What's Wealth?

Nowadays, more and more people are working towards creating wealth. But, what wealth really is? Is it a person's wealth is measured by how much he earns, by cars he drives, by house he lives in? Is it the more $$ you have, the wealthier you are? After reading some financial books, I learnt that wealth actually is measured in time.

In Robert Kiyosaki's book (Cashflow Quadrant), wealth is defined as "The number of days you can survive, without physically working and still maintain your standard of living". For example, if your monthly expenses are $1000 a month, and if you have $3000 in savings, your wealth is approximately 3 months or 90 days. Therefore, wealth is measured in time, not dollars.
In other words, the longer you can go on living your life without working another day, the wealthier you actually are.

Let's look at an example extracted from Adam Khoo's book (Secret of Self-Made Millionaires). Steve is a director in a multi-national company and earns a $20,000 monthly salary. He lives a lavish lifestyles that results in personal and household expenses a month of $18,000. He hasn't really saved much over the years as he has spend any surplus upgrading his house and car. His liquid assets are just under $18,000. Besides his full time job, he has no other sources of inocme. What is Steve's level of wealth? Well, if he stops working today, his $18,000 will last him for just a month. So his wealth is one month's salary. As you can see, wealth is defined by time, not by the absolute amount of dollars.

On the other hand, Susan, a marketing manager in a retail store earns a monthly salary of $5,000 but she is much wealthier than Steve. How is this so? Let's see.

Over the last 20 years, Susan has diligently saved 20% of her income and invested in the right stocks and mutual funds that have given her returns of 15% per year. As a result, Susan's liquid assets have grown to $1.32 million over 20 years. In addtion, she has spent her free time building up a home-based business that sells unique collectibles over the Internet. Her small business earns her an additional income of $1,300 a month. She may not drive a fancy car or wear a Cartier watch, but let's see what her wealth is.

If Susan were to stop working today, she would still retain the $1,300 monthly passive income that her home-based business earns her. Since her monthly expenses is $4000 a month (80% of her income), she would have a net outflow of $2,700 a month. With her $1.32 million in accumulated savings, she would be able to survive for 40 years.

If Susan were to put her $1.32 million into a risk-free fixed deposit account earning interest of 4%, it would bring her an additional interest of $52,800 per annum. This means another source of income that takes in $4,400 a month. So you can see how Susan can very comfortably go on forever without working another day in her life!

How to create your first blog with Blogger?

I have been asked by friends several times about how to create a blog with Blogger. I hope the 10-steps instruction below will give beginners a good start.

1. Go to the Blogger website (http://www.blogger.com/).


2. On the Blogger page, enter your Gmail’s Username and Password. Then click SIGN IN button. You will be directed to Dashboard page if your sign in is successful.


3. On the Dashboard page, click Create a Blog and you will be directed to Name your blog page.


4. On the Name your blog page, enter a Blog Title.


5. On the same page, enter a Blog Address (URL) and then click Check Availability to check if the blog address is available for use. If the blog address is not available, please rename your Blog address (URL) and click Check Availability again until you get it. Once the blog address is available, please write down or remember the blog address (URL).


6. For the Word Verification entry, please fill in with the characters that you see in the picture on your screen. Then, Click CONTINUE button to proceed to Choose a template page.


7. On the Choose a template page, choose a template for your blog. Then, click CONTINUE button to proceed to You are done page.


8. On You are done page, click START POSTING button.


9. Congratulations! You can start writing now. Happy blogging! Please remember to click PUBLISH POST button when you finish your blog.


10. Now, you can view your blog with your defined blog address.

Tony Robbins at the TED Conference

I found a 20-minute video clip of Tony Robbins. This is an incredible talk by Tony Robbins at the TED Conference. I am really impressed! If I can be motivated, I believe so can you!

What is "Rule of 72"?

Have you heard of "Rule of 72"?

The "rule of 72" is a simplified way to help you to estimate how long it will take for your money/investment to double with a given annual rate of interest. For example, if you expect to earn 4% interest rate on your money, it will take 18 years to double your money. How to get this? Just divide 72 by 4, you would get 18 years.

The "rule of 72" can also help you to figure out how much interest rate required to double your money/investement in a certain number of years. For example, if you want your investment to double in 10 years, you need to earn 7.2%. How to get this? Simply divide 72 by 10, you would get 7.2%.

The king's chessboard

This story book is about a king that wanted to reward his wise man for solving a problem for his king. When the man refused to accept a reward for his service to the king, the king insisted. Thus, the man simply asked for a grain of rice on the first day, 2 grains on the second day and so on for each of the 64 squares on a king's chessboard. For example: 1, 2, 4, 8, 16..... The king agreed immediately without much thinking.

For the first half of the request, the king was laughing at how trivial the reward was. However, situation get out of control later due to the power of compounding. The growth in the number of rice grains accelerated, slowly at first but went off the charts. On the 64th square of chessboard, there was really mind boggling as the number of rice grains became 2^(n-1) = 2^(64-1) = 9,223,372,036,854,775,808.

Can you imagine if the wise man asked for 1 cent on the first day and doubled it on the following day until the 64th day?

Now, can you see how powerful the compounding is? No wonder it is regarded as "The 8th Wonder of the World". Since it is so powerful, we must make full use of this principle with our money.

Winners Never Quit!

At one time, Sylvester Stallone was one of the highest paid actor who demanding a fee of US$20 million or more per movie. Do you think he was lucky? Was he naturally talented actor? Was he at the right place at the right time? The answer is hardly! He was someone who seemed to have all the odds stacked up against him.

His family was so poor until his mother had to give birth to him on the doorsteps of a school. A traumatic forceps delivery caused his facial nerve to be severed, leaving him paralyzed on the lower left side of his face. As a result, he had to live the rest of his life with slurred speech, droopy eye and lazy sneer. Not only that, he also had to deal with those who always taunted him because of his face feature and his name "Sylvester' which associated with the Looney Tunes cat. Despite all these limitations, he still dreamed of becoming an actor and inspiring millions of people through his movies.

He then started looking for job as an actor and going for many auditions. With his limitation at his face feature and slurred speech, he was rejected for more than 1000 times. His wife even told him to give up his "stupid dream" and get a real job. At that point of time, he was so broke until he was forced to sell his dog for $50 because he could not afford to feed his dog and needed the money to survive.

Two weeks later, he went to watch a boxing match between the world heavyweight champion Muhammed Ali and Chuck Wepner, an underdog that everyone thought would be defeated within three rounds. What no one expected was Wepner's determination and tenacity, he lasted the total of 15 rounds with Ali, just refusing to go down. Sylvester Stallone was so inspired by what he saw and he got the inspiration for the film - "Rocky". Instead of continued searching for an acting job, he started writing profusely for 20 straight hours without sleep until he finished the manuscript for 'Rocky'. He was so excited by the script because in his mind he knew that this was going to be the movie that would change his life and his fortune.

He began attempting to sell his script, on the condition that he himself must be the main actor but everyone rejected it. He didn't give up and he kept going. Eventually, he got an offer for $125,000 for his script but did not want him as the actor. Due to this, he walked away from the offer because his dream was to be an actor, not a writer.

The offer price rose to $250,000 and eventually to $325,000, as long as he would not star in the movie. But he still refused.

"Are you insane?", they asked him.
"No, I am Rocky", he responded.

Eventually, they reluctantly agreed, on the condition that the movie was made on a shoe string budget of less than a million dollars and he would only get US$35,000 plus a percentage of profits for the writing and acting. He agreed immediately.

Guess what! Things turned out well for Sylvester Stallone. After he got the money, the first thing he did was to search for the man who bought his dog. He offered the man US$125 and then US$500 for the dog. The man still refused. He ultimately paid $15,000 plus a part in the movie to get his dog back.

The moral of the story is winners never quit and quitters never win.

The 4-minute mile story

For thousands of years, people believed that it was impossible for a man to run a mile in less than four minutes. Many made this generalisation and formed this belief because anybody who attempted had failed. Doctors had also reinforced this belief by showing evidence from their study of the human body that it was physically impossible to achieve this feat.

However, in 1954, a man called Sir Roger Bannister refused to accept this belief and started to form a new belief that it was possible. After lots of training mentally and physically, he became the first man to run a mile in less than 4 minutes. What's more interesting is that within one year after his breaking record, 37 others runners also made it and in the following year, another 300 did the same. Why? Thanks to Sir Roger Bannister because his achievement had destroyed people's limiting beliefs that it was impossible.

The moral of the story is you must install a new belief to overcome a limiting belief.

What's a Blog?

What's a blog? I won't be surpirse many still asking this question.

A "Blog" stands for weBLOG. In layman's terms, a blog is an easy-to-use website, where you can quickly publish your thoughts, share articles that you finds interesting and broadcast news to the world. There are about 120,000 new blogs being published everyday.

You don't need computer programming experiences to start a blog. Designing a blog is just point-and-click and is as simple as composing an email. The fatest and easiest way to learn blogging is to start blogging at Blogger now. It's totally FREE but you must have Google's Gmail account!