Springfiend Newsletter 20

Wealth Principle: The habit of Life Long Learning

Assuming you have already set aside 10% of your income for the future,10% for “play”, what is next? Well, how about setting aside 5-10% for your Education? Yes, this is for your life long learning. Whether it is a structured learning like attending a short course or seminar or an unstructured learning experience like buying some self help enrichment books, cds, videos, dvds, it does not matters . Just do something!

“Five years from now you will be the same person you are today except for the books you read and the people you meet.” Getting educated is the key to prosperity. Learn about the investment world. Become familiar with a variety of different investment vehicles and financial instruments, such as real estates stock, bonds, share market, unit trust, and currency exchange. Understand about risk, and why risks need to be mitigated. Then choose one primary area in which to become an expert. Begin investing in that area in which you become expert. Do your homework and have a thorough think through process before making investment decision. It comes down to this; poor people work hard and spend all their money, which results in their having to work hard forever.

Rich people work hard, save, and then invest in themselves. They also put their money in investment so they never have to work hard again when the time comes.

Don’t underestimate the power of influence. 50% of our thoughts are influence by people around us. Try mixing with a group of negative people for a month and see what would happen to you? Without the slightest doubt, you will be exactly like them. Be careful whom you spend your time with. Mix with the right group of people. Look for people who want to be successful. These peoples see obstacles as opportunities. They rarely complaint and they believe nothing venture nothing gains. Their fighting spirit are strong and they are always very enthusiastic about what they are going to do and they set a deadline and get it done.

Your “Education” account is primarily used to nurture yourself – to continue educating yourself through seminars, short courses, reading materials, audio and video tapes. Get a coach or a mentor. Learn from people who are more successful than you. Stay miles away from people who can’t add value to you.

Action Plan # 1
Get educated. Take investment seminars. Read at least one financial book a month. Read magazines such as Money, Forbes, The Edges, and the Wall street Journal. Next, stay away with negative people who are always wincing and complaining. Mix with positive a minded person who embraces all problems and tackle it like challenges. Socialize with nice people, and leave those who don’t have such criteria behind.

Client :Springfield consultancy SDN. BHD.
Illustration of Springfield Newsletter 2008/ Issue 19

Springfiend Newsletter 19

Wealth Principle: The habit of observing a balance life.

After you have set aside 10 percent of your income for the future, next you have to set aside 10 percent solely for “play”. This may be the first time you come across such a suggestion and you may find it hard to comprehend. Yes, the 10 percent of your income is for you to “blow away”!

One of the biggest secrets to managing money is balance. On one side, you want to save as much money as possible so you can invest it and make more returns. On the other side, you need to put another 10 percent of your income into a “play” account. Why? The reason is simple; this is part of man’s holistic nature. You cannot alter one part of your life without affecting the other. Some people are too rational and they save, save, save and while their logical and responsible self is fulfilled, their inner spirit whithers away. As the saying goes, “all work and no play makes Jack a dull boy.”

On the other hand, if you spend, spend, spend, not only will you never become rich, but the responsible part of you will eventually create a situation where you won’t even enjoy the things you spend your money on, and you will end up feeling guilty. The guilt will then cause you to unconsciously overspend as a way of expressing your emotions. Although you might feel better temporarily, soon it’ll be back to feelings of guilt and shame. It’s a vicious cycle, and the only way to prevent it is to learn how to manage your money in a way that works.

Your play account is primarily used to nurture yourself – to do the things you wouldn't normally do. It’s for the extra special things like going to a restaurant and ordering a bottle of their finest wine or champagne.

Action Plan # 1
Open a play account or have a play jar in your home where you deposit 10 percent of your income. The rule here is that it must be spent every month. That’s right! Each month you have to “blow away” all the money and allow yourself to “feel” rich. You need to reward yourself for working hard and so it is okay to “play” hard and have lots of fun with it. It makes managing money a more interesting activity to do.

Client :Springfield consultancy SDN. BHD.
Illustration of Springfield Newsletter 2008/ Issue 18

Springfiend Newsletter 18

Wealth Principle: Until you show you can handle what you have got, you won’t get any more!

“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

Springfiend Newsletter 17

Back to Basics

“Isn’t it a little silly recording every chewing gum or Coke you buy and the 20⊄ you pay for using the toilet in a shopping complex?” my client asked, expressing his frustration. I told my client that businesses and wealthy people hire accountants and bookkeepers to track their money. Poor people don’t. This is one of the reasons why they stay poor.

Some of us may still remember the little small 555 booklet that used to cost 5-10 sen which our parents used to record the groceries they bought. I remember my mum carried one with her whenever she visited the sundry shop. Those little 555 books are still available today but due to inflation, it costs a lot more now.

Get hold of one of these and start recording all inflows and outflows of your money. By merely writing down all your financial transactions, you are not only beginning the process of easing your financial problems but you are also on your way to achieving financial success. You will find money that has been slipping though the cracks. Tracking helps you see these cracks, so you can plug them up and as a result, save more money for the important things.

If you spend a little time every day doing the fundamentals, like recording your expenses, you will begin to find yourself on auto-pilot, and very much in control. By now you probably have realized that we are telling you something you already knew, a principle buried in some deep forgotten place but the aim of this article is to trigger you to do something which appears to be trivial but yet so very powerful.

“Over the years I have learned to keep my weight down. It wasn’t easy, but one of the strange phenomena of dieting is if you can discipline yourself to write down on a piece of paper the calorie count in every item of food you eat, and without doing anything else, you begin to lose weight. The process of counting calories alone will bring about a weight loss. Isn’t that interesting?” said one of my clients to me on how she succeeded in keeping her weight down without burning a big hole in her pocket by going to a slimming centre. So, start today!

Client :Springfield consultancy SDN. BHD.
Illustration of Springfield Newsletter Nov 2007/ Issue 16

Sandwich family

The Sandwich Family indicates someone who juggle family responsibilities.
At a time when your career is reaching a peak and you are looking ahead to your own retirement, you may find yourself in the position of having to help your children with college expenses while at the same time looking after the needs of your aging parents. Squeezed in the middle, you've joined the ranks of the "sandwich generation."

Client :Springfield Consultancy SDN. BHD.
Illustration of Springfield Sales Material

Get some helps before it is too late!

The Forties-Pivoting Between Young and Old

The forties is a time of reflection of our life; financial concerns included. Thoughts about leaving something significant behind will naturally surface: “Will the world be a better place because of me? Will my children have a better chance in term of educations and career opportunities?” Thinking suddenly becomes longer-range and inter-generational.

If there are to be Ringgits at work producing an income for the older person that we will be someday in the future, then they must come from the earnings of the current younger person. Therefore, every young person’s pocketbook is supposed to comprise two sections: Section A for the young person and Section B, for the older person he/she will be someday.

Part of the Ringgits in the young person’s pocketbook are the old person’s, as surely as if they had his/her name on it. Unfortunately, with no name printed on the notes, the young person might unintentionally cross the boundary into the other section, and in the process, spend the older person’s money. This is human nature; this is life; and this is the problem that we must address today.

We must arrange a plan that will retrieve the older person’s Ringgits out of the younger person’s pocketbook. This money will be kept out, appreciated with interest, and saved carefully. Such fore planning provides the person the luxury to be waiting surely and certainly for the money the day he grows old.

If you are currently the younger of the 2, you should ask yourself these questions:
1. Do you currently have saving plans?
2. Have your current plans actually helped you to get the old person’s Ringgits out of the young person’s pocketbook before you have spent them?
3. Has the saving plans that you have used turned your good intentions into enduring saving habits?
4. Have the plans you have used forced you to constant reinvestment?
5. Do the plans you use provide for automatic liquidation in a guaranteed number of dollars when you are ready to retire?


Client :Springfield consultancy SDN. BHD.
Illustration of Springfield Newsletter July 2007/ Issue 15

The Ten Most Common Money Mistakes

1. Procrastination.
This is the biggest money mistake of all by putting off what should have been done yesterday till tomorrow. This is simply financial suicide on the installment plan.

2. Failure to Establish a Plan.
People do not plan to fail – they simply fail to plan. They fail to set specific objectives and implement a workable plan for realizing those objectives.

3. Ignorance of the Time Value of Money.
Most people do not understand the tremendous potential of compounding money over a period of time. It amazes most people to learn that $10,000 invested every year, earning 10% interest, can grow to more than $25,000 in ten years.

4. Failure to Recognize the Impact of Inflation.
Inflation reduces the purchasing power of dollars over time. The purchasing power of $100,000 ten years down the road is only $55,839 at an inflation rate of 6 percent.

5. Lack of a Clear Understanding of Tax Laws.
Income tax can be substantially reduced through effective tax planning. Understanding implications of tax laws can result in fewer Ringgit making the one-way trip to IRB.

6. Failure to Diversify Investment Portfolio/Taking Unnecessary Investment Risks.
Each individual must determine his degree of risk tolerance and formulate a balanced and diversified investment portfolio.

7. Inadequate Protection Against Unforeseen Losses.
Life, home, health, disability, liability and other forms of insurance are mandatory today to protect against unforeseen and catastrophic losses.

8. Letting Family Spending Run Wild.
Lack of discipline in spending habits can cause even the best-laid plans to fail.

9. Unrealistic Expectations.
It takes time to build wealth and hence an estate. Too many people expect dramatic results too fast and become disenchanted when get-rich-schemes do not materialize.

10. Failure to Use professional Advisers.
None on us can expect to live long enough to become expert at everything, especially the intricacies of efficient financial planning. We need to surround ourselves with professionals who are specialists in their areas and rely on a qualified financial consultant to coordinate the efforts of the entire financial team.

Client :
Springfield consultancy SDN. BHD.
Illustration of Springfield Newsletter April 2007

The Three Destinies

The first group of people would be those who needlessly carry heavy financial loads. They delay credit card balances from one month to the next, and in the process, owe far more than they earn. They will always be juggling ineffectively, thus struggling to keep their heads above water.

Next, would be the spend thrifts who live from paycheck to paycheck, spending every cent possible, as they flirt with credit cards, debit cards and ATM cards.

The last group is always the smallest, consisting of the ones who fight to maintain their financial freedom by restraining their spending urges. They embrace the debt free or near debt free lifestyle, as the only debt they might carry would be carefully thought through mortgage and car loans. They handle the uncontrollable events by outsourcing it. Being prepared and ready, they live with exuberance and confidence. As such, they most probably are the only people who can usher in this New Year with a spontaneous smile.

So which group do you belong to?


Client :Springfield consultancy SDN. BHD.

Illustration of Springfield Newsletter Jan 2007/ Issue 13