Pay yourself first（先付钱给自己）

Most people pay everyone else first – landlord, credit-card company, hand phone operator, Income Tax, and so on. Change that equation. In other words, you must adopt the earn-save-spend habit. We try and budget every day, week, month, and year hoping that if we’re careful we’ll have some money left over. Most people feel that they do not have enough income to save so they procrastinate by saying, ‘I will start when I earn more!’. Even if you haven’t said it yourself, you’ve probably heard a relative or a close friend say it. Trust me, this is impossible. Most of the people continue to live paycheck to paycheck regardless of increasing income. According to Parkinson’s Law, the more you earn, the more you spend! The general rule is that as people earn more money, they tend to spend more money. Ask anyone who got a raise last year if their saving actually increased. In almost every case, the answer will be “no.” Why? Because more often than not the more we make, the more we spend! And at the end of the day we’re still broke. Are you tired of this game?

If you’re making a reasonable salary and still find yourself living paycheck to paycheck, the problem almost certainly isn’t your income – it’s your attitude.

Most self-made millionaires make a decision at a young age to “pay themselves first”.

What does this mean? Some people think that “paying yourself first” means taking yourself put to dinner, but it really means putting aside money that you will invest and grow for the rest of your life.


Income - Saving = Expenses

When you get your salary at every end of the month, pay yourself ahead of others by allocating a certain percentage of your salary to saving before paying your bills. In other words, you must adopt the earn-save-spend habit. Through a systematic, disciplined way of controlling your spending habits and set aside a chunk of your income into saving every month and the discipline to be consistent is what helps you succeed. In order to make sure you save that amount, have it automatically taken out of your account before you pay anything else for the month. The first cheque you write every month should be to you and that should go to your savings. And the more we save, the less we spend and the more we can accumulate. You can never “over-save”. The magic formula, whether you earn minimum wages or RM100 an hour, is to save at least one hour a day of your income. A great goal for late starters is two hours a day of income.

To the extent possible, you may want to arrange to have certain amounts taken directly from your paycheck and automatically invested in accounts of your choice. And if you have the money automatically deducted from your check chances are you’ll never even miss it. Find out about standing instruction (S.I) plan that divert money from your checking or savings accounts into unit trust funds or retirement accounts. You’ll get the advantage of dollar-cost averaging: by investing the same amount each month, you buy more when prices are low and less when they are high and reduces the risk of impulsive or unwise spending that will threaten your savings plan. If possible, save more than you think you are going to need to provide yourself with a cushion.

Twenty years from now you’ll be amazed at how rich you are.

Emergency fund

“For age and want, save while you may; no morning sun lasts a whole day.” – Benjamin Franklin

When everything’s going well in your life, finances aren’t usually a big problem. But inevitably, something unplanned happens that end up costing you a bunch of money, and there’s never a “good” time for these things to happen.

To quote the American poet Henry Wadsworth Longfellow, “Into each life some rain must fall, some days must be dark and dreary.” We all know that the time to prepare for a rainy day is when the sun is still shining. In Life you should expect the unexpected, and this is why you need an emergency fund. The best you can do is to prepare for emergencies that require access to additional money and having an emergency fund is the ideal solution. Let’s face it, even relatively “small” emergencies can send your finances into a tizzy. There’s no way to predict when an emergency will strike, or to know how expensive it will be. But you can plan. An emergency cash fund is your best line of defense.

The first step in constructing any serious financial plan is to create an emergency cash fund. Everyone should have a cushion of cash to fall back on in case of an emergency. You’ll want to have enough money on hand ideally to cover at least three to eight months’ worth of living expenses. That means enough to cover your mortgage or rent, food, utilities, auto/commuting costs, debt payment and other regular expenses you can’t put off even in an emergency – stashed in a safe and liquid in a money market fund or savings account with the highest possible interest where interest earnings generate some excitement rather than yawns. Without this financial cushion, any unexpected expense can derail your long-term plans and force you to get into debt, quite possibly when it is worst possible time for you or from a very expensive source. The last thing you want to do is be forced to rely on credit cards or loan which could simply compound the problem.

Living without an emergency fund is like sailing on a cruise ship that’s not equipped with a life boat. If you don’t have an emergency fund, it means your threshold for risk is set dangerously high – to a point where normal events can become emergencies. Have you ever felt uneasy because you weren’t sure you had enough money in your current account to cover the cheques you wrote?

The only things you can be sure of is that there will be an emergency at some stage, so have some money put aside and don’t raid it or delay in saving for the proverbial rainy day.

You may believe you don’t have extra savings set aside because you don’t make enough money. Or maybe you think you’ll save after you get out of debt. It might be counterintuitive, but unless you start saving regularly, that day may never come. When you save for your rainy day fund, two things happen: You protect yourself so that you can handle anything that comes your way, and you’ll sleep well at night because you won’t be living from paycheck to paycheck. Remember, no amount is too small to get started – even RM100 every payday will make a difference. Start putting a little each month. Ideally, you should treat you emergency fund like any other recurring bill that you must pay each month. Dedicate the appropriate amount from your paycheck and set it aside. Every cent you save is a step toward building your own personal insurance plan. Donald Trump, the real-estate tycoon gives “The Smart” Money-saving advice: work hard for every penny. Fight for the pennies and the dollars will come.

In a crisis, it’s important to know you have resources. You can simply own up to the fact that you need savings and resources to back you up. The bottom line is that safety and security come with savings. And that once you have them, you’ll feel a lot saver going to sleep each night and a lot more comfortable waking up each morning. Start now and save whatever you can, even if it isn’t much. Some day, when you need the money, you’ll be glad you did.

$pend less than you earned & Live $marter

Being young and financially irresponsible is great fun, but being old and broke stinks.

Mr Micawber in Charles Dickens’s David Copperfield sums this up:

Annual income twenty pounds, annual expenditure nineteen ninety-six, result happiness.
Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

It is amazed that how many people flout this simple but most golden of all golden rules.

Spend more money than you make, this doesn’t sound logically possible. If you only make RM1,000 a month, how could you possible spend RM1,200 a month? Think of it this way. If you take two steps forward and then three backward, you have essentially taken one step backward. The same goes in respect to personal finance. If you get your paycheck and then go spend more than what you were just paid, you have lost money. It’s easier that you think. So easy, you might be doing it. Dipping into savings, borrowing from others, or buying on credit card are the primary ways of spending more money than you bring in. You might be able to get away with doing this for a few weeks or months, but soon, your hole-digging habits will catch up with you. Before you know it, your savings is depleted, your credit cards are maxed out, and you can’t borrow any more money.

Strive to live within your means – not some Hollywood fantasy. For those who are living way beyond their means not saving and waiting for their windfall, they need a wake up call. Put together a budget and live beneath that budget. Control your spending and allow yourself to create a little bit of savings, with which to generate more income. In the New York Times Best-seller, The Millionaire Mind by Thomas Stanley was shocked to find that most millionaires live below their means. For example, they prefer to repair or refinish things, rather than buy new. They believe that financial independence is far more important than displaying high social status.

A small change in mindless spending can translate into serious savings. You do it regularly, and the compounding works miracles.

It is not how much you earn that is important. It is how much you keep that matters. You don’t need to borrow more to get more stuff, because all that means is you’ll have to work more to pay for it.

Living below your means is the secret to prosperity.

What makes life 100%

Here's a little mathematical formula of life that might help:

If:

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Is represented as:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

then

H-a-r-d-w-o-r-k= 8+1+18+4+23+15+18+11=98

K-n-o-w-l-e-d-g-e= 11+14+15+23+12+5+4+7+5=96

BUT

A-t-t-i-t-u-d-e= 1+20+20+9+20+21+4+5=100

Therefore, one can conclude that while Hard work and Knowledge will get you close, ATTITUDE will get you there!

So, a person with the right ATTITUDE is always a WINNER!

Respect & Love Money$

The first and one of the most important Money Rules is to respect and love money.

The general population has a love or hate relationship with wealth. They resent those who have it, but spend their entire lives attempting to get it for themselves. The reason a vast majority of people never accumulate a substantial nest egg is because they don’t understand the nature of money or how it works.

You have to get up early, work hard all day and go to bed still working on your money. But is it OK to work hard to make money? It is a worthwhile thing to want? It depends on why and what you are going to do with it I guess. You are not the only person in this boat. We, as a society, are all in this Titanic together. The reason is learned behavior. We are taught from both parents and peers that we work for money, not having money work for us. We are all taught to do well in school, excel in college, get that degree and go make money for someone else and their company. Robert T. Kiyosaki, author of the bestselling Rich Dad, Poor Dad book series has observed, “The poor and the middle class work for money; the rich have money work for them.”

When you feel confident about your financial decisions, you’ll probably find you sleep a lot easier at night. Money might not be the most important thing in life, but lack of it, or lack of control over it, can affect our whole lives, including our mental and physical health. Nobody enjoys life when they are out of control financially. You should never have to get up in the middle of the night in a sweat about paying your bills and mortgage.

Being good with money doesn’t require a Ph.D. in finance. But you do have to get a certain amount of good, basic personal finance knowledge under your belt to recover from past mistakes, ditch bad money habits and make real financial progress.

Let's Talk About Money$

“Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the ‘gotta have it’ scale.” – Zig Ziglar

“Money, if it does not bring you happiness, will at least help you be miserable in comfort.” – Helen Gurley Brown (1922-)

An article I picked up a long time ago stated that what ever you do with your money you are wrong. If you save it you are a miser. If you spend it you are a spendthrift. If you go after it you are money-mad. If you don’t go after it you are lazy. If you accumulate it after years of work you are a fool who never got anything out of life.

What is money?

Money is a matter of functions four, a medium of exchange, a measure, a standard, a store of value as summed up is a rhyme found in many economics textbooks and primers. Money serves as a standard of value for measuring the relative worth of different goods and services. Money is a concept. You can’t really touch or see it. You can only do this when the physical symbol of money, the paper money was introduced in the form of bank notes or a cheque.

Everyone uses money. We all want it, work for it and think about it. Money is a very important part of our lifestyle.

It is a tool to get you what you considered most precious in life—putting the children through college, providing for a secure retirement, starting a charitable trust, taking a trip around the world – whatever. Money is a tool to assist you to achieve these ends, but it is not the end itself.

Money can’t buy happiness. No money can create more unhappiness. But money does buy opportunity and guarantee choice. How well you save and invest today makes the difference tomorrow.

“There are three ways to make money. You can inherit it. You can marry it. You can steal it.” – conventional wisdom in Italy

According to a survey from WHO (World Health Organization) shows that every 100 young men aged 25 today will find themselves in one of the following positions at their retirement age:-

1 -----WEALTHY
4 -----FINANCIALLY INDEPENDENT
5 -----STILL WORKING
27 ---WILL BE DEAD
63 ---WILL BE BROKE

According to the survey, most people end up broke at their retirement age and only a few will be financially independent. With these shocking statistics in mind, you need to change your future in a big way beginning now.

Most of us working 45 hours or more in a week just to make ends meet and we’ve got literally nothing in savings.

If you don’t like your results, change your approach.