something useful for all of us!

Tip #1: Be a Financial Genius
You don’t have to be a genius to be wealthy. Although high IQ definitely helps, it is more
important to have emotional intelligence in order to get rich.
I like to tell the story of the twin brothers, James and Jeremy. They graduated with the
same degree in engineering. They work for the same company. They earn the same
amount of money throughout their working life. But they have different mentality about
money.
James started saving RM1000 at age 18. The brothers’ income is measly RM10,000 a
year at that time. James decided to save 10% of his income. But Jeremy didn’t. Jeremy
thought that RM1000 saving a year is really hard for him.
10 years had passed by. James had never failed to set aside RM1000 every year for the
past 10 years. He invested the money and got an average return of 10% per annum. Both
the twin brothers were earning RM50,000 a year at age 28.
James thought he had saved enough. He stopped saving since age 28. But he still invests
what he had put aside before that. Ironically, at the moment he stopped saving, his
brother Jeremy started the commitment to save RM1000 a year. Jeremy was so
determined that he never stopped saving a thousand ringgit every year until he reaches
age 65.
The brothers invest in the same portfolio and reap a return of average 10% per annum.
Who do you think has more money at age 65? James only saved RM10,000 from age 18-
27. Jeremy saved RM38,000 from age 28-65. Without doing the compounded calculation
using Microsoft Excel, most people would have guessed that Jeremy would be richer.
But the fact is that at age 65, James has RM645,617 but Jeremy only has RM403,536.
James is richer than Jeremy by RM242,081! Both the brothers were doing quite well. The
moral of the story is about deferring your spending. The earlier you can do it, the better it
is. The earlier you can save, the less you need to sacrifice at later age.
When you receive your paycheck, there are only two major choices of what you can do
with the money. You either spend it now, or save it for future consumption. The question
is how long can you delay gratification? James only defers his spending for 10 years. But
Jeremy defers for 38 years and still failed to catch up with his brother.
Sometimes rational can’t lead you to save. It always involves emotional struggles. Do
you want that LCD TV now? Can you wait another three years to change your old car?
Would you buy that hi-tech hand phone now, or wait another year for an even more
advanced model, and perhaps cheaper? Only high EQ (emotional quotient) can ensure
your wealthy future.