Millionaire Create Their Own Luck

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We always saw or read how millionaires got their lucky break along the way and achieved their success. And we keep contemplating when will it be our time to get that lucky break. Some would invest on luck; which is buying lucky draw ticket, to get that lucky break. By the way, have you ever calculated how much you spent and received from that “investment”?

Well, it’s not about luck, though it played its part. It’s more to your readiness to act on that luck, should it cross your path. Don’t understand what I mean? Let’s say, for example, a large successful franchise company wanted to set up a branch in your area. It’s the opportunity you’ve been waiting for but you have to let it go because you don’t have the cash to initiate it. Sounds familiar? You’re out of luck, maybe next time you said to yourself.

So what can you do to create your own luck?

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1. Pay Yourself First

This is a concept that I recently learned. It’s actually, from my own understanding, based on our parents and grandparent advice, which is to always save for the rainy times ahead. Sounds familiar? How is it different from Pay Yourself First? Think of it like this. We always take for granted for the things that are free, but when you paid for it, you tend to value it more, because you paid it with your hard earn cash. Then it makes sense to pay yourself, first! But doesn’t buying that iPhone for yourself can be regarded as paying yourself? Well, you get the phone but the seller gets the money, so you’re paying the seller. Make sense? Millionaires think this way, the best investment that they can make is to invest in themselves.

How much do you pay yourself? That is entirely up to you. 5% of your take-home income? Maybe 10% or 20%? There are people who willing to have 50% so they can get rich faster. It all depends on you. You should, however, keep your money with a financial institution that can give you a higher return, and also have standing instruction (ie potongan bulanan) so you won’t deviate from your goal to become wealthy.

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2. Create A Reserve

Life is full of uncertainties. You will never know whether you will have a job, or your business is doing well, but life still goes on. You need to create a reserve to pay those expenses so your life could continue normally. Having an asset or insurance is not as same as creating a reserve because you need liquidity. Identify your monthly expense, then have a 6 to 12 months worth of expenses as your reserve. A business woman I met even advised me to have 2 years worth of reserve if you decide to venture into business. Having a reserve will give you peace of mind. As your monthly expense grow, so does your reserve. But please buy insurance. You wouldn’t want your life mishap to eat up your reserve, do we?

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3. Live within your means

This is a very simple rule but quite hard to follow. It’s a battle between wants and needs. The wants tend to make us get into debt, future money, thinking that we can pay it off slowly, with a very high interest. Not all debt are bad, there’s still good debt. Good debt are those you get to acquire assets and these assets increase in value over time. Just don’t go overboard with it. Other than that are bad debt. If you have to take one, make sure you try to clear it as soon as possible and on time.

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4. Invest for The Future

This is a no-brainer. The simplest investment you can make (for Bumiputras) is to put your money in ASB. For the non-bumis, in Unit Trust. ASB is actually a Unit Trust anyway, so why delay. But remember, this investment is for the medium to long-term goal. There’s risk involved in investment, just like trading in stocks, but the risk has been mitigated by Fund Managers. But when you invest in money, don’t borrow to invest because stock market fluctuates, debt interest do not. Unless you invest in residential or commercial property, then borrowing would make sense.

Conclusion

In conclusion, these are some of the tips, that I learn, from reading books and talking to people who have the same interest in becoming wealthy. But in the end, these tips worth nothing if you don’t act on it. It’s never too early or too late to start, as long as you start. I’m not an expert, but I might help give a few ideas on how to start yours, should you require it. By the way, this year I’ve stated stock trading, nothing big, just to learn first hand. After reading about it, I think it’s high time I dive in and get my hands dirty ?

Until next post.