from him at the end of the month. He always ran out of cash to give his school going kids their school allowance, before the montly salary is received!
Another senior government officer bought a $60,000 car by taking a bank loan (with a higher interest rate of 6%) instead of the government loan (at 4% reducing balance rate) because the government loan was only $45,000 and he had no savings to pay the difference.
It seems that 50% of adults are in this "Nothing" category. It doesn't include you, of course.
The second category is the "Borrower". As the name indicates, you are in this category if you borrow your way through life. You borrow money from your credit card for your marriage expenses (yes, a true story!). Two babies later, your credit card loan still has not been paid.
Your favourite exercise? Shopping! Girls are usually in this category. They just can't help it when the shoes, handbags, watches etc are at 70% discount. Sometimes even without discounts (I mean, the shoes and the handbags need to be colour-coordinated, right?)
I remember a friend. He had just successfully obtained a $2 million loan from the bank for a new business. With the money from the bank, he immediately (but not wisely?) bought a Mercedes for himself, and a Honda for his wife. One year down the road, the business was not going on as planned (especially the financials). Now you understand how some 'rich' people lose their Mercs overnight? One day the Mercs is in the car porch, the next day it's missing.
Another friend bought a $360,000 condo one day. From a bank loan. Two years down the road, there was a 'professional accident'. His company closed down. He lost his job. Anyone would like a condo for sale?
The problem if you are a borrower, is not the amount of money that you have as an income. It's just that you have poor money habits. Poor habits lead to poor actions, which lead to poor results.
The third category is the "Saver". You are a saver if you save a little money every month, and keep it in a savings, or Fixed deposit (FD), or Certificate of Deposit(CD), account.
Many save not to invest. But to consume (a vacation, a TV, a $15,000 bicycle). They like cash, not credit or debt.
The only problem with saving money this way is that it gives only very low returns. Frequently, it is a negative return (after inflation and tax).
You should of course have savings like the above. Some financial experts recommend that you should have about two years of your salary as savings. So that you can maintain your present standard of living for two years, if you have no income (because of retrenchment). Or you can survive for four years at 50% of your normal standard of living.
But anything above the amount needed for an emergency situation, should be better invested at 10-15% in other safe investments. You need to study, and look out for, such investments.
The fourth category is the "Apathetic". I was in this category. I thought that "I was busy".
So I turned over my retirement fund money to a 'mutual fund' lady "to manage". For the first 3 years it was losing money (the selling price was lower than my buying price). After the fourth year, I sold out when the price was at the price that I bought. I lost the dividend amount (5% annually for 4 years), if I had just kept it in the retirement fund.
The fifth category is the "Cynic". Or the Smart Aleck. You are in this category if you know all the reasons why an investment will not succeed. It appears that cynicism is the result of fear combined with ignorance, which leads to arrogance. Wowww! What an enlightening revelation!
Cynics are therefore best avoided. They infect people with fear, disguised as intelligence. Robert Kiyosaki wrote, "The worlds of academia, government, religion and media are filled with these people".
No wonder almost all of my office colleagues are in this category. I guess if you are an employee, you will be in this category.
Unless you have the entrepreneurial streak. Such as being involved in the network marketing industry (recommended by Robert Kiyosaki, Donald Trump, and T Harv Eker).
Cynics often buy high and sell low. And then blame the market for 'swindling' them.
The sixth category is the "Gambler". The gambler thinks that life is all about 'luck'.
You know a gambler when he asks you, "Got any tips on which stock to buy?". Just as a horse racing gambler will ask you which horse to bet on.
The seventh category is the "Long-Term Investor". You are in this category if you learn, often through training seminars, before investing. You know about the power of compound interest.
You are actively pursuing your financial goals. With the appropriate planning. You know your expenses. Your debts and liabilities. How much to invest per month. You are not 'flashy'.
My friend's husband drives a 10 year-old Volvo. Stayed in the same double storey terrace house for the last 30 years. But all their four children were sent to overseas universities. $30,000-50,000 per year per kid. He is, of course, a millionaire (through property development).
The eight category is the "Sophisticated Investor". You are here, if you create your own deals. With at least 25% return-on-investment (ROI).
You are financially savvy. You know how to manage risk. You are focused. Once you have one investment 'running on automatic', then only you diversify.
Bad times do not deter you. You can see opportunities, whether in good markets or bad.
The property market in the United States is extremely bad. Prices are going down every month. House foreclosures are increasing monthly. You see the opportunity to invest. To make 19-26% returns. To be a 'banker'. You can consider yourself a sophisticated investor if you can arrange the deals, and organise the investments.
The ninth category is the "Capitalist". You organise other people's money, talents and time. You get paid for results. For creating a new company. A new organisation. Returns of at least 100% is expected.
A guy in his mid-thirties forms a new company. To market an existing product. From an existing multinational.
He will create millionaires in the process. He will also become a millionaire in the process. He used an idea to become a millionaire. The idea of how to create (and capture) a bigger market for an existing company.
A person bought a rubber plantation (not using his money, but the bank's) and turned it into an exclusive housing enclave. He now has his own plane. He is a capitalist.
Olden day capitalists include Henry Ford. Present day capitalists include Richard Branson.
The moral of the story? What type of investor you are, will determine where you will be. Decide what you want to be, and take the necessary action (or inaction).
It also means that, if you are looking for an investor for your project, do not be easily disappointed. Not many people out there are true investors (category 7, 8 and 9). Be thankful when you find them.
I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!
I was enlightened after reading Robert Kiyosaki's Cashflow Quadrant. It appears that there are many kinds of investors in this world. Interesting. Can you identify which kind you are (see below)?
The first kind can be categorised as the "Nothing" investor. De nada. No money to invest. All your income is spent. For some, even the ones who 'look rich', they spend more than their income!
One of my friends told me that he had a neighbour (a senior government servant) who always borrowed $50 cash from him at the end of the month. He always ran out of cash to give his school going kids their school allowance, before the montly salary is received!
Another senior government officer bought a $60,000 car by taking a bank loan (with a higher interest rate of 6%) instead of the government loan (at 4% reducing balance rate) because the government loan was only $45,000 and he had no savings to pay the difference.
It seems that 50% of adults are in this "Nothing" category. It doesn't include you, of course.
The second category is the "Borrower". As the name indicates, you are in this category if you borrow your way through life. You borrow money from your credit card for your marriage expenses (yes, a true story!). Two babies later, your credit card loan still has not been paid.
Your favourite exercise? Shopping! Girls are usually in this category. They just can't help it when the shoes, handbags, watches etc are at 70% discount. Sometimes even without discounts (I mean, the shoes and the handbags need to be colour-coordinated, right?)
I remember a friend. He had just successfully obtained a $2 million loan from the bank for a new business. With the money from the bank, he immediately (but not wisely?) bought a Mercedes for himself, and a Honda for his wife. One year down the road, the business was not going on as planned (especially the financials). Now you understand how some 'rich' people lose their Mercs overnight? One day the Mercs is in the car porch, the next day it's missing.
Another friend bought a $360,000 condo one day. From a bank loan. Two years down the road, there was a 'professional accident'. His company closed down. He lost his job. Anyone would like a condo for sale?
The problem if you are a borrower, is not the amount of money that you have as an income. It's just that you have poor money habits. Poor habits lead to poor actions, which lead to poor results.
The third category is the "Saver". You are a saver if you save a little money every month, and keep it in a savings, or Fixed deposit (FD), or Certificate of Deposit(CD), account.
Many save not to invest. But to consume (a vacation, a TV, a $15,000 bicycle). They like cash, not credit or debt.
The only problem with saving money this way is that it gives only very low returns. Frequently, it is a negative return (after inflation and tax).
You should of course have savings like the above. Some financial experts recommend that you should have about two years of your salary as savings. So that you can maintain your present standard of living for two years, if you have no income (because of retrenchment). Or you can survive for four years at 50% of your normal standard of living.
But anything above the amount needed for an emergency situation, should be better invested at 10-15% in other safe investments. You need to study, and look out for, such investments.
The fourth category is the "Apathetic". I was in this category. I thought that "I was busy".
So I turned over my retirement fund money to a 'mutual fund' lady "to manage". For the first 3 years it was losing money (the selling price was lower than my buying price). After the fourth year, I sold out when the price was at the price that I bought. I lost the dividend amount (5% annually for 4 years), if I had just kept it in the retirement fund.
The fifth category is the "Cynic". Or the Smart Aleck. You are in this category if you know all the reasons why an investment will not succeed. It appears that cynicism is the result of fear combined with ignorance, which leads to arrogance. Wowww! What an enlightening revelation!
Cynics are therefore best avoided. They infect people with fear, disguised as intelligence. Robert Kiyosaki wrote, "The worlds of academia, government, religion and media are filled with these people".
No wonder almost all of my office colleagues are in this category. I guess if you are an employee, you will be in this category.
Unless you have the entrepreneurial streak. Such as being involved in the network marketing industry (recommended by Robert Kiyosaki, Donald Trump, and T Harv Eker).
Cynics often buy high and sell low. And then blame the market for 'swindling' them.
The sixth category is the "Gambler". The gambler thinks that life is all about 'luck'.
You know a gambler when he asks you, "Got any tips on which stock to buy?". Just as a horse racing gambler will ask you which horse to bet on.
The seventh category is the "Long-Term Investor". You are in this category if you learn, often through training seminars, before investing. You know about the power of compound interest.
You are actively pursuing your financial goals. With the appropriate planning. You know your expenses. Your debts and liabilities. How much to invest per month. You are not 'flashy'.
My friend's husband drives a 10 year-old Volvo. Stayed in the same double storey terrace house for the last 30 years. But all their four children were sent to overseas universities. $30,000-50,000 per year per kid. He is, of course, a millionaire (through property development).
The eight category is the "Sophisticated Investor". You are here, if you create your own deals. With at least 25% return-on-investment (ROI).
You are financially savvy. You know how to manage risk. You are focused. Once you have one investment 'running on automatic', then only you diversify.
Bad times do not deter you. You can see opportunities, whether in good markets or bad.
The property market in the United States is extremely bad. Prices are going down every month. House foreclosures are increasing monthly. You see the opportunity to invest. To make 19-26% returns. To be a 'banker'. You can consider yourself a sophisticated investor if you can arrange the deals, and organise the investments.
The ninth category is the "Capitalist". You organise other people's money, talents and time. You get paid for results. For creating a new company. A new organisation. Returns of at least 100% is expected.
A guy in his mid-thirties forms a new company. To market an existing product. From an existing multinational.
He will create millionaires in the process. He will also become a millionaire in the process. He used an idea to become a millionaire. The idea of how to create (and capture) a bigger market for an existing company.
A person bought a rubber plantation (not using his money, but the bank's) and turned it into an exclusive housing enclave. He now has his own plane. He is a capitalist.
Olden day capitalists include Henry Ford. Present day capitalists include Richard Branson.
The moral of the story? What type of investor you are, will determine where you will be. Decide what you want to be, and take the necessary action (or inaction).
It also means that, if you are looking for an investor for your project, do not be easily disappointed. Not many people out there are true investors (category 7, 8 and 9). Be thankful when you find them.
I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!
Thursday, December 18, 2008
Size Matters?
Do you believe that size matters? The bigger the better? Or the smaller the better?
I guess you realise that it all depends. On what?
You heard the story about the lady on her wedding night who thought she was going to get a big one? And the gentleman thought he was going to get a small one? Both were disappointed ... hehehe! Next time, just remember the saying, "To avoid the pain of lost illusions, have none!" ... Comprende? ... hehehe!
I prefer a petite lady ... like Tweety! So a model like Twiggy (I know ... you got to go to Wikipedia to find out who this person is ... thank you for your patience ... anyway, she was famous in the last century), would turn my head.
A friend of mine prefers his lady to be big ... like in 'elephant'! In fact, before their marriage, his wife referred to herself as an elephant (size). But that is precisely what turns him on!
Well, some men prefer birds. Some prefer elephants. To each, his own.
But there is one arena in which SIZE REALLY MATTERS! It's critical that you know why bigger is better in this arena.
Do you agree that the simplest (or easiest) way to live is to not do anything? Not to take risks? Not to take challenges?
Whether in your personal life. Or your working life. Or your volunteer work life.
When you have a personal problem, isn't it that the the easiest way, is to avoid or run away from the problem?
At the office, isn't it best not to rock the boat? Just do the same old things, when there is a problem? Don't take any new actions or consider new proposals which you are not familiar with? Your company do not need to implement the Suggestion System, because many other companies have failed in implementing it? (Even though Japanese companies implement it successfully).
Do the same things and expect different results!?! That is one definition of insanity.
I was observing the happenings in a voluntary organisation. When you are in a voluntary organisation, isn't the inertia even greater? You don't get paid for your time (it's a voluntary organisation, for heaven's sake, that's why ... ), is the common excuse.
So when there is a challenge, such as organising an international training program, where the number of expected participants falls short of the minimum required, you take the easy step - you cancel it!
Your excuse/justification? "We don't want to lose money". Convenient rationale? You feel good that you are saving the organisation money?
Yuhoooo!!! No need to do further work. No need to think about how to get more participants. No need to think of other possibilities to make the program financially viable. No need to contact speakers. No need to follow-up on other matters.
Just relax until next year, when you can offer it again. Just talk at the monthly meetings. Soon, you become a member of NATO (No Action Talk Only). Will your non-profit organisation make progress? There will be progress, yes ... but only in finger-pointing, at the end of the year, or before the Annual General Meeting.
If you want success, you need to be bigger. Bigger than your problems!
How can you become bigger? You grow yourself.
Take problems as challenges. Do not blame anyone (your boss? ... your colleague?...your wife? ...your cat?) or anything (the fricking economy? ... the fricking political situation?) for your problem. You take action to improve the situation. Just like Japanese Kaizen - continuous improvement.
What if, after taking action, you fail? Take it as a learning experience. To make you grow bigger. To make you wiser. To make your organisation better. To be able to handle a similar situation in future, better.
The moral of the story? When you want to be a winner, you need to be bigger. Bigger than the losers.
When you want to be a leader, you need to be bigger. Bigger than your followers.
When you say,"I want to follow what you (the majority) decide upon", you are a follower, not a leader. A leader has to lead, not follow. That's why you have to be bigger than your followers. Otherwise, you become just like your followers - a sheep. You want to be the Lion King, if you want to be a leader.
T Harv Eker said, "If you have a big problem in your life, all that means is that you are a small person ... Your outer world is merely a reflection of your inner world. If you want to make a permanent change, stop focusing on the size of the problems and start focusing on the size of you".
So, you know what to do now? Go! Go make yourself bigger!
I wish you Success in your undertakings and Good Health and Wealth to you and your family. Take care!
I guess you realise that it all depends. On what?
You heard the story about the lady on her wedding night who thought she was going to get a big one? And the gentleman thought he was going to get a small one? Both were disappointed ... hehehe! Next time, just remember the saying, "To avoid the pain of lost illusions, have none!" ... Comprende? ... hehehe!
I prefer a petite lady ... like Tweety! So a model like Twiggy (I know ... you got to go to Wikipedia to find out who this person is ... thank you for your patience ... anyway, she was famous in the last century), would turn my head.
A friend of mine prefers his lady to be big ... like in 'elephant'! In fact, before their marriage, his wife referred to herself as an elephant (size). But that is precisely what turns him on!
Well, some men prefer birds. Some prefer elephants. To each, his own.
But there is one arena in which SIZE REALLY MATTERS! It's critical that you know why bigger is better in this arena.
Do you agree that the simplest (or easiest) way to live is to not do anything? Not to take risks? Not to take challenges?
Whether in your personal life. Or your working life. Or your volunteer work life.
When you have a personal problem, isn't it that the the easiest way, is to avoid or run away from the problem?
At the office, isn't it best not to rock the boat? Just do the same old things, when there is a problem? Don't take any new actions or consider new proposals which you are not familiar with? Your company do not need to implement the Suggestion System, because many other companies have failed in implementing it? (Even though Japanese companies implement it successfully).
Do the same things and expect different results!?! That is one definition of insanity.
I was observing the happenings in a voluntary organisation. When you are in a voluntary organisation, isn't the inertia even greater? You don't get paid for your time (it's a voluntary organisation, for heaven's sake, that's why ... ), is the common excuse.
So when there is a challenge, such as organising an international training program, where the number of expected participants falls short of the minimum required, you take the easy step - you cancel it!
Your excuse/justification? "We don't want to lose money". Convenient rationale? You feel good that you are saving the organisation money?
Yuhoooo!!! No need to do further work. No need to think about how to get more participants. No need to think of other possibilities to make the program financially viable. No need to contact speakers. No need to follow-up on other matters.
Just relax until next year, when you can offer it again. Just talk at the monthly meetings. Soon, you become a member of NATO (No Action Talk Only). Will your non-profit organisation make progress? There will be progress, yes ... but only in finger-pointing, at the end of the year, or before the Annual General Meeting.
If you want success, you need to be bigger. Bigger than your problems!
How can you become bigger? You grow yourself.
Take problems as challenges. Do not blame anyone (your boss? ... your colleague?...your wife? ...your cat?) or anything (the fricking economy? ... the fricking political situation?) for your problem. You take action to improve the situation. Just like Japanese Kaizen - continuous improvement.
What if, after taking action, you fail? Take it as a learning experience. To make you grow bigger. To make you wiser. To make your organisation better. To be able to handle a similar situation in future, better.
The moral of the story? When you want to be a winner, you need to be bigger. Bigger than the losers.
When you want to be a leader, you need to be bigger. Bigger than your followers.
When you say,"I want to follow what you (the majority) decide upon", you are a follower, not a leader. A leader has to lead, not follow. That's why you have to be bigger than your followers. Otherwise, you become just like your followers - a sheep. You want to be the Lion King, if you want to be a leader.
T Harv Eker said, "If you have a big problem in your life, all that means is that you are a small person ... Your outer world is merely a reflection of your inner world. If you want to make a permanent change, stop focusing on the size of the problems and start focusing on the size of you".
So, you know what to do now? Go! Go make yourself bigger!
I wish you Success in your undertakings and Good Health and Wealth to you and your family. Take care!
Thursday, November 20, 2008
Why Do You Need To Market 'You'?
Is Coca Cola an internationally recognised brand? Have you drank Coke? The Real Thing?
If Coca Cola is a readily recognised international brand, why do they spend lots of money on advertisements and promotions? After all, everyone knows Coca Cola, isn't it?
So what is the reason they spend a lot on promotions and advertisements? To be number 1? Yes! You are right! They have a lot of competitors, such as Pepsi Cola.
If Coke spends tonnes of money to market itself, shouldn't you - a mere unknown (at this point in time, but certainly not forever!) - also do some promotion? Some marketing? Self promotion?
One fine day in 1997, I decided to join an international MLM (multi level marketing) company. Why? Because you can make lots of money? True, but that was not the principal reason; because I had no confidence that I would be able to do what it takes in that business.
My principal reason was to find out how network marketing works. To understand its principles, so that when people give their opinion on this method of marketing products or services, I will give a knowledgeable answer. From actual experience of being in the industry. Rather than hearsay.
MLM or network marketing companies use one of the most effective forms of advertising or marketing - word of mouth. That's what I learnt.
Are we digressing from our topic? No, because another lesson I learnt is that if you are in any business, you should promote that business.
Me? I was trying to hide it. From anything that breathes. Why? Because some folks have the wrong information on the MLM industry. They 'think' its a pyramid scheme. (And I was afraid people would associate me with this). Because they 'think' (without the right information), they do not take 'action' to grap one of the best business opportunities in the world.
Once he learnt about the awesome power of the network marketing business model, Robert T Kiyosaki wrote "The Business School for People Who Like to Help People" to describe the advantages of being involved in the network marketing industry.
Of course, network marketing is not for everyone. But it sure would be a great help for a lot of people, if they just opened their minds.
Robert Kiyosaki also states that one of the most important personal skills that you must learn, to succeed in life, is selling! Because selling trains you to tame the fear of rejections! Can you handle twenty 'No's before you get one 'Yes'?
Harv T Eker wrote, "... any leader who can't or won't promote will not be a leader for long, be it in politics, business, sports or even as a parent. (Also)... Leaders earn a heck of a lot more money than followers!"
The moral of the story? If you do not promote yourself, no one else will. If you do not sell your business, no one else will. If you do not transfer your enthusiasm ('the radio wave by which you transmit your personality to others'), no one else will. Go sell, with integrity, the product "YOU"!
I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!
P.S. In case you are the curious kind, which MLM company did I join? Give me your answer in the Comments space. If you give me your email, I will confirm the answer privately! Of course, if you guessed right, I will give you a little gift. Fair deal?
If Coca Cola is a readily recognised international brand, why do they spend lots of money on advertisements and promotions? After all, everyone knows Coca Cola, isn't it?
So what is the reason they spend a lot on promotions and advertisements? To be number 1? Yes! You are right! They have a lot of competitors, such as Pepsi Cola.
If Coke spends tonnes of money to market itself, shouldn't you - a mere unknown (at this point in time, but certainly not forever!) - also do some promotion? Some marketing? Self promotion?
One fine day in 1997, I decided to join an international MLM (multi level marketing) company. Why? Because you can make lots of money? True, but that was not the principal reason; because I had no confidence that I would be able to do what it takes in that business.
My principal reason was to find out how network marketing works. To understand its principles, so that when people give their opinion on this method of marketing products or services, I will give a knowledgeable answer. From actual experience of being in the industry. Rather than hearsay.
MLM or network marketing companies use one of the most effective forms of advertising or marketing - word of mouth. That's what I learnt.
Are we digressing from our topic? No, because another lesson I learnt is that if you are in any business, you should promote that business.
Me? I was trying to hide it. From anything that breathes. Why? Because some folks have the wrong information on the MLM industry. They 'think' its a pyramid scheme. (And I was afraid people would associate me with this). Because they 'think' (without the right information), they do not take 'action' to grap one of the best business opportunities in the world.
Once he learnt about the awesome power of the network marketing business model, Robert T Kiyosaki wrote "The Business School for People Who Like to Help People" to describe the advantages of being involved in the network marketing industry.
Of course, network marketing is not for everyone. But it sure would be a great help for a lot of people, if they just opened their minds.
Robert Kiyosaki also states that one of the most important personal skills that you must learn, to succeed in life, is selling! Because selling trains you to tame the fear of rejections! Can you handle twenty 'No's before you get one 'Yes'?
Harv T Eker wrote, "... any leader who can't or won't promote will not be a leader for long, be it in politics, business, sports or even as a parent. (Also)... Leaders earn a heck of a lot more money than followers!"
The moral of the story? If you do not promote yourself, no one else will. If you do not sell your business, no one else will. If you do not transfer your enthusiasm ('the radio wave by which you transmit your personality to others'), no one else will. Go sell, with integrity, the product "YOU"!
I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!
P.S. In case you are the curious kind, which MLM company did I join? Give me your answer in the Comments space. If you give me your email, I will confirm the answer privately! Of course, if you guessed right, I will give you a little gift. Fair deal?
Tuesday, November 18, 2008
What is Your Net Worth?
Why is your Net Worth important? Because once you have a Net Worth (instead of net liability!), you will be able to proceed to more wealth! "The journey of one million dollars starts with one single dollar", said the famous philosopher MyFinancial$Sense.
Common folks talk in terms of having a salary increase of 30% (a promotion) or 5% (annual increase to keep up with inflation, but not with personal expenses!). Rich people talk in terms of increasing Net Worth. Common folks talk of increasing Working Income.
Six years ago, a friend of mine, a millionaire (must be, because he lived in a million-dollar bungalow, and also had just been given a million-dollar golden handshake, with more than a million dollars in his retirement fund, plus a few road/racing bicycles worth what 3 administrative assistants would earn in a year!) said of another friend, "Dick will be worth a couple of (more like 50) million dollars when his company is listed on the stock market." It's only now that I understand that rich people never talk of 5% or 30% increase in your working income.
How do you calculate your Net Worth? Simple: add (expressed in '$ & c') everything that you own, and then minus everything that you owe.
If you own: a house which you bought for $300,000 (market value $180,000 because of the U.S.A.'s sub-prime crisis), an apartment which you bought for $ 125,000 (market value $ 160,000 because it is situated in the Central Business District), savings bonds of $10,000 (fixed value), 60,000 units of mutual funds which you bought @ $1.30/unit but whose price today is $0.50 (because of the world's worst financial market in two decades), an 8-year old car bought for $50,000 but now worth $10,000 on the market, a 2-year old car which you bought for $ 37,000 (market value $ 9,000 because it's a lemon), and you owe: the bank $25,000 (loan for 2-year old car), what is your Net Worth? (A special prize awaits you if you get the right answer!).
T Harv Eker states that four (4) factors determine your Net Worth:
(1) Income, (2) Savings, (3) Investments, and (4) Simplification.
Income can be from Active Income, or Passive Income.
Active Income is when you trade your 'time' for 'money'. Your time is worth less (perhaps $4/hour) when there is a lot of supply (e.g. you work as a manual worker, perhaps packing items into a cardboard box). If you have specialised skills (like a neuro-surgeon, divorce lawyer for the rich and famous, or creative marketing consultant), your rate could be $10,000 per hour.
Passive Income is when you have an income stream whether you are awake or asleep (or gone to heaven!?! ... Elvis Presley - o.k., ok., his estate - still earns lotsa $$$$ from his songs' royalties). Or you write a best-selling book (not a best-written book, for heaven's sake!), and collect your royalties as you go on a tropical cruise.
Savings is critical because because they will become the seeds of your investment, once it reaches a minimum level. Savings indicates that you have the discipline not to let money get completely out of your hands. If you can't keep it, others will! Get the message?
From your savings (if you keep it in the bank, some banks offer 4% per annum, a few may offer 12% when they are really short of funds), you will accumulate over a period of time to use for Investments.
Investments in gold, property, stocks or business? For a Mc Donald's or Kentucky Fried Chicken franchise, you may need a $1,000,000 investment. For a network marketing company's rights to market their products, the 'franchise fee' could be less than a $100. Without an investment fund, you may miss golden business opportunities which require investments of between $10,000 to $100,000.
Simplification requires you to reduce your cost of living, so that you can increase your savings and investments faster. A property millionaire started his road to riches by simplification, when he realised that almost 100% of his income was on expenses, with little room left for savings and investments. How?
He got rid of his big car (he was a lawyer with his own firm) and changed to a compact car. He unloaded the driver (of his big car). His friends gingerly avoided him at the club (because they thought he was in dire financial straits). He's laughing his way to the bank now (and riding, with the breeze caressing his moustache, on his Harley Davidson around the country). FINANCIAL FREEDOM!
The moral of the story? Once you realise that your Net Worth is more important than your Net Income, you will be on your way to financial freedom. Focus on your Net Worth everyday (o.k., every month for starters), and you will see it grow.
I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!
P.S. Sshhh ... what about his big wife? No, no! The guy didn't get rid of his big wife (see story on Simplification above), in case you were wondering. Just joking (about his wife being big), for heaven's sake!
Common folks talk in terms of having a salary increase of 30% (a promotion) or 5% (annual increase to keep up with inflation, but not with personal expenses!). Rich people talk in terms of increasing Net Worth. Common folks talk of increasing Working Income.
Six years ago, a friend of mine, a millionaire (must be, because he lived in a million-dollar bungalow, and also had just been given a million-dollar golden handshake, with more than a million dollars in his retirement fund, plus a few road/racing bicycles worth what 3 administrative assistants would earn in a year!) said of another friend, "Dick will be worth a couple of (more like 50) million dollars when his company is listed on the stock market." It's only now that I understand that rich people never talk of 5% or 30% increase in your working income.
How do you calculate your Net Worth? Simple: add (expressed in '$ & c') everything that you own, and then minus everything that you owe.
If you own: a house which you bought for $300,000 (market value $180,000 because of the U.S.A.'s sub-prime crisis), an apartment which you bought for $ 125,000 (market value $ 160,000 because it is situated in the Central Business District), savings bonds of $10,000 (fixed value), 60,000 units of mutual funds which you bought @ $1.30/unit but whose price today is $0.50 (because of the world's worst financial market in two decades), an 8-year old car bought for $50,000 but now worth $10,000 on the market, a 2-year old car which you bought for $ 37,000 (market value $ 9,000 because it's a lemon), and you owe: the bank $25,000 (loan for 2-year old car), what is your Net Worth? (A special prize awaits you if you get the right answer!).
T Harv Eker states that four (4) factors determine your Net Worth:
(1) Income, (2) Savings, (3) Investments, and (4) Simplification.
Income can be from Active Income, or Passive Income.
Active Income is when you trade your 'time' for 'money'. Your time is worth less (perhaps $4/hour) when there is a lot of supply (e.g. you work as a manual worker, perhaps packing items into a cardboard box). If you have specialised skills (like a neuro-surgeon, divorce lawyer for the rich and famous, or creative marketing consultant), your rate could be $10,000 per hour.
Passive Income is when you have an income stream whether you are awake or asleep (or gone to heaven!?! ... Elvis Presley - o.k., ok., his estate - still earns lotsa $$$$ from his songs' royalties). Or you write a best-selling book (not a best-written book, for heaven's sake!), and collect your royalties as you go on a tropical cruise.
Savings is critical because because they will become the seeds of your investment, once it reaches a minimum level. Savings indicates that you have the discipline not to let money get completely out of your hands. If you can't keep it, others will! Get the message?
From your savings (if you keep it in the bank, some banks offer 4% per annum, a few may offer 12% when they are really short of funds), you will accumulate over a period of time to use for Investments.
Investments in gold, property, stocks or business? For a Mc Donald's or Kentucky Fried Chicken franchise, you may need a $1,000,000 investment. For a network marketing company's rights to market their products, the 'franchise fee' could be less than a $100. Without an investment fund, you may miss golden business opportunities which require investments of between $10,000 to $100,000.
Simplification requires you to reduce your cost of living, so that you can increase your savings and investments faster. A property millionaire started his road to riches by simplification, when he realised that almost 100% of his income was on expenses, with little room left for savings and investments. How?
He got rid of his big car (he was a lawyer with his own firm) and changed to a compact car. He unloaded the driver (of his big car). His friends gingerly avoided him at the club (because they thought he was in dire financial straits). He's laughing his way to the bank now (and riding, with the breeze caressing his moustache, on his Harley Davidson around the country). FINANCIAL FREEDOM!
The moral of the story? Once you realise that your Net Worth is more important than your Net Income, you will be on your way to financial freedom. Focus on your Net Worth everyday (o.k., every month for starters), and you will see it grow.
I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!
P.S. Sshhh ... what about his big wife? No, no! The guy didn't get rid of his big wife (see story on Simplification above), in case you were wondering. Just joking (about his wife being big), for heaven's sake!
Thursday, November 13, 2008
NeFiPELoG Money Management System?
Under "Is There a Simple Money Management System (MMS)", you were introduced to the NeFiPELoG system. You need some elaboration on the six accounts that T Harv Eker came up with?
Ne = Necessities Account. This is the 50% of your income (after taxes) that you use to pay for your necessities, for your basic needs, such as your food and lodging. Without these necessities, you would not be able to live, or go to work.
Fi = Financial Freedom Account. This is the 10% of your income that you only use for investments. Or buying/creating passive income streams. The income derived from these investments must not be spent! It is to be further invested. Only when you retire (not necessarily at the formal/official retirement age) can you spend the passive income (i.e the principal remains untouched).
P = Play Account. The 10% of your income put into this account has to be spent every month! Why? Because if you just save, you may become addicted to saving only, and may become miserly. To nurture the habit of feeling good and being able to do things that your heart really desires (yes ladies - that cute Gucci hand-bag to match your sexy red shoes!), this play account money can be spent on anything that you fancy for the month. This makes you a 'holistic' person (I don't know whether you will turn into a holy man ... hehehe).
E = Education Account. You are familiar with the saying: "If education is expensive, try ignorance". This 10% of your income is for you to buy books, attend seminars, or pursue a course of study to improve your knowledge and skills. I met the General Manager of the Cameroon Development Corporation (Africa) in 1993, and found him very knowledgeable. I was impressed, and asked him his secret. He mentioned that when he was overseas and at the airport, he would buy books, because it was quite difficult to find a wide choice/range of books in his country. A few years later he was appointed the President of the Republic of Cameroon. They picked an excellent person. The right person, don't you think?
Lo = Long-Term Savings for Spending Account. This 10% of your income differs from the Financial Freedom Account in that it can use it anytime (and not only when you retire). The principle is that if you want to spend something, do not take a loan (especially a credit card loan!). Instead, save 10% of your income, and then spend when the accumulated savings is enough for you to buy the desired object (e.g. a new bedroom or sofa set, or a vacation to Tioman Island or Bora Bora).
G = Give Account. This 10% of your income is to be given out to your favorite charity or religious house. Winston Churchill said, "We make a living by what we earn - we make a life by what we give". Do you agree?
What is the moral of the story? If a multi-millionaire like T Harv Eker suggests that you manage your money according to the NeFiPELog system, doesn't it merit your attention? If he recommends the system, and he has the results to show for it, shouldn't you do your utmost to follow it? Even if you have $100 only to manage? That would be a measure of your discipline, isn't it?
Money, like everything in life, needs to be managed. If not managed, your money turns into a state of financial chaos. Isn't the global financial chaos a sign that you need to go back to basics?
I wish you Success in your undertakings and Good Health and Wealth to you and your family. Take care!
Ne = Necessities Account. This is the 50% of your income (after taxes) that you use to pay for your necessities, for your basic needs, such as your food and lodging. Without these necessities, you would not be able to live, or go to work.
Fi = Financial Freedom Account. This is the 10% of your income that you only use for investments. Or buying/creating passive income streams. The income derived from these investments must not be spent! It is to be further invested. Only when you retire (not necessarily at the formal/official retirement age) can you spend the passive income (i.e the principal remains untouched).
P = Play Account. The 10% of your income put into this account has to be spent every month! Why? Because if you just save, you may become addicted to saving only, and may become miserly. To nurture the habit of feeling good and being able to do things that your heart really desires (yes ladies - that cute Gucci hand-bag to match your sexy red shoes!), this play account money can be spent on anything that you fancy for the month. This makes you a 'holistic' person (I don't know whether you will turn into a holy man ... hehehe).
E = Education Account. You are familiar with the saying: "If education is expensive, try ignorance". This 10% of your income is for you to buy books, attend seminars, or pursue a course of study to improve your knowledge and skills. I met the General Manager of the Cameroon Development Corporation (Africa) in 1993, and found him very knowledgeable. I was impressed, and asked him his secret. He mentioned that when he was overseas and at the airport, he would buy books, because it was quite difficult to find a wide choice/range of books in his country. A few years later he was appointed the President of the Republic of Cameroon. They picked an excellent person. The right person, don't you think?
Lo = Long-Term Savings for Spending Account. This 10% of your income differs from the Financial Freedom Account in that it can use it anytime (and not only when you retire). The principle is that if you want to spend something, do not take a loan (especially a credit card loan!). Instead, save 10% of your income, and then spend when the accumulated savings is enough for you to buy the desired object (e.g. a new bedroom or sofa set, or a vacation to Tioman Island or Bora Bora).
G = Give Account. This 10% of your income is to be given out to your favorite charity or religious house. Winston Churchill said, "We make a living by what we earn - we make a life by what we give". Do you agree?
What is the moral of the story? If a multi-millionaire like T Harv Eker suggests that you manage your money according to the NeFiPELog system, doesn't it merit your attention? If he recommends the system, and he has the results to show for it, shouldn't you do your utmost to follow it? Even if you have $100 only to manage? That would be a measure of your discipline, isn't it?
Money, like everything in life, needs to be managed. If not managed, your money turns into a state of financial chaos. Isn't the global financial chaos a sign that you need to go back to basics?
I wish you Success in your undertakings and Good Health and Wealth to you and your family. Take care!
Tuesday, November 11, 2008
Is There a Simple Money Management System (MMS)?
Warren Buffet said, "Don't think that you have to be wealthy, before you can be an investor. You have to learn to be an investor, before you can be wealthy".
In other words, you don't have to have lotsa $,$$$,$$$ before you need to manage it. You need to manage it before you get lotsa $,$$$,$$$! Simple? Yes! But how many of you manage your money ... properly? Do you have a system to manage your $$$$$?
How much money do you receive over your life-time? Well, at least over your working life-time? For the majority you, it will be over $1,000,000! Wow! That's good news!
What's the bad news? You will spend most (if not all!) of the $1,000,000! How can this be? Indeed, how can it be?
But don't you agree, that oftentimes, truth is stranger than fiction? How can you personally check this out?
One way is for you to note your daily expenses for 30 days. Every single expense. Including credit card purchases.
A simple way to check other people's expenditure, in a roundabout way, is to check their bank balances.
Of course no one is going to show, (or allow you to check) their bank balance. But you can just (discreetly ... or like 007 ... your choice!) go to any automated teller machine (ATM), and collect the balance print-out slips. These are readily retrieved from the waste basket, or (not that many, though) from the tops of the ATM machines.
Check the balance slips. One set of slips - just after the beginning of the month. Another set of slips - just before payday at the end of the month. Can you please report to me your findings through the 'comments' on this blog?
The simplest Money Management System (MMS) is called E-S-I system. This requires you to separate your income into three separate items (or bank accounts!).
E = Expenses = 70% of your income.
S = Savings = 10% of your income.
I = Investments = 20% of your income.
Simple? 'Do'able? You doing it?
T Harv Eker has another (more sophisticated, or advanced, or complicated, ... depending on who you are?!?) system. There are six separate accounts or items, instead of the three for E-S-I system. It is the N-F-P-E-L-G system. For your easy memory retention, is it ok with you if we call it the NeFiPELoG system? Thank you for your kind agreement.
The six accounts are:
Ne = Necessities = 50% of your income
Fi = Financial Freedom = 10% of your income
P = Play = 10% of your income
E = Education = 10% of your income
Lo = Long-Term Savings for Spending = 10% of your income
G = Give = 10% of your income
T Harv Eker is 'a multi-millionaire many times over' (... I heard it right from the horse's mouth!). So if he says that the above is the key to your financial success, do you think we should have a debate with him?
The moral of the story? You are aware of friends or neighbours who earn more than $5,000 a month but who are broke (run out of cash before the end of the month! ... they love the month of February...hehehe!). You also know friends or neighbours who earn $2,000 a month but have cash left-over to be used the next month. How come the difference in results?
As T Harv Eker says, "The habit of managing your money is more important than the amount".
I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!
P.S. I read yesterday about a guy (in thirties or early forties) who experienced having his last $4.50 to be spent with his kid at McDonalds, and also of having his car reposessed, after having lost his job. He appeared to have had a very well-paying job before that. I do not know his exact background when he experienced all these 'sad situations' or 'traumas', but have you known your friends or neighbours being in similar situations? Hmmm ... care to share/comment? Thank you.
In other words, you don't have to have lotsa $,$$$,$$$ before you need to manage it. You need to manage it before you get lotsa $,$$$,$$$! Simple? Yes! But how many of you manage your money ... properly? Do you have a system to manage your $$$$$?
How much money do you receive over your life-time? Well, at least over your working life-time? For the majority you, it will be over $1,000,000! Wow! That's good news!
What's the bad news? You will spend most (if not all!) of the $1,000,000! How can this be? Indeed, how can it be?
But don't you agree, that oftentimes, truth is stranger than fiction? How can you personally check this out?
One way is for you to note your daily expenses for 30 days. Every single expense. Including credit card purchases.
A simple way to check other people's expenditure, in a roundabout way, is to check their bank balances.
Of course no one is going to show, (or allow you to check) their bank balance. But you can just (discreetly ... or like 007 ... your choice!) go to any automated teller machine (ATM), and collect the balance print-out slips. These are readily retrieved from the waste basket, or (not that many, though) from the tops of the ATM machines.
Check the balance slips. One set of slips - just after the beginning of the month. Another set of slips - just before payday at the end of the month. Can you please report to me your findings through the 'comments' on this blog?
The simplest Money Management System (MMS) is called E-S-I system. This requires you to separate your income into three separate items (or bank accounts!).
E = Expenses = 70% of your income.
S = Savings = 10% of your income.
I = Investments = 20% of your income.
Simple? 'Do'able? You doing it?
T Harv Eker has another (more sophisticated, or advanced, or complicated, ... depending on who you are?!?) system. There are six separate accounts or items, instead of the three for E-S-I system. It is the N-F-P-E-L-G system. For your easy memory retention, is it ok with you if we call it the NeFiPELoG system? Thank you for your kind agreement.
The six accounts are:
Ne = Necessities = 50% of your income
Fi = Financial Freedom = 10% of your income
P = Play = 10% of your income
E = Education = 10% of your income
Lo = Long-Term Savings for Spending = 10% of your income
G = Give = 10% of your income
T Harv Eker is 'a multi-millionaire many times over' (... I heard it right from the horse's mouth!). So if he says that the above is the key to your financial success, do you think we should have a debate with him?
The moral of the story? You are aware of friends or neighbours who earn more than $5,000 a month but who are broke (run out of cash before the end of the month! ... they love the month of February...hehehe!). You also know friends or neighbours who earn $2,000 a month but have cash left-over to be used the next month. How come the difference in results?
As T Harv Eker says, "The habit of managing your money is more important than the amount".
I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!
P.S. I read yesterday about a guy (in thirties or early forties) who experienced having his last $4.50 to be spent with his kid at McDonalds, and also of having his car reposessed, after having lost his job. He appeared to have had a very well-paying job before that. I do not know his exact background when he experienced all these 'sad situations' or 'traumas', but have you known your friends or neighbours being in similar situations? Hmmm ... care to share/comment? Thank you.
Monday, November 10, 2008
How to Manage Your Money?
What is the key to financial freedom?
Is it to have a well-paying job? There are many well-paid executives who have big cars and big houses. They also have big loans! (And big wives? ... just joking ... to check whether you are paying attention!). But small or zero savings!
Is it to be lucky, and win a million dollars through the lottery? You have heard of many stories of people who won a million dollars in a lottery, but are back to square one in a matter of 2-3 years.
Did you see the story in the newspapers of a grandmother who received more than a million dollars (because her piece of land was acquired by the government) but who then lost it all? She then became dependent on her neighbours to provide her with food.
Why did these people not keep their big money? The reason is that they did not know how to manage money!
If you do not know how to manage $100, you will not be able to manage $1,000,000! Similarly, if you do not know how to take care of 1 tree, you will never be able to take care of a forest or a plantation with 1,000,000 trees.
My wife has difficulty in looking after potted plants or flowers. Even the most hardy of plants - the cactus - will die (not a sudden, horrible death, I hope ... but more of a slow death, I guess) when she buys from IKEA and keeps it in the house. Would you want her to look after the Botanical Gardens at Kew, England? God bless the flower plants and the trees!
Haven't you heard of the following saying: "'Happiness' is when you have $100, and you spend $99. 'Misery' is when you have $100, and you spend $101"?
The financial tsunami experienced by the United States of America in 2008 is caused by this principle. When many individuals practise 'misery' in their daily lives, the result would be 'misery' on a national scale. Even on a global scale.
When you have $100 and you spend $99, you will have $1 savings. When your financial habit is 'savings' of 1%, you will save $10 when you get $1,000. Your 1% habit will make you save $100 when you get $10,000.
One of the secrets to financial freedom is that you must 'invest'. When you 'invest', your money is working for you! Instead of you working for money! Isn't that neat? Which is your choice?
When you have a financial habit of 10% savings when your salary is $100 a month, what would your savings be when your salary becomes 1,000 per month? What would be your savings when you earn $10,000 per m0nth?
When you invest all your savings (10%) above, beginning when you earned $100 per month, do you think that you could be a millionaire in 20 years' time? Or 30 years' time? Or 40 years' time? Or when you retire? Would it give you peace of mind?
The moral of the story? When you develop your financial habit of saving at least 10% of the money that you get, you will be on your way to financial freedom. Your 10% savings will allow you to invest - letting money work for you (instead of you working for money). T Harv Eker wrote: "Until you show you can handle what you've got, you won't get any more!...We are creatures of habits, and therefore the habit of managing your money is more important than the amount".
I wish you Success in your undertakings and Good Health and Wealth to you and your family. Take care!
Is it to have a well-paying job? There are many well-paid executives who have big cars and big houses. They also have big loans! (And big wives? ... just joking ... to check whether you are paying attention!). But small or zero savings!
Is it to be lucky, and win a million dollars through the lottery? You have heard of many stories of people who won a million dollars in a lottery, but are back to square one in a matter of 2-3 years.
Did you see the story in the newspapers of a grandmother who received more than a million dollars (because her piece of land was acquired by the government) but who then lost it all? She then became dependent on her neighbours to provide her with food.
Why did these people not keep their big money? The reason is that they did not know how to manage money!
If you do not know how to manage $100, you will not be able to manage $1,000,000! Similarly, if you do not know how to take care of 1 tree, you will never be able to take care of a forest or a plantation with 1,000,000 trees.
My wife has difficulty in looking after potted plants or flowers. Even the most hardy of plants - the cactus - will die (not a sudden, horrible death, I hope ... but more of a slow death, I guess) when she buys from IKEA and keeps it in the house. Would you want her to look after the Botanical Gardens at Kew, England? God bless the flower plants and the trees!
Haven't you heard of the following saying: "'Happiness' is when you have $100, and you spend $99. 'Misery' is when you have $100, and you spend $101"?
The financial tsunami experienced by the United States of America in 2008 is caused by this principle. When many individuals practise 'misery' in their daily lives, the result would be 'misery' on a national scale. Even on a global scale.
When you have $100 and you spend $99, you will have $1 savings. When your financial habit is 'savings' of 1%, you will save $10 when you get $1,000. Your 1% habit will make you save $100 when you get $10,000.
One of the secrets to financial freedom is that you must 'invest'. When you 'invest', your money is working for you! Instead of you working for money! Isn't that neat? Which is your choice?
When you have a financial habit of 10% savings when your salary is $100 a month, what would your savings be when your salary becomes 1,000 per month? What would be your savings when you earn $10,000 per m0nth?
When you invest all your savings (10%) above, beginning when you earned $100 per month, do you think that you could be a millionaire in 20 years' time? Or 30 years' time? Or 40 years' time? Or when you retire? Would it give you peace of mind?
The moral of the story? When you develop your financial habit of saving at least 10% of the money that you get, you will be on your way to financial freedom. Your 10% savings will allow you to invest - letting money work for you (instead of you working for money). T Harv Eker wrote: "Until you show you can handle what you've got, you won't get any more!...We are creatures of habits, and therefore the habit of managing your money is more important than the amount".
I wish you Success in your undertakings and Good Health and Wealth to you and your family. Take care!
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