This is Philip here. As covid-19 wanes and everyone is starting from different points of the race track, here is some advice from an old man on how he did things and how you can do it as well.
Great mental models here from ramsey and getting to the key points immediately and asking the right questions.
The key thing to remember is to get out of debt
And how to do it is by maximizing your best options, getting multiple income streams and generating the most you can with the time you have. I remember being in this situation as little as 20+ years ago
Wonderful advise on how to gain wealth Is in solving problems by breaking things into manageable points.
Find the core issues and solve it in this way. I love how ramsey asks the right questions and puts things into the right frame of thought. Useful mental model, Especially for those who are less financially technical. Same goes with picking stock investments
The most important thing we have is time. So the best way out is to pick investments which have multi year growth outlooks and trade/invest based on that
Same mental model actually even in investing.
Find companies that are constantly minimizing their costs and debt and maximizing the returns.
The exceptional ones are those doing so well that they have good debt borrowing to grow their business instead of surviving
Find those type of companies who understand the concept of time and maximizing time and leveraging resources, human, capital and cooperations
The best companies do what I call my infamous pikachu theory exceptionally well. Adding new capabilities within their scope of competency.
Like a race car driver going up the ranks.
From Indy car racing to formula 3 to formula 1, to starting on constructors division, then designing own cars like Bruce mclaren or like elon musk starting from a roadster to tesla s then powerwall to solar tiles, to ai driving, to doing tesla HVAC
Adding new capabilities!
For me it was as a graduate to learning how to be site electrical engineer to adding tnb license as a chargeman, to adding PE, to doing elv as a scada designer, to doing mechanical pumps systems, to doing civil construction to doing MLM (amway), from contracting to consulting to farmer to stock picker
Find your own way.
But learn what is important in life
Like this poor kid, making 10k a year with 20k in medical bills and credit card debt. It's definitely not a knock on this fellow, but playing life on difficult mode is not how I would like to play a game that you can only play once.
My advice to you young ones.... Winning the race from starting line is hard enough without trying to compound it by running 10 feet behind the starting line.
You give yourself very few outs.
And like a game of poker, you should never be playing every single have dealt.
First paycheck - KTV. Bad choice( learn from me).
First bonus - buy a sportscar. I learned this lesson early luckily. ( I bought my first inline straight six at the age of 58). Compound the money first, then you can do whatever you want
First credit card - max it. Very very VERY BAD choice. Debt is very very addictive thing. Something which I learned... The hard way.
First leverage - margin loans on options and warrants. NO. Remember starting 10 feet on the track behind everyone else? Don't do it.
Buying houses - in today's economy... Always look at supply versus demand. If the lease is cheaper than the loan, then don't even bother buying. How to look at it? If a 30year lease for a 1 million condo is charging you 5-7k a month. Do the math, if you can rent for 2.5-3k, you can keep 4k a month in fixed deposit or epf or some savings plan consistently... Then why buy that house? Always structure any long term debt in terms of time or in this case... OPPORTUNITY COST.
Insurance? Look at it from a time point of view
If you could buy your insurance early when you were 20+, then DO IT!
The cost to premiums ratio will always be excellent early on. Later on in life in your 30s and 40s... The premiums and costs will rise exponentially, making it probably better for you to just either die or go to gov hospital. I know this because I used to sell part time life insurance as well. Just kidding.
In any case,
As a consultant... The most important thing we look into any development is a MASTER PLAN
Something that stretches 15-20 years. This will make for a very good development with stages and growth that will bring you long term wealth
Where do you want to be and do that far down the road
If you can't plan and visualize how you want your life to be? If you are living day to day and paycheck to paycheck? You will forever be chasing your tail round and round.
in the end, the easiest message to share on how to be rich?
DO SIMPLE THINGS WHICH MAXIMIZE YOUR RETURN OVER TIME, WITH THE LEAST AMOUNT OF RISK. THEN COMPOUND IT OVER AND OVER LONG TERM.
Good morning Philip, True wealth is not of the pocket, but of the heart and of the mind. -Kevin Gates
I beg to differ with your view: Quote, “Buying houses - in today's economy... Always look at supply versus demand. If the lease is cheaper than the loan, then don't even bother buying. How to look at it? If a 30year lease for a 1 million condo is charging you 5-7k a month. Do the math, if you can rent for 2.5-3k, you can keep 4k a month in fixed deposit or epf or some savings plan consistently... Then why buy that house? Always structure any long term debt in terms of time or in this case... OPPORTUNITY COST” unquote
Why rent when you can buy? Perhaps the better option as per above example is buy cheaper unit costing you 0.5 million instead of 1 million, your loan payment of 2.5-3K a month and you still can have saving of 4k a month.
This is very very true. For those who have never been in great debt, and borrowing huge amount of money with interest payments that seem never ending, rich people look at poor people as if it is their fault that they are poor.
The biggest issue with poverty is not the lack of mindset, but the simple lack of cash.
Much easier to have a good mindset if you are not struggling to make ends meet, have a steady job and don't have to support a foreign wife with their entire family asking for money every month.
Try having that mindset when you are working 18 hours a day, making minimum wage and having to pay debt payments every week.
Very very hard.
scenery This apply only to ppl who are already rich...
True wealth is not of the pocket, but of the heart and of the mind. -Kevin Gates 09/04/2021 8:46 AM
You can say ask that because even by your remark you are already starting 5 meter in front of the starting line.
Who paid for your education in UM? Family? Government? Somebody did and obviously not you.
Who gave you free schooling? Did you have to pay for it? Father mother? Government?
Are you going to be the first to tell me that ALL your workers can be general manager of the company and earn millions of ringgit? And use epf to pay cash for houses?
The simple answer is no.
Those who were leveraging and taking long term bank loans to buy those houses at high prices thinking of using it as investment and rent out etc, if they lost their job during this epidemic and no more rental how?
Who pays? If cannot pay how? Default payment.
So, try thinking in terms of general population, not only your own self with your big semi D house costing you 1 million.
Why do you need 2 houses anyway? You can only sleep in one at night.
Sslee I bought my first house costing me 150K with 20 years bank loan. During Asian financial crisis of 1997 when interest sky rocket I withdraw my EPF to pay off the loan.
I bought my upgraded second house a semi D house in Setia Eco park costing me about 1 million by cash. 09/04/2021 9:00 AM
Those who are tied down by long term housing loans with no flexibility to put more money into their business/investment... Their so called "asset" in housing and apartments etc... Quickly become a LIABILITY, especially if you no longer have a job and no tenants and no backup plan to dip into to pay your monthly installments.
So, always THINK about what you are buying, no matter what it is, warrants or stocks or houses etc.
Anyone who tells you to blindly buy a house as an investment should be slapped.
The main thing is, only the first house that you use and stay in is an asset. Because your comfort and enjoyment after working late at night to come into a place you call home cannot be simplified into a price value.
Anything after that we will always need to value as a risk/reward, opportunity cost lost and gained, no matter how enticing it can be.
I for one only have 1 house and 1 shoplot in ss15, and that is more than enough.
I come from poor family and every exam break I had to take up odd jobs to earn some money. My father support me thro' my UM 4 years study with RM 3K per year.
My starting pay was RM 1,000 and I had to send back RM 250 to my parent.
What I am trying to say is, it was never my aim to be rich as I take it a step at a time to do my job well. I have many people, I am grateful and thankfull for giving me a helping hand and in return I am doing my best to help my people to do their job well and get the promotion they deserved.
Yes i started as a despatch boy earning rm 180 a month....but by working hard & savings money....venturing into business and subsequently investment....now i have build up my property portfolio over 15 units with fully payoff loan & getting permanent rental from it.
In addition my share portfolio worth few million...are this are done thru diligent investment & savings strategy loh!!
I can say anyone can make it to becoming rich.....if they exercise sound investment approach and save diligently without taking excessive risk loh!!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....