Building Wealth

Every month, when you have extra savings, what will you usually do?

I have asked many people this question, they gave me various answers such as save it for the rainy days, buy things they want or change his or her car.

If you are new to the working world, the BEST thing to do is to SAVE it for the RAINY DAYS for the first few MONTHS. Instead of spending lavishly on expensive meals, branded clothing or new meals, we should save it, unless you have a huge reserves in your bank account. It is because we will not know what is going to happen next. Maybe you will need a huge sum of money then.

If you need to spend on a car, especially in Malaysia, where the public transportation is disappointing, I think we have no options but to buy a car. However, you should ensure that the car installment plus other care related expenses don't exceed 40% of your income. You need to spend on other things as well to enjoy maximum satisfactory in life, or we called it utility in economic terms.

Now back to Wealth Building business. When you have some reserves, you may think of building your wealth. Some people suggests on Insurance Plan. It is up to individual, but in my opinion, I prefer to invest in other wealth building plan. No doubt we need Insurance, but we don't need to many plan. After all, Insurance is also a business. People do it as a business. No 100% guarantee. It always has risk.

According to Mr Kiyosaki, the author of Rich Dad Poor Dad, in his book, titled,"Retire Young, Retire Rich", if a person wants to retire young, retire rich, in summary, the only thing to do is to acquire assets. So I adapt his advice and suggest that you should acquire assets. The assets we acquire should be relevant to the amount of money we have and also our capabilities.

Based on his books, there are 3 types of assets:
1) Paper assets
2) Business
3) Real Estates

I will not explain the meaning of the 3 assets. You may want to find out from Mr Kiyosaki's book. We have to think about what we want to acquire. But one should start small if they are inexperience and have limited funds.

In this new age, the INTERNET as well as NETWORK MARKETING have provided new opportunities to many people. It is up to them to decide whether they want to do it or not.