Secure, Comfortable or Rich?

So, do you want to be Secure, Comfortable or Rich?

If you have graduated from university, chances are you will choose Secure and Comfortable because that is what you are trained to be all your life! You would probably buy unit trust and use dollar cost averaging and then plan to retire on half of your income...just according to plan!

But with inflation raging at 8% to 12% ( real inflation, not the govt stats) , you cannot afford to use the old method of investing amy more!

Say , you start work at 25, work 30 years till 55 , then live on your savings for the next 30 years...you will find that 10 years into retirement, your savings will not last any more than the nex t5 years!

That's when the mid-"later life" crisis will set in!

Enter Rich Dad's Guide for Investing :

You have to make a PLAN and CHOICE on the end result : SECURE, COMFORTABLE, or RICH.

Decide what income you want : Active, portfolio, or passive?

Quickly convert your Active Income into Portfolio and Passive Income.

After being secured, and confortable, it is time to get rich ( retire young and spend your time to get rich! A job gets in the way of getting rich. Hence start generating Passive Income that will exceed your Expenses and bingo...you are financially free)

The choice you make will be measured in TIME, and not money.

Your security purcahsed could be an ASSET or LIABILITY ( asset gives income, liability gives expenses!)

It is AUTOMATIC, BORING and it WORKS. Rein in your impatience, do not rock the proven method.

And the 3E's : Education, Experience, Excessive Cash.
( if you have the Education, and Experience, but no Excessive Cash... keep at it....the experience has probably not reached the Critical Mass yet....)

Sounds simple , eh? Well, humans always tend to complicate matters....

Slow, Safe Trains for Normal Folks

Traditional investments vehicles like cash, FD, unit trusts, stocks,shoplots, ruber and palm oil estates, raw land are time-tested investment vehicles of our parents when Malaya was just developing and oil has yet to be discovered.

An acre of rubber plantation costs about RM100 when average pay was about Rm300 in the 1950's ( 1/3 of monthly pay ) Fast forward to 2010, average pay is Rm3,000 and an acre of rubber plantation is about Rm40,000!! ( 13x average pay, or about 1 year's pay ).

My first book on Financial Freedom was ...well, Financial Freedom! Published by KLMutual ( now renamed Public Mutual ) , it was THE book to read on financial freedom. Rich Dad came out shortly, and a few later, Retire Young, Retire Rich.

The is a BIG difference in the approach taken by the two genre : traditional financial books are well, traditional. Safe, tested, SLOW TRAINS. Rich Dad books are fast, high velocity, leveraged, FAST TRAINS.

Both will bring you to your destination....eventually. But the fast trains allow you to reach your destination when you are in your 40's, not 60's!

So, which train do you which to board?

SLOW TRAIN tickets...



FAST TRAIN tickets...

Retire Young Retire Rich

"When it seemed the darkest, what kept you and Kim going? I want to hear the real reason...not the ones you have given so far" asked one of the participants (pg 533 )

And the answer?

"What would you do if there was no risk and it required no money to become rich?"

A question to a question????

" Are you sure such world exist? " one might ask.
" Well , I'll go find it"
" It does not matter what I think. What is important is what you think."
" If you think it is impossible , then it is impossible."

Many people cannot reach their maximum potential beause they do not open their minds wide enough. Sight is what they see with their eyes, vision is what the mind sees. If their minds are closed to possibilities, then they cannot see possibilities.

With every new invention comes a new leverage and new opportunities. PC , internet, Facebook, google, clouds, tablets.

What does your mind see? Obstacles or opportunities?

To retire young and rich, open your mind....

Look at for the LEVERAGE ( can be found anywhere : Business, Real Estate, Papers ( Stocks, Futures, Options, Commodities, Forex), Internet, Systems, Education ) that will fast track your cashflow. Increase the velocity of your ROI ( target quarterly, then monthly, fortnightly, weekly ).

Buy assets for CASHFLOW...

Use LEVERAGE to buy ASSETS...

Increase the VELOCITY of ROI...

The rich use them MORE than the poor, should you too if you want to retire earlier?

( Just remembered the One Minute Millionaire...the authors can show you the path to the millions, but you have to walk the journey yourself!)

On the Brink

Henry Paulson was the Secretary of Treasury of the US that oversaw the collapse of Lehman brothers and the rescue of AIG, and Goldman Sachs. So why did he rescue so many but left Lehmnan to die?

In actual fact, ( according to his book ) he tried to save Lehman but there were just no buyers as the valuation of the assets were too difficult to quantify.

Many insights were gleaned from this book...

..." the economic version of war"

...the concepts of " originate to hold " to " originate to distribute"

... the NINJAs ( No Income, No Job, No Assets )

and his favourite verse fom the Bible ..

" God hath not given the spirit of fear, but of power and of hope, and of sound mind.."

- Second book of Timothy , Verse 1.7


A very gripping insider view of what actually led to the financial turmoil of 2008.

And all for Rm5 at the Big, Bad, Wolf sale ( the front cover was slightly torn!)

Rich Dad Success Stories

A compilation of Sucess Stories. Very inspirational and content rich.

One thing I noticed was the gross rentals illustrated were all in excess of 10% in most cases.

For example, ( pg 11) a property bought for USD98,000 was grossing USD1,040 per month ( x12 = USD12,600) was was about 12.8% . If you can finance it for 5%, then you have 7.8% to work with to pay all the miscellaneous!

In eg 2 , a USD89,000 house was grossing USD950 per month ( $11,400) , giving gross yield of 12.8%. The financing was at 7.37%.

Eg 3 was a gold mine! A house for $50,000 was rented at $1,010 ( $12,120 per year )!! Giving 24% gross yield! With interest at 7.4%, plenty of room to move!

So, now the idea is to get an RM100,000 apartment and rent it for RM1,050, then I will get 12.6% gross yield too! Current mortgage rate is about 7%... hence 5.6% to play with!

Now, try to get a Gross Yield of at Least 10%.... as Management fee wil take 1% off, Assessment fees 1%, Insurance and repairs 1%. Leaving 7%. If you are conservative , take another 1% off for vacancy loss, leaving 6%. If your financing at the bank is 6%, then you break even. If you are financing from your FD at 3%, then you make 3%!! And if you rental is increased to 12% , then you make 2% ( with mortgage) 5% ( with cash from FD!)

So, it is not so dificult, right?

At pg 179, there was a formula for Marketing, namely :

(1) Concept
(2) Development
(3) Product Launch
(4) Market launch
(5) All system go!

And there was a part where you should live on increased sales, and not debts!

CONTENT rich, plenty of stuff to work your brains with!

Rich Dad, Poor Dad

One will never finish reading this book as getting rich is a continuing life-long learning process!

The six secrets ( as a refresher course )

(1) The rich do not work for money. Money works for them

(2) Assets bring in cash flow. Liabilities suck it out. To be rich, keep accumulating assets. Turn active income into passive income the fastest you can.

(3) Mind your own business. Keep your day job, but work your money at night.

(4) Taxes and corporation. Tools of the rich.

(5) The rich create money.

(6) Work to learn. Not work to earn money.

Very profound principles. Very powerful.

He also lists the Obstacles to Getting Rich...

(1) Fear ( of losing ) and how you handle fear ( low APtitude, high aTTitude game)
(2) Cynicism
(3) Laziness
(4) Bad habits
(5) Arrogance

And to Start, here are his 10 rules :

(1) Reason greater than Reality. Have a list of "DON'T WANTS" and "WANTS" to motivate you.
(2) Choose daily. Every dollar that gets into our hands can be turned into assets or liabilities. The choice is yours.
(3) Choose friends carefully. A rotten apple gets all the apples in the basket rotten.
(4) Master a formula and then learn a new one
(5) Pay yourself first. Let the others scream at you, it motivates you to find more money, it forces your brain to work.
(6) Pay your Broker Well
(7) Be an Indian giver. Always get your original investment back.
(8) Assets buy Luxuries.
(9) Heroes. Find someone to emulate.
(10) Teach and you shall receive. Docendo decimus!

And some extras to start...

(1) Stop doing what you are doing
(2) Look for new ideas : seminars, books, someone who has done it before.
(3) Take action!

In pg 190, he made a comparison between buyers of supermarket goods and buyers in the stock market. When a supermarket gives discounts , people flock to buy. When they raise prices, consumers shop elsewhere. In reverse , when stocks become cheap, people dare not buy. When prices go up, people rush in.

Now 15 years after reading the book, I finnaly found out why. The supermarket is displaying "fundamental economics" whereby when prices go up, people stay away. In contrast, the stock market is where "auction economics" is at play. The higher the price, the more people want it! This realisation also helped me become a better trader and investor. Traders practise auction economics, they buy high, sell higher! And they will never catch a falling knife! An investor, in contrast, practises fundamental economics : buy when there is blood in the streets! Buy low, sell high!

Bet Robert knows about this but has yet to put it in any of his books... perhaps I will write a book called " Rich Son, Poor son"and be the next best seller?

Now, where has my assets accumulating blueprint gone to....?

The Biggest Game in Town

Got this book at the BigBadWolf clearance at South City, Seri Kembangan( parking was RM1 for the 1st 12 hours!)... for RM5!

Very informative, very much like Trading for a Living, it's Poker for a Living.

If you are a trader, highly recommended.

A few gems ...

" It's easier to sleep when I lose than when I win. When I win, I'm all pumped up and excited. I can't unwind myself as quickly as I can when I'm down and semi-depressed"...pg 55

Very real. Especially for Traders too.

" In order to play high stakes poker, you need to have a total disregard for money" ...pg51

At that level, poker is a game , and the chips are just a way of keeping score. Just like what Kiyosaki said. At super -rich level, the rich just wants to keep score. And money is the measurement.

" In the free enterprise system, you have to assume that each guy is the best judge of what he does with his money. If someone wants to bet $30,000 in a poker game, that's his privilege. Society may consider it a bad judgement, but if that is what he wants to do, you can't fault him for it. That's America!" ...pg 63

That is also Las Vegas. That is also Bursa Malaysia if someone wants to buy 1,000,000 of XYZ - CD!

Finally...


"the guy who invented gambling was bright, but the guy who invested the chip was a genius"...pg 52

" a player who freezes at the sight of a fifty dollar bill, thinking it could buy him a week's food at the supermarket, will toss 2 green chips into the pot without even hesitating if the odds are right!


Viva Las Vegas! Viva Bursa!