When I was a full-time insurance agent, I once had a hawker as a customer. Every month I would need to meet him to collect the premium. Sometimes, he asked me to come back again a few days later. 

The usual excuse: “Business is not good. I have no money to pay insurance premium today.”

Later I found out that he bet a lot of money on KTM tickets. 

KTM = Kuda, ToTo, Magnum ( 4D lar!)

Of course, he never runs out of money for 4D tickets. 

That’s usual practice, especially among the Chinese, to bet some money on lottery tickets. Who knows you might be the next millionaire who strikes the jackpot? However, don’t you think it is false hope? 

The poor think that they need a lot of cash to make tonnes of money. And winning the lottery is the ticket out of poverty. 

The common myth among the poor is that you need financial capital to be wealthy. Pure logic is that it takes money to make money. But you need to look further and deeper, so you can see through the misconception. Unless you are born with a silver spoon, it takes more than money to create wealth. 

If you need thousands to make hundreds, millions to make thousands, billions to make millions, then how come the richest people on earth today can do it in such a short time? Of course, you need financial capital to generate income, but that’s not the only ingredient.

Watch the video to find out what Bill Gates and Warren Buffett still do nowadays even when they are already the wealthiest people living on earth today.

Have you known anyone who invested >RM100k to startup a cafe? A few years later, the business failed, and she lost everything. I once put up RM20k in a music cafe, as a minority shareholder. I lost all the money within 13 months. In this case, we had enough fund to set up the cafe and run it for many months. But we lack mental capability – the know-how of operating a profitable restaurant. 

Many years ago, a senior manager of a factory quit his job and joined our insurance agency. He is smart and has no problem learning the technical knowledge of life insurance. He had the product knowledge, role-played well during the training session. However, after many months in the business, he only managed to sell a few policies. The commission is not enough to sustain, and he finally quit the business. 

Later, we found out that what he lacked is not mental capital, but relationship capital. During his working years, he was known as the jerk, the badass who lack integrity. When you make a lot more enemies than friends, how do you expect people to trust you and pay you money? I think his circle of acquaintances would have laughed at him when he asked for their “support”.

Creating wealth takes more than financial capital. You also need the mental capital and relationship capital. Most of the time, the money problem is due to the lack of the latter

I organise webinar every week to educate the public on financial literacy since 2012. Many people asked me how did I manage to get all these trainers on my show? By the way, I am very grateful as all these speakers help to educate my audience without getting paid. 

If you think I only need financial capital to run this business, naturally I would have to invest and pay trainers to speak. That’s not the case since I don’t pay the trainers. I only pay for the email autoresponder service, the webinar platform, the website hosting, video streaming bandwidth and other operating costs. 

So there are two other ingredients: the mental capital (technical know-how) and relationship capital. When I first started, with a small email list, I rely on close friends to help produce the content. They help me grow my business, as I also contribute to refer more business to them and elevate their reputation in the industry. Together, we position ourselves as experts. 

How to create wealth when you don’t have much financial capital yet?

How to create wealth when you don’t have much financial capital yet? The poor use this as an excuse so they can bet more on lottery tickets. What would happen if you stop giving excuses, and take charge once for all. Recognise the fact that lack of financial means doesn’t hinder your path to accumulating wealth. When you have the other ingredients, you can get funding from many sources: crowdfunding, P2P financing,  angel investors, venture capitalist, bank loans, equity funding, etc.

Now, the smarter way is to invest in yourself to increase your mental and relationship capital. Then the problem of funding will take care of itself.

How do you do that starting today?

When you want to venture into a specific field, read the top 5 best selling books in that topic. Study how the successful people did it. Find your mentor in the area. Can you subscribe to any courses to learn it fast?

In relationship building, you need remarkable social skills. And those skills are learnable, not just “inherited”. Can you provide value to the people who can help you? Give them something first before asking for any return. 

Can you invest in these areas? I do. Even Bill Gates and Warren Buffett still do.

Bill Gates takes one week, twice a year to isolate himself in a secret cabin to read dozens of books. Meanwhile, his good friend Warren Buffett still spends 80% of his day reading!

It never stops

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Personal finance author and trainer

    5 replies to "Two Things for Creating Wealth without Financial Capital"

    • Dr Narentharen Selvarajah

      Good day Mr Lau,
      Been following your blog and videos for some time now. Excellent stuff. Made quite a bit of good financial decisions based on your ‘mentorship’.
      Essentially, we Malaysians lack financial literacy and you have taken immense effort to teach this to us. Thanks a million again.

      Dr Naren Selva
      Primary Care Specialist Registrar
      Ministry Of Health Malaysia

      • KCLau

        Hi Dr Naren, I really appreciate your encouragement. Thank you very much!


      Good day Mr.Lau.
      Please advice me what I need to do so I can buy property continually under bank loan?What bank want from me so everything is smooth deal?

    • Suresh Pakrisamy

      Hi Lau,
      Well written article and very practical. I migrated and never had to opportunity to follow up with your articles for few years.
      Will do from here onwards.
      Keep up the valuable effort. Thank you

      Suresh Pakrisamy
      New Zealand

      • KCLau

        Wow .. New Zealand is such a beautiful country. Enjoy your life there!

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