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Showing posts from October, 2009

Savings, System and Security (Part 1)

Hi all! I mentioned in my earlier post that sound wealth management requires Savings, System and Security. Let's touch on Savings first.

Very often, I'll ask my clients this very important question. You may also mentally ask yourself this question:

There are 2 ways of saving money.
(A) You spend on things such as paying your bills, credit cards, food, shopping, entertainment, etc, FIRST and you save whatever is left untouched.
(B) You set aside your savings FIRST before spending any of your income.
Which category do you belong to?

90% of the time, I'll get 'A' for the answer.

And 90% of the time, people who chose 'A' will never attain financial freedom. In fact, people who chose 'A' usually WORK FOR people who chose 'B'!

People who chose 'B' usually end up financially independent, and may also own businesses and start companies which the 'A's work for.

Why? And if you chose 'A', what can you do?

First, let's loo…

Commitment and Financial Freedom

Hi there!

As mentioned in one of the earlier posts, 'Financial Freedom' is attained when one no longer have to actively work, because his or her passive income is sufficient to cover all expenses. Sounds good?

However, none of it is going to come true if we just dream about it.

You see, there is is popular saying: "Nobody plans
to fail, but most fail to plan." Similarly, if we don't actually plan for financial freedom, chances are we won't get it!

To be successful in anything in life, one first have to make a decision to be successful, then one must commit to that. In the case of financial freedom, it is much easier to achieve it as compared to becoming a top athlete, winning the Nobel Prize or winning the lottery. All you need to do is start committing 'investment capital' to the cause.

Start by setting aside at least 10% of your income into a separate bank account that is set up specifically for the purpose of investment. This money is NEVER TO B…

The Truth About Wealth & Wealth Management II

Never build a house on a weak foundation.

The same applies when it comes to wealth building. Often, people neglect this simple rule and start exploring and entering risky investments, without having a strong foundation to start with. This explains why some have got 'burnt' in the stock market, and end up owing debts or even worse, declared bankrupt.

There are basically 3 layers of foundations to lay, before your wealth skyscraper can be built and soar.

Firstly, it is important to have cash on hand, to pay for any immediate needs that comes once in a while. You may also call this your 'emergency fund'.

As a rule of thumb, it is wise to keep 3 to 6 months' worth of your basic expenses in your bank account. This should help to tide over any periods of financial difficulties, such as retrenchment or hospitalisation. The exact amount may vary from person to person and your needs may be different. So work out your monthly expenses today.

Secondly, it is important to hav…

The Truth About Wealth & Wealth Management

What exactly is 'Wealth', and for that matter, 'Wealth Management'?

Many of us may have heard of stories of people who made tons of money from trading in the stock market, forex, options and the various kinds of investment vehicles. There are also many courses, workshops, seminars and training programmes that teaches the public how to do so, at a fee of course.

However, do you know that investing is only a part of wealth management? In fact, I can even boldly declare that it is not the most important aspect of managing your finances. Yep, you hear me right. How many percent returns you get from investing isn't the most important.

To put things into perspective, let us first understand what 'wealth' means...

Wealth is a measure of how long one can sustain his/her lifestyle without working. For example, if Mr A has $100,000 in the bank and spends $20,000 per year, his savings will only last him 5 years. Thus, he has 5 years' worth of wealth.

Not exactly e…