The best investor is a gambler.

I don't mean the sucker class mentality gambler, but the gambler that always wins in the game of chance. If you can play in the game of chance and always end up a winner. Congrats! Try getting or a night of poker for illustration purposes.

The worst investor is those that claim themselves to be an investor. Why? They invest and when they lose they lose it all, I don't have to be very detail but see the investor in Transmile and Enron. They are all investor but they all die standing.

Based on the first premise that "gambler is the best investor" Why? You see gambler always have a strategy to win and if they lose, they will modify it until one day they have the edge and strike it rich. Talking about strategy, if you have a sure winning strategy will you share with me, if yes thank you. Or else I should continue learning till I get the winning streak as "luck favor those who are prepared"

My definition of gambling is anything that involves chance or probability or what we say there is a chance for you to win or lose. So, guys maximize your winning and minimize your losses and you will see the differences in your investment results - either better payable or odds ratio.

(Wisdom of a gambler).

Good Luck! Amigo!

Sincerely,
Dr. Lion

The Holy Grail of Investment.

Sure, all of you are looking for the holy grail of investment. Here, I will tell you about it.

Other than you inherited it or marry a rich girl nothing else can beat this holy grail.
People use to joke "if you are born poor fated but marry poor you are stupid". I would like to differ and say that to be rich it is a choice, a mind frame shifting experience of knowing what you need to do in life.

You need to do all four step, miss either one and your chances of becoming super rich diminish tremendously. As your level increase, the difficulty increase and fewer people will be able to do it. If you really become rich by achieving level 4, congrats and do tell me because I am very happy to be of service to you. Basically, its like learning new skill there are many levels.

So, let us start.

Level 1 - Earning.

Everyone knows how to earn.

Level 2 - Saving.

I have discussed saving earlier. Its like adding "+" to wealth and spending is a minus "-" to wealth.

Level 3 - Investing.

In investing it is about multiplication "x". But, it can be a divide "/".
So, make sure that in the investment you take out more money than you are putting in.
Then you know it is a multiplication "x".
Here, you are like a businessman dealing with stock or other goods that are on demand, profit by margin multiply by volume that you have in hand.

Level 4 - Protecting.

Able to diversify and invest in the low-risk solid asset from the profit you make.

So, we start by earning, an active income.

The balance we save, saving.

The investment, a businessman mentality and Protecting, developing a passive income.

"That's all folks the holy grail of investment. If you don't agree to, try proving this wisdom of the century wrong."

Good Luck! Amigo!

Sincerely,
Dr Lion

The magic of saving: Rich is an option.

Do you think that being rich is destiny by faith, luck, religion, race, creed or anything else?

You can blame others, anybody or anything for not being rich.

Here, I will prove to you that being rich is an option, not fate.

Why?

In the book "Acre of Diamond", a guy was always looking for diamonds to be rich. He spends everything to look for diamonds in a faraway land and even sold his own house without realizing that the land that his house sits contains the richest deposit of diamond in the world.

To be rich, you don't have to look far just within yourself.

Here is the magic word that I will prove to you that being rich is an option: Saving.

But, you will ask me how to be rich with saving and how much to save?

I will answer the second question first.

How much yeah to save - The rich man from Babylon have provided us with wisdom over the century, just saved 10% of our income, regardless of income or expenditure. But, make sure that you pay yourself first. Whether you have enough or not you just pay yourself first. You yourself are responsible for your own wealth and financial well being.

You will ask why the magic number 10%. Surely the more the better. Wisdom of the century have shown that 10% is adequate as the remaining should be used for a better life - a better house, car and holiday - life is short, play hard. Saving more surely would be ideal, but that would make you a miser. The purpose of Saving would then be defeated.

Ok, now we go to the second question, how to be rich. It is by saving added to compounding. Saving is a "+", spending is a "-"...While compounding is a "power". So, in kindergarten, we learn about adding, in primary school we learn about multiplication and in secondary school, we learn about factoring and power. Let me show you what happens to the money when saving a"+" meets "power".

Believe meet, it explodes.

Say, I earn only RM 1000 a month, no pay increment but, I compounded my saving with 7% per year, it is like putting your money in "EPF", how much would I have in 10, 50 or even 100 years.

My saving = 10% of 1000 = 100.
Compounding = 7%
Multiplication = every 10 years double.

So, in 10 years i have = 100 x 12 x 10 x 2 = 24000.
So, in 50 years i have = 100 x 12 x 50 x 2^5 = 1,920,000.
So, in 100 years i have = 100 x 12 x 100 x 2^10 = 122,880,000.

See the magic of compounding the rich man from Babylon is right. See the effects of saving a "+" meets compounding a "power" in 10 years, 50 years, 100 years and how it multiplies.

I always believe in management by example as above.

"So, my dear friend becoming rich is a choice, not fairy tales."

Good luck and welcome to a rich and luxury life.

Sincerely,
Dr Lion

Miracle: Passive Income and Magic of Compounding

Firstly, active income - income that we work hard for, income that we toil from 9 to 5, running in the rat race. To be successful in active income, get a good education or experience, be confident and get a job. The more highly demand a job is the higher your pay is. If the boss like you and the company profit, your income will increase. A boss will pay you a higher pay only if you were to earn more than what your salary worth (income per employee > Salary). This is universal law in business.

IF you are a businessman or stock operator, your profit will only come from margin multiply by volume. So, to be richer either you improve your margin or volume. Volume is like the sword of domicile, it can kill you or make you superb rich depending on whether it is a positive or negative margin.

Second passive income - whereby money works for us with a guaranteed percentage monthly or yearly.  You will be asked what is passive income then, it is income in the form of what we get back from the asset we employed, we become the master and the landlord - the house landlord, the shop landlord, the stock investor with dividend or even the unit trust or FD investor. Why I say so, this is because anybody with surplus income is definitely an investor and anybody with excess expenditure is definitely a debtor. When we let money works for us, we should make sure that money's children, grandchildren, and grand grand-children also works for us. Let me illustrate it with some simple story.

Passive income is good with the concept of compounding. Let us say, we just arrive in Australia in the 1800s. There is no rabbit in Australia then. Do u know that rabbit is not a native in Australia? Say in 1800, we as the early fortune seeker introduce a pair of rabbit in Australia and the rate that rabbit multiply is 4 months twice. Can we guess how many rabbit there is in 10y, 50y or 100y? I will do a basic calculation with all the rabbit surviving or what we say in the financial sense the money is re-invested. So rabbit population in 10 y =  1 billion (1x2^30). In 10 years the rabbit population reaches 1 billion. What about 50 years, 100 years or now. See, why Australia is now overpopulated with rabbits by now.

Let us see some magic that exists in real life, compounding. In the real world, the way to compound your investment is through monthly reinvestment and the rate of compounding, let me show you the way. Let say we have 2 people Mr. Scrooge and me. Mr. Scrooge invests 5k per month in FD with a yearly return of 3%, while, I invest 1k per month with a yearly return of 7%. Can we see the difference that both of us have in 10y, 20y, 50y, or 100y? If we were to be able to be alive by then.

In Mr. Scrooge case, his money will double every  48 years  (72*2/3); while mine will double every 20 years (72*2/7).

In the first 10 years, Mr. Scrooge will have  720k (5000 x 12 x 10 x 1.2), while I will have 180k (1000 x12 x 10 x 1.5). Not bad for both of us.

In 100 years time, Mr Scrooge will have 24m (5000 x 12 x 100 x 2@2), while i will have 38.4m (1000 x 12 x 100 x 2@5).

See, in 100 years I am richer than Mr. Scrooge, even though he invest 5x more than me monthly. This shows that it is not how much that you invest per month that matter but the monthly reinvestment and rate of compounding that matter in the long term. So, start investing consistently at an earlier age as possible.

But everyone want windfall profit or fast buck, don't we? Thats why people become punters, gamblers and investor. Those that seeks windfall profit is like a rabbit, while, those that do compounding is like a tortoise. In real life, rabbit or tortoise will win the ratrace? It is for you to ponder and choose your proper strategy to the cathedral of wealth. Are you a tortoise or a rabbit in real-life? Just for your info, have any of you seen tortoise walking backward?

Good luck in your strategy

 Bon Voyage!

Sincerely,
Dr Lion

Debt is the root of all evil.

Say we have 2 people.

1) The first person is a professor earning 10k per month.

2) The second person is a clerk earning 1k per month.

The professor spends 12k per month and the clerk spends 900 per month.

At the end, who will be rich and who will be poor, if we assume that the interest in saving and debt is similar: 6 percent.

I am sure, all of you agree with me that the professor will be poor and the clerk will be rich. But, can you tell me what is the effect in 20 years?

Let me calculate how the effect of both spending lifestyle in 20 years.

First, the professor, he will need to borrow 2k per month (10k-12k = 2k). So, in 20 years, he needs to borrow 480k (2k x 12 x 20). Now, the ugly part will be when we added interest. He will have to pay interest of 72/6 or double the amount he borrows in 12y. As it is additive, in 24 years he will have to double what he need to borrow or to simplify matter we assumed he needs to repay double what he borrows in 20y. This become 960k (480k x 2). So, after 20 years of working this professor will be owing to the bank around 1m.

Second the clerk, he will save 100 per month (1k-900 = 100). So, in 20 years, he will save 24k (100 x 12 x 20). Now, the magic of compounding work for him, cos he is a saver. Same like the professor in 20y his money double. So, in 20y he will have 48k or around 50k. Even though, he saves only rm 100 per month.

So, the professor will be down with 1 million debt when he retires and the clerk will have 50k when he retire.

See, the ugly picture on debt.

So, we must avoid debt at all cost by reducing our expenditure or by increasing our income (eg. by getting another part-time job or better still start a part-time business).

"You can be a very kind and pious person but if you are heavily in debt it is not a bless thing."

Good luck.

Sincerely,
Dr Lion

Terminology of the rich

Before becoming rich u must understand the terminology of the rich, like the ABC of language.

How much money do you need to survive? 1? 100? 1000? 1million? 1billion? 1 trillion?

If we don't know the basic we will say as much as we can land our hand on. We become a typical miser and our life will be misery as all miser life a misery life.

For some others, why to bother, lets it take care of itself. You will be an avoidance of the current topic. How many of us wanna talk about our finance, but finance is the heart of what we need. Money cannot buy everything (eg. love and health) but everything needs money.

So, what terminology we need to know to be rich:

1) Expenditure
2) Income
3) Active income
4) Passive income
5) financial security
6) financial freedom
7) financial wealth.

I will not dwell more on the terminology, you can always google up or see youtube for it.

But, I will put it in equations or how the mechanics of it working.

First, you are financially secure when your active income and passive income > expenditure. Remember the agony of balancing your credit card, checkbook, and tax each year. You are financially secure only if you continue working. Once, you stop working your security is gone. Most people are practical bankrupt if they don't receive their next paycheck.

Second, you have financial freedom. This means your passive income (money that you don't have to work for or basically money working for you) is more than your expenditure. Here, money is your slave but as long as you live within your means. You are free of the rat race. You don't need to continue working or to be employed. This means works become leisure and not a necessity anymore. But, you cannot live the life of the rich yet.

We then come to financial freedom, whereby your passive income is 10x more than your expenditure. This time you are really rich and you have many lee-way to spend more.

So, to be rich we must accumulate as much passive income as we can. In the first ten years, we work for money, in the next ten years, the money will work for you. I will prove to you in the next topic entitle passive income and the agony of debt.

"Money is not the root of all evil for me but debt is the root of all evil."

Good Luck! Amigo!

Sincerely,
Dr Lion

The Diamond Paradox of a rich man

Which is the rich man:

1) A man who live frugal (wooden house and only a bicycle) but left 1 million in the bank when he dies.

or

2) A man who lives a luxury life (Ferrari, Porsche, Lamborghini, big house) but left USD 1 in the bank when he dies.

Which 1 is the rich man? The first 1 is a poor man when he lives but rich when he dies a typical miser. The second one is rich while alive but a practical bankrupt when he died.

For me, both are poor man, we should live in moderation; which is acknowledged in most religion.

We should spend 1/3, donate 1/3 and keep 1/3 for our future or our children. So we will have good current, future, and after-life.

"Rich man is those who live a well-rounded life"

Good Luck! Amigo!

Sincerely,
Dr Lion

Balanced Personality (Maslow's theory)

If we were to study motivation theory, Maslow's hierarchy of need will come to play.

Without fulfilling Maslow's hierarchy of need history had proven that we cannot be a successful person.

1) The first need is a psychological need, we as human, we need a lot of things and wants a lot of things. We need to differentiate our needs from our wants. Basic needs are food clothes and shelter. With modern time car and the internet are necessary. However, all this need money. So our basic needs can only be fulfilled with money or financial freedom. But, we cannot be successful with only money, can we?

2) The second need is a physical need. We need good health to be able to enjoy and live our life to the fullest. When we are young we exchange our health for wealth, when we are old we exchange our wealth for health. What is wealth without health and what is health without wealth? So, take care of your health.

3)Thirdly, we need emotional need. No man is an island, we need to be in a certain social group and role in society. We will feel most appreciated if we know that we contributed to society and make this world a better place for us, our loved ones, friends, relatives and future generations to come. Try the satisfaction of doing good - realizing that with our life, we make a better life for somebody else is most rewarding. In life, we don't have to be the greatest mountain but be the best rock to the utmost of our ability. We can start with a small donation, plant a tree, write a book or groom our children to contribute to society. Why? Because they live longer than us and we know we have made someone life better with our mere existence.

4)Fourthly, intellectual needs. We need wisdom and we need a lot of it, why? A lot of people say cash is king but in truth, wisdom and knowledge is king. Experience is part of wisdom and knowledge. Why? I give u an example. In medieval England, a boatman was rowing the king and 2 of his minister over a certain part of a river. The boatman grumbles that the king pays his minister a lump sum while they idle their time away, sleeping and snoring. The king has his wisdom. So, he tries to give some wisdom to the boatman. When they reach the shore, the king and the boatman heard the sound of lion cub growling. He asked the boatman to go and see, the boatman came back and answer a few lion cubs is crying. The king asked what is the color of the cub? The boatman goes again and check. The third time the king asked the boatman, why the cub cry? The boatman goes again and check. After a few attempts by the boatman, the king woke up one of his ministers and asked him to check the sound. The minister came back after a while reporting that the cry is the from 3 yellow male and 2 yellow female lion club crying due to hunger because their mother had died and he had hunt some wild rabbits to feed them. The boatman heard about it and admit that the king and his minister is full of wisdom and deserve to be their leader. All of them agree that wisdom is of utmost importance. As another example, whenever a rich and clever man meets they always exchange - the clever man teaches knowledge to the rich man and the rich man give wealth to the clever man. How true it is, it is for you to ponder in your daily lives. So, knowledge, my friend is the way forward - country with the knowledge-based economy will be stronger, more resilient and succeed in the future. Compare your subordinates or child; which 1 u prefer? the boatman or the minister?; It is wisdom by itself in your choice.

5) Lastly, spiritual need is important as everything will come to pass. Shakespeare have said in Macbeth, "life is a story, told by a fool, which would eventually end in the grave". So, whats' the point to be the richest man in the grave like Mr.Scrooge in the Christmas Carol by Charles Dickens, spend some time with our creator or patron saint (whatever you believe) and be kind to your parents. Be prepare for your after life.

If we fulfill all the five needs above; I believe we can have a rich, healthy and fulfilling live without worry about after life.

May your life be bless.

"Let us choose a fulfilling life and not drifting aimlessly anymore!"

Good Luck! Amigo!

Sincerely,
 Dr Lion

Startegy to be rich

There are a few steps that u must follow on the strategy to be rich.

Firstly, a burning core desire or dream. Say u want to be a millionaire in 10 years time. Write a check to yourself in 10 years time with a million in it. Feel it taste it smell it. Let all your senses feel the joy of getting a million dollar.

Secondly, a direction, if better get a mentor that has threaded on a specific path, cos he will enlighten your path, make it shorter and you can avoid most pitfalls. Getting the right mentor is the key. If no real mentor available you must choose a financial genius who has been successful and follow his trait in whatever field you choose, for me Livermore, Buffet, Graham.

Thirdly, proper action and willing to pull the cart to get the harvest. If you dream thousands, millions, billions and trillions it is okay. Come to the world of possibilities The bigger the dream the more difficult the task. Then get a proper strategy with guidance from your mentor.

Fourthly, persistent, if you fail, you get up and start all over again till you reach your goal. However, whenever you fail you must learn something from it. It is okay to fail but it is not a blessing if you don't learn something from it say Jesse Livermore or if you play bridge, you don't know who is the patsy then you are the patsy says Warren Buffet.

"A life without a strategy is the same as living without a goal in life - haphazard and always hoping for the best outcome that nature or nurture offered us."

Good Luck! Amigo!

Sincerely,
Dr. Lion

Value of money

Cash is king. Do u agree?

Dream of you to have an unlimited amount of cash, what will you do?

For me, I will do everything to my heart content. The world is my oyster. I will go wild, party whole night, make new friends, buy whatever I want, donate for social cause and most important free myself from the rat race.

So, where do you get the cash?

It all started with a dream a desire, not any desire but a burning core desire to be of utmost rich.

If you have the burning desire sure you will willing to pay any price to get there. It is paying the price that gets you there, willing to sacrifice 10 or 20 years to be rich.

After dreaming, we need to come to reality in lives, "you can build a castle in the air but make sure that the castle or dream has legs."

"You can wish anything in life, but the bigger the dream the higher the price you gonna pay."

After dreaming, we need strategies, in order, to be successful.

So, start dreaming to be free from the rat race. Do you like to be a slave to money or money to be your slave? I choose the second option. Let the burning desire to be free from money prison start in you. Like Archimedes say if you have big enough level you can move the world.

Then, get a strategy.

I will discuss strategies later, start the burning desire to be free from "money prison" like what Martin Luther King believed.

"Know the Truth and the Truth will set you Free!"

Good Luck! Amigo!

Sincerely,
Dr. Lion