Education: Part 2

Creating a Hedge, then start growing your wealth.

In this way, You will have the desired results either by hook or by crook.

Example:

You might want to have a net worth of $5,000,000.
So you started working for it once you graduated.

You studied very hard during your colleague years and graduated with a 1st class.
And you started working for 2 years with a starting salary of $3,000 - $3,500.
And after 2 years, you went on to pursue your master.

After getting your master, you got another job, paying you $5,000 a month with a promised increment of $500 every year.
After 10 years, you'll be earning $10,000 a month without adding in your blah and blah bonuses.
And projected, you're intending to invest $5,000 every month and starting your own small business with your expertise and hoping you will achieve a net worth of $5,000,000 when you're 60 years old for retirement.

So first, it would be advisable for you to first create that $5,000,000 hedge that should anything unfortunate events were to occur, you would have achieved that $5,000,000 end results.

But if nothing happens, you can continue working towards your dreams of achieving $5,000,000 net worth.

In this way, your $5,000,000 would be secured.
But the million dollar question is, how many people actually can afford this $5,000,000 hedge?

Therefore, creating a hedge is a process. Maybe you start with $500,000 first and slowly "upgrading" your hedge to $5,000,000. So financial planning is never a one time event.

Secondly, this hedge which i talk about actually helps you to achieve your desired results, this hedge which you created helps you to increase your wealth, makes your money work harder for you, and also fulfill the "8th wonder of the world", compounding, months after months and years after years.

30 years down the road,

55 years old, you already have a networth of 4 millions dollars, you're "ON TRACK".

Then you asked me, "but now i don't need 5 million dollars hedge leh, i already got $4,000,000 net worth leh. how?"

Then you can either give it as a love gift for your loved ones when you're gone, if not, you are able to decrease your coverage & at the same time get some $$ back from this hedge, thus expertising your way to $5,000,000.

Lets say after 30 years, you decided to decrease your hedge to $1,000,000
and you received a return, lets say $500,000 from this hedge,

Effectively, $4,000,000 + $500,000 = $4,500,000 and your short fall will only be $500,000.

Isn't it great?
Yes, Life isn't just great, It's fantastic when you've such a hedge.
A Hedge that compresses time.

Good luck.

Education

How many of you here reading agree with me that an education is important ?

It is very important especially in singapore.
Alot of times, we would expect our employers to hire on merit.
But there's an old saying, it's not what you know, it's who you know.

Which is still quite true today.

In the last 10 years, the world is changing more rapidly than it has compared to the past 100 years. We see drop out becoming millionaires.
People who had the best education doesn't necessarily be the highest paid people in our world today.
Does that means that it's ok not to seek an education?
Certainly NOT !

Although these people might be drop out of the education system in their country, however, the same group of people who are dropped out and still being able to be one of the top earnest in their countries definitely deserve our attentions, what are the ways and means and how did they do it ?

They are being taught something which were not put in our school syllabus.
Well, some of us might call that "CCA".
PR-ing.
Fair, fair.
There's still something else called the financial literacy.
And personally i believe that's what differentiate the rich and the wealthy, and creating the gap in between and rich/wealthy and the poor&middle income.

The rest is for you guys to find out.

Stay Tuned !

Being Rich OR financially Independent

Being Rich and Being financially independent are totally 2 different things.

Although you can be rich & be financially independent at the same time.

There are 4 kinds of people in this world.













1. Poor & Financially Dependent.

2. Poor & financially independent although this is uncommon, theoretically it can be done.

3. Rich & financially dependent, this is most common in our society today.

4. Rich & financially Independent.

Which category do you belongs to ?

Example 1: A senior manager in a certain company drawing a monthly salary of $20,000 a month.
Is that consider rich ? Err.. maybe quite well to do, and to some people maybe quite rich but not exactly very rich, but still can afford a nice European car with a nice Condo. Financially independent? not quite, when they bad market hits, he might lose his job. You must be thinking, "when they bad market comes, everybody is affected" I agree to a certain extent. You see a high post manager in a big company usually still have a fixed working hour, example, 830-6? And as his position and influence in the company grows, his income increase, so is his responsiblities.

So is he consider quite rich? YES.

Financial Independence? NO.

Example 2: A business owner owns a few seafood restaurants in singapore. He have 100 manpower working for him with his team of supports running the business for him. Every year he earns about $400,000 dollars on average, factoring in good times and bad times.
No doubt in the first few years there's abit of risks and he work very hard, but once his businesses start rolling and generating income for him, he doesn't have to work that hard anymore, but he still needs to supervise the progress, however he can choose to spend more time with his family and going on a holiday when he chose to.

So is he consider quite rich? YES

Financial independence? YES

The main differences between the 2 fictional characters which i highlight is very obvious.

One work very hard for money and is still doing so.

The other work very hard for money and after he has the money, he made the money work for him instead.

You can be a General Manager of a huge company and drawing a salary of $500,000 a year.

But I can be a small business owner and my business generate $300,000 for me a year.

Financially, you're richer than me, but my income will not have a huge impact regardless i work for 3 months a year or 6 months a year. However, if you were to work only 3 or 6 months a year, i think you will lose your job.

When i talk about business, i mean business with a sustainable business model and is able to make money regardless of your existence.

I've read a book before and it talks about 4 kind of people who are able to achieve financial independent,

1. Entrepeneurs
2. Investors
3. Insurances/Property agents
4. Multilevel network marketing

However, I still believe there's a way to achieve that.

Some people would known it by the "8th Wonder of the world"

It's called the power of compound interests.

Remember your credit card interests? 2% a month ?
Let this idea of compounding interests work for you instead of working against you.

Instead of building up debts and let the banks compound your debts, instead put your money in a medium that is able to compound interests for you, months after months and years after years.

Let your money work harder for you instead !

Steve Jobs, who once was diagnosed with pancreatic cancer, on following your heart

No one wants to die. Even people who want to go to heaven don't want to die to get there.

And yet death is the destination we all share.

No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life.

It is Life's change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away.

Sorry to be so dramatic, but it is quite true.Your time is limited, so don't waste it living someone else's life.

Don't be trapped by dogma — which is living with the results of other people's thinking.

Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

Taken from www.NextInsight.net

The Agony of Planning.

Recently, I've got in touch with some articles and statistics on planning.
The numbers here are not perfectly accurate but it's close to actual stats.

Lets take 100 young people at the age of 25 years old.
In 40 years time, when they are 65, 11 of them would be dead.
I mean dead, die la, accidents, illnesses and suicide and whatever you could think of, just dead.

13 of them would be dead as well, dead broke.

About 66 people, would be able to have enough to just get by, not very rich, with a little bit of savings enough to get through everyday until they meet God.

10 people, and only 10 would be somewhat financially independent.

Any ideas why is that so?

Drumrolls please.

*Drumrolls*

It is because,

People doesn't planned to fail.

They just failed to plan.

There are 2 kinds of people in this world,

First, we have the Spend first, save later if have any, not enough, we still have credit card.

Second kind of people belongs to the Save first, Spend later.

Actually, close to 90% of the people belongs to the Spend first and Save later(taking away the not enough and credit card part).

And actually, the 90% of the people who spend first and save later and bringing into the our topic today those not enough still got credit card people, we are actually working for the

minority, 10% who save first and spend later indirectly, thus, helping them to achieve financial independence.

In an ideal world, with an ideal salary and situation, everyone of us(i hope), would want to save first and spend later, am i right ?

But this world was not ideal, and is not yet ideal.

So there won't be an ideal time for you to save first and spend later.

However, you can make a choice today to make your life ideal today by saving first and spending later. So, when do we start?

Tomorrow? or next year?

Well i doubt the world gonna be ideal then, but then again, the ideal time for you to start saving first and spending the rest, is NOW!

You guys know i'm a life planner right?

So basically, I does planning for a living.

Theoretically, I sell financial products for a living,

But i doesn't agree with that, i does planning for a living.

Let me explain myself abit, i does not help you with which month is an ideal month for a new child to be born or should i get a 1.6 or 2.0 car.

These things you guys will go to the internet and library to check it out and plan for youself.

I does the kind of planning where people doesn't plan for themselves,

example, retirement, they take it for granted that they will have enough funds in CPF to retire.

Or planning for unexpected events, it's like I've got a crystal ball right in front of me.

Or example love gifts, which i mentioned in my previous post.

I does the kind of planning which people refused to do for themselves/doesn't know how to do/don't bother to do/or never thought of doing kind of planning.

So let us work hand in hand today, to plan for the kind of things which normally you won't do for yourself. Good night.