The Final Winner

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The Final Winner

Bringing Financial Information To The Uninformed
This e-book is brought to you by

Andrew Chia
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The Final Winner Version 1.4

by Andrew Chia © Copyright 2008 All Rights Reserved
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The Final Winner

Version 1.4
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Andrew Chia

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Praise for The Final Winner
"The Final Winner is an instructional read for anyone who is beginning to achieve, or even
well on their way to, financial independence. You can't go wrong with this book."
Aziz Azman
Advocate and Solicitor
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is clearly presented, though revolutionary and challenging. You get to explore the minds of
the greatest entrepreneurs and investors to see how ideas are turned into cash."
James Choi
Insurance Consultant
“Andrew cuts and trims financial intelligence to its barest and goes right to the core problems
that most beginners like me face in our journey to financial freedom. This book is unique."
Alex Lee
Business Development Manager, Glory Plantation
"The ideas in The Final Winner are so deceptively simple, though old as the hills, that you
enjoy re-reading it many times just to let some of the glorious concepts sink into your
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Eric Chong
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valuable insight."
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Rejoice Care Centre
"Some of the information in The Final Winner is compelling and soul-searching. Like the first
and the last secret..."
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"Read this book first before you do any business or investing."

Christopher Heng, D Sc
Auditor
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Poon Chak Cheong
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"These money secrets cover a big portion of what we need to know about basic money
skills."
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"The Final Winner may become a classic in time to come."

Jane Yap
Entrepreneur, Wearline Marketing
"Reading this book is quite an exhilarating experience. The principles are rock solid and
delivered in crystal-clear terms. It is really relevant in educating our younger generation on
the importance of financial intelligence."
Saranjeet Singh
Charity Resources
"If there were one pill that could make us financially smarter overnight, that pill would be The
Final Winner."
Bryan Choong
Senior Property Negotiator
"Andrew Chia deserves my respect for arranging such an innovative document. Though
some of the ideas may not be unique, the presentation is. He has done a good job in
arranging powerful financial intelligence ideas in very small helpings suitable for beginners."
Kanicen
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"The Final Winner is a must-read book if you are looking for information on how to be
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To,
Kenneth Chia

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The Final Winner

Copyright ©2008 by Andrew Chia, AndrewChia.com. All Rights Reserved.
2008 e-Book Edition Version 1.4

Issued by arrangement with Andrew Chia
The Final Winner started off in 2006 as a 30-page ebook titled Money Secrets Revealed. It
has subsequently been converted into a 200-page hard-copy book. The Final Winner is a
globalised and evolving work on financial intelligence. Its offline counterpart is targetted
specifically for the Malaysian market, which omits all mention of Western influence on
financial intelligence including Robert Kiyosaki, Robert Allen and Warren Buffett. This ebook
version will be constantly updated with the latest happenings in our money world which
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No part of this publication may be reproduced or transmitted in any form or by any means,
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inclusion of quotations in a review.
This publication contains the opinions and ideas of its author and is designed to provide
useful advice to the reader on the subject matter covered. The strategies in this book may
not be suitable for every individual, and are not guaranteed or warranted to produce any
particular result. Any reference to any product or service does not constitute or imply an
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possible in the creation of this book but do not guarantee that the information herein will
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Due to the nature of the Internet which is growing at a very fast pace, information or
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For more information on financial intelligence, free downloads and the latest updates in our
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the author at andrew@andrewchia.com.

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The Final Winner

CONTENTS
Preface
Acknowledgements
Introduction
Chapter 1 Be hungry!
Chapter 2 90/10 rule of success
Chapter 3 Edgewater
Chapter 4 The great misunderstanding
Chapter 5 Secret of the rich
Chapter 6 The difference
Chapter 7 Red line
Chapter 8 Eighth wonder of the world
Chapter 9 How expensive is procrastination?
Chapter 10 Breaking the "three-generations curse"
Chapter 11 The only way to retire
Chapter 12 We need two jobs
Chapter 13 Tsunami!
Chapter 14 The dark side
Chapter 15 The overlooked subject
Chapter 16 The foolish work for money
Chapter 17 Bucks 'n' dough
Chapter 18 Sorry, your Mum was wrong!
Chapter 19 It's only words
Chapter 20 A risky myth
Chapter 21 Opinions kill
Chapter 22 Two most powerful forces
Chapter 23 Get into the habit
Chapter 24 Strictly business
Chapter 25 Marketing 101
Chapter 26 Sold on selling
Chapter 27 Just do it!
Chapter 28 Investors vs Traders
Chapter 29 The magic of mistakes
Chapter 30 Super investors' secret revealed
Chapter 31 The highest purpose in life
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MY LITTLE JOURNEY IN OUR MONEY WORLD
Welcome to the world of money. You are about to embark on a journey to

discover one of life’s greatest mysteries - why doesn’t anyone teach us about
money?
Have you ever attended any class on Money 101? I bet you haven’t. Neither
have I. Yet, money is one of the most important aspects of life. Some of
life’s greatest enjoyments are intimately linked to money. And some of life’s
greatest disappointments also result from our decisions about money.
You can never have true freedom without financial freedom. And it is never a
mistake to learn how to make money.
Having little or no understanding about money may also result in having too
much debt. When you have too much debt, the world takes away everything
- your time, your work, your home, your confidence and dignity, your life -
from you.
I started out working as a clerk for a bank in the early 80's. After just two
years in the bank I decided that banking wasn't for me. The main reason
was that it seemed like a rat race to me. There were just too many people in
a bank.
However, I was impressed with the skilful way the bank motivated its staff to
work for it. Every six months, the bank had a promotion exercise. Of course,
being a small bank at that time (more than 20 years ago) with only 20
branches, not everyone could get promoted. Today, it has more than 200
branches and 14,000 staff.
When we were not promoted, management really took the trouble to pacify
us and, at the same time, motivate us. We were encouraged to study harder
to pass banking exams, to work harder and be patient. We were told many
valid reasons for not getting promoted, such as not having the necessary
paper qualifications. When we did, we were told there were certain quotas to
be met. When those quotas were met, we were then told that there were a
few seniors ahead of us; they needed to be promoted first. The ultimate
motivational quote was that if we were really good enough, it was only a
matter of time before we get promoted, so, just wait a little longer. "Real gold
can stand the test of fire," they said.

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It took me another four years of working in the bank before I could get my
break to start out on something I wanted to do - business. While my friends
were waiting patiently for promotions, I was secretly learning and reading
everything I could about business and management. I had to wait a long
time before I got my chance to start my own business because I came from a
poor family and did not have much capital.
While I was in the bank, I really did enjoy every minute of it although some of
the tasks were quite mundane. I remember a time when it was my turn to
emboss ATM cards. I did that for two months. It was really a robotic job - I
just needed to key in the name, the card number and the issuance date. I
did it from 9 to 5; just name, number and date. You would imagine that I
would have been bored to death, but I wasn't, really. They had piped in
music, you see. But the problem was they had only tape, by Anne Murray. I
didn't mind because I like her songs. I suspect my big boss must have liked
her very much. We had her 365 days a year, minus the festive seasons
when the New Year songs were put on. With such merciless repetition, I
could hear her even in my sleep!
Those were the days when computers had just been invented. We had to
work doubly hard during the transition from manual to digital systems. I
started work at 7 in the morning and finished at 10 in the night, almost every
night. We had a joke among our colleagues that life in the bank was so
tough that you work until you "see stars". We literally saw stars.
There was a day when the bank security guard had to chase me away when
I tried to enter the premises to work at 7 in the morning. It was Chinese New
Year's day.
My colleagues were great, I miss them a lot. Most of them are bank
managers now.
My break came when one of the bank's customers felt that I could
complement his business operations and took me in as his partner. I still
remember I couldn't sleep that night because I was so excited. I tendered
my two-sentence resignation letter the next day.
I finally ventured out into the new world of business. I did management
services and IT. It was boom time during the early nineties. We sold a PC
for five grand and made a profit of one grand. We sold business software for
good margins too.

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We started with zero knowledge in computers and had a lot of fun learning
along the way. I still remember the first quotation we sent to our customer.
We quoted 2 megabytes of RAM for one thousand bucks when it should
have been two thousand instead. (One MB RAM today might be selling at,
what, ten bucks? Well, so much for inflation.) My partner and I were kept
awake that night worrying about the oversight. Luckily, the customer was
forgiving, understanding and sympathetic. We have been friends since.
And, we managed to make a profit from that deal!
Each time we added a zero to our sales we had a little celebration. We

broke our RM10,000 sales mark, and celebrated. We then broke our
RM100,000 sales mark and celebrated. Yes, we broke the million dollar
mark too. At our peak our turnover was in excess of seven million ringgit in a
year. And, we made almost two million in profits.
You can guess what happened next. Despite everything we had learned
about business, success went to our heads. We threw caution to the wind.
We thought we were invincible. Like many of our customers at that time, just
before the Asian financial crisis in 1997, we over-expanded. In fact, we were
over-everything. We over-budgeted and overspent, we over-celebrated,
over-enjoyed and over-entertained government officials at night clubs; we
were over-confident. We soon had to run with our tails between our legs.
When the crisis came, we paid for our excesses. The sales that we
forecasted did not materialise. Instead, our expenses were sky high. We
had rented bigger premises and taken in new staff. We had even taken a
bank loan for our business expansion. Fierce competition set in as everyone
perceived the new IT market to be very lucrative. Prices were slashed
drastically and profit margins became razor thin.
Some of us can still remember the main culprit at that time, an infamous
company named KT Technology Sdn Bhd. They sold second-grade
hardware at firesale prices. Customers just loved them because their goods
were so affordable. After pulling down almost every computer hardware
dealer in the industry, they had to make a quick exit when they themselves
incurred catastrophic losses due to the price war that they had started. Their
exit was so sudden that hundreds of their staff found themselves locked out
of their premises early one morning when they went to work. Their bosses
were nowhere in sight.
We never expected any of these events to happen. In our hurry to expand,

we did not pay attention to the need to protect our business against
unforeseen circumstances.
We finally learned how not to run a business.

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My partners and I were all but broke. But we were not poor. The experience
we had in business, particularly in dealing with customers, stood us in good
stead. We could spot opportunities and capitalize on them. Within a couple
of years, all of us had little ventures with friends or former customers and
were making some money. I, too, did not have many problems financially. In
fact, within two years, I had six months' cash reserve and a six-figure budget
for investment. That was when I learned my second, more painful lesson in
investing.
Having been in business for ten years, I thought that I was now a naturally
good investor. That could not be further from the truth. In fact, looking back,
I didn't have the foggiest idea what investment was all about.
My strategy was very simple. I divided my money equally between property

investment and shares. I bought a condominium for RM165,000 (partly in
cash), shifted into it, folded my arms and waited for it to appreciate. Today,
ten years on, it is worth RM95,000. And they still say property always
appreciates!
Well, so much for property investment. My share investment strategy was

even simpler. I carefully chose a good friend who had been investing
(successfully) in the share market for more than ten years and asked him for
tips. I then plonked one bullet (lump sum) amount of my whole share
investment account into one counter. Again I folded my arms confidently and
waited. This time nothing could go wrong. After all, they said that if you buy
penny stocks, they cannot go down further. The stock that I bought was
selling at 26 sen only. Every friend I talked to shared the same opinion. Like
me, they didn't know any better. I think there is truth in the saying, “your
advisers are only as smart as you".
The stock started to go south the very day I bought it. I held on. Of course, I
prayed. It went even further south. I prayed harder. After almost two years
of waiting and praying, I was finally convinced that at the rate it was going,
the stock would soon reach the South Pole. I liquidated at 11 sen.
By the way, property and stocks were not my only investments. I did have a
few other smaller investments which went down the drain as well. And my
strategies were equally silly, to the point of being naive. Some of my
experiences are too malufying (embarrassing) to even mention.
It may sound funny but I assure you it wasn't funny at all - pouring hard-
earned money down the drain. I went through many emotions: greed to
begin with, confidence, then hope, then fear, anxiety and agony, self-denial,
blaming others, then blaming myself, regret and remorse, hopelessness,
despair and loss of self-esteem. Finally, I just gave up.

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Then, I did a post-mortem. I tried to identify what had gone with my

investment plans. And more importantly, what had gone with me, the
investor.
I found that I had done a lot of things wrongly. I could not control my
emotions of fear and greed. I did not know that I had to budget my
investment account. For example, you should spread out your share account
to at least a few counters instead of buying just one counter. I was also very
impatient; I wanted quick returns. I thought that the faster I put in money, the
faster I would get returns. I also thought that if I wanted more returns I had to
put in more capital. More risk, more gain, see? (At that time I didn't know
any better.) In short, I did not do any homework. That was the biggest
reason why I failed.
I was determined to learn everything about investment to make myself a

good investor, even if it was going to take me another ten years. I started to
read up and ask other investors how they did it.
t was then that I was pleasantly surprised. It took me less than two years to
master the basics of investing, including the theory parts of property and
share investment, plus a few other forms of investment like derivatives
trading. Of course that would not have been possible if not for some world-
class books written by some of our very own local authors. They really slash
the learning curve by a great deal.
I have not had a day job for more than ten years now, neither do I run a
business. I have become a full-time investor. I was struggling at first but
investing has since become much easier. I am not exactly in my pyjamas
every day but it has been a long time since I wore a tie or a long-sleeved
shirt. Nowadays, I am more likely to be spotted in my Levis and Tees,
having a cuppa with either my investment sifus or some old friends at my
favourite Oldtown Kopitiam.
My investments are generating very encouraging returns in the region of 20%

to 25% a year. More importantly, they are as iron-clad as they should be. I
have also learnt how to use almost zero capital to secure handsome profits in
some projects. In a few cases, I use OPM (other people's money).
The world of investment has since been a lot of excitement and fun. That is
why I am writing this book to encourage readers to take on the challenge to
be financially free by learning how to invest.

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There have been many books written on various types of investments, like
property and shares. However, I feel that before you can learn about
investment there are a few money basics you should know. These are not
covered in investment books. They just assume readers know the basics,
which is not really true.
We need to know some basics about money, that is, financial education. I
hope that you will be able to master the basics found in these chapters
before you launch out into your own investment ventures. Also, from reading
about the mistakes I made I hope you can avoid some painful lessons and
save some of your precious time on your journey to financial freedom. The
time that you save tearing out your hair may be spent at an exotic tourist
attraction with your loved ones.
The other thing that is missing from investment books is the element of
emotional management. Investment books need to concentrate on the
particular topic of investment and the specific skills involved. It would be
beyond the scope of these books to emphasize on how to manage your
emotions of fear and greed.
However, our emotions do play a critical role in ensuring the success or

failure of our investments. In fact, they can cloud our judgment so much that,
at times we only hear what we want to hear. That is why when it comes to
money, common sense is uncommon and logic often goes out of the window.
It is sometimes quite shocking to see an otherwise brilliant brain become so
misaligned when it is emotional.
Fear and greed, coupled with ignorance, make up the guaranteed potion for
financial disaster. You will find in these pages how even veterans whose
technical skills are beyond reproach, fall victim to their own emotions.
I believe financial IQ is 80% emotional IQ and only 20% technical skills. This
could be one of the reasons why the rich appear reluctant to impart their
knowledge concerning money. They may be able to teach you the technical
skills but they may not be able to help you with emotional control.
Financial success involves emotional learning - you have first got to take
baby steps for six months to a year. You cannot grow up overnight, not if
you are human. After a year, you start learning how to walk. Then, you
finally learn to run.
One day, when it is your turn to teach your loved ones, remember this, one of
the most important lessons a teacher must know is that true learning involves
mental, emotional as well as physical aspects.

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Studies by psychologists have shown that emotions are about 24 times

stronger than the rational mind.
In most markets there is no logic, only emotions of fear and greed. For
example, many people think they are privy to certain inside information.
There is something about inside information which seems to paralyse a
man's reasoning powers. His greed blinds him to the fact that the inside
information has failed the test of logic. For example, some companies have
poor financial track record, and their share prices have been grossly over-
valued. But because there is "inside information", people ignore the obvious
risks and buy their shares with the hope of reaping high returns, presumably
within a short time.
In these pages, I will try to take you through some of the emotional roller
coasters in our money world. You can then gain an insight into your own
emotions and harness them to your advantage to become a better investor.
So, sit back, relax, and let us go for the drive of your life. Together, let us
learn money skills and become masters of our own financial destiny.

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INTRODUCTION
Who is going to be the Final Winner in the game of money? Is it the

enterpreneur or the employee? Is it going to be the investor in the stock
market or properties, or is it going to be the businessman? Is it going to be
the quick rabbit that makes a million bucks, or is it the slow and steady
tortoise that is going to attain wealth and financial independence at the end
of the race?
I will attempt to answer all these questions and more in this book. I hope that
the answer will be obvious to you before you reach the last chapter of the
book.
In a sense, money is just a game. Wealth is when small efforts produce big
results, and poverty is when big efforts produce small results. Once you
understand the basic principles of money and wealth you will find that they
are so simple. It is just a matter of getting the right information. And that is
the objective of this book - to bring financial information to the uninformed.
Here are some of the things you will learn in this brand new topic of financial
intelligence:-
• how you can escape from the rat race and find the joy of financial
freedom
¬• what most people mistake for assets are in fact, liabilities
¬• the new (and correct) definition of assets, and how it can put you on track
to financial independence
¬• the practical difference between the poor and the middle class
¬• why you should avoid operating your finances on the red line, as in our
car speedometer
¬• Einstein's greatest mathematical discovery of all time, and how you can
use it to become very rich
¬• the cost of your procrastination worked out mathematically
¬• the only way you can retire
¬• why you need "two jobs"
¬• what causes the downfall of rich and powerful people and how you can
avoid it
¬• how you can break the "three-generation curse"
¬• and much more...

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This book is written especially for you if you belong to the poor and middle-
class. You are sick and tired of running the rat race each day but don't know
how to get out of it. You will be amazed to see how much the author relates
to your experience, and the pains I have taken to ensure that you see the
light at the end of the tunnel. You will feel me personally guiding you through
each dark step until you emerge from the darkness and step into the light.
You will learn what 90% of the people on this planet don't know and will
never find out.
Do you know why you must possess a good knowledge of the money world
that we all live in?
Think about work. You get up early in the morning. Sometimes you have to
drag yourself out of bed. You get stuck in a traffic jam. Your blood pressure
goes up, and you are thinking of the work in your office. Sometimes you get
scolded by your boss or your customers. You have got to figure out the
politics among your colleagues. You reach home late at night, totally
exhausted. You work hard at your job to earn money. Without knowing the
basics about our money world, you would not be able to spend your hard-
earned money wisely. If you are not careful you may even end up as one of
the numerous unfortunate victims of get-rich-quick schemes and pyramid
scams.
Think about your loved ones. They count on you to provide them with the
best education, and some small luxuries. Sometimes you wish you can
provide for all their needs. It hurts on the inside to think that you are unable
to send them to the best schools or colleges, or to get them a decent car to
drive. You wished you knew how to grow your savings faster through
prudent investments that generate higher returns.
You could be one of those who have gone from hope in your younger days to
disappointment and disillusionment in your middle age, and now you are on
the verge of despair. You have given up on your dreams. You are sure you
will never attain financial freedom in your lifetime. You have been battered,
bruised and beaten in our money world. As you read on, you will begin to
believe again. Remember, your favourite chicken chef, Colonel Sanders,
started Kentucky Fried Chicken only at the age of 66. So, if you are younger
than that, there is still hope.
I will help you eliminate the mindset that holds you back by exposing the
myths of "money makes money" and "no risk, no gain". The more you read,
the more you will feel the power of finally having the knowledge to fight for
your place in our money world.
Page 17
These important lessons are also structured so that you can remember them
easily. Once the information is internalized, you will not only be able to
speak almost like an expert on any money-making topic, you will actually
start to make some serious money. I recommend that you hold on to your
investment plans while you read and understand these Secrets.
So, what will all this do for you? You will have more freedom to choose what
you want, when you want it and with whom you want it.
Andrew Chia
Kuala Lumpur
September 2008

Page 18
ACKNOWLEDGEMENTS
Numerous people have chipped in to help make this book a reality.
I would like to thank all my mentors who have helped in my financial

education, especially my taikoh (big brother), Jimmy Kok, who first pointed
me in the right direction to improve my business skills. Thanks to Joseph
Chey who helped in strategies, Calvin Chelliah on delivery skills, Kanicen,
Marc Leong and Dechen Lau on Internet marketing, Doris Yap from
Rockwills for patiently guiding me through financial instruments, Foong Mun
Keong on option trading and Lee Mun Wai from USANA on network
marketing.
I am thankful to my students and clients who have trusted me in managing

their investment portfolios and for their support in the writing of this book.
I am grateful to Adrian, Kenny and my classmate KC Yip for their invaluable

advice in the area of publishing. I am indebted to Wendy and Carole for their
untiring efforts in making The Final Winner easier to read by meticulously
proofreading and editing.
Special thanks to many of my other mentors who have helped shape my

investment landscape. Due to various reasons, they cannot be mentioned
here but I am truly grateful to them.
Last but not least, I wish to thank my school mates from Cochrane, especially
Dr Christopher Heng, D Sc and Dr Chin Chow Shin, and business associates
who have given me encouragement and support when I needed them. This
book was originally written in the form of investment notes for them. The
Final Winner is now dedicated to them.
Andrew Chia

Page 19
ABOUT THE AUTHOR
Andrew Chia, MBA, California University FCE, Los Angeles, California U.S.A. is a
chartered strategist. He completed the Graduate Certified programme in Business
Administration of The International Institute of Chartered Strategists and was
admitted as a Fellow Member of the International Institute.
Andrew started his own business in management and IT in 1987, after working for
six years in a bank. He went into business consultancy and has pursued studies in
various fields of investment since 1997. He was exposed to various types of
business setups, having worked with sole proprietorships as well as public
companies. He has been a consultant to many business owners in industries
ranging from the service sector to the manufacturing sector.
He has been taken to the rural areas of Jengka in the State of Pahang in Malaysia,
and Pengkalan Chepa in Kelantan to help develop entrepreneur programmes under
the Federal Government. His company also organized business tours to East
Malaysia. Headed by the former Deputy Minister of International Trade and Industry
(MITI), Datuk Chua Jui Meng, Andrew's company led more than a hundred
businessmen from the Peninsula to Sabah in search of joint venture opportunities,
particularly in Kota Kinabalu Industrial Park (KKIP). His company also organised
the first SMI Conference in Malaysia, which was officiated by the former Minister of
International Trade & Industry, Datuk Seri Rafidah Aziz, and attended by 2,000
businessmen from East and West Malaysia.
During this period, he has seen small companies with very humble beginnings grow
into big players. Kami Food, for example, operated from half a shoplot in the
nineties. Today their operations cover more than ten shoplots in Kepong and have
spilled over to a RM12 million food-processing complex in Ulu Yam, built recently
with very little borrowing.
He has also seen profitable companies, which expanded too fast, staggering close
to bankruptcy after being hit by the financial crisis in 1997. Precision engineering,
and many other types of engineering companies, which occupied huge complexes
covering a few acres of land and employing hundreds of workers were among the
main victims.
Andrew is currently an active investor and financial educator. He manages funds for
clients and is a consultant on marketing. In 2006, Andrew co-founded
CharityMalaysia.com, the first non-profit online donation portal in Malaysia. He is
currently also the technical advisor to a new instant web-design portal.
Andrew believes that financial intelligence is greatly lacking from our education
syllabus. He is trying to fill this void by sharing his experience in this book so that
readers can be more investment-savvy and gain financial freedom.
If you want more information on the topic of investment, feel free to contact him at
andrew@andrewchia.com.
Page 20
Chapter 1
BE HUNGRY
Money, money, money

Must be funny in the rich man's world
Money, money, money
Always sunny in the rich man's world
... All the things I could do, if I had a little money
It's a rich man's world
- ABBA, Swedish pop music supergroup
I believe all of us would love to be rich. Some of us can spend all day
dreaming of being rich until it hurts. If only our dreams could come true...
Before we get down to seriously learning about money we need to

understand the first criterion for success in any endeavor, that is, hunger.
Dreaming is not really hunger. There are people who would love to be rich
and successful but they will hesitate when asked to exert the slightest effort.
Hunger and passion are essential to produce excellence in any field, be it
making money, business, studies, sports, or simply, hobbies.
Have you heard of the term “soul-searching”? It is usually used by

sportsmen or their coaches. When a sportsman repeatedly fails to improve
on his performance, he does some soul-searching. Well, what do you think
he is searching for? He is searching for hunger and passion, among other
things. He asks himself whether he really wants it that badly. He asks
himself whether he still has passion for the game. He asks himself honestly.
And if the answer is yes, he knows that he can actually improve on his
performance.

Page 21
Talking about hunger, Randy Pausch says, "The brick walls are there for a
reason; to show us how badly we want something. Because the brick walls
are there to stop the people who don't want it badly enough," he says.
For those of you who may not be familiar with Randy Pausch, here is an
introduction. He was a computer science professor who delivered the
lecture, "Really Achieving Your Childhood Dreams," at Carnegie Mellon
University in September 2007, a month after being told he had three to six
months to live because his cancer had returned. As such, his lecture was so
highly publicised that he became a runaway phenomenon on the Internet.
As at July 2008, he has been viewed 3.2 million times on Youtube. His
lecture is also known as "The Last Lecture" and was turned into a best-
selling book.
Randy Pausch died on 26th July 2008 at the age of 47.
That is what hunger can do. Imagine a boy reaching for a piece of KFC
chicken after having starved for twenty-four hours. His stomach is rumbling
and his digestive juices are crying for food. You can see the saliva in his
mouth. He is really hungry. You can bet it is going to be finger-licking good.
Now, imagine yourself reaching for a piece of chicken after having just
completed an eating contest. It would be difficult for you to understand the
satisfaction he derives from eating his piece of KFC chicken.
Similarly, it would be sometimes difficult for people to understand passion in

others. Like they say, what drives twenty-two guys and a man in a black shirt
to chase after a ball for an hour and a half?
Or, how insane is it for a man to stand under the hot sun, or sometimes in
pouring rain, to put a ball into a hoop for hours on end, day after day? What
satisfaction can one possibly derive from such an unprofitable feat? That is
what Michael Jordan, reputedly the world's greatest basketball player, and
thousands like him, do every day.
Page 22
The two words that best sum up the success of the world's "madmen" are
hunger and passion.
Have you ever wondered why motivational books and speakers are so
popular? Never mind if they don't teach you a single thing about money.
The book stores are full of them. It is as if people really need them. They try
to create a right mental attitude (RMA) in people. They promote positive
thinking. Without having the right mental attitude and thinking positively, you
will not succeed in whatever you do. After reading, the reader is immediately
fired up but soon enough the fire dies down and you would have to go
hunting for a new motivation book or a better author or speaker.
We cannot tell anyone how to get rich if they do not know why they want to
get rich. My friend, Eric, pointed out to me that the word motivation comes
from the word motive. People need a motive before they can actually be
motivated.
That is why most motivation seminars do little to help you succeed. It is

because the speakers do not tell you that you need to bring along your own
motive to their seminar. Contrary to what most people believe, they don't
supply you with a motive; they just enhance it for you. Now, if they told you
that, you wouldn't go to their seminar, would you?
Do you want to succeed because you want to give the best to your loved
ones? Is it because you are trying to ensure a lifetime of comfort for your
beautiful girlfriend? Is it because you want to prove something to your
friends and relatives? Or, is it simply because of the fear that you are not
able to provide for your family?
What inspires you? What creates a passion in you? What makes you
hungry? The answer is, strong emotions and desire.

Page 23
I remember a popular Chinese novel from my childhood days. It was

Chinese martial arts fantamania and I was crazy about it. The novel was
entitled Lethal Weapons in the Martial Arts Kingdom. You would imagine
swords and spears and stuff. If you are a fan, you would know that there are
only two famous authors of Chinese martial arts stories. Lethal Weapons
was written by one of them.
No, it is not about swords and spears. It is about emotions. The author
illustrated clearly (and of course, in a very interesting manner, with suspense
and all) how emotions evoked superhuman deeds in each of the characters
he depicted.
One of the characters in his story went through untold hardship to train
himself in kungfu because of pure hatred. He was angry because his enemy
had murdered his family in front of his own eyes when he was just a kid. His
passion for revenge was so great that he channelled all his energies to
become highly skilled in kungfu. He eventually managed to kill his enemy.
Indeed, hatred and anger are powerful emotions.
Another character was overcome by the fear of being conquered by his

enemy from another state. Day and night, he was filled with anxiety for the
safety of his kingdom. This fear caused him to carefully prepare his army for
the imminent attack. When his enemy finally came, he had a highly
disciplined defence which managed to win the battle. Thus, he prevented his
kingdom from being conquered by his enemy. Fear is a powerful emotion.
A female character was obsessed with her own beauty. She lived constantly
in the fear of not being beautiful enough to warrant the continued attention of
the king. This jealousy of her other competitors finally got the better of her.
Her plotting created intrigue in the palace and eventually caused a kingdom
to fall. Never underestimate the power of jealousy.

Page 24
Another of his characters went to war to restore family pride. Such was his
pride in his heritage that he managed to overcome great obstacles and
eventually returned triumphant. Pride and ego, when properly harnessed,
have been the fuel to stir many men on the road to success.
The author divulged what could be the most powerful and lethal weapon of
all - love. His character fell in love with a beautiful maiden. He had to
endure hardship and make sacrifices including giving up fame so that he
could be with his loved one in the secluded countryside.
Take a deep look into your heart. Is it lukewarm with a "never mind"
attitude? Tidak apa, like they say. Or, can you find strong emotions of love
and hate? Whichever the emotion, you can be sure it will cause you to
achieve something extraordinary in our money world.
Do the following statements of hate and love echo what is in your heart?
I hate being poor. I hate being ashamed of being poor. I am ashamed of

living in a slum and moving around in a very old used car. I feel small in the
presence of friends with new and expensive clothing, with me not having a
single item that is branded or remotely presentable. I feel tiny and doubt
whether I will ever amount to anything in life.

Page 25
I hate being forced to work all my life. Working takes up all my time. I do not
have time to even do personal things like going to the bank or to the
Immigration Department to renew my passport. Being a good daddy and
fetching my kids from school? Don't dream. I have got to take leave to do
things like that. Getting away to do some catching up with old friends,
teachers or relatives is the furthest thing from my mind. Work is like a prison
with invisible walls.
I used to tell myself, "I've got to work, man. Even Robert Kuok has to work.
Besides, I love my work; it's my hobby." Well, rich people work differently;
they can go on a holiday anytime they like. They actually work because they
like their work. I am different - I am forced to work, hobby or no. I don't have
a choice. I am forced to get up very early every morning and trudge to the
office. The only thing on my mind is to play catch up with time and pay my
bills at the end of the month. It is the same month after month and year after
year. "Job" means just-over-broke, they say. I sadly agree. I feel sick each
day thinking that I am just exchanging my time and my youth for a miserable
couple of thousand dollars. My life seems to be draining from me.
I hate not being able to do what I want. I want to be able to help all my loved
ones who are in need financially. They may have problems due to big
medical bills or unforeseen and unfortunate events happening to them.
Some got retrenched due to no fault of their own. Some have collection
problems with their business. It hurts me to see them in trouble and being
helpless to do anything but look on in anguish. When I look at myself, I find
that I am not much better off; I have been struggling just to put food on the
table for my own family for as long as I can remember.
I hate not being able to buy what I want. I am not

going to lie to myself anymore. I want to own that
Rolex watch. I want to possess it. I want to feel it on
my wrist. I am not going to tell myself it is a waste of
money. I am going to face the fact that I simply can't
afford it. I am only going to say it is a waste of money
when I can afford it. Right now, I can't.

Page 26
I hate not being able to go where I want. The world is so big and it is created
for all of us. Yet, I feel like I am going to be stuck in this one tiny country
forever. I want to visit the United States and Europe. And all the beautiful
places that I can only watch with envy and regret on National Geographic. I
want to bring my parents, my wife and kids along, too. (It brings a tear to my
eye now.) I want to go visit the places Down Under. Yet, all I can afford is to
visit the nearest country Down South, Singapore. Who can break these
invisible chains that are holding me back?
I love being rich. I love being proud of being rich. I really like the little
conveniences that come with being rich. I like being treated with respect at
hotels and high-class places, instead of cowering in embarrassment. I love
the gates being opened without question when I drive through areas of
security in a luxury car instead of being told to get out of my small car and fill
out a form.
I love to be free to enjoy my hobbies. I love to hang out at Starbucks with old
friends and catch up on old times and talk about all the adventures that we
had when we were younger. I love to be able to call on them any time I like.
I would really love to fire my demanding, slave-driving boss, stay up late and
wake up any time I wish.
I love to have the power to protect and help my loved ones. I love to be able
to lend a helping hand whenever they are in need, without ever hurting my
own wallet. I love to see the smile of relief and gratefulness on their faces,
with the burdens lifted off their backs.
I love being able to buy what I want. I love to be able to afford that fully-
carpeted, air-conditioned hilltop residence with my favourite Mercedes model
parked securely inside. Of course, I love having that Rolex watch, too. That
is compulsory.
Actually, the truth is, a lot of rich people do not buy expensive stuff. (Some
people would chop off your hand together with that expensive Rolex watch if
you wear it at the wrong places.) They are happy simply because they can
afford it.

Page 27
I know that for a fact when I see my Mum's eyes light up whenever I remind
her of the five-figure amount of money in her fixed deposit account. She
knows she will never have to spend a single cent of it because we children
take care of all her needs. Trips to her favourite destinations in China are
always financed by us. But you see, the thought alone gives her great
pleasure. She feels like the richest and happiest woman in the world. That
is because, at one time during my childhood, we used to live from hand to
mouth. Having a fixed deposit account was just a figment of our imagination.
Conversely, because we lack the courage and the skill to become rich, we
comfort ourselves with the thought that we are the most decent human
beings on earth. That is because we are poor. We are poor because we are
not greedy for money. Greed is a sin, you know. And rich people are all
sinners. My dear friends, let us just do away with this kind of thinking, shall
we? It is not useful at all. A lot of beggars are greedy. And a lot of rich
people are philanthropists. If being greedy is a sin, being poor is equally
sinful.
Money can allow you to be stuck to an easy chair with nothing else to do but
watch the waves lap at your feet on that sandy white beach. Your loved
ones are chasing each other making silly noises, disturbing your
concentration as you try to read that irrelevant novel you are holding.
What is money? How do you feel about it? Is it just pieces of paper with the
image of some famous dead people them - at times dirty and smelly - or
worse still, is it just a lifeless number in your bank account stored in some
remote computer?
People living on the streets have gone to live in bungalows. People driving
taxis have switched to limousines. All this is because they have more of
these pieces of paper. Rich and mighty people have become paupers by
simply misplacing some of these pieces of paper.

Page 28
The Final Winner gives you tips on how you can get more of these. You can
get whole loads of it, and buy your life back.
Are you hungry to know more? Read on.
1st Secret: Only when you are hungry will you have the passion to
succeed.
You live this life only once. To live life to the fullest, be the best that you can.
Don't do things half-heartedly. Always choose the best - the best book to
read, the best teacher to follow, the best business to be in, the best
investment to make. Soon you will discover the passion and the hunger to
be the best that you can be. Remember, it is never too late to be what you
might have been. - George Eliot.

Page 29
Chapter 2
90/10 RULE OF SUCCESS
90/10 Rule of Success: In any field, less than 10% of people will excel.
- Andrew Chia
Observe the fields of study, sports, money-making or even hobbies and you
will find that this is not far from the truth. Understanding this rule will
encourage us to strive to be among the 10% who succeed. It will also guard
us against complacency as we do not want to be among the 90% who don't
succeed.
10% of the people in the world have 90% of the money. The Wall Street
Journal (13th September 1999 issue) says that 90% of all corporate shares
in America are held by 10% of the people. We have reason to believe that
these statistics are also true in our country.
Statistics show that 90 out of 100 businesses fail within the first 5 years. 9
out of the remaining 10 fail in the next 5 years.
Thought making money was easy? Now, you know the odds.
Have you ever wondered why most people are not rich? That is simply
because more than 90% of people want to be rich, but less than 10% will do
anything about it.
A lot of people do not have the real hunger to improve. A simple example
would be eating places. I am sure you know of some restaurants or even
food stalls that are packed with customers all year round. Then, there are
competitors nearby or even next door that are swatting flies. Sounds
familiar, right? There are a lot of places like that; now, why is that so?
Page 30
There are many reasons and theories given, including bad location and of
course, feng shui. Whenever people fail to discover the reasons for their
failure, they usually blame it on luck. What they are actually trying to say is
that they are not incompetent, just plain unlucky. They should pay attention
to the great badminton player, Han Jian, when he said, "I play with skill, not
luck." I think the simple answer is - their food tastes lousy, and they have not
improved after decades of cooking. If you return to that shop even after a
long time, the food there will still taste exactly as it was - awful. They have
that kind of tidak apa attitude and do not bother to find out how other
competitors can cook better.
Don't give up. There is good news. Although less than 10% of people
succeed, it does not follow that the rest of the 90% have failed. You only fail
when you admit defeat.
The sales of squash rackets, shoes and squash balls go up every time our
Datuk Nicol David wins a tournament. Young athletes are thrilled with their
heroine winning competitions easily and basking in the limelight. They
immediately go out and purchase their gear and rent squash courts to try to
emulate Nicol and to embark on a career in squash.
Most of these would-be sportsmen give up after just a few rounds of practice.
Success seems too hard to come by or, they may not have the natural talent.
The pain of sacrifice may be too great, so they just hang up their gear.
Let me ask you a question; did all these people who quit, fail? No, they did
not fail; they just quit. There is a difference. They probably left squash to
look for something they enjoyed doing more.
For all we know, they may have performed better compared to Nicol during
her first practice. She just stuck to it because she had more passion. She
must have failed a thousand times before she tasted success.
So, keep at it, friends. Whether it is business, or investing, or sales closing

skills, keep working at it. Don't give up. You have not failed. You only fail
when you throw in the towel. Don't do it; you will be a champion yet. I hope
you will catch Donald Trump saying this at:
http://www.youtube.com/watch?v=qg6wuiSIUJs&eurl=http://www.investing-
secrets.com/donald-trump-6/
(Donald Trump, a billionaire investor who has written several best-selling

books, is also the star of The Apprentice show.)

Page 31
I remember the day when my school headmaster, Mr Seow, popped into our
Form Five class out of the blue. In all my years at school, both primary and
secondary, no headmaster had ever set foot in our class. This headmaster
just appeared without warning, and without any introduction, proceeded to
deliver a lecture to us. He explained to us the difference between Fate and
Fatalism. I believe what he had to say was rather important.
A lot of things in our lives may be fated. We may be destined for a particular
job, to marry our spouse, or to even strike the lottery. But we should be
careful, he said, not to fold our hands and just wait for fate to dictate the
course of our lives. That would be fatalism. Instead, we should always
strive to do our best and be our best at all times.
We should be like the spider we had studied in primary school. No matter

how strongly the wind blows, it keeps spinning its web until it is done. We
should be like Abraham Lincoln who became President after losing more
than ten times. We should be like Thomas Edison who succeeded only after
10,000 attempts. We should be like the basketball legend, Michael Jordan,
who said, "I've failed over and over and over again in my life and that is why I
succeed."
Failure is temporary, success is lasting.
Most people give up and admit defeat too easily. Oh, we will never make it.
We will never be rich. It’s just too competitive. But they have forgotten that
they have survived worse odds than that! In insurance circles, they always
tell you that you have won the battle against more than a million people
before you were even born. The odds here are only one in a hundred. You
get what I mean? If you don't, go ask your insurance agent friends.
Don’t be discouraged. Take up the challenge and go for it. Make a

commitment to learn something new about making money each day.

Page 32
The secret of success in life is for a man to be ready for his opportunity when
it comes. People complain that they are not given the opportunity to get rich,
yet more often than not, they are not ready when the opportunity arrives. Let
me give you a simple example. I learned this while attending a property
seminar conducted by my favourite guru. (I adore her; she's my "Malaysian
Idol".)
Before she started her seminar she took out some US$10 dollar bills and told
the class, "I have a few US$10 bills here. Who would like to exchange their
RM10 bill for a US$10 bill?" Almost all of us were in shock. It sounded too
good to be true. Was this some kind of trick? Was there a catch
somewhere? A few of us managed to recover and run up to the stage. (Not
me, being a slow coach, I was still trying to analyse and figure out the
bargain.)
There was no trick, no catch. It sounded too good to be true but it was! By
using such an ingenious little exercise, she gave us an important lesson
which we will remember for a long time. The Chinese saying that "there is no
big frog jumping on the road (someone would have caught it already)" is not
true! Successful investing lies in being able to catch that elusive frog. If you
are not Chinese, the frog stands for anything that is valuable. And as some
of us learned that day, it is so easy. Because almost everyone else believed
in that saying, only a few bothered to pay attention to that frog. They caught
it.
At the same time, we learned another lesson; we have to be prepared when

opportunity strikes. For example, we must know that US$10 equals to about
RM35 (at that time), and it is a good deal. (I have friends who are so behind
time they tell me that US$10 equals to RM45 instead of RM35.) Most of us
do not know at what price a property or a share would be worth buying. We
miss good opportunities every day. Simply because we did not know that it
was an opportunity. My guru taught us that day to be ready with our
calculations and when that opportunity comes, don't hesitate - grab it!
So, do be ready the next time opportunity presents itself. How do you do
that?
Learn up all you can on topics related to making money, whether it is a

particular business or industry, or an investment topic, like property or
shares.
Adopt a positive mindset. Get rid of the mental baggage that most people
carry. On one hand, they complain they are not given money-making
opportunities. On the other hand, they are convinced they will never be rich
no matter what. Hey, life is complicated enough as it is. Don't make it more
difficult for yourself than it really ought to be.
Page 33
Poor people say they will never make it in life because they have no capital.
People who didn't do well in school say they will never make it because they
are not highly educated. Highly educated people complain they are not well-
connected. They end up confused, discouraged and depressed. Worse still,
they may even end up sceptical and cynical. Don't allow this to happen to
you.
Pretend that you can succeed. Don't get me wrong, you can't pretend to
know something if you don't. You can't tell people you know so and so if you
don't; that would be lying. But you must pretend you are on the way to
success. After all, life is a stage, they say. We are all actors. When we
pretend we can succeed we will be on our way to real success. Let me
explain.
If you are an entrepreneur on your way to success you must appear

confident and knowledgeable when you are trying to make deals with your
business partners. You need to appear professional, dress smartly and
always be on time for appointments. Only make commitments which you are
absolutely sure of fulfilling.
All these may sound like common sense but you would be surprised to know
that there are many businessmen who do not practise them. To begin with,
they arrive late for appointments and offer the perennial excuse of traffic
jams. They look unkempt and are unsuitably attired. They light up without
even seeking permission from their non-smoking customer. They start off a
conversation by trying to impress but without giving any convincing facts or
figures to support their claims. More often than not, they do not have a
systematic proposal with all the relevant decision-making points outlined for
their customers to consider. Within minutes of an appointment with their
potential business partners, their credibility has already flown out of the
window. For decades, they try in vain to pin down the deal that will make
them millionaires.
Bosses, too, promote staff who carry themselves as if they have already
been promoted. Think about it; it is true. They dress like supervisors. Their
behaviour is different from their colleagues who decide they will improve their
grooming only after they are promoted. They work hard and have the right
attitude, like supervisors. They help their colleagues as if they were
supervisors. They are confident but not patronising. They are not bossy, but
request assistance from their colleagues just as a supervisor would. They
look every inch a supervisor and, before long, they get promoted.

Page 34
There you have it. When you are ready, you don't actually have to wait for
the opportunity to come. You can attract the opportunity. Do you know that
people who are holding the ‘opportunities’ are always looking for the right
person to give it to? I often hear of rich people who are looking for suitable
personnel to manage their assets. They lament the fact that people close to
them, such as relatives and friends, lack the hunger and the knowledge for
the task. And there are some who have the knowledge but their integrity is
questionable. All in all, rich people often meet up with many people but are
always not comfortable in allowing their assets to be managed by them. Talk
about missed opportunities.
Success comes in small steps. That is why stairs were invented. Imagine a
wall that is twenty steps high. Now, don't believe it when someone tells you
that they can use "light-kungfu" to fly or float up the twenty steps. If they can
do that, then the world record for high jump needs to be rewritten. No, even
the strongest athlete will not be able to jump twenty steps in one leap. But a
three-year old kid can easily reach the top of the twenty steps by taking one
step at a time. Success is the accumulation of small successes. Take baby
steps. (However, if you are stuck financially it may be hard for you to even
take baby steps - you need a ladder to climb out of the hole first.)
Once, a troupe of kungfu performers from Shaolin visited our country and
displayed their skills at Sungei Wang, a premier shopping centre in the heart
of Kuala Lumpur. When interviewed, their Elder had this piece of wisdom to
share, "Don't be afraid of slow progress. As long as you are learning and
improving you are going to be fine. Just be afraid of being stagnant." Don't
give up. Many of the world’s failures are people who did not realize how
close they were to success when they gave up.
2nd Secret: You can be amongst the 10% who succeed.
The key to financial success is in accumulating new knowledge every day.

As you keep learning, you will soon find that you know more than 90% of the
population do. But you don't need to look in front or behind; you are not
competing with anyone on the road to financial independence. Just keep
bettering yourself.

Page 35
Chapter 3
EDGEWATER
Most people have a simplistic view of getting rich. If they see someone living
in a big house and moving around in a big car, they assume that person must
be rich.
My brother and I were having lunch one day at The Ship in Kuala Lumpur.
We parked our car at the building next door. On the way back, he
commented, “This building looks run down and the car park seems
neglected. The owner must be quite poor.” I said to him, “Hello, this building
belongs to Robert Kuok.” Robert Kuok is the richest man in Malaysia.
You see, things are usually not as they appear. A lot of rich people in
Malaysia dress very modestly and move around in old cars. Datuk Tan Chin
Nam, the owner of Mid Valley City shopping complex in Kuala Lumpur once
said that buying new cars is the worst investment. He never buys new cars.
Now, let us get back to our story for today.
In 1923, a group of America’s greatest leaders and richest businessmen held

a meeting at Edgewater Beach Hotel in Chicago. Among them were:-
• Charles Schwab, head of the largest independent steel company

• Samuel Insull, president of the world's largest utility company
• Howard Hopson, head of the largest gas company
• Ivar Kreuger, president of the International Match Co., one of the world's
largest companies at that time
• Leon Frazier, president of the Bank of International Settlements
• Richard Whitney, president of the New York Stock Exchange
• Arthur Cotton and Jesse Livermore, two of the biggest stock speculators
• Albert Fall, a member of President Harding's cabinet
Page 36
Twenty-five years later, all nine of them listed above, ended up as follows:-
• Charles Schwab died penniless after living for five years on borrowed
money
• Samuel Insull died broke in a foreign land
• Ivar Kreuger and Arthur Cotton also died broke
• Howard Hopson went insane
• Richard Whitney and Albert Fall had just been released from prison
• Leon Frazier and Jesse Livermore committed suicide. (A lot of us in
Malaysia who study technical analysis for derivatives trading still read
Jesse Livermore's book. He is considered one of the greatest stock
traders of all time. Although emotional control was once his forte, he lost
control of his emotions towards the end.)
No one can really say what happened to

those men. If you look at the date of the
meeting, it was in 1923, just before the
market crash and the Great Depression in
1929. We suspect that it had a great
impact on these men's lives.
Although the Edgewater incident happened far away and a long time ago, it
is not unique. It is only more spectacular in that the players were richer and
more powerful. In every country including our own, we can recall rich and
powerful politicians, businessmen, sports and other celebrities who went
from hero to zero.
We believe it is possible that these rich and powerful people may at the same
time lack financial intelligence. And money without financial intelligence is
soon gone.
I believe you will find the subject of financial intelligence adequately covered
in the pages of this book.

Page 37
The man who gave the world the three laws of motion, Sir Isaac Newton, was
both very intelligent and rich. But he did not have sufficient financial
intelligence and lost a lot of money in the South Sea Bubble. Traumatized by
the loss, he had this to say, "I can calculate the movement of the stars, but
not the madness of men."
It is human nature to amplify our own successes and play down or ignore our
shortcomings. That is why when we have sudden wealth, we assume our
financial intelligence has increased. It could not be further from the truth.
We allow success to go to our heads, becoming proud and unwilling to listen
to advice.
You have probably heard of rich and famous sportsmen, entertainment

artistes or professionals, like doctors, who have failed miserably in
investment. They think that just because they are rich they will be good at
investing. To some of you, the phrase, "that's irrelevant" may ring a bell.
That's why world-renowned marketing consultant, Jack Trout (you can

google him and be impressed) says, "The seeds of failure are found in
success".
Even businessmen fall into the same trap. You need to understand that
being good at business and being good at investing are two different things.
For example, our famous Asian squash queen, Nicol David from Malaysia,
may not be good at other racquet games like tennis or badminton.
Without financial education, people’s understanding of investment is simply

appalling. You can’t imagine the things they believe in. Take for example,
the “money-game” trend today. Numerous online scams like Swiss Cash
and Sunshine Empire have been uncovered and blacklisted by the
authorities of various countries in Asia. Entertain yourself by taking a peek at
this link while it is still active:
http://www.sc.com.my/eng/html/licensing/investors/Alert_list.html.
The question is, why are people so gullible as to believe in astronomical

returns? Everyone says it is greed. While that is true, the answer is that
people are also not aware of the sort of returns they are supposed to expect
when they invest. What exactly do we mean when we say high returns?
Nobody told them the returns that the world’s greatest investor gets are only
23%, compounded for 50 years. The highest return that he got in a single
year was in 1976 when he managed a whopping 60%.
(Throw that into a spreadsheet and you can see that he started with only a
couple of million dollars. That's the power of Einstein's greatest
mathematical discovery of all time.)

Page 38
If you apply Rule of 72 (if you don't know what that is, just google for an
explanation) on 23% returns, you will find that your money doubles about
every three years. Imagine putting RM1,000,000 into fixed deposits and
withdrawing RM2,000,000 after just three years!
It just takes a little bit of financial intelligence to see how easily people are
conned into believing their money is being used by some super-investing,
fund-managing, syndicated organisation (if there is such a term) which can
give them obscene returns like 700% or more a year.
Convince yourself by visiting the thousands of money games found in online

forums such as MoneyMakerGroup, Talkgold, Carigold, Nogold and
Asamonitor. You will see there are literally millions of posts to these forums.
You may recognize these schemes by fancy names such as HYIP (high yield
investment plans), or any other name that seems beyond your
understanding. You will be amused to view terms like “non-paying sites” or
“closed-down sites”. Now you see how acute and urgent the need for
financial education is.
I know of a red-faced business lecturer with an MBA who fell victim to one
such site (while it was still paying), and lost quite a bit. Her husband who
holds a PhD is equally embarrassed.
And I must not forget to mention my best friend, Cheng (not his real name)
who also holds a PhD and operates an international audit firm. He too, was
a victim of a scheme that stopped paying after eight months. He lost a few
hundred grand. The scheme paid out 11% returns a month; which worked
out to be 132% a year. Most of the victims were white collar gentlemen who
are either teachers or professionals, there were a few ladies, too. They met
every week for training and recruitment at a posh hotel in Petaling Jaya,
when the scheme was still paying dividends.
Well, it didn’t hurt him a bit, you know, because he rakes in a million bucks a
year from his audit and tax business. That sort of underlines what I said
earlier about being good at business and being a lousy investor. (Now if you
wish, you may consider business as a form of investment, too.) I can't think
of a single project that he has invested in that has made money. Some of his
investment misadventures would make you keel over in laughter because
they really border on the ridiculous. And being the ultimate sporting guy
(that's why he's my best friend), he doesn't at all mind me poking fun at his
silly investment ideas.

Page 39
Now, before you dash out to enlighten your friends who could be falling into
the trap this very moment, let me douse a little bit of your fire. Don’t bother.
Let them find out the hard way because pain is a good teacher. People who
drive with glaring headlights of greed and fear are not easily convinced.
They have become emotionally charged. (That may also be one of the
reasons why the rich are reluctant to teach us financial intelligence.)
Financial ignorance is a silent killer.
Did I forget to mention that financial education and investing involves a great
deal of control over our emotions? It is not only money skills. It is always the
investor who is risky, not the investment.
When we are not financially intelligent, we practise only one investment

strategy, that is, the ultimate Matchstick Investment Strategy. That
investment strategy will give the same result as gathering a whole pile of
cash and putting a lighted matchstick to it.
3rd Secret: It is not how much you make; it is how much you keep.
Some people are not aware that they are living dangerously. Just because
they are rich today, they let their expenses spin out of control. Soon their
world comes crashing down and they may take a long time to recover. In
fact, there are some tycoons who have never recovered from their losses,
and they live in depression for the rest of their lives.

Page 40
Chapter 4
THE GREAT MISUNDERSTANDING
The Great Misunderstanding in our money world is thinking something is an

asset when it is actually a liability. Liabilities, (like monthly instalments,
interests, repair, maintenance, insurance, taxes and depreciation), cause
recurring expenses. An asset does exactly the opposite. Assets, (like
interest, rental from property, dividends from shares, profits from business
and royalties from patents and copyrights), generate recurring income and
cash for you every month.
Most people suffer financially when they buy liabilities and think that they are
assets. Ask anyone and he will tell you his house is an asset. Still don’t
understand? Read the previous paragraph again. (I read it five times before
I understood.) Just stop thinking about appreciation for a while. It is not
putting any cash into your pocket; instead, you are forking out money every
month to pay for your beloved house.
I don't mean that we shouldn't buy a house. We just have to understand that
we need to accumulate assets to be rich, and our house is not one of them.

Page 41
This minor oversight may cause a lifetime of financial struggle. Just because
something is listed as an asset in your statutory statements submitted to the
government, does not really make it an asset. Don't feel bad. Many people
including very qualified professionals always get asset and liability wrong!
This is because the accepted method of accounting allows liabilities to be
listed under the asset column. If you have not attended an accounting class
you definitely have a head start over those of us who need to unlearn our
definitions. I know that sounds really weird.
I hope I can explain this important concept of an asset by using an example

from property investment.
There are a number of books on the subject written by both international as

well as local authors. They extol the virtues of properties that give positive
cashflow. They give detailed calculations on how a property can generate
positive cashflow.
At first I was quite surprised at how much trouble they took to outline
numerous examples of how a property investment can generate a positive
cashflow of just a hundred dollars. I found the idea so repulsive that I literally
threw away the book in my hand. But somehow I couldn’t get rid of it. The
other books by best-selling authors say the same thing. It was disgusting.
Why do they go to great lengths just to teach you how to make a hundred
bucks?
Do you know why I had such a reaction? It was because I was a

businessman, and businessmen have overheads. My overheads each
month were close to RM30,000. I had to pay rental, salaries, utilities and a
host of other monthly expenses, particularly bank interests. Each day I woke
up, I was set back by a hundred bucks in bank interest, without doing
anything. Talk about passive income. All I understood were passive
expenses.

Page 42
Given my expenses, how much sales do you think I would need in order to
cover those overheads, not to mention making a profit? And here are guys
teaching me how to make a hundred bucks. They are so excited when they
find such a property that they are like a kid who has just found his favourite
lollipop. And I am supposed to be impressed. It made my blood boil. With a
hundred bucks, how was I ever going to even get out of debt?
Today, I jump for joy if I find a property that makes me a hundred bucks.
I have finally discovered the secret of getting rich. It is found in just one word
- assets. An asset is something that puts cash into my wallet without me
working. If we keep accumulating assets, we will be rich in no time.
The main difference between $100 and $100,000 is time, not to mention
effort. It is much better to earn a hundred bucks without doing any work. I
used to make a hundred thousand bucks but I had to work for years to get it.
And once you spend it, you have to work again to get it.
Not convinced? Think about it. Once you have a hundred bucks of passive
income you have all the time in the world. There is nothing else for you to
do. What do you do when you have time? You look for another source of
passive income. Yes, you keep doing that for just a few times and you will
never need to work again for the rest of your life.
Let's look closely at that hundred bucks again. Being a businessman I

usually think in terms of profits. That hundred bucks is not your profit. It is a
lesser known but infinitely more important term called cashflow. It is cold
hard cash that goes into your wallet. If you are not impressed with that
perhaps you may be impressed by fishing out a hundred bucks from your
wallet to pay bank interest. Is that real enough for you?

Page 43
What about profits? Well, your tenant actually pays you $1,000 of his hard-
earned money each month. Your bank instalment may be $900. That is how
you arrive at $100 positive cashflow. Do you think it is easy to find a property
that gives you positive cashflow? Think about it; why don't the tenants pay
the bank $900 instead of paying you $1,000. Furthermore, at the end of the
day you own their house. If you don't know the answer I am going to torture
you by not telling.
On second thoughts, since this book is about revealing secrets, I might as

well tell you. The answer is simple; they just can't afford the downpayment.
They also can't afford the legal fees, stamping and loan agreement fees. It is
a pity to see how the poor are penalised every day. The Chinese saying
(literally translated): a poor man eats expensive rice, is true. That is how the
poor get poorer, and of course, the rich get richer.
You can see that your profit is actually $1,000. Just put aside bank interest
for a while and imagine your property is fully paid. You now have $1,000
positive cashflow.
If you have just five properties like that, your tenants will be paying you
$5,000 a month. An average Malaysian can happily survive with that amount
even with a family in a big city like Kuala Lumpur today (2008). You may
give yourself the title "Financially Independent". I have many friends and
customers who are doing just that. They are whistling every day and
laughing their way to the bank. My friend, Simon, owns almost all the shops
in the bustling commercial area opposite the badminton hall in Cheras (and
those beside and behind the hall). His inches-thick stack of rental receipts
lying casually on the desk in his office would convert any unbeliever into a
property worshipper.
What about appreciation? Like most people, I got it all wrong. Most of us
are on the quest for that one property that is going to appreciate through the
roof and make us a millionaire. Somehow, we never find it. Now, eureka! It
is right here! A property that can generate positive cashflow is a property
that appreciates. The more positive cashflow it can generate, the faster and
higher it can appreciate. Sadly, the reverse is also true. Many of my friends
who bet their fortune on their ‘asset’, namely their house, can never
understand why it doesn't appreciate. That is simply because if they were to
calculate the ROI (which they never do because they don't know what that
is), it generates negative cashflow.

Page 44
Let us come back to the loan part. As a

borrower, particularly with the kind of
economy we have been having lately, it
is such an advantage. Imagine yourself
as the bank. You lend me $100,000 and
I repay you in instalments for say, thirty
years. Taking into consideration
inflation, the instalments I am paying you
as time goes by will be worth lesser and
lesser in actual value.)
Can you see that almost everything is working to your advantage? Your loan
becomes smaller as time goes by, due to inflation. Your property
appreciates because properties are a very good hedge against inflation. The
price of building material goes up together with everything else. In line with
inflation, you may increase your rental. If you are enjoying an ROI of say,
8%, you will be elated each time you re-calculate your ROI. It could even
double. That loan that you worried so much about earlier can get repaid
much sooner than you imagined.
Yes, I understand those ‘other’ fears that lurk in your mind. For many years I
had those same fears. You have seen some of your friends buying
properties which cannot be sold or rented out. You have heard of numerous
nasty tenants who not only default on the rental but reduce your property to
something you cannot recognise. Not only that, your friends are tearing their
hair out because those tenants have locked their premises and are now not
reachable, not contactable, as well as not locatable. A frantic check with
lawyers reveals the fact that it is illegal to enter into the tenant's property (it is
your friend's property, mind you) to vacate it.
I have a friend, a very good businessman who accumulated so much profit

that he has invested in almost twenty properties at various locations, totalling
more than RM3 million. But he is not as good a property investor as he is a
businessman. When the Government announced that it was abolishing real
property gains tax some time ago, I was so excited. I quickly gave a call to
my rich friend. To my surprise, he did not show any enthusiasm at all. When
I asked him why he wasn't excited, he said that nobody would be affected.
Upon my gentle probing, he said that since people will not make a profit
selling the properties, there would be no RPGT to start with.

Page 45
"Now, why would they not make a profit?" I asked. "Oh, all my properties
cannot be sold for a profit!" For your information, most of his properties are
either located near Timbuktu, facing a T-junction, having inauspicious
address numbers, or artistically shaped. You may wonder how or why that
happened. It is due to his ultimate strategy of buying things based on only
one consideration - low price. All his properties were bought at a discount
from developers' price. Not only are most of his properties not saleable; they
are also not rentable.
My property guru helped me overcome most of my problems. She taught me

how to select a good property as well as to select a good tenant. You should
seriously consider investing just a couple of thousand bucks in seminars
before you invest hundreds of thousand in properties. If you do not have that
budget, the next best thing you could do is to spend a few hours at the
bookstore. Carefully skim through investment books on the topic and then
select one or two good ones to take home for study. (Remember to pay at
the counter first.)
My property agents helped with the fitting together of the other pieces of the
jigsaw puzzle. From negotiating with sellers, getting the best deals from
banks and lawyers, and screening for the best tenants, their assistance is
invaluable. My team of handymen who fix up and maintain my properties are
also referred by them. One of my tenants whom they secured for me is a
Malay contractor who moved in with his family two years ago. Now, rental for
properties is usually paid between the first and the seventh of the month.
This tenant is so good that he usually banks in his rental for me at the end of
the preceding month. If he is too busy, he will bank in on the first of the
month and he will call me to apologize for being late.
While my friend has a hard time renting out his properties, my agents
assured me that my properties are easily lettable. For example, my low-end
properties, like apartments are located near public transport like buses and
LRTs. In fact, one of my properties is zero minutes from the LRT. How else
would you describe it if it really takes less than sixty seconds to walk from the
lobby of the apartment to the ticket counter of the LRT? (For medium and
high-end properties, factors other than transport, such as security, beautiful
surroundings and good neighbourhood are more important.)
Let us come back to the problem of bad tenants. The problem is non-
existent. Yes, you heard it correctly. Over coffee, my property agents
outlined three simple steps to evict any naughty tenant. "In case you are still
not convinced, we guarantee collection for you for a small fee. Are you
satisfied?" they asked. At first, I unloaded my burden on them. After
securing the first two tenants who kept banking rental into my account
promptly, I felt it unnecessary to pay extra for guaranteed collection. There
was no collection to be done at all.
Page 46
(If you are still curious to know what those three simple steps are, just
remember your homework. You are supposed to view a hundred properties
before you make your first purchase. In that process you will meet up with at
least a dozen property agents. Most of them will be able to tell you those
three simple steps. Just think about this; property companies have hundreds
of properties for sale or rent. They may be collecting rental for many of the
customers. Do you think they have sleepless nights doing that? No, they
don't. In fact, you may even use this as a test as to how good your agent is.
If he cannot answer this question, you should be carefully when dealing with
him. He may not be a good agent.)
So, treat your property agents well. Remember those high-ROI properties?
Regular bribes of coffee and an occasional beer do wonders. Once you
establish yourself as a ‘ready-buyer’, you will stand to gain all kinds of ‘unfair
privileges’. You will likely be the first to know about juicy deals or be given
additional information about the seller or alerted about certain conditions
concerning the property. You may even not have to pay legal fees for S & P
and loan agreements. For your information, ready buyers are getting hard to
come by as more agents enter this lucrative industry every day.
I hope I have made the concept of an asset clear enough for you. Once you
grasp the idea, you will find it very easy to apply it to other types of
investments too.

Page 47
Besides property, the other more popular form of investment is shares. By

applying the concept of assets you will be surprised how close the
resemblance is between these two types of investments.
People spend countless hours researching how to ‘stock pick’ to find that
super share that will again go through the roof. In the US, it could be
Microsoft. In Malaysia, most people would think it is Public Bank or IOI. How
do we find that share? The answer is the same - it is in the cashflow. Stocks
with high dividends will put a lot of money into your wallet. Focus your
attention on high dividend-yielding stocks. Put in another criterion - track
record. Ignore stocks that have given high dividends in just the recent years.
Find stocks that have been giving consistently high dividends for the past ten
years at least. You would have found your potential winner.
This stock or stocks will give you just as much ROI as properties and you will
be laughing your way to the bank again. Wait! Don't buy immediately. That
is only your starting point. You need to learn a few other things like how to
evaluate the business, how to calculate the buying price, earnings, return on
equity, PE ratios and debt ratios before you can actually do stock investment.
As you learn these elements, you will again be surprised at the striking
similarities between different types of investments.
It is eye-opening if we think of business as just another form of investment

and apply the same concept of assets to it. Almost everyone dreams of
being a boss someday. You only become a boss if you run a business.
Now, what is so great about being a boss? Let me see; you get to earn a lot
of money, to start with. You do very little or no work; your staff does
everything for you. With a lot of money and a lot of time, your job is to enjoy
yourself and be free from worries. Everyone respects you when you are the
boss. Enough! Just thinking about being a boss is so tempting - I will start
my business and become a boss tomorrow.

Page 48
We all know the reality. As the boss of a business, you get paid last. If
rental is not paid, you will have no premises to do your business in. If salary
is not paid, workers disappear. If staff EPF is not paid, you will be sued. If
overheads like electricity, water and telecommunications are not paid your
business comes to a grinding halt. Finally, if you take a business expansion
loan, interest will have to be paid. You will only be paid once all the above
expenses are paid.
When it comes to work you are totally disillusioned. You are the first to arrive
and the last to leave. Sometimes you even have to work on weekends, not
to mention ta-pao, taking back work to your home.
Once you start losing control, you will have no money and no time. For
example, most of us have seen the cartoon depicting the fat man who did
business by cash, and the thin-looking guy who did business by giving terms
to his customers. We all know that, but we become victims of circumstances.
If we implement cash terms, customers leave us for other suppliers giving
them credit terms. So, we are left with no choice but to give credit terms as
well, which is like opening up Pandora's box.
Everything else is compromised, and businessmen end up like total drunks,

losing all direction. We even read in newspaper columns about consultants
teaching bosses how to make their staff happy. Now, that is the last straw.
We already have to make customers, suppliers, bankers and even our own
partners happy. Do you mean to say we even have to make our staff happy?
Who is the boss now? Or, what has happened to the so-called boss who is
supposed to be rich, happy, enjoying life and respected by everyone?
Try asking an average businessman what his perception of business is. You
may be saddened by the answer. Most businessmen and ex-businessmen
may be reluctant but will be forced to agree to the new definition of business.
Business is tough, no-fun and it is difficult to make money. Furthermore, it
doesn't really command respect.
Wait, let's pause for a moment. Now, replay. Bosses are supposed to be
rich, do little work, enjoy life and respected. That is called business. There
is no need to alter our definition just because our experience says otherwise.
The truth is simple - what we are doing is not business! Business is all about
setting up systems that run on autopilot, and most businessmen have not got
this basic concept correct.

Page 49
Most businessmen are victims of circumstances. Each morning they wake

up, they have ‘no choice’. No choice, I have got to set up this factory myself,
nobody else knows how to do it. No choice, I have to have partners. I don't
have enough capital or expertise. We need to pool together resources. No
choice, we need to lower our prices. Competition is just too stiff. No choice,
we need to give terms because everyone else is giving terms. No choice, we
have to please our staff, otherwise they won’t work for us. It is hard to find
good staff nowadays. No choice, we need to borrow from the bank. We
need funds to roll because our customers are dragging their terms. Very
soon, businessmen will have no choice but to close shop.
You should not be surprised to know that more often than not, they first
started because they had no choice. They just had to do something to put
food on the table. They are not willing to work for others, so, they have no
choice but to start a business.
I really miss my former classmate, Andy Chan, who has left us. He was such
a brilliant, friendly and wonderful guy. All of us classmates miss him dearly.
I have yet to fathom his words of wisdom which keep ringing in my ears even
till today. "In life there is always an alternative," he said.
A lot of the world's financial woes (or other problems for that matter) stem
from these two words, "no choice". "We have no choice but to borrow more."
"We have no choice but to give handouts to our citizens." So, the next time
you are faced with a situation where you have "no choice", think harder.
Remember the words of my eternal buddy.
Just like property and shares, a business is supposed to generate positive

cashflow month after month. Is it doing that? Before you start a business,
you must make sure that your factory, shop or office is capable of putting
cash into your wallet without you working hard at all. You need to have
systems in place, just like businesses such as McDonald's or KFC.
So, before you start a business, try your best to make sure it is going to run
like clockwork without you running it. The systems must be in place. Do not
start simply because you have no choice.
I am not saying you will succeed in business the very first time. (Statistics
show that most people succeed in business only on their third attempt.) But
whether you succeed or not, you need to try to do things correctly the first
time, and every time.
Before we can be rich we have to be financially skillful. Understanding

accounting is part of financial skill. With this skill, you can create your own
luck.
Page 50
One who cannot read a financial statement will have the least money and the
biggest financial problems. An average investor cannot distinguish between
a security and an asset. That is why we must give up the idea of being just
an average investor. We have no choice but to excel because investing is
mostly a zero-sum game. Average investors will find it difficult to resist
transferring all their cash to super investors. Sometimes, they even do it
unconsciously.
Your money life will spin out of control if you have nothing under the asset
column, and huge liabilities and many items under the expenses columns.
Don't worry if you are not an accountant. Learning how to read financial
statements is not really that difficult. We used to train our new staff to do that
within 24 hours. I still cannot understand why some courses take two years
to do the same thing. I guess they are being taught a lot of advanced
techniques. In the process, students get confused and by the time they
graduate, they are not able to grasp the important points of financial
statements.
That is why my buddy, Rico Ho, says, "It is not how many things you know,
but how well you know the few important things." If you lack the basics, then
you will have gaps of knowledge later on. They may come back to haunt you
every now and then. So, make sure you take time to learn the basics of how
to read financial statements well.
The concept of assets can be applied on a macro scale too. Leaders and
lawmakers in most countries make sure that each project or each decision
implemented will generate cashflow for their people. Unfortunately, there are
still lawmakers in some countries who have not grasped this simple idea.
They have a hard time figuring out how to manage their country's finances.
In extreme cases like in Zimbabwe, mismanagement has caused inflation to
spin out of control. There, you have a hundred billion dollars on a single
note.

Page 51
4th Secret: Don't mistake a liability for an asset. It may cause you a
lifetime of financial struggle. Do not rest until you get this
right.
When it comes to assets and liabilities, a lot of people have trouble figuring
out which is which. For example, some people are afraid of buying cars
because of the expenses they incur. Yet others think they need expensive
cars to show off before they can secure business or contracts. Who is
correct?

Page 52
Chapter 5
SECRET OF THE RICH
The rich do not need to work because they have either money or people
working for them. We call these by difficult names like assets, residual
income and passive income, as we shall learn soon enough.
Li Ka Shing and Datuk Tan Chin Nam do not need to work because they can
collect rental from their properties, their money in properties is working for
them. Tan Sri Teh Hong Piow does not need to work because he collects
interest from the loans his bank gives out, his money is working for him. Tan
Sri Vincent Tan does not need to work because he has many staff members
working for him at his franchises, like Seven Eleven, Starbucks, Tai Thung
and many others. Warren Buffett puts his money in shares and they
generate huge dividends year after year without him working.
Dear reader, do you have money or workers working for you yet?
We have seen from the first chapter that before you can succeed, you need
to be hungry. We naturally assume that the hungry will be fed. This is
usually true but sadly, not always. There are places like Africa or North
Korea where people simply die of hunger.
If you are hungry to be financially successful, you should ask the rich how
they did it. Ask sincerely, and you will get a sincere answer instead of just a
"standard" answer. If you do not know any rich people personally, the next
best thing would be to read about them. If possible, read books written by
them personally. There are many watered-down versions of success stories.

Page 53
Sportsmen know the importance of having a good coach. Similarly, you

need good mentors to become rich.
There are three categories of people who can give you advice on how to be
rich, or on any other subject for that matter.
The first category is people who have not done it before. They can advise
you because they have seen other people doing it. Or, they have have heard
of how it is done. Or, they may have read about it. But, they have never
done it. Thus, the advice they give may or may not be useful.
The second category is people who have done it before, but failed. You may
be quick to recall many friends from the insurance or direct-selling industry
who fall into this category, but they actually exist in every other industry. The
advice they give is usually poisonous, even though it may sometimes be
mixed with genuine care and concern.
The third category is people who have done it and have succeeded in doing
it.
You now understand why you have been receiving the kind of advice from
people you asked. Asking advice from the wrong people may result in us
dying in our hunger.
On a lighter note, there is a fourth type of people who give you "wonderful"
advice to take home. (Some people will never tell you they don't know.)
When you reach home and ponder them, these types of advice are silly
nothings. It is like our road signs in Malaysia, for example, a sign says,
"Kuantan, straight ahead." You obey the sign and reach a T-junction. There
is no further sign there to tell you whether Kuantan is to the left or right. My
brother thus arrived at the conclusion that these signboards are made for
people who already know their directions.
• You can be rich if your income is more than your expenses.

• To retire, you need to be financially independent. (Now, don't you be
rude, ok? Show respect to mothers.)
• You can be rich if you save more than you spend.
• People who are rich know how to save and accumulate wealth.
• Winning in shares is easy, all you need to do is to buy low and sell
high.
Some financial advice reminds you of the mice who had a conference and
decided to tie a bell round the cat's neck to alert them to its coming. Great
idea, but who's going to do the tying?

Page 54
I once heard a remisier who was so "blur" that he gave this advice to his
client, "If the share prices don't go up tomorrow, they will go down." Sounds
perfectly logical, but that is not too helpful, is it?
Follow the example of Arkad, in The Richest Man in Babylon, who solicited
advice from Algamish, the money lender who was the richest man at that
time. Arkad went on to become the richest man in Babylon after the old
Algamish had passed on.
The Richest Man is a classic book on wealth creation written during the
Great Depression. It sold more than two million copies.
The rich have assets.
What exactly is an asset? An asset is something

that puts money in your pocket, day after day,
without you working at it. The only work that you
do is to acquire it, and perhaps monitor it.
Here is where the confusion begins. A lot of people think they have assets
like property, shares or business. But their so-called assets, though legally
defined, do not generate positive cashflow. For example, they have got to
fork out cash from their own pockets to pay for monthly bank instalments for
their property despite it being rented out. Or, they may have to pump in cash
from their own savings into their business, instead of vice-versa.
Also, they are tied down to their "assets", like their business. If they leave
their business even for a month, it would collapse. If your assets do not
allow you to stay away from it for say, a year, you can hardly label it an
asset. You should be able to exercise maximum control over it with minimum
monitoring or supervision. An asset thus labelled would make more sense.
Examples of assets held by the rich are real estate or property, stocks and
shares, mutual funds or unit trusts, fixed deposits, bonds and business,
intellectual property and franchise rights.

Page 55
The rich have real estate that gives them rental income. They are not like
the middle-class who receive say, rental income of $1,000 and have to pay
monthly instalments of $1,200. The rich are smart. They will always have
rental income in excess of their monthly instalments plus other costs like
repair and maintenance, insurance, quit rent and assessment, and even
taxation.
The rich have stocks that give them dividends. They seldom meddle with
margin and contra accounts which are liabilities that erode their accounts
with lots of interest, brokerage, stamp duty and service charges.
The rich have mutual funds that also give them dividends. They are very
careful to factor in annual management fees and hefty account opening
charges. Unlike most investors who do not have the knowledge and
therefore place their faith in fund managers, they have exceptional
knowledge of their mutual fund investment. They know exactly who handles
their funds, the person-in-charge, as well as his company's track record.
The rich have fixed deposits and bonds that give them interest.
The rich have businesses that generate profits. More often than not, they
have managers reporting to them. They may like to work themselves but,
unlike the middle class, they are not tied down to their business' daily
operations.
That brings us to another little known secret of the rich. The rich may not
have everything. But there is one thing that all rich people definitely have,
that is, time. In fact, it is true that if one claims to be rich but does not have
time, he is not truly rich.
The rich became rich because they built up their assets.
The rich stay that way because they keep accumulating assets.

Page 56
Your house is not an asset because it does not generate income or put
money into your pocket. Even paying it up fully does not make it an asset. It
must generate income for you every month if it is to be an asset.
Now I can see it in your eyes that you want to rush out immediately and buy
some assets. You want to buy properties and collect rental like the rich. You
want to invest in the stock market like the rich. You want to call your Public
Mutual friend to buy from him. And you want to start a business
straightaway.
No, I am not going to discourage you. You do not need to wait another five
years, read 5,000 pages of investment stuff.
But let me exhort you, would you like to know another important thing that the
rich have? Patience. Do you have it? It is better to wait five months for the
right opportunity to invest. Otherwise, if you are in a hurry to invest today,
you might need to wait five years for your returns, if there are any at all. All
great achievement requires time, said David Joseph Schwartz.
In times of great economic change, there are always great transfers of

wealth. You may think that people make a lot of money during good times,
but a big secret is that true investors make more money in bad markets. So,
the good news is, when you are ready, you are capable of making money in
both the up as well as down markets. Let us take a quick look at a current
example.
The price of fuel has just gone up by 40% in Malaysia (mid 2008). By the
time this book goes into print, the price would be anybody's guess. Let us
assume it stays that way for some time. Within weeks, the cost of building
materials has gone up by 30%. A house that cost $100,000 to build, now
costs $130,000. The rich who own choice properties and are currently
renting them out and earning high returns of say, 8%, are in for a windfall.
The fact that their properties can earn such high returns means that they are
strategically located. Not only will their rental rise, but they may earn a 30%
capital appreciation also.
The only caveat is that Soros' prediction does not come true. He says that
the world will go into a state of recession worse than the Great Depression in
1929. (Refer georgesoros.com for latest updates on his views about the
world economy.)

Page 57
For now, let us bear in mind our money secret for today.
5th Secret: The rich have assets.
Rich people have assets. The famous Donald Trump, who hosts the show
"The Apprentice", generates a lot of cash by renting out his high-end Trump
Tower.

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Chapter 6
THE DIFFERENCE
Do you know the difference between the poor and the middle class?
The poor have expenses only. They do not qualify for any liabilities like
housing loan, car loan or credit card. Whatever the poor earn as income is
fully used to pay bills and expenses. The poor live in fear of losing money,
and constantly try to be thrifty. An example of the poor are the hawkers.
They do not have “Form J”, “EA Forms” or "Borang B" - those documents
that you submit to get your credit card.
Don’t get me wrong. I may believe most

hawkers are poor, but there are exceptions.
I do know of some hawkers who are
“loaded”. My favourite hawker is one who
fries Hokkien mee every night until 3 a.m. in
KL, something he has been doing since
1977. He lives in a bungalow, and moves
around in a Merc. (He says his wife is
driving it.) He collects rental from many
properties, has his own wine retail shop and
people to look after his plantation business.
Wow. Talk about passion. He seriously
doesn't need to do it, but he just loves frying
his Hokkien mee.

Page 59
The same goes for my friend downtown who rents his shop to Hong Leong
Bank and owns another six shops nearby. He, too, wakes up very early and
serves bak kut teh to his customers.
These people started out as poor people who lived from hand to mouth.
Although luck and hard work played a part in their success, it is their
profound understanding of assets that made them rich. That is the secret,
my friend. The poor are totally unaware of this. That is why they have to
attribute the success of every rich man to luck and fate. (The rich are
actually amused and usually play along, acknowledging in public their
success to be just a matter of luck. They know better. Besides, contrary to
what a lot of people think, most rich people are humble and unassuming.)
By assuming to be a fact that people become rich just because they are plain
lucky, the poor will always remain poor. The poor man who has grasped an
understanding of assets will soon be poor no more.
The middle class have liabilities besides expenses. The middle class guy
even thinks that some of his liabilities, (that is, his house and his car), are
assets,. And of course, his credit card is an asset to him. Why else would it
be called a credit card?
If we have more money but increase our expenses and liabilities, we won’t
be rich. The rich, poor and middle class can all go broke if they lose control
of their expenses.
The following is a survey done by the US Dept of Health, Education and

Welfare which I believe applies to Asia as well. By the age of 65, for every
100 people...
36 are dead
54 are living on government or family support
5 are still forced to work
4 are well off
1 is wealthy
Page 60
It is the expenses and liabilities of the poor and middle class that stop them
from becoming rich.
6th Secret: The middle class have liabilities besides expenses.
Donald Trump of "The Apprentice" says, "The second happiest day in your
life is when you buy a yacht. The happiest day in your life is when you sell
your (expletive) yacht." He is referring to the heavy expenses of maintaining
the yacht, making it a huge liability to him.

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Chapter 7
RED LINE
The maximum speed your car can reach is up to the red line on your
speedometer. If you go faster than that, your engine may blow up.
Many people, including the rich, operate their finances constantly at the red
line. They spend money as fast as it comes in.
Earn $800, take a bus

Earn $1,000, get a small car
Earn $1,500, get a medium-sized car
Earn $2,000, buy a condominium
Earn $2,500, change to a bigger car
Earn $3,000, get married
Earn $3,500, have kids
Earn $4,000, get a landed house
Earn $4,500, spend more on credit card
Earn $5,000, time to change car again
Earn $5,500, get a semi-D
Earn $6,000, buy a golf membership
Murphy's Law of Personal Economics states that "one's income is always

less than one's expenses."
Not enough money? Do overtime, get a second job, do direct-selling. (Well,

there is nothing wrong really; it’s okay to do direct-selling. As we shall see,
direct-selling can be an asset.)
When they reach retirement age, they still don't have any assets. Then they
say they are too old to learn, too old to invest, too old to start over. How sad.
Page 62
A little known fact that we prefer not to think about is this. A lot of people are
only three to six months away from getting their house auctioned off or their
car repossessed. Most of us take for granted that we are healthy every day
and are able to work. For some less fortunate ones, this may not be true.
And they soon find themselves in serious financial difficulties.
One of the reasons why some people get trapped financially is that they
simply cannot differentiate the two words, cash and budget. Let’s say you
are an employee and you have just got your pay of $3,000. You are
whistling while walking down the street and meet up with some good friends.
You want to buy them lunch. Can you buy them a $300 lunch? Don't forget;
you are holding $3,000 cash in your hands. Yes, you can, because you have
the cash. No, you can’t, because you don’t have the budget. Your $3,000
has to pay for rent or house instalments, car instalments and petrol,
insurance, living expenses and a host of other expenses. You are probably
left with only a $30 budget to buy your friends lunch. People shoot
themselves in the foot and get into all kinds of trouble when they are careless
about their budgets.
"You don't need to pay. Just sign and swipe your card." Isn't that a symptom
of one who cannot differentiate between cash and budget? How many
people fall into that trap? For an answer, just look at the many credit card
salesmen (or salesgirls) at the shopping complexes who are offering you
‘free for life’. (Free annual membership fees for life.) Don't for a moment
believe them; I have many friends who got stuck for life. I even have some
friends on breathing apparatus fighting for life.
And then there are a few big companies offering easy payment schemes for
everything from electrical items to furniture, to make sure you pawn away
your life.
I also noticed that people holding cash have an uncontrollable urge to spend
it as fast as possible. I have seen wholesale market hawkers with a huge
cash collection making a beeline for the casino, sometimes camping there.
They feel relief only after they have been relieved of their cash. I have also
seen educated people who can’t wait to ‘invest’, queueing up at the stock
market or property market, with the cold hard cash they earned from their
salary or business deals. They then wait impatiently for their elusive return;
because they have not bothered to do any homework on their so-called
investment. Cash can do wonders to people, some literally spend as if there
is no tomorrow.

Page 63
The December 2008 publication of Fortune magazine says that 81% of

respondents to the American Psychological Association's "Stress in America"
survey cited money as a main source of stress.
Doctors say the problem today is stress caused by working too hard and not
having enough money. One doctor says that the biggest cause of health
disorders is ‘cancer of the wallet’. When people feel financial anxiety, what
do they do? They hurry off and bury themselves in their work. And they
work really hard. They just want to temporarily forget all their problems; they
go shop for a house or a car, or go play some golf.
More money will not solve the problem if cashflow management is the
problem.
Bear in mind the Golden Rule of Personal Finance: pay yourself first. When
you receive your salary, don't straightaway pay bills and purchase liabilities.
Pay yourself first and use that money to buy assets. Put aside at least 10%
of your income in a separate account dedicated solely to savings. You will
be on your way to a better tomorrow.
7th Secret: You will have no money to buy assets if you constantly live
on the red line.
A lot of people today are living on a cliff's edge. With the burden of expenses
and liabilities piling up, they are just a step away from falling over.

Page 64
Chapter 8
EIGHTH
WONDER OF THE WORLD
Albert Einstein once said that the eighth wonder of the world is compound
interest. He also said that it is the greatest mathematical discovery of all
time!
The simplest way to riches is to save and invest. Save. Invest. Save.
Invest. It may be boring but I am sure you have heard of some uneducated
old ladies who have gotten rich just by doing this, beating some college
professors with their sophisticated methods. Einstein was right.
$10 a day can grow into a million...
in 74 years with a fixed deposit rate of only 3%.

in 34 years with a good property investment rate of 10%.
in 20 years with a good stock market dividend and capital gains rate of 20%.
It may not be the fastest way in the short run but in the long run it is the only
way.

Page 65
I understand that some of you could be struggling right now just to put food
on the table. This idea of compounding holds no appeal to you. You need a
quick fix for your financial problems today. (Who doesn't need a quick fix?)
How you wish you could make some quick money. Of course there are
ways, you will find out in the coming chapters. The purpose of this book is
not to tell you that you can only be rich in twenty years’ time.
Let's come back to compounding. Our parents were right when they said,
"Live on less than you earn. Invest the surplus. Avoid debt. Build long-term
security." Meditate on that; it has a lot of wisdom. It is not the exciting get-
rich-quick rabbit but the tortoise that laughs slowly all the way to the bank.
Einstein foresaw it.
8th Secret: The eighth wonder of the world is compound interest.
The eighth wonder of the world is not a physical structure but an

understanding of how money (or debts) can accumulate at an alarming rate
over time.

Page 66
Chapter 9
HOW EXPENSIVE IS PROCRASTINATION?

Annual Annual
Savings Savings
Year ($) ($)
1 10,000 0
2 10,000 0
3 10,000 0
4 10,000 0
5 10,000 0
6 10,000 0
7 10,000 0
8 10,000 0
9 10,000 0
10 10,000 0
11 0 20,000
12 0 20,000
13 0 20,000
14 0 20,000
15 0 20,000
16 0 20,000
17 0 20,000
18 0 20,000
19 0 20,000
20 0 20,000
You invested 100,000 200,000

You get back 454,713 350,623
(We assume an investment compounding of 10% p.a.)

Page 67
The above example shows the difference between investing early and
starting out late. We look at a period of twenty years.
In the first example, you invest $10,000 a year for ten years. Then you stop
investing. You receive interests of 10% a year and allow them to compound
for another ten years. At the end of twenty years, you would have $454,713
in your account.
In the second example, you only start investing in the eleventh year. Instead
of investing $10,000 a year, you double-up your investment and put in
$20,000 a year. You try to make for the ten years' time that you lost.
As you can see, if you start late, even if you double-up your money your
returns are still less than if you had started out early!
Annual Last Year's This Year's

Savings Total B/F Total Interest @ Total
Age ($) ($) ($) 10% p.a. ($)
21 10,000 - 10,000 1,000 11,000

22 10,000 11,000 21,000 2,100 23,100
23 10,000 23,100 33,100 3,310 36,410
24 10,000 36,410 46,410 4,641 51,051
25 10,000 51,051 61,051 6,105 67,156
26 10,000 67,156 77,156 7,716 84,872
27 10,000 84,872 94,872 9,487 104,359
28 10,000 104,359 114,359 11,436 125,795
29 10,000 125,795 135,795 13,579 149,374
30 10,000 149,374 159,374 15,937 175,312
31 10,000 175,312 185,312 18,531 203,843
32 10,000 203,843 213,843 21,384 235,227
33 10,000 235,227 245,227 24,523 269,750
34 10,000 269,750 279,750 27,975 307,725
35 10,000 307,725 317,725 31,772 349,497
36 10,000 349,497 359,497 35,950 395,447
37 10,000 395,447 405,447 40,545 445,992
38 10,000 445,992 455,992 45,599 501,591
39 10,000 501,591 511,591 51,159 562,750
40 10,000 562,750 572,750 57,275 630,025
The above example shows the big difference in final returns of just one year.
If you start saving $10,000 a year at an interest rate of 10% p.a. when you
are 21 years old, you will have RM630,025 when you are 40.
Now consider this, you just want to procrastinate by one year and start
saving when you reach 22. You say to yourself, "I would be slower by just
$10,000 when I reach 40. It is just a small amount; it won't make much
difference."
Page 68
Look carefully at the table above. When you reach 40, you would have only
$562,750 instead of $630,025 in your account. You have actually lost
$67,275 instead of $10,000! And that is for an interest of 10% only. When
you become a good investor, you will be able to generate between 20% to
30%.
The two examples above produce different responses in different people.

Some are quick to grasp the implications. To others they are mere numbers;
they do not feel the urgency. For example, I feel that generally ladies, with
their inherent need for security, would start off saving or buying insurance
policies earlier compared to guys. They can visualize having better financial
security twenty years down the line.
9th Secret: Start learning and investing today. Delay is very costly.
Procrastination is very easy to practise simply because you actually don't

need to do anything. That is why it is not surprising to find a lot of people
talking about building a better tomorrow. They are not learning anything new
or doing anything to create a better tomorrow. They are just hoping for a
better tomorrow. Don't fall into this trap. Tomorrow won't be better if you
don't start learning and investing today.

Page 69
Chapter 10
BREAKING THE
"THREE-
"THREE-GENERATION
CURSE
CURSE"
Most of us, particularly the Chinese, have heard of the phrase "three-
generation curse". It is almost a proverb in Asian countries: The first
generation earns it, the second accumulates it and the third spends it.
Some are lucky to be born on the right side of the coin. They are born with a
silver spoon. They do not need to struggle financially. They always have
capital to do business or invest. But they never figured out the way to get
there. Or rather, they never understood how their parents got there. Building
wealth (or anything else) takes a lot of time but destroying it takes just a tiny
fraction of that time.
They soon find themselves back on the wrong side of the tracks. And
because they have not figured it out, they plunge back into the rat race
reserved for the poor and middle class. Often times, they waste all their
parents' hard earned capital on "match stick" investment projects. They
could even be well-educated graduates from overseas with some new and
exciting, high-tech marketing plan to replace their parents' "outdated"
business strategies.
The way to break free of the three-generation curse is just to accumulate

assets! With assets, you gain back your financial freedom. And thereby
regain your time freedom.

Page 70
What do we mean by assets? Is it your land and buildings? Is it plant and

machinery? Is it your furniture and fittings? Or, is it the number of cars in
your garage? If you are familiar with accounting you will notice that these are
the usual items listed on a balance sheet. They are assets in the legal sense
of the word.
However, they may or may not be assets to you after all, in the practical
sense. You see, this is where the confusion starts.
The assets we are talking about are those which generate cashflow for us.
They put cash into our wallets faithfully month after month, year after year.
Let us take a simple example - property.
If you have a shop that is fully paid, located at a readily tenantable location,
collecting $10,000 in rental a month, you have an asset. Every month you
are richer by $10,000 - in cash.
But if you owe the bank and each month your instalment is $12,000, you will
have to fork out $2,000 from your pocket to feed your asset. If you don't, the
bank will take legal action against you and may auction off your shop. Your
tenant will be paying rental to the new owner instead of paying to you.
Would you then call your shop an asset? Look at it another way. If you are
the boss and your salesman makes money for you. To you he is an asset. If
your salesman is lazy and draws salary without being productive, you will not
call him an asset. You would just call him a liability.
How does the "three-generation curse" come about? The answer is wealth
destruction, or simply, asset destruction. Instead of increasing the number of
cashflow-generating properties, a patriarch's descendents would simply sell
off properties and spend on luxuries (expenses). They kill their golden
gooses.
In other cases, they pawn away their gooses. They mortgage back their
fully-paid properties to the bank, with the good intention of obtaining more
capital to expand their business. But little do they realise that they have now
reversed the situation. Instead of generating cash, their properties are now
sucking up their cash through bank interests.

Page 71
It would be fine if bank interests were $2,000 and cash generated from their
business is say, $4,000. But, as evident from the "three-generation curse",
this is not the case. Assets are eventually turned into huge liabilities and
younger generations become poor and debt-ridden. They are then left to
figure out the equation all over again.
The next chapter will focus on the many ways you can create assets for
yourself. With assets, you will stay debt-free and have your financial life
under control. You will overcome the "three-generation curse".
10th Secret: You can only break the "three-generation curse" by

accumulating assets.
We will fall prey to this curse if we do not keep accumulating assets.

However, some rich people with assets have also fallen under this curse
because they spend money faster than it comes.

Page 72
Chapter 11
THE ONLY WAY TO RETIRE
An asset means residual income.
Yes, for those of you who are still not exactly sure what assets are all about -
assets put money into your pocket. And that is what residual income does!
Now, I am not against anyone with a beautiful plan to make some active
income, say, finding and executing a trading transaction to make a million
bucks. There is nothing wrong with that. The problem is, I have seen many
people who have made millions but continue to struggle financially. People
have got a way of using up their earned income faster than it comes. And
they are usually not so lucky with their second million-dollar transaction.
They might have to wait a terribly long time for it to materialize.
Yes, residual income is the sure way to premature retirement. There is a

more common term called "passive income", if you like. My favourite term,
which I feel is more accurate, is residual income. It simply means that you
are getting paid many times for doing work once.

Page 73
The Wrong Question
Most people ask themselves this question at one time or another, "How
much money do I need to have before I can retire?" This is a kind of million-
dollar question. The word retirement evokes a lot of emotions. However, the
answer (or answers) to this seemingly simple question usually leads
nowhere.
The problem is that people are asking the wrong question. That is why they
say you would already have half the answer if you ask the right question. Did
you notice that when we are lost we really don't know how or what to ask?
A trip to Cyberworld will show you just how lost people are when it comes to
the topic of retirement. Join an online forum. It is free. Google keywords
like "malaysia investment forum" and you should be able to find some
interesting forums in Malaysia. Substitute "malaysia" for your own country.
Once you are inside the forum, look for threads pertaining to retirement. (A
thread is an internet term for a topic in an online forum.) If you find it difficult
to locate such a thread, don't bother - just start one yourself. Post questions
like, "Can someone tell me how much money I would need before I can
retire?" You will find there are many members who will immediately offer you
advice including how to build your "nest egg", investing, interest
compounding calculations, buying unit trusts, writing wills, and even
bereavement planning. You may also be bombarded with financial jargon
and complex formulas.
You will then observe how the emotions of greed, fear, anxiety, insecurity,
worry and despair distort numbers and common sense. Figures are simply
plucked from the air in desperation. "You will need a nest egg of $1 million to
start with. Just put it into fixed deposits paying you 3% a year and you would
have enough money for your retirement." Or, "Don't worry if you have only
$100,000. If you compound that with a 30% yearly return, your retirement
would be secured." For most part, these people are actually talking to
themselves, not to you. You start asking yourself how on earth you are going
to get a million dollars to start with. Or, how are you going to get a 30%
return on your investment each year. Even Warren Buffett can't manage
that.
Asking, "How much money do I need to have before I can retire?" usually
gets us nowhere. That is because it is like shooting a moving target while on
the move yourself. Not since the days of Genghiz Khan and his Mongolian
troops have people been able to do that. Different people have different
needs and wants. Not only that, our needs and wants change with the
money that we have. The lines between necessities and luxuries blur with
every change in our bank account.
Page 74
A poor man will use his natural immunity to recover from a bout of flu.
Panadol is a luxury to him. However, once he becomes rich, he may send
his children to a specialist doctor at the slightest fever. Even a general
practitioner may not be good enough for his kids.
To some people a fitness centre membership is compulsory. It is not a

luxury; it is a necessity, a serious need. Tell that to a guy who lives from
hand to mouth and he will be cursing you on the inside.
You can retire on just $5,000!
It is not really how much money you have that determines when you can
retire. It is how much money you will be getting each month without you
working! My favourite example is my friend who gets rental income of about
$30,000 each month from his fully-paid property. There is no work to be
done except the difficult task of writing an official receipt. He needs to spend
five minutes warming up the muscles of his right hand before he does that.
Five thousand bucks should be enough to overcome your "passive

expenses" each month, even if you live in a city. Your house and car
instalments, your petrol and car maintenance bills, your food and
entertainment bills, (did I say entertainment?) and your insurance payments
should be less than $5,000. Therefore, if you have passive income (say,
from rental) of $5,000, you practically don't need to work.
Needless to say, this retirement package comes with a little discipline of

living within your means of $5,000 a month. Do I need to add that some
people with monthly incomes of $50,000 each month spend in excess of that
amount, too? Discipline is always an integral part of any financial package.
Your retirement plan based on $5,000 a month may be jeopardised if you

include green fees of a thousand dollars a month as "necessities", should
you immediately take up an expensive hobby of golf.
I am sorry to disappoint guys who propose million-dollar figures as answer to

the retirement question. Doesn't $5,000 seem more achievable to you
compared to a million? Can you see that you are now on course to retiring
early? Of course, retiring rich may be a slightly different matter. Then again,
once you are retired you would not be too worried about that, would you?

Page 75
In this chapter I have listed nine common ways to get just five thousand
bucks of passive income a month. As you progress in your financial
education you will surely find a few more ways yourself. The methods listed
here are just road signs in the right direction; they are by no means a
detailed map of the journey.
1. Property investment
You buy a piece of property once and you get rental each month for a
very long time. My property guru gets a six-figure income each and
every month from rental alone.
Almost every rich man in this world either made or parked their money
in properties, you should definitely learn property investment. Unlike
some other investments, you don't need any qualification to do this, but
you need lots of experience. You need to study or view at least 100
properties before putting in your money. Come on, that is not a lot.
Spend some time at property fairs like MAPEX or Homedec. Don't be in
a hurry; spend some time walking around to learn. But avoid getting
stuck in one booth just because the salesgirl is pretty. (Or, the
salesman is handsome.) Remember, you are there to learn.
There are a lot of advantages investing in properties. Unlike shares you

seldom see cash being "zero-rized" because the land is still worth
something even if a building is burnt down. Property can also be one of
the best hedges against inflation. You can take your investment to the
bank and ask for a loan but your banker might not be so welcoming with
your other investments, like shares. Your leverage will be much lower.

Page 76
Don't fret if you feel you do not have the capital. (I understand that
feeling. Most of us poor and middle class guys don't have the capital to
start investing.) It takes less than you think, for example, I have a friend
who invested about 20k in a flat in Setapak. She rented it to TAR
College students for about RM500 a month. The same lady has
another terrace house in Bukit Jalil which she bought for 200k, and for
which she also gets about RM500 rental a month. Now, what does that
tell us? It is not how much capital you have, but rather the property
investing skill.
A clever little improvisation on my investment learned from my property

gurus helped me convert my loss-making condominium investment from
being a liability into an asset.
Instead of renting out to single or family tenants, I rented the unit out to
carefully-selected overseas students who do not have a big budget but
are nevertheless comfortable with sharing the unit amongst themselves.
Thus, I was able to collect higher rental. Furthermore, this left me with
two vacant car parks as the students do not need them. I fetched
another two hundred dollars extra. All in all, my rental income now
exceeds my bank monthly instalment (including other expenses such as
maintenance) - voila, my house is finally my asset.
This simple technique taught to me by my property guru is used

frequently by many property investors, especially for commercial
property. In a soft market, owners who split up their shop to two tenants
(usually selling complementing products) collect more in rental than if it
were rented to a single tenant.
My tenants have since been paying my monthly instalments for me with

a little extra to spare.
Start your lessons in property investment by keeping in mind two

important formulae.
Your ROI should be roughly double the FD rate. If the rate today is
3.7% p.a., your ROI should be 7.4%. This is actually common sense
because FD is 100% guaranteed, there is no risk involved. Property
investment, like any other investment, comes with risk. But, as usual,
common sense is not so common. You will find a lot of people happy
with an ROI the same as FD or even lower.
In case you don't know what ROI is, it is simply your rental receivable
times 12 months, divided by the purchase price of your property. (I use
10 months instead, for of the reasons explained below),

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Example:
Rental is RM500.
Purchase price is RM60,000 (medium-cost apartment).
ROI is 500 x 12 = RM6,000 , divided by RM60,000 = 10%.
The other formula that you should bear in mind is that your 10 months'
rental income should cover your 12 months' bank instalments.
Remember, you have to take into consideration that your property may
be vacant pending new tenants when your old tenants move out. Also,
there are costs involved in property investment such as repairs and
maintenance, interest, assessment and quit rent, insurance, legal fees,
survey and valuation, stamp duty and, not forgetting, taxation.
That is the only way you can get positive cashflow from your property
investment, thus making it an asset. Otherwise, you would have to fork
out money each month to pay for bank instalments because rental
collected is insufficient. It would then be a negative cashflow
investment and you will be caught holding a liability instead. That is
where the trouble starts for most investors.
Armed with these two formulae, you are well on your way to success in
property investment. However, I am afraid that you will immediately run
into problems. It would seem that such a property as described in the
two formulas does not exist!
That is where you start your education in property investment. If such

properties did not exist, then rich people would not exist either.
Most of you would have heard of the term, ‘location, location, location’.
That seems to be the slogan for property investment. Your friends
would probably tell you that all you need to know about property
investment is found in those three words.
Do you really know what that means? Well, I thought I knew before I
started studying property investment. It turned out that all I knew about
location was how to spell it. If you can do better than that, I think you
could become a better property investor than me. (I recently bought two
properties both of which generate ROIs of about 10%, with nothing
down.)

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All right, let us look at the first lesson on location. You should only
invest in properties in other places if you cannot find any in KL,
Selangor, Penang or JB. (This is not intended to hurt any of my fellow
Malaysians' feelings if you come from other towns, but that is what I was
taught.) The reason being that appreciation rates are the fastest in
these cities. This is simply because of demographic, or population
concentration in these areas. For example, with the improvement of
infrastructure, the population in KL will keep increasing as whole
families migrate en masse from smaller towns to the capital.
What a relief, I thought. I am living in the Capital. If I were to be from

say, Kedah, it would be difficult for me to invest in KL as I would have to
travel all the way to study the property market in KL before I can invest.
Now I can just buy any property in KL, sit back and collect profits.
I soon found out that KL is a big place, and not all locations in KL are
the same. As I started mingling with property agents and property
investors, I found out that many people are losing money investing in
properties in KL.
Well, fine, I told myself, let's just try to narrow down a bit on the location.
We'll go by area: maybe Cheras, Kepong, Taman Tun... OK, let's try
Ampang.
Oops! Not all properties in that area are the same, either. Terrace
houses in high-end areas cost much more than in low and medium-end
areas.
Right, let's just try one residential area in Ampang, say, Taman Muda. I
called up the property agent and told him I wanted to buy a shop.
(Actually, it was just part of my homework. I was supposed to study 100
properties first before I made my first purchase, remember?)
I asked him how much rental a 4-storey shop in Taman Muda could
fetch. "RM3,000 for the ground floor, and another RM2,000 for the rest
of the floors." came the reply. "All right," I told myself, "I've got it nailed
this time." I asked for the selling price and some details like area and
whether it was freehold or leasehold. I then went to see the property to
do a survey.

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The property looked almost the same as its neighbours. The owner
was out and the staff did not know about the rental or selling price of the
property. I was about to leave after noting down the condition of the
property including the direction it was facing. (I brought along my
compass for the assignment. It is one of the tools you must have for
property investment, besides things like maps and measuring tape.)
But, something was bugging me.
I had not confirmed the price or the rental of the property. I quickly went
across to the next shop and tried to ask as casually as possible, "How
much is the rental around here?" "RM2,000 for the ground floor, and
another RM1,500 for the rest of the floors." "What?!" I couldn't stop
myself from shouting, "I thought it's RM3,000 for the ground floor?"
"Well, RM3,000 is for the opposite row of shops. This row can only
fetch RM2,000." "But," I found myself muttering, "it's on the same jalan
(road). Why the difference?" "We also don't know, but it's like that.
You can ask the next few shops; they are also renting for RM2,000."
I later learned that even properties located on the same road may sell at
substantially different prices. And that is not all. Even shops on the
same row may be selling at different prices. A shop located next to
another shop selling say, coffins, can expect to fetch a lower price.
When you start learning about property investment you may soon find
there is more to it than just location, location, location. One of the
leading mappers in Malaysia, Mr Ho Chin Soon from Ho Chin Soon
Research Sdn Bhd, gives regular talks on property investment. He says
that in today's market, buyers do not look at location alone. They buy
based on other factors, like branding. For example, Sunrise is a
preferred developer with many signature projects such as Mont Kiara.
Therefore, if Sunrise were to launch a new project, people would buy,
regardless of the location.
Timing is another very important factor to consider, besides location.

This piece of wisdom comes from a very seasoned developer, Tan &
Tan.
It would be wise to consider property investment as one of your main

sources of residual income. The advantages are just too many.

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2. Share market
Study hard to find a good company's shares to buy at a cheap price and
you will be rewarded with high dividends and capital gains year after
year.
Imagine this, you buy a share at say, $5.00 and you get a dividend of
4%. ROI would be 4% or 2 sen. If, after a number of years the share
has doubled to $10.00 and still pays an annual dividend of 4% based on
the market price, your ROI would now be 8%. I am sure you know of
some good companies whose share prices have been climbing slowly
and steadily. How you wish you had bought those shares earlier. You
will be tempted to "hold forever" to just enjoy the dividends.
There you have it, one of the more important criteria, if not the most
important, is to buy shares with high dividends. Start your education on
share investment with this in mind and you can't go wrong.
Make sure you don't make one silly mistake that I made. I thought it
was expensive to buy a certain guide book and later regretted not doing
so. Get all the tools that you need for different investment projects. To
do property investment, you must buy things like maps, measuring tape
and compass. For stock investment you must buy Dynaquest's Stock
Performance Guide for Main Board companies and their Second Board
Guide for Second Board companies. Dynaquest is the company which
compiles financial data for all companies listed on the stock exchange in
Malaysia. (Dynaquest.com.my)
When I first started stock investing, I did not buy these guides because I
thought they were expensive at RM65. I did not know that you can't do
stock investment without doing homework. All the figures are in these
guides. I went on to lose tens of thousands of ringgit.

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While we are on Dynaquest I might as well give you more tips. You
see, they had this "Stars" rating system of classifying companies before
2007. The company meticulously compiles and classifies financial
performance such as earnings, returns, dividends and important ratios
and then assigns ratings to them. They have since changed the
system. (Why they did that is anybody's guess.)
The stars rating system was very easy to use. The highest rating
theoretically is 12 but in practice the highest attained were only 9.
There is only one company in Malaysia that has a 9-star rating. Less
than 10% of the stocks in BURSA or KLSE have 7 stars or more. There
you have it. If you are a newbie, you can start by studying these
companies first and ignoring the rest.
What about the Second Board? There was only one company rated 8
stars. I say "was" because it was subsequently transferred to the Main
Board. (I bought the share a year before it was transferred.) There are
no 7-star companies in the Second Board! Is it any wonder that the
Government is trying to merge the two boards? This is so that newbies
will have a harder time separating weak companies from really
profitable businesses. More money will then be transferred from the
pockets of beginners to the big players. Have you ever wondered
where the EPF and other big institutions get the money to pay you high
dividends? Tip: stock investing is a zero-sum game. It makes it even
worse if you factor in brokerage.
If you are curious to know, the stock that I bought before I learned to
invest had a "U" rating. U means unrated! That means less than 0
stars. No wonder I lost money. Had I only been wise enough to invest
RM65, and patient enough to do a little bit of homework, I would not
have lost so much money.
3. Doing business
Businessmen and industrialists, like Li Ka Shing, generate profits by

having money as well as people working for them.
Business is an investment, too.
When you begin learning about business, you should start with a
revolutionary definition: If you cannot leave your business and go for a
holiday for one year, then it is not a business! It should be running
better and be more profitable before you left for your holiday. That was
very hard for me to swallow at first. I am now quite convinced that no
other definition is acceptable.

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My banker, Mr Nava, shared with me a little secret about delegation.

He uses the 4 D's. (Not the 4-D that you buy at the Magnum shops.)
First, he Delegates. Then, he Disappears! That's where I find him, at
the Royal Selangor Club having a little shot of his favourite whiskey.
What does he do next? He Disturbs. He calls back to his office to see
whether his staff has completed all his work for him. Finally, if tasks are
not completed satisfactorily, he Drills. He is the only banker I know who
stumbles into his office at irregular hours, just a wee bit tipsy. Never
mind his silly habits, his work gets done (without him doing it) and the
last time I checked, he had been promoted as general manager.
I thought only my friend Nava uses such methods. I later discovered

that most successful businessmen adopt these 4 D's unconsciously.
The only thing is they don't have a fancy name for it. Instead of
disturbing and drilling they may call it follow-up and giving advice. But,
most of them practise the "disappearing" part.
Recently, I read in the papers of someone offering a seminar teaching

people the 17 steps of delegation. How ridiculous. Imagine people
paying for it. That is the problem with people studying too hard. They
confuse themselves and their innocent victims. Nava would laugh until
he falls off his chair.
Business can be an extremely complex subject. It can be likened to a

group of hikers going into a jungle. Some will be quick to realise that
they are lost. Others will take a long time to come to the conclusion that
they are indeed lost.

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That is why you should always try to

keep things very simple.
Go for products that are

straightforward, and not high-tech.
The advantage is that they will not be
outdated soon. Some businessmen
spend a lot of time developing their
business. They put in a lot of effort to
build a stable business with regular
customers that generates steady
profits. Then, that particular industry
goes into a sunset phase. New
technology and trends take over.
What a pity.
Go for sole-proprietorships instead of having a lot of partners in your

business. It will be less complicated. I understand this is quite hard if
you need to pool together resources of cash and expertise. You need
partners. But I have observed that partnerships come with a lot of
problems, especially in terms of business direction and marketing
strategies. There are a lot of conflicts due to difference in opinions.
The last time I did a survey I found that most businesses are either
done on a sole-proprietorship basis or there is only one sole decision
maker in the business.
Go for businesses done on cash terms. Avoid businesses that need to

give lengthy terms of more than thirty days to customers. A lot of
people tell me they can't do it because the market is giving terms. If
they don't give terms they cannot secure the business. That is why you
should consider not going into that type of business in the first place.
Once you are trapped you will find yourself in a situation where "if all
you have is a hammer, everything looks like a nail". You will be caught
in a bad situation trying all sorts of ways to salvage a sinking ship.
I do have customers giving up to nine months' terms to hypermarkets

when they first started out. Once they were established they
conveniently said goodbye to those slow-paying hypermarkets and
trimmed down their terms to either cash or one month.

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I have one last piece of personal advice. If you are new to business,
remember to have all the cards to yourself. What I mean is you should
not have anyone in your company who is indispensable, whether he is
your partner, a manager or just a staff. When this happens, an
extension of Murphy's Law will come into play. Murphy's Law says that
whatever can go wrong will go wrong. Whoever you rely on to keep
your company running will give you problems if he is indispensable. He
may even be your family member! That is how powerful this law is.
Let me clarify. In business we must rely on people. We always need to

pool together resources. But the danger begins when the person we
rely on becomes indispensable. So, make sure you always have
someone on standby to do what he does. If you don't, be prepared for
some very unpleasant surprises.
The other alternative is to limit your bet. Protect your business

investment from harm by putting just a small fraction of your total capital
into it. Don't put all your marbles (or eggs) into one project if you need
to depend on people who are indispensable.
With that, I leave you to begin your studies on how to start and run a
successful business. You can find a lot of books written on the subject
of business.
I would like to share with you two small businesses which I consider to
be successful.
Pan Bakery in Subang Jaya is operated by Mr How, a good friend of

mine. It has been running for more than ten years. It is profitable and
they have recently opened another branch in Petaling Jaya. The
curious thing about this business is that the owner does not know how
to cook commercially - he is a land surveyor.
I find it interesting because quite a number of my other customers have

closed shop when they relied on their chefs who subsequently left their
restaurants. I asked Mr How (his real name) how he manages to run
such a business when he himself cannot cook. He simply replied that
whenever his chef resigns, he just advertises for a new chef and there
are a lot of good chefs waiting to be interviewed. Now, I wonder why
my other customers couldn’t do that.

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LKH Motors in Petaling Jaya has been operating for almost three
decades now. They are a very profitable used car dealer, specialising
in SAABs. I consider them successful because it is the only partnership
business that I have come across where the partners are seriously on
kissing terms. I mean, they are like brothers even though they are just
friends.
They have an almost telepathic understanding when it comes to running

the business. On top of that they have a very similar philosophy of life.
They take things easy, money is not everything. They really enjoy
making money and they really enjoy their partnership. They get along
like brothers. In fact, I feel they are closer than brothers. I have seen
siblings fight over business. I have even seen fathers suing their
children over business. I think these two guys are simply fantastic.
Incidentally, LKH stands for both their initials!
4. Network marketing
Network marketers can have hundreds or thousands of downline

associates working for them while they sleep, and generate millions in
residual income. Network marketing is the current preferred term for
direct-selling or multi-level marketing (MLM). They all mean the same
thing. You may ask your upline to explain to you why this is so, but be
prepared - he may become historical and hysterical.
Actually, network marketing is the more accurate term. It simply means

that this type of marketing is done through networking. The
effectiveness and success of network marketing is past the
experimental stage, with leading businesses, like Amway, raking in
billions of profits each year.
All of us practise network marketing without realising it. If we come

across a good restaurant, we naturally alert our friends to it. The same
thing goes for a good movie or a beautiful tourist attraction. That is
network marketing in its purest form. It works. (Of course it doesn't
work if we do not have any friends or we are so selfish that we want to
keep good things to ourselves.) Now, extend that to health
supplements or any other product which uses the network marketing
system as its distribution channel. If you are a person who finds it fun to
enthusiastically recommend good stuff to your friends, you stand a good
chance of succeeding as a network marketer.

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Malaysia is one of the most popular network marketing sites in the

world. The majority of products, like health food, from the West make
their entry into Asia via Malaysia. One of the reasons is simply that
Malaysians are multi-lingual. Unlike places like Thailand, Indonesia,
Singapore or Philippines, Malaysians are proficient in Chinese, English
and Malay which are languages used by all the countries in this region.
They can conveniently sponsor and expand their network.
Therefore, Malaysians are much more mature when it comes to direct-

selling. Almost everyone has been involved in direct-selling at some
point of time.
Direct selling is a proven business model which has created millions of

millionaires across the world. Traditional business seldom makes the
staff millionaires, only the bosses. Anyone who participates in direct-
selling has the opportunity to make a lot of money. For the operator,
the model eliminates the necessity for having staff. Every dealer is his
own boss. Robert Allen, who has written four international best-selling
books on making money over the past twenty-five years, says that he
hates any business that involves staff. Staff are a permanent
headache.
There are many objections to direct-selling. To be successful in running

a direct-selling business, we need to be able to educate our customers
who wish to be involved in the business. Education and training today
is easier with the Internet as information is easily sent to the customer's
doorstep with a touch of a keyboard or a click of the mouse.

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"Direct selling is a pyramid. It is illegal. The top people make all the
money, from the people down the line. It is exploitation." This is a
common objection. Well, there is nothing wrong with pyramids; it is the
strongest structure known to man. If people care to look, there are
pyramids everywhere. In any company there is only one CEO,
sometimes with hundreds or thousands of staff. We all know that some
CEOs get paid ridiculous amounts. In an army there is a general with
thousands of soldiers under him. In a school there is only one
headmaster. In a university there is a chancellor. There is a president
or prime minister for a country.
Any direct-selling business may be accused of being a pyramid. Even

USANA, which won the best compensation plan in America for eight
years in a row, according to industry standard magazine, MLM Insider,
was recently sued for running a pyramid scheme. The story is easily
available by searching Google. USANA is a down-to-earth company
selling health supplements. Its products obtained the highest ranking
among 1,500 leading products in US, Canada and Australia, scoring
96.1 points out of 100. Incidentally, this is also one of my favourite
direct-selling companies.
"It is very hard to succeed in direct selling." Why, it is very hard to

succeed in anything at all, don't you think so?
The key to success in direct selling is training. Similarly, the reason

why people do not succeed in direct selling is because of lack of
training. Unfortunately, most people do not know this, and they will
never find out. Most people do not know the reason why they are not
succeeding in other endeavours as well.
You need to be trained how to sell products and recruit downlines. The
mere mention of these two tasks conjures up images of pain that comes
in rainbow colours.
You recall the incident of your neighbour who was fired up after
attending a direct-selling talk. Full of zest and excitement, he comes
home and immediately summons his sister. He dumps the sales kit
along with the full range of products and application form to join as a
distributor and commands her to sign up so that they can make tons of
money together. He does not even bother to ask her permission and
least of all, her opinion. After all, it was all for her own good. He would
never harm her. She should simply trust him. Furthermore, he has
personally attended the talk and was convinced that the company was
solid. The products are first class and the compensation plan
marvellous.

Page 88
He is totally taken aback when his sister gives him the chewing of his
life. "I hate direct selling!" she said, running back to her room and
slamming the door behind her. How mean of her. How hurtful it is. "I
just wanted something good for her and this is how she treats me."
These two siblings have not been on talking terms since. Tragic, isn't
it?
Other scenes of horror also come to mind. A good friend pesters and
begs you to buy products. Another friend corners you at McDonald's,
whips out a stack of A4 papers and starts furiously drawing circles and
triangles with pyramidal shapes while you are trying your best to stifle a
yawn.
Or, this classic. Your childhood friend approaches you with, "Are you
free tonight?" Being Malaysian (or Singaporean for that matter) you
immediately sense it coming. "No, I have something on." "How about
tomorrow night, or next week?" "Where do you want to take me? Is it
ABCXY direct selling company?" "No, definitely not! Believe me, it is a
very good money-making opportunity." You sacrifice your dinner with
your sweetheart, resist the urge to take a bath because there isn't
enough time, get caught in the after-work jam, curse at the toll booth,
curse louder at the petrol pump, run out of curses after paying for
parking and being unable to find a parking lot, and guess what? You
land smack right in the middle of the ABCXY direct-selling talk.
Now, you see what I am trying to tell you? Training. All the above
scenes would not have happened if a network marketer is well trained.
I know it is hard to believe that so many network marketers are not well
trained. That is exactly the point. Most network marketers believe they
do not need training; they are good enough already. Training is a waste
of time.
It is not possible to delve into any aspect of this vast topic of training.
However, a simple illustration will set you thinking. Refer back to our
earlier example of the movie. You have just watched Indiana Jones and
you feel that it is such a fantastic movie. You also know that your sister
hates action movies; she loves romance and soap operas. She often
finishes your box of tissue in one sitting. Now, would you be in a hurry
to recommend Indiana Jones to her? Would you be so kind as to buy a
ticket for her in advance?
I bet you would approach your brother instead. He shares your passion
for action movies. You would probably be scolded for not watching it
with him.

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The above process is called "qualifying your prospect" in network

marketing. You find out who would like to buy your products, and sell to
them. You are allowed to give information and consultancy pertaining
to your products but the moment you sense that they have no interest,
you would have to leave it at that. You do not "hard sell". In fact, you
do not even offer to sell your products because you have discovered
that your prospect is not interested. You move on to the next prospect.
You will find that you have conquered what most salesmen fear most -
rejection. You have not been rejected simply because you have not
even offered to sell anything. You only sell to them who wish to buy.
The same thing goes for recruiting. Some of your customers or

downlines may want to buy your products but they have no interest in
doing the business. So, you do not keep convincing them to do the
business.
5. Licensing
Bill Gates licensed his software to IBM and many other organisations
and individuals, including you and me. He also gets paid millions of
times.
You can find numerous books on property and share investment but
licensing is relatively unknown. That's why I think I should give you an
introduction to this wonderful stream of passive income.
The year was 1928. A train from New York to Los Angeles carried Walt
Disney and his wife home from a meeting in which they learned that
they had lost the rights to Walt's cartoon creation, Oswald the Rabbit.
The news was devastating - they were out of business.
But a stray mouse on the train inspired Walt to come up with a new
idea. Walt wanted to call his cartoon creation Mortimer Mouse, but his
wife prevailed, Mickey Mouse it was.

Page 90
With this idea, Walt and his brother, Roy, started business in a one-car
garage on the wrong side of the tracks in east LA and it grew into the
largest entertainment organisation in the world. (Who says it takes
money to make money?) Walt and his brother wanted to be
moviemakers, but moviemaking is not the biggest moneymaker for
Disney these days.
Licensing began as an accident; an afterthought. It came in the form of

an enterprising businessman trying to ride on the coattails of the Mickey
Mouse phenomenon. He approached the brothers and asked
permission to silk-screen the image of Mickey onto 10,000 wooden
pencil boxes.
Permission was granted, and thus was launched the modern concept of
licensing. Disney Licensing and Merchandising Division eventually
became the most profitable division of Disney. At first the cheques were
small, but licensing soon grew into major streams as Mickey began
appearing on Lionel trains and Hallmark cards and in Little Golden
Books. It wasn't long before the brothers Disney recognized their gold
mine. With little effort or risk on their part, they could generate huge
streams of income!

Page 91
In effect, the Disneys sold that original businessman only the right, or
license, to attach an image to one of his products to enhance its sales
potential. The businessman did all of the manufacturing, marketing, and
the movement of product from seller to buyer. He took all of the risks,
managed all the money, and simply sent Walt Disney a fee for each
product sold that carried the image of Mickey. Think of it: no
manufacturing, no setup costs, no inventory, no sales costs, no sales
force, no distribution costs, no employees, no risk, no money and little
or no investment of time and energy. And yet, they always maintain
control of product quality. Today, billions of dollars worth of Disney
merchandise is marketed throughout the world - all from the genesis of
that idea. It is the ultimate form of leverage.
Licensing is the most powerful and yet least understood form of

intellectual property in the world. Just saying the word brings blank
stares from most people. Property, they understand. Shares and even
direct-selling they have heard of. But just what is licensing?
The Story of Hang Ten
After Walt Disney's successful foray into licensing, a local San Diego
surfer in the 1960's came up with the idea of manufacturing swimming
trunks for surfers - trunks made of sturdier material than the flimsy
swimsuit material popular at that time. He started with a prototype sewn
from rough canvas. His logo showed 10 toes hanging over the edge of a
surf-board. He called his new brand Hang Ten.
(Hanging Ten is a surfing manoeuvre, considered one of the most

impressive and iconic stunts one can perform with a surfboard. Hanging
ten is when the surfer positions the surfboard in such a way that the
back of it is covered by the wave and the waverider is free to scoot to
the front of the board, hang all ten toes over the nose of the board, all
while holding two "high fives" up in the air as a celebratory indication of
this feat.)

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As time went by, the company grew larger and larger as it manufactured
surf-related clothing. At its peak, Hang Ten had thousands of
employees in various plants throughout Southern California.
Today, the manufacturing plants no longer exist. Hang Ten is down to

only one building with a fraction of the number of employees compared
to the old days. It might sound like things are not going so well. Not so.
In 2003, Hang Ten collected over US$300 million in licensing revenues
worldwide! And what do they license? They are just licensing that silly
"10 toes" logo.
Clothing manufacturers all over the world pay Hang Ten millions of
dollars just to attach the Hang Ten logo to T-shirts and surf wear of all
kinds. Hang Ten employees no longer focus on making clothing. They
focus instead on making sure that copycats don't knock off their
designs. And all of this is a result of licensing.
The year was 1979. A geeky computer nerd by the name of Bill Gates
stole the concept from Hang Ten, paid $50,000 to buy the exclusive
rights to a new computer program called DOS, the disk operating
system for minicomputers. It would turn out to be the deal of the
millennium.

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Gates then licensed the non-exclusive rights for DOS to IBM to use it in
its very first minicomputer, the PC. (He didn't sell it to IBM, he licensed it
to them.) Gates then licensed the non-exclusive rights for DOS to IBM
clones. That simple shrewd decision is the reason that the market value
of Microsoft is greater than the market value of IBM, General Motors
and most of the Fortune 500 companies. Going from zero to billions in
about 10 years, Bill Gates is the richest human being on the planet.
(This honour has been alternating between him and Warren Buffett in
the last decade or so.)
If he had sold his idea to IBM, he would have made a nice chunk of
cash. But he wasn't interested in chunks of cash... he wanted streams
of income. The only way to do that was through licensing. He doesn't
have to manufacture any of those complex computing machines that
use his software. He just sells the right to install his operating software
on every computer built - and then he gets to sell upgrades to all of
these computer owners. Smart. Really smart, isn't it?
From the legal aspect, there is a lot of difference between franchising

and licensing. However, in terms of intellectual property they are quite
similar. We have a lot of franchise success stories in Malaysia, like
Secret Recipe, and of late, Oldtown White Coffee. The franchise has
increased from about 50k to almost 500k for major outlets. The
billboard advertisements are a testimony of how fast it is growing.
Some outlets are getting more beautiful and appealing, like the one on
Jalan Burma.
6. Write a book
JK Rowling, the author of the Harry Potter series has become one of the
richest people in the UK just by writing books.

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You may not know it but you can write a book, too. You may not be
able to sing, dance or act but you can certainly write a book. That is
because all of us have a book inside us. Our lives are full of
experiences. There is certainly a part of it that is unique and that others
would like to read about.
You may not become a writer overnight but you can start learning. For
a start you may try to google "ghostwriter". No, I am not joking. This is
from Wikipedia, "A ghostwriter is a professional writer who is paid to
write books, articles, stories, or reports which are officially credited to
another person." A lot of books in the bookstore are actually written by
ghostwriters. You must have wondered how some people can write
thick books on technical subjects like feng shui and get it on the shelves
like greased lightning. They had ghostwriters to help.
Next, you may try googling "copywriters". You will be pleasantly

surprised to discover that they can actually teach you to be a
copywriter. (And you can earn money from it.) Of course, if you can be
a copywriter, you can be an author. Food for thought, isn't it?
The only thing that may stop you from writing a book is self-confidence,
or the lack of it. Once you beat out fear and self-doubt you will be
rewarded. You can only go as far as you think you can. Let me share
with you the true story of a courageous lady who defied the odds and
published her best-selling book.
Cindy Cashman made a million bucks by taking an old idea and adding
a twist to it. This is a true story and Cindy now lives in a huge mansion
on a lake in Texas. She marketed her speciality book all by herself
without a publisher. The name of her now famous book is Everything
Men Know About Women by Dr Richard Harrison, her pseudonym. By
now, she has got a real life, well-known American psychiatrist Dr Alan
Francis to be the author of her book. The book is simply amazing - there
isn't a single word printed on any of the 96 pages! (Talk about courage -
would you dare to do that?) Yet, women bought it by caseloads to give
to their friends.
Cindy made enough to retire; she doesn't have to work another day in
her life. She has since gone back to Texas and worked on a video
version of her best-selling book. Guess what? It's also blank.

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One of my favourite authors has already sold eight million copies of his
best-selling book at last count. Everyone would agree that his style of
writing is boring and repetitive, but I was told his sales have increased
even more than compared to when he first published. Now, imagine
that reward for your effort. Wouldn't you like to make publishing another
way of generating endless income? Wouldn't that be a wonderful asset
for you?
Talking about lousy authors, John Grisham, the

mega-seller who has written more than twenty
novels, was rejected 15 times before his first
book was published.
Your direct-selling motivator would have probably told you stories like
that of a grasshopper which was kept in a glass container for a long
time. Each time he jumped he touched the invisible ceiling. When the
glass was removed, he still jumped the same height, and no higher.
Or, he may tell you the story of the elephant that was tied to a tree for a
long time. When the rope was removed he was still standing by the tree
because he was so used to it.
Let us break free from the bonds that bind our minds. There are no
invisible glass ceilings and no ropes to hold us back from success, just
break free. You have my permission.
7. Internet marketing
Internet marketing gurus like Dechen Lau and Sen Ze sell products and
services over the Internet and get income over and over again.
The advent of the Internet has caused great disturbance in the

marketplace. Today, all forms of investment can take advantage of the
conveniences of the Internet in obtaining information and speeding up
communication. It pervades the sphere of influence of almost every
aspect of life. Yet, a lot of people are all but oblivious to it.
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To some people it offers new power to do things previously thought not

possible. To others, it represents a rude wakeup call. The Malaysian
Election 2008 is an example of the influence of the Internet.
Businessmen who resist change can keep telling themselves that their
customers are IT illiterate, they don't have a computer, Internet access
is slow, broadband access is not popular and expensive, and the rest of
it. They refuse to notice that people today are not only accessing the
Internet from Starbucks but from the mamak stalls! And every statistic
relating to the Internet gets hopelessly obsolete by the time it goes to
print.
Let us run through some of the advantages of marketing on the internet

vs traditional marketing. Business people are quickly migrating to the
Internet and these are the reasons why.
Traditional Marketing vs Internet Marketing
Normal mail - slow, expensive, unreliable, wasteful

E-mail is fast, cheap, reliable, efficient
Mailing costs are high

Zero mailing costs
Long delivery time

Instantaneous delivery
Inflexible business hours/days

24/7/365
Limited to local geographic area

Planetary access
Limited, shrinking customer base

Unlimited, expanding customer base

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High overheads
Almost zero overheads
Real time, real contact

Store-and-forward time (autoresponders)
Usually caters to average customers

Internet-literate customers are usually upscale, wealthy and
intelligent
Long enquiry time

Instant response time
Dress up/go to the office

Stay home in your T-shirt
Mass marketing
Intimate, one-on-one marketing
Impulsive customers must wait

Impulsive customers get instant gratification
Old, traditional
New, exciting, mysterious
Intrusive marketing – interrupts the customer

The customer is in the searching mood – he always feels welcome
One-way marketing
Interactive marketing
One-dimensional marketing
Interactive and multimedia marketing
Ads disappear quickly

Ads are as permanent as you want
High entry
Low entry costs with level playing field
High cost of failure

Low cost of failure
Operates from a fixed location

Operates from any computer in the world

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Need to be a big player with big money

You can be a nobody with little or no money
High barriers to entry

No barriers
Highly visible/public
Private/anonymous between buyer and seller
You are judged by age, sex, $, looks, race

You are judged only by the quality of your ideas
Uncool
Cool
Most people think that Internet marketing means marketing products or

services over the web. That is, of course, true. But most people do not
realise that Internet marketing is more than that. In fact, it is the name
of a new subject! Some of the topics under this brand new subject are:-
Building a Minisite
Payment Methods:-
Paypal
2CheckOut
Stormpay
Commercial Payment Systems
CCAvenue

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Internet Marketing Strategies:-
Affiliate Programmes
Articles
Banner advertising
Blogs
Classifieds
Clickbank
eBay
E-mail marketing
E-zines/newsletters
Forum
Joint Venture
Linking
List Building
My Space
Pay Per Click (PPC)
Press Release
Search Engine Optimization (SEO)
Squidoo
Viral
Google Adwords
Google Adsense
If you have not attended an Internet marketing class yet, most of the
above terms may be Greek to you. That is why it is a new subject.

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You can try some of these first, just to get your feet wet.
Website Techie Lingo:-
Offline Term Online Term/Jargon

Apartment Hosting (space)
Address Domain name
Kitchen, toilet, rooms, etc Web pages
Doors for people to walk
in and out Bandwidth/Traffic
Landlord/Gardener Web designer/web master
A sports car to reach
apartment ISP eg. streamyx
Mailbox E-mail of domain name
Answering machine Autoresponder
Mailman cgi/php script to process forms
Comfy relaxing furniture Site map
Shopping basket Shopping cart
Cash register Merchant account
Security system Secure certificate, e.g. Verisign, SSL
Good advertising SEO (Search Engine Optimisation)
Signage at doors Banner ads
Grand Opening
Notification Press Release
Neighbourhood www
Private room/conference Intranet
Buzzer/Doorbell Firewall
Basement Database, e.g. mysql c/w php
Hallways Hyperlinks in your website
Phone line Hyperlinks to other sites
Decor/Interior Design css, php, html, Flash Tech, Javascript
Guestbook Cookies
Moving companies FTP (File Transfer Protocol)
Art, pictures JPEG, GIF, PNG
Key to open apartment Password
The noisy drunk who
lives down the hall Spam
Gossipy neighbour Search engine

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If you are too busy to attend an Internet marketing preview, I can give you an
inspirational story here. This story is usually told at internet marketing
seminar previews to attract participants to sign up for a full course. It is a true
story, though I have forgotten the name of the hero.
The Iguana Story
Tom loved his pet iguana so much that his wife got jealous. Maybe he was
spending more time with it than with her. One day she threw him a
challenge, "Can you make money just playing with the iguana?" Tom took up
the challenge, instead of abandoning his iguana to make more money, he
decided to write a book on iguanas.
He went and participated in Internet forums on iguanas. (By the way, if you
don't know how to find forums, it's simple. Just type in your favourite hobby,
say Basketball, in your preferred search engine, which is usually Google,
and add the word forum behind. You will get a list of all basketball lovers'
forums throughout the world, with the biggest and most popular forums
displayed on top, of course. You can then just join in and start talking to all
your friends sharing the same passion.)
Now, back to our story. Tom went and asked at the forums and compiled a
comprehensive list of questions and problems faced by iguana lovers. He
then took the list and went to see his local zoo keeper who happily answered
all his queries to his heart's content.
Instead of taking the answers and just throwing it back to his forum friends,
he carefully compiled it into an e-book and offered it for sale at the forums.
He made quite a bit of money.
Making money - Part Two. Our friend was clever to omit the most important
tip from his book. He then told his readers that he had a second book coming
out - the secret of how to make your iguana live longer!
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Actually the secret is very simple. His zoo keeper friend told him that iguanas
can live up to fifteen years in the wild but die in less than ten years as a pet.
His second book, which is more expensive than the first and with fewer
pages, explains that iguanas actually need protein. Pet lovers just assume
that iguanas are vegetarians and feed them with vege, fruit and leaves.
Protein is what they need, and that's the secret.
Now, for the finale. Where to buy protein for iguanas? You got it. You can
buy from Tom! And our friend, upon advice from the zoo keeper of course,
just buys all the cat food and dog food that are naturally rich in proteins, and
re-packs them under "Special Diet for Iguanas"...
Of all the money-making gurus and authors there is one that stands out -
Robert Allen. The reason is that he actually shows you how he does it. Live.
He may be in America but the simple technique he uses is applicable
elsewhere, too.
In 2000, Robert made this challenge, "Sit me at the keyboard of any

computer in the world with access to the Internet, and in just 24 hours, I'll
earn at least $24,000 in cash."
He was put on the show "Real Streams of Cash" produced by Guthy/Renker

Corporation, one of the world's leading producers of infomercials. In fact, the
producers of the show were quite skeptical and asked him to lower the figure,
"A thousand dollars an hour is still quite a lot of money to the average
person."
The show was on in the afternoon and just 6 hours later, the figure was
$46,684.95! Robert slept peacefully that night. When time was up, the figure
reached $94,532.44.
Keep improving on your Internet marketing skills. (The Internet is here to

stay.) As in any other form of investing, do keep an open mind when
learning new skills. Business on the Internet may prove to be different
compared to offline methods. For example, I usually prefer writing a sales
letter that is short and to the point. But research shows that for online
business, long sales letters work better than short ones. In fact, very long
sales letters work even better. It took me quite a bit of time to get used to
this. And I have to learn the technique of writing long sales letters that have
got to be interesting and persuasive at the same time.

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8. Recording an album
Elvis Presley went into the recording studio once and gets paid each
time his album is bought. And that means millions of times. He is still
receiving great amounts of income till today. I beg your pardon, I mean
his descendants.
You do need some vocal and showmanship talent for this. Training can
greatly improve your talent but I still believe you have got to be born
with musical talent. I am one of the unlucky ones who will never make
this my stream of passive income. I am a born bathroom singer.
9. Making a movie
I am sure most of you love Pirates of the Caribbean. Walt Disney made
Pirates of the Caribbean once, and each time it is screened anywhere
on the planet, they get paid. Of course, Johnny Depp and the lovely
Keira Knightley get paid, too.
You may need even more talent for this. If you are one of the lucky
ones endowed with acting talents, you have my congratulations.

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Remember not to fall in love with any of your investments - be it property,

shares or even business. Put things in proper perspective. Be ready to sell
at your targeted price. Be wary when you have friends who say things like,
"My car is my wife," or, "My house is my wife," or, "That is a good share; I
think I’d better hold on to it a bit longer." Being emotional will cloud your
judgment and override your calculations which are based on the figures that
will make your investment profitable.
Even though all the above types of investments are different, the underlying
skill of managing risks is inherently similar.
With the above streams of income pouring in for you, retirement is now well
within reach. While you may learn all the ways of investing at the same time,
it is wise to concentrate on one particular form of investment first and be
good at it.
11th Secret: Assets generate residual income for your retirement.
A lot of people find posters of their favourite "retirement poses" like this one
very motivating. They have one close by to remind themselves to work
towards it in the shortest possible time.

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Chapter 12
WE NEED TWO JOBS
Working to earn an income means working for our company. Working to pay
tax means working for the Government. Working to pay our liabilities means
working for the bank. We should work for ourselves!
In 1974, Ray Kroc, the founder of McDonald’s, stunned the world when he
said, "My business is actually real estate and not hamburgers!” Today, many
people know that McDonald's makes more money in real estate than selling
burgers. That is their actual business.
If you do not have passive income, you will not be able to retire. (That is,
unless you have inherited a handsome amount of money from your
ancestors, and you are spending it at a controlled pace.) It makes no
difference whether you are an entrepreneur or just an employee, you will
have to continue working to support yourself. You may need to continue
working even after your retirement if you have to support your loved ones.
The problem of not having passive income is more serious than you may
think. It is not just about being unable to retire. Imagine what will happen if
you fall sick and are faced with a sudden loss of income. You will run into
problems immediately, and your retirement may still be a long way off.

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You will need to heavily insure yourself to protect against sudden loss of
income. The irony is this - people who need insurance the most are often the
people who can't afford it, and vice-versa.
In order to be rich, we need to look for another job for our money to work,
while doing our daily work. That should be our actual business, not our day
job.
If you are an employee, you must make a serious attempt to re-evaluate the
term ‘job security’. We all need financial security but is it really true that
financial security is found in job security alone? That is what all of us have
been taught in the family or in school.
Money working in the bank's fixed deposit account will pay a mere 3% a year
currently, with no other benefits.
Money working in properties may pay out 10% a year in rental plus high
bonuses in terms of appreciation.
Money working in the stock market may earn dividends, bonuses in the form
of capital appreciation, and other benefits such as rights and bonus issues.
Money working in a business as capital will get paid in profits.
Don't find another job for yourself; find a job for your money today. That is
how the rich do it.
If you are an investor, that is all you need to do - make your money work
hard for you.

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12th Secret: Get a good job for your money today.
People are reaching their breaking point both physically and mentally by
taking up extra jobs besides their day job. Don't do that; it is bad for health.
Don't get another job for yourself. Get one for your money. Soon you will
not need to work anymore.

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Chapter 13
TSUNAMI!
In the event of a tsunami, fasten your seat belt and run as fast as you can to
higher ground.
You can forget the part about the seat belt, but you do need to tighten your
belt a bit, though.
Have you seen a tsunami before? Most of us haven't. Those images that
you see on the e-mails sent by your friends don't count. What I mean is,
have you actually seen the waves coming in from the sea and hitting the
shores?
It was just like any other day. Men and women were going about their daily
chores. The kids were happily playing on the beach, oblivious to any
impending danger. Suddenly an old man felt the slightest of tremors going
through his feet. He flashed a hurried glance at the horizon. Something was
amiss. Instinct told him that something unusual was about to happen.
He had been there before in his younger days and he had barely survived
when the monstrous waves had hit his humble home. He shuddered as he
recalled the images of horror those waves brought. Now, he kept his cool
and patiently surveyed the seas one more time. Its unusual calm worried
him as he looked for more signs. Far at the horizon he spotted it.

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He began to alert his friends but they failed to see what he saw. He grew
more impatient and agitated with each passing second. He started to shout
at the top of his voice to get people to evacuate. For some, his panic was
getting infectious as they saw the terror in his eyes. They started packing
and running.
However, most just stayed on and busied themselves with their daily chores.
They were busy, you know. That is why they ignored the paranoid old man
who really behaved crazily the way he shouted.
It was almost half an hour later when some people noticed the strange sight
in the seas. Never before had they seen anything like it. It looked like a
wave but no wave could ever be that big. The sight was marvellous. In fact,
it looked anything but deadly. Everyone was rooted as they admired this
seemingly wonderful creation of nature.
Too late! It was only when the waves started to rip apart boats like
matchboxes in the distance that they realised the force and fury of a tsunami.
People started panicking and screaming as they ran away from the shores.
About 300,000 people from eleven countries died in that tsunami on

December 26, 2004.
Have you experienced an economic tsunami before? Most of us have not.

The last time it hit was eighty years ago when most of us were not even born
yet. The year 1929 is firmly etched into the memories of every economics
student. It was the year of the Great Depression. It was Black Tuesday on
29 October, 1929, when the US stock market crashed, ushering in the
unforgettable era called the Great Depression which ended around 1939.
Black Tuesday was the day the tsunami crashed onto the shores but the tidal
waves were created much earlier, although no one seemed to notice.
Amongst other factors was the very high debt that people owed at that time.
And the stock market was making all-time highs every other day. Most
stocks were over-valued by almost 25 times!
Most of us here in Malaysia are not aware of the debt that Americans are
allowed to carry. Take housing loans for example. Most of you would
understand that the banks allow you a third of your income to go towards
servicing monthly instalments. If your salary is, say, $3,000, your monthly
instalments should not be more than $1,000, otherwise your application for a
housing loan would not be approved. In the US you are allowed two-thirds,
that is, $2,000 out of a salary of $3,000. Does that make any sense to you?

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In the old days most loans were repaid within fifteen to twenty years. Today,
you may borrow up to age 65. If you are 25 years old, that makes it a 40-
year loan. In the US, you may borrow up to 50 years! Again, does that make
any sense to you?
Is it any mystery why they have a subprime crisis? Subprime is their word for
housing.
If you think the problem is contained within the US alone, you will be
surprised to know that most of Europe adopts the same banking policies as
the US.
Is it any wonder that giant banking institutions, such as Bear Stearns in the
US and Northern Rock in the UK, have fallen and require massive bailouts
from the government?
Now, if you are unable to pay your housing loans, you can, always rely on
your credit cards. Fortune magazine estimates these two "animals" to be
worth US$900 billion each.
Look at the horizon again. Do you see anything?
What about the lifestyle of the Americans? Their savings rate is a mere 1%
of their GDP compared to about 30% in some Asian countries, like China or
Malaysia. Japan has got the highest savings rate in the world. What does
that tell us? Americans are spending as if there is no tomorrow. It would be
fine if we spend within our means, but if we spend borrowed money, like
credit cards, we should expect problems later on.
Look at the Dow Jones. (I know some of you may be more familiar with Tom
Jones.) The Dow Jones Industrial Average (DJIA) is the US equivalent of
our Kuala Lumpur Composite Index (KLCI). They measure the general
performance of stocks in the countries. DJIA has a history of more than 100
years. In 2000, it reached a historical high of about 12,000 points. We all
know what happened after that. Dotcom crash, remember? If stocks were
over-valued at 25 times during the Great Depression, it was 100 times during
the Dotcom Crash. Does that make any... oh, never mind.

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The DJIA continued its drop for three years. It went from 12,000 points and
dipped to about 7,000 points in 2003 before rebounding. In late 2006, it
surpassed the high created in the year 2000. The Bull Run was so
impressive that it even surpassed the 14,000-point mark in late 2007.
In mid-2008, when this was first written, the DJIA was hovering around
11,000 points.
(Update: In end-2008, the DJIA was at around 8,000 points.)
Are you feeling slightly nervous now?
There are many other creatures of the night hiding in the closet of the US
economy. The biggest problem being Medicare, followed by Social Security,
current account deficit, and the list goes on. If you are wondering what the
US has got to do with us, ask any economist. He will most probably tell you
that the US will bring down almost everyone else with it, just like it did in
1929.
Let us rewind to take a look at the previous devastation. Overnight,

businessmen and investors lost everything, including their pants. Brokers
were fished out of the Hudson River by the dozens. If you lived around that
time, you would probably have heard of the term ‘high jumpers’. No, they
were not athletes but brokers who jumped off high buildings. Millions were
retrenched from factories. Scenes of unemployed people lining up by the
hundreds to get a piece of free bread and a cup of hot coffee were common.
Construction came to a grinding halt. International trade declined sharply, as
did personal incomes, tax revenues, prices and profits. Massive withdrawals
followed the run on the banks as depositors panicked. 9,000 banks failed
and depositors lost $140 billion in deposits. Crime rates shot up and people
were living in fear.
If the above is not enough to frighten you, let me now let loose the ‘old man’
who has been there before. He tells us that the coming economic tsunami
will be worse that the Great Depression. Thanks to the Information Age, you
can read all about him, his prophecies and updates at georgesoros.com.

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Mind you, he is not the only ‘old man’ saying this.
The Asian financial crisis may still be fresh on most people's minds. It
started in Thailand with the currency and stock market crash in April 1997.
Not many people in Malaysia bothered; after all Thailand is ‘so far away’.
The ‘Tomyam Effect’, as it was nicknamed by economists, infected South
Korea before hitting Indonesia and Malaysia. We felt the full effect in
September 1997, when our stock market crashed.
The signs then were almost the same. Almost everyone over-borrowed. It
was very easy to get business loans approved a couple of years before
1997. Most businesses were heavily in debt, yet at the same time there was
euphoria because market sentiment was very good. Suppliers trusted
customers, and banks trusted borrowers. There were jobs and projects all
around. High-end eating places were always packed. Spa operators were
really raking in the cash as speculators went for their ‘sparring’ sessions in
groups immediately after 5 o'clock each day, after making their killing in the
stock market. Stock market was at an all-time high at 1,400 points.
What goes up must land somewhere. Malaysia had to resort to Danaharta to

solve the banks' NPL problems. (Some people think that the Danaharta idea
was very innovative. Actually, it was copied from the Resolution Trust Corp.
of the US which had the same problem much earlier in 1989.) NPL means
non-performing loans or loans that have gone bad. Billions of loans had to
be thrown into Danaharta in a massive exercise to clean up the banks'
balance sheets.

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I was trying to apply for a business loan from a bank on behalf of my

customers during that time. The banker told me, "Your customer's balance
sheet is stronger than my bank's. We now have negative NTA because of
our NPLs." (NTA is net tangible assets.) Needless to say, the loan was
"rejected".
The stock market went down from 1,400 points to 286 points!
I have always preferred comedies to horror movies. So, don’t get me wrong,
it is not my intention to frighten anybody. Let us set a few points straight.
Lesson No. 1 - Never make predictions on timing. We may know for certain
that an event such as a recession is about to happen. But we will never
know when. There were many ‘heroes’ who correctly predicted market
timing. But among the miserable failures were notable economists, central
bankers and some of the world's greatest investors.
For every "doomsday" prediction, there is an equally sunny prophecy,

although some may sound far-fetched. Some say crude oil will soon be used
for bathing purposes only, as they find alternative sources of fuel such as
nuclear (as in Iron Man, the movie), or water (I forgot which movie - I
watched it a number of years ago.) Larry King just interviewed a professor
who is positive he saw a UFO. Aliens, it seems, have been around Earth for
quite some time now. With their superior technology, problems like global
warming will soon be a thing of the past.
There is one thing about scientists though; these guys are really capable.
One of the things that they might have discovered is scalar energy. As in
scalar pendants - have you heard of it? (Shhh... some say it's a scam.) Not
only can it solve the oil problem, it can also cure all diseases. If you do
happen to have a sleepless night, entertain yourself with these...
http://www.prahlad.org/pub/bearden/scalar_wars.htm
http://www.rense.com/general39/scalarenergy.htm
But don't get carried away. If they really had super heroes, they would have
brought on Ultraman to put out the fire at Bear Stearns, the gigantic bank.
Instead, the US government had to resort to good old bailout.

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Lesson No. 2 - Be prepared. (There is great wisdom in this ‘Scouts Motto’

we learned in school.) Gamblers and speculators predict. They may fold
their hands and wait until the cows come home for their predictions to come
true. True investors get prepared.
What can we do to get prepared for a tsunami? Run to higher ground. Now,
how do we do that?
Go into austerity mode. Start saving. Cut down on unnecessary spending,

but don't stinge. Spend cheerfully on necessities but avoid expensive meals
and go slow on vacations, especially overseas ones. Curb your addiction to
gadgets like fashionable cameras and mobile phones. Stop pretending to be
the next Malaysian Idol by having a unique wardrobe for 365 days a year.
Don't deceive yourself by thinking your expensive car consumes as little
petrol as a Kancil.
Start shopping for assets. Look for cashflow generating properties to buy.
Scoop up high dividend-yielding shares selling at a small fraction of its
valuation. If you can't find them yet, wait. Study viable businesses selling
essential products to the rich. (Many people make the mistake of trying to
run businesses catering to the poor during bad times. Succeeding is
possible but not likely. It is simply difficult to make money from the poor
because by definition they don't have much.)
When investing, plan your exit by asking yourself the question, what will
happen if a tsunami arrives tomorrow and my investment gets stuck for ten
years or more? Work out your strategies from there. The most successful
investors in the world constantly ask themselves this question. They are
masters of the little-known art called "eventuality planning".

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Well, you may ask, what is the difference between planning by taking into
consideration a tsunami is coming, and normal planning? There you are -
you have just uncovered the secret found in this chapter - there is no
difference.
You should save regardless of whether a tsunami is coming. You should

also be thrifty at all times.
You should always invest by assuming a tsunami is coming because it is

risky to do otherwise. Meditate on this: your profit is made when you buy,
not when you sell.
You should learn everything about business and investing whether or not a
tsunami is expected to hit us tomorrow.
The only difference perhaps is that we should inject speed into the equation.
The more convinced you are that a tsunami is hitting us soon, the faster you
will hurry to equip yourself and accumulate assets.
Imagine this, if the stock market crashes tomorrow, which shares would you
buy? I'm sure you would have heard this, "If I knew, I would have bought
Maybank in 1997 when it was RM3.00." The phrase "if I knew" is one of the
most worn-out phrases in investment terminology.
Bear in mind, the stock market does not crash from1,400 to 286 overnight.
What would you do when it is at 1,000, 800, 600 or 400 points? Would you
buy, sell or hold? Remember, at any point in time you would not know what
will happen the next day or the next month. There could be a reversal. A
reversal is a technical term for market changing trends.

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Be prepared now; which shares would you buy, when and how much should
you buy them at? What would you do after you have bought if it is going up,
down, or sideways? Would you continue to buy, sell or hold? What if there
is no crash? Would you have bought the same shares? All these questions
are food for thought, aren't they? Go on now, be a good investor. Do your
homework so that you will be ahead of others should a tsunami arrive
tomorrow.
If you are interested in investing in the Malaysian stock market, you may find
my book Bursa Winners 2008 very helpful.
Secret #13. Be prepared for an economic tsunami.

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Chapter 14
DARK SIDE
There are many books written on positive thinking, right mental attitude and
self-help. This is because there is indeed a force that chains people to the
dark side so that they are not able to succeed in our money world.
"Whatever the mind can conceive and believe it can achieve." The reverse is
also true. We cannot acquire the skill to make $600,000 a year if we are
trapped in an unbelieving $60,000-a-year brain. The two most powerful
words on earth are none other than, ‘I can't’.
You can choose to break free because it is your Creator's will that we live a
life of abundance.
Have you ever wondered why some businessmen succeed when others
don't?
Have you ever wondered why some employees are paid more than others? I
once asked an accountant why some accountants are paid only $2,000 a
month when there are accountants working for big corporations who are paid
$20,000 a month? Is there a difference in their qualifications? He told me
that they read the same text books and sit for the same exams. (There are
also other professionals like doctors, lawyers and engineers who earn ten
times more than their counterparts. All are equally qualified.)

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I am not sure if he is right but he tells me that it is their confidence level. For
example, some accountants feel they lack the experience required to work
for a big corporation. The big boys won't hire them. But, then, if they don’t
work for the big corporations, they will never get the experience, will they?
That is why there are many professionals who are stuck with a small salary
until they retire.
There is indeed an Inner Game as well as an Outer Game in financial

success. The Inner Game is all about what is going on inside your mind,
body, and emotions.
If you do not have your Inner Game together, then almost nothing you do or
say is going to get you success with money.
If you don’t have your inner game together, then fancy techniques and cute
investment theories will only waste your time. That is because the people
you are talking to, your customers and business associates, will quickly see
that you are not the smooth guy you are pretending to be.
On the other hand, if you do have your inner game together, then you can
use almost any technique because your customers will be able to feel that
you are the kind of man they have been looking for to do business with.
Now, techniques and strategies do work. In fact, I have found that customers
appreciate that you have taken the time to polish up your presentation and
business proposals and learn how to communicate in a smooth, interesting
way. But you need to get rid of any negative traits in your character and
attitude, and instill self-confidence and high self-esteem.
Can you see yourself associating with any of the self-limiting attitudes
mentioned below?
"The love of money is the root of all evil."

The lack of money is the main cause of many of our problems.
"We can't afford it." (Brain stops working.)

“Now, how can we afford it?" (Brain starts working.)
“The reason why I am not rich is because I have you kids.”

The reason I must be rich is I have you kids.
"I can't take risks, I have a family to think about, I must have a secure job."
I can't risk having my family worry about their future.
“When it comes to money, play it safe, don’t take risks.”

Learn to manage risks.
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I’ll never be rich.

I am a rich man, even though I may be broke right now.
“I am not interested in money. It doesn’t matter.”

Money is power.
Because of low self esteem, the poor work harder, take a second job but
accept a smaller pay. The rich are confident and keep using their brains to
think of new ways to make money.
Being bold and confident can make the difference between whether we are
rich or poor. The good news is that once we make it across, the old thoughts
stop screaming.
14th Secret: You can break free from self-limiting attitudes.
Is the glass half full or half empty? Only you can decide. Successful people
always see the glass as half full.

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Chapter 15
THE OVERLOOKED
OVERLOOKED SUBJECT
Financial intelligence is a subject not taught in schools.
You study Mathematics and Science in school. You learn about History and
Geography. You study Languages, Arts, Physical Education, Engineering,
Law, Medicine, Agriculture and Architecture. Even Beauty and Skincare,
Flower Arrangement, Hairdressing and Auto Maintenance are subjects.
Subjects take TIME to learn. It can take anything from 6 months - for
example, Flower Arrangement or Ancient Traditional Massage - to 20 years.
To be a doctor you have to go to school at age 7 and graduate only at age
27. We are not born to know subjects, unless we are geniuses. Even
geniuses like Mozart had to study Music formally.
There is one critical subject that is not taught in school, neither is it taught
anywhere outside school. That subject is called Financial Intelligence.
Some professionals mistake this subject as Accounting, Financial
Management, MBA, Economics, Management, Commerce, etc. No, these
subjects may be part of the syllabus of Financial Intelligence but they are not
the subject. Financial Intelligence teaches us things like Assets and
Liabilities, the differences between the Rich, Poor and Middle Class, and
Investing.

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Just like any other subject, Financial Intelligence takes time to learn.
Contrary to what most people believe, we are not born to know this
subject.
We do not know whether this subject is as important as Medicine,

Engineering or Law. But one thing is certain; not knowing this subject
may cause a lifetime of hardship. One who has mastered this subject will
have the power to do good to mankind. In 2006, the world's richest man
today, Warren Buffett, donated 85% of his wealth of US44 billion towards
charity.
15th Secret: Do not overlook financial intelligence. It is a critical

subject.
Because our universe is so big, there are a lot of subjects to be studied.

However, financial intelligence must rank among the most important subjects
that one needs to study. It is a universe by itself.

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Chapter 16
THE FOOLISH
WORK FOR MONEY
The main reason people seek job security is that they are taught that way at
home and at school. If you were born before 1930, this is good advice. Life
was very much different back then. For example, today's factories compete
against each other to bring products to customers. Back then, factories and
steam engines were just invented and customers clamoured for whatever
that was produced. Farmers were fighting for jobs in offices and factories.
Everyone liked to "sit under the fan".
Money is a drug. If you become addicted to it, it is hard to break the

addiction. You know why? Just like when they are on drugs, people are
happy when they have money, sad and moody when they don't have it.

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Look at Government handouts; those too, are a hard pattern to break.
Money is more than a habit, it is an addiction. Most people think that having
more money will solve their money problems. It doesn't. That is because
money is just an idea. Money is not real. The more real you think money is,
the harder you will work for it.
When people need more money, they normally take on a part time job, but
they do not get ahead financially. They still do not have assets. If you want
to get ahead, one of the ways is to keep your day job and start a part-time
business.
Those who work the hardest are paid the least! Learn to spot opportunities,
read financial statements. Security is a myth, meaning there's no security in
any job. For example, people in South East Asia used to think that working
for a bank is like having an iron rice bowl. When the banks started to merge
at the turn of the century, staff got retrenched.
If working for a bank is not secure enough, then working for smaller
companies is even worse. There are many people who have been in trouble
ever since they were retrenched during downsizing as they cannot get
another job now that they are older.
Therefore, don't work for money. Keep learning while working on the job.
You can then widen your choices, perhaps start your own business, or be an
investor. You will then be on your way to financial freedom.
One day, my boss at the bank pointed out to me, "Andrew, there are some
people who have been working here for ten years but have got only one year
of experience." They go about their job blindly everyday, never bothering to
ask how or why certain things are done. They have the wrong attitude.
What happens in another department is not their concern. They don't learn
things about another department. They think that in the process of learning
they would be helping the staff of that department do their work. Soon, what
happens to the company is also not their business. They become contented
just doing their job and getting paid at the end of the month.
This kind of selfishness and short-sightedness is a common attitude among

staff everywhere.
What they don't realise is that after say, ten years, their salary may have
increased due to annual increment and inflation, but their knowledge and
skills have stagnated. They are now at the mercy of management who is
forced to replace them with new staff who are younger, more energetic and
knowledgeable. New staff are much cheaper to employ and saving in labour
costs means more profits for the shareholders.
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Security is a myth, learn something new and take on this brave new world.
Don't hide.
16th Secret: Work to learn something new everyday. Don't just work
for money.
With age catching up, a lot of people are worried about getting retrenched.
Once they are retrenched they would have difficulty looking for a new job
with the same pay. They would then run into financial difficulties.

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Chapter 17
BUCKS 'N' DOUGH
In the olden days, hunters got up each morning, kissed their wives good-bye
and set out to hunt for deer. Now a male deer is called a buck and a female
deer is called a doe.
Today, hundreds of years later, nothing has changed. Modern men, and
women, are still charging out the door after saying good-bye to their loved
ones. They run off to work to get a few bucks so that they can have enough
dough to put food on the table. The difference is that they sometimes carry
papers or notebooks instead of bows and arrows. (Even notebooks used to
have a different meaning not too long ago.)
Let's go back to the past. One day, our hunter had an idea. Why waste time
chasing bucks? He took time to build a fence to form a holding pen. Then
he went and captured some deer and put them there. His friends laughed at
him, for working so hard. You know, on top of his day job of hunting deer he
has to work overtime to build the pen. This was hard work.
His deer grew and multiplied; he took down his pen and built a larger pen.
Even more work. But he never grumbled. He fed and cared for his deer.
Soon, they grew in numbers and he never had to hunt again. He then kept
selling his deer and he and his wife lived happily ever after. The End.

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17th Secret: Things only become better after they become worse. -
Rico Ho
The key to financial success is to build your own ranch to rear your own deer.
No matter how difficult, once you have done that you can sit back and relax
because each day your deer will grow and multiply.

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Chapter 18
SORRY, YOUR MUM

WAS WRONG!
Money makes money, right? That's what Mum used to say.
Wrong! The idea that it takes money to make money is one of the worst
ideas there is. It just means that if you are poor, you are going to be poor
forever. Countless people have risen from rags to riches. If it was true that
money makes money, that would not have been possible.
Let us take a quick look at the many rich and successful people who have
come from very poor backgrounds.
Malaysia’s Tan Chin Nam, the boss of Mid Valley City, a leading shopping
complex in Kuala Lumpur. His father was a very rich businessman but
lost everything in the Great Depression in 1929, causing his family to live
in poverty.
Thailand’s billionaire Charoen Sirivadhanabhanabakhdi, son of a fried-

mussel pancake street vendor
Singapore’s Kwek Leng Beng. His father, the late Kwek Hong Png, left
Fujian province a penniless teenager for Singapore and subsequently
founded the Hong Leong group there.
If money makes money, just imagine this for while. If I give you $100,000,
how much returns can you give me? How long do I have to wait?

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Straightaway your mind would be wondering how to invest the money. Put it
in the bank? Buy property or shares? Start a business? Invest in a get-rich-
quick scheme? See, whatever you plan to invest in requires skill and
knowledge. It is your brain that is making money. You just can't make
money with money. So you have got to make sure that your money brain is
functioning in tip-top condition.
Here are more ingredients to getting rich:
• Hunger and passion

• Financial skill
• Human skill
• Credibility and integrity
• Resourcefulness and ability to improvise
• Hard work
• Patience and perseverance
• Ability to dream
• Willingness to learn
• Time
• Courage
• Connections in the right places
• Luck
• Last but not least, health - without it, nothing is possible.
These are the ingredients that you can leverage on to make money. And
when you have them, but not before, your money capital will appear,
magically.
Back in my childhood, I had this habit of "direct-shopping". I went through

the list of things I had to buy and made a bee-line straight for those items
only. I didn't bother to look at anything else, especially the expensive and
luxurious items. I thought it was a pure waste of time because I didn't have
the money.

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It took my good friend, Eric to

change that habit. One day he
invited me to Naza Motor to
look at a Ferrari. "Don't waste
time, we can't afford it," I said.
Knowing better, he said, "Just
taking a look won't hurt. You'll
be surprised. After taking few
looks, we will be able to afford
it."
Because he is my good friend, I relented. I went reluctantly, still feeling it

was a waste of time for we had a lot of serious work to do at the office.
Anyway, off we went to Naza Motor and when we reached there, we not only
took a look but sat inside the car and felt the leather cushion and the
controls. We admired the sleek design and the smell of leather. All the while
our brains were working furiously. We asked ourselves a hundred questions,
such as, "Who can afford it? Why can't we afford it when they can afford it?
What did we do wrong?" Finally, we asked ourselves, "What can we do so
that we can afford to buy it?"
It was indeed an educational and emotional experience for me that day.
You see, you must not tell yourself that you have no capital to invest. Go
and take a look at that beautiful piece of property. Don't hurry. Take time to
smell the flowers. Look at the building's architecture. Run through the
figures of how much income you can make if you rent it out. And with the
profits you can buy another piece of beautiful property. Go on, ignore
traditional wisdom. Count your chickens before they are hatched. Visualize
yourself as a successful investor. That vision will inspire you to go to great
lengths to make sure you have all the ingredients that you need to make your
dream a reality.

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18th Secret: You don't need money to make money.
Money does not multiply by itself. You have got to invest it. And you need
knowledge in order to make an intelligent investment.

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Chapter 19
IT'S ONLY WORDS...
The Bee Gees sang, "It's only words, and words are all I have to take your
heart away."
That is the power of words.
Words, or vocabulary, can help us make money. Doctors, lawyers and

engineers, computer programmers and car mechanics, all have their own
vocabulary. This techie lingo or technical jargon helps them communicate
important ideas efficiently. A single word may take an hour of explanation.
Similarly, in the money world there are certain words that can cause money
to appear seemingly out of nowhere.
Without knowing some of these words, it would be very difficult to make

money. These are the words we use in our money world. Sometimes you
could be missing out real opportunities to make money simply because you
are not able to understand what your businessmen and investor friends are
talking about. They could be using common, but very important, money lingo
such as ROI. You just stand there “blur blur” as they say.
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The more of the following words you understand, the richer you could be. It’s
funny how people want to play the money game yet don’t understand
important words like "Rule of 72". Here are more such important words:
Assessment, Bulls/Bears, Candlesticks, Cashflow, Call and Put, Capital

Gains, Circle of Competence, Compounding, Contract, Dividends, Double
Tops and Double Bottoms, Dow Jones and S&P, Earnings, EPS, Forex and
Commodities, Freehold/Leasehold, Fundamental and Technical Analysis,
Hedge, Instruments and Vehicles, Margin of Safety, Motivated Sellers,
Moving Averages, NPM, NTA, Options & Futures, Patents, P/E Ratios,
Positioning, Quit Rent, Reversals, RPGT, ROI, RSI, Share Splits, Ticker
Symbols, Trends, USP, Volume.
19th Secret: Words and vocabulary are essential in making money.
The key to successful investing is to know more of the important jargon used
by financial people.

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Chapter 20
A RISKY MYTH
All of us have heard, "No risk, no gain."
Even highly educated professionals like doctors, lawyers, engineers and

accountants believe this mantra which is usually handed down from their
parents. They are not aware of the danger of the black magic behind this
little tune until it strikes.
Having programmed themselves from young that they need to take big risks
in order to make a lot of money, the poor and middle class pass up chances
of making good money where there appears to be little risk.
The rich blow away their fortune in the process of trying to increase their
wealth by taking big risks.
The antidote to this myth is study. The more we know about a particular
investment, the less risk we have. Ask anyone, "Is swimming risky?" The
one who does not know how to swim will answer yes. A good swimmer will
probably just give you a funny look.
You hear the term “risk tolerance” very often, especially from mutual funds
salesmen who are trying to sell you their investment schemes. Investment
experts, including newspaper columnists, are always eager to explain this
term to you. What they are basically trying to tell you is that if you want to
make more money, you should be prepared to lose more money. You
shouldn’t be complaining if you do lose money.
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Every time I hear someone giving this advice to a new investor, it makes me
cringe. I can afford to lose some money. I am sure you can, too. But why
should we be losing any money at all? Haven’t you heard of the first rule of
investing? Don’t lose money! I hate it when someone starts chanting that
age-old mantra: no risk no gain. I can see my friends losing money all over
again.
You really don’t need to lose money. If you are not convinced, get a second
opinion. This time, don’t ask another investment salesman. Don’t even ask
your banker. Look for a successful investor and ask him to explain risk to
you. You will be surprised at the answer.
Risk decreases with knowledge. The more you know and understand a
particular investment or business, the less risky will be your investment.
Instead of groping in the dark and leaving things to chance, you are able to
grasp where an investment can go wrong.
Some investors think they are sophisticated just because they know how to
use the word "contingency". They want to tell you that no matter how well
you plan, there are circumstances that are unforeseen. That is another way
of saying, "I am too lazy to study it from all angles." You should allow the
fear of losing money to motivate you to study everything that is required to
protect your investment.
A successful investor will tell you that the higher his profits, the less risk they
take!
I remember those days when I was working in the Loans Department at the
head office of a bank. It was our function to approve loans submitted by our
bank's branches. One day, my immediate boss turned around from his desk
(I was sitting behind him) and said to me in an irritated tone, "Andrew, can
you please approve this loan on my behalf? It is RM500,000 only." I looked
up and said, "What's the problem, Sir? I can't approve such a big
amount." Anyway, my boss knew that I had no power to approve any amount
at all because I was only a clerk at that time.
"Sure you can. Here, you go and approve it." He then continued, "Any moron
can work in this bank, everything is fully secured. Customers give us a
property of RM100,000 and we give them back a loan of RM70,000
only. There is no risk involved. You don't need a degree to do this. I wasted
my time studying for one."
My Big Boss (the CEO of the bank) is one who does not take any risk at all.
Today, he is the most respected banker in the country. When all the other
banks either collapsed or made losses during the economic crisis in 1997, he
made record profits. Today, he is still making record profits every year.

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You can imagine his fellow bankers saying that he is a scaredy cat banker for
not taking risks. You can hear his managers and staff complaining. They
are complaining because the customers are scolding them. Customers are
not happy because their loans were either not approved or the amount
approved is too small. And everything is fully secured.
Most of the richest people in our country like Public Bank's Teh Hong Piow,
Hong Leong Bank's Quek Leng Chan and Tan & Tan's Tan Chin Nam, are
well-known for their conservative investment styles. They always try to
eliminate the word "risk" from the investment equation.
No risk, no gain? Think again.
20th Secret: It doesn't take high risk to make high gain.
The investor is the most dangerous factor in any investment. An investor

who is lazy or ill-informed will cause a lot of money to be lost.

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Chapter 21
OPINIONS KILL
There are few lessons more important than this. Most people's lives are
determined by their opinions, not facts. Many struggle financially because
they use opinions when making financial decisions. To be successful, be
sure you know the difference between a fact and an opinion.
A survey showed that thinking is one of the seven most difficult things to do.
Most people accept opinions simply because they are too lazy to think. It
seems that the "cure" for this very difficult task of thinking is simply to believe
and accept opinions or even rumours.
Make it a habit to let your brains work for you. There is a lot of truth in the
saying, “Luck is found between your ears.” You can create your own luck
and you will soon have the satisfaction of discovering how ridiculous some
commonly held opinions are.
Every man has a right to his opinion, but no man has a right to be wrong in
his facts.
If you cannot verify that something is a fact, then to you it is just an opinion.
Former US President Ronald Reagan said, "Trust, then verify." When your
friends tell you something, it is only polite to tell them you believe.
Otherwise, they may feel hurt because you do not trust them. However, you
should not just take their word for it, especially when it involves huge
amounts of money. You should always verify whether information given is
factual or just an opinion.

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Numbers tell the facts. Your financial survival depends on it. Financial
blindness is when a person cannot read numbers. If you can read financial
statements, you can tell how an individual or a business is doing. Financial
vision lowers risk; being financially blind increases risk. Have you heard of
the term "due diligence"? It is a term often used by accountants and
auditors. It simply means finding out what are opinions and what are facts.
Besides numbers, charts also give us the facts. Regardless of whether

figures have been fixed or manipulated, charts do tell a story if you are
educated to know where to look.
For example, most people do not bother to look for a gold price chart. They
just believe it when their friends tell them that gold price always goes up.
Sounds familiar? Everyone says gold price will always go up, isn’t that true?
Google a gold chart and see for yourself the ups and downs of gold prices for
the past 50 years. They tell a different story. If you look closely, you can find
the investment corpses of "heroes" who bought at the peaks.
Examine the dangers contained in the following statements which are

common opinions:-
¬• Your house is an asset.

¬• The price of property always goes up.
¬• If you hold on to your house long enough, you will make money.
¬• Stocks have always outperformed properties.
¬• You should diversify your portfolio.
¬• You shouldn't diversify your portfolio.
¬• You have to be dishonest to be rich.
¬• Investing is risky.
¬• Play it safe.
¬• Gold is an asset.
¬• Find a secure job and stay there all your life.
¬• Highly educated people make a lot of money.
¬• They have a big house; they must be rich.
¬• There is not enough money for everyone to be rich.
¬• The earth is flat.
¬• Humans cannot fly.
¬• Humans cannot go to the moon.
¬• Share prices always go up before an election.
¬• Genting shares always go up before Chinese New Year.
¬• It is safer to invest in Main Board companies compared to Second Board.
¬• His business must be very good because he opened so many branches.

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Another danger is that opinions are often so ingrained that words like
"mindset" and even big terms like "paradigm shift" need to be used to
describe them. For example, you have just completed a study of stock
investing and are competent to manage and reduce risk to a minimum.
When your friends ask, you tell them you invest in the share market.
“You mean you are playing shares?” “No,” you say. “Don’t gamble on
shares, it’s dangerous.” You say, “No, I am not gambling. I am investing.”
“You are what? Be careful, you know. All my friends lost a lot of money in
the share market.” You see, for some people the word "investing" is just not
in their dictionary. And it is impossible to explain to someone the term
investing without explaining Money 101. And to do that you need to explain
Assets and Liabilities.
We all need to learn step by step. You have to give milk to a baby for many
months before feeding it semi-solids. If we try to tell our friends how to invest
when they don’t understand money, then little or no communication is taking
place. That is because they are not on the same level of understanding as
you. Communication works best when two persons are on the same level of
understanding.
If you wish, you can try something simpler which our parents have been
telling us from young, that is, save money. Most people can relate when you
tell them to save money. Go easy on the making money and investing parts.
Reserve that for later Keep singing the same tune of saving money with him
first, then gently hand-hold him to become a more sophisticated investor.
Most poor and middle-class folks are brought up with their minds thoroughly
poisoned by the time they step into our money world. Rich people are
usually brought up differently. Unlike their friends on the other side, they
have been brought up to understand that money is not real. Money is just an
idea. And they are smart enough not to go around ‘educating’ their less
enlightened friends who love to struggle and stinge just to save a few bucks.
Some poor people are masters of "suffering". They love to suffer in silence:
working hard and earning little.
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Poor and frightened people are systematically brainwashed to believe:-
¬• Money doesn’t grow on trees.
¬• You’ve got to work hard for every cent, otherwise you don’t deserve it.
(Tell that to Ananda Krishnan, the boss of Maxis, a communications
tycoon in Malaysia. Work means pushing the satellite to space himself.
Only a few people can do that - Superman or Hancock, for example. And
they are all not humans.)
¬• Never delegate or trust others. Do it yourself. God helps those who help
themselves. (Less discerning folks get into trouble misinterpreting this
half-truth. By the way, if that is true, then the statement "God helps those
who are unable to help themselves" could be even "more true".)
¬• Always be down to earth; that means don’t take risks.
¬• Never wear a hat that is too big for you; that means don’t have big
ambitions - you will never make it. (Thanks, pal, it is very comforting to
know that.)
¬• Study hard and get a good job. Then you won’t need to worry about
money because you will be on “auto-pay” mode every month-end.
¬• There is no big frog jumping around on the street, meaning, if there was a
money-making opportunity, others would have grabbed it before you. It
even spreads to the West and goes by exotic names of Random Walk or
Efficient Market Hypothesis (EMH). Isn't it surprising that people who are
rich have always managed to find their elusive Frog? Laziness to think or
learn fuels the popularity of this belief.
Other examples of conditioned thinking involve less harmful but widely-held

beliefs like the following ones, but they serve to illustrate how we are brought
up to accept many things without bothering to question.
¬• Dogs love bones. Try an experiment yourself. Place a piece of meat and
some bones side by side and see which one your dog will go for.
¬• All humans go through four stages in life: birth, aging, sickness and
death. Actually there are a lot of people who don’t have the privilege of
aging; they die young. And some people are very fortunate to age and
die without any disease. So, that generally accepted sweeping statement
is not true.

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¬• Practice makes perfect. Sometimes when we are doing it the wrong way,
we should stop practising immediately. The fault becomes increasingly
harder to correct the more we practise.
How do you recognise poor and frightened folks? It is simple actually. I

must say I was shocked the first time I saw their reaction. When you try to
tell them that a certain investment can make them rich, they will literally
shout, "You can't do that!" (Other variations include, "You can't do that in
Malaysia," and "You can't do that; it is illegal.") It took me some time to
understand that reaction. They are not speaking from their mind but from
their emotion of fear. When they say, "You can't do that" they actually mean
they can't do that.
I learned something else from that experience, that is, when we hear their
feelings we are speaking to the real person. From then on, I tried to decipher
from their words the actual fears in their hearts. This technique has since
saved me a lot of time, and it has allowed me to respond correctly to the
actual person speaking.
Many poor and middle class folks have their minds badly damaged by bad
opinions. They end up with the helpless and inevitable conclusion, “I can’t. I
will never be rich.” And off they go to the betting shops to try to change their
destiny.
Make it a point to check that your investment decisions are based on facts
and figures instead of just opinions.
21st Secret: You must invest based on facts alone, not opinion.
Differing opinions can be confusing. To eliminate confusion, always refer to

numbers, financial statements or historical charts.

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Chapter 22
TWO MOST
POWERFUL FORCES
The two most powerful forces in our money world are fear and greed.
Before we can be rich, we should learn how to control these two emotions.
Once they control us, we will work for money and money will control us.
Even some rich people are controlled by fear and greed.
What can fear and greed do to a man with a day job? It will simply cause
him to be glued to the job for an indefinite period of time. Why? Because
fear is that he won’t be able to pay his bills at the end of the month if he
doesn’t go to work. This is true even for higher management staff because
they have more expenses. And greed will cause them to continually look
forward to promotion, pay rise, bonus, allowances, ex-gratia and overtime.
They can alternate between these two emotions for decades, usually till
retirement.
My entrepreneur friend, Joseph, has done a simple calculation to encourage

people with day jobs to take the bold step to venture into business or
investing in order to achieve financial independence. I find it quite
enlightening. Here is what he says.

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A lot of working people are running the rat race to get promoted and achieve
a higher salary scale. Now, let us assume you are hard working and
eventually get promoted and earn a salary of $10,000, which can be
considered reasonably high. What happens next? Are you rich and
financially independent? Not likely. Let us see what a $10,000 salary can
do.
For a start, your EPF/CPF and income tax will be deducted, leaving you with
two grand less. If you are earning $10,000 it is not likely you are driving a
small car. You will be using a Merc or a BMW, or at least a higher range
Toyota. That is another two grand for instalments. (There are also higher
road tax and insurance expenses, not forgetting that a bigger cc car will
consume more petrol.) It is also likely that you are living in a semi-D house,
or at least a double-storey terrace house. Mind you, that is another two
grand towards instalments. And you will need a maid to take care of the
house.
You should be having a golf membership; or at least a fitness centre

membership. That is another grand or so. With your salary and status you
are not likely to be hanging out at mamak stalls, and you will not be allowing
your friends to buy you lunch. In fact, most of the time you will be buying
lunch for your friends, colleagues and customers. You may even be buying
them beer at the pub. You think a couple of hundred bucks here and there
once in a while won't hurt but you will be shocked if you add them up one
day. It runs in the thousands. And a person with a $10,000 salary will be a
bit easier on his credit card, too. Just sign and swipe only, remember?
Throw in the rest of the monthly expenses like food, clothing, petrol, life
insurance, Astro, utility bills and the like. Don't forget to multiply that to
include your spouse and kids. If you do the math now you will find that what
my entrepreneur friend says is quite true. There really isn't much money left
over for savings and investment.
I go for a beer or two once in a while with my buddy, CT, who grew up with
me since Form One. He has a string of degrees and holds a high
management post in a leading insurance company in Malaysia. He
commands a salary of more than RM10,000. Being buddies we always have
this heart to heart talk before the beer really takes over.

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He confides in me and recently when we were recounting our financial

status, he was ruing the many financial opportunities that he had missed. He
should have settled his house and his car instalments when he had the
chance more than ten years ago. Instead, he blew a lot of money over
entertainment and late nights. Now his kids are "suddenly" growing up and
he has to start preparing for their college education. And guess what, he has
not yet settled his loans. Today, instead of living comfortably with such a
high salary, he is a worried man at times.
We must handle the fear of losing money and the fear of failure. We have to
start believing in ourselves. Never say, “I am not smart enough. I am not
good enough. So and so is better than me.” If you want to be very rich, you
need to overcome fear.
Great waves in the market are caused by these two powerful forces.
We believe that economic depression is also caused by two human

emotions: anger and sadness. Economic depressions could be
synchronised emotional depressions. People are angry at themselves
because they are not getting ahead financially. And they are sad over their
loss of time, because we are humans, remember? All of us have a life span.
The thought of spending a big fraction of our limited life span just to make
ends meet immediately generates a migrane of 4.4 on the Richter scale.
How do we conquer fear? One of the ways is to have a lot of reserves.

Save up at least six months of living expenses as a buffer or cushion just in
case your business venture or your investment project meet with unexpected
failure. That way you will not be pressured into taking unnecessary risks.
How do we conquer greed for the employee? The figures above have shown
that it is quite futile to look forward to financial independence just by holding
on to a day job.
How do we conquer greed for the investor? Do budgetting. For example,

you should not have more than 75% of your total funds in stock investments.
You should have some cash on standby. And you should not have more
than say, 30% of your stock investment account in one counter only. Greed
is a useful emotion and when we set its boundaries we harness the monster
in us. We will not fall in love with our investments. Rather, we will be
keeping track and control over our profits. We will be ruthless in cutting our
losses.

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22nd Secret: To become very rich you must conquer your fear and
greed.
Between fear and greed, fear is the stronger emotion.

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Chapter 23
GET INTO THE HABIT
Habits control our lives. If we want to be successful, we need to build good

habits.
Busy people are often lazy people! People stay busy to avoid something
they do not want to face. Sometimes stopping for a moment is harder than
staying busy. Don't be lazy because dreams are only made for those who
really try.
Saying something is risky may also be saying, "I am too lazy to study the
subject." However, there is a cure for laziness. It is to get a little greedy.
If you are working at a day job, cultivate a habit of asking and learning
everything about your job. This knowledge may one day enable you to be
your own boss. Once you know everything about your job, your company,
your products and your industry, you are an expert in your field. The
possibilities could be endless.
Good attitudes like being humble will help us keep an open mind and learn.
When we are proud we start thinking that what we don’t know is not
important. When we pretend to be smart we are at the height of stupidity.
We should not allow our schooling to get in the way of our education.

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Renowned futurist writer, Alvin Toffler who

visited our country during Dr Mahathir's regime
had this to say, "The illiterate of the 21st Century
will not be those who cannot read and write, but
those who cannot learn, unlearn and re-learn."
A glaring example is this. Today, there are many three-year olds (I have
seen them personally myself) who can switch on the computer, key in the
password, call up the browser, click on their favourite online game and start
having fun. In contrast, there are a lot of highly educated professionals who
are unable to perform even the first task, that is, switch on the computer.
They have simply become "illiterate". They freeze at the thought of having to
send an email. Of course, the thought of having to receive an email is
equally terrifying.
When it comes to money, don't be shy to say I don't know. Between being
embarrassed and losing money, always choose being embarrassed - it's
cheaper.
I have discovered two magic words, "Teach me." Whenever I recite these
two words I am always amazed at how fast people come to help me
understand what I don't. It works better than, "Open sesame!" or even
"Abracadabra!"
One of the humblest guys I have ever come across is Tan Sri Dr Lin See
Yan, the former Deputy Governor of Bank Negara. We invited him to be a
speaker at one of our SMI seminars. We had to go to Bank Negara to brief
him on the topic.
When my partner and I reached Bank Negara we were surprised to find that
the security guards at the lobby had been told about our appointment with
the big man. We were escorted up the lift to his office.

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In the middle of his office was this awesome tropical hardwood table that was
cluttered with books and journals about a foot high. I reckoned there were
easily more than a hundred books. We casually asked whether he had time
to read so many books. He informed that he had contributed articles in every
single one of those books and that they were sent to him as complimentary
copies!
We fished out our profile on Tan Sri. His profile reads, Tan Sri Professor Dr
Lin See Yan, Deputy Governor... As we needed to introduce him properly on
the day of the seminar, we proceeded to ask him how we should address
him, since he has such a long title. He said, "You can call me Tan Sri, or
Professor or Dr Lin. Or you can just call me Mr Lin." Being such a busy man
we were impressed and thankful that he even had the time to enlighten us
with a little lecture on the banking system.
We call him Dr Lin whenever we see him at his favorite eatery in Imbi.
To cultivate good habits and attitudes we should also choose friends

carefully. Spend time with people who have knowledge. Don’t listen to poor
or frightened people. Sometimes we need to stop doing what we are doing.
If we are using a formula that is not making money, Stop! The definition of
madness is - doing the same thing over and over again, the wrong way and
expecting a different result. There is a Malay saying "kembali ke pangkal
jalan" which means that if we are on the wrong track we should go back to
the starting point. People think that since they have already started, they
would reach their destination faster if they just continue from where they are,
even though they are on the wrong track. Actually it is faster if we start over
again.
You will find a lot of people swallowed up in over-crowded businesses like

printing or selling mobile phones. They keep complaining that it is too
competitive and margins are razor-thin. But they make no effort to start
anew in a better environment. The mobile phone guys are saying it is too
late to change because they are too old and don't know any other trade.
Mind you, they are only in their twenties. And the printing industry guys are
collapsing under the weight of giving too many terms to their customers.
They make enough just to keep paying instalments for their beloved
Heidelbergs. Of course these guys won’t change because they are usually in
their fifties.
Make it a habit to think; use the power of your brain to make you rich. Too
many people use the power of their brain to make themselves poor. They
concentrate all their mental energies to ensure self-annihilation, by telling
themselves each day that they are not good enough, not intelligent enough,
not well-connected enough - in short, not deserving enough - to succeed
financially. They really don't need enemies; they can do it to themselves.
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Make it a habit to take action immediately once you learn that some changes
need to be done in your way of making money. The most life-destroying
word of all is the word tomorrow. It destroys more lives than any other word.
Tomorrows only exist in the minds of dreamers and losers. Winners take
action today.
23rd Secret: Develop good habits today. They go a long way in

helping you achieve financial success.
If we are not successful financially, one of the first things we should look at is
our daily habits.

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Chapter 24
STRICTLY BUSINESS
You want to make money by investing but don’t want to learn about
business? Well, it is like saying I hate chicken but I like KFC meals.
What has business got to do with making money and investing? Everything.
All investments can be traced back ultimately to business.
You will not be able to invest in properties without understanding the

business and development of the particular location. Warren Buffett does not
invest in shares; he invests in the business of the companies. Li Ka Shing
only invests in property when he feels that the location has got business
potential. The interest rates of banks and mutual funds are also determined
by demand and supply in the business marketplace. Even employees work
for bosses who are in business.
Investment is most intelligent when it is most businesslike. Business is a very

complex topic because it involves people. (Humans are the most complex
creatures in the solar system.) But before you give up, rest assured that you
do not need a business degree before you can start making money.
To be a scientist, a doctor, an engineer or a lawyer, you need to have high

IQ. Successful investing does not require high IQ, unusual business insights
or inside information.

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24th Secret: Start learning about business today. Anything that

makes money can be traced back ultimately to business.
The secret of making a lot of money is to have an intimate understanding of

the business world.

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Chapter 25
MARKETING 101
Business is about people. In particular, customers.
Without customers we would have no business. So, let us do first things first.
Business shareholders, management and even staff will have to take a

number.
Suppliers are also very important people too. In fact, sometimes we treat
suppliers with more respect because we really need them to provide
products or services to our customers. I remember the days when we were
doing business; we never expected our suppliers to come to our office. They
didn't need to remind us to pay them. We personally drove over to see them
to hand over our payments. But they too, will sometimes have to play
second fiddle to customers, who must always come first. No matter how
important suppliers are, it is the customers who pay us.
Bankers, lawyers, accountants, associates, government authorities and

everyone else, hang on.
Let us focus on how to get our customers in. That is what we have to learn
in the important topic of marketing.
The most important specialized skills that you need to have are selling and
understanding marketing. We will be covering selling in the next chapter.
Let us now explore the critical topic of marketing.
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Before we go further you should not confuse marketing with sales. Sales
may mean many things like one-to-one selling, or a special offer that you
normally see at shopping complexes.
Marketing is a big topic covering mainly strategies. Besides that, it covers

things like branding, choosing a name for your product, advertising, pricing,
packaging, quality, look-and-feel of the product, or choosing your channels
for distributing your products. For example, you may need to consider
whether to use a dealership network or multi-level marketing (MLM) system
to sell your products.
Now, you may ask, "Marketing is such a vast subject, where do we start?"
That is true. Degree and diploma courses take a few years to complete.
And they have to do in-depth studies on stuff like "The 4 P's", "SWOT
Analysis" and even "Positioning". How much time do we need to spend
studying this important topic? Is there any shortcut? You are anxious to
know.
I have good news for you. You can now formulate marketing strategies just
by applying a simple formula outlined below. You may use this strategy in
your daily observations to analyse why other businesses are succeeding or
failing.
In fact, it is a concept popularised in the 60's by the chairman of an

advertising company by the name of Rosser Reeves. Here is how he does it.
He calls it the USP or Unique Selling Proposition. We have modified it
slightly to make it even more powerful.
U = Ultimate Advantage (that differentiates your product/service from your

competitors). What is it that your company or products have that
others don't? Most people are unable to answer this but went ahead
running the business anyway. (Again, laziness to think is the
problem.) Stop! I am afraid you have no choice. You must answer
this.

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Your customers must understand clearly and simply that they are
buying from you because of the one difference you have compared to
your competitors.
No, "cheap" is not a differentiating factor. A lot of people fall into this
deadly trap. You should only start a price war when you have
absolutely no other alternative; because in war there is usually
bloodshed.
S = Sensational Offer (the world today is spoilt for choice compared to

yesterday). An example is Air Asia's free tickets.
Think of a way to make your customer an offer they simply can't

refuse.
P = Powerful Promise (back up your offer with credibility). Usually this

involves money-back guarantees which is less popular in Asia
compared to developed countries. The idea here is to eliminate the
question lurking on customers' minds, "Why should I trust you.”)
Discover your ultimate advantage. Create a sensational offer. Back it up

with a powerful promise. Then you can be confident that you have done
more for your business than 90% of all other businesses!
With this formula you may start to analyse and dissect businesses to
understand why they succeed or fail. It may take years of practice and a lot
of failed hypothesis and theories. But after some time you will be quite good
at it.
In fact, though we are not sadists, sometimes it is easy to see why certain
new business startups fail because their marketing is done wrongly. They
just jump into a very competitive business, like selling mobile phones, with
nothing to differentiate their products from their competitors'.
The other common example is entrepreneurs opening new eating outlets in

areas where there are already a lot of eateries. They sell food that is quite
"homogeneous", meaning there is nothing special. They soon find
themselves struggling to pay rent, and die a natural death.
After studying a lot of successful business models you will be confident

because you would have grasped most of the ingredients required to make a
venture successful. You will be on your way to becoming a successful
businessman yourself.

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But you really need to get your hands dirty.

Studying alone will not do. I hear I forget, I see I
remember, I do I understand - Confucius.
That does not mean you will be successful the first time. Knowing theories
does not guarantee success. Learning how to do business is like learning
how to ride a bicycle. Galileo, the Italian philosopher says, "You cannot
teach a person anything; you only help him find it within himself." No one
can teach you how to do business but you can learn how to do business
yourself. You have got to experience and feel it yourself. And be ready to
get yourself bruised in the first attempt. The experience will be invaluable.
And once again, don't bet your horse on your first attempt.
25th Secret. You can now analyze any business using the USP
formula.
The word branding is so important that a lot of people use it interchangeably

with marketing.

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Chapter 26
SOLD ON SELLING
Selling equals communicating.
Making money and investing are related to business. Business is related to

people. They are intricately linked. We need to communicate with people.
When one says he can't sell, what he is really saying is that he can't
communicate. Great businessmen are great leaders, and great leaders are
good communicators.
If we cannot communicate well we will not only have difficulty making money
but we will not be able to effectively convey our care and concern to our
friends and loved ones.
The ability to express an idea is sometimes more important than the idea
itself.
Speaking or writing perfect English is not communicating. Using wordy

phrases or bombastic language is not communicating. In fact, renowned
English writer George Orwell goes so far as to say that it is barbarous to use
big or difficult words. So, let us all remember to always use simple language
that people can understand. We do get carried away easily at times.
Communication takes place only on the same level. The best example is
when you talk to a baby. You just have to make noises like da da. That is all
it can understand.

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Similarly with the people we want to sell to. If our customer does not
understand our organisation or products we have to go down to their level
and explain ourselves. We then bring them to the same level of
understanding. That is where communication takes place. It will be easier to
close a sale then.
My friend Kimosawi was a very decent lad in school. He was always polite
and never curses or swears. We were looking forward to seeing him for the
first time at his parents' shop after he graduated with two degrees from
Canada. Upon reaching his shop we were shocked with the vulgarities that
came blasting out of his mouth, aimed at a group of his foreign workers.
Satisfied that they got his message, he turned around and welcomed us as if
nothing has happened. "Guys", he said as a matter of factly, "that's the only
language these fellas understand. It's good to be back, I miss you all."
Closing a sale is rather like a thief trying to get into a locked house. We
would wonder at the intelligent man who, upon finding the front door of a
house locked, merely stood there and beat on it. Why would he not try the
back door, the windows or the porch door? Some thieves even try to enter
from the roof or by digging underground.
But is he less sensible than the salesman who knows or uses only one
closing technique? We have salesmen who drive and drive, always
attempting to get the prospect's order with the same technique even after it
has failed time and time again.
Do not laugh. Life is filled with examples of loving parents trying in vain to
get their children on the right path by using the wrong technique over and
over again. Everyday people are trying to discourage their loved ones from
losing a lot of money in investment projects, but with no avail. Again, they
failed to use the right technique. This "using one technique" problem has
resulted in numerous tragedies that we see and hear everyday.

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There are many ways of closing a sale, just as there are many ways of
extracting your favourite fruit. You don't cut open a durian the way you cut
an apple or an orange. You have got to look for the "line", then insert your
knife in and then pry it open. You can't peel your rambutan the way you peel
your banana. The closing technique that we choose depends not so much
on us, but rather on the prospect.
But, sad to say, a lot of sales people know only one technique. The most
common is persuading, as in harrassing or begging. It is often annoying to
the prospect. Persuading is supposed to be a fine art.
The other common technique used is reverse psychology. Here, the

salesman pretends to be indifferent. By doing so he tries to make the
prospect impressed that his product is so good that people will buy without
him saying much. Little do they know that they are trying to use one of the
most sophisticated sales techniques available. Furthermore, it is supposed
to be used sparingly, say, for one in twenty prospects. These salesmen use
it every single time because that is the only one technique they think they
know.
A lot of society's problems may have resulted indirectly from the fear of
selling, including the escalating rate of divorce. Most people understand that
if you can't communicate you can't sell. What they don't realise is that the
reverse is also true: if you can't sell you can't communicate.
Most people have to get over a lot of negative ideas about selling. A
common problem is that people think they are begging when they are selling.
That is not true. Well, it is true if what you sell has no value to your
customer. And you are only eager to earn your commission. (When you
think about this you start having cold feet or butterflies in your stomach.)
Otherwise, you should see it as offering your customer the privilege of
owning something he really needs or wants. There is no begging here; it is
mutual gain.
Once you understand that you are stretching out your hand and giving your
customer something useful instead of taking something away from them,
your fear of selling will slowly disappear.
It is this fear of selling that we see evident in our corporate literature. Even
big corporations are sometimes not able to write convincing sales letters,
proposals or brochures. This is partly because they are taught by academics
who are afraid of the word "sales". (Maybe that's why best-selling author
Robert Kiyosaki co-wrote the book If you want to rich and happy, don't go to
school.)

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Look at our business proposals today and you will realise that they are so
stereotyped. You have Executive Summary, Background or History of the
Company, Our Products & Services, Our Management Team, Our Mission
Statement and Our Vision. Does anyone know what is wrong with that?
Actually there is nothing wrong except that it can't sell. Why?
The basic selling features of the proposal are not structured properly. It
focuses on ourselves, our company and products, not on the customer. Let
me elaborate.
Statistics show that men think about sex every six seconds. Well, we are not
sure where that statistic came from or how true it is. But one thing is certain;
we have so much to focus on every day that proposals are definitely not on
the top of our list. Let's face it. People are not interested in what we say or
write. They are also not interested in our company, products or services.
What are they interested in? Themselves. Therefore, every section of our
proposal must talk about they, them and themselves only. Any other topic
would cause them to immediately lose focus. Let me give you another tip to
illustrate further.
Feature: Do you know that the headlight our company is selling has got
state-of-the-art HID technology?
Answer: Don't know. Don't care.
Advantage: Do you know that our company's headlights shine 30% further
than conventional headlights?
Answer: Don't know. Don't care.
Benefit: You can driver safer at night with our headlights.

Answer: Tell me more.
Always tell your customers the benefits they are going to get from buying
what you are trying to sell. (It applies to whatever you want to sell to your
friends and loved ones, too. Things like care and concern, or education.
You can't shove it down their throat; you have got to sell it to them.)
Another classic example of communication can be found in one of Aesop's

Fables where the Wind challenged the Sun as to who could make a boy take
off his shirt. The Wind blew with all his might but the harder he blew, the
tighter the boy wrapped his shirt around himself. The Sun then gently
increased his rays of heat and the boy naturally took off his shirt.

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We should not raise our voice; we should improve our arguments.
We need to appeal to people's emotions such as fear, greed, pride or

compassion in order to communicate and sell, not to their intellect. Our
arguments must be clear, sharp and logical. But as they say, intellect opens
the mind but emotions open the wallet.
Selling and communicating skills are acquired, they are not inborn. You can
be a good communicator if you constantly work on the skill. It is one skill that
we have to polish till the day we die.
26th Secret: Develop your selling skills today. That is the only way to
develop our communicating skills.
Christopher Columbus had to sell the idea of his exploratory expedition to the
Queen of Spain before he could get the funds needed to start the journey.
We all know what happened after that. He found America (accidentally) and
history was created. That would not have been possible if he lacked selling
skills.

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Chapter 27
JUST DO IT!
OK. I have learned a lot about how to make money but where do I start?
What do I do next? Here are some activities for those of you who are
anxious to start out immediately.
1. Study. Choose a money-making project and start studying. Examples

are properties, shares, options or other derivatives, internet marketing,
licensing and other intellectual properties, and finally business projects.
When you have mastered a formula or way to make money, learn a new
way.
Yes, I can hear some of you moaning and groaning already. I am too
old to learn. I don’t have the time. I am not smart enough. I don’t have
a degree. A lot of people with degrees have failed in investment; what
makes you think I can succeed? I don’t have the money to attend
courses or even buy books. Even after I have learned how to invest
where do I get the capital?
Let me encourage you, my dear friends. Time passes quickly. If you

start improving your financial intelligence today, I assure you that five
years down the line your friends will be envious of your financial and
investing skills.
Haven't you heard of the ancient Chinese proverb? "The best time to
plant a tree was twenty years ago. The second best time to plant a tree
is today."
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If you have not started learning about money, start today. If you have
missed an investment opportunity, don’t fret. Start looking for another
chance today. Remember the boss of your favourite fried chicken,
Colonel Sanders? Well, he started Kentucky at the age of sixty-six.
And I can still hear some of you saying you are too old to start.
And, if you think financial education is expensive, try ignorance.

Sometimes I wonder where our priorities are. I once heard a course
mate complaining at my mentor Renesial Leong’s property seminar. It
cost only RM1,000 at that time and he said it was expensive. He has
just lost more than RM100,000 by investing in the wrong property.
Anyway, though he complained, he paid for the course so we can't hold
that against him.
2. Manage your time. Because time is such an important and scarce

resource, allow me to share with you a little bit more on this crucial
topic. Be ready for a surprise in this sub-section because you are
about to receive some unconventional advice on time management.
First, let us run through some common advice. You get these at
courses conducted by PhD holders and you've got to pay a lot for them.
I get these contents by attending a lot of time management course
previews. I usually get that sinking feeling like they are throwing a
manual on how to swim to the guy struggling in the water.
Generally, the time management courses that we attend and books that
we read about time management broadly fall into the following
categories:-
¬• Setting goals
¬• How to organize your work
¬• How to prioritize between what is urgent and what is important
¬• Tips on how to cram more work into a day – Part One (working
faster)
¬• Tips on how to cram more work into a day – Part Two (multi-tasking)
¬• More advice like, “Don’t procrastinate”
¬• Even more advice, bordering on the ridiculous, like breathing
exercises and meditation to relieve stress
In my humble opinion, if you adopt the above advice, time management

could be like shooting a moving target. You are not addressing the root
of the problem.

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My Choice of Useful Tips
I want to share with you something more practical that will seriously
alter the way you look at time management.
a. Good Tip from Parkinson
Work expands to fill time. That is Parkinson’s Law. Discovered by

Professor Cyril Northcote Parkinson, knowledge of the existence of
this law itself will enable us to use time more effectively. The law
itself is self-explanatory.
"How do I apply this Law?" It is simple; after you have set your
goal – I assume you know how to – set also a time required to
complete the task. If you do not set the time, or if you set too long
a time, the task will take more time to be completed than it should.
Time would then be wasted.
For further reference you may Google Parkinson’s Law.
b. Better Tip from Pareto
Pareto’s Principle, the 80/20 Rule. In 1906 Italian economist

Vilfredo Pareto discovered that 20% of the people in his country
owned 80% of the wealth. This discovery was named the Pareto’s
Principle or the 80/20 Rule, not by him but by someone else, and
the name has since stuck. A lot of people have found that this
principle can be applied to many areas in life, from the trivial to the
critical. For example,

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We spend 80% of our time with 20% of our favorite

friends.
80% of your revenue will be the result of sales

made by 20 percent of your sales staff.
Ray Kroc, founder of McDonald's sold what most

customers wanted to buy and trimmed down his
menu to just those few items.
In computer science the Pareto principle can be

applied to resource optimization by observing that
80% of the resources are typically used by 20% of
the operations.
Pareto’s Principle reminds us to stay focused on the “20 percent

that matters”. If anything in the list of activities and action items
has to be left undone make sure it is not listed in that critical 20
percent.
It is the cure for “doing faster” and “multi-tasking” which creates

stress and produces only 20% of the desired result.
This principle is the basis for the Pareto Chart, one of the key tools
used in total quality control and the famous Six Sigma used by
General Electric and other giant corporations.

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Most people are able to prioritize their tasks. If you are one of
those who have difficulty differentiating between the urgent and the
important this is what you should consider. A lot of our daily tasks
are urgent, for example, chores required of us by our boss and our
customers. Sometimes, friends too, need our help urgently.
However, although these jobs keep us very busy day after day
they do not help at all in furthering our career or building our
business. Things like learning new areas of our job or getting
familiar with new technology and building important contacts are
actually more important.
Therefore, we should not allow urgent tasks to get in the way of

these important things to do.
Knowing the above is the first step. Doing it could be extremely

difficult and involves sacrifice. This is where most people fail.
They would rather finish all the urgent tasks every day in order to
keep making money for survival and to avoid getting scolded for
not finishing scheduled tasks. After some time they find that they
are stuck in a rut and develop the bad habit of always not doing
things that are important. They lose direction. A typical example
would be an internet marketer who spends time reading
unnecessary emails which seem urgent instead of concentrating
on the task of improving his skills.
For further reference you may Google Pareto’s Principle, Six

Sigma.
c. Best Tip from Al Casey
Al Casey, considered one of the most successful and original

American businessmen of our time, invented Casey’s Law in
answer to the more famous but negative Murphy’s Law. Most of
us are well-versed with Murphy’s Law which states that “whatever
can go wrong will go wrong”. Al Casey says in his book Casey’s
Law that “whatever can go right should go right”.

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Given the stature of the man, we should pay close attention to his
time management technique. He mentions that his secret of
success is “doing first things first and second things never”.
This technique may blow the minds of most people because it

sounds kind of weird. But as we mature in business we realise
that this is indeed a powerful technique. The reason is simply
because it amplifies Pareto’s Principle which involves sacrifice.
How to apply this technique? At any time most of us may have ten
important tasks to choose from. Pareto’s Principle will encourage
us to choose only two.
However, at any given time we can only focus on one task. (Just
forget multi-tasking. You can use it on trivial tasks but it is
dangerous to practise that for important tasks.) So normally we tell
ourselves, “I’ll finish Task One quickly, after that I’ll attack Task
Number Two.” The problem quickly arises because while we are
performing Task One, our mind is thinking of how to tackle Task
Two. This unconscious multi-tasking causes us to lose focus.
Therefore, the highest technique involves sacrifice and full

concentration to complete only one task at any given time. Highly
successful people do this.
On the contrary, I have observed a lot of intelligent people tackle

multiple tasks simultaneously. These people are usually MBA or
Ph D holders. Some of these people are my former customers. I
remember one guy went to the extreme by doing ten projects
concurrently. Of course they typically end up failing miserably. I
can only guess what makes them think they can succeed by
working in such a manner. Perhaps they think that if they can
score at ten subjects in school they can handle ten projects at one
time. Anything less would be a disappointment.
Most successful people whom I have come across do one thing at

a time. They agonize over detail and are meticulous in planning.
Patience is their forte. It always appears that they are slow but
before you know it they have completed their money-making
project. Or they have acquired a new money-making skill.
Then they move on to the next project. By doing one project at a

time and sacrificing the rest they end up completing all their
projects in the shortest time.
For further reference you may Google Murphy’s Law and Casey’s
Law.
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3. Select daily activities that help our minds, for example seminars, books
and tapes to increase our knowledge. Find friends who can share
money-making ideas with you. Do not indulge too much in trivia talk.
When great people get together they always talk about ideas. Normal
people talk about events such as politics or football. Mediocre people
talk about other people i.e. gossip. I usually stay away from people who
have no other topic except to talk bad about other people.
Some people are baffled why they are not getting ahead financially. It
has a lot to do with who they hang around with everyday.
4. Find a mentor. Follow your investment hero, for example, Li Ka Shing,

Quek Leng Beng or Teh Hong Piow. You can even have different
mentors to teach you different skills, for example, internet marketing. I
have three internet marketing gurus because I am really a dummy; an
internet dinosaur. When one guru gets angry with me for being too slow
or dumb, I quietly go and approach the other two.
Tip: Learn from the best. In whichever subject of investment, choose

your gurus and mentors carefully. Once you have made your choice
learn as much as you can from them.
We can see further by standing on the shoulders of giants.

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Smart people learn from mistakes. Wise

people learn from other people's mistakes.
- Ichak Adizes
5. Teach someone. The more you try to teach other people the more you
will learn yourself. You are refreshing your memory in the process.
Sometimes when your friends disagree with you, you see things from a
different angle, too.
6. Learn from others' experiences. Find someone who has done what you
want to do. Learn new ideas. Take people who have the experience to
lunch. Ask them for secrets and little tricks of the trade. (And I mean
you pay for the lunch.)
7. Watch your words. Slow words: High paying job, Save money,
Appreciation, Avoid risk, Buy shares, Go to school. Fast words:
Cashflow, Make money, Depreciation, Gain control, Sell shares, Go to
seminars.
8. Trust in yourself. When you hear a voice within you say "you cannot
paint," then by all means paint. - Van Gogh.

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I have a friend who has a passion for music and singing. She wanted to
take part in Astro's annual singing competition. She worked hard. She
took music courses and attended singing classes in Imbi operated by a
renowned composer from Singapore. The lecturers there praised her
as the best student in the class with a lot of potential.
I met up with her one day and asked, "Are you taking part in the Astro's
competition this year?" "No, I did not register myself." "Why?" I asked,
surprised. "You worked so hard to prepare yourself." "I didn't have the
courage. I don't think I'm as good as the other competitors."
Twenty years from now you will be more disappointed by the things you
have not done than by the ones you did do. - Mark Twain
Life's race does not always go to the strongest or the most skillful. If
you think you can, you can.
Success lies in taking action. Success does not come just by arming
ourselves with more knowledge and skills. I came across a very harsh
saying from Zen which goes like this, "If a person says that he knows
but doesn't do, he actually doesn't know."
The final crunch always comes in taking action. This is where the
strongest are found lacking. Some of the finest business graduates will
just freeze if you tell them to be enterpreneurs themselves. For all their
knowledge they do not have the confidence to start out on their own.
The only thing on their mind is to work for other people.
Taking action is half the battle won.
Have faith in yourself, my friend. Believe me - you are better than you
think.
9. Don't rely on others or blame others for your failure. That is not the right
attitude. I have come across people who received assistance up to
95% for starting a business but are bitter men. They always ask, "Why
didn't they help me a bit more? It is only another 5%." I have also
come across better men who were thankful for the 10% assistance that
they received. These are resourceful entrepreneurs who will solve the
problem of the other 90%. In case you are wondering which particular
race is having a problem, I can assure you that people with good or bad
attitudes are found in every race and country.

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10. Be professional. Well, what does that mean? In the words of KC, my
motivational trainer friend, being professional simply means putting your
personal stamp on a task. You are not afraid to tell the world that, yes;
this job is completed by me. I did it my way. I have done my very best;
I could not have done better. I am proud of my work.
Apply this test of professionalism and you will always have that sense of
fulfillment.
If, after you have done your best you are still not sure whether it is good
enough, try this. I call it the ultimate test. I use this test on my best
friends who always aspire to be the best. They come to ask me
whether they are good enough. I usually have these two words for
them. Is your work “world-class”? If it is not world-class, is it the best in
your country. Go for it.
It may sound difficult but it really isn't. You don’t really have to look at
your competitors all the time and be better than them. All you have to
do is to create a habit of bettering yourself each time. Before long you
would have beaten everybody else. That was what our gymnastics
coach taught us in his first "lecture". (Depending on whom you ask, he
is either loved or hated for his numerous lengthy motivational lectures.
But one thing is certain, he is respected by all. He is the first Malaysian
to win a medal in the sport of gymnastics in an international
competition.)
Getting rich begins with the right mind, right words and right plan. Action
steps are easy.
27th Secret: Just do it!
Some people can never make up their mind. Being fickle minded and
indecisive can be a great hindrance to success. For better or for worse,
make up your mind. If your decision is wrong you can learn from it. You will
never know if you hesitate. Do not be a victim of paralysis of analysis, which
means analysing too much without taking any action.

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Chapter 28
INVESTORS VS. TRADERS
Do you know the difference between being an investor and being a trader?
An investor will buy a cow for its milk and calves. A trader will buy a cow to
slaughter it.
An investor buys to hold, a trader buys to sell.
In properties, an investor will buy a property for rental and appreciation. A

trader will do flipping, a term that means to buy and sell quickly for a profit.
In shares, an investor will buy a share for dividends and capital gains. A
trader will try to make a ‘killing’ by hoping to buy low and sell high. A person
who buys a share hoping to sell it and make a profit within one year should
not consider himself an investor. He is more often than not, a speculator.
An investor will win in the long run because he will have cashflow and
passive income. A trader will need to continue working, he cannot stop.
I recently attended a workshop on shares investment organised by my

broker. At this particular point in time market sentiment is very bad with the
US facing subprime problems, oil and food prices escalating almost out of
control and our local political scene looking more fragile than ever before.
One of the participants asked the million-dollar question, what shares should
we ‘invest’ in now? Given the context of the speaker, the question should be,
what shares should we ‘trade’ now. Obviously the participant didn't know
better as most people cannot tell the difference between investing and
trading. A little example from the game of soccer may clarify it for you.

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At the time of this writing, Euro 2008 has just concluded. Spain won the Cup.
Soccer fans may recall the many memorable moments of that event,
especially the beautiful goals scored. Among them undoubtedly would be
the wonder goal scored by the German Philipp Lahm who is a defender.
Now, a defender is not supposed to be scoring goals. But his goal would be
remembered by fans, especially Germany’s fans around the world for a long
time. He ran around his Turkish opponent as expertly as any other striker
could and coolly slotted in his goal, giving the keeper no chance at all.
We can say Lahm is like an investor. When an opportunity presented itself to

trade he did it. Similarly, we should start off as an investor, buying shares to
hold for long term with a view of earning dividends. However, we tell
ourselves that if the share price were to suddenly shoot up by say, 30%
within the first twelve months, we will just sell it and make a capital gain.
You see the difference? You did not buy the share solely for the purpose of
trading it; you bought it for long term. You are an investor. But being a
flexible investor you became a trader when you had the chance.
Having said that, you could even have done it in the reverse; that is, you
could have bought shares hoping to trade it for a profit within a year.
However, you would have no qualms about holding it for the long term should
the price not reach your desired selling figure. In this case, you would be like
a striker who runs back to help in the defence.
Just as a player needs to know whether he is a striker or a defender, you

need to know whether you are investing or trading. Confusing the two would
quickly lead to a depleted bank account. You may even score an ‘own goal’.

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Besides knowing the difference between investing, trading and speculating,

you will need to know a few other basics before investing. For example, in
shares investment you need to first of all understand that you are ultimately
investing in a business, not the shares of the company. You need to spend
time to really understand the business. A lot of investors including so-called
professionals don't do this. Learning the business is just too difficult and
time-consuming. You can almost immediately recognise it when they advise
you to buy certain ‘good shares’. To start with, there is no such thing as
good shares, only good companies or businesses. There are however,
cheap shares.
Here we come to a very important part called valuation. Once we identify a

good company’s shares to buy, we need to know at what price to buy. Even
CNN or Bloomberg will not teach you this. They will simply say, this share is
a ‘Buy’ share. You assume that means you buy at today’s price, even
though today means historical high!
Doing that is like closing your eyes and jumping into the ring. You may be
shocked to find that your opponent is none other than Iron Mike Tyson.
Not many people can answer the question, “How low is low?” Or, “How high
is high?”
The other silly thing that I recently came across in the newspapers is that
someone is selling stock simulation programs. Hey, you are supposed to be
simulating or back-testing options, futures, forex or other derivatives. (You
can do those for free online. You may use FXCM, interactivebrokers,
thinkorswim, or optionsxpress, and many others, depending on your personal
preference. Some of you may not like popular sites like FXCM at all.)
Stocks are too slow to be simulated. That is, unless you are really an expert
who can identify those few stocks with big volumes and swings. Simulation
programs make use of technical analysis, not fundamental analysis.

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You are supposed to apply fundamental analysis (long-term) and not

technical analysis (short-term) to stocks. Put simply, the man (WB) says if
you are not prepared to hold a stock for five years, don’t buy it. He always
holds forever.
And do you know the trend for unit trusts (or mutual funds if you like)? It is
called switching. If the share market is going down you are to switch to
bonds and vice-versa. So everyone is watching the market every day, with
adrenalin pumping. They get very high at times. “We have to watch it
ourselves,” they say. “The agents are too busy.”
Hello. Time out, please. I thought at one time they said you are supposed to
invest in shares, not speculate. And unit trusts is supposed to be a “basket”
of shares, which means it should be more stable and even more long-term
than shares. Since when do we need to watch it every day? Again, greed
and ignorance take control. And my poor friends usually end up, “Sigh, we
should have switched earlier. Now I have lost money.” What do they mean
by earlier anyway? They don’t have any idea how to read a chart to find the
trend. They have not heard of either SMA or EMA. They don't know the
significance of a 20-day average, or 50-day average. These are the
technical indicators to guide you to the right timing to buy or sell.

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Be patient, my friend. Invest so that we can have it all - security, income,

appreciation, tax breaks, etc. You can even have your "killing" in the end.
28th Secret. You need to become an investor to achieve financial

freedom.
An investor goes for the eggs instead of slaughtering the chicken. We

should always go for repeat income instead of one-off profits.

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Chapter 29
THE MAGIC OF
MISTAKES
Investing and financial analysis cannot be learned by reading only. It is more

like riding a bicycle. It is the ultimate hands-on experience. And the
probability of making at least one mistake at some point in our investing life is
virtually 100%. Therefore, take time to learn from mistakes, there is magic in
them.
We seldom learn much, if at all, from success. Success is really a poor

teacher.
In his book Never Say I Assume, Datuk Tan Chin Nam revealed many of the
mistakes that he had made in his business ventures. He painstakingly
analyses how those mistakes were made so that readers can benefit by not
making the same mistakes themselves.
Here are some of the biggest mistakes ever committed and how brave men
converted them into opportunities and success.

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Thomas Edison ‘failed’ 10,000 times

before inventing the light bulb.
Berkshire Hathaway, the highest priced stock in the world at about $100,000
a share, was one of Warren Buffett's biggest investment mistakes. Today
(2008) Berkshire shares are selling at a high of $150,000 per share! Google
shares are only $750.
Levi Strauss did not find gold; he made pants out of canvas instead.
Diamond Fields did not find diamonds; it found the largest nickel deposit
instead.
On the street you make the mistake first, and then find the lesson, if you ever
find it. Why? Because at times we really do not know what went wrong.
Consider yourself blessed if you have friends who are kind enough to point
out your mistake to you. And mistakes are only mistakes if we don’t learn
from them.
You would probably have heard this, "Good judgment comes from
experience; experience comes from bad judgment."
Some people avoid mistakes, which is the bigger mistake. Some make
mistakes, fail to find the lesson and keep repeating the mistakes. In school
you are considered smart if you don't make mistakes. Each time we make a
mistake we learn something new called experience.
Be prepared to be disappointed. Inside each disappointment lies a priceless

gem of wisdom. Don't hold grudges for too long. Don't allow disappointment
to overcome us and don’t say, "I'll never do that again." It simply means that
you have stopped learning.
There is a reason why there are so few self-made rich people. It is because
only few can tolerate disappointments.

Page 177
However, some people are very ‘experienced’ because they make the same
mistake over and over again.
Keep a record of your mistakes so that you won't have to go through the pain
of committing them again. If we forget our mistakes we are condemned to
repeat them. That is why painful lessons are a blessing in disguise because
we will always remember them.
29th Secret. You sometimes need to learn through mistakes.
A mistake will land us into a lot of inconvenience, just like a golf ball ending
up in tall grass. But more often than not, a mistake will cause us to lose
money, which is even worse.

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Chapter 30
SUPER INVESTORS'
INVESTORS' SECRET REVEALED
Shopping.
That is the secret! That is what they do. And that is what the poor and
middle class do, too. The difference is that the rich shop for assets whereas
the poor and middle class shop for liabilities and expenses. Like nice houses
and beautiful cars. Like branded attire and stocking up groceries. Like
jewelry and golf memberships. Like the cheapest airfare and travel package.
Like the latest gadgets and gizmos from mobile phones to cameras.
Good investors find great bargains the same way any shopper finds a good
deal. Just that they have trained their brain to see what others do not see.
To make money you need to be a professional shopper.
Start learning how to spot characteristics of a good piece of property. Learn

how to analyse a good company’s stock to buy. It takes practice, but at the
end of the day you will be proud and satisfied with your choice. Don’t leave it
to so-called professionals. Some of them are just salesmen out to earn your
commission.
The secret of becoming very rich is found is eight letters - F-I-R-E-S-A-L-E.

Rich people are forever on the lookout for firesales. It is in their blood. They
even do it unconsciously sometimes.
Firesale is not the same as buying cheap. It is buying something valuable at

a cheap price. We need to first identify what is valuable.

Page 179
Even smart people often overlook an important arithmetic; profit is a function

of buying price. Say, you sell a Maybank share at $10.00. If you have
bought it at $8.00 you would have made a profit of 25%. Now, if you have
bought it at $3.00 (as in 1997) you would have made a profit of 233%. When
we put it this way it looks painfully obvious. However, when people go out to
buy a share they do not consider this. In their haste to make profits, they
simply forget and just buy at a high price.
As George Carlin says, "Today we have more degrees but less sense."
George Carlin (1937-2008) was an American stand-up comedian, actor and
author who won four Grammy Awards for his comedy albums. If you are
interested, you may hear more of what he has to say about people of our
times at andrewchia.com/archives/georgecarlin.html.
You must always remember this word, firesale. To help you etch it firmly in
your mind, I will share with you a graphic and grotesque remark from the
world's greatest investor, "Bad times in a stock market are fantastic for an
investor. It is like an over-sexed man visiting a whore house." When times
are bad you can find firesales everywhere. That is why you should not be
afraid of bad times. In fact you should look forward to it. That is how you
can become richer. Do not be surprised if you find yourself uttering "firesale"
in your sleep one day.
When you buy valuable investments for a song you will be reaping rewards
for a long time to come. Now, how do we identify valuable investments and
how do we know at what price we should be buying? Do not start investing if
you have not figured out the answers to these two questions. Let us just
discuss the two main investments; property and shares.
For properties, just remember the two formulas that I learned from my
property mentor mentioned in Chapter 11. That will help you put a price tag
on the property that you have identified as valuable. To train your eyes in
looking for valuable properties you need to read as much as possible and do
site visits. A hundred properties, remember? In properties, firesale is usually
pronounced as "motivated seller".
For shares, the formula taught by my shares mentor has proved invaluable. I
would not have survived without it. You may find it in a brilliant book written
by him titled How To Make Money From Your Stock Investment Even In The
Falling Market.

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Just as he has always advised me against using formulas blindly, I would

advise you to study companies and businesses carefully before making your
share investment decisions. A classic that can help you do that is The
Intelligent Investor. It is a 623-page, easy-to-read book. Now I know you will
not believe me. (No way, Andrew. Six hundred over pages, you must be
kidding me.) That is why I have put up a sneak preview of the book for you
at andrewchia.com/freedownload/TIIsummary.pdf. I summarised some of
the important points found in the book. I hope you will find it interesting and
helpful.
Dear reader, I wish I can make life easier for you but that is the best I can do.
Spoon-feeding is prohibited. You really ought to work hard for success. But
be assured that once you have done your homework you can catch up with
your friends everyday at the yamcha or teh tarik shops. Or, you can relax by
the beach if you want. Yes, and do call me when you are on the way to the
pub, will you? I'll give you my number. Or, you can go to the movies every
Wednesday like I do. (Do you know that Wednesdays' tickets are almost half
the normal price at every cinema?) You would have mastered the basic tools
of investment and you deserve a break.
For all your hard work you may even give yourself a pat on the back knowing
that you are now better off than some investment bankers, hedge fund
operators, economists and even law makers who run a country. Why do I
say that? Take a look at the financial mess these people have created all
over the world, particularly in the US and Europe where even some Nobel
laureates for economics reside. In Hong Kong and Singapore alone
thousands of people have lost their entire life's savings investing in shares of
these banks that have collapsed. They were told by men in suits and ties
that their investments were "very safe" and profitable.
The subprime mess alone is a $1 trillion beast. (To be more accurate, it is

$900 billion.) It has already wreaked havoc around the globe. People are
holding the breaths to see how we can defeat it. Little do they realise that
they are other monsters on the way to Planet Earth. ETA - estimated time of
arrival - could be any time within these few years. The Credit Card Monster
is another $900 billion. The Medicare Monster is $34 trillion! Come on now,
where is the fire extinguisher? Call the Bomba, quick!

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People who run giant corporations and even countries have focused most of
their energies in accumulating expenses and liabilities (borrowing) for
everyone. What happened to assets? Could it be that despite all their
learning they have got it wrong? True assets are not physical items. Neither
are they just numbers on a balance sheet. (The fact that they can just
disintegrate overnight proves it.) They are seen in the mind's eye. They are
seen by one trained in the subject of financial intelligence. When you can
identify valuable properties or shares and put a value to it, my friend, you
would be truly financially educated.
You must not only work hard but you have got to work fast, too. You need to
get ready and prepared. That is because we do not know when we would be
having a firesale. The date and timing is beyond our control. Imagine there
is a firesale tomorrow and you have not identified your investment nor
calculated your buying price. You would be missing great opportunities.
However, when you are prepared you may need to wait for a terribly long
time. (Some say that is Murphy's Law.) The greatest stock investor I know
did not buy a single share for a period of fifteen years. That is simply
because he did not find anything closely resembling a firesale in a prolonged
bull market.
Perhaps for this reason, a lot of people chose to become traders. They do
not want to be investors; they buy and sell quickly to make a profit. Hedge
funds, for example, are out to make a killing. In fact, most people who invest
in stocks are out to make a killing. Of late you find a lot of them getting killed,
isn't it? My favourite martial artists in kungfu movies say, "They that live by
the sword shall die by the sword".
Then you have Bloomberg, CNBC and rating agencies who practise mass
hynopsis. They give advice on what shares to buy without telling you at what
price you should buy. Greedy and lazy people lap up the news and make a
beeline to their brokers to place their orders with the hope of getting quick
profits. They often buy at prices that are unrealistically high.
Patience is a virtue. It beats me to hear, “The project sounds great but it will
take me three years to be rich. That is not acceptable; it is too long.” And
the guy who is saying it is usually one who has been trying numerous get-
rich-quick ways in vain for thirty years. Ever since the invention of Maggi
mee, any proposal to educate ourselves or to acquire a new skill in more
than three months is considered too long.

Page 182
Humans are very imaginative. It is this imagination that takes us to the

moon. But it is when we start believing in a Super Pill that I feel we’ve really
stretched it. Take the US economy for instance. A lot of people think that
whatever problems the US has will be over almost immediately. For decades
it has indulged itself in all sorts of vices. It has got balance of payment or
current account deficit problems, low savings/high spending rate, subprime
and credit card problems, Medicare and numerous other ailments. It is like a
man who is a glutton; now he is obese, he has got hypertension, diabetes,
cholesterol, and you name it. And we seriously believe that if he takes a
Super Pill he will wake up tomorrow with a clean bill of health. All this is the
fallout from the Maggi mee revolution.
We have become a very indulgent race. Working hard and delayed

gratification (meaning we can't wait to enjoy) is certainly not for us.
I am sure each day in your travels you would pass by some infrastructure
construction. Stop for a moment and ponder on this. It takes a long time to
lay the foundation of say, a bridge. For months or years on end, nothing
seems to be happening. But you can be sure either someone is working on
the foundation or it is waiting to cure or dry. Then one day you suddenly see
workers actually putting up the bridge. In almost no time, Voila! - the bridge
is up and motorists are happily moving along, saving a lot of time with the
new infra.
It is the same thing when we build money bridges to take us from poverty to
the other side. Your friends may not realise it but you have tuned your
investment antennae and are now able to see with your mind’s eye what
others cannot see. You now have a keen understanding of what an asset is
all about.

Page 183
You may take time to sift through all your investment opportunities. (You
can bet there are so many that you are spoilt for choice. Just ignore those
who tell you that once you miss an investment opportunity you will never get
it back.) You may then need to wait for the right timing; either for a seller to
get “motivated”, or for the market to plunge before moving in to take a
position. Or for a businessman to get so desperate that he sells you his
perceived non-viable business at a deep discount.
Once you have secured your investment, it is your friends’ turns to be

surprised at your newly acquired asset which is generating residual income.
They will not be able to figure out how you did it. Simple, you’re plain lucky.
That is what they think. And you bet it will take some explaining, if you
bother. But by then you will be busy tuning in to your next investment which
is calculated to generate another stream of income. If you follow the rules
taught by your property, shares, internet marketing or other gurus, your
streams of income will flow for a very long time. Even if one stream of
income stops you will have others.
You will truly be a free man, financially.
"What do you do when you don't have any money?" The answer is the same
"Go shopping for assets." When you discover assets you may be amazed to
find money appearing magically in your hands. Asking questions and
analysing deals is how we get our financial education. Analyze investments,
hundreds of them, and your vision will slowly improve. Great investments
are seen in the mind's eye, it takes dedication and practice. As they say, if
you can't see it in your mind, you won't feel it in your hands.
Financial literacy means knowing what to look for - the things average
investors miss.

Page 184
30th Secret. You can learn to be a super investor by shopping for

assets everyday.
There are a lot of opportunities in the stock market due to the manic
depressive nature of human beings. They wake up on the wrong side of bed
one morning and decide that the share must go down today. That is where
your patience pays off and you move in to buy an income-generating asset at
a low price.

Page 185
Chapter 31
HIGHEST PURPOSE IN LIFE

There is no higher purpose in life than to love our fellow men and creatures.
- Andrew Chia
Giving it back. That is what we should do. I believe no book on financial

education would be complete without telling the reader that he should
contribute to society and nature after he has achieved financial success.
A lot of people are "lost in existence", not knowing why they are on this
planet. We should always remind ourselves that we become happier by
making someone else happy.
Billionaire John Rockefeller taught his five kids the importance of charity.
"Give away the first 10% you earn," he says.
Some rich people indulge only in themselves after they have achieved
financial success. To them life is just "wine, women and song" and nothing
else. But happiness is found not only in pleasing ourselves but others as
well.

Page 186
My favourite charity - Sunbeams Home, an under-privileged children's home started by my

former teacher, Mr Tan Ooi Seng. It grew from two kids to more than a hundred currently.
You can find them at charitymalaysia.com - a charity website I co-founded.
It is sad to note that a lot of rich people do not impart their valuable
knowledge and experience in financial intelligence to others. For some
unknown reason they do not feel it is their responsibility.
Be compassionate once you have enjoyed financial success. Do not forget

those who are less fortunate, especially those who are less talented than
you. Unlike you, they have not yet learned how to convert their ideas into
cash. They may still be trapped in the thinking that you have to work to earn
every single cent. Allocate your time and be patient to guide them along.
We are grateful to people like Datuk Tan Chin Nam, who in his twilight years
wrote books like Never Say I Assume! In it, he unselfishly shares his
precious experience in our money world. He has taken real pains to
organize his material in a manner which I feel is the most systematic way to
teach a newbie about the world of business, although he declares, “No book
can make you a success in business.” I would have no choice but to assume
he is doing it out of love.
Select your favourite charity, be it the Kidney Foundation or Cure for Cancer,
or Children's or Old Folks Home. Then dedicate not just your money but
your time as well towards it. You will find your life so much richer by doing
so.

Page 187
31st Secret. When you contribute to society and nature you will find
your purpose in life.
Every human being that comes into this world is special. You were born to
succeed in our money world.

Page 188
To your financial success,
Sincerely,
Andrew Chia
andrewchia.com


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Page 1

The Final Winner

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Praise for The Final Winner

"Reading The Final Winner is a transforming experience. It is compact. It is informative. It

"Read this book first before you do any business or investing."

"This is one of the books that made an impact on my life."

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"The Final Winner may become a classic in time to come."

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The Final Winner

MY LITTLE JOURNEY IN OUR MONEY WORLD

Welcome to the world of money. You are about to embark on a journey to

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Each time we added a zero to our sales we had a little celebration. We

We never expected any of these events to happen. In our hurry to expand,

We finally learned how not to run a business.

The Final Winner Version 1.4

My strategy was very simple. I divided my money equally between property

Well, so much for property investment. My share investment strategy was

The Final Winner Version 1.4

Then, I did a post-mortem. I tried to identify what had gone with my

I was determined to learn everything about investment to make myself a

My investments are generating very encouraging returns in the region of 20%

The Final Winner Version 1.4

However, our emotions do play a critical role in ensuring the success or

The Final Winner Version 1.4

Studies by psychologists have shown that emotions are about 24 times

The Final Winner Version 1.4

Who is going to be the Final Winner in the game of money? Is it the

The Final Winner Version 1.4

The Final Winner Version 1.4

Numerous people have chipped in to help make this book a reality.

I would like to thank all my mentors who have helped in my financial

I am thankful to my students and clients who have trusted me in managing

I am grateful to Adrian, Kenny and my classmate KC Yip for their invaluable

Special thanks to many of my other mentors who have helped shape my

The Final Winner Version 1.4

ABOUT THE AUTHOR

Money, money, money

- ABBA, Swedish pop music supergroup

Before we get down to seriously learning about money we need to

Have you heard of the term “soul-searching”? It is usually used by

The Final Winner Version 1.4

Randy Pausch died on 26th July 2008 at the age of 47.

Similarly, it would be sometimes difficult for people to understand passion in

That is why most motivation seminars do little to help you succeed. It is

The Final Winner Version 1.4

I remember a popular Chinese novel from my childhood days. It was

Another character was overcome by the fear of being conquered by his

The Final Winner Version 1.4

I hate being poor. I hate being ashamed of being poor. I am ashamed of

The Final Winner Version 1.4

I hate not being able to buy what I want. I am not

The Final Winner Version 1.4