Entrepreneurship: Words of Life

There are slow words and fast words when come to investing. The rich use the fast words and the poor use the slow words. In Sunday school we learn, the words become flesh. It is what you speak in words that reflect what you are. It is the words you speak or spoke that entice us to action on what we preach. Words can motivate and de-motivate us in doing something. Slow words make you poor and fast words make you rich.

I believe there basically 3 big words that dictate people life: (1) Security, (2) Comfortable, (3)Freedom. Each words are speak of different context and content. Each word has different reality. Therefore, people will choose different life based on which word that is the highest priority for them.

People who preach security will be put roof on the top of head, food on the table at their highest priority. Job security, high paid jobs, government pension funds, social security and other perks are at the highest priority for them. These people could not to tolerate month without paycheck. They could not associate their life with risks. They are the group who belief their future is under responsibility of government and company. They are the victim society that believe everything should come from outside of them. External factors are the one that dictate their life. Most of the middle class and poor people are fall into this group.

The second type of people is the one who preach comfortable. This group of people are the group who are smart and responsible to their life to certain extend. They believe that everything they could have today is the product of they did yesterday. But being rich are not important to them. These people can take risks, but until certain level. They have their own threshold. They love to be comfortable and love to do only what they like to do only. They are the often self-employed class people or the high paid executives. They invest some portions of their money with moderate return with moderate risks associate with. They just want to have a big house, a vacation home, 2 big cars, high standard of livings and perhaps a million dollar in bank. They are the group that may look rich, but they spend almost as high as they earned to make them self comfortable. When any new idea that introduce to them which might disturb their comfort, they will shun away, and go back to their comfort zone. This class of people are those who at the high managerial position in big A firm, professional such as doctor, lawyer and engineer. These people still working for money.

The third class of people are the rich who want only freedom. These people put freedom above anything in their life. They are the group of people who always associate with risks. They love risks, because it is the only way to achieve freedom. Freedom is the product of being financially free. Financial free is a byproduct of being rich. And risks can bring you fortune people could never be able to imagined once it is managed well. Therefore, they learn how to control the risks and weight the reward ratio to the risks. If the rewards outweigh the risks, they can afford to fail as many as they could in order to success once. They love challenges and achievements. They are the one who come out of no way, no title, no money, but with passion and idea of rich. They are the one who could create fortune from nothing. They are the riches, the one who create jobs, build buildings, and the one could make a nation prosper. The are the true capitalist.

"The true happiness is the product of achievement. The true achievement only can be realize when risks is associated. When there is no risk, there will be no achievement. And if there is no achievement, there will be no true happiness."

Quote By Ray Kroc, Founder of McDonald"

Real Estate Investment - Location, Location, Location

Location is the most important word in real estate investment. At least it is what everyone said so. But for me, location is not justify from the geographical perspective alone. Great location should be justify base on the principle of supply and demand. Regardless of physical condition, government incentive, promotion, or any rumors local opinions, all great location can add up to one and only one simple truth - low in supply & high in demand. Even in the hottest area of your near by downtown, if people just do not like to stay there (low in demand), regardless how great the site look like, or how convenient the location is, it is never consider as a great location.

A great location possess quality of drive by visibility. Drive by is the most effective and cost efficient advertisement means when come to rental property. The more cars that pass by your property and can see the "for rent" sign, the higher chances your investment to success.

The second typical attribute to great location is rare quality. Rare quality such as natural phenomena ie waterfront, great scenery & greenery can draw desirability of people to stay there. It is why, if your unit are facing a city skyscraper, often the price is higher than the one which facing a garbage dump site.

Employment is also a key to great location. People will only move to the town that has plenty of jobs. That is the fact! A place or town or city that is limited supply of jobs couldn't be any better a location compare to a stranded countryside village.

The bottom line is, any evaluation of location, do not caught into the delusion of geographical quality. In the economic term, any investment in real estate should be justified base on the most basic simple rule - Supply & demand.

SMART Goal Setting

Goal setting is very important to success. At least it is what those who been a successful person said so. It is easy to caught with lexicographical definition of goal, vision and mission. For me, goal is simply something you try to archived. And the goal must be written in clear manner. A goal that is not written and review frequently is simply a dream that could never be realized. A good goal should be included "SMART" concept which the acronym of Specify, Measurable, Attainable, Realistic, Time activated. For example, in real estate investment, "to be rich by investing in real estate" is not a good goal, simply the context is too broad and ambiguous. A good example goal pertaining real estate investment could be "to invest in 2 rental single family property (specify) that provide 10% return of investment annually each (measurable & attainable) in X community area (specify) in a year (time activated and realistic)." A SMART goal can make us focus, and by stay on your lane, you be able to shorten the race.

4 Things that Make People Poor: #4- Taxes

In today world, 2 things are guarantee when we are born - death and taxes. Taxes is the single largest expenses in our life. We are taxed when we spend, save, work, and die. For most people who are in the employee or self-employed quadrant, you have no control to your taxes. Tax is the first expense in the employee expenses column. The government will make sure that they get their shares first before you do. In most country, the more you earned, the higher percentage you are taxed. This will very difficult for most people to become rich. In America, high paid employees who are on the highest tax bracket will pay 50% in taxes of their gross income. Malaysia is about 30% to 40% range. Korea at about 35% to 45% range. This simply means, the higher your paid, you need to work almost 2 months in order to get full pay of 1 month gross salary. This single rule will make most of people who are in the employee quadrant stay poor.

4 Things that Make People Poor: #3- Inflation

Inflation is a thief to everyone. It is a thief that make most of us poor.

Inflation is simply means raising in price of goods especially the commodities such as oil, grain and rice. Another words, inflation make the value of every dollar you have in your pocket worth less. Every time, when we heard government is increase their budget, launch new social benefit program, hire more government servant during the recession, promise the citizen that there will be less taxes but more benefit to the society, they are in the context of hiring inflation. Why? Because, those program and promises are expensive, someone has to pay for it. Since there will be no additional taxes on the people, how they get the money? The answer is, they simply print it. They are printing pseudo money and flood the market. Yes! It is legal for the government to do that. In most case they called it minting. Since our current monetary system is fiat currency, it is the money back by the government, not the hard asset backing on it. So, as long as government can impose delusion to the community that they are strong and capable to pay back any debt, the currency of that country will be valid regardless how much they printed.

But the problem is when there is too much money is printed. The private sector simply could not supply or produce goods as fast as the money is printed. There are so much money suddenly being introduced in the market, making the market felt a delusion of rich. The market now can buy more goods. Yet, since the goods supply is constant, commodities could not be created (ie. gold, silver is god made money), demand of goods & commodities is now higher (since people now have more pseudo paper money printed by government), the market self-regulated law - demand & supply will automatically adjust the price for every goods higher. Since, most money that is newly printed by the government are often goes to the riches, inflation do not much have impact to them. But to the poor, who are employee or self-employed, working hard and saving hard, they money value is diluted by inflation. Every single dollar they have, is worth less, even the amount is never lost. The stuff they could buy is less than what they could buy years back. They are getting poorer the most they save. Interest rate of 1% or 2% given by the back are less than the inflation rate. Their money is been stolen every time the government increase the money supply. This is why the government do not need to taxes you, since they could take it from you by simply printing more! This is why most people now are getting poorer and poorer.

4 Things that Make People Poor: #2- Debt

The second thing that make most people today poor is the word called - "debt".

Debt is why most of people today are poor. The following is the typical story how debt (bad debt) affecting most people life. Consider a young person who just come out to work. He or she will rent a small apartment and work as an employee. Then he or she will meet someone. Times goes on, they fall to each other, then they get married. For time, life is sweet and fruitful, since now 2 person can live with 1 expenses. Now, they both able to set aside a portion of money every month as saving. Then, they finally be able to buy the dream of most of young couple, their first home from their saving as down payment and taking debt from bank. Now, they have a new home, so, they need new furniture and new toys. So, they become prey to the ads like easy payment and delusion cheap credit. Few years later, they finally got their first baby, and now they need more money to give a good life to their baby, thus, the only solution, more debt. By now, the couple will forever trap into debt, working for debt. Everything they earn, will go back to repay their never repayable debt. And they end up retire poor and destitute.

The story has illustrated the most typical bad debt that make people poor:

1. The long term debt - home mortgage
2. The short term expensive debt - unsecured debt, personal debt, credit cards

This simple one typical life pattern has cause million if not billion of people globally unable to become rich, and live poorly forever after.

4 Things that Make People Poor: #1- Retirement Plan

There are 4 main things that make most people are poor today. The first thing is:

The retirement Plan: Common known as 401k in America, EPF in Malaysia, CPF in Singapore and Superannuation Plan in Canada. These are the plan that supposingly structure by Government in many countries to enforce employer and employee to set aside a percentage of money from the pay check every months. The so called government guarantee pension fund, which can and must be withdrawn by retired at the designated age, such as 75 (America), 58 (Malaysia) And so on. The problem is, government didn't really just save the money collected from the employee and employer. They spend it. They will utilize the money for government budget. The thing become worst, when there are so much money being collected, the government then discover away to use the fund to boost the economy. Most of the Pension fund in any country are the major share holder in the public listed stock market. It means, most of the stock is been purchased by the fund. Every single cent is collected, will go into the market. It is why, we can see the market mostly are trending up, because the fund has create a figment of illusion that there are always more buyer than the seller, therefore the price goes up. This mean, the pension fund is the index of stock market. The fund today are so rich, it due to the baby booming age, who mostly made of employee. They are the major contributor to the so called public pension retirement fund. Since, the law has regulated that every retiree to withdraw the money from the fund, and people will definitely withdraw the money, this will cause a disastrous to the market. When the baby booming age started to withdraw the money, the pension fund, by law has to give the money back to the retiree by selling the stock. This will then cause the stock market to crush, since there aren't many people buying. It is not just a matter of people could get the money that been promised by the government. It is the macroeconomic problem which will cause the whole market crush, panic and ultimately social economic problem. When this do happen, most people will live their retirement age at the destitute.

The Art of Investing - Professional Gambler

Average gambler like to let "Luck" to dictate the outcome of their games. Money is often more important than the game for the average gambler. This often why, the casino across the globe is rich. Professional Gambler know it is not the "Luck" that decide who win who lose. Is the "skill" to be learned that is most concerned. The game is more important that the money. They know for every game, it is very little to do with the money. The know the odd of winning reset for every new game. The previous result of the game has very little to do with the new game result. They learn how to master the game, and use other people money to play for them. It is same apply to the concept of professional investor who use other people money to invest. The professional gambler follow the rule of the game, which is:

1. As long as the money is on the table, it is not your money, is the house money
2. The game is more important than the money
3. Put the money in the game, get your money back, continue using the house money to play, repeat the process
4. The house money is the money you win from your own money.
5. Your money is the money you take out from your pocket.
6. The ultimate goal of the professional gambler is to play the game by using house money, while their own money is off table. Which mean, their risk is zero, yet the reward could be unlimited depends how well they play the game.

The concept is simple, but the application is very wide. The same concept is very similar to the world of investing. The professional investor think like professional gambler, they like to put their money into an asset, get their initial investment money back, continue controlling the asset, use the initial money to invest into a new asset, get the money back again, repeat the process.

Leveraging Your Words

Leveraging your words is very important in the world of investing. Poor People cannot becoming rich is because they say "I can't afford it" more often than rich people. Poor people like to use poor words. Poor words create poor people. The words do become flesh. In order to become rich, we need to change our words. For instance, rather than saying "I can't afford it", the rich like to use "how can i afford it". The differences between the rich and poor, can be found significantly in their words. So, by starting to learn the rich's words, we be able to increase our chances to become rich.

The Most Expensive Advise

The most expensive advise is "free" advises. These are the advise given by those who around you but are not rich. What make you think that the poor be able to give you an advise to make you rich? Once people listen to these free advise from so called financial veteran such as your uncle, your boss, your friend who work at McDonald, and even your spouse, in long run will cost them a wealth of life time. Why, because what those people normally telling you about something that normally will stop you from start invest, or even worst invest to lose. These people are normally called as the cynic in the world of investing, as they will take whatever it take to tell people to do what they doing, therefore can justify what they are doing now is correct. They would be crazy, if you become successful doing something opposite from them, such as like invest in business.

The second expensive advise is the "cheap" advises from the so called financial expert such as broker, banker or mutual fund manager. These advises often come with almost free or cheap, and well presented. These are the people who trained by big firm "foxes", well dressed, who can speak of financial jargon with the aid of confound presentation materials. Their job is to sell junk to unsuspecting customer, confuse them, creating illusion to the customer to think they sound intelligent. They will make complex explanations, equation t their financial product, only emphasizing the strength, to mesmerise the customer. These advises are often identify by the real investor as the Sales pitch. Sale pitch is the illusion advise coming from the cunning financial fox to make money from you.

Remember:

"The sound financial advise is the advises that to make money for you, The sale pitch is the advise that make money from you!"

What you want to become when you grow up?

The Question, "what you want to become when you grow up?" has caught many of us into deception. Most people will answer such as a doctor, attorney, accountant, engineer or any other professional high paid profession. That is not the question is all about. The truthful answer to the question is about whether you would become a more honest or less honest, more integrity or less integrity, more truthful or less truthful person. What turn out to ourself, has very little to do with what we are from the outside, rather is what we are from the inside. I heard some people said, he become successful because he has a high paid job. Yet, I had seen people who come from rich family, high educated, big corporation management cadre, run down into bankruptcy. That simple anecdote can nullify the belief of by getting a high paid job will bring you wealth.

So, what about the idea of being honest, integrity and truthful will effect the outcome of each of individual life? The concept is come from the word, "Excuses". Every time, when we about to do something that should be done, but, we are reluctant to do so, excuses set in. For example, everyone want to have a good body like Arnold Schwarzenegger, but very few willing to do the work out. There will always be the excuses like, "I don't have the time". The more honest truthful answer on that excuse is "I am not willing to make the time!". The concept will same apply to the smoker who want to quit smoke but never did, and the investor who want to invest but never did. Nothing hold us back from being success, other than the excuses that lie in ourself. So, start asking yourself, what you want to become when you grow up? or what are you now, if you think you had already grown up. Stop saying "you can't", instead start asking yourself, "How can". If you be able to doing it for sometimes, something big will change in yourself.

Becoming Rich without Cutting Your Credit Card

Often we heard from the so called "financial gurus" teaching people to become rich by preaching the virtue of cutting off your credit card and live below your means. I personally do not agree with that statement. Cutting off your credit card will not make you rich. Cutting off my credit card only make me miserable. I believe that if given a choice, most of us, will not choose to live below our means. We will like to enjoy the finest things that money could buy, spend all we can, while the bill will be paid by our rich uncle. Believe me, it is not the money that motivate the people become rich. It is what you can do with the money that make us want to be rich. However, when come to the subject of getting rich, the first item most people look at, is the "expenses". Well, it is true that spending recklessly is very unwise. Yet, what i trying to say here is, why choose to live below your means, while there are many other better ways. Why focusing on the expenses. Why not try to divert your attention to the income. Why cut the expenses, since, there are much possibility to increase the income. This is the key, that make different of the rich from the poor. It does not take any intelligent to cut your expenses and do your saving. We can train a monkey to do that. On the contrast, it take massive intelligent for us to increase our income. Start asking ourself "how to increase our income?" rather than making the statement of "We can't afford to increase our income". When our mind start working, amazing things will happen. To become rich it actually only require you to change your way of thinking, your reality, your contexts. Focusing how to increase your income, your financial intelligent, then you shall able to see a different kind of world, a world of abundance, the world of possibility, the world of getting rich without needing to cut off your credit card.

Financial Success: Don't Predict But Be Prepared

In every community at any corner of the world, we had heard and seen there are some rich tycoon who seem to be a midas touch on every deal. They seem to be knowing things, they seem be able to predict the future, they were like having a crystal ball hiding in their home. This is why, there are such a frenzy theory about getting rich by seeking a way to see the future. For instance, we can see a lot of people like to go to temple, asking for numbers, and buying the lottery. We also can see people who going to fortune teller, hoping to see which stock will be hot in the coming days. These are the people who often let the LUCK to dictate their everyday life. These people are not really an investor, they are just a gambler.

For me, LUCK is a acronym of "Laboring Under Correct Knowledge". It means, to success, we shall not rely on prognostication, but be prepared. The true winner, is the one who always well-prepared. They are the one who diligently building their financial foundation. They do not need a once in a lifetime lucky deal to come to their hand in order to success. They are the people who do not believe in fate. They preach the virtue of effort produce result. They know preparation is the only key to success. They focusing on education, training, research, building a team, try and error. They do not let a temporary failure to hold them back. They do not afraid of mistake. In fact, they make more mistake than any other people, yet, they from the mistake, correct it and come back stronger. Making mistake is part of the preparation. They do not care what might happen, because either way, they know, they will do well eventually as long as they are well-prepared. The bottom line is, until we are no emotional attached on the up and down cycle of the market, we then in this context are well-prepared.

Financial Success: Building your Own Ark

In biblical story, I love the very famous tales of Noah and the Ark. Imagining that when God told Noah to build the Ark, it took Noah a great courage to come home and tell his wife and children about the news. Noah told his wife :" God told me to build the Ark. There will be storm rain coming. If we don't build the Ark, we will not going to survive." But his wife answer: "But, Noah, we are living in the middle of dessert, it not even rain out there, why there is a flood?" Despite the discouraging response from his family and friends, Noah determined and built the Ark, as told by the God. And the Ark was built, and Noah survive the flood. What make Noah being so determine on the belief different from everyone, is the vision he saw. The vision that took great mind, leadership, tenacity, perseverance and discipline to success.

In today economy world, many investor are living in the dream world. They worship advises from the poor, they worship Invest for the long term and diversify. They only see the market will only goes up. Most of them are only putting their money in the hand of stranger, hoping he or she will make their money growth, and when they are retire, the money will be there for them. They believe the government should take care of them. Their reality is on the victim hood of all external factors such as luck, parent, friends and environment. If any pitfall happen to their life, they will simply find someone or something else to blame. They are the dependent kind of people. This belief had and will cause the biggest crush of financial market.

Market always moving in cycle, market crush is part of the cycle. Yet, most of us are living in the figment of imagination that everything will be fine - market will always goes up. To survive the financial crush, we need to change our vision. We need to be different, to change despite any external negative feedbacks upon the acting. We need to act like Noah. We need to build our own Ark, the Ark to survive any coming financial crush. Today, we read financial news, we can see trillion dollar of debt currently bare by most powerful nations in the world. The government has no means to push the problem forward anymore. The problems has becoming too big, whereby most the government social program had and will failed to function. The bottom line, we all are on our own.

How to build the Ark? The answer is we need to act as independence and responsible kind of people. Obviously, the Ark size will be differ depend on each individual situation. A poor person's ark will be a leaky boat, which basically, you shall need no effort to build it. Social security, government pension plan such as 401k, EPF, CPF and other perks are often the case. A middle class person's ark will be slightly bigger, perhaps with some additional structure on it, that enable the vessel to float and nothing more. This is where mutual fund, long term and diversify investing theory come into play. They has debt to pay until they die. They are the best client to the rich, and because of them, the rich become richer. For rich person's ark, we need a strong big iron ship that has many cargo holds. The cargo holds is to load assets on it. This is where financial intelligent is so important. Our mind is the greatest asset we ever had. What we learned to becoming a better investor, the skills, the know hows, will never be taken away. These people, invest in themselves, before they invest in the market. These are the few people who driving their own future direction. They know how to control risks. Money or gain is not the issue. They are the breed that continuously learning and focus becoming a better investor, to make them the greatest asset of themselves.

By building your own financial Ark, you be able to archive and dictate your future. You will be more control over your own life. You can do the things you wanted to do. You will be free from the being slave to the money.

No Money Down Deal?

One of the main reason that most people do not invest in real estate is he or she claims to be no money. The first impression for real estate is "expensive". So, how could we invest in real estate without money?

Yes, there are deals out there that is no money down. For example, you can loan to 100% for buying a property at bargain price relative to its market value. Yet, the point that i try to bring out here, it is not the no money problem that is concerned. It is the lack of money management skill that is matter. What make you think that you be able to run the deal, if you could not manage your own budget? What make you think that you can manage the property well financially , if you could manage your own personal financial. Here is why, i personally believe that why bank require down payment for every mortgage you apply. The down payment is kind of justification or prove that you are in the context of well self-managed financially. It is not the deal that make people rich, it is skill on "how to" that make people rich.

The bottom line, if you could not raise up your own initial down payment to invest in real estate, stay out of any investment deal first. Learn to discipline yourself to manage your own financial before starting to invest. If you could not manage yourself well, your self personal management problem will be transferred to any deal you invested in. "Idiot will always an Idiot regardless what he or she invested in!"

Rich Habit: Choose your Friend Carefully

Friends, apart from family members, your relatives and your pets, is the person you spend your times the most with. Friend is a the acronym of "Few Relationship In Earth Never Die". Friends can be sweet dream and nightmare. Friends is like a double edge sword which can cut both side. Friendship is one of the most influential relationship in everyone life.

Choose your friend carefully, is an important habit for those who want to become rich. Who you become often factor by who you hang out with. See the 6 closest persons you spend most of the times with, and you shall see your future. We tend to speak the same language with our friends, or at least has the tendency change our tongue according to our friend. In Sunday school we learn, "The words become Flesh!" Simply, it means what we say become our reality. If we say "I never become rich", that will become your reality. If you say "I ll be rich", that will be true also. It is why hang out with pro dance, you dance better; hang out with pro golfer, we play golf better; hang out with crook; you act like one; hang out with rich, you become richer. They make you spoke and speak the same tongue. Friendship is a relationship that influence each other for better or worse. Friend will tell you this, tell you that, basically what they do is "why don't you do what i do". The problem is when you stick with bunch of poor mindset people, what is the chances you become rich by get used to their language? Remember, the words become flesh! So, choose your friend carefully.

Passion: The Key to Success in Business

Passion is the combination of hate and love. "Love to have you want, and hate if you don't have what you want." Passion come with leadership. A leader who willing to take responsibility higher than anyone in the team for victory. Responsibility come with mission and vision, a mission and vision that is so strong, making victory is the only word in the dictionary to the leader. It is like a law of victory.

When the mission and vision is so strong can create passion to the leader and the team, the leader will take whatever it take to win. There are no second best, only to win. Challenges are not excuses to give up. In history wee can see great leaders apply the law of victory, such as Winston Churchill of great Britain during world war 2, to fight against German. Mother Teresa who advocate the abolishment of poverty. Commander Schwartzkopf who leading the 6th Battalion infantry during Vietnam war. Michael Jordan in the basketball game. Magic Johnson a MVP in basketball league who turn himself into successful entrepreneur. These people practice the law of victory. "Give up" is not in their dictionary. Defeat is unacceptable. They vision only victory. When these leaders could apply themselves to the law of victory, they attract great team people who sharing same mission and vision, thus archive great success.

Often we see a strong team made of strong people, failed, the give up, is because the leader does not practice the law of victory. The leader has no passion in the way or task of the team. Why? Often is because of the Mission and Vision is not strong. When the mission and vision is not strong enough, there is no motivation on the task. The leader and the team will often fell empty, when the mission and vision is not clearly defined, meaningful, and produce great values. There is no sense to archive something. Therefore, people could not focus, distracted, half-hearted. It is no different for most employee in the big corporation. They did what they been told, but do not sure why or even how. They been called a Corporation is because it is a bunch of corpse in operation. Their physically is there, but mentally, they all are checked out. They only surviving the daily routine by sticking to the pay check. These Corporation will eventually die, such as Enron, AIG, Lehmen Brother, GM and so and so.

Long story cut short, the law of victory is by context, making a strong mission and vision to yourself as a leader, that is strong enough to blow out your mind to do whatever it is take to make it success. BE passionate about the goal, be responsible to the victory!

Business and Investment is a Team Sports

In school, we been taught to take exam as individual. If we try to cooperate during examination, that will be cheating. That individualism system taught by current education system has greatly hindered most of our generation people to success in business and investment. People mind is mold to operate in individual in undertaking any task. They perceive cooperation as cheating. They worship individualism and competition. They afraid of sharing information, asking for help or undertaking any manners that might make them look like a "stupid person". The school system has deliver a deadly message to most of the students as if you showing that you don't know, then you are stupid. Taking exam by individual might work in school, but in the real world, real business people cooperate like hell in order to win. In business and investment, there are so many important elements involved such as cash flow, communications, legal, system and product/services. Non of us are expert in all those area. Therefore we need a team, a team that make of people come from various areas of expertise to fill in the slot of business and investments elements mentioned above. The idea is simple, yet, most of us just can't fit that simple idea into our daily life.

One of the best quote I love about professional football coaches is :"regardless you are Roberto Baggio or Eusebio, you can't beat the game against 11 players by your own, It is impossible!". The quote has simply reflected that it take a team to win regardless how capable you are.

Find out the Why before the How

Often when we about to do something, the first Question we ask:"How?". Yet, if even we find the hows, not very often we manage to get the thing done, especially come to the question of becoming rich.

There are many ways of becoming rich - the Hows. You can become rich by marrying a rich husband or wife. You can become rich by becoming a crook. You can become rich by becoming cheap. You even can become rich by wining lottery. There are so many how to the answers, but why there isn't many rich person around us? For me, it is the "why" that inspire, motivate, energize people. Most of people could not become rich regardless of knowing how, is because they do not have the strong "Why".

The why give you passion. Passion is the combination of hate and love. Knowing the why, is like knowing why you love what you want, and hate why you do not have what you want. It is like the old saying, "if there is a will, there is a way!" . The Why will lead you there.

Your Report Card after Leave School

In school, we had our own report card. We check on our report card on quarterly basis to monitor how is our academic performance. If we see there are some weaknesses on certain subjects, we be able to rectify it before it is too late.

However, when most of us are graduated from school, we do not have our report card to check on how well we are doing in the society, the quo real world. The academic report card is not useful anymore after you leave school, report cards such as your medical check up, health check up, marriage status, emotional condition and so on. One of the most important report card in our life is our personal financial statement. The financial statement is the report card for us in this modern civilization world to justify how well we are performing in our life. Ask any banker, they will not ask you for your academic report card on how many As you get. They would not say :"oh, you got good grade, let me lend you a million dollar!". Instead, they will ask for your up to dated, industrial standard financial statements. They will ask for the financial statement regardless who you are, where your from, poor or rich. Why is that? It is because the financial statement is your report card after you leave school. why? Because, it is the only way to track, monitor, and justify how well you are doing financially.

So, ask yourself, how you be able to know where are you now financially, without a up to date financial statement? The answer is obviously, you can't. It is the same concept of going for medical check up. The doctor will take a blood sample, check your blood pressure, your urine and so on. Then you only be able to come out with a report. And you be only able to know how is your health condition from the report. So, in order to get rich, wealthy, we need to have our on personal up to date financial statement. From that financial statement, only then we be able to track, monitor, rectify if necessary to archive our financial goal. It is the report card after leave school that is so important to everyone in order to success!

Think Like a Dog - Success in Business

Human has a complex structure of brain. Human brain is made of complex layer from cortex, to sophisticated limbic system and neuron system. It help human to be able to think beyond other living organism we known. It help human to think more complex. Yet, when it come to business investment, human way of thinking make human more incline to fear, disappointment and escape. Often, people are so fear of losing their money, and fall prey to their own emotional error system of over analysis - analysis paralysis, thus they never do something. Some people did it once, fail and make those negative experience hold them back to try again. "Fail" is a verb, not a noun, yet most people make it as a noun, and it they become failure.

Dogs, on the other hand, is a simple creature made of simple construction brain. their brain is much smaller. Thus, they become more focus, optimistic and resilience when come to failing. If you has or had a dog, you know dog never demotivated by failure. They are focus, and only focusing on achieving anything they tend to archive. When you throw a Frisbee or a tennis ball to dog to catch it, no matter how many times they fails, they will come back to you again, with the same energy asking you to do it again. They are focusing on wining. They do not trap in how many times they unable to catch the Frisbee or tennis ball, they only remember the pass experience of joys of success. They response simplicity in term of pain, pleasure, love and respect. They fell down, get hurt, pain and displeasure, seconds later, they come back with strong, enthusiastic, full blown energy in front of their master. They are in some way surpass the emotional strength of human. They are focusing on winning and how to win again and again. Losing is hardly inside their dictionary. The concept is applicable to business, sales and marketing. If we can think like a dogs, we able to handle the emotional fear of losing, failing rejection and objection. We will be able to more focusing on how to win. When we are focus on both emotional and rational mindset, winning is just a matter of time.

Sales

Sales is number one skill for every entrepreneur. Statistic shown 9 out of 10 businesses failed at the first 5 years mainly is due to the business owner could not sales. Sales isn't about the closing the deal, promotions, prices, numbers, services or product. Sales is basically about knowing how to overcome the fear of objections, rejections, and criticism. We all sales, regardless we like it or not. In everyday life, when we talk our friends, parents, colleges, bosses, and even strangest, if you are either pursuing, arguing, demanding, promoting, presenting, teasing, mocking, teaching, questioning or asking, you are in these context of doing sales. When you ask for your mum for pocket money for some reason, you are selling. When you asking your lecturer to give you "A", you are selling. When you demanding to your boss for promotion or increment, you are selling. We all are selling in everyday life, it is part of everyone life. But, only few of us able to take this gifted nature talent to make themselves rich. Sales is your right brain, your emotional strength. It is about the capacity of you to handle critics. The more you able to overcome your negative emotions, fear of critics, the fear of being different, the new world will appear to you. A world that few of us could see. The world of entrepreneur, the world of for everyone to win, the world of earning your freedom - the world of rich!

Dairy Farmer and Cattle Rancher

In agriculture industry, you are either deal with plantation or cattle. When come to cattle, basically, we can think of 2 person, the Cattle rancher and the Dairy Farmer. Their both greatest assets are same - the cattle, but they treat their cattle very differently. The cattle rancher will feed their cattle, make them fat enough and send to the slaughter house. The dairy farmer will feed their cattle, nurture them, and send for milking. Instead of one time harvest, selling off the meat, and start over to raise a new cattle, the dairy farmer make their cattle provide them milk as long as the cattle live. The milk provide steady cashflow to the farmer, the meats provide capital gain to the farmer.

It is the same come to investing. People who invest for capital gain, such as stock, options, futures and derivatives are similar to the cattle rancher. They are like holding a bucket of water. Once the water is full, they consume it and there will be no more. If there is a hole under the bucket, their bucket will never fill with water. However, people who invest for cash flow, they are like the dairy farmer. Instead of holding a bucket of water, they are in building a pipe line. They built the pipe so that the cash can flow. They are also continuously expanding the diameter of the pipe line, so that the cash can flow even faster. If there is a leak on the pipe line, they got the time to plug the leak, while only the speed of the flow is affected. Once the pipeline is constructed, there will be no strap of cash or no cash!

It is very important for investor to know what they are investing for. It is for capital gain or cashflow? If i would investing in cashflow, i do not really care about the price, I will pay the price and show me the cash now!

Become a Big Fish in an Aquarium or Become a Small Fish in the Ocean

Fish that live in the sea, river, lake and your home aquarium are different. Fish live in the aquarium behave differently from fish that live in the lake, the river and the ocean. The fishes that live in aquarium are more passive, weaker and less survival capability compare those which live in the river or sea, even the fish itself come from same family, species and physical aspects. For example, for certain same species of fish, they eat their own eggs for those live in the river, but never happen to those live in the ocean. For physical aspects, fishes in which live in the ocean has stronger defensive system compare for the same size, same species of those live in the river. Fishes that live in the river could not survive in the ocean but this theory does not apply to the all counter part of fishes living in the ocean. Ocean fish has stronger adaptability as because of the ocean environment itself are more competitive, more dangerous compare to its counterpart of river, lake or your home aquarium. Yet, the ocean is much wider and bigger. It is an environment of abundance. It can provide more than enough to every living creatures. But, the river, the lake and the aquarium in your house, the resources for the fish to survive is limited. The lake depends on the rains. The 4 seasons river dry when drought is hit. The aquarium need to be rely on the owners. This mean, the ocean is abundance and independence. The river, lake and aquarium is dependence and limited in resources. Fishes living in the river, lake and aquarium is basically living in the mercy of external factors rather than own survival skills. That's why, fishes living other than ocean, sometimes so desperate to survive, they need to be cannibalism.

The concept apply to businesses and investments world. Some investor would like to stay big in small town, and some investor like to start small in big cities. The small town businesses owner or investors will live in the environment of resources limited. They need to adopt the concept of killing other in order to win as the resources are limited. They so afraid of some day some bigger player will come and wipe them out. They though they in control but basically they out of control. These "big fishes in the aquarium" so afraid of strangest or new players to come to the town. We can see these economy pattern in the small towns, whereby, often the lands, the shops, the farms is belongs to one family business.

On the counter part, some investors (like me^^) would like to start as small fish in the big wild ocean. The ocean itself is abundances. It is create for everyone to win. Businesses owners and investors from big ocean, regardless big or small behave so differently. They welcome new comers as long it is a good deal. The mindset of to be independence-dependence. They know they just need to be more skills, more educated, well-equipped in order to win. It does not take to be a killers or take a loser to make a winner. It just need to be more financially educated. And by knowing "how-to", even start as a small fish, in big ocean, everyone has the chances to win, and win big. Once you able to win in the ocean, you able to win in any kind of situation, circumstances and environment. The true investor will rather be a small fish in the big ocean rather than a big old fish in a small aquarium. Still, the bottom line, the choice is up to you!

*Thanks to my friend again, Mr. Zaidi Abdul Karim for his insight about Fishes.

What is Money?

Money is just an idea. Anything you think of money is true for you. If you think to get money, you need to find a high paid secure job, then that idea will be true to you. If you think, to be rich, it take to be an entrepreneur, that will be also true. So, to be rich, all you need to do is by changing your idea, your thought and your opinion about money.

To understand about money, we need to look back to the history of money. In the early time, money is commodities, i.e. cartels, eggs, seeds. It is called the system barter. People trade to each other by commodities. Farmer will trade a kilo of vegetable to 10 eggs. However, the system does not has a guide line on the exchange to ensure fair trade. And it will be difficult to carry or keep the commodities as such form. Then, shell, gold and silver come into replacement. People started to use precious metals as medium of exchange. People will start carry gold and silver for trading. However, as the these trader started to travel far let said, from Egypt to Italy or France to trade, they are so afraid the gold from being rope.So, these people will store their gold and silver in the safer place let said Egypt and carry piece of paper that represent the gold and silver in storage. People then can carry these piece of paper (receipt of gold & silver in storage) from Egypt to Italy or France to buy goods they want. People who carry these of paper then can go to Egypt to claim the golds and silver.

The paper money continue to be backed the hard assets - golds. Until 1971, new currency system is introduced - fiat currency. In fiat currency, the paper money is not longer backed by hard assets such as gold. In fiat currency, the paper money is back by the government, the IOU . the debt. The fiat currency is a debt back the tax payer from a government. If the government is strong in term of politic, social and economy, the currency is strong. In fiat currency system, the government can print as much money as they want. People need to get themselves into debt to sustain the economy. If people do not get into debt, economy cannot growth. If the people cannot take anymore debt, the economy will contract.

The problem raise when the economy is contract. The Government will do something. The government will give cheap credit by lowering the interest rate and pouring money into the market by simply minting more.This will deplete the value of the currency, or shall we call the inflation. The consequences, the more you save, the more you lose. In today economy, trillion of paper money is printed to support the downsizing of economy. Think about the long term effect of that, will your paper money really worth what you had perceived yesterday? I leave that answer to you.

An Unfair Advantages from Robert Kiyosaki

Assets Protection: Don't Put all the Eggs in the Same Basket

Would you drive a car without insurance? Would you buy a home without insurance? Then why would you buy insurance for your investment? Well, most of us never know that, we can buy insurance for investment. It is one of the key point that distinguish professional investor and average investor. In technical term, insurance for investment is called "covered". Often when we heard investor saying that their position is covered mean they have insurance of their investment against the up and down of the market.

There are basically 2 types of insurance: the one we can buy like for a house, and the one that we need to learn. The insurance that we need to learn can be best explained by the old saying of "do not put all your eggs in the same basket", metaphorically means, assets segregation is essential in our current litigious world.

Entities such as limited liability company (LLC), limited partnership (LP), C-Corporation, S-Corporation are good to be used for assets protection. By owning your assets, let's said your 4-plex, under these entity, you are in this context segregating your asset. To best illustrate the concept, let's us take a look at the following example:

1. If you owned all your assets under your own name, when come to the case of one of your rental property stair case broke down and your tenant had injured, he or she will sue you. In the event of he or she succeed the court case, he or she can claims not just the rental property but your other personal belongings. It is like you are holding all your egg in the same basket, in the event of the basket drop down or has a hole on the bottom, all your eggs are gone!
2. If you owned your assets under different entities, you are making a firewall against any predatory law suit to your personal belongings. The entity will limit your liability to the extend of assets under the entity when come to any court case. The plaintiff does not has the claims access to your other assets at other entities considering the case 1. It means, worst to worst case, you only lose what is under the entity which is being sued. It is like each egg is putting different basket, if one basket is lemon, other egg and basket is not affected.

The bottom line is, that owned nothing under your name, but by legal entity. It is what the riches do, owned nothing but control everything!

Different Class of Investment

There are several type of investment available to investor at the market. Every investor has their own unique niches when come to investment. Some like to play stocks, options and futures. Some like invest in property. Some like invest in business. Different class of investment, require different set of knowledge. Basically there are 3 main categories of investment class: Paper assets, Real Estate and Businesses. To best illustrate the differences of each investment class, I would like to suggest as follow:

1. Paper assets (stocks, mutual fund, unit trust, options and futures): Investing in paper stocks is like go out and dating a girl. If you 2 won't get along, you two will shake hand, good night and never meet again.
2. Real Estate: Investing in Real Estate is like getting married. First, probably you be looking for as much "girls" to date for. And come to the final choice, you be sitting down to have a big signing ceremony of engagement. Well, if the marriage don't get well, getting divorce will be a tedious job to do.
3. Businesses: If investing in Real Estate is like getting married, then investing in business is like getting married with a kid. Your kid can be your biggest liability or assets depend on how you raise and teach. It is the most rewarding among the 3 classes yet the most difficult to deal with.

So choose the asset(s) class that suit you. Well, be fore warn, before getting into any investment, we should invest in ourself first - to be financially literate and smart!

Becoming a Better Investor - The Art of Fishing

Japanese love to fishing. It is part of their social culture. When the Japanese fishing, they always want to catch the big fish. And to catch the big fish, you need the small fish to be bait. But, the interesting about these Japanese is, they didn't buy the small fish from the market. Instead, they buy the small shrimps. I wonder how they able to catch the big fish by those small shrimps, knowing the big fish do not eat the bait. The trick is, they use the small shrimp to catch the small fish, and by then using the small fish to catch the big fish. If you think the way they doing such way is because they want to save money by direct buying small fish from the market, then you are wrong. The main reasons for them to doing this are:

1. The small shrimp are indeed cheaper, yet by using small shrimp to catch the small fish, it horn the fishing skill - you can't catch the small fish, what make you think you can catch the big one. It is more economic by using the cheap shrimp to train how to fish rather than using the expensive small fish.
2. The big fish are smart, the Japanese know they like to eat live fish rather than the dead one. By using the small shrimp to catch the small fish, the Japanese got the live small fish as bait for the big fish. The chances for the big fish to eat the bait greatly increase.

The Japanese know, in the art of fishing, it is not about the bait, or the tools, or the location that destine the outcome. It is the "know how" and "How do". The Japanese is focusing on how to become a better fisher than the fishes.

It apply to the point that I been emphasize: " The sophisticated Investor is focusing on becoming a better investor rather than what investment he or she want to invest in."

*Thanks to my friend Mr. Zaidi Abdul Karim for his knowledge about Japanese fishing

Building Your Keel before Erect Your ship

I am hull structure engineer for shipbuilding. I find it interesting to explain the financial aspects by related to engineering approach.

In ship construction, the most important part is keel. It is the back bone to the ship. The stronger the keel, the bigger the ship can be erected.

Same apply to financial intelligent. Most of people are easily fall into the trap of what investment you should invest rather than what kind of investor they want to become. When come to a bad deal, people tend to blame the investment. But, the truth is, you as the investor is the one who choose the investment. Regardless what you are invested in, if you are a good investor, the deal will work. Contra to that, if the investor him or herself is not competences, the deal will not work.

By hastily choose a investment portfolio to invest in without doing your home work, is like erect a ship without the keel. Imagine, if a ship is built so big, but without a strong keel support, the ship will failed. And it will failed hard. It is why, there are some armature investors who purchase a good well run real estate, but run it to foreclosure. Like the it is said: " an idiot is an idiot regardless what he or she invested in."

By building a strong keel, or metaphorically mean building up your financial literacy, is the key of the success in business world. The ship might failed, but the keel will not, which you can erect a new ship again even though you failed. The true investors focusing on how to become a better investor, the average investor only focusing on money. It is the "how-do" that make the different. Ask yourself if you lost everything you owned today, can you or do you has the confidence to make it back in shortest time? Do you has the "how-do" answer? During early 1900s, when Henry Ford was a Millionaire, people ask him if all his wealth is taken away, his reply was:" no problem, I'll make it back in less than 5 years!" - That's is the power of know "how-do". The power of building your strong keel before erected your ship!

*Acknowledgement for Friend of mine Mr. Zaidi Adbul Karim of his explanation of Shipbuilding