New Year – Time for Reflection

Every new year will bring us closer to the day we dream of. The day we can stop being in the rat race, the 9 to 5 routine or the weekly 3-shift work we are in. Whether we want it or not we will eventually retire one fine day.

The last day of the year; 31^st December, always give me that feeling of underachievement. Of not doing enough or not completing all that I intended to. It gives me the déjà vu feeling, that I have been on this road before. Why?

It is time for reflection….. had we done what we had set ourselves to do at the beginning of the year or had we done enough for ourselves and for others?

Your Successes

Have you been successful in some of your endeavours; if you have, are they good enough for you, is it up to the standard you want? Are all your successes beneficial to you and to others? Are they good enough for you to repeat over the coming year?

Your Mistakes

If you fail in some of the ventures you have got yourself into this year, are you able to learn from these mistakes (I feel strongly about calling mistakes failures as I believe no one will ever fail, you just miss your target). Mistakes are there for us to learn, we learn not to repeat them and learn to correct them so we make them into successes.

There is No Comparison

I would urge everyone who is on their venture to become successful to avoid comparing yourself with others. You should compete with yourself and not others. Do not compare yourself with your friends, neighbours or even siblings. Set your own standard and target and the only person you compete with is yourself. Everyone is different in their making and everyone succeed at their own pace. You will only get frustrated if you start comparing yourself to others and that will definitely be detrimental to your mental health. You do not want or need that.

I find reflecting a very good way to move on with our lives especially if there are obstacles that we have encountered and reflections give us time to heal and repent and it is good for the soul… have a fun time doing that on the 1^st day of the year.

Plan Well to Retire Well

You have to learn to plan well to retire well. Year-end is usually the budget time for organisation and companies and it could be also the right time for personal planning. As I have said in my previous posts, if you fail to plan, you plan to fail.

Face Your Fear

I asked my young son “Why are you broke before the end of the month?” and he shakes his head with the answer “I don’t know”. Then, after pondering a moment, he said “Maybe because I earn too little, I am going to look for a better paying job.” Well, that may be somewhat true but frankly speaking, no matter how much you earn, it will never be enough unless you put up a good financial plan.

When asked to write down all his monthly expenses, his response was “No way, I am not going to shock myself”.

I felt this is the common fear people faced when its time to financial plan. I would advise all to take the bull by the horns and go for it. Face your fear and find out where you are wasting your money and what is causing you not to be able to save.

Take Time to Save Now

Dream your dream and reach out for the sky. Every success begins with a dream. I find saving as the best way for a novice investor to start creating wealth but it usually start with a dream, a need to save.

a) Obstacles to overcome

There are usually many obstacles on the road to success. Do not fear these obstacles as they are the experiences that you need to achieve success. Find them and overcome them one by one and they will make you stronger by the day.

b) Make time work for you; time makes a difference

If you were to save $100 a month and can earn a 5% interest, how long will it take you to achieve the goal of $10,000. You can find the calculator by typing “how much will be savings be worth” in any search engine to help you do the calculation.

c) Interest adds up

If you want to achieve your saving goals faster, instead of just $100 a month, you can work harder by taking up a part-time job over weekends and put all the earning into this saving plan. Lets say you earn $400 a month and you add this to your original of $100. See how much faster this will grow by using the calculator again.

Learn about compounding interest and how it can work for you.

Convert Your Dream into Reality

List the financial goals you want to achieve for yourself and work towards those goals. Remember, you have to write it down; better still if you let people know of your goals. Be specific; know what your goal is, how much money it takes to achieve that goal and when you want to accomplish it.

Again you will need to write out your plan and how you plan to accomplish your goal.

You need to plan well in order to retire well. Today is a good time to start your planning. Never put off what you can do today till tomorrow.

Giving Back to Society

John Wesley who founded the Methodist Church in the 18^th century used this simple rule to teach God’s love. Universally, God’s love is doing good works.

Do all the good you can,

By all the means you can,

In all the ways you can,

In all the places you can,

At all the times you can,

To all the people you can,

As long as ever you can.

By John Wesley

We read so much about rich people giving back to society what they got from society. People like Bill Gates, the richest man of the world, left his company to focus his time for society. He gave away his wealth for important issues like education and health. Warren Buffet invested $31 Billion to his foundation to help society.

Does all these good doings stop with the rich people? Or do we wait to be rich to do good?

In this season of festivities while we are all enjoying ourselves and having fun time with our family and friends, let us stop for a moment to think about the lesser fortunate. Lets spread joy and goodwill and start to give to others.

I read somewhere that running after money is like chasing after the wind. My father always said that “money” has four legs and we only have two and it is hard keeping up with money. But, if you willingly give and give, they will come back to you. Give with your heart.

So while you are working hard earning money out there, spare some time to do some good this season and continue to do so the whole year round. There is no better time to start than like right now. Start by giving way to a car at a traffic jam, giving up your seat for the elderly in a public transportation, giving your change and a little more in the charity boxes….. in fact you can do a lot more on a daily basis if you are tuned in to giving.

One act of random kindness a day will add up to 365 kind acts you will have done for a full year.

“Retire Young & Rich” – Next New Year Resolution theme

December is the time of the year where people make resolutions to be better for the next year. The Christmas and New Year festivities allow us to spend relaxing time with our family and friends, reflect on the past year’s achievements and shortfalls and shout out our resolutions for the new year.

Yes, the usual resolutions are to lose that extra 10 kg you have gained over the year or to stop smoking or even to be a better person by promising yourself to do a few good deeds a day; give up your seat in public transportation to the elderly, disabled and pregnant etc etc. All these are fine and good but let us change the theme for this year’s resolution.

How about setting a goal to retire young and rich? It is a lifetime goal and if you have set this goal then your next 5 years’ resolutions will be set for you. In fact, your new year resolutions are set for life as you now have a life long direction. Here are 5 I can think of on top of my head; maybe you have more to share……

Year 1: Where Your Money Goes?

Do a comparison of your Income versus Expenses and readjust to balance your personal finance. Your resolution should be to reduce your expenses after your splurging on this festive season.

Year 2: Pay Yourself First

Start looking at ways and means to save so that you can now apportion part of your income to a special account. Target at 10% and once you have achieved your target, reset your goal higher. Instead of spending your bonus money on a new car, use part of the money to open up a special account where you can continue to put in money monthly.

Year 3: Let Your Money Earn Money for you

Following your Year 2 resolution of paying yourself first, your 12-month savings will be earning money for you by now, even as little as earning fixed deposit income.

Year 4: Learn to Invest

Yes! With your new portfolio you will by now have enough to put your money into some kind of investment to earn bigger money. If you are new to investing you will have to start on the safer type like mutual funds and fundamentally sound stocks. Go easy here and advance as you improved in your financial skill.

Year 5: Invest in Yourself

Take lessons on how to earn money or to build a sound business. Read as much as you can on financial literacy. Teach yourself to be an expert in your field of work. Learn, learn and continue learning.

Preparing Yourself for Retirement

Every one has to retire at one point or the other. Whether you retire early or late depend very much on your financial situation and your family background. Some who are late starters; meaning those who are almost at retirement age but still having young children might not be able to retire early even if they want to. Others are luckier in the sense that they have their retirement years all planned out.

Remember, when you retire you are expected to draw on your retirement funds and investment portfolios for at least a minimum of 25 years; some may be longer depending on individual life span.

Here are 3 things you need to do before you retire:-

1. Explore Investing Avenue for your retirement funds

If you are only starting to invest after drawing on your retirement funds, you will have restricted investment objectives, in other words, you cannot afford high risk investment and you definitely cannot afford big losses. You probably have to settle for dividends and interest income where your investment has assured earning.

a. Invest in Stocks

Start to look for fundamentally sound stocks with good historical dividends payout to purchase. Check out the stock historical price and set a target price that you are willing to purchase and look out for the stock movement. Once you draw on your retirement fund, you are ever ready to start your stock investing. Research needs time and its better to start now before you actual retirement date.

b. Invest in Mutual Funds

It would be good advice to put at least 50% of your retirement funds into a good mutual fund to grow your money. Do a survey on the funds available in the market and do a study on the returns of the funds you want to invest in. Again, you need to start looking for good investment funds now rather than wait for your fund to be available.

c. Foreign Currency Deposit

You might want to explore foreign currency investment which gives you better interest rates than your home currency. It will be to your advantage to purchase the currency when the exchange rate is low and put them into fixed deposits.

2. Medical Check-up

For working people who has medical benefits with their companies, it is advisable to go for a full medical check-up before your final workings days. Ironically, once you retire you will probably discover some sickness that we weren’t aware of while you are busy working. So, take time off to do your much needed check; all the scans and tumor markers that are so needed. Mostly, we put off such check-up due to fear of finding out the truth but it is better to know while you are fully insured than to find out later when your working insurance has lapsed.

3. Do a Retirement Budget

Depending on your retirement portfolios… you will have to be realistic when coming out with your retirement budget. Obviously, without an active income, you will need to scale down on your expenses. If you put out a monthly expenses budget, you will be able to know how long your retirement fund will be able to last you. If your stretch is 30 years, then you are safe to retire in comfort, if not you will have to re-look at your expenses. If you can stretch longer years, then it looks like you are ready to retire and enjoy life.

Anyone can trade in the stock market

You don’t have to be a qualified analyst or have a degree to trade in the market. To earn good income from trading can be an option for anyone who has a keen mind and a willingness to learn. Time will help you excel in this skill. Here is a few pointers to help beginners get started.

1. Read, Read and Read

The man who doesn’t read good books

has no advantage over the man

who can’t read them.

Mark Twain

Every one of us knows this “Knowledge is Power”. We are in school a big part of our life, to do what? Yes, to learn, learn and learn. That doesn’t mean that the minute we are out we stop learning. Learning is a life long process which only ends on the last day of our life. So the best way for us to learn is to read, read and read. In order to learn about trading in the stock market, we have to find good book on stock market trading.

2. Do a “Phantom” Trading

If you are new to stock market investing, you might want to do a 3-month trial trading. This may help you get ready for the real investing you would like to go into. You will have to do the same thing similar to what you need to do if you are doing real trading. Pick a few stocks and start studying the company background, history, dividend payment and trading price for the past 10 years. Keep a record of these stock and see how you do in 3-month’s time. Once you are confident, you can start your first trade.

3. Join the membership of a live website

To do both, the “phantom” trading and actual trading, it is better to shop around for a good trading live website to join as a member so that you can use this site to help you track your portfolio. Most site might have a one or two- hour time delay, so, you can either do your trading online (this usually charge very low fee) or with a registered trader.

There are a lot of trading online websites available for you to join as a member so that you can use their site to control your portfolio. Most of these sites has a platform for forum, where investors can communicate and share their views on stocks and market situation.

4. Study the stock you want to invest

Background check on company, share prices for 10 years, do a search on the history of the companies you intend to invest in. Information are usually available on trading companies websites. Check them out and keep your own journals.

5. Diversify by concentrating on only a few shares

Diversification is very subjective. You may concentrate on a few stocks but avoid putting all your eggs in one basket by choose different category of products. I personally felt that one should not over diversify when investing.

6. Keep track – Create your own personal "Watchlist"

Use a reliable and near real time site to create your "Watchlist". This way you can keep track of your portfolio easily and you can also have a quick glance of how the stocks are doing every trading day. You may also want to keep a separate "watchlist" for any potential stocks you plan to purchase. By doing this, it will help you keep track of the price fluctuation in order that you can make the right decision at right time.

Strategise Your Investing

Sometimes when you read on “Investing” topics and “Investing” books, you get all kinds of advice, all kinds of strategies and all kinds of methods to invest. At times you even get contradictory strategy. Some says to diversify, others advise to stick to one; all with good reasons… So, who do you listen to?

Then, you might be told to listen to the successful ones and do exactly what they do and you won’t go wrong. Here again there are so many successful ones with different methods and ways. If you are new to investing, you get more confused. Some might just give up on their quest to invest.

For me personally, my strategies change with time and in order for us to invest wisely we must keep abreast with the current news and changes in the economic climate. Your have to learn to strategise as the earth is evolving as today maybe good to invest in REIT but tomorrow is Gas & Oil, then it just might change to pharmaceutical or even plantation. Stay resilient.

The following are the “holy grails” of a good investor:-

1. Emotional Control

2. Having Guts

3. Having a Clear Vision

All the above 3 points are actually integrated. If you have a clear vision to invest in some stocks, then you must have the guts to hang in there when the going gets tough and having a perfect control on your emotion. Ride out the rough water and you will then be able to enjoy the calm sea.

Select a few stocks and start monitoring the movement of such stocks, after a while you will feel more comfortable to invest in them as you will be able to gauge the company’s direction. Emulate some of the successful investors but come out with your own strategies where you feel most comfortable.

Happy Investing!!

Financial Literacy – your insurance to living

Today is Sunday, I woke up ready to have a lazy day but when scanning news online, I had headline like this “1,600 turn to Bank Negara’s AKPK unit every month” screaming at me. This is alarming for a small country like Malaysia.

These 1,600 individuals turn to the Credit Counselling and Debt Management Agency (AKPK) for help to manage their debts. What about those who are also in debts but are not aware yet and also there are those already in debts and trying to clear them on their own to save their pride. I am appalled by just thinking about it.

As reported by Rashvinjeet S Bedi, the number seeking help monthly has tripled since the agency was set up 18 months ago. And I am sure it will continue to rise if nothing is done to educate these people about how to handle their personal finances.

When I started this blog, my main objective is to bring awareness about how to value money to the younger generations; Generation X and Generation Y who should now be in the thirties and twenties and have just started to earn their own money and be out there to swim with the sharks.

I wanted so much to warn these young kids about “money danger” that some of my postings had become so dull, so boring, so not exciting and so annoying as a “nagging mum”. Yes, who wants to live frugally or live a simple life just to ensure there is enough money to keep us going when we are old. How uninteresting can that be? There are so many “happenings” out there that you would want to get your hands into.

To emphasise on why you should, here are the 2 real life examples quoted by reporter Rashvinjeet:-

“DR AZAM, 28, had it all: two flashy cars, a beautiful home and a flourishing career. He wore expensive clothes and lived extravagantly on credit.

He renovated his mother’s home and decorated it with expensive Italian furniture. He took a loan for the renovation and bought another house.

Without realising it, Dr Azam owed creditors RM400,000 in housing loans, hire-purchase loans and credit card debts.

Stuck, he approached the AKPK for help. Being single and with his mother being the only dependant, Dr Azam was advised to sell his house. He moved in with his mother and sold one of his cars.

In the end, Dr Azam was able to save 45% of his monthly loan payment.”

This is a typical example of living beyond your means and spending your money before you even earned it. At least Dr Azam can still be rescued and live a comfortable life. Lets look at the next example:-

“BEFORE the economic crisis of 1997, Allen was a sales manager earning a five-figure monthly salary, living a comfortable life. However, the economic downturn forced his employers to shut down operations in Malaysia.

At 43, it was hard for him to find a new job. To complicate matters, his wife has a medical condition.

Allen turned to loans and credit cards to fund his lifestyle. Soon enough, creditors began hunting him and threatening bankruptcy.

Suicidal, Allen turned to odd jobs, making less than RM1,000 a month. He skipped meals to ensure his wife had something to eat.

His wife changed his mind about suicide and suggested that he seek the help of AKPK.

Allen had RM200,000 in his EPF, although he could only withdraw the money at 55.

With a debt of RM130,000, AKPK advised him to consider bankruptcy as an option, so that he would be able to settle all his debts when he turns 55.”

I truly empathised with Allen. Earning a five-figure income in the 90s is a lot of money but obviously he did not foresee the economic crisis. What we can do now is to learn from this very painful lesson.

A good friend of mine thought me to use the “Worst Case Scenario” method of looking at every situation. Do a “worst case scenario” of your financial situation. How much mortgages, loans, debts do you have and if you were to lose your job today, how are you going to survive. Do you have “Plan B”? Really look at it, it is scary but it is necessary.

Change your ways. Do not spend indiscriminately or at your wimp and fancy. Think before you spend.

CHANGE

Time and again, we need to change but change is hard.

Sometimes we change due to living changes

or we will wait for “hurt to change”

but never wait till you have to “despair to change”.

It may be too late or too drastic, like in Allen’s case.

Stock Market Investing or Gambling?

I was posed a question about gambling. Is gambling in a casino a kind of investing? I always believe that there is actually a very very fine line between investing and gambling and if you are “sober” you will definitely be able to see that line.

Of course, clearly enough, if you go to a casino with a lot of cash, you are going there to gamble, hoping to win more money than you are prepared to lose. And this kind of “hope” has a 90% chance of disappointing you.

Many risk-taking choices are referred to as “gambling” but investments are usually not considered gambling, although some investments can involve significant risk. Some examples of investments can be stocks and shares, bonds, real estate and businesses.

Wikipedia explains that “Investments are generally not considered gambling when they meet the following criteria:”

• Positive expected returns (at least in the long term)
• Economic utility
• Underlying value independent of the risk being undertaken

Some risky speculative investment activities are still usually not considered as gambling but I would like to warn that if you are always purchasing stocks with no fundamentals to speculate that would equate very close to gambling. It is high risk as you risk losing a good chunk of your money.

Psychological aspects

Some people participate in gambling as a form of recreation or even as a means to gain an income. Gambling, whether legally or illegally, like any behaviour involves the variations of brain chemistry, therefore can become addictive and create bad behaviour in some individuals. Gambling being additive can cause gamblers to persist in gambling even with repeated loses. This can be damaging to your life and peace of mind.

The right reasons to invest in the stock market

If you speculate all the time, that can go very close to gambling but if you study the company behind every stock that you intend to invest, wait for the right price to go in, then you are an intelligent investor.

Yes, you have to find the right reason to invest in the stock market. If you want to earn quick bucks on a short term basis, then you are treading on the brim of gambling. Beware….

The actual and the only right reason for people to go into stock market is to continuously earning an income.

Look for company that issue quarterly dividends and continue putting in the earned dividends into purchasing more of such shares. Make a long term investing plan and aim to retire with your invested money.

By investing for the right reason and using the right choices you automatically become a long-term, dollar-cost averaging, buying investor.

Be smart, spend your time to start studying good companies and concentrate only on a few. Diversify if you must but do not over-diversify or you will end up using too much time studying too many companies. Diversify by selecting a few different categories but here again not too many. By studying the history of companies and their dividends payment percentages and pattern, you will be able to decide on the type of stocks you want to invest in to take you to your retirement years.

Success is Predictable

Success is as predictable as the sun will rise in the east and will then set in the west everyday, 365 days a year. Success is not simply being in the right place at the right time. Success is not meeting one rich person who will help you out. Success is also not a matter of just good luck.

Success will only happen to you if you want it to. You have to work for it. You will have to learn all the success principles and guides given by all the “gurus” of the world and by putting into practice all you have learned you will then be moving to the front line of your life. Once you have attained those principles, you will have an incredible advantage over people who do not yet know or is willing to learn and put such techniques and strategies into practice. You will have the winning edge for the rest of your life and career.

A few good personal traits to have:

• Have a clear sense of direction
• Commit to excellence
• Willing to serve others
• Honesty is the best policy
• Be dependable
• Self Discipline
• Utilise your inborn creativity
• Be Decisive
• Be Action Oriented
• Be Consistent
• Be Persistent

Things you have to do and work on:

• Dare to dream
• Work towards being self employed
• Do what you love
• Work hard and long
• Have life long learning attitude
• Know the detail of your job and/or business
• Learn to prioritise
• Build a reputation for speed and dependability
• Willingness to advance in life
• Go out there and meet the right people
• Keep in good physical health

Last but not least ----- Failure is not an option

If you want to be a big success, all you have to do is consistently do all the things other successful people do. Observe the stuff rich people do and don’t do. Emulate them and learn to think and work like them.

You and you only can determine your fate and your destiny. You are the driver and the only person responsible for your own life. Remember, there is no limitations to what you can be and what you can do unless you put the limitation there yourself by thinking too much. Remove the fear and the disbelief from your mind.

Everyone is born a winner. Nobody in this world can stop you from being successful. You are the owner of your own destiny. You have the potential to hit the target you set for yourself. You have the creativity, the talent and the abilities for much greater things in life than what you are doing now.

Today, now, decide what you want, to the exact minute detail of what you really want to be and want to achieve. Your greatest responsibility now is to continue that dream and make your plans to achieve your goal. Take action towards your goals and never, never even dare think of giving it up. Once you get yourself started laced with all the above traits you need and things you need done, you will be unstoppable and success is confirmed.

Don’t forget

“SUCCESS IS PREDICTABLE

and

FAILURE IS NEVER AN OPTION”.

Discover the 90/10 Principle

Most chaotic situation are caused by the reaction of human population. Sometimes a single action causes a chain of reactions which allow situation to get from bad to worst.

This is so true to life that I felt compel to share with all the visitors of this site. This 90/10 Principle is written by Stephen Covey and is applicable to your business situation as well.

I once heard a simple story of a rich man who display a lot of expensive antiques in his home. One day his seven-year old son accidentally knocked down one of his favourite expensive vase and broke it to a thousand pieces. The normal reaction of a human being is to scold or even beat up the poor frightened boy but the reaction of this wise man was so touching. He not only did not get upset or angry, he was all concerned and fussed over the boy. “Did you hurt yourself” he asked, ” Did the sound of the breaking vase frightened you?” and he knelt down beside the boy hugging him tight, ignoring the broken vase entirely.

When asked by his visitor who happened to witness the incident, his explanation was simple. “I can replace any expensive items in this house but not my son; he is my only priceless possession.”

My outlook of children upbringing changed at that moment onwards.

Discover the 90/10 Principle.

It will change your life (at least the way you react to situations).

What is this principle? 10% of life is made up of what happens to you. 90% of life is decided by how you react.

What does this mean? We really have no control over 10% of what happens to us. We cannot stop the car from breaking down. The plane will be late arriving, which throws our whole schedule off. A driver may cut us off in traffic.

We have no control over this 10%. The other 90% is different. You determine the other 90%.

How? ……….By your reaction.

You cannot control a red light. But you can control your reaction. Don’t let people fool you; YOU can control how you react.

Let’s use an example.

“You are eating breakfast with your family. Your daughter knocks over a cup of coffee onto your business shirt. You have no control over what just happened.”

What happens next will be determined by how you react.

You curse.You harshly scold your daughter for knocking the cup over. She breaks down in tears. After scolding her, you turn to your spouse and criticize her for placing the cup too close to the edge of the table. A short verbal battle follows. You storm upstairs and change your shirt. Back downstairs, you find your daughter has been too busy crying to finish breakfast and get ready for school. She misses the bus.

Your spouse must leave immediately for work. You rush to the car and drive your daughter to school. Because you are late, you drive 40 miles an hour in a30 mph speed limit.

After a 15-minute delay and throwing $60 traffic fine away, you arrive at school. Your daughter runs into the building without saying goodbye. After arriving at the office 20 minutes late, you find you forgot your briefcase. Your day has started terrible. As it continues, it seems to get worse and worse. You look forward to coming home.

When you arrive home, you find a small wedge in your relationship with your spouse and daughter.

Why? …. Because of how you reacted in the morning.

Why did you have a bad day?

A) Did the coffee cause it?

B) Did your daughter cause it?

C) Did the policeman cause it?

D) Did you cause it?

The answer is “D”.

You had no control over what happened with the coffee. How you reacted in those 5
seconds is what caused your bad day.

Here is what could have and should have happened. Coffee splashes over you. Your daughter is about to cry. You gently say, “Its ok honey, you just need to be more careful next time”. Grabbing a towel you rush upstairs. After grabbing a new shirt and your briefcase, you come back down in time to look through the window and see your child getting on the bus. She turns and waves. You arrive 5 minutes early and cheerfully greet the staff. Your boss comments on how good the day you are having.

Notice the difference?

Two different scenarios. Both started the same. Both ended different.

Why?

Because of how you REACTED.

You really do not have any control over 10% of what happens. The other 90% was determined by your reaction.

Here are some ways to apply the 90/10 principle. If someone says something negative about you, don’t be a sponge. Let the attack roll off like water on glass. You don’t have to let the negative comment affect you!

React properly and it will not ruin your day. A wrong reaction could result in losing a friend, being fired, getting stressed out etc. Even to the point of ending in jail.

How do you react if someone cuts you off in traffic? Do you lose your temper? Pound on the steering wheel? (A friend of mine had the steering wheel fall off) Do you curse? Does your blood pressure skyrocket? Do you try and bump them?

WHO CARES if you arrive ten seconds later at work? Why let the cars ruin your drive?

Remember the 90/10 principle, and do not worry about it.

You are told you lost your job.

Why lose sleep and get irritated? It will work out. Use your worrying energy and time into finding another job.

The plane is late; it is going to mangle your schedule for the day. Why take outpour frustration on the flight attendant? She has no control over what is going on.

Use your time to study, get to know the other passenger. Why get stressed out? It will just make things worse.

Now you know the 90-10 principle. Apply it and you will be amazed at the results. You will lose nothing if you try it. The 90-10 principle is incredible. Very few know and apply this principle.

The result?

Millions of people are suffering from undeserved stress, trials, problems and heartache. We all must understand and apply the 90/10 principle.

It CAN change your life!!! It can help you change your personal as well as business life situation for the better.

發現了 90/10 的定律。

它將改變你的一生（最低限度，它將改變你對不同情況的反應）。

90/10 的定律是什麼？生命的 10% 是由你的際遇所組成，餘下的 90% 則由你的反應而決定。

這意味著什麼？我們無法掌握那 10% 的際遇。 我們無法阻止行程因汽車壞掉、航班誤點，甚或車子拋錨而延誤。

我們無法控制那 10% 的際遇，但餘下的 90% 則不然。你可以決定餘下的 90% 。

如何？ … 憑你的反應。

你不能控制交通燈轉紅，但你能夠控制你的反應。別讓他人愚弄你，你能夠控制你的反應。

讓我們舉個例子。

你與你的家人吃早餐，你的女兒不小心把咖啡潑倒在你的襯衫上，這是你無法控制的情況。

下一步將如何則由你的反應而定。

你開始責罵。

你狠狠地臭罵女兒一頓，令她陷於痛苦之中。然後你又把怨氣發洩在太太身上，責難她把咖啡放在桌邊。接踵而來的是一場短暫的罵戰。你生氣地上樓更換你的襯衫。你下樓，然後發現你的女兒正哭著吃早餐並趕著回校。結果，她錯過了巴士。

你的太太趕著上班，你匆忙開車把女兒送回學校。因為你已經遲到了，你以時速四十英里在一條限速三十英里 上的道路前進。

你付了六十元道路罰款，終於抵達學校，並已遲到十五分鐘。你的女兒沒有跟你道別便已跑進學校。你回到公司，已是九時二十分了，這時你竟然發現──你忘了帶公事包。這是非常糟糕的一天，而你感到你的運氣每況越下，你開始渴望回家。

當你下班回家，你感到你與太太及女兒的關係上出現微小裂痕。

為什麼？ … 一切皆由你早上的反應而起。

為何你會有如此糟糕的一天？

Ａ）是咖啡所造成的嗎？

Ｂ）是你的女兒所造成的嗎？

Ｃ）是警察所造成的嗎？

Ｄ）是你所造成的嗎？

答案是Ｄ。

你無法控制女兒打翻咖啡一事，但你在緊接那五秒內的反應讓霉運開始發生。

以下是你改寫命運的結局。

咖 啡翻倒在你身上，你的女兒幾乎要哭了，但你溫柔地說：「親愛的，這並不算什麼，但你下次得小心一點了。」你拿起毛巾便上樓去。在你更衣完畢並拿起你的公事 包後，你下樓去，望出窗外，你看到你的孩子正在上巴士。她回頭並向你揮手。你早了五分鐘回到公司，並親切地與你的同事打招呼。你的上司亦對你新的一天給予 正面的評價。

看到兩者的分別嗎？

兩個不同的情景，由同一個開首所引起。但結局完全兩樣。

為什麼？

皆因你的反應而起。

你或許真的無法掌控 10% 的際遇，但剩下的 90% 則可以由你的反應而定。

以下有一些實踐 90/10 定律的方法。如有人說起你的是非，千萬別當一塊「海綿」，讓那些攻擊性的說話像水在玻璃上一般的流走。別讓那些負面評價纏繞著你！

適當的回應能夠使你的生活免受破壞。一個錯誤的反應能夠使你失去朋友、生氣、甚或被壓力壓得喘不過氣來。

如果車子拋錨了，你會如何感想？你會生氣嗎？你會否猛擊車上的鐵鍊？我的一個朋友就把鐵鍊弄下來！你會怒罵嗎？你的血壓是否急速上升？你會否嘗試去踫擊他們？

誰會在意你上班遲到了十秒？為何讓車子破壞你的駕駛過程？

記著 90/10 的定律，別在意。

你被通知說你被辭退了。

你為何失眠與憤怒 ? 事情總是發生了。不如用你憂心的力量及時間去找尋新工作吧！

航班延誤了，而它將影響你一整天的行程。為何將你的怒氣發洩在服務員的身上？她並不能阻止事情發生。

如利用你的時間學習，或認識旁邊的乘客。不要憤怒，它將令你的一天變的更糟。

現在，你懂得了 90/10 的定律。實踐它，你將會發現它的驚人效果。嘗試實行它，你將不會有任何損失。 90/10 的定律非常神奇，而只有很少數的人懂得運用它。

結果呢？

超過百萬人沈溺在痛苦、嘗試、問題與心傷之中。我們必須理解並實踐 90/10 的定律。

它將改變你的一生。

願與各位並勉！

Assets versus Liabilities

A man builds a fine house;

and now he has a master,and a task for life;

he is to furnish, watch, show it,

and keep it in repair;

the rest of his days.

Ralph Waldo Emerson 1870

Question: Think, is a house an asset or a liability?

Answer: Both. Liability because, as with the above quotation of Emerson, if you buy a house or build one, the house become your master as now you have just gained a “master” for yourself, you have created a task for life. You have to furnish, clean, repair, maintain and keep it in liveable condition for the rest of your life.

It will only become an asset if you purchase this house at a good price to sell it when the price appreciate and meanwhile it is rentable to earn you money, earn you more than what you can get if you put your cash in the bank.

Let us now try to understand the difference between an asset and a liability.

Assets

• Real Estate
• Stocks
• Mutual Funds
• Bonds & Notes
• Rentable properties
• Cash

Liabilities

• Mortgages
• Credit cards
• Loans (all kinds)
• Property for own dwelling
• Car for own use

A generic rule is all assets can earn you money while liabilities are those that cost you money.

The poor spent their total income on day-to-day expenses, sometimes the income is not even enough to cover living expenses; while the middle class purchase liabilities that were mistaken for assets like a home, one or two cars and luxury items like big screen televisions etc. Only the rich accumulate income-generating assets on an ongoing basis.

The poor will always be struggling to avoid hunger and should the breadwinner fall ill, most will end up depending on charity.

The middle class will continually be on the race spending only on the sole income which is the monthly salary. As salary increase, so do the taxes and inflation which probably increase faster than the salary. Therefore the middle class will constantly in a financial struggle. They usually ended up paying mortgages of their home and car, treating these to be their assets.

Meanwhile, the rich will get richer as they are on the continuous lookout to acquire more money earning assets and investments. Their expenses will remain constant while their income-generating assets increase earnings for them.

Why is our home a liability? It is because you spend your earned wages for the following:-

• The middle class work all their lives to pay off the mortgage of a home, usually a 25-year loan, assuming you start at 30years old, you will only pay off you loan at 55, just as you were about to retire.
• You need to put aside a portion of your monthly earnings for maintenance and utilities.
• Even if your home value appreciate, you are unable to dispose of as this is your only dwelling.
• Annual yearly taxes like assessment tax, quit rent etc.

Start planning when you are still young. I would encourage all Generation X and Y kids to learn about assets and liabilities and understand the difference. If you are still young and have just started to earn a salary, you would probably still be living with your parents, therefore you do not need to purchase a home yet. You should just do the following:-

1. Understand what is the difference between a liability and an asset

2. Concentrate on purchasing income-generating assets

3. Keep your liabilities and utilities expenses to the minimum

Focus your energy on building your assets to retire young.....

Investing – with your spouse

The age-old saying “Behind Every Successful Man, is a Woman” is true to its being. There is a synergy to balancing in which the Chinese believes in “Ying and Yang”. Some things just need a partner to go with and should not be left alone or separated like “fork & spoon”, “table & chair” (in French table is feminine while chair is masculine), “mortar & pestle”.

This adage is very true in the olden days and I dare say it is still true today except that I believe it works both ways now more than ever. Behind every successful man there is a woman, who can be a wife, a mother, a sister or a girlfriend and behind every successful woman there is a man; a husband, a boyfriend, a father or a brother. God created man to be stronger in physical sense while woman to be stronger emotionally. There is a good balance if we put both sexes together.

No matter how rich you are, no matter how big you have become in the corporate world, no matter how successful your business is, a man requires a balance that a woman can provide and vise versa. There must be the “ying yang” balance otherwise all the treasures you acquired will not have much meaning in your life.

“Two heads are better than one”. A lot of couples keep their money matters away from each other. Some to the point of lying of their expenses; some even lie or keep mum on their investments. I believe couples should share with each other the things they do.

1. Talk to your spouse

If you are suddenly motivated to put up a budget and to start an investing plan I would suggest you start by talking to your spouse. Let her or him know your thoughts. The first step is communication. By talking out loud your thoughts will prepare your spouse of any eventuality. No surprises up the sleeves.

2. Discuss with your spouse

If you are planning to invest so to retire early, put up a plan. Set your goals. List out the things you need change in order to achieve your goals. Before putting your plans into action, take time to discuss your action plans and goals with your spouse. Make it a fun project that you can do together.

3. Argue with your spouse

Yes, if you must, you should start arguing with your spouse before you put your plan into action. Argue and fight your hearts out. It is never easy living with another and it is never smooth sailing because 2 brains usually go different directions. Make adjustments to your plan to suit both your needs. Leave your disagreement behind. Do not take it to bed with you.

4. Agree with your spouse

After all the arguments and fights, come to a common goal where you both agree can work in a win-win situation for all. Be specific with your goals and put them down in writing. This will avoid any fights later on if things get rough.

5. Harmonise with your spouse

Form a strong alliance with your spouse so as to take your investing ideas to greater heights. List out the things each can do better and set out to conquer the investing world together. Make a pledge to work in harmony with each other.

6. Work in tandem with your spouse

Having a common goal with the same motivation will take couples who can work together to achieve their final goals faster and with better results. Working in tandem with each other may not be easy but it is possible. What both of you need is a determination to succeed.

If somehow your chain of momentum slowed or come to a halt, go back to rule # 1 and start all over again, start talking to each other and building your dreams once more. The more you practise at it, the better you will become and ultimately your path to successful investing will be a dream comes true.

If you ever notice the habits of the mandarin ducks, always swimming in pairs and toward the same direction, side by side and in great harmony. Nothing fluster them. Be like them.

Save to Grow Your Money

Don’t give away or waste away your hard earned money so easily. Take time to find ways and means to avoid spending money unnecessarily. I know for sure some of us do not like this task and may even feel that life is too short to deprive oneself of some luxuries after a hard day’s work. Yes, this concept in life is fine. I am not suggesting you to be a miser but merely to be more conscious of where your money goes.

Here is a checklist of my own experience and how we can all save without feeling miserable.

Your Transportation

• Check your tyre pressure every month. Most car owners and drivers know that fact that it is a “must” task but a lot of us do not do it regularly and punctually. We are always postponing this task simply because we are either in a rush or too lazy. Unbalanced tyre pressure cause more petrol consumption and also additional wear and tear.
• Park at free car park. This may not be easy in the city but putting in your effort to locate one may save you a big chunk of your daily expenses. You may have to arrive early and may even have to walk a longer distance but if taken positively, you are having multiple savings; save on petrol; walking is a good exercise; waking up early is a healthy habit; helps you avoid the usual jam and in a way reduce your stress level.
• Car pool. If you have colleagues living in your neighbourhood, you may just work out a schedule to car pool. This will definitely cut down your transport cost by half.
• Take public transport. It is definitely cheaper to use the public transport than to drive to and from work provided it is convenient to do such.
• Wash and polish your car on your own. Instead of driving to the car wash and get your car wash and polished. Do it yourself. Dual advantages; you save money as well as get the much needed exercise. Make this chore a fun activity with the family.

Energy-efficient Your Dwelling

Energy-conservation is not only environmental friendly (statistics showed that in UK, housing produces about 30% of carbon emissions), it saves you a lot of money as well. Take the effort to gradually convert your daily chore and electrical uses to be energy-efficient:-

• Use energy saving products. It may cost you more to buy energy-saving bulbs or lightings but in the long run you will save on electricity consumption and cut down energy cost. Buy energy-saving products like boilers, heaters, fridge, dishwashers and washing machines. Look out for the Energy Saving Recommended Logo.
• Conduct a home energy audit. Some of your electrical equipment may be old and leaking energy so an energy audit may help you identify what is causing your electricity bill to go up.
• Generate your own energy. Use solar energy panel for some of your electrical equipment. Initial cost may be high but if it provides energy for 50% of your daily uses, it will eventually save money for you.
• Join some energy-saving movement. Or attend talks on how to save and control the energy usage in your home. Put what you learn into practise
• Switch them off when not in use. Turn off the lights, fan, air-condition, heater etc. when you leave the room. Check to ensure all are switched off before leaving your house to work.

Food Shopping

These are some money saving tips on food shopping which I felt personally that allow me to save. Next time you go groceries shopping put these tips in your “Groceries shopping list”:-

• Purchase generic brands. Most generic brands usually contain about the same ingredients and nutrients as your favourite brands. Products like coffee, oil, rice are nearly as good but sold at a lower price.
• Buy fruits in season. Fruits that are out of season can be much more expensive and may not be as fresh as fruits in season. However, seasonal fruits may be higher in price at the beginning of the season and it is better to wait awhile before buying. My experience is that I bought 2 persimmons for $8 at the beginning of the season and after 2 weeks I could get 4 persimmons for only $6.
• Avoid buying imported brands. You are not only paying for the food you want to consume but paying for the freight and handling charges as well as tax imposed by your local government. Support your local economy by going local and save.
• Buy from your local markets. Do your shopping at the local markets instead of going to the supermarkets where the prices are inflated. In some areas, the markets are now open longer hours. It may not be as comfortable as the supermarkets but the foodstuff are usually fresher and much cheaper as you eliminate the middleman cost.
• Do not overstock. Eat up all that you have bought. Statistics showed that one-third of the world foods are being thrown away. This is definitely wasteful. Foods usually do not last forever, so only buy the amount you need and avoid overstocking.
• Shop Around. If you have to shop for non-perishables in supermarkets, go shop around for the best buys. Here you can stock up your one month’s need to avoid going too many trips. This will save you petrol, parking, time and even to prevent buying extras (what you really do not need).
• Make your meals at home. Cooking your own simple meals at home is a much cheaper alternative to eating take-away or eating out. Pack lunch boxes (sandwiches and fruits, fried rice etc) for the kids as well as yourself to your office. Eat in restaurants only on celebrations, this will make the occasion much more special then eating out all the time.
• Use leftovers. Use your imagination to cook up new dishes from leftovers. I use left-over meat to cooked up “Shepherds” pie and fry the left-over rice. Its delicious and cost saving and food are not thrown out adding to the landfill and go wasted.

There are more ideas to share but I think I am stretching a little. What I am trying to stress here is that you can really save a whole load of your money if you ever stop to think of the wastage you have done thus far.

I like this simple phrase “BE BOTHERED”. Take charge of your life, take charge of your money, don’t waste it away. Practise the above suggestions and put any savings into a used tissue or shoe box (no need to waste money buying a money saving box). Commit to a monthly contribution into a trust fund to earn you money. Believe me if you start now, you will retire richer than you planned to be.

Readers can share any money-saving ideas by putting in your comment. I am pretty sure there are a lot more ideas not mentioned yet. Share your successful experiences with the world.

Investing in Stock Market – Beat the Odds (Part II)

The first 4 rules were basically telling us to keep a cool head and to ensure we make good decisions as far as stock investing is concerned. Another aspect of being a successful investor is continual learning and having a good control of your portfolio. Stay cool by using your head, not your heart when dealing with your nest egg. Let’s take a look at the remaining 4 rules……

Don’t be snobbish

Be humble…. If you are not sure of what to do, take time to learn. Ask for advice. If you don’t ask, no one would know that you need help. Do not be afraid to be laughed at. Remember that “those who laughed last always laughed best” and “pride goes before a fall”. It’s better to look stupid than to be stupid. Looking stupid is not stupidity and stupidity cost you money eventually.

Don’t worry

“Worry is interest paid before it is due”. People tend to worry when they see their investment not doing as they have expected. If investing is so predictable, then every body will just be doing investing and nothing else. So why pay your interest before it is due? Stop worrying and put your energy into more productive avenues.

Don’t get out of perspective

When the market drops, it is naturally that the human mood will follow suit. And when market surges, people tends to think that a bubble is in the making. If this is how you think, there is never a right time. Investing then becomes a chore. Timing the market is near impossible. So, keep your perspective, stay away from all the “Don’t”.

Be specific

Know what you want and know how to go about getting it. Eleanor Roosevelt once said “It takes as much energy to wish as it does to plan”. Wishing isn’t getting you anywhere but planning will move you on.

Investing and planning your finances may be an unnatural act. Our brain is trained to undervalue long-term goals and have a tendency to exaggerate the cost of short-term sacrifices. People who do some kind of planning and specify their needs have twice as much savings than those who don’t.

Set specific and realistic goals. "I'll put $200 a month into a mutual fund to build my retirement fund" is more likely to succeed than "I'll start my saving plan."Be specific in your investment and financial planning!!

These 8 simples rules will help you overcome the volatility of the present market place if you put them to use. Have a fun-filled investing journey your life-time through.

“TAKE THE ‘TOUGHNESS’ OUT OF INVESTING”

“ENJOY WHILE YOU EARN”