Mankind learn best from inspirations or at least I and most people I know do. Between the carrot and the stick, I will always choose the carrot. However once in a while, we have to learn from our frustrations in life as well. Not that we should let it affect us, but we definitely should pick out the lessons in these circumstances. Afterall, we should always look at a situation and always make it a point to see a glass as half full rather than half empty. Sometimes, the only way to see a glass as half full, is to pick out a good lesson from it and go home knowing we learned something new.

Every heard the phrase, “Singapore is a Fine City!” You get fined for every little rule you break and many a times, I’ve found these to rules to be necessary to keep the city running like a well-oiled machine. Having traveled a round a bit, I don’t necessary agree with the statement above. For example, I know that in some countries in Europe, the fine for speeding can be quite a bit more hefty than what we are used to paying in Singapore.

Everynow and then though, you do come across rules which drives you up the wall. Sometimes you wonder if the person who puts up these rules, think about what they are putting up or are they just enjoying themselves, exerting their authority on us lesser individuals who have to abide by whatever rules they put up.

I’ve decided to take pictures of some of these “ridiculous” rules just for the fun of it. Some may not see my point of view and may find these rules necessary but what the heck, I’m going to have some fun posting them up anyway.

Here’s one I found at my windsurfing club that says “Toilet strictly for members only”. This may look like a very innocent sign considering that it is a club where people pay a small membership fee to use the facilities. However, this “club” is opened to the public who comes in to attend sailing and windsurfing classes and dine at the restaurant which serves some pretty fine food. There is a public toilet down the road about 150m away and this club has to cheek to place another sign that says, “Public Toilets are located within walking distance along the park”! Imagine if you were a diner and decided you needed to use the washroom… would you walk 150m to use the wash room only to find out when you are back, that either your food (which you paid good money for) has gone cold or the waiter has cleared it thinking that you had left (without paying your bill!)?

I asked one of the staff and they said that diners, guests and students are most welcomed to use the toilets. Then why even put up the sign in the first place? What if a member of the public walked in and wanted to use the toilet urgently… will they be turned away? I bet not… and if so, why even bother with the sign? Never set rules that needs to be broken all the time!

Here is one I saw while cycling along the East Coast Park connector. There are tunnels and bridges linking the East Coast Park connector to the other side of the highway(East Coast Parkway) so that cyclist cycling to enjoy a ride by the beach can come across easily… nice touch!

But the sign? You have to push your bicycle across or you will be fined $1,000. One thousand dollars for riding your bicycle? OK I recognised the safety aspect of cycling through the tunnel or bridges, especially when you cycle at high speed, but a $1,000 fine?

I see a few problems here. Firstly, cycling at a leisurely pace across the bridges and tunnels is not dangerous… I know and I do it all the time. Secondly, you cannot cycle fast, even if you wanted to due to the narrow path and sharp bends. Thirdly, I think the authorities should know that Singaporeans have a brain too and we are responsible people who will not be reckless when there are pedestrians walking along the bridges and tunnels. Forthly, if the authority has ever walked around with a clip-on cycling shoe, they will know that it is even more dangerous for the cyclist to walk down that slope in those slippery cycling shoes! Lastly, the $1,000 fine is absolutely ridiculous. We get fined $120 to $300 for speeding in a car when it is much more dangerous… and lives can be lost, vehicles damaged and/or people can get critically injured. But to fine a cyclist $1,000 for riding his bike on a bridge or through a tunnel… especially when he or she does it in a responsible way is just taking it a little too far?

Looking at some of these signs, I can understand where the phrase, “Singapore is a Fine City” comes from! I see it a little differently… Singaporeans love to exercise their authority on others and in general, they like the public to follow the rules. Hey, but the government is going all out to encourage responsible living, freedom of speech, personal freedom and creative thinking, especially among the younger generations and such rules are just going to create a society of non-thinkers and rule followers.

I really think the authorities should re-look at some of these ridiculous signs! Are we setting ourselves up for a society of irresponsible, non-thinking, low creativity citizens? Were these part of the reasons why the Singapore Changi Airport has been booted out of top spot and had to settle for number 3 position?

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Financially smart people knows that not all debts are bad. Sure Credit card debts are bad but there’s such a thing as good debt as well. Broadly defined, Good Debts are debts that allow you to make more money than the interest you have to pay on your debt. Bad Debts are debts that get you deeper into the red and you should clear these debts as early as possible.

Credit Card Debts are probably the baddest of bad debts you can get yourself into. They not only do not contribute in anyway to your wealth, they suck up your wealth really really fast… up to 24% per annum.

On the other hand, a mortgage can be a good debt if you implement it properly. Let’s look at an example here, especially in these days when interests rates are at an all time low.

Let’s say you happen to have $500k in free cash and  intend to buy a $500k house for investment. Assume that you can fetch a monthly rental of $3k per month. If you buy the house fully in cash, which many people think is the wise thing to do, you will actually get a yield of about 7.2% ($3k x 12 divided by $500k). While 7.2% is certainly good, and better than many other investments, let’s look at another way of financing your property so that you can actually leverage on your debt and get a better yield!

So, you can decide that you do not want to pay for the property in full. Let’s say you choose to pay just 20% of the price of $500k which works out to $100k and you take a loan of $400k for 30 years at 3.5% interest. You will then need to fork out $1,796 every month to service the loan. This property, just like the earlier example, can fetch a rental of $3k per month, which means that after paying up your mortgage, you still end up with a positive cash flow of $1,204 every month.

When you look at the dollar value you receive every month (ie $1,204) in the latter scenario, it looks alot less than the $3,000 you will get if you pay for your property in full. Sure, true enough, but let’s not forget that your outlay in this case is only $100k instead of the full $500k, which means that you still have $400k in hand for other investments.

If you calculate the yield based on the second scenario, you will get a yield of 14.45% which is just a littel more than twice the yield of the first scenario. Of course, we have simplified the above scenario by not taking into account incidental cost like stamp duties, lawyer fees, maintenance cost, renovation cost etc… just to make the calculation simple. However, if you are really serious about yield, you can actually perform a “what if” analysis to see which level of mortgage debt will set you up for the highest yield!

So, you can see that by taking on some debt, you have doubled your yield. And by using this to leverage your financial situation, you can actually buy 5 units of $500k property with total  intake every month of $6,020 (ie 5 x $1,204) at a yield of 14.45%. Your positive cash flow is double the $3,000 you can get with one single fully paid property!

And that’s not all. Property almost always appreciate with time, especially in a small island like Singapore or any big city for that matter. If it does appreciate, you will be sitting on capital gains of 5 times more than in the first scenario. And even if property does not appreciate, in 30 years time, you will be the proud owner of five properties instead of just one.

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In the first article, we looked at the first 3 myths of MLM. As we continue with the second part of this article, let’s look at a few more “promises” of many MLM’s and see if there are any truths in them.

4. To be successful fast, you need to start big!

This is a big claim, especially by so called “Ponzi” schemes masquerading as MLM’s. Companies that cajole you into signing up multiple positions so that you can “benefit” from being early in the “pyramid” are doing exactly just that; selling you positions, instead of focusing on products. And MLM’s that are not focusing on products are not legal MLM schemes (at least by Singapore standards).

MLM’s are supposedly home businesses, and the basics of good home businesses are no different from the basics of a good Brick-&-Mortar business. You start with one store and when it is successful and running, you start a second one. While many brick-&-mortar businesses may have a plan to have multiple stores in the longer term, they almost always start with one and continue to build on the success of it by building more at a later stage. Even fast food giant like McDonald’s started with one solitary outlet before branching out further.

Not every business suits every person, and the only way to know if MLM is for you is to take that first step and try it out. The dropout rate for MLM’s are very high and unless, you are very sure that’s something that suits your style and skill sets of doing business, it is best to start with one position and build upon it. And let’s face it, if the business really suits your style, you’d be successful, even with just one position! On the other hand, if you cannot be successful with one position, you will never be successful with multiple positions!

5. Sit back and let us build your downline for you. Just bring your friends to the meeting.

While this may be true initially, like all businesses, you can be successful only if you are actively involved in it. MLM’s is a game of teamwork, and this game of teamwork is often what makes it a fun business to do, especially with a team of like minded individuals. However, like all relationships (be it a husband and wife relationship, employer-employee relationship etc…), the relationship can only continue to succeed if both party sees value-add in it. And if the only value you can add is to bring your friends, very soon you will run out of friends, and very soon, that value-add will end and you’ll be dropped off along the way.

If you don’t have the skill sets to sell, recruit, speak and convince, you will not be successful in MLM, even if you have lots of friends.

6. If you can recruit just 10 of your friends, you’ll be successful before you know it!

The theory behind this claim is that 10 friends will introduce the next 10 and the next 10 and so on. As mentioned earlier, the truth is that the dropout rate is MLM is extremely high and success rate is extremely low. What this means is that unless you are very lucky, out of the 10 persons you recruit, most probably 5 will drop out along the way and out of the 5 remaining, only 1 or 2 may be successful. In a business notorious for high drop-out rate, the only way to ensure success is to keep recruiting and to keep selling.

One of the “tricks” MLM recruiters use quite often is to show you their “pay-check” from being in the business. Many times, what you are seeing is the commission they are paid for what they buy and stock, not for what they sell. So be very careful not to fall for this one… make sure that the cheque is payment for what they have sold. Many MLM’ers get their first “big paycheck” from they multiple positions they signed up together with the high level of stocks they purchase to get started in the business. Visit their home and take a look at their level of stocks!

7. We may only have one product, but that’s all you need to get Rich if you do it right!

Be wary of MLM’s with only one product, especially if it is one product and not even one range of products. It is OK to have one range of products eg supplements, but to have one product is another thing altogether. You don’t start a Brick-&-Mortar business with one product and neither should you get into an MLM with one product.

The only Brick-&-Mortar business with one solitary product is almost always a product where the company has invented and protected by patents as a barrier-to-entry. And even a patent is not fool-proof and companies whom were successful on one product before knows that they need to continue to develop new products because patents do expire and new technologies can always come along to supersede your inventions. IT products are notorious for products that leapfrog each other. Witness the demise of once well known IT products and companies like Lycos, Infoseek, Netscape etc… 

So there you have it. The next time you attend an MLM “party”, keep your “antennas” up and don’t just soak up the hype that’s being sold. In a later article, we’ll look at what you should look for in long term MLM success!

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The current crisis has to be one of the worst anyone has ever seen. There’s more companies going bust during this crisis than any others I have seen. And these are not small companies. They are the giants like Bear Stearns, Lehman Brothers, Merril Lynch, GM, Chrysler and if the governement had not stepped in to help, I doubt if Ford, Citigroup, Bank of America etc… could have made it.

How did it get so bad? Well the truth is, it is a pretty complex creation but I recently came across a video that explains it in very plain and simple language. This is an excellent video everyone should view to understand the source of the crisis better… so that we can all learn from it. Here it is! Enjoy!

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Just in case you are not able to see it here, you can go direct to the site here or here.

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In the previous article we looked at how we can identify legitimate MLM companies to join. Here we explore some fo the myths related to MLM’s!

Let’s face it! We all want to get rich fast and we want to get rich without working out butts off! And if you can get the two together, it is even better ie get rich fast without working your butts off! Well, if you are one of those who have been attending MLM (Network Marketing or Direct Selling) talks, you’d probably heard this dream sold one too many times. Do the promises hold true, the promise of financial freedom, the promises of unlimited passive income and the promises of getting rich without working your butts off!

There is really no such thing as a “Get Rich Quick” scheme, not to mention a “Get rich Quick without working your butts off” scheme. There may be some, but in all those that I can think of, you can only get rich quick and fast at the expense of someone else…

In this two part article, let’s look at some of the promises of MLM and see if they are really true!

1. You can make all the money in your free time without quitting your day job!

This is really one of those you hear the most… make money in your free time. Sure you can make money in MLM and I’ve seen some very successful people who have done well in MLM, legal or illegal. But you can be sure of one thing… all of those I know who made it in MLM made it as a full time job! MLM is a full time job! You have to be recruiting, giving talks, training people, selling products (if there is a product!) and if you think you can do all these and still hold on to your day job without either buring out or foresaking your family and friends, you’re kidding yourself!

2. Once you have built up your network, sit back and watch the cash roll in! Make money while you sleep!

The promise of unlimited Passive Income is a big draw to everyone. The closest thing buidling passive income I can think of is either putting money in the bank, which pays peanuts with the very low interest these days, or rental income and dividend payments which can be quite attractive but requires substantial investments.

The successful MLM’ers whom I mentioned above are not sitting back and doing nothing. They are still recruiting everyday, selling every day, training others everyday and being trained everyday. There is no slowing down in MLM because the dropout rate is horrendous. I’ve bought some stuff from these people and you know what… they have to visit you to deliver the goods, even if it is just $30 worth. If this not work, then what is?

Some successful MLM people tell me that it’s not as easy to recruit a successful MLM’er as they make it out to be. Out of the 100 you bring, 80 will walk away without signing up and of the 20 who signs up, 10 will drop out along the way, 7 will be passive, and only 3 will be reasonably successful. While the percentage of success varies from company to company, it remains a tough job regardless.

Many who join an MLM network, especially if they join at the top are spurred on and motivated by inital success of recruitment. Just bear in mind that anything that is new will always attract people but when the novelty wears out, that’s when the grind begins.

Also MLM companies are no dummy. Many do not pay out commissions, no matter how much yoru downline sells if you do not meet your own targeted figures every month! So there is no sitting down and no promise of passive income… it’s alot of work but the truth is, if you are willing to put in the work, you can most probably make a decent living out of it.

3. MLM products are cheaper because they do away with the middle-man!

Ha, this has got to be the biggest lie of all. While it is true that MLM companies do not have the usual middle men that we know of… ie the friendly neighbourhood grocery store, or the distribution network required to bring the product from the factory down to the shop where you buy from, they have added in place hundreds of people they have to pay in the process of getting the product out to you. Just imagine if you buy a tube of toothpaste from Amway! The person you bought from gets paid, his upline gets paid, his upline’s upline gets paid (… not sure to what level), the company that brings the product to your country gets paid and finally the manufacturer gets paid.

Just look at some of these products.

This tube of Glister toothpaste from Amway weights 6.75oz and cost USD4.70 per tube.

The equivalent from Colgate weighs 8.2oz (a full 21.5% more) and cost just USD3.99. And there is a dollar off if you buy 2 tubes which brings the price to USD3.00 per tube. On a per oz level, this works out to USD0.758 per oz for Glister and USD0.366 per oz for Colgate… Colgate cost half less than half the price of Glister!

Ok, sure you can argue about the quality of the product etc… etc… but nobody really knows unless you put it through a lab test!

Let’s take a look at another example! The product to the left is a bottle of Aloe Vera Juice sold at USD16.95 per bottle and 33.8 fl.oz. If you have used any of these before (I have), it is watery and small slices of Aloe Vera in it.

In contrast, I found at an Aloe Vera farm in Singapore which sells vacuum packs of freshly harvested Aloe Vera with a tint of honey to give it taste (as Aloe Vera is almost tasteless).

This pack of solid Organically grown Aloe Vera from Kin Yan Agrotech (see picture on the right) cost just USD6.50 per pack and I would easy estimate it to contain 2 to 3 times as much Aloe Vera as compared to the Forever Living pack. Again you can argue about quality of Aloe Vera, Research & Development etc… etc… but the fact is, Aloe Vera is Aloe Vera and the fresher it is, the better it is. And there is no better and fresher Aloe Vera than those organically grown at your doorstep.

So there you have it… 3 truths about MLM and in our next article, we will continue to look at a few more which I am sure you are familiar with. Enjoy!

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In this time of Crisis, more and more people are out of jobs and seeking for ways to make ends meet. It’s probably a fantastic time for the Network Marketing crowd, as they have a ready market who will do just about anything to earn an income just to keep life going.

While I am all for MLM / Network Marketing /Direct Selling, I am also quite wary as to the companies whom are selling their wares out there. The theory behind MLM (Multi-Level Marketing) is very attractive indeed, to the extent that well known self-help gurus like Robert Allen and Robert Kiyosaki are promoting them. However, there are also many companies whom are obviously promoting Pyramid Selling Schemes where the money from the downlines are used to pay the uplines and they are selling positions rather than products!

Sure, you can make money from Pyramid Schemes, especially if you are near the top of the pyramid and/or if you work hard at recruiting members consistently. However, Pyramid Schemes are illegal in many countries and it would pay to make sure the MLM company you join or are intending to join is not one of those.

Every MLM will promote the fact that if you have a strong downline, you never have to work ever again because you will be paid on whatever your downline sells… the dreams of perpetual Passive Income! This is probably the biggest lie of MLM companies. I’ve known MLM proponents who are at the top of their game, and they have to work just as hard, if not harder, than any of us. They have to continue to give and attend talks and recruit because active MLM members are few and far between. They need to continue to recruit and it does not even matter if these recruits will be successful in the future or not because the initial package they purchase will go a long way to paying their income. What’s more, almost all MLM companies have rules that if your own sales volume fall below a certain limit, you will not be entitled to full commission!

So how do you weed out the real MLM / Network Marketing / Direct Selling companies whom are masquerading behind products not worth one tenth of the value you pay for them ( eg magnetic mattresses, magic slimming pills etc… etc…). An article in the Singapore business times (see below) gives some tips and I have summarise them below for easier reading (click on the picture below to see the full article).

Here is a summary of some of the things you should look out for before parting with your hard earned cash :

1. Money Back Guarantee - Almost all good MLM companies have a very strong Money Back Guarantee. Countries like Singapore requires that MLM companies give at least a 60 days money back guarantee and good MLM companies extend their money back guarantee even longer. A few years ago, I had a friend who joined AMWAY. After about 6 months, she decided that this is not something she wants to do and decided to get her money back. The company returned the money promptly without any questions asked.
2. Product Range - A good MLM company will almost always have a good range of products to sell. Let’s face it, MLM is all about selling products. The purpose of recruitment is to help you sell more products and the recruitment itself does not and should not make you any money. It will be very difficult to make money in an MLM scheme if there is only one product to sell, unless the product is a monopoly. It does not matter if the company only has one line of product as long as it is a good range. For example, a company may sell only one line of nutritional products but in this one line, there are many ranges of vitamins and minerals for you to sell. Be wary when a company just has a handful of products to sell eg  magnetic mattress or pillow.
3. Product Price - The product price must be competitive with the market (within a ±15% range), unless the product can justify its premium price with other features and benefits. If a product cost more than twice the market price, it is obvious that you will have difficulty selling the product and a large chunk of the profits goes to paying the upline.
4. Product Type - While any product can qualify to be an MLM product, you as the seller will want to make sure that your hard earned effort to build that massive downline will not all go to waste. For this reason alone, almost all MLM companies do not sell technology products because as a general rule, technology products have a short lifespan and if the company is not actively pursuing new technology, it’ll be gone in no time.
5. Initial Joining Package - You must be able to join the company for a small fee without having to pay for a substantial intial package. Many Pyramid Schemes requires new recruits to buy a package worth several thousand dollars just to get started. This is no different from Pyramid Schemes which requires recruits to pay a large sum of money to join. The Pyramid Scheme masquerades behind the cost of the inital package which is used to pay the upline, just to get on the right side of the law. This is a dead giveaway that the scheme is a Pyramid / Ponzi scheme, so you’d be advise to stay far away!

So before you join the next MLM company, make sure they pass all the five criteria above before you part with your moolah! Times are hard enough, so you don’t have to make them any harder! In the next article, we’ll look at some of the myths propagated by many MLM companies!

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In the on Steps to Wealth Part 1 and Part 2, we saw the first 7 steps you can take on your journey to Financial Freedom. The journey does not end there. In fact, the toughest part of the journey has to be the first 4 steps, where you virtually have to turn your lifestyle completely around (for many of you) and start putting money into investments. Investments and savings are the key to financial wisdom and this is why they are in the first 4 steps because you got to get started in investing as quickly as possible.

Well, the good news is that it gets easier from here. Some say it takes 21 days to form a habit and if you start getting into the habit of saving and investing, you’ll find that the rest is really not difficult. Getting a passive income stream, once you have sufficient savings, is as easy as buying dividend paying stocks or buying your first property and renting it our for a steady flow of passive rental income. Sure, the first passive income will be small… but it will compound and grow and before you know it, you’ll see a steady stream of passive income you can live on.

Here are 4 more actions you can take on your journey to Financial Freedom

1. Develop good habits – In Part 2, I mentioned in point 3 that one should develop good time management habit. Time Management is the first good habit anyone should develop because without good time management, it is difficult in this hustle and bustle world to really find time to do anything else. Once you have time management in place, you should look at developing more good habits. Some of my favorites are :
   • Reading - Reading may be just one habit or pastime but it really serves many purpose.
     • Firstly, it improves your spoken language and this helps improves a persons communications skills greatly. Nobody can become successful in life without good communications skills… so this is where you get a head start over the rest!
     • Secondly, it also helps your written language by improving your vocabularly, giving you more ways to express yourself. Communications is not just all vocal, written communications is equally important, if not more important! Of course, to make this work, you must take the effort to check up on the words you do not understand by investing in a good dictionary. Today, you can download dictionaries onto your cell phone, so there’s really no excuse!
     • Thirdly, it improves your knowledge. Of course, it depends on what you read and that’s the reason why I hardly read fiction anymore. Not all fiction are bad, some have so much research and facts going into it that you actually can learn alot reading it eg Da Vinci Code, Geisha etc.. However, the best books for knowledge are non-fiction books in the areas of your interest eg NLP, Trading, Business, Biography etc…
   • Regular Exercise - Wealth and financial freedom is hardly any use if you do not have the health to enjoy it. Imagine working hard and saving all that money and building all that passive income, just to spend it on doctors and hospital bills. One should invest at least an hour, 3 times week to build cardio-vascular health and strength, as these go a long way in ensuring you enjoy every bit of money you have.
   • Waking up early - Another one of my favorites, simple as it may sound. We really don’t need that much sleep. 6-7 hours is fine, yet I regularly see people sleep till 10am on weekends. Imagine, if you sleep 6 hours vs someone who sleeps 8 hours a day. You have 2 hours more each day to do the things you love and this works out to 730 hours more each year or an extra 30 days a year. If this still does not sound significant, imagine an average lifespan of 70 years and this works out to 5.83 years!
   • Learn continually - The mind is like a muscle. If you stop using it, it weakens and deteriorates quickly. One of the key human needs in life is growth and to do that, we must keep learning, no matter how old we are. Research shows that when a person completely retires and stop learning, he usually dies within 5 years of retirement. While we all look forward to retirement, we must ensure that we continue to grow and contribute and that means continually learning something new to stimulate our minds and muscle and to have a purpose to live. As in the earlier point about “Waking up early”, what is the use of sleeping less, gaining 5.83 years over a lifespan when you die 10 years earlier than others. You’re still 5 years in deficit
2. Emotion Control - This is one of my favorites. I’ve seen too many people get upset over nothing. Anger, hatred, worries and other bad emotions builds up “poisons” in our body that will ultimately harm us. The only way to live a long, happy life is to manage your emotions. I see so many people get upset over what others say or do, that it makes senses to live life with the principle that you cannot control what others say or do. You can only control the  way you react to what they say or do, so react in the right way! So Laugh alot, Love alot and Count Your Blessings always!
3. Set Goals! - Last but not least, SET GOALS! In a University study in the U.S., it was found that students who set goals early in life, get to the top 5% of achiever much faster than those who don’t. Most people who don’t have goals don’t even get there. Even on your journey to financial freedom, set goals and milestones along the way, so that you know when you get there! There’s a saying that goes, “If you don’t know where you are going, it does not matter which direction you take!”, so make sure you know where you are going in LIFE!

So there you go… with this, we offer you 10 steps to get on your way to Financial Freedom. See you there!

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In one of my older post in February 2008 about inspiring music, I wrote about how important it is to have inspirations in different forms… specifically music.

Recently (what took me so long?), I discovered playlist.com, a music site where you can set your own playlist of favorite music and play it anytime you want from your computer. The best thing is that the music is not stored on your computer, so it does not take up any hard disk space at all.

With this, I decided that I’ll put up the play on my site for those who want to listen to my list of inspiring music… I’m sure you’ll enjoy it. Have a great time and start setting up your own list and sharing them.

Enjoy the Music!

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In the earlier post, we saw the first 4 steps to Financial Wealth. Let’s look at 3 more steps that will help bring us closer to our goal of Financial Stability and Security … I guess we’ll just have to leave Financial Freedom and Abundance out for the time being until we get there…

1. Find a second stream of Income –  One of the biggest keys to building Financial Security is to have Multiple Streams of Income. Unfortunately, Multiple Streams of Income don’t come overnight, you have to build them one at a time.  Since we all only have 24 hours and 8 of these are spent sleeping, the best way to start is with one additional Stream of Income. This additional stream could be from giving tuition, taking up a second job after office hours, MLM, etc… etc… While this second stream of Income need not be passive at this time (that’s the next step), it’s main purpose is to build up your cash fast so that you can move on to the next step, which is to build it into a Passive Stream of Income. You see, time is a limited resource for every individual and unless your streams of income become passive, you cannot really have more than 2 Streams of Income, unless you do not mind working a 16 hour day. 
2. Build it into a Passive Stream - Once you have your second stream of income secured, the key now is to build it into a passive income stream. I had a friend who started teaching Yoga during her after office hours and weekends. However, over time, as she took on more and more students, she decided to have other Yoga Teachers working for her. So today, she has a Yoga Business as a second income and while she still have to work at running the business, she does not have to teach directly and this becomes a semi-passive source of income. The truth in life is that there are few sources of income that are 100% passive unless you choose to just put your money in the bank and collect interest. With today’s interest rates at an all time low, that’s probably not the best thing to do. Rental Royalty, Dividends are highly passive but you still need to work at it every now and then. You need to look for new tenants, update your portfolio etc… etc… Writing a book is as passive as it can get although unless you are prolific book writer or a best selling author, the income you get will be minimal unless you are promoting the book on a regular basis. 
3. Learn good time management - Almost every successful person knows good time management and this is especially important if you intend to start a second stream of income. As mentioned, we all have 24 hours a day and the only way to stretch that 24 hours is to manage it well. One of the best recommendation I have to you when it comes to time management can be found in two books which I recommended wholeheartedly. One is “First Things First” by Stephen Covey and the second is “Don’t Sweat the Small Stuff” by Richard Carlson. Both these books did wonders for me in term of stretching my hours and I am sure it will do the same for you.

So there you go, three more tips to get you on your way to Financial Security… start practising them today because the faster you do it, the faster you get there.

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In my last posting, we talked about the 5 stages to Financial Wealth. While it is difficult for someone who is now in a stage of Financial Instability to get to a stage of Financial Abundance overnight, it is definitely possible if we take a step-by-step, systematic approach to get to our destination. Nobody said the journey to Financial Weath was going to be easy. In fact, if anyone think or say it is easy, they probably have not done it yet, or if they have, then they are probably  lying to you about how easy the process is (unless they inherited the wealth!)

The path to Financial Wealth starts with good wealth habits and here are some which will defintely set you on your path to your next destination, wherever you are now! Let’s look at the first 4

1. Pay up your Credit Card Debt - Credit Card debt continues to be the number one destroyer of Wealth. How is anyone going to accumulate wealth when they are paying 24% per annum interest on outstanding amounts! If you have credit card debt, this is the first area to correct, and there are more people with Credit Card debt than you can imagine. Just using the Credit Card adn waiting till due date to pay does not count andin fact, that could be a good wealth building habit as you get freebies using credit card and 30 days free credit! It is after the initial 30 days that the going gets really rough!
2. Save 10% of your primary income in cash (CPF or other Pension Funds don’t count) - There is a saying that goes,”It’s not how much you make, it’s how much you save!” This is possibly the most important step for anyone just setting out on their journey of wealth creation to learn and master. In fact, if this is your first step out of the stage of Financial Instability, you should even consider saving up to 20% of your primary income, so that you can use some of these to invest at a later stage. The more you can save earlier, the more you will have to invest later… which brings us to the next step: Invest!
3. Invest at least 15% of your primary income every month - Every one who becomes wealthy invest in something, be it stocks, funds, real estate, businesses, bonds etc… Begin the investment habit early because this is the key to compounding your wealth and possibly the second most important step anyone on this journey must learn. Investment in the right instrument is your key to compounding your wealth. Look for instruments that will give you at least  a fair chance of 10%  to 15% returns on your investments in order to accerlerate your journey to Wealth Creation! Just bear in mind that Investments are not fool proof and along the journey of investment, you will always face small setbacks here and there. Do not be discouraged and keep pounding on because without investing your income, the chances are becoming wealthy diminish substantially!
4. Invest 5% of your primary income each month on self improvement - Besides investing in Wealth Creating instruments, do not forget to invest in yourself. As mentioned earlier, investments involves risk and the more you learn the less risky it becomes. What types of investments should you go for? Well, look at investing in Educational Seminars on self improvements, investment seminars, Books, Audio CD’s etc… Don’t forget to invest in something to stay healthy because wealth without health is as good as a butterfly without wings!

So, there you go, the first 4 tips to Wealth building… stay tuned for more!

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