RANCANG KEWANGAN

Tips On Budgetting; Know Your Basic

Posted on 9:54 AM No Comments
Labels: Budgetting, Financial Planning

Nowadays prices of commodities is increasing day by day and with the crisis of cooking oil ‘shortage’ in market recently is a clue for its’ price hike. Not to mention about our hot topic at ‘kedai kopi’ – the petroleum price hike. Everybody know the situation is, so the question is how long can government hold the existing price? Most likely it would not be imposed before the election. With the price hike it may affect the way we use our income so in our part it is proper to make our very own strategic plan on maximizing financial resources and to make sure every cents earned is well spent.

The following tips are basically on how we can help ourselves manage our finances and assume a new outlook to become responsible in our spending habit.

First, coordinate our finances and list of expenditures that may affect the way we use our income to empower us on economic stability as a working individual. Our source of income, lifestyle, spending habits, current job, cost of living, payables and loans determines our level of budgeting needs. Starting to take note of our finances is one sure way of becoming successful in a field of self-fulfillment and success.

Second, do not spend more than we earn. It’s a very basic financial planning tool. There is always truth to this phrase for us cannot live in a world where we consume more than what we can produce. Live wisely!

Third, know our wants and needs. Please limit our spending on something which we are not in dire need of. No need to buy a new car because the old one still can run smoothly and more important is the hire purchase and hanky panky from finance company is over.

Fourth, always keeping a list. Making your own budget list is vital to your success to becoming prudent. A wise buyer needs to consider the amount of a certain commodity and how will it impact his life as an individual.

Fifth, always treat math as our partner. Try to compare prices across our current location for the price of a range of grocery and household items we need in a day-to-day basis. Do the entire math in our purchasing needs.

Sixth, save as much as we can in an item we are trying to buy. Look at Chinese businessmen; they exercise an effective buying technique. They save as much as they can and usually purchase in bulk to increase their revenue on the item they plan on selling as well.

A bad consumer would not care about what is being purchased as long as he or she has money to buy for them. Unless you are someone who has a considerable amount of wealth and income resources, you can not afford to disregard this recommendation and go ahead with your practice.

So guys, make your move now.

Rules In Investing

Posted on 9:16 AM No Comments
Labels: Financial Planning, Investment

What Does Investing Mean To You?

What comes in to your mind when you mention the word investing? Does it mean, putting your money in insurance, mutual funds, the stock market or even high-yield investments?

Other people might only think about investing when they are about to die and they haven’t left anything for their offspring. Some even shiver when they hear the word, often claiming that they have no money to invest or feel that is too complicated a subject to even discuss about.

Many people even invest heavily in health supplements, personal trainers and beauticians to make themselves live longer, healthier or even look younger! Imagine the advertising budget for beauty companies nowadays.

All these are legitimate concerns when it comes to investing, but I am talking about the most important investment a person can make in his lifetime.

Invest in YOURSELF

The most important and No.1 rule is “Invest in Yourself” – if you don’t, who else will?

Your parents will only invest in your education only until you leave college. But that is just the basic necessities provided and does not teach you important lessons about financial education.

Would you depend on colleges or universities to teach you how to make money? Most colleges only teach you skills so you can earn money working for other people. How about business school? Honestly, if business lecturers are such experts at business, why are they still lecturing there instead of making a fortune in business ventures?

Would your boss teach you how to succeed in business so that one day, you will be in his position?

YOU and ONLY YOU have to be proactive enough to take that responsibility

You see, when you invest in yourself, it means taking on the importance of educating yourself. Education not in the academic or technical sense, though they are necessary skills to be developed in life. Our education doesn’t stop at college.

For most working adults, their education enters retardation stage after they leave college. They stop learning and therefore they stop growing. They only grow sideways from eating too much pizzas or take-out during their busy lunch breaks.

We know that IQ is important right? But why aren’t the most intelligent people in the world the richest people in the world? There are many accountants and financial planners rushing to their cars every evening trying to beat the after work traffic congestions! They are not rich!

How about EQ or Emotional quotient? Do working hard, having a great attitude and a positive mindset solve our financial situation? These are important when running a business, but let me illustrate:

If you are driving from KL to JB using the wrong road map, you won’t get to your destination no matter how fast you drive your car (working hard)! You can work harder, but you would only get to the wrong destination faster! You may have the best attitude in the world or the most positive mindset, but you still won’t get to JB(although the journey wouldn’t bother you since you are feeling positive about it)

Choose Your Wealth Building Models

Posted on 8:54 AM No Comments
Labels: Financial Planning, Money Management, Motivation

Everyone wants to make more money, but people are generally split into two categories:

Those who bring results after they are promised wealth first
Or
Those who bring the results first, then are rewarded by others afterwards

Let’s explore the two groups in depth.

Those who only move their butts after promised big fat paychecks are more like employees, freshmen, or mercenaries.

There is no right or no wrong with this kind of thinking, but consider: you are once again, trading your precious time for money. Instead of investing your time in an ASSET that generates money, you spend your time working on something that is short term, limited wealth, and does not give you income long after you have stopped working.

Consider also, that this kind of short term vision will only produce limited or temporary results at best. Ever seen a security guard asleep at work when the boss is not around?

Furthermore, the part where our emotions get the better of us is when we allow our lives to be run by chasing the dollar. It is evident whenever an employee is offered a higher salary, more medical benefits and longer vacations, that their heart starts pumping faster.

A higher salary doesn’t mean less financial problems. On the contrary when your income goes up, your commitments and your time spent in your company increases. The greater your salary, the weaker your position because if your boss is paying you a 5 figure income and calls for an emergency meeting, you had better rush over to the office even if you are halfway to your holiday vacation!

I think the best definition of an employee/boss relationship can be summed up as this.

An employee will only do the bare minimum to keep the boss from firing them and a boss will only pay the bare minimum to keep an employee from leaving.

Now let’s explore the other group.

There are many creative people, inventors, entrepreneurs, and business leaders who fall into this category.

An entrepreneur is someone who always has good ideas.

The first obstacle we need to overcome if we want to succeed in the second group is to stop working for money. What does this mean? Isn’t making money part and parcel of having good financial IQ?

What I mean by ‘stop working for money’ is not working for free. Rather, it means work so as to gain the necessary skills you need to be a successful entrepreneur (or inventor, investor). Allow me to illustrate:

If you lack the contacts for running a business, where would the best place be to look for contacts? Of course, your competitor’s customers.

How about product knowledge? Then work with a company that will teach you all the ins and outs of the tricks of the trade.

Not familiar with the production line of a factory? Work in one! Learn the ropes or manage the factory workers.

Fear of talking to people? Get a sales job where you will be forced to talk to lots of people. It is also a great way to develop perseverance!

Don’t you know that the best education you can get is in real life! Not at a lecture hall.

The bottom-line is: not everybody has what it takes to succeed as an entrepreneur!

It is not that easy. Many lack the perseverance, the creative mindset, the financial capabilities or the necessary people to get the job done and usually give up too early before any results can be seen! The fastest way to get those skills to succeed is to learn them hands on and you even get paid in the process! Don’t get absorbed with how much you are paid.

When Donald Trump was selecting candidates in The Apprentice, their first task was to go to the streets and sell lemonade! Many would find it a degrading task. But to The Donald, it was very important: If you can’t even do something as simple as sell lemonade, how on earth can you handle a daunting task like running the Trump Empire?

Again, let me emphasize:

Would you trade time for short term money? (Money stops coming in when you stop)
OR
Trade time and money for a long term asset that generates you income? (Even long after you have stopped)

God created us with a brain. All we need to do is look around us and observe problems to overcome because every problem is an opportunity in disguise.

It is all up to you. You may or may not see the results in the short term, but by using our brains and the resources around us, we can create true value that others are willing to pay for what we have to offer.

Awareness Before Change & Correlation Between Time And Money

Posted on 1:56 PM No Comments
Labels: Money Management, Motivation

Bila Nak Berubah Ni?

Now don’t get me wrong when I said “as long as you work for money, you are enslaved by it!” before; I’m not banging on working at a job (I worked at one before I decide to become an Entrepreneur).

But let’s face it: our needs today are growing more than ever before in any period of history. Oil & gas go up, tolls go up, prices go up but salaries don’t making very little pension to show for our (not me hopefully) decades of years of work efforts.

And there is no guessing to how many people really, really hate the unhealthy, hectic lifestyle of getting up early, coping with stress for most parts of the day, join traffic jams, spend more money and time in traveling, enjoy very little rest, and REPEAT the viscous cycle. (not me anymore).

Definitely doesn’t paint a nice financial and lifestyle picture, huh?

The Biggest step to change is to be aware of the problem. Awareness before change (or ABC for short) is necessary if you are to make any changes in life to start taking control of your financial life and then get out of the rat race.

We need the awareness to know what state we are in so we know where we are going. For beginning, you have to determine which one of the four categories below are you CURRENTLY in and which one category do you desire to be in TOMORROW.

Correlation Between Time and Money

There are generally 4 types of people in the world:

1) No time, and no money.

Most employees fall into the category. You can’t go shopping on a Tuesday afternoon or fire your boss whenever you like. Most employees can’t even save money in their pension to last 3 years!

2) No time, lots of money.

Self-employed, professionals and small business owners are in this category. They are slightly better off than the employee because they earn more, but they have to work even harder than employees to keep up with the diminishing profit margins, competition and servicing their customers.

3) Got time, no money.

A lot of farmers, villagers, college dropouts or bums have lots of time but no money. Maybe ignorance is bliss, but without a stable source of income, how long can you last many days forward?

4) Got time, and lots of money.

It is the category that big business owners, landlords, investors are in. Imagine, not having to work for money, but having money to work for you by investing them and earning profits by using your money to make money.

Money Management, What is Money...

Posted on 1:40 PM No Comments
Labels: Money Management

What is Money? Duit, Wang, Fulus, Ongkos, Pitih, Pitih Pitiihhhhh.....

You see, there are many ideas of what people think money is.

Some say it is a form of measurement.

Yes, but a measurement of what? Wealth? In the olden days, people measured wealth by how many cows, sheep and horses they had. But do people measure wealth today by your cows and sheep? How about slaves? Was there a time where manpower is considered a hot commodity? Are slaves worth anything today? Are your dollar bills sitting in the bank going to protect you if a recession strikes the country? No, wealth can not be measured by the dollar bill.

Some say it is a form of power.

Yes, money can give you power, but if you are stuck on a desert island forever with a trillion dollars, will that money mean squat to you? If someone offered you water and a helicopter to fly out of there, you would trade all your money in a split second, so money is not an accurate measurement of power – it heavily depends on how and wisely you use it (hint!).

Many believe it is the root of all evil… and several others take on this belief without much questioning.

Now, now, now… money is NOT the root of all evil (otherwise, why do you think mosques still accept monetary donation and charity?). The love of the money is the root of all evil. Remember, money is an excellent servant but it is a terrible master. If you are trading your life away for the dollar, money then has power over your time and life.

And unless you have proper financial intelligence, the lack of money can spawn a lot of evil thinking and negative mindset as observed in primarily cheats, thieves, criminals, breakups, freeloaders, cheapskates, and more to name.

But what is money, really?

Money is an idea, backed by confidence

While money has naturally been developed by merchants in the older days to replace the questionable barter system, money today is literally invented by the rich and wealthy.

Entrepreneurs are willing to part with their money to buy other people’s time. Other people’s time i.e. employees and self-employed people becomes their employer’s asset and the employers this priceless resource to go on to create more wealth for themselves.

And here’s the thing: as long as you work for money, you are enslaved by it! 80% - 90% of the populations today are being enslaved involuntarily. Read my post about Insanity.

What we don’t realize is that there is a part of our soul that cannot be bought at whatever price. Would you chop off your little finger if your boss offered you 24 months of your salary immediately? You and I know we are worth more than that. But when you hear of cases of people selling their body parts for cash in some countries, we can have our eyeballs pop out of our eye sockets.

On the other hand, we occasionally DO sell out a part of ourselves for money like a donkey and a carrot.

Insanity

Posted on 1:31 PM No Comments
Labels: Financial Planning, Motivation

Fitrah Manusia & Lumrah Kehidupan

Naturally, most if not all of us want and crave for something better. It is all part of us if we want a bigger car, a better house, buying good things for the family. We keep hoping for more but, in order to get what you don’t have, you have got to do something you have never done before.

That simply means:

Doing the SAME thing over and over again YET expecting DIFFERENT results!

As an employee, you can’t stay at the same job forever and hope that a miracle will happen and your boss will suddenly give you a raise. You will be lucky that there is no downsizing in your company. Switching to another company will only provide a short term solution to a long term problem.

Sure, you can take up a second or even third job, but do you have enough hours and stamina in a day to sustain it?

The bottom-line: Trading time for money isn’t wise financial sense in the long term. You keep on increasing the hours just to win the rat race, but in the end of the day, you are still a rat on the mill!

Increasing your wages only puts you in a higher buying power. Your salaries increase but so does your expenses on your house and car. How will you invest in yourself when all the time you spend working for a company to please your boss who want to please your big boss, working for the government to please your minister whom hoping to be a senior minister and working for the bank paying off your house and car?

What if you fall sick and can’t work tomorrow? Will your company take care of you? Will the government take care of your family? I highly doubt so.

So isn’t it time you take care of your finances more seriously?

Why Financial Planning

Posted on 1:10 PM No Comments
Labels: Budgetting, Financial Planning, Money Management

Nowadays financial pressures are a leading cause in all forms of mental and physical sickness from depression and stress to substance abuse and suicide. There are hundreds of reasons why we are stuck in financial problem. It’s a result from our bad attitude about money, wrong money management or living in debt to pursue a lifestyle of materialism as the rich just to name a few. The only simple and logical answer for this is you don’t have a proper financial planning. Trust me.

Our attitude about money and the way we handle it serves as an excellent indicator of our level of commitment in financial planning. Money can buy things and experiences that bring temporary pleasure, but it can never buy the peace and contentment that are the by-products of freedom.

Anyone can have financial order in their lives by simply deciding to live a disciplined life in accordance with a wise budget plan. By following a logical step-by-step plan, minimizing debt, and being cautious of emotional and impulsive spending, anyone can get control of his finances.

Every family needs a written plan (budget) for how they are going to spend their money, especially those who think they don't. It is impossible for you to efficiently manage your finances without a written plan.

We must responsible to provide safety for our family. Planning is a critical part of that process. Although the leader is responsible, it is vitally important that the decisions required to be made in the development of the budget plan be made by those who are going to have a part in making the plan work. We can relate building a tower to living one month; one year; etc.

Without a written plan, the outcome of our months, years, or our entire life is at best, a guess. A Plans must be flexible but visible. That is the rule.

A written financial plan for the family (budget), allows you to be able to carefully consider and track the “goings” of your money. Without a written plan you become a “responder”; one who reacts rather than controls (Those who fail to plan are planning to fail).

Again remember this, to make sure the plan working; those who involved in its design should have an active part in its executing.