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Content

Smart Money Tips1. Be a financial genius

2. Know what’s your time worth

3. Focus on increasing income

4. Get rich using excessive debt

5. Have a budget plan

6. Employ “Compound Interest” to work for you

7. Quickly evaluate an investment using the Rule of 72

Money-Making Tips8. Earn passive income while surfing the Internet

9. Liquidate those junks in your house

10. Turn your passion into money making machine

11. Turn your credit cards from foes to friends

12. Learn the Essential Rules of Investing

Money-Saving Tips

13. Get your first car FREE

14. Enjoy tax relief for education purposes

15. Minimize Upfront Service Charges in Unit Trust investment

16. Manoeuvre your Mortgage

17. Upgrade your lifestyle while cutting down expenses

Money-Protection Tips18. Five Basic Insurance Benefit You shouldn’t lack

19. Traditional plan vs. Investment-linked plan

20. Understand “Insurance Switching”

21. Investment Replacement Feature

22. Beware of the Worst Advice from Insurance Agents



23. Premium: Monthly, Quarterly, Half-yearly, or Yearly?

24. Minimum Effort to keep you Investment-linked policy in

force.



TOP MONEY TIPS FOR MALAYSIANS

Tricks that make you richer without hard work

K.C.Lau has been involved in the financial industry since year 2003. He graduated from

University of Technology Malaysia with a degree in Aeronautical Engineering, but

ironically never ever worked as an engineer. Starting at age 21, He has been performing

as a pianist, keyboardist, and vocalist professionally for many years and still doing whathe loves now. While serving hundreds of his existing clients, he writes regularly at

http://kclau.com to give valuable information to the public in regards of personal finance

topics. If you are wondering how well he performs musically, check out his solo albumswritten, produced, recorded, mixed and mastered by himself at http://music.kclau.com



Introduction

After I graduated, I didn’t get a job. During the final year studying in university, I haddetermined that I am not the kind of person to be an employee. While my school mates

were busy sending out resumes applying for jobs, I was busy thinking of alternative ways

of not to have a day job.

There is really nothing wrong to have a job, and work on it from seven to eleven, even

though during weekends. It is just my own choice not to work as an engineer. However, it

is an undeniable fact that time had to be traded in exchange of money. There are people

who work their whole life, just for the money. Money can’t be everything. But withoutmoney, we are most probably left with nothing.

This leads to my quest to gain more knowledge in personal finance. You can spend yourwhole working hard just to earn more money. But without knowledge in personal finance,

you are just sailing blindly in the middle of the ocean.

So I buy a lot of books, study them, digest the content, practice the tips, and finally I

ended up involving in the financial service industry. Unlike most personal finance books

that preach on a certain concept, this book will show you many simple, and practicaltricks and tips. Most of the tricks can be used right away. Some of the tips here just

require slight changes in your daily habits in order to be effective. Hopefully, this book

will be an eye-opener for you to achieve more with your limited financial resources.

This book is arranged into four parts:

Part 1: Smart Money Tips - You will learn important money concepts that will tuneyour mindset to the right frequency.

Part 2: Money Making Tips – I will share some easy tips for making more income that

doesn’t require a lot of work.

Part 3: Money Saving Tips – Collection of tips that will save you money, without

significant downgrading of lifestyle.

Part 4: Money Protection Tips – This part includes information and advices oninsurance planning. Accumulating wealth require strong foundation of risk management.

I share tricks that even insurance agents never realize.



Tip #1: Be a Financial Genius

You don’t have to be a genius to be wealthy. Although high IQ definitely helps, it is moreimportant to have emotional intelligence in order to get rich.

I like to tell the story of the twin brothers, James and Jeremy. They graduated with thesame degree in engineering. They work for the same company. They earn the same

amount of money throughout their working life. But they have different mentality about

money.

James started saving RM1000 at age 18. The brothers’ income is measly RM10,000 a

year at that time. James decided to save 10% of his income. But Jeremy didn’t. Jeremy

thought that RM1000 saving a year is really hard for him.

10 years had passed by. James had never failed to set aside RM1000 every year for thepast 10 years. He invested the money and got an average return of 10% per annum. Both

the twin brothers were earning RM50,000 a year at age 28.

James thought he had saved enough. He stopped saving since age 28. But he still investswhat he had put aside before that. Ironically, at the moment he stopped saving, his

brother Jeremy started the commitment to save RM1000 a year. Jeremy was so

determined that he never stopped saving a thousand ringgit every year until he reaches

age 65.

The brothers invest in the same portfolio and reap a return of average 10% per annum.

Who do you think has more money at age 65? James only saved RM10,000 from age 18-27. Jeremy saved RM38,000 from age 28-65. Without doing the compounded calculation

using Microsoft Excel, most people would have guessed that Jeremy would be richer.

But the fact is that at age 65, James has RM645,617 but Jeremy only has RM403,536.James is richer than Jeremy by RM242,081! Both the brothers were doing quite well. The

moral of the story is about deferring your spending. The earlier you can do it, the better it

is. The earlier you can save, the less you need to sacrifice at later age.

When you receive your paycheck, there are only two major choices of what you can dowith the money. You either spend it now, or save it for future consumption. The question

is how long can you delay gratification? James only defers his spending for 10 years. But

Jeremy defers for 38 years and still failed to catch up with his brother.

Sometimes rational can’t lead you to save. It always involves emotional struggles. Do

you want that LCD TV now? Can you wait another three years to change your old car?

Would you buy that hi-tech hand phone now, or wait another year for an even more

advanced model, and perhaps cheaper? Only high EQ (emotional quotient) can ensure

your wealthy future.



It is your decision to be made. Defer? You will get richer. Or spend it now?

We all learn the simple arithmetic in primary schools. For example, you certainly know“8 = 10-2”. There is really no challenging mathematics involved in personal finance.

Simple plus and minus equation is all you need.

The two most essential equations in personal finance are:

S = I – E

Where S = savings, I = income, E = expenses

&

NW = A – L

Where NW = net worth, A = assets, L = liabilities

In the quest of acquiring wealth, one must have a positive S all the time. Only throughsmart utilization of your savings can ensure that your net worth will increase over time.

Hacking Your Cash Flow and Balance Sheet

In accounting world, a balance sheet (also known as a "statement of financial position"),reveals a company's assets, liabilities and owners' equity (net worth). The balance sheet,

together with the income statement and cash flow statement, make up the cornerstone of

any company's financial statements.

Similarly, every individual is also an entity that has his/her own financial statements.

Living in this modern society, you are earning an income and spend money to maintainyour lifestyle. You also have your cash flow statement and balance sheet to look after.

Publicly traded companies have to disclose their financial statements in a regular basis.

Do you do the same for your own “company”? I mean your own “company” as anindividual.

Based on the two formulas discussed previously – (S = I – E), (NW = A – L) – you shallhave two very important financial statements at any point of time – the cash flow and

balance sheet statements.

Learn to hack the charts and you will be on your way to the road to riches. These charts

are discussed and elaborated insightfully in the book Rich Dad, Poor Dad: What the Rich

Teach Their Kids About Money–That the Poor and Middle Class Do Not!



There are three general “shape”

First, let’s look at the chart of the mediocre.

Hacking the Charts of the Mediocre

Financial situation:

• always spend less than they earn

• save a portion from their pay check every month

• conservative passive investors who mostly keep their money in the bank

• buy a house, buy a car, go to work and wait for retirement

• net worth grow slowly (probably too slow).

• they are very afraid of debt and try hard to pay it off as soon as possible

Being mediocre is definitely better than being poor.

Cash Flow Net Worth

IncomesExpenses

Savings

Assets

Net

Worth

Liabilities



Hacking the Charts of the Poor

Financial Situation:

• at first, there is some tiny saving left at the end of the month

• but they use the little surplus to acquire more debt - buying stuff they can’t afford

• liability is greater than the amount of asset, resulted in negative net worth

• excessive amount of liabilities put more load to the overall expenses because theyneed to pay interest charges - Negative cash flow

• when they finally got a career promotion with higher income, they use the tinysurplus to acquire more liability — switch to a bigger house, a bigger car etc

• frugal is a word that doesn’t exist in their dictionary

Cash Flow Net Worth

Incomes

Expenses

Deficits

Assets

Liabilities



Hacking the Charts of the Rich

Financial Situation:

Cash Flow Net Worth

Incomes

Expenses

Savings

Assets

NetWorth

Liabilities



• they are definitely the Millionaire Next Door

• normally they work hard to increase their income

• they earn better than the mediocre but still spend like the mediocre.

• they save a lot from every paycheck which is normally invested, in the area theyare familiar of, probably in their own businesses.

• some ultra rich know how to use the leverage of good debt. They might get intodeeper debt, but at the same time the debt is being used to acquire justifiably

greater assets. Assets contributes more earning and improve their cash flow chart.

• financially, they are independent.

• They are the prodigious Accumulator of Wealth

How do your cash flow and net worth charts look like? What’s the shape?

There are two rules to follow:1. Have a positive saving (the “S”) – you must have surplus or saving in your cash

flow chart

2. Use the saving (the “S”) to acquire more assets (A), not liability (L)

Plot Net Worth Chart versus Age

Definition of net worth is assets minus liabilities. More accurately, it should be defined

as total assets less total liabilities.

Net Worth = Total Assets - Total Liabilities

In this case, assets include all your economic resources, such as fixed assets (land,vehicles, houses) and current assets (cash, money owed, stock, unit trust, etc)

Liability is anything that is owed to someone else, including your mortgage, car loan,

credit card debt etc.

The net worth of a person is the value of his possession in monetary terms. You can saythat the wealthier a person is, the greater is the net worth. When we plot the net worth of

a person over his age, we will know how the person actually manages his money.

There are two extreme groups of people: The financial idiots who belong to the worst

group and the financial geniuses who belong at the other end of the spectrum. Most of usare somewhere in between.

Financial Idiot

Eddy is a fresh graduate who earns RM1800 per month. Right before graduation, hebought a new Toyota Vios with minimum down payment. After paying the hire purchase

installment, he is left with RM1000 for all other expenses. He rented a room in KualaLumpur that costs RM300 per month. Without proper budgeting, he pays for all other



expenses with his credit card whenever possible, such as petrol, fine dining, and some

other consumer spending.

Just within a few months, he had reached the maximum credit limit of his first credit card.

Not enough still, he applied more credit cards from other financial institutions. Another

six months down the road, he can no longer afford to pay the credit card minimum

payment. Finally, he lost everything. This is a typical story of a financial idiot.

Let’s look at the net worth chart of a financial idiot.



Net worth chart of a financial idiot

This chart shows an idiot digging a never ending debt hole. Until the day he is too broke

to even declare bankruptcy, he will be buried in the deep pile of debt shit. There is no

other way to help this guy unless he is willing to delay gratification, cut a lot of expenses,

and work hard to save!



Financially Disciplined

If you are educated enough and have the discipline to save, you will get the chart shown

below:



Net worth chart of a financially disciplined

This is a typical chart of a graduate, who takes up a study loan to obtain his tertiaryeducation certificate. That’s why you will see the line chart drops to the negative part.

After he graduates, he knows that he is in debt. He gets a job and moves up the corporate

ladder. Meanwhile, by spending less than he earns, he’s able to settle the study loan, and

build up some assets. You will see that his net worth goes up and finally stops at the

retirement age. After he retires, there is no more active income generated and he starts to



spend his hard earned retirement fund. This fund might be just enough for him to spend

until the day he rests in peace.

This is not too bad right? In fact, there is a study that shows that only 5 out 100 fresh

graduates can successfully achieve the net worth trend shown above. These people are

said to have achieved financial independence. They don’t need monetary sponsorship

from family members nor the public. These are the financially educated group.

Financial Genius

Let’s look at another story about John. He is a frugal person. Every month when he gets

his salary, he saves at least 20% of the net income. The savings are used for investment.

His income grows every year, so as his savings because he still keeps saving 20% of what

he earns. While earning active income from his job, he also tries various ways of making

more money through investment and other business. Finally he acquires a large amountof wealth that he will never have to worry about working hard for money anymore.



Net worth chart of a financial genius

A financial genius is someone who is really good with handling money. It doesn’t require

a Ph.D in Maths or Economics to pull off something shown above. What ones need to

know is some simple arithmetical operations. He definitely knows that to have a positive

net worth, assets have to be greater than liabilities at all times. He would also know that

savings is equal to income minus expenses.

Please plot your own net worth chart using the past historic data of your financial status.

What’s your net worth when you are still studying at secondary school? What’s your net



worth now? And extrapolate the line graph. Is it moving up? Or is it going down? Is it

forming the shape that you want, like the financial geniuses?

I think financial idiots know these simple principles too. The only difference is that the

financial geniuses know that wealth and money is unlimited, but time is limited and

scarce. Time ends at our last breath.

That’s why financial idiots don’t save money from the start. They never want tocompromise to delay gratification. They think that time is abundant and retirement is still

very far away. They don’t know what their time worth is!

__________________________ END OF PREVIEW _______________________

You can purchase and read the rest of the book here:

http://kclau.com/about-2/moneytipsbook

Hopefully these money tips have helped you to make more money, save more money and

make you wealthy.

If you wish to find out more money tips, do check out

My blog: Personal Finance Money Tips (http://kclau.com)

And please share your personal money tips at the forum: http://forum.kclau.com

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