"I want to be RICH but I don't want to invest in Financial Knowledge"

Very often, I noticed people saying:

"I wanna be RICH, but don't want to spend money in gaining Financial Knowledge."

"I wanna be rich but I don't see the need to buy books on financials."

"I wanna be rich but don't see the need to spend money attending seminars to learn more about investments."

The problem is, this group of people are more willing to spend on CLOTHING, VACATION, CAR, FOOD, BAGS etc without any hesitation and yet they want to be rich.  

Investing RM1,000 to buy books, seminars, workshops is too expensive compared to spending on vacation, clothing etc (making others richer). 

This is the mindset of many people, which I call the 'Victim's Mindset'.

Let me now explain what the other group of people is secretly doing, YES! they are doing it secretly without you realizing it. The moment you discover it, very often they have already achieved certain degree of financial success.

I call this group of people having the 'Winner's Mindset' which usually only accounts for 10% of the population because of their distinct mindset. This group of people is actively investing in knowledge every single day.

They love reading online articles about financials, they love investing in books to learn more about money and investments. They love attending seminars and workshops to learn better and faster. They view the RM1,000-4,000 spent on books and seminars as an INVESTMENT and not a COST. They know that they will make BIGGER RETURNS in the future. They know that the opportunity cost is much higher if they choose not to invest in books and seminars. For example, the mistakes made by many in the way they manage their money and investments (Unit Trust, Stock Market & Property Market) would have easily cost more than RM4,000. 

The question is many don't know what they don't know, and some may only realize it many years later. 

Li Ka Shing (Richest man in Asia) understood this very early in his life. These are a few famous quotes by the man himself:

"I bought secondhand books whenever I had spare money and absorbed them before trading them in for more books. Even today I read before going to bed every night."

"Knowledge is not a guarantee of a life of riches but it does open the door to more opportunities. And recognizing more opportunities is really the best that you can expect." 

My Personal Experience

At age 17, I realized the importance of 'Alternative Education' because simply relying on mainstream education is insufficient as it does not exposed me to the area of finance and investments. I started investing in financial books and signed up for Azizi Ali free newsletter. 

I wanted to attend a few seminars but I could not afford it as they cost a few thousand ringgit. Books are my best friend then to expose me to the world of finance. 

Even now, investing in books & seminars is my priority. Every year, I would invest hundreds OR thousands of RM to gain knowledge. I discovered that the more knowledge I have, the richer I become. Next would be taking MASSIVE ACTION to apply the lessons in real life. 

As Warren Buffett often said: "The more you learn, the more you earn."

That's the main difference of mindset between a person having a 'VICTIM's Mindset' and one having the 'WINNER's Mindset'.  

So are you willing to adopt the 'WINNER's MINDSET' today?

I hope you do.

To sign up for my workshop, you can either email me at: writetogeorgeleong@hotmail.com or whatsapp me at 017-6593817. 

I wish you great success~^^

Register for my 1-Day "Wealth Academy for Youth Workshop!"

Want to learn how to make RM200,000 Net Worth by 25?

Want to own RM 1 million Property Portfolio by 25?

Come and register for my 1-Day Wealth Academy for Youth Workshop! Unlike many other workshops that may only cater for people in their 30's and beyond, this workshop is specially designed to assist youth in their 20's to achieve their financial dreams in life.

People in their 30's & 40's are welcomed to register too as there is no such thing as being late if you make the decision to kickstart that journey TODAY!

This is a workshop with many worksheets and not merely on theories as I believe in being practical.

As my previous post stated that we are soon observing 'The Birth of a Homeless Generation' due to inflationary pressure, it is therefore crucial for youth to maximize their potential and take a strategic move to overcome that.

I published two books that are available in MPH, Times Pavilion & Kinokuniya KLCC.

If you want to be rich, you have to learn how to play the GAME of MONEY. In this 1-Day Wealth Academy for Youth Workshop, you will learn:

1) The 6 Steps towards Financial Abundance
2) The 10 Habits of the Rich
3) 'Save + Invest + Re-invest' Model 
4) How investing RM300/- per month will turn you to be an automatic millionaire in the future
5) How to invest in Unit Trust & the Stock Market (10% - 40% per year)
6) How to make RM200,000 Net Worth by 25
7) How to own RM 1 million Property Portfolio by 25
8) How to avoid the frequently made MISTAKES by 90% of the population

and many more...

I am running two workshop for February, please refer to the details below:

1st Workshop

Date: 15 February 2014 (Saturday)
Time: 9 - 4 pm
Venue: Subang Jaya (Venue to be confirmed later)

2nd Workshop

Date: 22 February 2014 (Saturday)
Time: 9 - 4 pm
Venue: Subang Jaya (Venue to be confirmed later)

Notes will be prepared for you. You just have to commit yourself and bring along your calculator and laptop as we are going to do many exercises and come out with a financial plan to help you achieve RM200,00 Net Worth & RM 1 million Property Portfolio in a short period of time.  

Say YES! I want to learn the strategies of making RM200,000 Net Worth and own RM 1 million of property portfolio in just 4 years of working right after graduation.

Say YES! I want to make a CHANGE and INVEST in knowledge!

Please register with me if you are interested, there is a fee involved. Invest in knowledge, and you will not regret! 

You can email me: writetogeorgeleong@hotmail.com

or whatsapp/sms me at: 017-6593817

"The BIRTH of a HOMELESS GENERATION"

Is owning a property a dream to many? Would you like to have your own home one day? I guess many do want it. Sadly, as I conduct a research, I discovered there is this growing phenomenon facing the youth population in our country Malaysia, that is "The Birth of a Homeless Generation'.

Affordability

1) Based on Budget 2014 announced by our Prime Minister Najib in October 2013, per capita income is estimated to grow to US$ 17,173 (RM 54,253.97) from US$ 16,743 (RM 52,895.49).For your information, per capita income refers to average income and is used as a measure of the wealth of a country's population. 

2) That will work out to be an average of RM4,521/month per capita income. Could people afford to buy a property based on that income?

Question: So where would you want to stay? 

Answer: Hmm~ I want to stay in a condo within Klang Valley with proper facilities & established public amenities, I want a good lifestyle (LIVE, WORK, PLAY). 

Latest Property Prices, 2014

(a) Setia Walk (Puchong, Selangor)

Selling Price: RM611,000 (1,390sf, 3+1 Bedroom)
Source: Propwall.my

(b) Gembira Residence (Kuchai Lama, Selangor)

Selling Price: RM700,000 (1,168sf, 3+1 Bedroom)
Source: Propwall.my

Alright, assume you are looking for an older condo and found a very good deal with a Selling Price of RM 500,000 ( 3+1 Bedroom, 1300 sf Condo at Klang Valley) 

Please refer to the table below for better illustration:

Item	RM
Property Selling Price	500,000
Down-payment (10%)	50,000
Loan Principal (90%), 35 years loan	450,000
Interest rate (BLR – 2.4%), BLR = 6.6%	4.2%
Monthly Loan Instalment	2,047

Remember about the average income per capita of RM4,521 stated above? Your balance will be:

Balance of Disposable Income: RM 2,474 

(Workings = RM 4,521 - RM 2,047) 

What about other expenses? Lets take a look:

Item	RM
Balance Income	2,474
Car Loan (rm60k +/- car)	600
Petrol	300
Toll	50
Car Park	50
Car Maintenance	100
Insurance, Road Tax etc	200
Car wash	50
Total Car Expenses	1350
Condo Management Fee	250
Food (rm20 x 30 days)	600
Smartphone bills	100
Entertainment (movies, holiday)	200
Clothing	50
Balance (Deficit)	(76)

Wow, negative balance of RM76...

What about parents allowance? baby expenses? property quit rent & assessment fee? holiday expenses? insurance payment? etc

IMPORTANT QUESTIONS WE SHOULD ASK OURSELVES:

(a) Do we have RM100,000 CASH in our bank account by 30?
10% downpayment of rm50k, legal & stamp duty fee for Sales & Purchase Agreement & Loan Agreement of rm20k, renovation, furnitures etc

(b) Is my income sufficient to support my lifestyle expenses and to service a property loan in the future?

(c) Where would I want to live in the future? What type of property? What kind of lifestyle?   

I would say most youth in Malaysia would not have RM100,000 cash by 30, and would not have an income that is sufficient to service a property loan, car loan and daily expenses.

The plan of owning a property is usually delayed, or will become a far-fetched dream. Just look at the youth in Singapore & Hong Kong, it's becoming an ultimate dream to just own one property on their own.

Many youth (I said the word 'many', not all) will choose to deny this phenomenon, they basically live in denial. And many will say, it's alright the property prices will come down, I will make my purchase then. It's true to a certain extent, lets take a look:

Cooling Measures on Property Prices:

Below are 6 measures taken by the government to cool down the property market by reducing speculation and making sure property loans are granted to genuine buyers who can afford to service the loan. (We don't want to be like the United States who is recovering from the subprime-crisis)

1) Removal of Developer Interest Bearing Scheme (DIBS)

2) Higher Real Property Gains Tax (RPGT)

3) Loans to be assessed based on Net Income (after deducting EPF, Socso, other loan payment), and not Gross Income 

4) Loans based on Nett Selling Price for new property launches (after deducting discounts, legal fees etc)

5) Foreigners can only buy properties above RM1 million

6) Refinancing on Residential Props under Individual to a maximum 10 years period

With the measures taken above, property prices is expected to reduce marginally or remain flat in locations that are not very attractive.

However, there are factors that will drive property prices up in good locations (5-10% increase), refer below for better explanation:

Factors to drive Property Prices UP:

1) Subsidy Rationalisation on Sugar, Petrol, Electricity etc 
Just take a look at the prices for 'Teh Tarik', 'Roti Canai', 'Mee Soup' etc. Increase in construction cost or daily expenses will be passed on to the next property buyers.

2) Supply vs Demand in key areas (Greater KL, Klang Valley, Penang, Iskandar Malaysia)

According to a property market report by the National Property Information Centre (NAPIC), average housing completion yearly was 100,000 units (Supply) relative to the average annual household formation, which was 140,000 (Demand).

Therefore the issue of not producing houses fast enough in key locations to cater to the increasing demand arises.

3) Foreign investments

Foreigners from Singapore, China, Hong Kong etc to compete with locals to purchase properties in strategically sustainable locations such as properties within Klang Valley, Greater KL, Penang, Iskandar Malaysia etc.

Further upside for Property Prices come 2015:

Goods & Services Tax @ 6% (Implemented by April 2015)

We have already noticed the price hike of daily consumers goods & services, the issue is the prices will increase further in 2015 when GST is implemented. You may refer to countries like Singapore when GST is implemented in the past.

With the increase in construction cost, who do you think the developer will pass on the cost to?

Reflection:

I really hope that I am WRONG and my friends are RIGHT that property prices will go down to an affordable level in the future, as many could afford to buy themselves a property.

But what if I am RIGHT, what if prices went up to RM700,000 for 1,300sf condo in the Klang Valley? Wouldn't it be a BIG BIG PROBLEM for many youth out there.

There is a saying, it's of little use to make any prediction, it's better to be READY at ALL TIME. I prefer the latter over the former.

Solutions:

1) Get one property at a discount AS SOON AS POSSIBLE especially for people without a property.

2) Increase FINANCIAL EDUCATION to make GOOD FINANCIAL CHOICES every day that will make a great difference in your life.

3) Take MASSIVE ACTION to make it happen, merely knowing something without acting on it will only make you a FOOL.

P/s: You may 'LIKE' my page in Facebook to follow more interesting posts in the future (George Leong's Investment 
Journey)

You may INBOX (Facebook) or WHATSAPP me (017-6593817) to register for this Saturday (30 April 2016) "FINANCIAL INVESTMENT WORKSHOP", from 9am to 5pm, Subang Jaya.