Before You Make Money, Save Money

Regardless of you making a lot of money now, or are going to make a lot of money later, you have to know how to save. You are making $1 million a year and have done that for the past five years, but you spend all of them and have not saved a cent, you are wasting your five years time and effort making no production at all. When I ask you: "You are making $1 million a year for the past five years! How much have you earned to show?" If you have spent everything, you have nothing to show. "You mean you have earned nothing to show?" ~memory from Richest Man in Babylon.

It is all about increasing your networth. When you make $1, you increase your networth by $1. If you spend that $1, you are back to where you were, which means you are not doing anything to increase your networth.

This is true for fresh graduates who have got a job. They earned their salary every month-end, spend some on clothes, some on techs, some on beers... After 5 years working 9-5, they realized they have not added any amount worth talking about to their networth.

Wealth and abundance come by if you can increase your networth by not spending it. Saving is not easy. It takes discipline and great amount of faith in yourself.

Everything starts with training. Start today by saving away 5% of your income into a new account and label it "Do Not Touch". Many save to spend. Anyway, save to spend is still better than borrow to spend, which is encouraged by credit cards issuers around the globe. Do not borrow to spend, and avoid save to spend. When you spend, spend what you are worth spending. If you are not worth looking good, do not spend on making yourself look like a millionaire. Spend what you are worth, save the remainings and to grow your wealth.

Gradually increase the portion you save, from 5% to 10%, to 15%... Eventually, you will find yourself saving 50% of your income. You might be thinking: If I am saving 50% of my income, how am I going to support my living? Yes you can. It is weird. This method of increasing saving is nothing new in wealth building. Many who adopt this method found that their income goes up everytime they increase their saving percentage. It is that weird. It can be explained by their understanding of building wealth that brings them more wealth, or that they respect money and thus money flow to them. It is just weird. The Universe seems to like people who have a saving habit, and are commited to saving more and more.

Try it for yourself for one year. Afterall, you have nothing to lose but everything to gain. A good and effective method is to increase your saving rate by 5% every quarter.

Learning how to save is easier than learning how to earn. If you are earning powerful amount of money, saving can speed up your wealth building even faster.

Thanks for reading and see you next time!

How to save time?

Time is precious. To prove it, we will take the example of Diamonds. Diamonds are precious because they are time tested version of coals.

Money can be saved, can time be saved?

Yes, definitely. Money saved is money earned. Time saved is time created. We have only 24 hours daily. Do you know some people manage to enjoy more than 24 hours daily? This can be proven by their successes. Many achieved their dreams at a very young age while others fail miserably. What makes them different is their ability to save time and create time!

Ask yourself these questions:

1) How long does it take for an author to write a book?

To write a book, most time is spent researching for the content of the book and finding ways to organize and code them into words and sentences. Most authors are experts in the field they write about. They frequently code their experiences into words. If an author, after 20 years of experience in his field, feel of writing about what he knows, then, it takes the author 20 years + the time it takes to code them into a book. By reading his book, you saved yourself 20 years of time.

2) How long does it take for trainer to speak in a training seminar?

Now you understand how long it takes to prepare for a training seminar. It is the time needed to prepare the materials, plus all the time it takes to learn about that knowledge, experience, content…and the time it takes to learn how to successfully transfer the knowledge to the audiences. If the trainer read 2000 books, has 20 years of experience, learned from another 10 trainers, and you attend his seminar, you are going to save for yourself all the time the trainer has spent.

Imagine today if there were no Windows XP and you want to develop it yourself. You will have to spend all the time and resources it takes for a giant company to finally come up with Windows XP. What you do now is just install it into your computer.

Same thing apply to knowledge and experience. What you do is find an authority that has the knowledge you want, learn from him, and install it into your own brain. It is that simple. This is the best way to save time.

You do not have to go through all the pain of learning what does not work, learn from someone who has “been there, done that”. Learn from successful entrepreneur. Learn from someone who has achieved financial freedom. Learn from people that has already achieved what you want. You don’t have to reinvent the wheel to be successful. Success has been sped up as failures are easier to avoid nowadays with so many books, seminars, and information out there.

Learn and keep learning. You could save yourself great deal of time by learning from people who has “been there, done that”.

Now you know how to save yourself a lot of time. Use those time saved to explore areas that others have not explored, and code them well. You may find it useful someday in the future.

Thanks for reading and see you next time!

Reality of Self-employed

Have you seen the REALITY OF SELF-EMPLOYED?

Since the Asia Financial Crisis, companies have been downsizing and downscoping, which leads to shrinking of demand for manpower. Many have lost their jobs. Fresh graduates cannot find enough companies to hire their talents. This creates an awareness of the importance of entrepreneurship.

Some has followed the right path, other look into get-rich-quick schemes that ultimately fails their lives. It is important to understand what entrepreneurship is and what the costs of being an entrepreneur are.

The lure of becoming your own boss
Becoming your own boss has been used as a lure to attract public into believing it is so much easier to work for yourself. People get the idea that once you are your own boss, you can rest whenever you want, enjoy vacation whenever you like, have good income, live big house, drive big cars, retire early…. Illusions!

This is not the case.
Becoming your own boss has its costs, and usually larger than getting employed. This is not to discourage entrepreneur spirit, but to further enforce the reality of being your own boss.

Reality of Self-employed

- More challenging
Statistics shows that an entrepreneur becomes successful only after 5 years of failure. Statistics also shows that 95 percent of new businesses fail. Those that survive, 95 percent of them fail in the next 5 years. This is the truth, and the truth is always cruel. Fear not. Understanding the truth and take courage to follow it is always better than believing in the illusion. That said, if you were thinking of starting your own business and be your own boss, take courage to challenge the 5 years of failure. Expect to taste little success only after the 5 years of failure. Take it as a 5 years business degree course. The best part is, after the 5 years, you might graduate with a REAL business.

- More responsibility
When you are running your own business, you are managing a few operations altogether. You are the boss of your company, which means you are the head of the human resource, finance, accounting, procurement, marketing, production, sales team….. You name it.

You have the power to influence every part in your company, and with power come responsibility. You are held fully responsible of all your decisions.

- More work
As an entrepreneur, you may ask: “what is my working time?”
I would answer: “You have to work 7 days a week, but you only work half-day.”
And I continue: “There are 24 hours in a day; you only have to work half-day, which is 12 hours a day.”

Get the picture? Yes, that is the reality of self-employed. If you do not want your business to fail, put every of your effort into making it succeed. You cannot afford too many failures, but you definitely can afford losing some sleep.

- More areas of skills and knowledge in your repertoire
To be successful in business, you need to be “Jack of all trades”. In the industrial age, if you want to be successful, you need to be very professional in terms that you need to know in-depth of what you specialize in. This is information age. In order to be successful, you have to be “Jack of all trades”. You need to know a broad area of knowledge with a little bit that is enough for you to control your business. You need to know how to communicate, how to market your product, how to comply with the law, how to report your taxes, how to protect your intellectual property, how to manage your subordinates, how to deal with banks to get funds, how to evaluate projects or capital budgeting, how to stand, how to talk, how to walk…

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“You need to learn how to swim, how to drive, what makes you think you don’t have to learn how to stand, how to walk, how to talk, how to smile…?” Start from the basic.
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Now that you understand how tough it is to be a successful entrepreneur. The most important spirit you must have is the willingness to take on the training in the 5 years of failures. The 5 years basically trains you to be wholemanly ready to manage a business successfully. Building a successful business is something books can never teach. You can only learn them through failures.

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“If you are not successful yet, that means your speed of failure is not fast enough!”
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With every failure, learn something. That means you have completed a paper with flying colors. If you have not have failures: that means you have not sat for exams. Do not simply fail, strive your best not to fail. If you do fail, find out why. That will show you the “crack” in you that prevent you from building a successful business. Amend the crack.

Challenge the 5 years of training, take courage! The rewards are worth all your efforts.

Thanks for reading and see you next time!

Employment vs. Self-employed

Employment vs. Self-employed

Which is better? Getting employed or be your own
boss a.k.a self-employed? according to wikipedia:

Employment is a contract between two parties, one
being the employer and the other being the employee.
In a commercial setting, the employer conceives of a
productive activity, generally with the intention of
creating profits, and the employee contributes
labour to the enterprise, usually in return for payment of wages.

Someone who is self-employed works for himself/herself instead of as an employee of another person or organization, drawing income from a trade or business. Self-employment is sometimes a precursor to forming a small business with employees.

When this question is asked:
"which is better? Getting employed or self-employed?"
Obviously, people who raise their hands for the former will work for the latter. That is a simple
employee-employer relationship.

What is so significant about getting employed?
When you are an employee, you are doing a great job solving problems of the company you work for. By solving their problems and contributing to their profit pools, you take a share of their profits every month, which is called salary or wages. You will also enjoy various benefits in kind, such as health insurance coverage, family health protection, retirement fund, pension plans, to name a few.

When an employer tries to recruit an employee, he has the obligation to pay the employee of his job done everytime when payment is due. In this context, he has to make sure that the value of the job the employee does has to exceed the salary amount that he is going to payout.

====== Side Bar ======
In other words, if your boss is paying you $5000 a month, he will definitely make sure you are doing some great jobs that are worth more than $5000 a month, so he has the balance as profits. This is a simple idea in business.
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If you are still under employment, which is a good news, that means every month you are doing more than what you receive. The question is this:
If you are able to help you boss earn more than your salary every month, don't you think you can make yourself earn the same amount?

You are making your boss richer every month, and only get a portion of what you have done. You should have received the FULL amount if you were working for yourself. Make sense?
So quit your job now and become self-employed.

When the above sentence flashes through your brain, many questions surfaces:
- No, I have a family, I cannot afford to lose my job
- I like self-employed, but what can I do? I don't know how to start.
- start my own business? I do not have capital required
- It is too risky, I cannot take that
- what is the success rate of self-employed? I will not risk if I am not fully assure of success
- add yours
- add yours
- add yours

This is a good exercise. List all your thoughts down. Your job is to find ways to clear those blocks one by one. Those thoughts are what separates employee and self-employed.

Imagine now you are a Boss. You have a good business and now you are recruiting someone to do some work for you. Do you know there is this concern among bosses:Now I have recruited this person, and I will let him do part of my work. What if he knows too much about my business, and then leave me and start the same business, end up being my competitor?

So what do you think? Will the employees after learning everything about the business, will leave the job and start the same business, end up being a competitor of the business? it is UNLIKELY.

Employees and self-employed are different in their mind set. This sets them apart and that is why a business owner never afraid of employee leaving them and be a competitor.
What is the mind set that separates them?It is the list of your thoughts that you have written down. If you are a business owner, you will not have this list, since you do not have those
blocking thoughts, or you have found ways to eliminate them.

Congratulations! Now you understand the critical idea that set apart employees and self-employed. So what's next? Your choice. Not everyone is suitable for being self-employed, and not everyone can work as an employee for long. You choose your own destiny.

Thanks for reading and see you next time!

Step #1 - Know where you are - PART 1

Step 1 - Know where you are: This is obviously the first step you will come across in any planning. Whatever you plan to change, wherever you plan to go, you need to know where you are now.

Before you start any journey, I am sure you have a map in your brain's eye showing the route. Destination is important. To get to your destination, you must first know where you are.

Getting to know where you are now is an art and science. Some get to know where they are easily, some fail to do so. There are 3 types of "where you are":


1) The REAL "where you are", the truth
2) The "where you are" you think you are
3) The "where you are" others think you are

The REAL "where you are" is what we are going to discuss in this topic. It is not easy to get to the REAL "where you are". Many find that they have to be really honest to themselves to arrive at the REAL "where you are". To achieve Financial Freedom, you must know where you are at any point in time.

Many lessons on finding out "where you are" suggest you to take out a sheet of paper, and write down your Income Statement and Balance Sheet. Yes, this is the right way. You might find it easier if you have a history of income and expense record. After drafting out your income and expenses, you will have a clear view of what brings you income and what causes you outflow. If you find that you have only one Income source, you have to find ways to increase the number of income sources. It will be safe if you have at least 3 income sources. This is called Multiple Sources of Income, which will be covered in later chapters.

After finding out your current finance situation, which is your Income Statement and Balance Sheet, it is time for another crucial exercise. This is uncommon: Write down your hobbies and activities in a column. To the right of each of your hobby and activity, write down whether they create income or expense. Then, proceed on writing down the estimated amount of each income and expense. It is common to have more expense than income. Hobbies and activities usually cause outflow. Do not worry, we will cover more on How to Turn Expensive-Hobbly into another Income Source. This is a knowledge which deserves celebration. There are many possibilities. While many are spending for their hobbies, others are making money out of them!

So now you know 2 situations:
1) Your Finance Situation
2) Your Passion Situation

Later in the chapters, we will look at how to
1) Increase sources of Income
2) Decrease unnecessary expenses
3) Reduce Debt
4) Make money with Hobby

Thanks for reading and see you next time!

Passion and Career - Discovering Possibilities

I read from a thread on soulcast.com about someone who is 22-and-searching. I posted a reply and thought I have to post the same thing here, as it will benefit everyone of us.

Here's it:

We are brought up thinking that the only option after graduation is to get a job. This is not really the case. Many have not thought of other options as they are not exposed to the possibilities. Ask a 4-year-old kid his ambition. He cannot answer you well. He does not know he can be an astronaut, a scientist, an arkeologist, a resort owner...This is because he has yet to see all the possibilities to make an EDUCATED choice.

The best path to finding a person's passion is "TRY". Keep "TRYING". There is only two outcomes:
1) You found your passion
2) Not your passion, quit, and KEEP TRYING.

It usually does not take too long before you realize whether it is your passion or otherwise. Just keep trying. 22 is still a young age. You have plenty of time to try, and it will save your future 66 years.

Finding your own passion is very IMPORTANT. You are brilliant to understand the Power of Passion. When you are doing something of your passion, you go crazy about it, you dig deep into it, you expand it to the horizons, you will achieve magnificient heights within your passion, and you will definitely -never have to work again-. When you are doing something of your passion, you will wake up very early in the morning, and sleep so late in the night just to hand onto your passion.

If your passion turns out to be unable to provide good income the usual way, then BRAINSTORM! That is totally another chapter. Find a way to MAKE IT WORK! Samething, KEEP TRYING and find a way to make it work.

This is your life. You have all the control over it, and you NEED to control it. Many forgot to control their life. If you do not control it, someone else will: your boss, your environment, your friend, your family... They can influence you to become someone they want. (this is another chapter). As People live up to others' expectations.

Find your Passion, and find a way for your PASSION to make good income. Making good income means you ARE contributing well to the society. The more you make, means the more you serve with your passion.

Good Luck in your Journey!
Success is at your side the time you realize the POWER OF PASSION.
Follow it and you will be there!

Welcome - Celebrating the creation of Financial Freedom Guide blog

Financial Freedom - Wholeman Guide and Resources

Philosophy:
Financial Freedom
This phrase has been a buzz lately, especially in the online community. Financial Freedom is a state where your finance allows you to live without having to work. When I say "without having to work", it does not mean that I will share with you how to be lazy but still make a lot of money. "without having to work" is about putting a system in place that will continue to contribute to the society, and you get your share of income from the system. When you have a system in place, it works even without your participation. That brings you free time to engage in your passion, or even build more of the same system. This will ultimately lead you to financial freedom as it is the time you have that allows you to keep increasing your income. When your passive income is more than your passive expenses, you achieve financial freedom.


Wholeman
Financial Freedom can only be achieved by understanding wholeman concept. Many factors are involved that determines whether or not a person can achieve financial freedom. Your risk profile is one of the factor, as it determines the path you will take to achieve financial freedom. Your psychological preperation is another major concern. I have seen many people start from nothing, created a big fortune, and then self-sabotaged and went back to ground zero. It is important to understand that in order to achieve Financial Freedom, one must be prepared "wholemanly". It is not only knowledge and skill and action, but emotional control, environmental influences, your friends, your families, your health, your awareness, your self-esteem... Everything you can think of and not aware of of are part of the factors influencing your chances of success. This blog does not attempt to identify and quantify all the factors, but it does not eliminate the fact that there are many possibilities that can influence your chances of success.


Guide
It is like a map. In order to reach your destination, you need a map. There are many ways to get to a destination on the map. Some chooses the nearer paths, some likes to explore and learn more. There is no rule that only this way work and others won't. The guides attempt to bring to light many ways and "direction on the maps" that you can relate and refer in your quest to Financial Freedom. The guides will include everything that allows a person to better prepare for Fianancial Freedom.


Resources
Financial Freedom is a theory and a reality. When it is a theory, it allows everyone to understand what it is, how to achieve it and how to maintain it. When it is a reality, it proves to you that millions of people out there has achieved financial freedom. It then documents their thoughts, actions and believes so everyone can refer and adopt whatever is good to them. The world is changing every miliseconds. New theories and realities arise with every sunrise. To keep up-to-date with the world, resources can help.

This Welcome message has been long. It will be constantly updated to reflect the latest ground of Financial Freedom, so check back often. Re-read it every month, print it out if you need. Muscles are trained through repetitive weight-lifting. Our brains and believes are trained the same way - repetitive inputs of syntopic information.

Welcome abroad!
Daniel Tan
http://financial-freedom-guide.blogspot.com