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Saturday, December 27, 2008

I bought KC Lau's book entitled : TOP MONEY TIPS for MALAYSIANS. Yes, I bought it to share with MANY people around me who are STILL financially-retarded and STILL refuse to change their financial mindset!!

It is written in simple language but too GENERAL. Malaysians are generally spoon-fed. You don't just get them fork and spoon and expect them to know how to use them, do you? Even after you took a simple part of the book to share, you will still struggle to explain so-so many ALIEN words to them. It is a huge challenge as I see it. Besides, asking them NOT to use their money is something NOT so good to do, right?

Yes, they are in deficits budget(and they do not even know what is that!! Who cares so much la? Tomorrow I might not be here liao, enjoy first la, can arrr?). Yes, they want to be RICH and always envy of those neighbours or their friends going places. I can BUY that also ma, in fact I bought it MORE expensive than yours!! I flew to Paris to get that LV bag, you know. etc etc

Ok ... using my newly bought book, I tried to speak to my parents-in-law last night. I was explaining the most basic concept written there: Saving = Income - Expenses.

How do we increase our savings? Errr ... no no .. that is NOT for your financial-retarded society. Most of them(especially if they are young! For some, 40-50 are still considered as young as they still have NOT start to save?) DO NOT have much SAVINGS.

So, I was emphasing on REDUCING your expenses. A change of MINDSET is needed. Phew!! That is VERY VERY challenging, if not near impossible. Changing of habits of using money, changing of lifestyles, changing of your attitude towards money ... that is VERY personal and ... might be a TABOO to many to speak about it, publicly.

BUT ... I gave an example to my wife : Look, I have a colleague who is obese. It can be SEEN obviously. NO ONE will have the guts to tell him, hey ... you are REAL FAT. That is very unpleasant, rude and inconsiderate? So, we observed his diet ... taken a few pack of keropok, with coke during leisure time!! The amount of food, especially it is a buffet-style is too tempting. Anyway, we all just watched wiith awe ... no one speak about the BAD effects, as we do not wish to be known as BAD human? BUT ... someone have to advise him??! HELP him ... he is killing himself, physically(emotionally too, actually). THAT IS TABOO ... I m not so close to him(very different wave-length in terms of BRAIN) ... so, I reserved to be a GOOD human?

Well, I believe his wife, his family members, closed friends have advised him accordingly. So, I will be seen as 'keh-poh'(busy-body) if I ever said anything about his diet, health and err ... general well-being?

Getting about to my parents-in-law ... I told my wife, I m still an 'outsiders' but wish to help them with their financial situation ... Well, she is concerned as her parents retired with very little saving!!

Yes, Saving = Income - Expenses.

Once your income reduces or nearing-zero, you still need to USE money, right? If you fail to reduce your expenses, certainly your saving might be in RED ... NEGATIVE or DEFICITS. Choose your term, in short ... you will be pok-kai(bankrupt) soon.

Hence, you are left wiith not much of choices : Get yourself productive and earn some money. And reduce your un-necessary buyings/expenses. Once you committed to that(MANY prefer to AVOID the whole financial issue ... it is TABOO. Don't speak sex to me ... arr ... you so ham-sap!), your COMMON sense will lead you on HOW to increase your income and reduce your expenses so that at the end of the month, you have POSITIVE SAVINGS!!

After about half-hour or so of explaining that SIMPLE concept, I could only hope they are not offended, and saying that I m trying to 'control' their financial lives. I hv no intention to advise ANYONE on their own financial situation(I m not qualifiied, anyway) ... but I do hope that some of young ones(MY STUDENTS??) will read these and START young. Yes, TIME = MONEY, if you know how too convert that. To me, TIME is MONEY so so much so ... as I m struggling to llearn from ground-zero, and TEACHING in the same time? Can I teach you how to be RICH? hehe ...

Anyway, at least my wife appreciate that I took the RISK of being the BAD pperson of advising them to reduce their expenses. Yes, old-habits die hard ... my half-hour talk will NOT be effective, I know. But, that is the least I could do? I m speaking about something TABOO here, ok?

Now : SAY you are those FEW financial savvy dudes/babes, will you ADVISE your parents to be prudent, your friends to invest their money according, your wife/husband to tighten their belts next/next-next year?? And without asking anything in return? Please la ... not everything also you must benefit from it. Sometimes sharing what you know is POSITIVE, if the receivers being POSITIVE too. But, if you feel strong resistance, I will say that many of things better to keep it to ourselves. SHHHH ...

INCOME

For salaried person(like me), our monthly pay-check could be our largest INCOME. Well, my part-time tuition classes complement my other part of my income. By writing this blog, I could also generating some 'income'. Hence, we should ALWAYS be thinking HOW to utilise FULLY our time to EARN more ... increase your income by working part-time, or perhaps start our own business to generate some side-income. Anything LEGALLY that could increase our $$.

EXPENSES

We surely have fixed expenses --- FOOD. Of course we need a place to stay. How about some BASIC bills like electricity, water, phone, internet, Astro ... etc bills? We CAN minimise those if we are prudent.

For example, as I just got this new internet-bill, i will CUT off my Astro(Sorry Astro). That will balance my expenses. I could download some Cartoons for my son. Reduce in hours of watching TV will be good for him, anyway. Looking for the cheapest mobile-phone package will helps too. We do not need a fix line(sorry TM) ...

There are many more ways we could think of on HOW we could reduce our daily expenses. Yes, you may call me 'kiam-siap'(stingy). But, I m determine to SAVE every dollar possible. See?

SAVINGS

Therefore, by continue to increase my income(if possible) and reduce my expenses, naturally I shall have surplus by end of the month. I have no problem applying a 10% of my salary into saving. What I did was ... a direct CUT of 10% of my salary into Maybank, as I took a Maybank loan(specially for ASB holders only) for ASB at 5% interest rate. ASB paying an average of 7% interest rate. I still gained a 2% interest while FORCING myself to SAVE 10% of my salary!! i hv done that for passed 3 years ... with 7 years to go. By the way, my wife is a sino-kadazan with ASB a/c. Lucky me ... hehe.

INVEST

Now, the surplus of saving SHOULD be used to WORK. ASB giving good interest rate. If I am a 'pen-tan'(stupid egg) with money, I have no problem putting all my saving with ASB. It is surely one of the highest interest generated in Malaysia, rather than FD in any banks!!

But, I hv since learned that I need to get my money to work harder. You may want to look into UT or Bonds. Or save as much as possible now, and BUY a property(withdraw your EPF for this purpose too) when it is CHEAP and start to be a land-lord. Then, when the value of property apppreciates, you may want to SELL it off for huge profit and increase your holdings in more properties. That is just an idea ...

OR because I m exposed to STOCK MARKETS, I m learning to trade/invest. Yes, this is an express vehicles to WEALTH. Many in KLSE is half-right here. The only prooblem with them is tthey FORGOT that they need EDUCATION before they could profit from the markets!! INVEST in yourself before you THINK of profitting from market, that is what I m trying to say as that is what I AM DOING!!.

Are you still with me?? ever wonder how come a Maths teacher, who is driving a Kancil, could have such a thinking? Hmm ... so, don't look down on someone driving Kancil next time. He might be a future millioonaire, you know. He is driving Kancil as he wants to save MONEY on petrol, maintainance and no need to pay so much interest to the bank, right? Will you prefer to drive a TOYOTA(one of the TOP 10 most valuable brand in the WORLD) ... or going back to the lesson above? WHAT IS THAT?? Reduce your expenses-la ... hehe

周華健 - 愛相隨



Well, with new year days away ... we really need to seriously think on HOW we could increase our saving and use it to invest smartly.

We still have two more trading-days left in 2008.

Wish all well. Happy New Year. Shall we prosper together?

TEH

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