“I will start managing my money as soon as I have more money” is like an overweight person saying “I will start to exercise and diet as soon as I lose 10 kgs.” No one with that type of mindset is going to be successful in managing his or her money. The first task is to start handling the money you have properly, then you will have money to handle.
A simple illustration clearly explains this wealth principle: Imagine you are walking along the street with your five year old nephew. You come across an ice cream store and get your nephew a single scoop of ice cream on a cone. As the two of you walk out the store, you noticed the cone wobbling in your nephew’s tiny hands. All of a sudden, plop! The ice cream falls out of the cone onto the pavement.
Your nephew begins to cry. So, back you go into the store, and just as you are about to order another cone, your nephew notices a colourful sign with a picture of the “triple scooper” cone. Your nephew points to the picture and screams excitedly, “I want that one!”
Now here is the question. Being the kind, loving, and generous person that you are, would you go ahead and get your nephew the triple scooper? Your initial response might be “sure.” However, after second thoughts, you change your mind because why would you want to set the child up to fail? The child couldn't even handle a single scoop, how could the child possibly handle a triple scoop?
The same holds true when it comes to the universe and you. We live in a kind and loving universe, and the rule is “Until you show you can handle what you have got, you won’t get any more!”
You must acquire the habits and skills of managing a small amount of money before you can have a large amount. Remember, we are creatures of habit, and therefore the habit of managing your money is more important than the amount.
Action Plan # 1
To get you started, open a separate bank account to be designated as your Financial Freedom Account. Put 10 percent of every Ringgit you receive (after taxes) into this fund. This money is only to be used for investments and buying or creating passive-income streams. The purpose of this account is to build a golden goose that lays golden eggs called passive income. And when do you get to spend this money? Never! It is never spent – only invested. Eventually, when you retire, you get to spend the income from the fund (the eggs), but never the principal itself. In this way, it always keeps growing and you can never go broke.
It doesn't matter whether you have a fortune in your coffers right now or have virtually nothing in your savings. What does matter is that you immediately begin to manage what you have got, and you will be in for a shock as to how soon you will get more.
Client :Springfield consultancy SDN. BHD.
Illustration of Springfield Newsletter 2008/ Issue 17
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