Work for money OR let it work for you!

In my previous post, I've mentioned about the time of retirement. Of course we all wish to retire early.
Yet, most people work for money. They travel to office, work from 9 to 5 and get the paycheck every month.

But have you ever wonder how it will be like if you use the money to work for you instead? How can you do that?

I've collected many ideas from different books and experiences of great mentors. So here's to share some of the knowledge I've learned.
One of the many ways to let money work for you is through...investment!

You can simply dump your money into some investments, leave it for few years or more, and let the money grow. After some time, take it out and voila! you earn more than the money you invested! Sounds easy? Well, it seems, but you need to do your homework before you invest, that's for sure!

Mutual Fund/ Unit Trust

This is one of the easiest way to invest, requires less monitoring compared to other investments.
How mutual fund work is that, the fund manager will allocate your money to invest into different companies or industries (depending on which sector the fund is in).

Invest it in the long run, for example within 5 to 10 years time, the earnings percentage will be around 7-15%. The chances of having to see a growth in your investment is very likely (unless you choose a wrong fund at the wrong time, then you lose money!)

Stock investment/trading

Here you will become a part of a public listed company's shareholder. You buy a company's share, you own a part of the company. As their share price increase after you bought it, you will earn money.
You may want to invest for long-term or short ones, it requires plenty of understanding of stock investments.

But as you invested your money in, it will start to work for you. You will start to sit down in front of the tv or computer monitoring the share price, hoping it to go up.
I wouldn't want to explain in detail on this, it will make this post look like a novel. On my next post perhaps. =))




Property investment


This is one interesting. It always reminded me of big players like Donald Trump or best-selling author Robert Kiyosaki. Both emphasize on property investment.
Many ways to invest in property. One way is to buy a property that has really great value. Good property's price will grow overtime, when it reaches a perfect time, sell it and earn a great percentage of returns.


If its a shop lot or a house, rent it out, get the monthly rental income to pump into your mortgage. Through this you can reduce some mortgage expenses at the same time finish the loan until the tenure ends. This requires huge capital, of course young people without much money don't even have to think about it.


Another way of investing is to start renting the whole house. And rent it to other tenants at a higher price, you will earn small returns from there as well.
This is best practice if you are able to rent it around college/uni locations.


Many other ways of having the money to work for you. Its whether we can practice it real life or not.

Bear in mind, these are only some of the suggestions I've derived from mentors, books and also myself. You may have different ideas of investments from mine.

Happy investing, remember, let money work for you is the best way to earn extra!

When should I retire?

When should you retire? Ask yourself. By the age of 50 or early 40? After you secure your savings and earn high salary…?

Get good grades in college/uni, develop an outstanding resume and hope to enter an MNC company with good prospect.
Climb your ladder up the top, become a manager by mid 30s, and get a secured top management position as you grow older. Earn a 5-figure salary and save enough money. Try not to spend so much, so that you can retire safely.

Try to picture my sentence above, is that almost similar to what you plan to do?
If not, good, hope your plan works out well in future.

If yes, then I must say this is such a dangerous plan.
These people are always stuck in the rat race until they get old. Because they are always in the corporate circle, work for company..sometimes till late night if job is not done. Wake up every morning 9-5. At the end of the month earn their paycheck.

These people work for money, if one day they fell ill, or not able to work, they don't get paid. So they work even harder in order to earn more money before they grow old, and retire early.

Health deteriorates, stress piling up, emotional breakdown….

All because they choose to earn more, and work harder to earn the kind of money.
Its not wrong to have a commitment like this, in fact I respect their persistence, they are very hardworking. I am less than half of what they can do.

Its just sad they suffered because of choosing a dangerous plan. A plan that majority chooses, very common to everyone, and even some parents teach their kid to do so!

I've seen many of them faced depression due to such plan, but doesn’t mean these people CANNOT change it.
They just need to improvise their plan, setting a better financial plan and future plan that save them from depression~
Instead of working for money, let money work for you

I've mentioned earlier in my previous posts, some ways to help build your wealth base:

http://wealthstreetjournal.blogspot.com/2010/11/pay-yourself-first.html

http://wealthstreetjournal.blogspot.com/2010/11/blog-title-is-simple-pay-yourself-first.html

These are some small steps to begin with, at least you wont stuck in the rat race until old age. At least there are still money coming in even when you are not working.
More suggestions to come in future…once I've listed out some other opportunities to get out of rat race =)

Imagine the power of compounding

Yesterday I attended a basic fundamental workshop on stocks investing. And amusingly, some of the audience experienced investors and traders. I supposed they wanted to feel humble to attend an event for beginners lol!

The speaker, Pauline Yong is the author of this book, I Love Stock. A simple lady around her 30s yet, packed with knowledge and experiences on stock investing. Dun be surprised if you cannot  find this book too far away from Malaysia or Singapore. Its just a simple local book.

The book provides the very basic and fundamental aspects on how to invest in stocks. This is very much linked to a beginner, so if you wanted to invest in stocks but you're still new, I guess it match your criteria?

During the workshop, I wasn't surprise to realize that I am the youngest of all. I could see from their faces, either they are married couples, retirees or family man. None of them looked as if they're in their 20s.


And that's why people say, start young is always better.
Warren Buffett (3rd richest man in the world as of 2010) started investing at the age of 11.


I decided to design my own FAQ....

Statement #1: Why start young? I can always start when I have sufficient/more money, or when I am ready.

Because, money will never be enough and you will never be ready, if you don't act! Learn how to start investing and equipped with the tools needed, you can start.  But never start investing blindly, that's stupid!
Age is not a matter, there is no problem to start with small amount if  you don't have a lot of money.

Statement #2: Why can't  I start later? When I grow older its wiser to start as I'll be more experienced.

Power of compounding. The younger you start the earlier you can become rich.

Source: http://www.commbank.com.au

Based on the chart, Flo saved $2000 per year from 21-40, at the age of 65 he earned $200,000++
And Joe saved $2000 per year from 31-65, at the age of 65, he earned only $150,000++

See the difference? Start young makes a different!

Pay yourself first

 The blog title is simple, pay yourself first...

The reason I said that is because, we've encountered many people who don't pay themselves first after they receive their paycheck/salary.
They pay their money to other people FIRST....Put it simple as soon as they get their paycheck, they pay house mortgage, pay their mobile bills, pay for groceries, shop for new shirt or shoes, traveling and so on~

After that, people will complain that they don't have enough money after the end of the month.
So they wait for the next month's paycheck and there we go again, spend, spend, spend!!

This sounds familiar??


Are you complaining that you don't have enough money every month?
No matter how you save or spend lesser, it just doesn't make a difference??

If you are, I hope this can help you, I've summed up some way to pay yourself. This is very similar to the suggestions from  financial advisers or book authors, I'm just following their suggestions as a guide.
To get started, you should first create different individual accounts for yourself.

Bank A for the money you used for your monthly expenses (expenses can be your mortgage, car loan, bills, shopping, food, groceries, fees etc).
Bank B for your savings.
Bank C for your investment purposes (even if you don't have any investment planning, save it first! You might find some alternatives for these portion in future).

So here's the percentage allocation you can distribute for 3 banks. Assuming $1000 you received, allocate $650 for your expenses, $100 for savings and $250 for investments.

Why savings lesser than investments?? Simple, how much interest does the bank pay for your bank deposits? 0.3% normal and 3% fixed deposit? Save $1000 and you get only $3, it sucks doesnt it?
You can't even buy a nice cup of ice cream!

Allocate your money to very low risk investment like Mutual Fund/Unit Trust, you can gain returns higher than 3-5% easily. Provided that you get some professional to manage your money if you're not sure how to fully manage it. (Mutual fund/ unit trust consultant can help to manage and advise).


There you go, some simple money allocation. Start practicing for 1 month or two, you will be happy to see some savings you can get from this. =))

*For professionals or prominent investors, they don't have to know this already. Well, they may have their own equation to divide their money properly.*

Money is the root of evil? Really??

You should be familiar with this statement:

'Money is the root of evil' 

Its a common statement people have heard before, and some actually agreed!

So I wanted to know, how evil can money be? What have money done to have caused unwanted events to occur?
There are some people who become desperate and greedy because of the need for money. Eventually try to rob, steal and cheat for the sake of money.

At this point, I keep asking myself, how many among us use evil to gain money? Not everyone, not even majority.
Without money, we cannot imagine what will ever happen to us.

Let me share this scenario of my friend:

The friend of mine, right now has a happy family, loving dad and mom. But 10 years ago, her dad suffered a heart attack, and seriously need a heart bypass. And her dad had to go through intensive care for one month.

And such treatment don't come cheap, all the sudden they need to fork out almost USD25k for the treatment. At that point of time, he was saved, because money was paid for it.

So tell me, if we don't have insurance and such money? How do we survive?

In my own terms, money can give happiness, better health, and love. No money we don’t get any of those.
Is money the root of evil? I say, no money is the root of evil in modern age.
Note this, even if one has insurance and got warded in a hospital , he/she needs to pay money out of their pocket first before they can get treatment! Hospital needs to have a 'down payment' before they proceed with their service. That's life...

And dun give me that crap of saying, I have no money and I live happily ever after, because there is no happily ever after when you are poor. At least not now, not at our time.

Today while I'm writing this down, we should have a positive mindset about money and understand how it can help us live a better life. With the need for money, we strive to improve ourselves, whether it is career or personal development. I keep a good mindset towards this.

Do you have fat wallet or thin ones??

Few days ago I've encountered someone who asked me this, "How did u go to work normally?"
And I responded, "I commute by train and bus everyday".  
The next statement responded like this, "Whoa, u dun drive to work? U are crazy!"

************

And what do you think? Maybe some do think that I am crazy, maybe some do not. But I sure can afford a car, I'm working and I can afford an average car to drive to work. Save my trouble to wait for bus, save my energy to walk everyday for 20mins.
Still in my opinion, IF i really get a car right now? I really am crazy!
First and foremost, why do we need a car when we have an option to still commute to work? Why do we need it when we don't need it to generate money?
I'm on sales line, yes i am suppose to need one, but it doesn't stop me from getting sales even if i dun drive~
So if I have a car, I have to ensure that every month I can earn much more to cover the loan for hire purchase. But for what reason when I still can earn the same without a car. So am I crazy now? I dun think so.

 *Doesn't mean that I dun wan to drive or have a car. I still wish for a day to have my dream car, but its not my time yet =))

I want Aston Martin DBS!*

The thought that has been running through my mind is the level of commitment we should hold on to.
If we can reduce the level of commitment, we can save few more bucks in our wallet every month. So instead of paying a car loan, its better to pay for a bigger wallet to put more money in.

I've sum up some part of my commitment which I currently possess, and some that i dun~

Hire purchase (car) - None

Credit card - None

Study loan - Partially paid out (so that I won't get blacklisted); remaining to dump into stocks, lolx (leveraging??)

Phone bill - I'm still on prepaid; I can use office phone to call out

Insurance - Yes

Therefore my commitment right now is pretty simple to sum up, there's a lot of unnecessary commitment I can avoid through this. And where did the rest of my money go? I've dumped portions of it to investment to make money work for me.
I do not like big commitments, that is a lot of work to calculate my monthly expenses, shucks!

After all these years, i realize im in love with it

I've decided to make a turn around in my blog. I've made new changes on my blog appearance, and new profile.

Made a turnaround on my topics as well....since now that I've gained a rather...'remarkable' number of pounds on weight, i decided I dun wanna post too much on food.

However, I want to make this blog sound even more BORING to some frequent food bloggers and entertainment hunter. I talk money, im in real hyper and motivated spirit to earn money all the time. And now that its nearing the end of the year, we should achieve something to make up for 2010!

I find it interesting to learn various ways to boost up my personal income, anyway  it wasnt rocket science for real. Yet, I have to say that my family doesn't teach me how to earn my money, my lecturer doesn't care if i earn money, my company doesn't give me extra money for working hard. So nobody gives a damn to help you with your money but yourself.

So what did I do to help myself??
Thanks to some contributions of these books I've read.
It changed my mindset and made my day to do something more meaningful in my life:


Rich Dad, Poor Dad - Robert Kiyosaki


Now I wanna to put it this way, who the heck doesn't know about Rich Dad, Poor Dad?!! If you think this is some family-loving novel about a dad and son, then I suggest you really need some serious exposure on financial books.

And yes, some people say this book is overrated, doesnt really explain the real facts, author's background is vague (Robert Kiyosaki). BUT this is still the first book that change my concept towards money and investment. The way he describe the fact of life and money is very convincing. I will need to thank Robert for this!

Secrets of Self-Made Millionaires - Adam Khoo

This book has brought wonders to a lot of people i must say. Book title mentioned 'Secrets of Self-Made Millionaire' but it isn't secret at all. Adam Khoo the author, tells u almost everything on how to earn money HIS WAY, even providing websites to where you can access info. Positively opened up my mind on many routes to increase my income consequently. I have noted some cons.....honestly, I have some serious cover page issue on this book, it looks like a typical college textbook. Some creativity has to be enhanced to whoever the cover page designer is!

Many other things to be shared some other time, here's about it for now! =))

If you find it boring, perhaps you can skip my blog, because the topic will still goes the same way next time. Cheers