Whether you are an employer or employee, this makes a good read. They say – the fool makes the same mistakes and never learns, smart man made the mistakes and learn from it while the wise man learns from others’ mistakes. The below are the words from Millionaire Investor Program founder, Ken Chee (the first part) and Lim Dershing, an active angel investor in digital media startups in SEA in his article at DrWealth (second part). I am not affiliated to the products or services offered at the time of this writing, and I am not promoting them. It is for the sole purpose of sharing so that more people can “learn from certain experiences, have more choices in life and hence made a different decision to improve their life.”
In Ken Chee’s words
1. I have stressed in all my programs and seminars that it is an illusion if any average employee think that they can retire based on a salary. In fact, there is no such thing as job security anymore especially after the world is connected via internet after 1997.
I have seen increasingly more professional executives being retrenched at the peak of their career (late 30s and early 40s) and many could not find a similar good paying job as compared to their last retrenched one.
And very often, these PMET group are trapped in the mountain of commitments and debts such as mortgages, car loans, credit cards bills, insurance, children education fee, parents medical bills.
Like swans in a big pond, many of them look good on the surface but paddle like mad below the water struggling to stay afloat.
Even if some of them managed to keep their job all the way to 65 years, they will soon discover that they cannot retire based on their saving or EPF because the “invisible thief”; Inflation, has already eroded their purchasing power 30-40 years down the road. In a nutshell, they are screwed and discovered they need to continue working in order to have a decent meal. But what kind of job can you get at age 65 regardless your qualification and experience?
The solution? Twin engines to financial freedom: Business and Investing. The former generates cash flow, the latter compounds your cash flow while you sleep.
It is imperative to have another source of income apart from your day time job. Learn a new skill, give tuition or pick up internet marketing knowledge and do something. It is better to do something productive rather than to sit in front of your couch and watch TV or spending mindless hours playing candy crush.
However, regardless whether you are an Entrepreneur, Self Employed or Employee, there is ONE THING YOU MUST DO; Invest and you must LEARN to invest well because it will help you to out beat inflation. But if you learn the Right Investing Knowledge with the Right Mentors, Right Network and Take Massive Action, You will Be Rich, Very Rich.
It is also important to note that sustainable investing required cash flow. Hence, you must have good money management habit, save well from your business profit or pay check while spending less, giving you the bullets to invest. Before you start a business or start to invest, one of the best way to reduce your risk; Get the Right Knowledge first.
2. How to Choose the Right Business or Investing Program to learn? But before that, why must you pay for knowledge?
It is sad to know that many unsuccessful people have these mindsets (I used to think like that 13 years ago until I went to programs and unchained all these limiting beliefs. My life soar, become successful and happy),
A) Why must I pay to get knowledge?
B) Those who can’t do, teach. Therefore, their teaching can’t be good.
First, knowledge is never free. Good Education requires energy and resources. We need money to build schools, pay electricity bills, hired good administrators, teachers and logistic staff members to run it.
It is a huge investment to maintain an education eco-system. But we have been spoilt by our governments especially in countries where education is heavily subsidized. This conditioned us to think that “Knowledge is Free”. It is not. Don’t believe? Just enrolled into any good private colleges or international schools and you know the fee difference.
This also apply to your “After School” education because private training providers are not subsidized by governments and there are bills to pay, people to feed. And I love this quote from Mark Twain, “I have never let my schooling interfere with my education”. The day you stop learning and growing is the day you die spiritually, mentally, emotionally and financially.
Second, if you are one of those who believe in “those who can’t do, teach”, then I must say you have a scarcity mentality. Why can’t good knowledge be shared commercially? What’s wrong with masters, trainers, speakers getting richer because they impact thousands, millions lives with Integrity and Passionate about what they do? (Provided they have must proven track record)
And many trainers add massive value as compared to what they charge.
When you start to see Good Quality Education with Proven Track Record as an investment rather than cost, your life will start to transform. Mine did and it went supersonic.
3. Know what you are working on or buying after attending the program.
I know some property training programs often introduce property projects to their students. Personally, I have made good return buying great undervalued projects after attending some property programs 4 years ago. But I went in with my eyes wide open, exercise independent thinking and often doing my own research knowing the different risks involved. How about you?
In fact, I have also walked away from many “property opportunities” in these networks. Some of these trainers intention are good, often wanting to benefit their students with great bulk discount they got from developers. But be careful because as much as their intention are sincere, they can be sincerely wrong at times especially in the area of due diligence.
And some trainer’s ethic are questionable, pushing over-priced properties to their own student network just to earn high commission or the price difference they got from overseas developers. Thus making themselves rich first at the expense of their students carrying the “crying babies” for years to come.
Do note that physical property is an illiquid asset class and require one to have great holding power. It just takes one bad property “investment” to ruin your financial life if you are average employee. It becomes worse when it comes at the point when you are retrenched.
Be careful who you learn from and Invest Well.
No doubt that one should live in abundance and happiness. If you can afford it, go for it. But it would extremely unwise to exchange your time freedom and happiness just to pay mortgages, loans and credit bills in order to look ‘good’. Financial freedom is not just about having money, it is about freedom of choice. Exercise your choice wisely and do not let material possession to define who you truly are.
I finally understood why Warren Buffett stayed in the same house in an average neighborhood for the past 50 years.
From Lim Dershing’s article
Most people thought that because I started a business, sold it and because I make private investments that there is something special or unique about how I invest my assets. Let me be the first to say that the traits required to be a good investor are very different from those that entrepreneurs have. And i think I am still learning from the market and about myself all the time.
By default, entrepreneurs are high risk takers who control the risk by knowing everything there is to know about their business and industry. We deep dive into every aspect of our work so that we are able to control risk and maximize our returns. Even when our business has grown a lot, we continue to invest more into it and take further risk by going overseas or into adjacent markets. Frequently, the company we own is most of our net worth.
Furthermore, Entrepreneurs are also highly passionate people and you will hear many successful ones who advocate a combination of gut and metrics to make major decisions.
Good investors on the other hand, diversify. They minimize risk by not concentrating in one area and by proper portfolio allocation. And it is also humanly impossible for them to know with any depth any particular industry which they are invested in. They frequently outsource and use professional managers to help manage their money. Decisions are made based on numerical allocations and frequently a fixed methodology for deciding when to buy or sell. Investors who employ their gut tend not to do well.
My personal experience is that the above descriptions are totally true and one can lose a fair sum of money if one does not understand the very different traits required. I lost close S$100K or 100% of portfolio during the 2000 dot com crash because I had over-concentrated my positions in technology stocks. Then more recently in 2010, I experimented with options without clear knowledge of how volatile they can be and lost another S$100K on these simply because I could not cut my losses and applied the dogged perseverance entrepreneurship trait to options!
From the above lessons, I learned that it is best for me and perhaps for entrepreneurs like me to stick to passive portfolio decisions and outsource the active selection decisions to good fund managers.
What this means is that we should make the decision on how much to keep in cash, how much to invest in stocks, fixed income and properties. But when it comes to the actual stock or fixed income picks, either buy ETFs which mirror the market or buy a few different mutual funds. Use dollar cost averaging strategies if we get more cash and rebalance the portfolio periodically every 3 to 6 months.
If the urge to take risk or to make decisions is too strong and if we have an interest in trading, then set aside a small percentage of assets – say 5% to make speculative trades on equities, options or bonds. The above philosophy has worked well for me and I hope it will work readers too.
And this is an excerpt from Focus Malaysia featuring Yap Ming Hui, reinforcing the point here: