Attitude Vs Investment

Success in investment are partly or I would say that contributed by our attitudes. As time flies, we’ll see more money in investment, if can’t control our attitude might end-up with disaster. That is the reason I always emphasize that better to be not rich instead of being poor. If you notice, in anything if you have problem with your attitude then you’ll face the disaster. This is regardless of the tools or mechanism that you could have is the best available but due to attitude can be totally disaster to you. In this case, don’t limit to finance subject matter only, for example on driving attitude; even you’re driving the best car in town but if your attitude is not tally with your class of your car then all the safety features promoted by the car manufacturers are waste.

This attitude is the one will guide parallel with the financial planning we have developed or being developed. Hence, most of the time we need somebody professional to guide us with discipline so that the goal can be achieved. This is because when we have the professionals with us then we have to follow their plan for us to see the results as we’re paying to them for professional fees which could be very costly but very effectively. From there we can develop our attitude to be more constructive manner to achieve our financial freedom. What I’m writing here is based on my personal experience where before I’ve got my personal financial planner my saving will not be long-lasting because normally at the third month I’ll use my savings to pay-off all my bad debts. By having professionals with us, we indirectly able to educate ourselves to allocate our savings totally for savings so that it will be our platform to start our investment. Now it’s very difficult for me to withdraw the savings for any unnecessary expenses which are mainly bad debts.

So, what I would say about how attitude is affecting our investment portfolio is mainly on managing our cash-flow and the first cash-flow we have to prove that we are good in our attitude against investment by maintaining our savings progressively. From there we have capability to develop our positive cash flow in our investment portfolio.

Loans

Do we need loans in our life? Is it important in our life? Some says, it's not recommended to have loan or many loans. I believe most of us have heard or seen about good debts and bad debts right? So, how to know whether the loan we are acquiring is good or bad? Simple concept on this good and bad debts is on the impacts from these two (2) debts/loans; good debts/loans is something can make us richer and richer, whereby bad debts is something can make us poorer and poorer.

As discussed earlier, there are so many products in banking world and to be more specific; they are so many loan types based on needs and requirement. Sometime due to our knowledge level, we may acquire bad debts. This may happen accidentally or unfortunately. Another rule of thumbs is that it is very to get good debts and it is very easy to get bad debts. Sounds good so far? Let us discuss further in upcoming articles.

Levels of Financial Freedom – Part 1

How can we gauge our financial freedom level in life? Are we healthy enough financially? How to optimize it? What are the supplements can be taken to improve our healthiness? All these are important because we can only improve if we are able to detect our own loopholes. It’s not sufficient only by knowing the loopholes but must know how to rectify it so that our goal for financial freedom can materialized as we planned.

I personally segregate level of financial freedom into six (6) different levels by referring to our active income, passive income, expenses, and savings. How all these four (4) items are very important? These are the tools can gauge our attitude and reflect it into our financially healthiness which can be rectified if we have certain “diseases” which may be harming our goal to achieve our financial freedom.

The worst level ever in financial freedom is where our expenses is more than our active income. What? Where is our passive income? My friend, if there deficit in our balance sheet, it shows that there is no other income except our active income. In this situation, the most probable causes are due to bad debts and money spent to unnecessary items, i.e. updating gadgets based on latest available models which ultimately reflect our bad habit in finance subject matter. So, how to rectify it to be at the best level or at least one level higher than this worst level? You may go on How To Start Saving - Part 1 and How To Start Saving - Part 2 as a starter to rectify your "illness" and comment if have some specific area to be discussed.

We will discuss more on the remaining five (5) levels in the next coming article Levels of Financial Freedom – Part 2. List down all our passive income, active income, and expenses so that we can gauge our level if we are lucky enough not to be in this level. Again! Remember that money could be the Cash King but knowledge is the QUEEN to manage our wealth wisely.

Credit Cards - Part 1

How many of us experienced where we got credit card application been approved and activated even without our notice? How many of us got credit cards application approved even we purposely forgot to sign the application form? How many of us not sure why we apply credit cards? How many of us really sure about the benefits of having credit cards? Who are normally easy to get credit card application get approved?

I believe everybody have experience applying credit card(s) because this is very common for those fresh graduates with new payslip and no commitment in the list yet. Why this is very common? You may give small laugh to yourself. Hehe! This is mainly because of the approval will be very easy and fast. Furthermore, normally all these fresh graduates are baited during some promotion in shopping mall or during exhibition. Why this group are normally baited? Be frank, we'll feel extra luxurious by having credit cards and this feeling was my personal experience when started my career life. Luckily, I have experienced indirectly of using credit cards from my late father where he pays before due date. Similarly, I have experience indirectly from my friends on the bad side where they pay only the minimum amount.

Let us discuss first on the benefits that is very clearly can be seen by using credit cards. What you can get by using credit cards? Obviously we'll collect points to redeem gifts in future. Gotcha! Other than that? By using credit cards, all our expenses will be recorded in details about the dates and merchandises that we spent. All these records are printed for you free of charge. Not even a single cent is charged to you. By having this statement for your credit cards usage, we can monitor our expenses on monthly basis to improve our budget in order to achieve or at least to come closer of financial freedom. There are lot more that we can discuss on the benefits by using credit cards but I will write separate article on it very soon.

Benefits are being discussed so far and lot more to cover in future but what are the bad things of having credit cards? As briefly described on bad thing due to bad habit mainly on paying minimum amount which end-up with compounding interest with the maximum rate will be imposed on us. This scenario could happen due to lack of understanding on credit cards usage or purposely without knowing the bad impacts of pretending to be very luxurious. In very recent years, there are very huge numbers of fresh graduates are declared bankrupt due to compounded interest of huge amount spent that cannot be settled by all these youngsters. The other case, happened to one of my close friend where he bought a laptop for his sibling and paying only minimum amount by assuming that minimum payment is reflecting easy-payment with no end point.

Using credit cards exactly like using knives where different knives having different applications; to cut meat, fruits, etc. If we use different type of knife for different application, the result will be very poor. If we wrongly use the knives to scratch our back due to itchiness then big disaster is waiting for us. Hence, choice is in our hand and choose wisely before act. How to do so? Invest on knowledge first before take action.