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Saturday, 21 April 2012

MM : The 3 Buckets (Part 1)

Celebrities / Sports Stars Gone Bankrupt or Deep in Debts :
Mike Tyson
Dennis Rodman
Allen Iverson 
Toni Braxton
Nicholas Cage
Stephen Baldwin 
Michael Jackson
Whitney Houston
Does this list surprise you?  They were once multi-millionaires.  All were professionals in the career of their choice.  They've made the right career move.  Their move brought to them loads of luxurious lifestyles.  Money seems to come easy for them.  But one day, BANG!!  Either insolvency comes or almost there knocking at their doors.  What happened?
The list of stars in financial grunt goes on and on.  Just do a simple google search, the list can be dumbfounded. 
Remember in my 1st MM post, I mentioned that money comes easy.  Whether its a RM1,000 monthly salary or RM1million business income, the truth is, everyone knows how to attain this part.  Its just the mode of attaining them that's different.  Some people prefer to work for others in exchange for a decent dough while the ambitious others do businesses.  THERE IS NOTHING WRONG with your career choice.  It is only a matter of time that everyone will get to their destination of choice.  YES, I SAID EVERYONE!!  Provided your actions correspond with your aims, of course!!
We can change our lives.
We can do, have, and be exactly what we wish.
~ Tony Robbins 
So, revealing fact no. 1 here.  You do not have to work madly racing for a high paying job in order to get a good life.  Yes, high pay accelerates in reaching your dream destination, but if you fail to juggle the 3 buckets, you may as well end up just as any one of the stars above.  
QUESTION: Have you met people who nag nonstop of their financial woes even when they just got a pay raise? (I'm asking a very ironic question here le, 'coz I think I am that person le :P).
Okay2 *self slap face*, gonna move on and teach this kitty and you all what the above superstars have failed to juggle, i.e. the 3 buckets.
Reintroducing the below image again.   

I must self praise myself again as I am very lousy at drawing.  But the image is simple and fetchingly good, right?  *vainmode.  Okay-lah, boleh tahan saja (marginally satisfactory only)  :PPP.  As long as it helps in our learning process, I am satisfied.
To recap , what you are seeing is the liquid that flows out of the left faucet is the "S" sign with 2 vertical bars running through it.  The liquid will be captured by the 1st bucket. 
Introducing the 1st bucket : Your "NEEDS" bucket. Anything that falls in the category of "surviving" will fill this bucket.  Food, drinks, clothes, clean air, shelter & etc etc.  The bucket does not conform to a standard size. You name your needs, and the bucket will accomodate accordingly.  Some people may even include cellphones, pc, spiritual comfort and etc etc.  Like said, everyone has their own individual needs bucket.  Only when you have satisfactorily fill this bucket, any $$$ excess will flow out into your next bucket.
AHA!! So, for those with non fancy-ful income, do not despair. There is opportunity for you to move faster than the rest.  Define your Needs bucket.
The bucket includes protection too, or in other words, "security".  Some people may argue that there is a need for job security.  But for the purpose of this learning curve, the job part has been covered by the faucet.  We are managing money after the job/business produces a return.  So you make sure your faucet is of strong and sturdy, of the hardest steel/material.  We are learning to be sustainable, manageable and hopefully future-able.
The other structure of security is Insurances, which forms the core for protection.   Personally, I have been battling this mentality thinking that insurances are important.  In financial planning, the hierarchy to practice is PROTECTION, SAVING, then INVEST.  I am at times pro while other times against it.  I am especially against it when sales agents kept pushing for a sale, but not able to help in visualizing I have a need for more protection *raging mad.  Nevertheless, I am angelic enough to be patient while he/she finishes her stuff *batting eyelashes. 
I find myself not appreciating insurances, not until when I start managing my 2nd bucket, which then I learn to understand its priority.  There's so much more to understand about Insurances.  Maybe a future post will be done on this.  But for now, we need to move on on what lies ahead when the Needs bucket is filled. 
What will you do with the excess money in hand?  Remember, the bucket's size is dependent on you.  Once that's filled, the excess amount will most likely be saved or you starting on venturing for some luxury.  And that, ladies & gentlemen, will bring us to the next bucket, WANTS.
To be continued.....

1 comment:

  1. this really a good tips...

    p/s: Bakal menggegarkan dunia blogger pada 30 April 2012:


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