Journey of a Kampung Investor in search of financial freedom
There are many reasons why people fail to achieve financial freedom although many crave to be financially free. Let me share some of the reasons why people often fail in achieving financial freedom.
Came across Financial Rich blog on his blog post titled The Rat Race. The blog title really interest me and without much hesitation spend some time reading on it.
After reading his explanation on the rat race i couldn’t really understand what the main point of the post. Of course i seek some explanation from Financial Rich and now i truly understand what does the rat race means already.
I am pretty sure most of you have seen a rat running on a round track in a pet shop. The rat will start slow and gradually gets faster and then slower down till it runs out on energy.
If you really think deeper, the rat is still on the same point after running from slow to fast then slow till it stops.
So what did the rat tried to tell us? If we are an employee and have to work for money, we will always be at the same point no matter how slow or fast we run. When we just get our first job, our expenses is not big (The rat is warming up and running slowly).
Gradually as we grow older, we will want bigger houses and cars. To get those, we need to work harder as the expenses are growing. (The rat is running fast).
When we retire, we have not much strength and energy to work anymore. (The rat is gradually running slower and slower).
If you really realize, we haven’t really improve ourselves if we work for people as we will be still at the same point from where we started without realizing it. We huff and puff in the end we are still at the starting point!
So what we should do is get out of the rat race. To run out of the track, one have to be financially free. It is not easy if you want to reach financial freedom. By working a daily 9 to 5 job is not the answer.
This concept according to Financial Rich, he got it from Robert T.Kiyosaki, the author of Rich Dad and Poor Dad. I have heard of him before but hadn’t got the time to read his books yet.
Anyway are you still on the rat race like most of us? I will be hoping to jump out from that race soon. Wish me luck. I can do it so can you!
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That is the sad truth about life. Majority people only will respect you if you have money. When you have no money, people will look at you in a different way or manner.
I am sure you have seen many incidents where rich people will get special treatment from others. Even when the rich farts, people will say that the fragrance from their fart is good in smell. Isn’t that funny?
When you are rich people will do anything for you. You just need to snap your fingers. Of course those hyenas are not doing it for free as they are expecting something in return from you. No free lunch in this world remember?
This is the face of life where you can never run away from. Most people measure people by what car you drive, how big is your house or how many factories do you have. Money is used to measure almost everything instead of the heart.
Anyway, that’s how most people think but i beg to differ. Maybe like most of my friends call me, i am naive and not well exposed to the world yet.
Not only the public look at how much money you have. Even family members tend to sway to look and measure their own people on how much money they have. I am not surprised at all this because even my relatives look at me on how much money i have or how well i am doing.
Of course my parents and sister don’t look at me like that. The family members i mean are like my cousins, nephews, aunties, uncles and etc. Of course not all of them but there are some like that.
It does not mean that i am not working outside i am in a bad financial state. That’s how most of the people conclude about me.
Luckily my closest family members and close buddies didn’t make such assumption and respect me as a person on how much money i have. They respect and love me for the person i am. That’s one thing i really appreciate and will always remember.
Conclusion
We can’t run away from this fact that money plays an important role in how people look at you in this modern and realistic world. Pick your friends wisely and appreciate your family members that support you all the way.
Friends and families that looked at money first rather then your person you must know how to draw a line on how much you be friend with them. Choose wisely and never ever let money blind you over!
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How much do Malaysians spend? Came across this interesting title when i was browsing through Raja Petra’s Malaysia Today.
The video is about How much do Malaysians spend? At first when i saw the title, i was quite curious on what is it all about as you all know Kampung Investor is a investment blog. So the title is really interesting for my blog.
I will put this post on the Wealth Management and Ramblings categories and enjoy the video! ^^
Ever wondered how you can make your money last longer? It is essential to prolong the lifespan of you money during tougher times especially during recession. In short, you should make your money stay with you longer in down times.
Having a stable income
Your income is ample to cover those basic expenses for your family. Retrenchment is a no no as by loosing your job you will loose your income. When you loose your stable income, you have to dig from your reserves.
Income growth beating inflation
Pray that your company pays you an increament and be thankful if your increament beats the inflation. If not, you have to spend more as prices of goods increases.
Liquidity in having cash
You will never know when the storm will come, just like the recession. During stormy times, the faster you can get on hold to cash, the longer you will survive. Imagine being out of work for 6 months and having no access to cash. Nobody pays you by counting sheeps!
Don’t spend unnecsarily
Do not buy things or goods that is not important. Basic expenses should be given priority. Keep your ego and lust for spending at bay. Your Louis Vuitton bags cant help you when you are hungry. Your new Nike shoes couldn’t help whenever you are thristy. So spend wisely.
Have enough protection
Its important to have adequate protection especially on the health and life section. In short, having a insurance policy which is ample to cushion you when you are not able to work when mishaps happen. You wouldn’t want to be digging on your savings or your emergency funds just to fix your health during bad times right?
Let your money stay longer by your side during touch times. You will know the importance of it when facing an economic down turn.
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We often hear people saying we should buy a house because it’s an asset. My dad used to tell me that when i was young and is still telling me now that buying a house is an asset not a liability.
Maybe when i was younger, i would agree with my dad’s statement but not now. A house is a liability unless it’s generating income for the property owner.
Why i say buying a house is a liability? It’s plain simple. I will just do a simple case study on it.
Case I
Mr. Ali buys a house. The house is use as a residential house where Mr. Ali stays in the house with his family. Most people will take a house loan of around 20 years.
As we all know, a residential house does not generate any income to Mr. Ali. He is paying his loan, eletricity bills, water bills and so on. In short, he is not making any money from his house.
How could we call the house bought by Mr. Ali as an asset?
Case II
James bought a house. James does not stay in the house but is renting his house away to others. With this, James is generating income and making money from the purchase of his house.
With this, we can say that James bought the house as an asset and not liability.
Conclusion
Buying a house can be an asset in a certain prospect or vice versa. In this scenario, Case I is a case where a house is a liability whereas Case II is a case where buying a house is an asset.
So do you all agree with my statements? Comments are welcome!
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To be an investor, it’s crucial to know your risk tolerance. Risk tolerance is the amount of uncertainty that an investor can accept or handle to a drastic change in the value of your investments.
There are basically 4 categories of risk tolerance for investors.
It is everybody’s dream to be financially free. Who does not want to be financially free? When people reaches financial freedom, most problems involving money can be solved.
This will definitely kill off those headaches of money not enough every end of the month or have to eat bread for 15 days in a month just to settle debts.
Most people grumbles and whines usually during middle towards the end of the month. The number one reason for their complain is money not enough. Even my very best friends face such troubles.
What people usually do during the period when money not enough? They spend less. Cutting on entertainment and household expenses are some of the method used when money not enough.
Buying a car - Asset or Liability
My dad used to tell me that buying a car is always a liability. The main reason my dad made the statement ‘Aiyoh, buy car today tomorrow the price drop already’. Fair enough, make sense.
After some further thinking, i think that my dad statement is right but not absolutely right. Buying a car can be an asset or liability. Depending on how you look at it or what you do with it.
Ill give examples on what cases buying a car is an asset and when buying a car is a liability.
