Debt Free?

Since the day we were born we were strap on with an open bill. Payments need to be made for the medical facilities, infant milk, diapers and etc. As long as we live in this urban jungle, we can never rid ourselves of debts. It is our nature to continue to want more and better things in life. 

Stop a moment and ask yourself this question. 10 years ago, did you need more to survive? If yes, is having more money now, perhaps double your income solved your problem? Most likely NO, because as we earn more we buy bigger toys, we want more comfort and more leisure in our life. And all this comes at a cost.How many millionaires do you know do not have any debts at all? Even though they are wealthy, they realise that it is better to use other people's money then their own. It is all about cash flow management. Today, the only recognised exchange medium is money because barter trading concepts has diminish significantly over the years. 

In the early 70's though Labuan is a small island, it is well known for it's barter trading especially with countries such as Philippines. I personally know some of those people who were pioneers then, became multi millionaires today. The profit gain from the trade is reinvested into shop lots and other properties. Now, the barter trading is no longer a viable business.  

If you think about it, the greatest natural resources is found in most third world countries and developing countries. However the mining and the extracting activities does not make this country rich but rather they sell the goods to the developed country to be churn into finish product where the real money is. The strong marketing campaign further reinforce the perceive value of the product even though it may cost a tiny fraction to make it.

Without debts, most dreams will be unfulfilled because of time factor. Since we cannot rid ourselves of debts might  as well learn to coexist with them. As long as we are earning more than we spend, we will be all right. But most people including myself is struggling to balance our financial balance sheet. Saving all our money in the bank is also not a good solution because you may see on television that long establish banks also file for bankruptcy. 

So whats the solution? Firstly take responsibility of your money instead of depending on others to make the decision for you. Be well informed about financial matters and start a viable business. 

P.S The type of people you are with most of the time often is an indicator about your attitude towards money and your life. So choose and surround yourself with the right minded people.

Retirement age and Change

For those who worked on projects with dateline, we may understand the urgency of change. Many things may go wrong during the projects and unless it is address immediately it may cause financial loss. There are professions that requires continuous update especially in the line of IT, product development and marketing. Any delay in adapting to the changes may cost potential loss of opportunities and possibly incur heavy liabilities in terms of loss market share, shrinking customers retention, dwindling profit loss and etc.

There is an urgency for us especially people who are in their 30's to make changes. Time is ticking away as our opportunity to earn more reduces every year as younger generations are more competitive and our employ ability reduces. If you are 30 years old now and the retirement age is 55 years. It means you only have 25 years of generating income before retirement. Assuming that you have a job till retirement.

According to the World Health Organisation (WHO) http://www.who.int/whosis/mort/profiles/mort_wpro_mys_malaysia.pdf 2004 report, the average life expectancy of a male in Malaysia is 69 while female is 74 years. The average between both sexes is 72. Lets take the example from the above for simple calculation purpose. At the current age of 30, assuming if we stop working at 55 years, we have 25 years more to work to save enough money to support ourselves for the next 17 years. If we keep to our simple living , and the cost to sustain us is RM1, 000 a month then we require RM204,000 cash saved up in our account.

In simple calculation, to save up RM204,000 we need to set aside RM680 a month from NOW. This is a simplistic approach to financial planning, however in reality you need to take into account the inflation rate, interest rate and currency strength and etc.

I am sure you can source for the many financial planning books that are made available in bookstores out there, that can give advice on the necessarily steps that you can take to improve your financial standing. Well , I only trust does who are managing their own finance well before getting their advice. Experience speaks louder than all the framed certificates.

Though I was involve in financial planning many years ago, I still believe that, what is important is knowledge. We need to keep on adding to our knowledge bank so that when the inevitable happens such as loss of job, we are able to quickly apply our knowledge in other industry or business to ensure the inflow of income does not stop. I firmly believe that applied knowledge is the key to continuous flow of money. Why a person is earning more than the other person boils down to 3 things, Knowledge, skills and Attitude.

If we have the right knowledge and the right skills and applied with the right attitude, who says that we need to stop getting income at 55 years. We should never let our income be at the mercy of someone else. If we can always have the sense of urgency everyday to change, life becomes a little bit more exciting.

What changes do you need to do today to make your tomorrow a little more secure?

Employment for Life

I recently met up with an old acquaintance George, who has recently retired from 30 over years of service with a reputable oil and gas company. Through that window of 30 minutes we talk about his retirement plan. He told me that he can live a comfortable life style for the next 20 years without relying on others, including taking annual holiday.

There are not many people who have the opportunity to have work with such a strong and stable company.In today's competitive environment, there are many companies that may not even pass the 20 years mark. The recent investment scandal, the crash of the sub prime market in U.S, sudden rise and fall of commodities prices can shortened the future of any companies.

I had the opportunities to have met few business people who is generating income from multiple sources. I think it is very important that we do not put all our security in just one basket. Leveraging on other people time (OPT) and other people money (OPT) is one way to catapult ourselves to success in a shorter time. However, in order to be able to manage OPT and OPM requires the right knowledge, right timing and knowing the right people.