Many of us are familiar with a lot of success philosophies such as Napoleon Hill’s 17 success principles and that of other self-help gurus. I have been doing financial seminars since 1998 and through my observations of many successful people, I realized that there are 6 essential ingredients or what I call the 6 Golden Rules to becoming a Millionaire. If you want to be successful, you need to master these 6 Golden Rules in the right order:
1. The first rule is:
In order to EARN and INVEST More,
You First Need to LEARN More
Let’s assume I have a time machine and I can send you back in time say 5 or 10 years ago. Do you think your life today would be different if you had the ability to go back in time? Perhaps you may have taken different courses of study, pursued different careers and even have gotten married to someone else!
What is the difference between the You Today and the You say 5 or 10 years ago? Even though you are basically the same person, the difference is in the Knowledge, the Wisdom and the Experiences you now have that you didn’t have many years ago. Likewise if you want to move upwards to the next level in life, whether it’s earning or investing more money, you first need to upgrade your knowledge and skills.
I would recommend that you set aside and invest at least 5% of your annual income on self-help books, motivational audio programs and seminars. The difference this 5% will make to you in years to come will be immense. Often, all you need is just 1 great idea to completely turn your life around.
2. The second golden rule is:
NETWORK with as many like-minded people as possible
I am sure you will agree with me that in life, especially in Malaysia, WHO you know is much more important than WHAT you know. Meeting the “right” person at the right time in your life can have a major impact on your life.
In your circle of friends, or in your mastermind group, make sure you are the “least smartest” and poorest. If the others are smarter and richer than you, there will be a tendency for them to pull you up as they climb up. On the other hand, if you happen to be the smartest and the richest, you are in trouble! There will be a tendency for the rest to pull and slow you down instead.
3. The third golden rule is:
EARN As Much as You Can
As FAST As You Can
In my opinion, you need to get into areas where your earning potential is unlimited. If you are an employee, the best departments to be in are the “front-line” ones that bring in the money for your company for example marketing, sales, trading in stocks, bonds, currency, commodities, etc. In fact, the best way to have an unlimited earning potential is to do your own business.
Having an unlimited earning potential also allows you to take greater risks in life especially in the investment area. Any unexpected financial setbacks can be easily earned back by working a little smarter, harder and longer. On the other hand, people with fixed incomes will need time to recover back any losses.
4. The fourth golden rule is:
SAVE As Much as You Can
to Build Up the Seed Capital for Investments
Personally I am not a great believer in saving money, especially when your savings are too little to make any impact. Though saving money is extremely important especially in the case of medical emergencies, I feel it’s much more important to position yourself in a way where you don’t actually have to worry about saving money – it is something that happens automatically.
Let me share with you a real life case. Many years ago, a Unit Trust Consultant attended my program and she asked me where her client who was a Taxi Driver and who was able to save RM100/month should invest his money. I frankly replied that while saving RM100/month was better than nothing, it was still not going to get the taxi driver far in life. A far better way for him would be to invest the RM100/month on self-help books on business and entrepreneurship. What this taxi driver needed to move from being a taxi driver today, to owning a fleet of taxis within a few years were the right ideas and mindset.
If he could achieve it, his need for savings would automatically take care of itself, assuming of course he is disciplined enough not to spend everything that he makes.
5. The fifth golden rule is:
BORROW INTELLIGENTLY As Much as You Can
… but make sure your
Potential Returns are greater that the Borrowing Costs
Let’s say you purchase a property where the return is 9% pa and your loan is 7% pa. Logically, should you borrow as much as you can? Yes, you definitely should! You are getting rich with the help of the bank’s money. In fact, even cash rich companies borrow money. For example, Genting Bhd which is sitting on billions of dollars is still borrowing money to build their new casino in Singapore. The reason why borrowing makes sense to them is because their expected returns on that project are far greater than their borrowing costs.
In fact, one sure sign of how wealthy you are is how much you are able to borrow. Typically the person who can borrow RM100 million is richer than someone who can only borrow RM10 million who in turn is richer than someone who can only borrow RM1 million!
Hence don’t be afraid to borrow money and do make sure you borrow intelligently for the right purpose!
6. The final and sixth golden rule is:
INVEST WISELY As Much as You Can
In Malaysia, my strong recommendation is to focus on two powerful asset classes like property and stocks. This is usually more than sufficient for most people and you don’t really need to even consider other investments. Use properties to gradually build-up a solid, stable and predictable cashflow. Then leverage your property loans for stock market investments whenever the opportunity to make at least 20% within a few short months with minimal risks presents itself. If you need more information on this topic, you are welcome to help yourself to my books.
Ultimately, your Investment Goal must be to Build Up Your PA$$IVE INCOME via BUSINESS, RENTAL and PORTFOLIO Income. Your Focus should be on generating CA$HFLOW and NOT so much NET WORTH!! There are some people whom I know who are Asset or Net Worth Rich, but Cashflow Poor. All their properties are highly geared and they have to bear with negative cashflow sometimes to the extent that they don’t even have enough money for their living expenses.
To briefly summarise the 6 golden rules, the most important are the first 3:
1. LEARNing
2. NETWORKing
3. EARNing
Followed by:
4. SAVing
5. BORROWing and
6. INVESTing
If you can master the first 3, you don’t need to even bother about the last 3 ie Saving, Borrowing and Investing. You can be making enough money from earning money that you need not be concerned with saving, borrowing or even investing. You can even leave your savings in fixed deposits and you will not be affected by inflation as your income coming in every month is more than enough to offset any adversity. However to do extremely well, it does help to master all 6 rules at the same time.
Milan Doshi is an <a href="http://www.milandoshi.com">Independent Financial Trainer and Director with Achievers Resource Centre Sdn Bhd.</a> He is the founder of Malaysia’s FIRST and BIGGEST Financial Program on Personal Money Management, Property and Stock Market Investments since 1998 called “How You Can Get RICH from the Malaysian Property and Stock Markets”. He has spoken to over 21,000 people and has over 1,500 graduates.
In May 2004, Milan wrote his first book: “How You Can Get RICH from the Property and Stock Markets: What the RICH Invest In and How YOU Can Do the Same!” This book was the Number 1 bestseller on the Non-Fiction Section of Popular Bookshops for the month of August 2004.
In August 2005, Milan wrote his second book called “How You Can Become a Multi Millionaire Real Estate Investor ” Milan’s mission is to Inspire People to Improve Their Financial Intelligence and Achieve their Full Potential. Over the years, he has helped thousands of his seminar graduates discover their Unique Investment Profiles and Make Money through Smart Asset Allocation and Investment Strategies.
<a href="http://www.milandoshi.com/blog/?cat=13">Independent Financial Trainer and Best-Selling Author</a>
