Lesson From "Rich Dad Poor Dad"
I was reading Robert K's "Rich Dad Poor Dad" again recently. Just like the Bible, we should frequently revisit these teachings to remind ourselves of things that we know but may have forgotten due to our “busy schedule”.
Some of my friends asked me if I have earned my first million after all these rea
dings, sharing and philosophy. I told them I am still working on it. I don't even have a few hundred thousands in my bank account, talking about millionaire! But that does not means I suppose to be ignorant; that does not stop me from reaching that goal – financial freedom. I guess it's like watching TV. My all time favourite ACCA lecturer Mr Fred Keer used TV as an example to illustrate that not knowing how something was constructed does not stop you from using it.
……ok may be this is not a good example. Pardon me.
Solving Long Term Problem
Let me quote page 49 of “Rich Dad Poor Dad” to you – “Remember what I said before: a job is only a short-term solution to a long-term problem. Most people have only one problem in mind, and it's short term………”.
Recently, one of my colleagues mentioned that her husband intends to switch to another company for job security reasons. I overheard it and I kaypo (nosey) and asked her whether if her husband's decision will make any different. This is because job security problem occurs everywhere and everyday. Remember those days when we used to say that the SAF (the Army) offers iron rice bowl? Not any more. Today and most of my ex-SAF colleagues are in the commercial sector. I asked my colleagues again whether if she knows the bigger problem? I ask her why would she (and her husband) wants to earn a higher income? Is it for bigger house or car, or to maintain bigger monthly bills?
Fortunately, she replies that she is aware of the bigger problem – the long-term problem as described by Robert K. If you ask me why I work hard for promotion or seek other sources of income, I assure you that it is not because I need it to support my bills. In fact, my close friends know that I am debt-free. My living cost is extremely low and I can survive working in MacDonald – yes I'll be poor but I can survive.
I want higher income so that with extra money, I can use it to “create” more money. I want to use a short-term solution (higher pay) to solve a long-term problem –financial freedom. Unfortunately, fortune god has not been kind to me during recent S$10 million TOTO draw. I'll try harder next year. Having said that, you must also know how to make your money work hard for you. Otherwise, even if you are rich, you money will leave you someday, somehow.
“The Poor and the middle class work for money. The rich have money work for them” – Rich Dad Poor Dad.
Example Of My Uncles
This afternoon, my uncle came to my house to deliver his son's wedding invitation card. This uncle is my mother's 2nd elder brother. The wedding will be held at in a restaurant in Boon Lay Shopping Centre. For those who stay at western side should know that Boon Lay Shopping Centre is a rather old shopping centre and a little bit run down. It is definitely not like Jurong Point or Causeway Point. I don't mean that couples need to show off and hold their wedding dinner at Fullerton, although I had been encouraging my colleagues such as Kim Song and Valarie to do so. Anyway my point is that all my friends and colleagues will usually hold their wedding dinner either in a respectable hotel or at least a restaurant in town. Any place but a restaurant in Boon Lay Shopping Centre. And please do not think that I am despising them. Let's me share with you a little history on uncles and you'll understand what am I talking about.
When I was still a boy, my four uncles were relatively rich. I don't think they were millionaires but certainly, they were cash rich and had very strong purchasing power. They were able to spend on big car/house, visited big restaurant frequently, and gave bigger red packets during Lunar New Year etc. I understand from my mother that these uncles were doing construction work. I don't know the details but I presumed that they were sub-contractors. Before the slump of the construction sector (that recovers now), many people had earned big bucks by just bidding for a small portion of a construction work and then employed foreign workers to get it done. It was a highly lucrative work and as a result, all these sub-contractors were relatively rich. Big house, big cars, holidays and nightclub were common phenomenon.
Unfortunately, most of them didn't make it today. After the slump of the construction sector, many either bankrupted, or back to the “employee community”. In fact, many listed construction companies had either gone busted, delisted or re-structured. One of my company's drivers also used to be a sub-contractor. He shared with me that those years, his annual income topped $100,000. It was easy money and he spends more time in nightclubs. Today, he is a driver earning a humble income now.
Back to my uncles. Of the four brothers, the eldest passed away a few years ago. According to my mother, he was the ringleader and after he passed away, the rest could not survive. However, I think the slump is the main cause; the outcome is most likely to be the same even if my eldest uncle is still around. The remaining uncles now earn a humble income as a taxi driver. It will be very difficult to revert back to employee status after being a “boss” for many years.
Robert K's Lesson #1: The Rich Don't Work for Money
IMHO, my uncles used to be rich but they continued to work for money. When they are rich, they are not suppose to keep working for money; they should let their resources work hard for them. Instead, with more cash then, my uncles enlarged their spending power and enjoy life in the short term. They failed to divert extra cash into a “money-printing” machine. So even if you are a millionaire, without sound knowledge in financial planning, you can easily re-join the “employee community”. All it takes is a collapse of the stock market, property market, business prospects, economy etc. That's why it is hard to believe that today, the 2nd uncle's son is holding his wedding dinner in a small restuarant.
And please, nothing wrong with that restuarant, ok? It's perfectly fine to hold wedding dinner in that restuarant. My sharing focus on the lesson - financial planning to snowball your resources. Remember – knowledge equals to power. This is the mother of all truths.
I was reading Robert K's "Rich Dad Poor Dad" again recently. Just like the Bible, we should frequently revisit these teachings to remind ourselves of things that we know but may have forgotten due to our “busy schedule”.
Some of my friends asked me if I have earned my first million after all these rea
dings, sharing and philosophy. I told them I am still working on it. I don't even have a few hundred thousands in my bank account, talking about millionaire! But that does not means I suppose to be ignorant; that does not stop me from reaching that goal – financial freedom. I guess it's like watching TV. My all time favourite ACCA lecturer Mr Fred Keer used TV as an example to illustrate that not knowing how something was constructed does not stop you from using it.……ok may be this is not a good example. Pardon me.
Solving Long Term Problem
Let me quote page 49 of “Rich Dad Poor Dad” to you – “Remember what I said before: a job is only a short-term solution to a long-term problem. Most people have only one problem in mind, and it's short term………”.
Recently, one of my colleagues mentioned that her husband intends to switch to another company for job security reasons. I overheard it and I kaypo (nosey) and asked her whether if her husband's decision will make any different. This is because job security problem occurs everywhere and everyday. Remember those days when we used to say that the SAF (the Army) offers iron rice bowl? Not any more. Today and most of my ex-SAF colleagues are in the commercial sector. I asked my colleagues again whether if she knows the bigger problem? I ask her why would she (and her husband) wants to earn a higher income? Is it for bigger house or car, or to maintain bigger monthly bills?
Fortunately, she replies that she is aware of the bigger problem – the long-term problem as described by Robert K. If you ask me why I work hard for promotion or seek other sources of income, I assure you that it is not because I need it to support my bills. In fact, my close friends know that I am debt-free. My living cost is extremely low and I can survive working in MacDonald – yes I'll be poor but I can survive.
I want higher income so that with extra money, I can use it to “create” more money. I want to use a short-term solution (higher pay) to solve a long-term problem –financial freedom. Unfortunately, fortune god has not been kind to me during recent S$10 million TOTO draw. I'll try harder next year. Having said that, you must also know how to make your money work hard for you. Otherwise, even if you are rich, you money will leave you someday, somehow.
“The Poor and the middle class work for money. The rich have money work for them” – Rich Dad Poor Dad.
Example Of My Uncles
This afternoon, my uncle came to my house to deliver his son's wedding invitation card. This uncle is my mother's 2nd elder brother. The wedding will be held at in a restaurant in Boon Lay Shopping Centre. For those who stay at western side should know that Boon Lay Shopping Centre is a rather old shopping centre and a little bit run down. It is definitely not like Jurong Point or Causeway Point. I don't mean that couples need to show off and hold their wedding dinner at Fullerton, although I had been encouraging my colleagues such as Kim Song and Valarie to do so. Anyway my point is that all my friends and colleagues will usually hold their wedding dinner either in a respectable hotel or at least a restaurant in town. Any place but a restaurant in Boon Lay Shopping Centre. And please do not think that I am despising them. Let's me share with you a little history on uncles and you'll understand what am I talking about.
When I was still a boy, my four uncles were relatively rich. I don't think they were millionaires but certainly, they were cash rich and had very strong purchasing power. They were able to spend on big car/house, visited big restaurant frequently, and gave bigger red packets during Lunar New Year etc. I understand from my mother that these uncles were doing construction work. I don't know the details but I presumed that they were sub-contractors. Before the slump of the construction sector (that recovers now), many people had earned big bucks by just bidding for a small portion of a construction work and then employed foreign workers to get it done. It was a highly lucrative work and as a result, all these sub-contractors were relatively rich. Big house, big cars, holidays and nightclub were common phenomenon.
Unfortunately, most of them didn't make it today. After the slump of the construction sector, many either bankrupted, or back to the “employee community”. In fact, many listed construction companies had either gone busted, delisted or re-structured. One of my company's drivers also used to be a sub-contractor. He shared with me that those years, his annual income topped $100,000. It was easy money and he spends more time in nightclubs. Today, he is a driver earning a humble income now.
Back to my uncles. Of the four brothers, the eldest passed away a few years ago. According to my mother, he was the ringleader and after he passed away, the rest could not survive. However, I think the slump is the main cause; the outcome is most likely to be the same even if my eldest uncle is still around. The remaining uncles now earn a humble income as a taxi driver. It will be very difficult to revert back to employee status after being a “boss” for many years.
Robert K's Lesson #1: The Rich Don't Work for Money
IMHO, my uncles used to be rich but they continued to work for money. When they are rich, they are not suppose to keep working for money; they should let their resources work hard for them. Instead, with more cash then, my uncles enlarged their spending power and enjoy life in the short term. They failed to divert extra cash into a “money-printing” machine. So even if you are a millionaire, without sound knowledge in financial planning, you can easily re-join the “employee community”. All it takes is a collapse of the stock market, property market, business prospects, economy etc. That's why it is hard to believe that today, the 2nd uncle's son is holding his wedding dinner in a small restuarant.
And please, nothing wrong with that restuarant, ok? It's perfectly fine to hold wedding dinner in that restuarant. My sharing focus on the lesson - financial planning to snowball your resources. Remember – knowledge equals to power. This is the mother of all truths.
