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Friday, 24 August 2012

MM : The 3 Buckets (Part 3)

How many rich people are there in this world?

According to a published statistics in 1996, which at that point in time, being a millionaire was the measurement yardstick, this group of well-off are only a mere 5% of the total population in US.  (sourced : The Millionaire Next Door : The Surprising Secrets of America's Wealthy). 
Whether its America or any other countries, be it the past of year 1996 or even at present, the above information doesn't really matter.  The real question is:
Most of us are groomed to the belief that as long as you have equip yourself with education, life will be good.  ITS TRUE!!  As long as you are equip with FINANCIAL education, YES!, life will not only be good, it will transform to be BETTER and ultimately BEST.  So:
1) Why stay at just good? 
2) Why being part of the 95% of the population? 
3) Are you not worthy to be among the financial elites?
95% of the population remains at buckets 1 & 2 i.e. the NEEDS and WANTS.  After toiling much and finally getting out of college/university, there is the tendency of assuming you've reach freedom and that you have obtain all the education required to survive.  How many of you have this thinking?.....  Only to find, the road ahead is much more difficult. 
Most people after satisfying their NEEDS bucket, would go for immediate gratification.  This is facilitated with the convenience of credits, loans, easy payments....... you name it.  If you are unable to get whatever you want in cash, these facilities are there waiting for you.  Is this good?  YES DEFINITELY!, you get whatever you want now, hence the WANTS bucket, but the consequences is it erodes your future earnings.  Every month comes in, the salary/earning goes out to service these facilities.  The pinch may not be as hurtful if you have limit yourself from these facilities, but the burden is greater when you are having big amount and long repayment period.  This situation is made worse when you are limited by your salary/earnings.  If you are selling your time, health and attention to your work/business for the salary/earning, and you can't simply walk away from it, then yes, you are categorise as the 95% of the population.
Did your education help you?  Yes, in getting a job with limited income.  Jumping from job to job will not solve your dilemma as you are still selling your time, health and attention.  Be it if you are being paid a handsome amount, but if you fail to grasp the meaning of financial education, you are just that, selling your time, health and attention.  Do not be surprise if the guy who is being paid/earning better than you is actually suffering from credit nightmares.  Do not be surprise your boss may be that guy!
Oh, how I miss the days of carefree life.  I can take a longer time for lunch with good meals, spend more time with my family instead of just quality time, having more fun and go anywhere and where ever I want at anytime, spending hours away doing things that I like and brings more meaning to my life.  I miss my HK TVB drama!! (Ahem, this applies to me).  Another thought provoking question:
The answer is, b'coz you have sold your time, health and attention, remember your job appointment letter?  B'coz you have a business to run, a day not attending your business is a day lost in income. You get stressed, you get tired, you burnt-out, facing uncooperative staff and the demand to perform/deliver all the time. And one more thing, you are not focusing on your own well-being.
Why can't I meet people that I like?  Why do I have to mind other people's business?
The 3rd bucket,  functions itself otherwise.  Just like the previous 2 buckets, there is no limitation to its size.  In fact the bigger the size of this bucket, the better you are.  When the bucket is so filled and overflows, just like your first faucet, it creates another faucet, a source of income.  When this faucet starts flowing, it brings new meaning to you.  The outcome from this bucket are CHOICE & FREEDOM.  And this is exactly what the rich focuses at.  This bucket consists of 2 modes to achieve freedom i.e savings and investment.  
You can put aside a large amount of money in preparation of your retirement.  Period!.  When I drew the 3 buckets drawing, I was thinking that savings provides interest which contributes to the faucet flowing.  That was about 5 months ago.  5 months later, although interest do help, but it is very insignificant seeing how inflation rises faster & eroding interest.  Nevertheless, this is one option.
The other option is investment.  There are all sorts of investment products available out there.  For the purpose of me explaining, I shall touch on unit trust/mutual funds 'coz Malaysians love unit trust, especially those from PNB/ASNB.   Some people see it as savings, but I beg to differ.  It gives out dividend.  By virtue of you investing, you are filling the 3rd bucket.  By virtue of receiving dividend, you are creating your 2nd income i.e the 2nd faucet.  The bigger the size of your bucket, the stronger the flow of your 2nd faucet.  If on top of unit trust, you are taking part in other vehicles of investment with handsome returns, imagine the flow of this faucet.  WOW! 
All these comes at a price. The price is financial education.  Are you willing to learn more?  Are you spending more time on yourself or your job?  If your mindset is not prepared to accept the above, take time to condition your mind.  If you are not prepared, the various mechanism behind the 3rd bucket will look very very complicated. 
Do not shut your mind, as I have met many many people who simply push away opportunities without knowing what they are and how they work.  Tiredness and burnt-out kept them away from learning more.  Do you like learning? Are you learning for the benefit of your boss (your job) or for your ownself?
This has been a very long post.  I wonder whether this post helps?.  
BTW, have you guess the name I've labelled for the 3rd bucket yet?  I called it:
♥ ♥   the DREAM bucket.   ♥ ♥
Every great dream begins with a dreamer.  Always remember, 
you have within you the strength, the patience, and the passion 
to reach for the stars to change the world ~ Harriet Tubman

Go confidently in the direction of your dreams.  
Live the life you have imagined ~ Henry David Thoreau 

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