Blueroselady's Weblog

I wish you abundant happiness, health & wealth

Posts Tagged ‘finance

On defining, dreamlining, doing, being, and having

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I am a BIG dreamer.
I have many dreams.

I am very grateful that I have achieved many of my dreams, from receiving free education in top universities, flying an airplane, to sponsoring my parents for their trip to UK.

Recently, I learned about dreamlining from Tim.
Dreamlining = DREAMs + timeLINEs
It means applying timeLINEs (e.g. 6 months, 1 year) to what most people would consider DREAMs.

In autumn 2012,

Things I dream of HAVING :
happy, healthy and independent children (by 2016)
profitable property (by 2015)
freehold property in the city area (by 2019)

Things I dream of BEING :
entrepreneur (by 2014)
millionaire (by 2019)
author of a New York Times bestselling book (by 2014)

Things I dream of DOING :
increase my income (by 2014), see the target in my pink board
achieve financial freedom and abundance (by 2019)
donate 80% of what I have for charity and live comfortably with the remaining 20% (by 2019)
visit Iceland / Antarctica (by 2014) and see aurora borealis

Tips:
1. If you do not know what you want,
brainstorm on what you do not want / what you hate / fear,
and write down the opposite.
2. convert BEING into DOING (actionable).

See also my bucket list, focusing on a happy and fruitful life beyond a century.

A thought on definition / meaning
Tim Ferriss wrote on p58 of his book The 4-hour workweek that being fluent in Chinese means having a 5-minute conversation with a Chinese co-worker.
In my opinion, one does not qualify to state (e.g. in one’s CV) a fluency in a particular language by merely being able to talk for 5 minutes.
This comes to my awareness that definition / meaning varies among people. I do not blame people, but I am aware that it is natural for human beings to put their PERCEIVED truth in the best light.
Recent complaints by friends (WT, SH) about students and fresh graduates who have good paper qualifications, but end up not as productive / talented as expected, are indeed related to the concept of varying meaning.
Next time when I hire someone, instead of believing what he states as his ability, I will ask for demonstration.
e.g. if someone claims a fluency in a particular programming language, ask the person to write 10,000 lines of code.

Written by blueroselady

October 19, 2012 at 11:11 am

How to increase our income?

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Income = value x time x scalability

Indeed, in September 2012, I learned from an Australian mentor with numerous patents (KS) that scalability and low cost enable easy commercialization.

How much are you worth currently?
Your hourly current value = monthly income / hours worked per month

To create more value to our company and our clients, we must keep upgrading our knowledge, skills, intellectual capital.

We must constantly install new software into our mind in order to be able to create more value.

It is not one’s age, experience, or academic qualifications, but how much value one can create for his company / clients that matters and translates into different levels of income.

It is about "WHAT CAN YOU DO?"

Let us compare 2 insurance advisers.

Insurance adviser A, age 33, monthly income $3,000.
Waits for leads.
Follows up on leads.
Give adequate presentation on products / services

Closes the sale.
Never follows up with the client thereafter.
Closes monthly premium of $7,000.

Insurance adviser B, age 33, monthly income $20,000
Sets specific monthly sales target.
Actively generates leads from all source.

Creates partnership with other companies.
Ensures a minimum of 2 appointments for consultations / day.
Gives seminars on financial planning.
Writes and publishes a book on financial planning.
Does a a detailed needs and outcome analysis for potential clients.

Presents a highly beneficial and value-added plan for the client.
Helps the clients save money and identify important needs client may have overlooked (i.e. corporate insurance, estate planning, asset protection).
Follows up every 3 months to ensure client’s emotional and financial needs are met.
Sends a quarterly e-newsletter to his customers packed with tips on money management and investments.
Able to generate even more referrals from powerful services.
Helps recruit and train more sales people for the company.

Closes monthly premium of $50,000.

Now, let us compare 2 teachers.

Teacher A, age 42, monthly income $4,000
Has worked for 12 years.
Teaches the curriculum.
Gives and marks homework.
Gives tests and mark papers.

Fulfills minimum extra curricular duties.

Teacher B, age 34, monthly income $9,800
Has worked for 4 years.
Teaches the curriculum.
Able to motivate and inspire even the weakest and most unmotivated students.

Innovates / develops new curriculum / teaching methods.
Writes systems of best practices.
Trains new teachers.
Produces innovative marketing ideas to enroll more students.
Develops strong rapport with parents and provides additional family counseling.

Innovates ideas to increase department productivity, reduce expenses.
Has written 6 textbooks, assessment books that are sold locally and over the internet.
Uses accelerated teaching methods to boost grades.
Conducts seminars / workshops on weekends for parents on how to motivate their children.

Conducts seminars for students on exam skills.
Consultant to private tuition centers.

Things to increase in order to increase income:
1. leads
2. conversion rate
3. repeat business
4. average dollar purchase
5. net profit margin

In more details …

LEADS
learn how to create more effective advertisements (stronger headlines, more persuasive copy, i.e. text)
TV, radio, newspaper advertising
industry newsletter advertising
internet / email advertising
magazine advertising
outdoor advertising
flyers
promotion / sale
ask for referrals
member get member scheme
offer free gift
insert into other company’s invoice
letterbox flyers
sales teams
telemarketing / make more cold calls
buying / swapping database
seminars, events, roadshows
attractive window display / video
posters, large signage

CONVERSION RATE
define our unique selling proposition
set sales target
excellent customer service
introduce myself
survey our past customers
sell key benefits (not features) passionately
high quality in store posters / brochures
in-store sales scripts
be a consultant / problem solver
give a money back guarantee
benefits, testimonials list
give free bonuses that increase value
great prospects and use their name
learn closing techniques
ask for the sale more than once
personal grooming, high dress standards
video in store displays
leave price to last
study and prepare for objections
specialized knowledge about our products and industry
focus on client’s needs and emphasize benefits
convenient payment scheme (credit cards, nets)
offer installment schemes with 0 interest
allow mail order / home delivery
address concerns / possible objections upfront
sell on value not price
use NLP to build strong rapport with clients
follow up with prospects regularly
improve our presentation skills

REPEAT BUSINESS
direct mail offers of the months
keep in touch every 3 months
inform clients of our entire range of services
target likely repeat customers
send special occassion cards
make customers feel special (super experience)
build a close relationship / friendship
create a loyalty program
exceed customers expectations
discount voucher off the next purchase

AVERAGE DOLLAR PURCHASE
focus on a higher income target market
use a shopping list
sell add-ons/up sizes
make sure our client knows our full range of services
suggest most expensive first
create value packages / bundle several products in a package
buy 3 get 1 free deals
ask people to buy some more
increase prices by 10%
arrange easy finance and payment
free gift / lucky draw with $xx purchase
ask customers to buy more (e.g. McDonalds, do you want to have a combo meal? do you want to upsize? do you want to have a dessert? do you want toy?)
up sell
cross sell
do a complete needs-analysis to find out how we can add even more value to customers

NET PROFIT MARGINS
increase prices
sell on value / service than price / discounts
set monthly budget targets
track costs weekly and aim to reduce by 10%
stop running ads that do not work
sell more higher margin items / sell higher margin products 1st
source for cheaper suppliers which are just as good
bargain hard with existing suppliers
increase working efficiency

Written by blueroselady

September 24, 2012 at 3:37 pm

How to achieve financial stability, security, freedom, abundance?

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Criteria of financial stability:
1. liquid assets to cover a min of 6 months of current expenses.
2. have insurance (life, hospitalization).

To calculate expenses, see a previous post on how to make personal income statement.

Let say in 2012 (based on an estimate for the 1st 8 months), my monthly expense is $2,700.
Therefore, I need to keep a liquid asset of ~ $16,000 in my bank account.
Stocks are also considered as liquid asset, but to be conservative and safe, I only consider cash in my calculation.

Tips:
1. Get a term insurance with a much cheaper premium than a whole life insurance. Understand that term insurances are often up to only certain age, e.g. 65 and its purpose is to protect your family (not your retirement).
2. If you want to also get a whole life insurance, try to buy it at younger age and to finish paying the entire premium early. Unlike long-term housing mortgage, which can be protected with mortgage insurance, I hear many cases of people failing to pay for the expensive premium of the whole life insurance hence their policy lapses.

Financial SECURITY means your passive income can cover your BASIC expenses.
Financial FREEDOM means your passive income can cover your CURRENT expenses.
Financial ABUNDANCE means your passive income can cover your DESIRED expenses.

Criteria for basic expenses:
1. housing mortgage, utilities.
2. public transport.
3. food (inclusive for my children) / groceries.
4. all interest payments for debts.
5. all insurance premiums (life, hospitalization, fire).

Let say in 2012, my basic expense is $1,500.
To achieve FINANCIAL SECURITY, I must have passive income of $1,500 per month.

I realize that these components (a) gifts / donations, (b) insurance premiums, (c) dining out, contribute to my non-basic expense in descending order, but I want to keep on giving and enjoying the fruit of my labor, so let us set our target higher.
To achieve FINANCIAL FREEDOM, I must have passive income of $2,700 per month.

To calculate my desired lifestyle, for now I only add 2 items (but the list may grow over time).
I want to be able to give meaningfully and travel the world.
To achieve FINANCIAL ABUNDANCE, I must have passive income of at least $5,000 per month.

I am working smart and hard to have more passive income. Keep on the spirit!

Written by blueroselady

September 18, 2012 at 9:10 am

How do you perceive money and wealth?

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The media (TV, movies, magazines, newspapers) often portray the wealthy as those who wear designer clothes, eat fine dining, drive luxurious cars, and fly first class. Growing up and being fed by such information make many of us believe that is how the wealthy live their lives. In reality, this is only true for those who inherit their wealth, strike lotteries, or those super talented artists and sportsmen, but they risk losing their wealth without proper wealth management.

Examples:
Doris Day, a famous 60s Hollywood singer-actress, lost her fortune when her husband-manager cheater her and ran off.
Mike Tyson, a heavyweight champion who earned over $500 million, filed for bankruptcy because of his lavish lifestyle of luxury cars, huge mansions, and Bengal tigers.
Michael Jackson, earned over $700 million in his career, but he spent $20-$30 million more than he earns every year.

On the other hand, many people stay poor because of common negative beliefs about money and wealth. For example, when one sees one’s parents work so hard, being cheated, and still remain poor, they may adopt the common negative beliefs.
Here, I list the common negative beliefs and debunk why they are not true.

Myth: Having a lot of money will change you (into a bad person)
Myth: Money will make you less spiritual.
Myth: Money is the ‘root of all evil’
Fact: Money is a personality magnifier, it is neutral on its own, it is just a tool.
If one is selfish, having money will make him even more selfish.
Majority of causes of murder, cheating, stealing, lying are poverty (lack of money) and greed.
If one is kind and generous, money will enables him to give more to others, do God’s work.
When you no need to worry about money anymore, you can focus on more important things in life.
Some wealthy people believe that they do not own their money, they are merely custodians of God’s wealth.

Myth: We do not have a lot of money / time to make money because we love our children.
Fact: People who believe in this myth are giving themselves excuses. If they love their children, they will provide their best for their children, and not use their children as an excuse / justification for their lack of money.

Myth: Money will not buy you happiness.
Myth: Money is not that important.
Myth: Money is not everything.
Fact: It is true that money is not everything but everything is money. Without money, you cannot buy food / clothes and provide shelter for your family, you cannot buy presents for you friends, you cannot send your children to schools. Money can enhance the things that matter: family, friends, health, spirituality, career, education. Note that when someone says "money is not that important", he is just consoling himself. Analyze carefully before believing what others say.

Myth: The wealthy are materialistic.
Myth: The wealthy worship money.
Myth: Rich people are greedy and selfish.
Fact: Not all wealthy people work for money, some of them work for their passion / personal mission. People who lack money can also be materialistic, they constantly worry about money or are envious of their richer neighbors / relatives / friends.
If you resent rich people and think that they are bad, then your subconscious mind will never allow you to become rich.
It is important to find role models (rich people with integrity and kindness) whom you admire and are keen to learn from, instead of making hasty generalization.

Myth: If I am wealthy, my friends / family / relatives will look at me differently.
Myth: If I became wealth, I will lose all my friends.
Fact: If you lose some of your friends, then you realize that they are your false friends. True friends will be happy for your success and wealth. When you become wealthy, you will make new friends with wealthy mindset.

Myth: To have more money, I will be depriving others of it.
Myth: There is no enough money for everyone to be rich.
Myth: There are less opportunities to make money nowadays.
Fact: There is abundance in the universe. There are always enough / new resources for people who pursue wealth with integrity. In your process to make money (ethically, legally), you will create new / better products / services and jobs for others.

Myth: Having a lot of money will give you worries / problems.
Myth: The wealthy have a lot to manage.
Fact: Most problems in life (relationships, health, career) are the results of the lack of money.
Blueroselady’s reflection: I used to follow the myth in my early 20s, until a mentor VB told me that if I have no money, I will have more things to manage.

Myth: If God wanted us to have money, he would give it to us.
Fact: God helps those who help themselves. There is no free lunch in this world. Be self-sustainable. You have to ask (through prayer), believe that you deserve prosperity, and take action (work hard and smart).
Blueroselady’s reflection: Spending a larger proportion of my life seeking knowledge (as a student) than seeking wealth, the same principle applies. If we do not put in efforts in our study, we will not get good results, we will not gain wisdom, no matter how hard we pray, we need to take action. Now, in my chapter of life in seeking wealth to nurture the next generation, I will put my best efforts together with prayer to God.

Written by blueroselady

September 17, 2012 at 2:00 pm

How to make personal income statement?

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One of the most useful courses that I had in my undergraduate study was accounting.
We learned how to make income statement for companies.
However, the same principle can be applied to make our own personal income statement.
Only when one is able to manage personal finance well, one is capable of managing the finance of companies.

PERSONAL INCOME STATEMENT
You can use spreadsheets (e.g. excel) to keep track on your income and expenses.

Total savings = total income – total expenses

Types of income:
active
passive

Types of expenses:
personal
children
housing
transport

In more details …

ACTIVE INCOME
net salary.
401K / CPF: I do not include this since it will be many years later when I can withdraw.
commissions.
bonuses.
directors fees.

PASSIVE INCOME
dividends.
royalties.
interest income.
private business profits.
net rental income.

PERSONAL EXPENSES
dining out.
clothes: except for underwear, I do not mind wearing 2nd hand ones from my mother / sister.
entertainment.
communication (mobile phone, Skype, data plan).
insurance (life, hospitalization).
personal taxes.
gifts, donations.

CHILDREN EXPENSES
health : vaccination, medicine.
education (school, text books, tuition / enrichment classes): swimming, music if the children show keen interest.
school bus.
clothes: get all new underwears and few new ones for special occassions, get 2nd hand for most clothes because children grow fast.
toys: we strive to minimize this, instead bring children to beaches, parks and libraries. I had little toys so that I socialized a lot (other kids seem to have a lot of toys) and when my parents moved to non-residential area, I used my imagination to play.
allowance: we strive to minimize this by packing their lunch. I had no allowance until I finished my primary school education.

HOUSING EXPENSES
mortgage.
utilities (water, electricity, service and conservancy, internet connection).
cleaning (e.g. full-time maid, part-time maid): get your children and spouse to do duty roster.
groceries.
property tax.
fire insurance.
mortgage insurance.

TRANSPORT EXPENSES
public transport (trains, buses, air tickets): buy air tickets in advance for peak period.
car installment.
petrol.
maintenance / servicing.
car insurance.
road tax.
season parking.

See also how I strive to minimize my expense through frugal lifestyle.

Ideally: earn -> save -> invest -> spend
Vision (December 2013) : earner -> saver -> investor -> philanthropist

Written by blueroselady

September 17, 2012 at 8:56 am

My simple frugal lifestyle in autumn 2012

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In three and half more months, we will be saying good bye to 2012.

Life has been pretty simple for me lately.
I am enjoying my simple life now.
I am grateful for having God, loving family, caring friends, supportive mentors.

I am grateful for my job, where I can earn and learn; I am always learning and preparing myself for the future.

Towards the vision of achieving my financial independence and realizing my grand dream (I want to help many poor children in my chosen ways), I become more conscious about my spending, saving, and financial intelligence than ever. This of course has implications on my lifestyle: the many decisions I make daily.

I strive to kick start and end my everyday with prayers of gratitude and guidance.

I strive to eat more healthy home cooked food using higher quality ingredients (e.g. olive oil).
I try to minimize dining out (for meals above $10 / per person) to once or at most twice per week.

I will go for free food after talks.
Like the IKEA founder Ingvar Kamprad who waits until the afternoon to buy his fruits and vegetables when the prices drop, we buy discounted bread after 9.30 pm for the next morning breakfast. For more inspiration, see the frugal millionaires.

I am increasing my financial intelligence by reading books borrowed from libraries / read at bookstores / e-books, and consulting my mentor K.

I am having good rests, especially in the weekend.

I appreciate the greenery near where I live: walking, breathing, thinking, nurturing relationship with my lover.
I prefer to watch (inspiring / romantic comedy) movies at home, I no longer need to spend on cinema tickets. If I have to watch in the cinema (e.g. for 3D movies), I will buy the cheaper weekday ticket than the weekend ticket.

I listen to music from radio / youtube (I no longer buy songs / CD).

I use public transport, gently fight for my seat with smiles, use my fist and mouth to protect my baby. I have no car now, but I am happy to have a car to support my future business.

I use delay rule when I want to shop for things above $50. Do I really need it? Can I be creative to use things that I already have?
I ask for samples and discounts, wait patiently for sales.

If possible, I minimize spending my free time in shopping malls to minimize temptation to shop for unnecessary things.
I shop with a shopping checklist.
I maximize the potential of my credit cards (to earn points) and always pay full outstanding amount to avoid the blood sucking 24% interest.

I am not going overseas in this autumn and coming winter (a huge saving on air tickets), yet I can do virtual travel at home, thanks to documentaries and travel books.

Since this summer, I have not shopped for any cloth, except for underwear.

Thankfully, my mother bought me some new clothes, my sister handed me few of her clothes (I do not mind second hand clothes).
However, I foresee that I have to shop for my baby, and it will be a happy bargain hunt.

I still donate a little amount for charity, I hope I can donate more as my income increases in the near future.
My life is simple and blessed.

Written by blueroselady

September 14, 2012 at 8:38 am

Should you say Yes to loan between relatives or friends?

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Your friend or relative may borrow money from you when s/he is going through hard times. Should you say Yes to loan between relatives or friends?

1. Can you afford to lose your money? Be prepared to lose your money.
2. How much do you treasure your relationship? If s/he is someone you treasure and are willing to help, then you prioritize your relationship over your money.
3. Is the money needed for a valid reason or something you agree with? Do not lend to fund other’s expense on instant gratification (e.g. car, entertainment system).
4. Can you protect yourself? Ask for an asset of value as collateral, though this might be awkward / uncomfortable for most people. Write up a simple IOU (including names and identity number of lender, debtor, witness, the amound owed, date of the debt to be repaid, date the debtor sign the IOU). Request for some post-dated cheques to hold on to. Note: IOU is only valid for 6 months from date of repayment.

Manage expectations. Be clear of the amount that you can afford. If s/he asks for more down the road, you can say No.

Written by blueroselady

September 13, 2012 at 2:21 pm