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Many of us have asked this question over and over and over again, including myself. I’m going to tell you one pretty bad news…….. if you do always ask yourself this question, it means you are most probably trapped in the rat race like I do. A person who has no worries about money, will never ask that question……or maybe, the frequency won’t be as high as those caught up in the rat race. 😉

Just a few hours ago, my dad called me up…(for your info, he’s my financial controller…in-charged of paying the loans on my behalf), and informed me I owe him **** amount this month. Thats is actually more than 50% of my monthly salary (the monthly salary before the income tax, pension fund, etc which one must pay every month to the government). And after paying my study loan, mutual fund investment, etc…….i’ll only have RM 400-500 per month to eat. Hmm… my brain is already trying to work out how to get “free meals” from my friends. LOL.

Sometimes, people tend to get trapped in the rat race without knowing it…..they work and work and work, hoping that the next increment will come soon. When it came, they then realized that it is not enough. Their expenses somehow will shoot up also. This is exactly what I am currently experiencing. My expenses used to be quite okay…..and then I changed a job, got a 30-40% pay rise……..and i went on to buy a car (I opted for a slightly more expensive Japanese car due to safety reason). Then I moved into my new condominium….renovation, furnitures, etc…..all these cost $$$. Before I realized…..i’ve become the latest victim of rat race. Working hard, just to pay the bills.

So, how do I intend to step out from this rat race? It’s not easy. Or rather…I’ll say it’s very difficult based on the number of commitments I have – taxes, mortgages, etc. Still, this will not destroy my ambitions. I believe I’ll figure out some ways to step out of this rat race.

Maybe working as a part-timer in Starbucks? LOL. Just kidding. There should be some other ways to do this. Taking a part-time job is not really recommended especially for those in the IT & Consulting line.

Sorry for reading my ramblings. My intention here is to tell you my first hand experience of being a victim in the rat race. I seriously hope that all of you will plan your finance better so that you will not end up being the next rat race victim. If you are already in the rat race…well, all is not lost.

Start asking yourselves…...why are you working so hard yet earning nothing? Why are you repeating the routine of getting more pay just to pay off higher debts?  How are you going to stop this routine? 

One of the simplest methods – start to buy assets and not liabilities….please refer to my previous posts on that. 🙂

Hope it helps.

I wonder how many people will I attract with this title. *grin*

In my previous post, I’ve talked about acquiring more assets and minimizing the purchase of liabilities. It is one of the methods to build up your own fortune.

But how do you actually begin on this never-ending journey especially if you have limited fund…and you think you are quite caught up in the so-called “rat race“? Hmm…sounds familiar eh? I think I’m describing myself. LOL.

What I’m planning to do is quite simple…. Save a minimum of 10% of my monthly salary (before the tax) and put 60-70% of that amount into mutual fund. Mutual fund, according to Robert Kiyosaki, is meant for people who are quite caught up in the “rat race” and who dare not take the risk of investing in speculative investments – stock, real estate, etc.

Since I am quite a risk taker myself (did not take part in the speculative investments due to the fact that I don’t have sufficient fund), I would prefer to go for equity fund and not bond.

Once I feel I have enough fund from this mutual fund investment, I would venture into speculative investments. Do bear in mind though, our world is currently undergoing a tremendous change. It’s a bullish market out there…and a slight mistake can cause a pretty big damage. Do know what you are doing before you venture in.

If all goes well….these speculative investments will help build up my wealth. I’m hoping that I will be financially independent before the age of 30 (very very challenging thing to do). I need to find a way to pay off my loans n commitments…to get myself out of the “rat race” before I can actually start my own business.

Well, for now, I’ll just have to stick close to my money and put my limited edition $$$ in the low-risk areas. Once I have the proper amount of savings…i will go for the higher risk options. High risk, high return. Low risk, low return. 🙂

To be honest, I have no right whatsoever to provide any form of advice to all of you. I am still learning and this is what I think I should do. Do drop me some comments to let me know how you feel. 🙂

p/s…i know the actual stuff will be much more complicated than this…but well, we have to begin somewhere right? 

Something actually happened to me lately….something bad. My PlayStation Portable (PSP) which was bought less than a year ago at around RM 1000 (around USD 300-400 ?), was pronounced dead by the second doctor. I was feeling very sad (er…maybe i should use “I am feeling very sad”).

There’s something within me that shouts the line “Alvin, go ahead and buy another PSP for goodness sake. It’s only RM 700 now!” And I seriously mean it, I do have that urge to drive to the shop and purchase another PSP…especially with all the nice games coming up.

If this happened 6 months ago…..I would’ve bought myself another PSP…around RM 700 (total cost of owning a WORKING PSP will then be around RM 1700). But now…something within me, is telling me not to buy another PSP. Why?

Because it’s a liability.

A lot of things around us can be considered liabilities. Branded clothings, bags, shoes, luxury watches, video games, LCD TV….I’m sure you know better than me. True, some of you might argue with me (or with yourselves) that the NICE thing that you’re planning to buy (such as Nintendo WII) is NOT a liability. Well, let me ask you this question “How sure are you?

Asset is something that you should buy, if you want to be in control of your finances. Assets can earn more money for you. These are the things which will make you rich. These are the things which will make money work for you. Example? Shares, bonds, etc….of course…the right ones. 🙂

Liabilities, on the other hand, are mostly our desires. The “nice-to-haves” such as …well, i just listed some of them down.  These are the things that will make you spend money….but there will not be much (if any) returns of investment.

One of my best buddies told me he plans to buy a new PC…cool. I asked him one question “Do you think it’s a liability or an asset?” He said…”It’s an asset“, and I asked “Can it make money for you?” and he said “Of course! I can start an e-business using it!“. Pretty relevant. You can indeed start an online business using your PC………but…….i pushed on with my last question “How sure are you that your main purpose is to start an e-business using this PC?“…and he went silent.

If you are pretty sure the “liability” you are buying can earn you some $$…then please, go ahead and prove to yourselves (not to anyone else). Most of us thought that these liabilities that we are planning to buy, will end up bringing some $$ to us….but most of the time, this “dream” of ours will not materialise.

So, the next time you are planning to buy something….think about this. 🙂

p/s…of course, it helps to reward yourselves from time to time with nice-to-haves. Don’t be so stingy to yourselves. 🙂 But please don’t overdo it especially if you have big dreams. For me…I don’t think I’ll get another PSP just yet. 😉 …..even though I seriously want 1. LOL.  

Phew…last week was a pretty busy one for me. 2 of my good friends got married (yea, the husband n wife are my good friends). Congratz to Ryan and Andrea 😉

Wasn’t been able to post up something until now (which I think, is late Monday).

I’ve been reading a book titled “Rich Dad, Poor Dad” by Robert Kiyosaki. I’m sure some of you have heard about this book before. It actually enlightened some of my friends who have read this book. I’m still at chapter 2 or 3….so…don’t expect me to talk much about it. 😉

What I intend to discuss today is the so-called “Rat Race“. In the book, the author mentioned that most people work for money…and not the other way round. Don’t believe so? Let me ask you a simple question. I am sure most people (including myself) have this big dream of doing whatever we like…pursuing our passions in life…abandoning our current job and go chasing after our dreams. But we didn’t. Why? Because we have something called commitments – families, bills, etc.

We need money to support these things.

In other words…we’re being controlled by money. We are working for money.

Also, most of us will say that a higher pay can actually help us to solve the problem. I can assure you, it won’t. The higher your pay…the higher your expenses. You will have more bills to pay, more desires (nice-to-haves) to fulfill. The cycle will go on and on and on…never ending, and this is what they called the “rat race“.

So if you are in a situation I’ve described above….do take some time to ponder…whether you are really in control of your lives…or you’re being controlled by money.

Think about what you really want. I know what I want…. and it’s not paying bills. I have the option to go to the SAP world…earning big bucks, but I chose not to because I realized that’s not the direction I wanted to go. Bigger bucks might be able to solve some of the short term solution……but the long term problem here is, I am still chasing after the $$…working for the $$.

Do take some time to think about this. 🙂 Life is not just about chasing after money…or involving in the never ending rat race.

In our world today, money is something that you no longer can escape from. Everything that you need…you’ll need money. Food, vacation, daily necessities, entertainments, etc….all of these, you will need money to buy them.

For myself, I am actually looking into investing my money in certain areas right now. I’m planning to diversify a little – maybe a bit in mutual funds, a bit in stock, and when I have enough money, put into real estate. The latter is less volatile but has bigger risk. So…it really depends on your financial capability and how big a risk are you willing to take.

Well, in the end, the most important thing is…do you actually have the money to start buying or start investing?

For the younger generation (20s and 30s), spending your money on something you really like is quite normal. For guys, gadgets and for girls, clothes, cosmetics, etc etc. I used to be like a typical young man…spending a lot on gadgets, games, food and entertainment. I used to spend like 5k in 3 months…on such things (my salary is not much, fyi).

But recently, I’ve changed. I no longer spend so much on gadgets and food. I feel most of those stuff are “nice-to-have” and not “need-to-have“. With 5k…there are a lot of things that I could do. I can buy a lower-end blue chip stock in Kuala Lumpur Stock Exchange. I can deposit the 5k into a Fixed Deposit…or even put them into the mutual funds. There are so many things that you can do with 5k…and all of them will lead to making you 5k multiply. True, it’s not something that you can see overnight and it’ll most probably need some time to grow..and at times it might gain negative progress. However, it is still better than using your 5k on purchasing a liability.

So, how much have you save this month? I am sure all of you have your own ambitions, your own dreams…and everyone wants to see their current money grow. But I can seriously tell you……..spending majority of your money on short-term happiness will never help your money to grow. 🙂

I’ve learnt this, and I hope you do too.

Entrepreneurship, as defined by The Free Dictionary is the activity of organizing, managing, and assuming the risks of a business enterprise. Sounds complicated? Well, it is. Being an entrepreneur is never easy. You need to go through a lot of hurdles in order to survive, not to say successful.

If you want to be successful (everyone does, right?), then there are more things that you need to look at. The uniqueness of your offerings (be it products or services), the usefulness (values for your customers), your competitors, etc. There are so many things that you need to think of and so many plans you need to lay out (and execute) if you are seriously into making your business a success.

However, there are things that would help you in your quest to be a successful entrepreneur.

One of them is the policy(or policies) set by the government of your country. In my country, Malaysia, most entrepreneurs obtain fundings from the venture capitalist or the government itself. That’s good. But you provide people with funds.. and maybe training (to train them how to use the fund etc) and maybe even to teach them how to market their stuff. Are all these sufficient? They could be.

But why don’t my country (and many other countries for that matter) consider one simple policy like what the South Korea government did (entrepreneurs from South Korea and Japan have achieved much greater heights than those from Malaysia)? The policy is simple – to give extra incentives or “bonuses” to the companies using the products/services of the entrepreneurs in that particular country. The “bonuses” could be tax reduction, free facitilies, etc. Imagine if the government of your country has such policy, it would definitely boost the condition of the entrepreneurship in your country.

By doing that also, the entrepreneurs do not need to worry much about selling their products/services locally. Most of the entrepreneurs these days (including from my country) would need to look outside their country in order to sell. The local market, most of the time, would not be interested in their products. How unsupportive.

That is why, in my humble opinion, a country should at least provide some policies to help boost the local market for these entrepreneurs before asking people to venture into this risk-taking and dangerous world of entrepreneurship.

Remember, why rely on people outside your country when you have ample of potential clients locally? 

Ah well, human beings ARE greedy. Even if we are paid “this much“, we will never be satisfied. Thus, we’ll end up pursuing more and more $$$ to fulfill our greed for money. This will result us in possessing more than enough money that we need. What should we do?

If you are someone who prefer short term gain, you’ll most probably end up like the old me – buying something of no value (or the value will depreciate, and never the other way round) or buying something related to our interest(s) or hobbies. For myself, I must admit that everytime I have some extra $$ in my pocket, I’ll look at technology gadgets or gaming equipments such as the latest Nintendo WII (which really caught my eye). I can easily spend all my “extra income” on this so-called “short term gain“. The resell value of this WII? Close to zero I’m afraid. I’ll most probably have to lose more than 50% of the price that I paid if I were to resell it. That is why…until now….few months later, I’ve yet to buy this WII. 😛

To me, short term gain will always remain as short term gain. It is better to use our money elsewhere. If you haven’t get an insurance, go get it. It’s the first thing that you really should invest in for the sake of yourself and your beloved ones. We will never know what might happen tomorrow. 🙂 It’s better to be safe than sorry.

If you have any outstanding loans – car loans, housing loans or even study loans (yea, I have all of them), use part of the money to pay them off. You’ll surely be charged some extra interests from the banks or financial institutions……but you will also take off some burden off your shoulder. Trust me, having a number of “big money loans” on your shoulder is NOT an easy thing to cope with.

After you’ve settled insurance and loans, maybe you can start looking at other type of investments –  mutual funds, fixed deposits, stock market (highest amount of profit but it also has the highest risk. Make sure you know what you are doing before you get into this), etc. Remember, investments are very important because it helps you to “grow” the money that you have. It is the place where you plant your “money tree. Just make sure you seek advice from professionals before you commit to any investments….and beware of scams. 🙂

I hope that these tips (which I’ve read from a local magazine) will give some basic insights on how to manage your money and where are the right places to put your hard-earned $$$.

If you still cannot figure out where to put them, just let me know, I have a brand new (still empty) savings account looking for donations. 😛 Just kidding. Have a nice day.

Ever find yourself overspending every month? To be honest, I always find myself overspending (maybe it’s because I’m a Piscean).

I’ve been working for more than 2 years now and I basically have limited savings. I tend to buy a lot of stuff (gadgets, clothes, books, games) without even looking at the price. Ah….the wonder of credit cards.

However, without money, there are a lot of things which you can’t possibly do. You can’t start your own business. You can’t help those in needs. You can’t even save yourself if there’s an emergency. That is why, it is always important to have a bit of money in your bank (be it Fixed Deposit, savings account, funds, etc).

For myself, I’ve started to save a small portion of my salary since 5 months ago. That was when I came across the book “The richest man in Babylon” by George S. Clason. The book has a very simple concept of managing your finance. Let’s summarize it this way….

  • Every month, save 10% of your salary (something to begin with. You can save more if you’re comfortable).
  • This is a MUST. Save the 10% no matter what. Make this a habit and don’t give excuses to yourself if you can’t save. 10% is not really a big amount. Cut down on your food and your “Nice to have” items to accommodate this 10%.
  • You’ll eventually see your savings grow….but since savings account does not provide you high interest rate, feel free to get the money out and put into things like Fixed Deposit, or trust funds. Let the money grow…. but do proper research before you commit to something.

That’s it. Simple right? I do highly recommend the book to all of you out there. 🙂 Hope it helps.