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Money Tips Volume 4

How to attract money into your life

by KCLau http://KCLau.com

The electronic version of this book can be downloaded free of charge. Feel free to republish excerpts from this book, as long as you link back to http://KCLau.com for attribution. And it’s also okay to share this ebook in its entirety with anyone you think might be interested. In fact, I’d be delighted.

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Published by KCLau Dot Com Sdn. Bhd. Email: [email protected] Website: https://KCLau.com Copyright © 2018 by KCLau All rights reserved. 2nd Edition 7 March 2018 The strategies outlined in this book may not be suitable for every individual and are not guaranteed or warranted, whether expressed or implied, to produce any particular results. The advice, ideas and suggestions are written as a general guide and specific professional advice may be necessary. No warranty (whether expressed or implied) is made with respect to the accuracy, adequacy, reliability, suitability, applicability or completeness of the information contained herein, and both the author and the publisher specifically disclaim any responsibility or liability for any damages, lost profits, losses or risks, whether personal or otherwise, which is incurred as a consequence, whether directly or indirectly, of the use and application of any contents of this book.


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A Note to the Reader

This book is a compilation of the articles and ideas I’ve published online, on my website, or on other people’s website, newspaper, magazines or other types of publication. You might have come across some of the ideas in this book. The purpose of making this book is to give you the convenience to access my writing in a more organised format. That’s why I’ve made the electronic version freely downloadable. Meanwhile, the physical copy is not available, sorry guys :) Also for your convenience, I’ve made the size of this book small enough to fit on your mobile device screen, so that you don’t have to do excessive horizontal scrolling to read the pages. I will be updating this book from time to time since I am writing new content on a regular basis. I urge you to subscribe to my e-mailing list in order not to miss out any future updates.



A Note to the Reader 4

How to Attract Money into Your Life 10 Think positive and get rid of negative thoughts 12 Upgrade your circle of friends continually 13 Change your habits 14

How to Improve Financial Literacy with Minimum Effort 16

Invest in Life Assets and Get Unexpectedly Awesome Return 19

What’s Life Asset? 20 Example #1: Invest in Education 21 Example #2: Invest in Health 21 Example #3: Invest in Relationship 22 How to Get More Life Assets 23

Should You Put Your Money In Jail? 26 What is “dead money”? 26 Why “dead money” is good? 29 Why “alive money” is even better? 30 “Dead” or “Alive” 31

What’s the Best Way to Get Rich, Especially if You are Poor Now? 33

#1 – Build a massive portfolio of stocks. 34 #2 – Join a start-up and get stock. 34 #3 – Exploit your skill and become a celebrity. 35 #4 – Buying, developing, managing and selling property37



#5 – Start your own business. 38 You decide your journey 39

Solving Problems: The Key to Wealth 41

The Biggest Challenge to Increase Your Income 44 Setting a Higher Goal 45 What’s your New Year Resolution? 45 Here is the biggest challenge 47 Not to start with ZERO 47 Start with a base 48

How to Build Multiple Sources of Income? And do it the easy way 50

Problem of Single Source Income 50 The Actual Value of Having Additional Income Stream51 Is multiple income streams better? 52 Having Diversification, not Diworsification 53 Create Multiple Sources of Income from your Existing One 54

How to Invest in REIT in Malaysia 56 What is REIT? 56 Malaysian REIT 57 What to Look For on a REIT? 58 Why Invest in REIT 60 Buying REIT Investments in Malaysia 61

6 Reasons Why You Should Invest in Stock 62



#1. Put your money where value is created, not just stored 62 #2. Easier to Own a Piece of Established Business than Building One Yourself 63 #3. Flexibility and Liquidity 64 #4. You Can Do It from Home 65 #5. Enjoy Long Term Business Growth 65 #6. Available to Everyone 66 Rich People Have Stock Holdings 68

Stocks VS. Properties: Which One Suits YOU? 69 Which one is better? 70 Pros and Cons of Property Investment? 70 Pros and Cons of Stocks 71 Your preferred investment 73

How not to Worry about Medical Expenses, and Minimise your Hospital Bills 75

Get insured with Hospitalization and Surgical benefit 76 Live a healthy lifestyle 77 Have your previous test report ready and decline other unnecessary “add-on” 77 Consult a practitioner rather than a specialist 78 Always request for the itemised billing statement 78 Ask for discount – from doctors and also from hospitals79 There are cheaper options of generic drug. 80 Get help from your employer. 81



Why You Should Buy Your Dream Gadget with Installment, Too! 83

The Golden Rule 83 When buying consumer goods on credit makes financial sense 84 Better Cash Flow 85 Affordability 86 Regulate your Expenses 86 Credit Card Rewards 86 Final Tips 87

How Much Should You Spend on a New Car? 88 Why is a car priced higher here? 89 Malaysians pay a lot for cars 90 How do you know if you can afford a new car? 92 The millionaire next door is driving a Myvi 94 Car Loan vs Housing Loan Psychology 95

Five Financial Must-Haves for First Time Home Buyer 97 1. Have adequate Down Payment 99 2. Estimate How Much Can you Borrow 100 3. Know How much Can you Afford 101 4. Transaction cost 101 5. Get ready with Renovation and Furnishing Cost 102

The Importance of Appointing a Guardian for Your Children104

The importance of personally selecting a guardian 104 Allowance for guardians 106



Why is there a Need for a Comprehensive Will? 108 What is a Will? 108 Write a comprehensive Will 109 What happens if you do not have a Will? 109 What if there is a Will, but it is not comprehensive enough? 110 Testamentary trust 111

Why and When Should You Review Your Will? 112 Relevant Scenarios 112



How to Attract Money into Your Life

Writing is a creative process, no matter you are writing articles, books or music, which I do all of those on a regular basis. I guess that’s what gets me excited about my daily work. Perhaps, having a creative mind does attract money into your life, which we will discuss further here. I was invited several times to contribute to a magazine column, but we can’t work it out for the last couples of times. The main reason is that some journals prefer me to have a neutral voice. In other words, I shouldn’t preach about anything too extreme. That reason alone had sucked out all the fun of writing an engaging article. I like to write in my voice, directly and in simple words. I guess that’s why my books are selling well because it represents my unique point of views in a very understandable way. Sometimes, I received critics from readers who said my writing lacks great command of the language, which I honestly agree because I am still learning to write better sentences. At the same time, I do think that it is important to deliver the message swiftly and efficiently. I believe that if I want people to understand what I’m saying, I got to write in straightforward words and short sentences that even a primary school students can learn a thing or two. Don’t you agree? Now, let’s see how you can attract more money into your life. Recently there has been an explosion of discussion regarding



the Law of Attraction. If you’re not familiar with the concept, it’s quite simple. Positive attracts positive and negative attracts negative. In other words, you’ll receive good things or bad according to what is your focus. If you focus on the positive in your life, then more positive things will come your way. If you spend your time and energy focusing on the negative, then you’ll attract more negative things. It is plain simple.



Think positive and get rid of negative thoughts

If you are not getting more money now, the first thing you probably need a change is your thinking process. When you look at anything that happens in your life, there are certainly two sides of it. One is the positive aspect. The other one is the downside. If you can always think of the positive aspects first, you can get rid of the negative thoughts. When I twisted my ankle during a basketball game on the day right before my son is born, I immediately had trouble walking, and it took six months to heal. During that period, I got to visit my wife and newborn baby in the hospital, and that required a lot of walking. I would also miss out all the fun basketball and volleyball games I used to play three times a week. There was unquestionably plenty of negative consequences. But by being positive, I knew that I got more time to spend with my family, and also on the computer doing productive works. As a result that six month is probably the best time, I’ve ever spent with my family and also my most productive period in cranking out articles. It’s imperative that you eliminate as many negative feelings as possible. Make a conscious effort to find the positive in everything because your negativity won’t be compensated with positive results. Remember this: you can always take action to make something positive out of a bad situation. When you are in a negative state of mind, you won’t be able to solve problems. No problem solved means no money for you.



Money only comes to you when you add value to other people’s lives.

Upgrade your circle of friends continually

Birds of a feather flock together. Nobody who is productive and successful would like to mix around with a failing low life. I’m not asking you only to befriend the wealthy group of people. That’s not going to happen if you don’t have the standard to match the lifestyle of the extremely wealthy. Apparently, a negative mind won’t be welcome in a positive energy field either. But you can certainly take it a step at a time. You can spend more time with the person who is one grade higher than you. When you surround yourself with more people who are more successful than you are, you will ultimately end up on par with them at a certain point in life. The reason that this will happen is that you are going to learn more stuff you never know before. You will have a better and more vibrant network of friends. You will have more advisors to turn to whenever you face obstacles or go into a new business venture. When you do so, you not only help yourself but also bring your best friends along up the ladder of achievement. Later on, you will find that money-making opportunity keeps coming to you and at a certain point you will realise that it is just so easy to make more money. It is as if the money is attracted to you!



Change your habits

All the above only happens when you replace your poor habits with productive ones. If you have a habit of turning on the television every night after dinner, please replace it with a habit of learning something new by watching video training or informative documentary. If you used to read entertainment news in the newspaper, then replace it with financial news. If you find yourself tending to wait until the last minute to complete a productive task, throw away the word “wait” and do it NOW! We all have all kinds of habit. Whenever you have a habit of something, you are not having the exact opposite habit. For example, if you have a habit of “not eating breakfast” in the morning, you don’t have the habit of “eating breakfast”. In order to make more money and attract wealth, you need to have all sorts of “habits” that are healthy and productive. For example, I was an active insurance agent when I first moved to Penang back in 2003. I don’t have many friends there. So I got to do a lot of cold calling to get appointments and do sales presentations. It was so difficult at the beginning. I got to cultivate the habit of making phone calls to strangers every day. When that habit is developed, I no longer feel shy to make a phone call to somebody I don’t know. The great thing is that after I have hundreds of customers, sometimes one of the customers will call me to buy. Isn’t this habit giving the positive result of attracting money?



So I do believe that you will attract money into your life by practicing these three important things. You have to stay positive all the times so that you can upgrade yourself to a higher level of society and mix around with more successful people. By cultivating productive habits, you also push your boundary of comfort zone to be a more productive person who attracts more successful friends. Eventually, you will reach the point when you gradually realize that money is attracted into your life in a subtle way. Everything shall work well when money is attracted to your life. However, there is one piece of essential knowledge you need for keeping that money with you - FINANCIAL LITERACY!



How to Improve Financial Literacy with

Minimum Effort

Personal finance is a vast topic. You can say that anything that got to do with money is personal finance. You probably got your first financial lesson from your parents, who handed you the first dollar to spend. For me, I’ve personally learned about financial stuff through many ways. My parents are not affluent. The biggest lesson I learned from them is to live frugally and always spend less than I earn. As I was studying in university, I started to pick up books on personal finance niche and later on got myself involved professionally in this field. Now the question is how do you learn more about this topic? And what is the method you can apply to improve your financial literacy? Let’s start with something easy and free. With the growth of the Internet and the number of websites, you get to connect to the “net” practically anywhere anytime. Coupled with the growth of Google, you can pretty much search a lot of free information out there. Some people say that knowledge is power and now information is freely available when more internet users are sharing ideas



and making more in-depth discussion. It is really convenient to find info. But the problem of information overload arises. Other than this, you can also ask the people around you for free advice. When info is free, who is going to judge whether the info is valid or not? It is also how you organize the info that determines whether it is practical and valuable. So as people are overwhelmed with free load of info, many had chosen to pay for organized information. So you buy books, pay to attend seminars and workshops and even online courses. You are willing to pay so that you can access the trusted content easily, conveniently and ultimately learn in a more organized way. Believe it or not, the best or more often the biggest financial lesson learned is through personal experience. I call this the expensive way because you simply can’t expect to get everything right at the first attempt. Some mistakes are really costly. Think of your first time buying a public listed company share. Think of the your very first property purchase. Imagine the hassle of starting your first business. And I still remember vividly the moment I earned the first dollar online. I’ve made mistakes along the way. Some cost money. Some cost me time which is impossible to be recovered. What I gain through the mistake is valuable experience. Now I know and learned that there are many ways that doesn’t work.



So what do you think is the best method to learn about personal finance? Should you rely on free info? Should you pay for premium access? Should you just do it and learn from mistake? The answer is that it all depends on your resources of time and money. When you don’t have much money, normally for those who just started out, you will prefer to search for free info. If that info is not available, at most you are going to buy books, a report or something similar that’s affordable. As you progress, you will find that you actually lack the time to try everything. Then you will start appreciate the premium content experts put effort into creating. You will then justify that paying money to attend seminar and courses are worth the time it saves you. After all, we are willing to pay for getting the return of more time and money, don’t we? The older you get, the less mistakes you can afford to make. But there is one area that majority people fail to "see" when it comes down to investing. It is intangible. And I have known a lot of successful people getting tremendous results from it. They invest in Life Assets.



Invest in Life Assets and Get Unexpectedly

Awesome Return

We’ve often heard about investing money in some asset classes that can generate a return. It seems like that’s all investment is about. But often time, the other valuable resources we can invest in like time, and the human relationship doesn't get much attention it deserves. Investing your money without the knowledge and effort is dangerous. That’s risky because bargain deal is not easily spotted. But if you spend the time to learn the trade, to pick up the skill, and to find the deals, the risk is substantially reduced. Most of the time, you are confident that the investment decision you make is going to bear fruits. Money should be invested in material assets that give you monetary return, whether in the form of regular income or capital appreciation. Meanwhile, you should spend your valuable “time” in Life Assets.



What’s Life Asset?

It is fascinating to note that when we use our time wisely and invest in the right kind of Life Asset, you will be able to save more time and also get more time and care from other people. Put it in simple language, a Life Asset will produce: - time saving - increased effectiveness - time and attention from others So you will have these results: - do more with less effort - more time to do the things that matter to you It sounds conceptual, but it is a vital factor that determines the success of a person.



Let me give you some examples so you can catch this idea of investing in Life Assets.

Example #1: Invest in Education

We spent many years studying in schools. For me, I am still spending several hours every week to learn new stuff. When you have a higher education, it is easier for you to get a higher paid job. When you learn about stock investment through a course or seminar, you will be able to spot great companies in less time and effort. After I mastered Cakewalk Sonar (music sequencing software), I can arrange a song from raw melody composition to a final full arrangement, complete with drum, bass, harmonization, string arrangement and even the vocal recording and vocal harmonization, all done within hours. In order words, investing in education (a form of Life Assets) is going to let you get more accomplishment, in less time.

Example #2: Invest in Health

Many people neglect the importance of having a healthy diet or doing regular body exercise until it is too late. If you are healthy and fit, you have a less down time or sick time. If you are not fat, you feel more energetic and even walk faster. Being more active is also a way to increase productivity.



In fact, health is also a form of Life Assets. If you invest more time to acquire health, you can live longer, have more time, and perform better physically and mentally.

Example #3: Invest in Relationship

During the years when I was active in the insurance selling industry, I have seen thousands of recruits joining as life insurance agents. Some of them had succeeded overnight, becoming MDRT achievers – Million Dollar Round Table, an internationally recognized award in the industry. But a majority of new agents work so hard, but yet to make a decent income. The most important factor that determines the success level is the fact that it is common that a new agent typically sells to their natural market during the first few months. Those who succeeded in such a short period, are often due to their past effort investing in human relationships. For these successful new agents, they have been a kind, helpful, trustworthy person, in the past. Their friends, colleagues or relatives are so comfortable with them. So buying a new policy or so-called “support” takes place quickly. That’s one example of the power of investing in the human relationship. So the relationship is also a great form of Life Assets. That’s why you always hear the advice to help other people whenever



possible. If the return doesn’t come back right now, it will come back in the future in a much bigger form. It sounds like Life Assets are also subjected to compound interest effect. Although conceptual, yet it is the truth. There is a saying that it is not what you know, but who you know. In business, it is true. Examine those successful entrepreneurs. Often time they are so good at building a relationship, with their suppliers, vendors, employees, and investors that let them leverage to achieve new heights. Merely knowing someone is of course not enough, it is the bond you have with a person that counts. When you have a good relationship with someone, there is less time spent on arguing. You even get more cooperation. Some influential people that have a real connection with you will be acting as leverage for you to get more done easily, to overcome the obstacle for you, and to give you more opportunities when you are ready with the capability.

How to Get More Life Assets

So how do you increase your holding of Life Assets? What particular tactic can you apply? To answer that, you would probably need to read hundreds of book on health, personal development, and human relationship. For me, I keep things simple. Here is just a guidance to get you started, or do more of:



- ask “what can I do for you?”, especially to those who are better than you - help others whenever possible - under-promise, over-deliver - listen more - solve other people’s problem - never complain - be sincere - eat healthy - sleep adequately - keep learning! I believe you’ve invested in Life Assets here and there. Just do more of it!



Before you get to the next chapter, answer this question: “Is your money dead or alive?” Think for a minute before you scroll to the next page.



Should You Put Your Money In Jail?

I must give credit to my business partner, Peter Lim for this idea. Peter and I co-founded a value investing stock investment course called Bursa Method. During one of the webinars I hosted featuring him as the main speaker, he shared about the concept of “dead money” and “alive money”.

What is “dead money”?

It will be much easier to understand if I just quote some examples right away. When you contribute to EPF (Employee Provident Fund), the money is pretty much “dead” because you just put it in jail. You can’t touch it until age 55. There are some



ways to withdraw it such as for housing loan instalment (only 30% of the total fund), and also some small portion from account one for direct investment in a unit trust or stock market. The other similar type of fund is the Private Retirement Scheme (PRS) and Deferred Annuity. Both funds require your contribution. In return, you also get tax relief and the return provided by those schemes. These are also “dead money” because you can’t touch it until retirement age. There are more examples, such as SSPN (Skim Simpanan Pendidikan Nasional) and even some endowment insurance policies. When you contribute to SSPN, you can only withdraw it when your child reaches the age to enter tertiary education. Meanwhile, an endowment policy can be terminated, but it will incur a significant loss if you do it prematurely. You can opt to withdraw the cash value from endowment plan as a policy loan, but that will incur interest charges at typically 7% per annum, calculated on a daily-rest basis. Since it means that you cannot “touch” the money in these places (EPF, PRS, SSPN, endowment policy), that money is considered “dead money”.



Why “dead money” is good?

Is “dead” good? I know you must be scratching your head now since I just wrote about the idea of putting your money in jail. In fact, “dead money” can be good for the majority of the population. In Malaysia, most retirees get the significant portion of their retirement fund from EPF. In other words, most people in Malaysia save more in their EPF and even endowment policies if compared to how much they are saving on their own in stocks, properties or fixed deposit. Most people don’t have the discipline to delay gratification and save money first, then spend only in later years. I was once an active life insurance agent. It is easier to sell endowment policies when we talk about the function of forced savings. When customers see the value of this automated saving system, they feel that it makes perfect sense to purchase these saving programs. They realise that if the money is not put aside for saving and investment, they might spend it elsewhere. Soon the money that is not “put in jail” will be all gone. It is why I said that “dead money” is good. It is okay to lock your money so that it can overcome your disciplinary problem. The big challenge is that these “dead money” is not getting an adequate return to make you richer. You might be attracted by



the short term benefit in the form of immediate tax relief, and also the long term stable return of 4-7% a year. However, this kind of performance is not going to make you a multi-millionaire. To achieve that level of wealth, you will need to do much better than that. It depends very much on how you make use of your “alive money”.

Why “alive money” is even better?

When we said the money is “alive”, you have full control of it. You have the flexibility to invest it in business, stocks or real estate. You are the decision maker on what to do with this money. It is not locked in any of the places mentioned above, so you still have the full flexibility to make good use of it. I’ve shared with you why it is right to lock your money because undeniably, this kind of system works. It will save you quite a significant sum of money for your future retirement need. But the only problem is that it is not going to make you rich. You got to have more than 10% a year return to see significant return coupled with the wonder of compounding interest. Actually, it makes a big difference if you can get 15%, 20% or even 25% annual return from your “alive money”. That’s why I said, “dead money” is good, but “alive money” is even better. If for the past few years, you are not getting much return on investment, you might not think that this concept applies to you.



I believe that if you have the discipline to delay gratification and invest consistently, coupled with the appropriate knowledge to get better than average return on properties and stock investment, it is much better to keep your money alive.

“Dead” or “Alive”

During the online training session, Peter shared the important four factors you want to consider when it comes to the decision whether you should “lock up” your money. First, it is the duration of the money is locked up. If you are 25 years old now, you would need to lock up your money in EPF for another 30 years. Employees don’t have the choice but to contribute to EPF regularly. The story will be different for those self-employed or those who are working in their own company. You will have the choice whether to contribute less. Obviously, if you have better alternatives to grow your money, it is better to keep the money “alive” rather than being “locked up in jail” for 30 years. The second factor you want to consider is the rate of return you will be getting. It is quite normal to get 4-7% from these schemes mentioned above, on top of the initial year of tax relief. If you can get 15-25% annual return from your stock investment, business or real estate holdings, it makes more sense to put your money at places where it can grow the fastest.



The third factor is the current tax rate you are paying. If you are paying 26%, the maximum tax bracket in Malaysia, do a calculation to determine if it is worthy to get the immediate short term gain in the form of tax relief. For example, if you contribute RM1000 this year in a PRS scheme, you save RM260. Then this RM1000 is going to give you say 5% per annum return until age 55. Put these numbers down in a calculation spreadsheet. Compare it with another scenario of using the after tax money, which is RM740 (after paying 26% for the tax from your initial RM1000) to invest in your vehicle of choice, say in a particular stock. If the stock counter provides you 20% per annum, is it going to be better off at the age of retirement? You can easily compare this by making some simple calculation on a spreadsheet. The fourth factor is the discipline issue. Do you have the mental strength to delay your spending? Can you make sure that you are going invest this money for the long term? If you doubt yourself, it might be a good idea to lock up these funds. So, what do you prefer? “Dead Money” or “Alive Money”? With Dead Money, you might secure your retirement. Well, do you want to get rich? Then you shall watch how to make the best use of your Alive Money. Let's examine the various ways to get rich.



What’s the Best Way to Get Rich,

Especially if You are Poor Now?

There are so many ways to get rich. Some ideas seem easier than the others. But if you want to have a high probability of success, I believe there are a few methods that are proven to be more likely to make your dreams come true. First, let’s start with the easier one: marry rich or inherit wealth. The problem is that only 5% of the population is wealthy. It is probably less than 5% in some places. If you are born in a well-to-do family, the rest may admire the lucky you. This leave the other 95% compete among themselves to get a wealthy spouse if they depend solely on this “easier” way to get into the 5%. Believe it or not, there are courses in China that train young girls on how to attract and get married to the wealthy men. After all, there are many new billionaires in China nowadays that a girl has higher chance to get married rich, provided that she has the necessary character. What else is a better way to acquire these valuable skills other than taking up a course or workshop? A consultancy firm in the upscale Jianwai Soho complex in Beijing is offering this type of specialised training. A standard 10-hour package costs 2,000 yuan RMB. Since most of the people are not super attractive females, now, let’s get more serious to examine the other alternatives:



#1 – Build a massive portfolio of stocks.

Warren Buffett did it. Many others do too, by accumulating shares of some great profit-making companies while the price is fair and undervalued. Stock investment is suitable for people with a great analytical mind. Thorough research can be done in the comfort of your home by studying the past annual reports since the information of a public listed company is easily accessible. In Bursa Malaysia alone, there are around 1000 counters to choose from. The key is to find the outstanding companies that can make good use of your money invested in them. If the management team can produce a better return than what you are making on your own, it is best to have your money managed by them. Certainly, there are a handful of companies that produce excellent financial result consistently for many years. Find those businesses and buy their share when it is at a discounted price. Accumulate enough of it through years of savings. You can even borrow money to invest when you are very confident about what you are doing. Then, you should be able to accumulate enough wealth just repeating this strategy.

#2 – Join a start-up and get stock.

Early employees in Apple, Nike, Google and Microsoft became millionaires on this basis. Are there such companies in



Malaysia? For us, there are not many great startups that eventually get listed and make their employees millionaires. But if you have the chance to study in some top universities like the MIT (Massachusetts Institute of Technology) or Stanford University in Silicon Valley, there is a great chance that one of your school mates will be starting some exciting high tech business there. MIT alumni founded or co-founded many notable companies, such as Intel, McDonnell Douglas, Texas Instruments, 3Com, Qualcomm, Bose, and Dropbox. Coupled with the perfect environment to get seed funding, angel investors' support and the venture capitalists who are actively looking for the new start-up to pump in their money, it is possible that you might end up as the first batch employee in some significant start-ups. For example, the number 20 employee of Google, Marissa Mayer joined Google as a software engineer. Later she became the CEO of Yahoo. When Google was publicly listed on Nasdaq, her fraction of company shares had turned into millions of dollar, making her wealthy almost overnight. Getting rich through this route looks pretty fun, but as many have known, not everyone has the luck that the perfect chance just comes at the right time.

#3 – Exploit your skill and become a celebrity.



Sports stars, authors and entertainers become rich by their highly specialised skills. You have to have some unique skills. Talent is a must-have trait for this route to riches. To create tremendous wealth through this method, you not only need to have a particular talent, but you also got to be able to market yourself well. When I refer to "talent", you got to be in the top 1%. It is just too hard to make it. Even if you are in the top 5% talented people, it might not be “talented” enough. In this case, I would love to take myself as an example. If you got the chance to see me sing and play the piano, I believe you’ll agree that I’m talented (Look for my music videos at youtube channel https://www.youtube.com/kclau77 if you are curious enough to see me perform). But why didn’t I end up being a full-time artist, or become a superstar? Frankly, I am not the top 1%. I am good, but I’m not great. I might be the top 1000 performers in Malaysia, but I am not the top 10. Or I am not good at marketing myself ruthlessly. Perhaps I didn’t try hard enough. And finally, my priority changed after I got married. By now, I think you’ve got what I mean. To be a celebrity who earns very high rewards, you simply got to be the best in your group who perform that specialised skill (acting, talking, singing, running, playing badminton, etc.) That level of success requires a very high level of talent (that not everyone is born with), luck, hard works, and even people skills.


https://www.youtube.com/kclau77


However, if you have any skill that you can make use of, by all means, go for your dreams! It is only worth living when you are chasing your dream.

#4 – Buying, developing, managing and selling property

Property investment gives you much leverage based on the straightforward logic: land is limited, but human population keeps increasing. In the long term, this remains a proven way to accumulate wealth for centuries. The challenge is that most properties, especially the good ones require relatively higher capital to acquire. One wrong decision might take years to recoup the losses. But if you learn the trade, it is quite safe to accumulate wealth this way. Since property hunting requires you to get out of your comfortable home and actively look for a real bargain, it is very suitable for those who are extrovert. In fact, if you don’t feel shy of negotiating with the seller, buyer, real estate agents, lawyers, even contractors, you have the upper hand to find more good deals, or even transform a seemingly bad deal into a good one. You can see that most of the local tycoons are usually involved in property development. Even if you find a multi-hundred-millionaires who is not a property developer, he or she normally has a massive holding of properties or lands. This strategy is so simple but yet so powerful. It will never go wrong if you are accumulating income-producing properties at



superb locations. In the long term, real estates price will just go one way, which is “UP”.

#5 – Start your own business.

I would say that this is the most efficient and proven way to become rich. Successful people are getting rich in every niche and industry. If you can find a new approach to a particular need and build a profitable business that addresses that need, then you’ll be able to create real value that customers will pay you for it. It could be a retail business, a saloon, a consultancy or a product dealer. It will probably take years of tough work to build up the enterprise. But when you can pull it off, the potential rewards are so huge. It is how many of the seriously wealthy people did it. I would say 90% of the rich people get rich through building a successful business. The best thing about making money through business is that you don’t have to be good at everything your business requires. You just need to find the right people to perform the work they are best at. Like what is said by the author of Good to Great, Jim Collins “We found, instead, that they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats. And then they figured out where to drive it.” It is about building a team of high performers. Then your business will surely take off!



In business, you can also get to choose the industry you passionate. You get your freedom right from the start when you are the boss, calling all the shots!

You decide your journey

Explained above are top five best ways I can think of on how to get rich, plus the bonus method about marrying your way to riches. Have you ever think of what is the suitable way for you? Whichever way you choose, the important thing is to start early. Make good use of your time now. Make a sound investment with your money and time right now. The earlier you start, the better the chance to get there on time because you will still have the luxury to perform course-correction. Start now. Good people deserve to have lots of money because you know how to spend the money on good causes. In the next chapter, we unveil the key to massive wealth!



Solving Problems: The Key to Wealth

Are you an employee? What are you employed to do? Nurses are hired by the hospitals to take care of the patients. Doctors won’t do that part of work such as changing diapers and taking temperature and blood pressure every other hour. Nurses are employed to solve the problem of patients who need nursery care. When your toilet got stuck, who do you call? Other than your husband or father, you would call a plumber. You want a reliable plumber who acts fast and is capable of fixing the problem. In other words, the plumber is employed to solve your toilet problem.

What problems are you solving?



As an employee, if you are, you are employed to solve a certain problem. It may be the issue of the companies, or the customers, or the products or the logistic. When there is no longer such problem you are handling now, you are out of a job, sooner or later. Businesses thrive when they can help more people solve more problems. Companies grow when there are more related problems yet to be solved. More people will be employed to fill the gap, to fulfil the workforce needed to resolve the problems. No wonder most business people find it stressful to start a business, because all the employees’, customers’, suppliers’, bankers’ problems are the business owners’ problems as well. SendOutCards.com do exactly what the domain name says – send out physical cards. It solves your trouble to go shopping for a card, fill up the cards with touching words, and send out the cards on your behalf. That’s wonderful. You save time and energy and the card got sent out at the right time. And when you want to send the card again next year to the same customers, the details are there stored in your membership account. Problem of forgetting the wishes solved! This is exactly why we pay for something. It has a price to solve a problem. We are willingly paying a lot of money to solve our problems, as long as it is affordable, convenient and solved. We would pay for solutions –

● We pay banks interest to finance our home purchase so that we have a place to stay



● We pay the mechanics to make our car running again ● We pay the doctors to prescribe our illnesses so that we

can recover and back on our feet again This is so obvious. But yet many people ignore the fact. You want to have a pay raise, but you don’t want more problems to solve in your current job. Your company can’t grow because when you face a problem, you get back to your comfort zone. Remember this - opportunity is everywhere. Identify a problem, and offer your solution to it. Then others will be happy to pay you over and over again so that you will be happy too. The next challenge you will face is how do you increase your income! Is it through solving more complex problems? Or work extra hard?



The Biggest Challenge to Increase Your

Income

Every beginning of the year, most of us have a common action, that is to make your new year’s resolution. When you are still studying in school, the typical resolution would be to study harder, get more ‘A’ in the exams. When you grow older, and into adulthood, the standard resolution would be to make more money. Think about it. If you are in the sales department, or a business owner or a self-employed salesperson, the very first goal you would set for the year is how much increment you want on the sales revenue.



If you are under employment, your boss will give you a higher key performance indicator (KPI). You would probably commit to perform better and try to get a raise, if not a promotion on the coming round of performance review. Most likely, most new year resolution has something to do with money and earning more income.

Setting a Higher Goal

When it comes to personal financial matter, I regularly urge people to set a higher target of savings and investments. It is easier to achieve if you can make a higher income this year compared to last year. Of course, bigger goal comes with greater challenges. What's the biggest challenge you anticipate? Just a hint – it is not about the lack of discipline, lack of strategies, or lack of time. You can make a guess now but keep on reading.

What’s your New Year Resolution?

Okay, enough about money. What about other types of resolutions you set for the new year? If you want a better relationship with your family, you might commit to spend extra time with your kids or date your spouse more, like at least once in a week. When you spend that extra time with your child, you want to get into their world really, and not just letting your son play on the iPad while you watch the latest TV shows.



If you have a new year resolution to have a healthier body, you might have committed to eating more vegetables and cutting down your fat intake. You might subscribe to a gym to work out more frequently. Extra effort needed if you want to look good and young. Some people also have the resolution to travel to some locations. For example, I have a friend who blocks out the vacation dates on his calendar. He knows exactly where he will be visiting for the whole year. Air tickets are booked early, and he will just reject all other events including wedding invitation that falls within his vacation period. All these different resolutions are believed to be able to contribute to your overall happiness. More or less, each one of that commitment is going to make your life better. Assuming that you successfully make it all, you are supposed to live happier, healthier and wealthier at the end of the year. Making a new year’s resolution is easy. The big problem now is how to do it all. All these stuff require not just money, but also a lot of your time commitment and effort. These two resources are what majority of us find it scarce. For example, if you spend more time to make money, you are left with not much time to spend on building a better relationship. You don’t have much energy to exercise and build a healthier body. Under stressful working environment, some people even tend to eat more just to relieve the pressure.



Here is the biggest challenge

Let’s dig deeper to the crux of the matter. What I think is the greatest challenge of all is that most people start with zero on 1st of January. If you are a salesperson, you start with zero order until you close the first case. Last year’s production is considered done, and it is counted for last year’s, not this year’s production. If you are an employee, your performance is reset whenever your boss is replaced. Your pay is, of course, starting from zero every day since you are paid as long as you work for your employer. If you are in that kind of business that relies on new sales every day, you start from zero at the beginning of the year. So to make more money this year, you got to repeat the effort you put in last year, and even more, effort to secure an income increment. I can say most of the people who are earning an active income are facing this problem. To make more money this year, you have no choice but to work even harder, if not smarter this year compared to the years before.

Not to start with ZERO

What can you do about this? In fact, there are some essential elements that when done right, you don’t have to start with zero every year. I’ll give some examples of how this concept works.



The first example, I subscribe to some services that I use on a regular basis on my business. These include the mailing list application which I pay several hundred ringgits a month, the website hosting service which I pay a few thousand ringgits a year and the several magazine and membership subscription I renew regularly. These service providers I just mentioned don’t start with zero sales. They have a ready subscribed customers who will continue to use their service as long as the service is excellent and updated. Another example is the unit trust consultant. These consultants not just get paid when clients deposit new fund to invest. They are also paid a certain fee on the asset under their management. So they start with a basic amount of remuneration. The effort they put in this new year is going to contribute to the bottom line, increasing their commission paid on the total fund under their management. Take a look at the household items at your home. Do you subscribe to Internet, Astro, water filtering system? More and more businesses are moving into providing subscription based service or products. It is how they can scale bigger and take in more business on top of the existing subscribers.

Start with a base

The whole picture is different when you start with a base. So the effort you put in this year to grow your income will be built



on top of your last year’s revenue. If you structure your career or business this way, you will have the luxury of having more time to commit to your other non-money-related resolutions. You’ll have more time to improve your relationship, your health, your look and ultimately your happiness. It is important to increase your income every year so that you can achieve other non-money related resolutions too. So that’s why I said that the biggest challenge of increasing your income this year is the reality that you start with zero on 1st of January. Now, I want you to think carefully about how you make money. How your business is structured? How your career is allowing you to leverage on what you’ve done on previous year? What is important to do this year that will still have an impact next year and the future? If you can arrange your business model in such a way that you start with a subscribed clients, repeat customers, renewal income etc. Congratulations! Next, in the pipeline, you will see how to build multiple sources of income.



How to Build Multiple Sources of Income?

And do it the easy way

Most people rely on a primary source of income. For an employee, the largest source of income is the monthly salary, in exchange for your service working for a company. Nowadays, job security is not being bragged about already. You can say that salary income is stable, but it is not 100% secured. During the past festival celebration, did you tell your friend that your job is pretty secure and you are happy about it? Did you tell your family and relatives that you are being paid more and required to work less? If yes, I would like to congratulate you and please also introduce me to your boss. Maybe being employed is not a bad idea after all. You’ll most probably find out that 9 out of 10 people working under employment always complain about hectic life, meagre salary and demotivating office politics.

Problem of Single Source Income

When you think of it, it is quite risky only to have one primary source of income. What happens if your boss fires you out of a sudden? What if your only major client switch to do business with your competitor? What if your only restaurant outlet had food poisoning incident and you had to close down?



To prevent this nasty situation, you’re commonly advised to have another source of income or even multiple sources of revenue. Likewise, it is better for both husband and wife producing income rather than relying on only one sole breadwinner.

The Actual Value of Having Additional Income Stream

First, I want to share with you the real value of having an extra source of revenue. Let’s say you have an extra income of RM500 per month, on top of your primary source. How much capital do you need to set aside to get this amount of return every month? To generate an additional RM500 interest income from a fixed deposit account, you’ll need to put in RM150,000 in the FD account that’s giving 4% interest per annum. So by putting an effort to generate that additional RM500, it is equivalent to having RM150,000 in Fixed Deposit. By comparing it this way, supplementary income is in fact worth that much if the revenue is passive. You require cash capital to generate passive income from investment. In the example above, the money is huge if the rate of return you manage to get is low, or you can’t stomach higher investment risk.



Like most people who start with a not much financial capital, your alternative to generating additional source of income is to invest your time and effort. So don’t look down on this because of your time and effort worth a lot, as elaborated above!

Is multiple income streams better?

Now, I might have already convinced you to build up an additional source of revenue. But is it true that multiple income streams are always better? For example, George is an accountant working in an accounting firm. To have more sources of income, he does freelance photography on the side. He tutors some primary school students at night. He also trades commodities during some odd hours. Furthermore, he also joined an MLM company selling some health-related products. What he ends up is having multiple jobs that are taking up most of his time. He works too hard, and after tiring weeks, he couldn’t even perform his day job correctly. Is this a wise move? Certainly not. I don’t recommend you to get into this kind of situation like George’s. I would prefer to have only a selected few significant sources of income, rather than having many small and negligible streams of small income. If you are like George, trying to build multiple sources of revenue by performing so diverse tasks, my advice for you is to stop and ponder. Assess the hourly rate and the



future potential income increment from each income source. Then focus on a selected few that you are passionate about and can it into an established business. Don’t just simply slog like a money slave. So it is about striking a balance. Undeniably, you should have multiple sources of income. But it is better to have multiple revenue streams in the same field that you can quickly scale, leverage and replicate.

Having Diversification, not Diworsification

In the investment world, asset allocation means you have a portfolio in a various asset class such as commodities, currencies, equity, bond etc. It is well-known that you need diversification, which reduces risk and can increase potential returns, by minimising the adverse effect of any one asset on portfolio performance. But when done wrong, you may end up with diworsification, which is going to pull down your overall return. It gives a better return if you are only investing in a few selected stocks that are all winners. Similarly, you would want to diversify your income, but not to such an extent that would make your return worse. The key point here is to create multiple revenue streams from your existing one so that you can leverage, replicate and scale!



Create Multiple Sources of Income from your Existing

One

If you are under employment, it is hard to have diversification. You couldn’t possibly work for several companies at the same time, could you? If you are a self-employed person, you have the option to choose customers and collaborate with a diverse group of clientele. In business, it makes sense to have multiple clients rather than just having only a handful of major customers. For example, I know a friend who is very successful in photocopy machine business. His company has a few thousand customers. His customers are small businesses from different industries. So even during an economic recession, I think his business will still be fine. Even though the market size might shrink but some of his customers might face financial difficulty, but some might be even thriving during the economic recession. It also makes perfect sense to have several products on sale. So when Product A is not selling as good as it used to be, you’ll have Product B and C that make up the sales revenue. Just to quote another example, when I was a full-time musician (about a decade ago), I performed at a five-star hotel lounge and also some other music cafes. In fact, some of the cafes had closed down, and new ones were opening up later at different locations. I did music production during day time. I wrote a new song every week, hoping to sell to some major artists. I even



published my solo albums so that I can sell it during my performance. In the later stage, I switched to financial industry completely when my life priority changed. In my current business, I got paid from my book royalties, online financial courses, membership site subscription, the commission from affiliate sales, advertising revenues, the commission from financial products, referral fees etc. It is all related to what I’m currently doing, which the core business is to educate the public on financial literacy. As a summary, you can create additional income by leveraging on your present foremost competence. It is much easier, and also much secured. Do it now.

When you see your bank account balance keeps piling up, what shall you do with the extra money? Of course, INVEST it! Where and what to invest?



How to Invest in REIT in Malaysia

“Next to the right of liberty, the right of property is the most important individual right guaranteed by the Constitution and the one which, united with that of personal liberty, has contributed more to the growth of civilization than any other institution established by the human race.” This saying by William Howard Taft best describes the significance and the importance of appropriating for one’s self real property, and it applies to everyone which is living in the world today. Investing in assets which can provide cash flow to its owners through regular income and dividends is simply the best deal that you can get with acquiring real properties. Real Estate Investment Trust or REIT is now one of the various ways to indirectly invest your money in real estate.

What is REIT?

Real estate investment trust or REIT is a form of company which invests its shares in acquiring and running profit-making properties and dividing the dividend among its shareholders. It is a system where investment comes through the buying of shares and investing it to buy real-estate which is rented out to gain monetary profits. Some of these properties include hotels, office and warehouse spaces, hospitals and shopping centres.



Real estate investment trusts first started in the United States in 1880 to let investors avoid double-taxation on their business investments. It also allowed smaller investments to be made on such large-scale business undertakings which broke the tradition of control by only the wealthy businessmen and corporations.

Malaysian REIT

Malaysia has caught up with the trend and has used the model of both the US and Australia in their form of REIT. The good thing about REIT investing in Malaysia is that it has brought a good amount of profits for its investors. It paid an average dividend higher than the interest on Fixed Deposit.



Some of the more well-off REITs in Malaysia are the AXIS-REIT which focuses on renting-out warehouse and office buildings, the KPJ Healthcare REIT which caters to hospitals, and the YTL-REIT which owns properties for shopping malls and complexes. Property developers are the common shareholders and owners of REITs as they specialise in the development of real estates. They have the advantage of knowing how to create and give the best improvements that can be made in real properties which let them have a better business strategy for renting them out for business purposes. Malaysia has come to be one of the leading nations when it comes to profits made in REIT in this particular region of Asia, other than our neighbour Singapore.

What to Look For on a REIT?

You should always put your money where you can be rest-assured that it will be handled correctly. Careful thinking and a serious study of a REIT’s background is an essential element before putting an investment in it. So what should you look for to get the best deal? 1. First, it should have an ever increasing dividend payout to its shareholders. Look at their records and see if there is any improvement on the money that they return to their investors. If



you do not see much improvement there, then you may want to reconsider. 2. Second, it should not be a stagnant entity – it should be acquiring assets and making improvements on their property for the past few years. Remember, you are not going to put your money on their shares for it to acquire the same amount of dividends each year or even to lessen. The management of that entity should be finding out ways in which to improve the bottom line. 3. The assets and properties should be well-taken care of and situated in a strategic location which will aid in the improvement of its rental income. Check if the property is located in an area where there are better chances of growth. If you are thinking of investing in a shopping mall, ask yourself if it is located strategically in a zone which will attract a lot of mall-goers? If it is a warehouse, is it properly maintained to ensure the safety and protection of the materials that will be entrusted to it? 4. Fourth, it should cater to tenants who show a promising chance of longer-term tenancies. Is the property occupied by a business which has a greater chance of staying for about two years? Or are they letting in businesses who are small-scale or those which have chances for being easily dissolved or abandoned upon particular circumstance? The permanency of those who rent the space is a major factor that will determine the success of the REIT.



5. Does it have sufficient numbers and variety of tenants that it will be able to continue functioning even if one large client should leave? It should be able to sustain its business without depending on a single particular client to keep it going. 6. Sixth, the management is composed of competent and well-skilled professionals who will be able to handle the business’ ups-and-downs. All types of business experience problems either financially or organizationally but it is the way with which its administrative team can cope with it that they can come through. If the REIT is staffed with excellent and knowledgeable personnel, you will be sure that it will be able to go through good and tough times.

Why Invest in REIT

Investing in REIT is now considered as a safer way of making an investment due to its nature and structure as an entity. Consider the following advantages that it has in contrast to other forms of investment such as in properties and banks. The REIT form provides you with lesser risks as the burden is shared by a lot more shareholders and investors. Remember that it is a collective ownership made when you buy shares in it. It provides people with the chance to become a part-owner of a large-scale business which would be quite impossible if you are going to the traditional investing. Management is made by an administrative team which relieves you of some of the problems of owning a business. Giving the



keys to the management will let you own a business where you would be able to gain profits and never have to worry about how to make it. The shares that you own can be sold in the stock market as they are treated as regular stocks. Hence, you can make them liquid in a very short span of time as early as three days. The shares also gain profits as their price also increases and decreases depending on the economic market.

Buying REIT Investments in Malaysia

You can buy shares of REIT of any entity in Malaysia by going to Bursa Malaysia much like the same way that you buy stocks in other markets. What to know more about REIT Investment? Visit REITMethod.com As REITs are suitable for more conservative investors who don't like high volatility, the general stocks market provide more opportunities. With the right investing temperament, you can see return 2x and 3x better than REIT.


https://reitmethod.com/


6 Reasons Why You Should Invest in Stock

Many readers ask me questions about what to invest. I always concluded that there are mainly two places you should park your money to let it work harder. These two investment vehicles are nothing special. You and I know them. We are all aware of them. First is business – either your own business or other people’s business. Second, real estate – property, farms, lands, etc. Now, let’s talk about why you should invest in stock, which is an ownership of an existing business that’s listed for daily trading.

#1. Put your money where value is created, not just

stored

As the paper money value depreciate more each day, I’ve got a lot of inquiries asking my opinion about gold, silver, and even cryptocurrency. I agree that you can invest in these precious metals and digital coins to make handsome profits when its price soars above the roof. It has happened in the past. You should probably convert a portion of your liquid cash into gold and silver, then use the gold coins and silver bars to decorate the interior of your safety box. But would you put 100% of your net worth in gold or silver? Probably not. The reason is pretty straight forward. These metals do you no good. It has value, but it doesn’t produce value. I believe that when you invest money, you want to invest in some assets that generate value or income. Mostly, great companies use



investors’ money to create goods, to produce sought-after service. These products and services inject values into other people’s life. It makes customers healthier (nutritional products). It makes your communication easier (smartphones). It lets you move faster (vehicles). It gives knowledge to searchers with a single mouse-click (Google). That’s why Warren Buffett preaches that stock investment is going to beat gold in the long term. The key point here is that when you are investing in stocks, you are buying an asset that is productive and creating value for its customers. The ability to create value makes the assets valuable!

#2. Easier to Own a Piece of Established Business than

Building One Yourself

You see, it takes a lot of effort to build a successful business. Most entrepreneurs are workaholics, at least at the beginning they work their ass off. Undeniably, building a successful business can produce the kind of high return you won’t find elsewhere. The message I want you to understand here is that building your own business takes a lot of effort, time, energy, and sometimes sacrifice. Compare the effort of building an enterprise on your own versus buying a piece of an existing established company. Relatively, it is many times easier purchase a share of a great company listed on Bursa Malaysia. Imagine that you don’t have to show up in the company you invest in, on every working day. You don’t need to deal with any issue of the business operation. You don’t even need to attend its annual general meeting! All you



need to do is to cash in the dividend cheque you receive regularly. And even this is done for you if you trade using a pledged account.

#3. Flexibility and Liquidity

Stock investment provides the highest flexibility and liquidity. You can sell and buy anytime, anywhere as long as it is the market trading time and you have access to the Internet. Even without the Internet, you are just one phone call away from your remisier or stock broker. I would like to compare this again to running your own business. If your business goes bad, you might get stuck. It is harder to close down the business because of your sentimental attachment. The process might be lengthy and miserable if a business goes bad. I’m not saying that you shouldn’t start your business. What I want you to understand is that comparing the hassle you will need to go through, investing in stocks provide you much more flexibility. You can always change your holding of stock portfolio anytime. When company X you invested in goes wrong, or just that the market overvalued it, you can quickly sell off the shares and buy another company stock that is selling at a bargain price. You have the flexibility of shifting your money to a different company, different industry or different country almost instantly. There are so many selections of great companies even if you are just referring to Bursa Malaysia alone. Nowadays, most



securities firms also provide the flexibility for an investor to invest in stock exchange at other countries and regions.

#4. You Can Do It from Home

Property investment suits extroverts, who love going out to look at properties, meet people, and negotiate the deals. Meanwhile, stock investment suits introverts, who like to stay home to read, research and think! In other words, you can do it all from the comfort of your home. You can DIY – Do-It-Yourself! You can do buy and sell transactions at home. You can find reports on the Internet. You can read the announcement and get the frequent update on the news. All these information is already sufficient to let you conduct analysis and research to find the companies that are worth investing your money. Compare it to running your own business and investing in properties. There is no employees and tenants to manage. In fact, investing in stocks had no other people to handle other than yourself (managing your own time and money). That’s one of the best advantages of being a stock investor.

#5. Enjoy Long Term Business Growth

If you invested $1000 in Berkshire Hathaway in 1964, it would be worth >$10 million today. If you bought 1000 shares of Public Bank back in 1967 during the IPO, it would be worth more than RM1.5 million today.



If you bought 1000 shares of Genting back in 1971, it would be worth more than RM2.2 million today. It shows the other advantage of buying shares of a great company – it keeps growing!!!

#6. Available to Everyone

When a company is publicly listed, it is available to everyone to own a share of the business. In Malaysia, you can buy the stock at 100 unit at a time. Although it is not viable to invest hundreds of ringgit at a time due to the minimum transaction cost involved, it is easy for anyone to own a share. You can buy RM2000 worth of stock at a time, or RM10k, or RM20k or whatever amount. The transaction cost is negligible when you are buying a share in a relatively large amount. Due to the regulation and strict requirement of listing, a public company has to be transparent in the sense that a lot of information is made publicly accessible. You can download their annual report. You can also read analyst reports. You can also make better sense by visiting the business outlet to see it yourself. In stock investing, you can accumulate “one share at a time” due to the small capital required and the readily available public information. So the big guys and the little guys are in fact playing at a level field.



Rich People Have Stock Holdings

Rich people I know have the majority of their money invested in these two places – business and real estate. In business, the rich either hold shares of other people’s companies, or the shares of their own business (think of Larry Page and Sergey Brin of Google). Other than stocks, another investment asset is property. Would you rather invest in stocks or property?



Stocks VS. Properties: Which One Suits

YOU?

I received a similar type of question from time to time, repeatedly. Through my blog and my mailing list, many readers ask about the best place to put their money. I think you probably have the same type of question popping into your mind right now. Should you follow the herd into the latest gold rush, cryptocurrencies, or private equity? It seems like silver is the next precious metal that’s catching up on the appreciation on most commodities. Is unit trust worth investing? What stocks should you buy now? Isn’t borrowing money to purchase a property considered a dangerous venture? There are also questions about some new types of fancy investment scheme like swiftlet farming, palm oil plantation lot, or land banking. My philosophy is simple. Most rich people got rich quick by involving directly in businesses. Of course, I don’t expect that you must be an entrepreneur to accumulate wealth because becoming a successful entrepreneur requires not only leadership and communication skill but also the most important of all – massive amount of action to implement the business plan. So where else can you get a high return, if not from direct involvement in business? There are two common and proven



investment choices: stocks and properties. If you are still not master investors in these two categories, you shouldn’t even bother about all the other schemes. The proof is evident. Most affluent people either have a lot of shares of great companies, or a lot of real estate properties, or BOTH.

Which one is better?

Asking which investment is better is like asking whether a BMW is more superior to a Mercedes Benz. There isn’t an answer, but I would guide you to choose the one that’s more suitable to your personality, preferences and style, towards the end of this section.

Pros and Cons of Property Investment?

When you are buying a property, which may be a unit of a high-rise condominium or a commercial shop lot, you are getting something very tangible. It is real in a sense that you can see it, touch it, smell it or even live in it. Since a property cost a lot more than a unit of public-listed company share, you may find it hard to come up with the investment capital to even commit the down payment. But banks are more than welcome to lend you the rest of the money you need, as long as you have a stable income. Banks are not only betting on your ability to pay back the debt, but they are also confident that the price of properties is stable and will appreciate over the long term. If you can’t pay back someday, banks are still able to recoup their losses by auctioning off your property.



This fact alone provides the greatest advantage of leveraging effect. You practically own a big piece of asset just by paying as little as 10% of the real estate market value. When the property appreciates 10% in value, you are getting a 100% return on your 10% capital, based on the simple calculation of omitting all other related costs. But at the time your investment property is not performing, as you want it to be, it is sucking money out of your pocket every month. It needs a lot of maintenance such as mortgage payment, utilities, and taxes. In other words, it would be like a cancer tumour that may get even bigger, and at one point, it would threaten your financial survival. Of course, there are other pros and cons, but it would make up a whole book if I keep on elaborating this. Let’s look at what’s offered in the stock market.

Pros and Cons of Stocks

Stock investment is very liquid. You can move your money from company A to company B within a few days by trading the shares. When you buy a stock of a company, you are investing in the management of the enterprise, and expecting that these executives will make the business operation profitable in the coming years. Unlike investing in properties, you don’t have to be actively involved in managing what you’ve bought. Last time, owning a share of a company means you’ll at least get a piece of paper, which is the certificate of ownership. But



now, it is all done electronically. The company and business are there. It is real, but you just don’t "see" it. It doesn’t give you much control over the business assets and operation because you are only giving the power to the management team to carry on their job. You are allowed to cast a vote in the Annual General Meeting, but without owning the majority of the company’s share, you don’t have the influence to change much of the decision. It sounds like a more passive type of investment where you can sit and wait for your fat dividends cheques. Now comes the biggest problem of investing in stock – the roller-coaster type of price movement undoubtedly disturbs most investors. The price of stocks can experience extreme fluctuations in the short-terms, which make most investors feel uncomfortable. Without high emotional intelligence and discipline, the majority of stock investors made the wrong decision, usually at the wrong time. Nevertheless, master investors can navigate through a storm and get an awe-inspiring return year after year, as much as over 25% per annum. The world’s richest investor, Warren Buffett for many decades, demonstrates this. So both investments present its respective advantages and disadvantages. The question should be boiled down to “Which one is right for you?”



Your preferred investment

Through my experience investing in both asset classes, and also from the sharing of other experts in both fields, I had summarised the following for you to pick your preference. If you: - Prefer to read company financial reports at home, rather than driving around to hunt for property for sale - Prefer to sit back and let the management team operate a business, rather than managing your tenants - Prefer to execute buy-sell transactions through computers or a simple phone call, rather than going through several times of negotiations Then, the stock is your first choice for investment. But if you: - Enjoy talking to different professionals like real estate agents, properties buyer and seller, tenants, bankers, contractors, lawyers and developers - Want to invest in assets that give you a lot of control such as making changes to the properties and even choosing the people you want to work with - Are comfortable owing banks a lot of money and are making sure that there will be other people paying your loan for you Then, real estate is certainly your cup of tea.



After playing offense (the money-making part), starting with the next chapter, we will see what you can do on the defensive play. First, we tackle the biggest worry of middle-class people - MEDICAL BILL!



How not to Worry about Medical Expenses,

and Minimise your Hospital Bills

Have you ever experienced being admitted to a hospital because of your illness and your eyes bulge when you see the expensive medical bills that you have to pay for, and you don’t have enough money to pay it? There is a saying that when we are young, we work too hard and trade our time and health for money. Then when we are old, we exchange our money to gain back some health hopefully. It is so true because there are so many old folks who save hard and put the money in the bank but the interest earned is barely enough to cover the medical cost inflation.



Nowadays, many people had realised the high cost of being hospitalised. When medical fees keep escalating, more people are aware and seek for health insurance coverage. So the first step towards cutting medical expenses is to get insured, while you are still qualified to apply for total coverage.

Get insured with Hospitalization and Surgical benefit

Utmost, personal health should be one’s top most priority. You can’t go to work if you have a high fever, right? Because if you do, you won’t be that productive compared if you are in your normal state. In the past, I’ve met several MLM or direct salespersons who typically sell all kind of health products. Once they know that I was an insurance agent, they almost always pitch the idea that when you eat healthily and take good care of your body, you’ll never get sick. Therefore, there is no need to buy medical insurance. This statement may have some truth in it although some insurance agents may get offended by the whole idea of stay healthy and throw away your “medical card”. Obviously, the second tip on cutting medical bills is to live a healthy lifestyle!



Live a healthy lifestyle

Eat organic food, work out regularly, and take care of your hygiene and your home’s cleanliness to have a healthy lifestyle, therefore a healthy body. However, if you are too late to get insured, or your health is already depleted in some way, don’t be panic. There are still more tips coming up that may save your hospital bills. Just in case you are sick (touch wood) due to unforeseen circumstances, here are more tips that could get you going.

Have your previous test report ready and decline

other unnecessary “add-on”

First things first, for you to lessen the cost of your medical bills, you have to have your updated previous test results for your health with you. If you just ran a test a few days ago, then you could bring that when you visit the doctor. These previous results that you have could lessen your cost since you don't need to go through another round of similar examination. But bear in mind that not all previous results are helpful when you want to cut costs. Some tests need to be taken anew to provide you progress or update on your current health. Another thing to remember when you want to prevent necessary costs is that, when you have a hospital room, you can always decline offers of having a television, or a fridge, or any additional appliance or room ornaments that add up to your



costs. By doing these things, you can start saving your costs though it may seem to be small at least you started it. If you have already chosen a hospital room and you have already taken the necessary tests, having the right doctor and being admitted at a suitable time is the next thing that you need to consider.

Consult a practitioner rather than a specialist

We cannot predict when or where we are going to get sick. We always have to take good care of ourselves for us to avoid being in the hospital for any extensive treatment and for us to avoid any expensive hospital costs. But when you can’t stand the pain or illness, you need to go to a hospital for treatment. In finding a doctor, for you to cut costs, you can consult a general practitioner rather than a specialist. Why? It’s because general practitioners are much more affordable than those specialists. But you should always go to the general practitioners that you trust. If not, sometimes you may end up paying even more, when your first visit is not fruitful. You may still need to visit the specialist later.

Always request for the itemised billing statement

Be clever. Since you want to invest more in your health, you have to know everything that you pay for in the hospital. That is why you need to request the hospital to provide you detailed



information on your medical bill. From the cotton ball down to the drugs, you paid for everything in the hospital. As a smart and knowledgeable customer, know what you are paying for. Though mistakes unusually happen on the breakdown of your medical bills, still, you can always double check it.

Ask for discount – from doctors and also from hospitals

Another good tip that you can adhere to if you want to save on your medical bills is that you can ask for discounts. Hospitals could give you discounts, but not all people can truly avail. It would be based on the situation that you are in, concerning the financial aspect. For you to be able to enjoy a discount, the hospital may ask you to procure any proof of your salary so that they could estimate if your income is suitable for a discount or not. It is all based on the income that you have. If you have a relatively low income, the hospital could grant you the discount or another way for you to pay by instalment. Meaning, you will pay a percentage of the total amount of the hospital bill. After discharge, you will settle the remainder later, depending on the agreement that the hospital provided you to abide for. If the hospital cannot provide you with a discount, then you can always ask for the approximated amount that you need to pay for the entire duration of the treatment. It is usually done by customers who have a tight budget. You can always ask for



how much it would cost all-in-all even if the treatment hasn’t started yet. Besides requesting a discount from the financial department or billing department of the hospitals, you can also ask for a discount from the doctors who treat you. Get enough sympathy, and the doctor will write off some consultation fees, or procedure charge.

There are cheaper options of generic drug.

If your intention is to have a good health and keep your pockets intact, then you can consider this next tip. When choosing the medications that you need to buy, you can always find out



choices from generic medicines. These kinds of drugs may be cheaper compared to those branded drugs. Generic drugs may have the same quality as to patented medicines concerning the effectiveness of the medication. It is usually similar regarding the pharmaceutical components of both. Although generic ones are cheaper in costs, some of them still give you the same effects like that of those branded ones. If you can find generic and less expensive drugs instead of patented ones, you may save lots of money and at the same time, cure yourself of the illness that you have. Anyway, you shouldn’t be misled that all generic drugs are as good as the “branded” drugs. Warning: Always seek advice from medical professional and pharmacist before taking on any drug. Recall back the Pharmaniaga scandal where the generic manufacturer was clampdown by the authority which found out their factory was a mess and expired drugs were mixed up with new stocks! There are many other cases of abuse and shoddy generic manufacturers dishing out sub-quality drugs out of their factories. Ask a medical doctor treating life-threatening diseases like organ rejections, systemic infections, etc and they will tell you the problems with generic drugs (ineffective).

Get help from your employer.

If you are working in a company, you can always have them to help you shoulder some of the bills for your hospitalisation,



especially if the injury or the incident that happened to you is work-related. Some companies provide free annual checkups and other tests. Also, companies now offer extended medical services for your children or your other halves. Be wise to know what your boss offers so that you could have an advantage in taking care of your medical budget and your health as well. Ask your manager or go to the HR officer to find out about the medical terms and coverage that your employer provide. By following the tips mentioned, you can now be wise enough and be resourceful to not only save on medical bills but at the same time, have a healthy and productive life. You see, paying health insurance premium is like an installment plan for huge medical bills that will come eventually. How about expensive items like furniture, TV, smartphones, etc.? Did you ever split those into regular installment?



Why You Should Buy Your Dream Gadget

with Installment, Too!

We are all-too-familiar with the sad tales of friends, neighbours and relatives who fell headlong into the consumer spending trap and soon found themselves racking up a massive credit card debt which they would struggle to pay off for years and years, or worst of all – having to resort to borrowing money from “Ah Longs” or declaring bankruptcy. So we are warned not to buy

goods such as electrical items, smartphones, laptops, kitchen appliances, AV equipment, furniture, home décor items and a variety of other things on credit, easy-payment or installment plans. It is because eventually, we could find ourselves drowning in debt after buying things we could not afford. It is entirely true that unchecked consumer spending, which can easily happen when consumers have access to flexible payment options, could and usually does lead to financial hardship.

The Golden Rule



The golden rule that applies when it comes to purchasing consumer goods is simple – if you can’t afford to pay cash for it, then don’t buy it. Either do without it, look for a cheaper option online or at another shop, or pursue alternatives such as purchasing a second-hand/used item.

When buying consumer goods on credit makes

financial sense

However, there is one scenario in which it makes sound financial sense to opt for the easy payment scheme, installment payment plan or payment with a credit card. And that is when (and only when) you do have the cash in hand already, or can easily afford to pay the installments in full. Why? Well, there are a couple of benefits to purchasing consumer goods on credit, if (and only if) you are one of those who can afford it, and if (and only if again) there is no interest charged.



If the above criteria are satisfied, it might be worth your while to consider the following points.

Better Cash Flow

Firstly, since there is no interest charged, you can use the installment scheme to manage your cash flow better and keep your capital, for investment purposes or even let it continue to earn interest in your savings account.



Affordability

Secondly, the item immediately becomes much more affordable, when the cost is amortised over a 12 month period, instead of having to pay the entire amount upfront.

Regulate your Expenses

Thirdly, the installment scheme also helps you to regulate your expenses on consumer goods. Using smartphones as an example – as we all know, smartphone manufacturers such as Apple and Samsung, make it a practice to release an upgraded model every couple of months. We are easily tempted to join the craze to upgrade, especially when we are dazzled by all those incredible new features advertised! The temptation to just go out there and get yourself the latest one could be too difficult to resist as we are bombarded with advertisements encouraging us to buy. Well, here’s the good news – if you are still paying for your old phone on credit, it’s simply not yet time to upgrade to a new one (regardless of what the smartphone manufacturers are telling you!).

Credit Card Rewards

Lastly, paying for consumer goods on credit even though you have the cash and can pay off your credit card bill in full at the end of the month, allows you to collect reward points on your credit card that could then entitle you to cash-backs, gifts, or other rewards.



The more expenses you put on credit, the more points you rack up, and the more lucrative rewards you can get. But remember the golden rule which applies again – avoid credit card interest as a result of only being able to pay the minimum payment, at all costs! The rewards are not worth it if you can’t pay your credit card bills in full every month. You would be better off waiting until you have the cash to buy the item.

Final Tips

Final tips and suggestions include shopping around at various

retail outlets and online to find the best flexi-payment or

installment scheme, as well as analysing your intended

purchase carefully against your budget and future commitments

over the next month and next year – to accurately gauge

whether you can actually afford your intended purchase.

It is essential that you begin with the ready cash to pay for

these items. But how about a car? Do you wait until you have

the money? What's the car price that you can afford?



How Much Should You Spend on a New Car?

I’ve heard this complaint many times. I am one of those who complains about this too: “The cars are so expensive in Malaysia.” Well, to what extent the high pricing of consumers vehicles in Malaysia? Let me first tell you my experience chatting with an American over breakfast. It happened on 28th July 2012. In the beautiful morning, I drove 10 miles to Portland, Oregon to meet Noah Brockman, a business coach who had just helped me on my online project called Founder Method, which is a membership site for Malaysia entrepreneurs. We sat down in a typical Amercian breakfast restaurant. We shared information on a lot of stuff, and eventually, we got to the point of discussing the difference of lifestyle standard between Malaysians and Americans. “For a Honda Civic, how much do you think I pay for installment every month?” I asked. I sold this car before I moved to stay in the USA for 12 months. “About RM1500?”, Noah took a guess.



“Wow, how do you know? I paid RM1,425 every month. It’s pretty close!” “I don’t know about the price in your country, but here, a Honda Civic cost around US$17,000. With zero down payment, it will be around $1,500 to pay it off in one year.” Noah explained his calculation. “Damn! My installment is for a 7-year loan!”, I exclaimed.

Why is a car priced higher here?

Without blaming anyone, let’s see the taxes imposed on the vehicles here before hitting the road. There are import duty, excise duties and sales tax being imposed on cars.

Notation



● CBU = Complete Built up ● CKD = Complete Knock Down ● MFN = Most Favoured Nation

These taxes are also one of the highest in the world. It makes most foreign cars extremely expensive for the local buyers. These explain why a Honda Civic here cost RM120,000 but only US$17,000 in the USA.

Malaysians pay a lot for cars

It is a commonly known fact that a young fresh graduate might be paying 30-50% of his salary just to own a car that seems like a necessity, especially if you are working in the major cities. For example, if you get the lowest specification Perodua Myvi model (manual 1.3 liter, solid colour) priced at RM41,924.30 on the road, zero down payment, and 9 years loan repayment, your monthly installment is RM489.51.



Now add on the petrol, toll fees, parking fees, and maintenance expenses, you’ll most likely spend around RM800 per month just because you own this car. For a fresh graduate earning RM2,000 a month, RM800 is 40% of your salary. Don’t sweat. I’ll be giving you some suggestions below in order not to overspend on cars. Since we can’t change the National Automotive Policy on our own, the logical thing to do is to play within the rules. There are many ways to spend less on a car including not to get a new one, or not to own one at all. Either way, it involves living below your means.



Now let’s get to the question we are discussing in this section – how much should you spend on a new car?

How do you know if you can afford a new car?

The answer is the 20/4/10 rule. Michael Kling at Wise Bread (personal finance blog) shares this easy-to-remember rule: - Put down at least 20% - Finance the vehicle for no more than four years - Keep total monthly vehicle expense — including principal, interest, and insurance — under 10% of gross income Apparently, Michael is living in the USA, and he is talking about a different living standard. But the principles hold true for us who are residing in Malaysia. If cars are expensive, it just means we should get cheaper options.



If you are following these rules, before buying a Myvi, first you got to have at least 20% down payment ready in your bank account, which is about RM8,400. Secondly, by financing the remaining 80% on a four years hire-purchase loan, you’ll be paying RM779.79 per month.



According to the third rule, you got to keep your total monthly vehicle expense under 10%. By excluding the maintenance, petrol, toll and parking costs, you got to be earning around RM8,000 a month to afford a new Myvi. Okay. I know this is kind of hard to swallow. How many years do you need to climb the corporate ladder to get to the income level of RM8,000 per month? Some people take as long as 10 years to get there.

The millionaire next door is driving a Myvi

The truth is that many frugal people are driving a Myvi in Malaysia. I’ve heard a story from my friend, Lee, who is a top level manager of a property development project in Penang. He told me that a middle-aged man drove a Myvi to his office. That guy went in wearing short pants, and bought eight units of RM400k/unit properties in one shot! You see, even the millionaire next door is driving a Myvi.



So if you are not earning more than RM8,000 a month but drive a car as good as Myvi or even better, you need to take a close look at your finances. Are you heading towards the right direction?

Car Loan vs Housing Loan Psychology

After paying many years on both car loan and property loans here is the main difference I realised – it is the opposite feeling when you pay the n-th installment. The feeling of paying a car loan - 1st installment – “I pay so little to enjoy such a nice ride! Totally worth it.” - 50th installment – “When is the final payment going to come? I am tired of this old car.” The feeling of paying a housing loan - 1st installment – “It is going to take forever to pay off this mortgage.” - 50th installment – “Oh… I am paying so little to enjoy this expensive home.” The answer is obvious – don’t buy a car you can’t afford. Until the time you can afford your dream car according to the 20/4/10 rule.



In my previous Volumes of this book series, I preach to readers to buy a house first before thinking of getting a new car. When you hunt for a house, make sure you prepare the following MUST-HAVEs.



Five Financial Must-Haves for First Time

Home Buyer

Due to the recent hike in property prices, owning a home had become more challenging. I am glad that I bought my first house as soon as I could. But it is not so lucky for the tenant who is staying at the very first house I bought in Penang. When I moved to a bigger one, I was trying to sell off the old home. A couple made an offer. But finally, they settled in with a tenancy due to reasons unknown to me. A couple of years later, I just sold this property where the same couple was still renting. Thanks to their decision to rent rather than to buy it outright, I managed to sell it at a price 34% higher. How about you? If you are not yet a homeowner, you’ll find that buying your first home may be one of the most exciting events in adult life. Here are five financial prerequisites that are musts before you sign on the Sales and Purchase Agreement (SPA).



1. Have adequate Down Payment

Whether you are buying directly from the developer or seller at the sub-sale market, you must have the down payment of 5-15%. The first step of buying after you’ve identified your desired house is to sign the booking form and pay 1-2% earnest deposit, or the booking fees. It will allow 14 days for you to arrange for SPA signing. Upon signing the SPA, you will be required to pay the remaining down payment that adds up to the total of 10%. After that, you’ll need to finance the rest of the purchase price with a bank loan, assuming that you don’t have the ready cash to pay in full. In some cases, depending on the type of the property and your credibility, you may get lower or higher financing margin compared to the industry standard of 90% financing. If the banks only lend you 85% of the purchase price, you will need to fork out another 5% for the difference. Of course, there are cases with literally no money down. But you will still be required to fork out the down payment and get it back in short term period due to some smart negotiations, special discount or rebate from the developer, or creative financing. So the first financial must is to have 5-15% of the down payment accumulated.



2. Estimate How Much Can you Borrow

After you’ve got your down payment ready, the next thing you want to find out is how much installment you can afford to fork out every month. You then determine how big the loan amount you can take. Your mortgage servicing affordability is assessed by calculating your personal Debt Service Ratio (DSR). DSR is equal to your total monthly debt repayment obligation, divided by monthly take-home income (that’s after tax and EPF contribution). Bank Negara requires the bank not to lend borrower more than 60% DSR. In other words, if your take home pay is RM5000/month, you will be able to serve a loan payment of RM3000. However, it is not recommended to go to the limit. I would recommend that you keep your DSR under 30%. And this 30% should also include your car loan. Depending on the loan tenure, the younger you are, the longer term you can take, probably up to 30-40 years to completely pay up the mortgage. At the interest rate of about 4.3%, and 30 years loan tenure, a monthly payment of RM1000 can serve a loan amount up to RM200,000. After knowing how much you can borrow, the next financial must-have is to understand how much you can afford to pay every month.



3. Know How much Can you Afford

When you have your own home, other related expenses comes with it, other than the monthly mortgage installment. First, is the maintenance fee if your property is in a gated and guarded community or a high rise building. Secondly, you will also need to pay yearly fire insurance premium, quit rent and assessment. Thirdly, there are also regular expenses such as Indah Water Konsortium, water, and electricity bill, not mentioning the initial deposit for all these utilities. Therefore, you’ll need to understand that your expenses will increase when you are staying at your own house, comparing to staying with your parents or renting a place. So how much exactly can you afford? A careful calculation is recommended.

4. Transaction cost

When making a home purchase, don't neglect other one-time fees. You may need to pay real estate broker commission who helps you hunt for houses. There are also legal fees involved to prepare the SPA and also the loan agreement. Besides that, the biggest amount of all is the stamp duty payable to the government.



SPA Stamp Duty Rates: First RM 100,000.00 = 1% Next RM 100,000.01 - RM 500,000.00 = 2% Next RM 500,000.01 - RM 2,0100,000.00 = 3% Above RM 2,000,000.00 = 4% Meanwhile, the loan agreement stamp duty is 0.5% for any amount. So all these transaction expenses can add up to a total of about 5% of the purchase price.

5. Get ready with Renovation and Furnishing Cost

After you get the house keys as the proud new homeowner, you will get to do more alteration and enhancement, which will incur some renovation and furnishing. You can always decide the improvement that suits your budget. No matter how frugal you are, there will be some basic furnishing required before you can stay comfortably in your new home. So get ready with a minimum fund to cover this necessary expense. Buying your own home is probably one of the biggest financial decision in your life. Some people depleted all their accumulated savings after the purchase. Some even incur more consumer debts when they swipe credit cards and opt for installment pay back to furnish their home.



However, it is a different feeling, which is more towards satisfaction and fulfillment when you can stay in a property that has your name in the ownership title. Happy house hunting! After you accumulate some assets, get married with children, here are the worries coming up!



The Importance of Appointing a Guardian

for Your Children

If a couple passed away, who will look after the children? Usually, the grandparents will apply to become the guardian ad litem (appointed by the court) in the case where a couple dies intestate (have no written Will). If one parent passed away, the surviving parent is left to take care of the children. The surviving children will be taken care off in the following order --> surviving parent, testamentary guardian and guardian ad litem (appointed by the court).

The importance of personally selecting a guardian

The future can be unpredictable. For example, a couple may meet with an unfortunate accident while travelling or on holiday leaving the children behind. Similar situations may also happen to a parent or a single parent who is divorced or a widow or a widower. It does not have to be an accident but a fatal illness that can take a parent away. These are unfortunate circumstances that negatively affect any child’s life especially if he is still a minor (underage).



If no guardian has been appointed by the parents, the grandparents will step in as mentioned above. A serious problem may arise if both paternal and maternal grandparents fight for custody of the children. Once the parents are gone, who can determine and select the right guardian who has the children’s best interest in mind? If the parents left behind a significant amount of money or fortune for the orphaned children, this could attract dishonest people. An uncle, aunt or a distant relative or cousin may view the guardianship as super-attractive with a fortune attached to it.



All parents want the best outcome for their children, good health, happiness and a comfortable life. Therefore, parents should not ignore their rights to appoint a trusted person to become the guardian of their children should the unthinkable happen. The appointed guardian does not become the “guardian of property/inheritance” belonging to the children automatically unless legally specified, for example by a court order or as stated in the Will. The appointed Executor/Trustee will be responsible for managing the minor beneficiary’s assets or inheritance until he reaches the legal age of 18 years old. This way, the legal and financial interests of the children are protected.

Allowance for guardians

Providing some allowance for the appointed guardian is recommended. Taking care of one’s children is not an easy job, what more taking care of other people’s children. The responsibility is enormous and requires a tremendous amount of patience and sacrifice. Hence, giving some money helps to make the job or responsibility easier to bear. The monetary reward is also a show of appreciation towards the appointed guardian for taking on an important role. As a recap, it is important to designate a guardian for your young children and state it in your Will. As a parent, you can choose a suitable guardian that has your kids' best interest in



mind. It is equally important to leave some money or allowance for the guardian and stated in the Will, to reward him or her. The Will is a handy document which everybody should have one drafted, signed and witnessed. The next question - do you need a comprehensive Will?



Why is there a Need for a Comprehensive

Will?

I had my Will done even before my child was born. Having a Will is important as I want my kid, my wife and my parents to be taken care off should anything untoward happen to me. Therefore, it is for my own peace of mind to get my Will done early. Mine was done by a Rockwills’ will writing team and kept there for a lifetime custody.

What is a Will?

A Will is a document done by a person stating his last wishes or instructions. The person making the Will is called a “testator.” The testator can record his final instructions about various issues such as the division or distribution of his estate, choosing a guardian for his young children and appointing a trusted and capable person as the “executor” of the Will. A Will makes it easy to specify which assets go to whom. The deceased person’s estate including money, properties, shares, collectables or jewellery goes to the selected beneficiaries. For example, he can leave one property to one child and a second property to another child, thus ensuring there is no dispute later on. The best thing about a Will is that a person does not lose control over all his assets, properties or valuables that are



stated in the Will. The person can dispose off any of his assets anytime during his lifetime. The executor will carry out the instructions written in the Will only upon the testator’s death.

Write a comprehensive Will

Writing a comprehensive Will is important where a testator should list down all his assets, liquid as well as illiquid assets. Examples of liquid assets are savings accounts, investment accounts, fixed deposits, unit trust funds, shares and bonds. Examples of illiquid assets are properties, land tracts, collectables, vehicles and jewellery. Having proper details of each asset are important, for instance, the details found on a title deed or the S & P agreement of a house. The testator can also put in a residuary clause in his Will to include assets that are acquired in the future or any future inheritances.

What happens if you do not have a Will?

If a person dies without a Will (dies intestate), his estate will be distributed or divided according to the governing laws. For West Malaysia and Sarawak, it is the Distribution Act 1958 (Amended in 1997) and for Sabah, it is the Intestate Succession Ordinance (1960).



What if there is a Will, but it is not comprehensive

enough?

Well, the executor of the Will is going to be saddled with the challenging and complicated task of trying to understand and comply with all the instructions written in the Will. The executor may even have to do some intensive and extensive investigation work not unlike the character Sherlock Holmes, to gather all information on the deceased person’s estate. Nobody can put a time estimate on how long this process would take, which could be years. On top of that, the executor may even have to engage a third party to do the search to locate all the deceased person’s assets and incurring unnecessary expenses in the process. It could be years down the road before some assets are discovered. There is also a high possibility that some assets would never be found, remaining hidden forever. This is not an unusual situation as it has been reported that there are RM42 billion of unclaimed assets in existence. What are the consequences of this situation? Well, the major effect is that the beneficiaries will be deprived of their inheritance. The recipients, who could be the surviving children of the deceased will have a lengthy wait to benefit from their inheritance.



Hence, having a comprehensive Will is going to hasten the distribution of the deceased person’s assets, simplify the job of the executor to carry out all the instructions, ensure all assets are distributed accordingly and to the right people and ensure no assets are left out or overlooked.

Testamentary trust

If the testator is worried about irresponsible beneficiaries who may squander their inheritance, he can set up a testamentary trust in his Will. This will allow for the distribution of assets, especially liquid assets according to a fixed schedule. For example, the beneficiaries will receive a certain sum or percentage of money every three or five years. The periodical payment of money instead of one lump sum may work best especially when minor children (underage) are involved. In addition, the testator may also include a set of conditions to be met by the beneficiaries to be entitled to their inheritance. From the above, one can understand why a comprehensive Will is useful to ensure a proper and efficient handling of a deceased person’s estate. Keep in mind that providing a good wealth distribution is part of sound financial planning to safeguard a person’s wealth into the future. Do you have a Will written already? If yes, do you need a review now?



Why and When Should You Review Your

Will?

It is not unusual to hear about plans going wrong or awry even after careful planning was carried out. Therefore, writing a Will after prudent and detailed planning does not make it perfect or foolproof. A person’s life will undergo various changes throughout his lifetime which may affect his Will. Hence, it is wise to undertake a review of one’s Will from time to time to ensure it is up to speed.

Relevant Scenarios

Below are listed scenarios or situations that necessitate a review of one’s Will: - A change in one’s marital status. For example, getting married, divorced or separated. - A change in the Executor’s status. For example, the Executor is migrating, has passed away, has declared bankruptcy or is incapacitated. - A change in the guardian’s status. For example, he is migrating or has passed away. - A change of heart or mind with regards to the beneficiaries. For example, the testator may wish to include a new beneficiary or to cut off a spendthrift beneficiary. - A change in the witness status. - There is a new addition to the family, i.e. a new baby.



- A beneficiary has passed away. - There is a significant increase in the testator’s assets or estate. Reviewing a written Will need not be an annual process as a person can do it bi-annually or even every five years. However, certain significant events do make it imperative for a person to review and write a new Will, for example, if the appointed Executor has passed away. An event like this necessitates the writing of a new Will. It is to avoid unwanted or unpleasant consequences from arising such as “partial intestacy” where the beneficiaries fight among themselves to appoint their preferred choice of an administrator. Another example is if the chosen guardian intends to migrate to another country or has a change of heart about becoming the guardian. The testator may also want to rewrite his Will if one or more of the beneficiaries prove to be undeserving of his estate. The testator may discover that a beneficiary has turned out to be uncaring and is likely to squander all of his inheritance away. Hence, do not be surprised to hear of someone having a new Will drawn up and revoking an earlier Will. It is a reasonable act of ensuring a Will is updated to suit current conditions or situations. Everyone who has a Will should undertake a review once in a while or if one or more of the circumstances stated above arises.



----------------------- The End of Volume 4 --------------------------- If you find any error in this edition, kindly send an email to [email protected] If you enjoy this ebook series, please do me a favour by writing your comment on this page: https://KCLau.com/lp And post a review on my Facebook page: https://www.facebook.com/pg/kclaumoney/reviews You will help me in my mission to provide financial education to more people. Hear from you soon. regards, KCLau


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