THE 3 BASIC LAWS OF MONEY

having a photo opportunity with Sergey

Almost 7 years ago, I had a Russian friend named, Sergey, who poked me regarding a romance novel that I was reading one day. We were on our way to work and he asked me why I was reading it. I said I just like to read. So I read whatever I get my hands into. And then he told me, "You are young. Take advantage of your time and read this," and he showed me a book about stocks. My first reaction went, "Isn't that gambling?" And then he simply answered, "That's why I asked you to read it first."

I know I've shared this more than once, that there's no other greater investment than to educate yourself. Last year, I am thankful to have found out an interest in pursuing financial education. Now, I am aware of the importance of "how to" handle money. And that's what I aim to share today. I never knew about the 3 Basic Laws of Money until then.

I read a shortened version of George Clason's book, "The Richest Man in Babylon" and it was a story of how a lowly man had become rich and how he multiplied it further. From it, the 3 Laws were simply put this way:

The first law talked about SAVING.

The second law talked about INVESTING.

And the third law talked about RE-INVESTING.

In today's setting, many people who had been working in Hong Kong for more than a year don't realise that they are actually doing these three laws thru their MPF Fidelity Accounts already. By law, an employee, contractual or not, after having completed a year of employment here in Hong Kong, and is still expected to work thereafter, is required to open an MPF account and to contribute monthly afterwards the 12th month to their MPF's. This MPF (Mandatory Provident Fund) becomes compulsory amongst employees who are working more than a year in Hong Kong. But you can start as early as possible. The Mandatory Provident Fund forms an important role to your retirement planning. To ensure that your MPF funds are handled well, it's good to choose an MPF scheme provider that has a secure and proven investment management track record and extensive global investment experience.

My interest in the proper handling of money got ignited and I pursue getting informed about it. Before, I would always just go check out nonsense stuff in the internet. Right now, I receive newsletters from ColFinancial for my dividends from the stocks I own, The Rich Dad Company that pings me when there are free upcoming webinars and I am now a pathfinder for www.spearheadmission.com, a platform that aims to help people become successful by empowering them thru financial education. I know it's not that much but these sites lead me to researching deeply.

I aim to learn as much about each related topic as possible because I would like to claim and pass the abundance in God's blessings bestowed to me everyday. That sounds corny, right? It's undeniable that personal gains are present but in addition, I would want to help others, most especially, those who are helping themselves while I, myself, am learning. To make that purpose short, I want to be rich. And in helping others, I "need" to be rich. This is ambitious in all its actuality but imagine a financially educated world. 'Nuf said!

Making good use of such investment, the knowledge earned from self help, is an achievement for me. Moreover, this education would be at its utmost potential if it is shared. Once it's shared, it may even earn more clarification from other people, that means further learning for me. I am aware that learning from other people is inevitable. I embrace this moment.

The topic about saving is almost "always" taboo to many people. They consider it too personal to be talked about. Some take it offensive even. But you would know those who are truly rich, they don't mind talking about this subject. In fact, they are open to views, opinions and discussion about money. Because for them, there's opportunity everywhere and in everything. They would even be willing to  help you out if they sense potential in you.

The thing is, upon getting hold of empowering books in becoming rich, I've learned to create a team in my mind for a moral boost and a push at challenging times. I've learned that, when a person is actually blunt enough to tell you to save up, include that in your team. When there are people who aid you in opening yourself to embracing "good" habits that will lead you to having more "savings", put that in your team. In addition, having a trusted financial adviser eases the tension between your limited knowledge and the drive to pursue your financial goals, put one in your team. Having a professional advice is another option to be considered if you want to keep your financial standing discreet. You want to manage your loans and not be judged by it so having a financial adviser is one of the most sufficient moves for that. And last but not the least, the people who are actually inclined to doing the same thing, "saving"? Surround yourself with such if you aim to be rich. If you are saving up, and you are surrounded with one day millionaires, I don't know how you will survive.

Going back to the MPF. Here in Hong Kong, Fidelity is a partner of the Hong Kong government. They see to it that every Hong Kong resident has something set aside for their retirement. It's such a great law to impose as this takes care of the Hong Kong residents' welfare regardless of how long they would want to stay. And as for a general overview, this makes the country's reserves kept and are put in to work for the entire country. What does that mean?

People trust the investment schemes so they will be more than willing to fund for their retirement. This act alone saves a country from being under debts, saves it from a lot of crimes and gives it a sense of stability with its finances (gross national product). People have savings and at the same time, they have money to spend. This balance is necessary for a country's economy for cash-flow to be generated and spent. The laws of demand and supply are in balance. The producers earn and the customers are satisfied. Hoarding is minimised, small businesses are not crippled and most importantly, nobody becomes homeless or hungry upon reaching retiring age.

The beauty of it being compulsory is that I am saving (whether I like to or not) and it is being invested. The investment part can be diversified by the account holder himself/herself. Fidelity had assigned the account holder eligible to do so based on how they manage risks. It is lenient in a way in letting the account holder manage the percentages anytime. But as far as withdrawing the funds go, denouncing residency to the country needs to be done before they'd allow processing of these funds getting transferred to you. If you decide to come back to Hong Kong for another gig and then you work for another year and had to open an MPF account once again, then you can only withdraw those funds when you reach the retiring age of 65. But with its main purpose, why would you withdraw it if you need to leave the country when that was supposed to be for your own retirement? Why not just let it compound?

I am writing this post for those who are currently holding an MPF account. You are already doing the 3 Basic Laws of Money. It wouldn't hurt if you would put time in mastering the percentage allocation based on the risks you are ready to consider in investing your retirement funds. As of the present, the allocation depends on different indexes of banks, bonds, stocks and elements (gold, silver). Sergey had a point after all. It's not bad to learn about stocks as the second and third law may benefit from it.

*In 2010, changes had happened at work. Jugglers were changed for diabolo performers to welcome a different vibe. One time, my husband was watching one of my shows when he spotted an oddly looking fella, with long hair, long beard, in shades that was watching the show in the happiest place on earth... When he had seen him, the man had put down his shades and smiled, it was Sergey.

Related posts:

1. PARADIGM SHIFT - this is how I see time, compounding interest and saving works for me.
2. HOW TO SAVE HK$5,000 IN 52 WEEKS - the concept of saving put into trial. If you want to save more than that in a year, just make the necessary adjustments.
3. A STEP BY STEP GUIDE TO STOCK INVESTING WITH THE EIP COL EASY INVESTMENT PROGRAM - follow these system of long term investment to gain sure profit over gains of a day trading's gamble.

MY ADVOCACY FOR A FINANCIALLY LITERATE SOCIETY

Settling had made me sit aback and realise life's complexities. Right now, decisions are not done just for the sake of what I want or what fits in my schedule. My spouse and my daughter are the primary considerations for all the decisions I have to make.

Realizations, shifts in how I think and enlightenment that took time to seep in my mind is becoming clearer as ever. I am reminded of my purpose when my daughter giggles right in front of me. My drive comes from my spouse often when I hear him vent out about how he had a tired day because of a promise to be strong when he gets weak. All of these are symptoms of a family woman. And like how I always convince myself at the end of the day, I tell to myself, "I am a grown up."

Being a grown up entitles you to many things. With that much responsibility that it expects from you, life still needs to be perceived simply. Challenges will always be there but you should never think that others had not gone that road. One's experience may be different with the other but dealing with a life changing situation may have been dealt by somebody in a certain way. That being said, let me share to you how I came about a calling to an advocacy.

It's just this year that all of it started.

My old time best friends and I have our own family to rear and slowly, we fused into one thinking about how to make the most out of our productive years. We recently had that much time to rethink our 401(k)'s. We are aware that we are employed by the same company for nearly 10 years. So, when there was a random invitation to whoever needs understanding in terms of percentage allocation for the investment we put out on it every month, we went for it. Fast forward, we became interested in becoming financially literate.

As we start investing outside Hong Kong's compulsory one, Fidelity, we became aware of stocks, maturity dates, importance of insurances, compounding interest, retirement and many more. And one investment tool aids somebody into saving a certain amount faithfully, every month for 3 years, allowing it to earn a fixed 5% each month. Imagine if that money would be allowed to reach a maturity date of 20 years without getting withdrawn, it'd be earning millions. So, a paradigm shift happened to me giving this a thought that if I had started investing 8 years ago the time I left my hometown to work as an overseas worker, I would have a million at least in 12 years to start a business or something. I could actually retire at 44 if I would want to. Because I came here to Hong Kong when I was 24.

The catch is, I just knew of it now. So I just started 4 months ago. But then again, it is still good. Because if I wasn't able to do something before, the next best thing for me to focus on is that, I can still do something about it NOW. In addition, my friends and I had pleaded to sharing to the best of our ability, for FREE, the necessary information for all youngsters coming in and working here with us to know the importance of SAVING MONEY, INVESTING AND REINVESTING, the 3 Basic Laws of Money.

Starting to spread the mission in our humble home.

Here is what Melody Hobson had to say for I dream of doing the same thing in our own little way here in Hong Kong. We gather an intimate group and share basic knowledge for further financially literate society. Check out the website: www.spearheadmission.com and support us by sharing it to whoever needs it in any way.

Related posts:
1. PARADIGM SHIFT - 3 universal concepts that had happened in our pursuit of a financially literate society
2. CASHFLOW - everybody needs to wake up at some point, playing this may do the work for you.
3. HOW FINANCIALLY FIT ARE YOU - a simple test to take to know if you are in the right track in supporting yourself financially.http://www.spearheadmission.com

TEST YOUR FINANCIAL FITNESS

Hi everybody!!!!

I hope this simple test (care of the book, "Making Your Money")
that I had modified to be handy online
would encourage you to take action
whichever level you land in with your financial status.

Related posts:

1. CASHFLOW - a game that would open up your mind into balancing your income with expenses.
2. 15 CELEBRITIES WHO ARE SMART WITH THEIR MONEY, THIS IS WHAT THEY DID - they may be rich and famous but they are not stupid to just waste their hard earned money just like that!
3. RICH DAD POOR DAD - one of the many books that you may read as you get yourself educated financially.

CASHFLOW

Have you ever encountered

a board game

that actually speaks of life circumstances

in a sureal way,

its elements can be used in real life?

Living pay check to pay check, always wanting a higher salary to make ends meet, always worried that your pay check is never enough and you can't save up because there's too many things to pay? Then CASHFLOW might just help you sort out a way for you to think otherwise.

With technology on steroids nowadays, it's huge effort to detach to a comfortable lifestyle of getting away from your android for a whole afternoon to "truly" connect to where you are and who you are with at the present. But here I tell you is something worthwhile of your time, most especially if you are planning to retire earlier than 60 years old.

With a purpose of financially educating the world, Robert Kiosaki had created a board game that could actually teach its players the importance of MONEY. I'm pretty sure we all have our own perception of what it's for. But it feels good when you are "financially literate".

After reading his book, RICH DAD POOR DAD, the co-publisher of the book, Sharon Lechter, wrote on its introduction that she was on the verge of finding a way of understanding her son when he said, "Is having a good life due to just by going to school and earning good grades? There's got to be another way. Surely having a stable life is not solely dependent on graduating with flying colours and landing a good job." She was stressed out and was finding this situation very frustrating. In her pursuit of the "other way" herself, she had come across this Monopoly like type of board game called Cashflow. Her husband had encouraged her to partake as a guinea pig of the creator to determine loopholes in the game. It was the answer she was looking for.

In life, there are 3 types of education, according to Robert Kiyosaki, there's:
1. ACADEMIC KNOWLEDGE - this is gained in school as we were taught of how to read and write, add and subtract, basically, the fundamentals that we need.

2. PROFESSIONAL KNOWLEDGE - this is the specialty you gain when you finish as a bachelor. When you pursue further knowledge in a certain subject, and you become an expert out of it, the knowledge that you gained falls here.

3. FINANCIAL KNOWLEDGE is an understanding of the knowledge that you need to obtain to keep and maintain a lifelong security in terms of finances. This is the knowledge that only life and experience can teach. If you'd notice it, this type cannot be learned in school. Or in school alone for that matter.

You might ask, economics is being taught in school. Correct. But, it doesn't actually give you such awareness of why you should buy assets instead of gadgets and what are the reasons behind the huge gap between the poor and the upper rich. Moreover, it doesn't teach you what the basic laws of money are in which the secrets of the rich revolve in.

Well, here's an education made fun! The objective of the game is to get out of the rat race and experience how being an investor feels like theoretically.

What does it mean when I say, get out of the rat race !

If you'd look at the diagram on the left, a rat never stops running on the wheel. If I'd put a stationary cheese affront, the more it'd run like crazy. You, seeing the situation outside the box, know that the rat can never get the cheese. Now, let's have an open mind as I compare the majority of the working force to it.

An employed citizen goes to work, doing his best to keep his job and if possible doing extensive work to earn extra or to get a promotion. When he gets home, his day ends there and his earning power also stops. Meaning, when he doesn't work, he doesn't earn. He thinks that some changes will happen once he gets promoted but actually, it's just putting you to a bigger wheel for another longer race that just makes you more tied up and disables you to attaining financial freedom.

Now, let's look at what financial freedom means.

A T. Harv Eker Quote defined financial freedom simply as the "ability to live the lifestyle you desire without working or relying on anybody for money to sustain it". Who wouldn't want that?

So in order to win the game, Cashflow emphasises the importance of saving, earning passive income (income other than your current job), investing and reinvesting. It even follows an income statement wherein after you choose your random job, you have to balance out your income with your expenditures. There are some elements of surprise where you get a baby, you get laid off and a lot more. Now, a lot of us are in denial that we need some financial education. Well, in general, in order to resolve a problem is admitting that you have one. Answer the question in this diagram and you'd know what I'm saying.

Get out of it fast!

Well, this diagram actually shows a person who's tied up with his job for 40 years. His day pretty much goes about the same. He goes to work, then comes home and then watches TV for entertainment. Would you want to live such boring lifestyle? Of course not!

At first, learning the mechanics of the game was a work up. But as I played CASHFLOW 101 over and over, I tried to adopt some of the game's principles to win, into my own real life. And I never realised that I'd be bored with the mere fact of landing on to collecting my paycheck after knowing how to earn passive income in the game. When we started, nobody could get out of the rat race. Now, one of my friends can actually get out of the game in 20 minutes.

The beauty of it is that you can get out of the game anytime if you have to do something. And then just list down your investments and money at hand then just continue it whenever. It doesn't matter where your rat is at because it's just basically landing on the same thing again anyway. It is indeed a very smart game because the tool being used as per financial statement can even be used in real life.

For the people who are aiming to achieving financial freedom, you might want to give this a try. It is worth of your time and it will teach you a lot.

Financial statement being used in the game

Related posts:

1. A STEP BY STEP GUIDE TO SUCCESSFUL STOCK INVESTING WITH THE EIP COL EASY INVESTMENT PROGRAM - interested in buying stocks in the Philippines? Here's the broker, COL Financial, ready to cater and give you the best advices and deals.

2. 10 THINGS I LOVE ABOUT HONG KONG - Here are some of the advantages Hong Kong has that's why it's best to invest here.

3. RICH DAD POOR DAD - was written by Robert Kiosaki who also was the creator of the game, Cashflow.