This is a guest post by Louis Teo, a bright young man who managed to take control of his finances after being in debt.
Coming from a mid-income family, getting the opportunity to work with a multi-national company while tertiary studies fee 90% being sponsored by employer means a lot to me, a young 19 years old fresh STPM school leaver at the time. By taking the offer, I can achieve my dreams to earn big bulks of money, drive big car and live in a luxurious house, because this company promises greater career prospect.
Bank account is like a transit
All my dreams started to fade away when I realize that the income earned always not enough to cover my lifestyle. The reason why not enough is because I like to buy branded stuff and live in luxurious lifestyle. No matter how hard I work, my net worth will become “~RM0” at the end of the month. For me, bank account is like a transit place for the money. Once the money goes in, in less than a month time, it will go out. Sometimes even worst, it will go out more then what it supposes to. (I am spending my future money with credit card due to uncontrollable spending habits) Worst! Right?!
I have been living with this lifestyle for 2 years. I started to realise I need to save money when I find out that I don’t have initial capital to buy a house. By merely listening to friends advise, I took up my first ever investment, which is buying an investment-linked insurance. But I don’t feel comfortable after that. I have many sleepless nights because I am afraid of losing money.
Find a mentor
One day, I took up the challenge to search for “What is Investment-linked Insurance?” And I found KCLau Personal Financial Blog that explains about it. I clicked on it to read the article. I found the article very impressive and this prompted me to start browsing his blog to look for other articles. Wow!! I found lots of interesting articles which I have been looking for. I signed up for his newsletter, read his book preview. Folks, you know what? My journey to financial freedom begins.
I bought “Top Money Tips for Malaysians” book as Christmas present for myself end of 2009 and started to read it. Amazingly, I complete reading the whole book and even read repeatedly for 2 times in less than 2 weeks time. I am so impressed with practical tips provided by KCLau, he wakes me up I can be my financial genius, not financial idiot. Ask yourself, you want to be financial idiot or financial genius? I bet you will answer: “I want to get control of my money, I want to be financial genius”. If so, you must read his book.
Get financial education
Besides, I also spend a few hundreds of ringgit to buy Aziz Ali’s series of financial book. Yes, it cost me quite a lot to buy the books, but the money spend is well worth to increase my financial knowledge. For me, money spent to make myself becoming more “asset” and not more “liability”, is worth, it is worth!
I practice the tips learnt from the books and now I am on the correct path towards my financial freedom dream. I am happier and I always thankful with what I have now.
My Money Tips for You
Below are some of my tips to KCLau blog readers:
1. PAY YOUSELF FIRST. You are the most important asset to yourself, so you must pay yourself before paying other bills.
2. Make sure you have at least 3 months of equivalent emergency fund, preferably 6 months. Some may ask why 6 months? Ask yourself, the chance to get the 2nd job if you got sacked from your 1st job is higher in 3 months or 6 months? The answer is always 6 months.
3. Start your investment as soon as possible. You will lose if you don’t start early. Read the story of twin brothers, James and Jeremy (Pg 3) in KCLau’s “Top Money Tips for Malaysian”
4. Make sure you know what you are investing. Don’t invest in something that you don’t know or too complex to manage.
5. Divide your saving into separate accounts for separate objectives. Don’t mix them up. In this way, you are much clearer with the amount that you are lacking for each objective. It looks tedious, but if you don’t separate it, you will be tempted to spend your money.
6. If you are a working employee, make sure you read “The Millionaire in Me” by Azizi Ali. You will be amazed how an ordinary employee can be millionaire at your retirement age. The book teaches us how to remain an employee and still become a millionaire. (*Note: this book is one of Azizi Ali’s best-seller)
7. Tips No.7? Subscribe to KCLau’s newsletter and stay tuned with more practical personal financial tips. It’s free, by the way! So why not signing up?