Save money the stupid way

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Alice was not a bright student. She barely made it through high school. Without any certificate or diploma qualification, all she can earn is $1000 a month by helping out in a law firm. She is asked to perform very simple and routine tasks, such as photocopying documents and other errands of the company. Simply said, her low IQ doesn’t allow her to perform any complicated task.

She is slow. Some people would even see her as a stupid person. If she needs financial advice, what would you tell her?

When come to personal finance, someone like Alice in this case is not expected to make wonder out of her money. You can take many hours explaining to her about mutual fund, but she just can’t get a clue about this complex investment. No financial planner wants to serve her since there is really a great barrier in communication.

Forget about telling her how to invest in real estate, shares, unit trusts or commodity. She just won’t understand what you are talking about.

However, Alice is not helpless. Her uncle is a very wealthy person. He gave Alice a set of rules as guidance for her to manage her money. Alice is stupid enough that she just obeys all the rules. 30 years later, Alice is wealthier than all her siblings who are more intelligent (higher IQ).

If you are stupid, follow these rules

Here are the rules her uncle told her since she started working 30 years ago:

1. When you get your salary, save half of it. You can only spend the other half.
2. Put the money you save in a bank saving account.
3. Don’t withdraw the money no matter what happens, until the day you retire.
4. Don’t listen to anyone who wants you to withdraw your money in the bank to invest in something that you don’t understand.

In fact, there are many smart people having trouble with snowballing debts. They are smart enough to spend money on all kind of stuff. But not stupid enough to save and follow the stupid rules of saving money.

When you spend some time to think about it, stupid people has the advantage when it comes to saving money. Here is why stupid people can save more:

  • They only know simple mathematic operations – plus & minus
  • They follow the rules strictly. Smart people filter the stuff they don’t like.
  • They keep it simple when managing their money.

If you are smart, but not rich, think twice. Are you really smart?

Read this article in Malay language: Menyimpan Cara “Dungu”

About The Author


personal finance author and trainer


  • Kevin

    Reply Reply March 17, 2009

    Hi, Mr Lau.

    Good post about telling us the rule of Alice obeys.

    I will take note of my notebook, it look simple but action are more strictly.

    What do you think ?

  • Kevin

    Reply Reply March 17, 2009

    Another that, I have bought your E-book of

    It is so useful and meaningful to me.

    But I have got some understanding problem in this e-book, do you mind make some tutorial to me ?

  • LOKE

    Reply Reply March 17, 2009

    Everyone of us knows the principles of saving first and spending later and delayed gratification. But in reality, not many people follow them… I think Warren Buffett is one of the experts applying the principles successfully…

  • mtsen

    Reply Reply March 17, 2009

    Oh … all along what I have been promoting are the stupid stuff …

    • KCLau

      Reply Reply March 18, 2009


      you are humorous ..
      your stuff is for the smart people.

  • yan

    Reply Reply March 17, 2009

    Great post. It’s not easy to be both smart and rich. Agree with you, the smarts has a lot of stuff to consider, to filter…

  • TStrump

    Reply Reply March 21, 2009

    It goes to show you, personal finance doesn’t have to be rocket science.
    Find an approach you feel comfortable with.

  • Jason Unger

    Reply Reply March 23, 2009

    Sometimes it’s the simplest things that have the biggest impact.

    For example, automating your savings, investing and bill pay has a huge reward for only a little time commitment. When you make that kind of change, you feel the positive effects without any more effort.

  • Brook

    Reply Reply March 31, 2009

    What you are trying to tell is very true indeed! Nice Post!

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