Have you ever burnt RM100 before? (Part 3 of 3)

Continued from Part 2...

People were quiet in the lines. I bet they were confused and struggling on what is going to happen soon: Watching own hard-earned money to catch fire and burn to ash!

Looking at the doubtful crowd, I knew I've made a decision: No matter what happens, I WILL NOT BURN MY MONEY! I have full control and am held accountable for my own money, and thus my finance, and hence my own life for that matter of fact. Nobody is going to change, or can change, that. I know what I want, and I know what I am responsible for. I will not simply follow what other people will do without questioning the logic, feasibility and suitability for my own good. What good will it do to me if I burn my money? I am a hero? What benefits or values will I get in return? Does it help me to increase my wealth or other thing? NO! I'm just mere stupid and dumb if I do that...

Someone in the line was ready to burn his RM100 note. Everybody was holding on their breath...

"OK. Stop! Now everyone go back to your seat and sit down. This is just a hoax!"

Wow… the crowd cheered with mixed feelings. After everybody had been seated, the speaker asked if anybody would like to share how they felt before and after this exercise. Many people put up their hands, but due to time constrains, a few were being picked. Some people said they were confused. Some said they changed the RM100 note to smaller value when asked to burn the money. And some were excited about it.

"You will never ever burn your money," said the speaker. "Here are a few lessons we learnt in this exercise," he continued.

"First is about honoring. Money is just like a person. You respect money, just like you respect other people. You don't put anybody into fire and burn it. You don't burn your money either."

"Second is about the burning. This is a metaphor. If you would burn the money just now, you will be burning your money easily in your daily life too. That is, you spend money with no control. Rich people use money to invest and for their education, not burning."

"Next is about responsibility. You're responsible for your chosen choice. Don't blame other people for what you're today, if you are not wealthy yet. You should be responsible for your own financial account. If you wanted to burn your money just now and you always wonder why you are not rich yet, now you know why."

"The fourth lesson is about proving. Why did you choose to burn your money just now? Were you trying to prove to other people for something? Were you trying to show off? Because other people were going to burn their money so you wanted to prove that you could afford that too? They will be broke, and you want to be like them too?"

"Last but not least is about your integrity. Some people changed the note halfway. We are not burning our money in this exercise. But if you changed your note halfway, you broke your promise to yourself. You will be chickened out whenever something happens."

What have you learnt?

Have you ever burnt RM100 before? (Part 2 of 3)

Continued from Part 1...

"Guys, you rule money and money doesn't rule you? Talk is cheap! Show me you really mean it. You are going to burn your RM100 cash, one by one. Tonight! Here! Now!"

Wah... The crowd started to make some disbelieved noises.

"You're going to line up one by one, holding your money in your hand. When it's your turn, burn it!"

Wow... The crowd again expressed their mixed feelings. Burning real cash! Is that real? When we were still sitting there talking about what is going on, further instructions continued.

"Hold your money at one end while burning another end. Drop the side of the note that is going to catch fire lower than the side that you're holding. This way, the money can burn faster."

"When the fire has burnt about 50% of the note, drop the remaining part into the pail of water. Move away and allow the next person to burn his or her money."

"Because of some oil stains, older bank notes release black smoke when catching fire. Don't be alarmed. Continue to burn your money until at least 50% is burnt. Drop the remaining to the pail of water then."

"As you can see, our staffs have fire extinguishers ready by the sides. In case anything happens, they can help."

Oh! I'm going to burn my RM100 cash! Honestly speaking, I've never ever thought of burning my money before. Call me cheap. Although RM100 is not a huge amount nowadays, it's still money. I admit that from time to time I do spend money on unnecessary and useless stuff. But burning money? Am I out of my mind or what? Don't talk about RM100, even if just for RM1, if you ask me to burn it with fire directly, I doubt if I would do so. That's just mere crazy. I suddenly realized that sometimes the ways how I spent my money, it was actually no difference from burning money with fire directly. How many times have I actually spent on unimportant stuff? Those money, if not spent unnecessarily but use productively, such as invest into unit trust to grow more money, would have been more worthwhile. At least at the end, my money is working for me, and I'm that much richer than before. But if I've spent the money stupidly, I would have nothing at the end.

"OK guys. On your feet now. Line up and walk towards the fire. Let's burn some money!"

Are you also standing up now? Are you ready to burn your RM100? Are you set to go?

I stood up. The line was starting to move. Everybody was waiting for their turn to burn their hard-earned money...

Continue to Part 3...

Have you ever burnt RM100 before? (Part 1 of 3)

I attended a 3-day seminar called The Millionaire Mind Intensive over the weekend, co-conducted by speaker and trainer, also the author of Secrets of the Millionaire Mind, Mr. T. Harv Eker. The crowd size was enormous: a whooping 4,800 participants, with people coming from Malaysia, Singapore, Indonesia, Thailand, Vietnam, The Philippines, China, Hong Kong, Taiwan, Japan, Bangladesh, Australia, France, United Kingdom, and many other countries. It was a real nationality fest!

This 3-day seminar was, as its name suggested, intense! It started on Friday's morning at 9 AM and finished after 11 PM. Then on Saturday, it started at 9 AM again and ended after 10 PM. It ended slightly earlier because the next day, Sunday, we continued at 8 AM! (The seminar concluded at about 8 PM on Sunday's night.) Although I didn't get enough sleep for two consecutive nights, with less than 6 hours of rest per night, my mind was still able to stay awaken and clear during the day time. See, human mind can really do wonders when we want it to do so. Another thing I found out was that my body got dehydrated awfully fast at sleep for those two nights. On usual nights, I normally loss about 7.5% of water at sleep, even with urination in the middle of the night. For those two nights when I had lesser sleeping hours, I lost as much as 9.43% of water at sleep, and I didn't even wake up in the middle of the night to urinate. Scary!

OK, let's get back to the question: Have you ever burnt RM100, your own cash, your own money, right in front of your naked eyes, in your life before?

One of the topics that we talked about during the seminar was to realize our attachment to money. Is money important to you? What is the relationship between you and your money? You work for money, or money works for you? You are the master to money, or the slave to money?

(You can ask yourself about these questions too and see what are your answers before continuing reading.)

Because we were there to learn more about money, 4,800 of us agreed on the statement that "I rule money, money doesn't rule me." (I guess nobody would want to say or admit that they are slave to money and money is controlling or ruling them, right? What about you? Do you agree on this statement?)

Then, we were asked to bring out our RM100 bank note on the spot. (We were told to bring a RM100 bank note to the seminar beforehand.) We didn't know what happened at first, so we just reached out to our wallets for the bank note. Some people didn't have one RM100 bank note (hardly see people using RM100 bank notes nowadays), so they took out two pieces of RM50 bank notes instead. When we were doing so, we saw the staffs of the seminar showing up around us, some holding lit candles, some holding pails of water, and some with fire extinguisher in their hands!

Huh, what is going on? We looked at each other and asked. Are we going to burn our money?

Continue to Part 2...

Who wants to be a Millionaire?

Theoretically, anyone of us will become a millionaire eventually. Even if we are just making RM1,000 a month without any increment, we will become a millionaire in approximately 83.33 years. Isn’t this great, Mr. or Miss Millionaire?

But we all know that this is not true in real life. Firstly, we don’t get to keep the full amount of what we earn. We have to pay for taxes and daily expenses. Secondly, sometimes we simply overspend. We earn RM1,000 but spend RM1,200. Thirdly, and most importantly, time is the crucial factor. Even if we got to keep the full amount of our earning, we don’t want to spend, or we don’t have, that much of time, to accumulate the asset.

So, we need about 83.33 years to accumulate RM1 million, if we can save RM1,000 per month consistently, right? Well, unless we’re keeping the money under our pillow, it actually takes lesser time to achieve our RM1 million goal.

Welcome to the world of Compounding Interest. In short, Compound Interest is the concept of adding accumulated interest back to the principal, so that interest is earned on interest from that moment on.

Let take a look at an example. Assuming we have RM100,000 of savings now. How fast can this RM100,000 turn into RM1 million is dependent on the financial vehicle that we choose. Every financial vehicle attracts different compound interest rate. The higher the compound interest rate, the shorter the time for the money to grow.

Annual Compound Interests vs. Number of Years

So, if we park and leave our money in a financial vehicle that offers 3.70% of compound interest annually (such as in the fixed deposit), our RM100,000 will grow to become RM1 million in about 65 years. If we park and leave our money in a financial vehicle that offers 5.80% of compound interest yearly (such as the dividend rate declared by EPF in year 2007), our RM100,000 will become RM1 million in about 40+ years.

Now, are we satisfied? Are we happy with that kind of return? Do we know how much compound interest are we getting now? Shall we have an option, will we want to get our RM1 million, or multi-million, or multi-billion, as soon as possible, or just let time do its work?

Question: Do you know where and how to get the financial vehicle that offers higher compound interest? If you don't know yet, stay tuned, as I'll show you the ways to enjoy optimized returns.

In a nutshell:

1. So long as we don’t mind to wait (factor out time issue), we’ll get what we want eventually.
2. How much we earn is not important. It’s how much we save that makes all the difference.
3. We must take actions if we want to make our money to work harder for us, rather than we work harder for the money.