Part 1: Job 1O1 | Know Thyself
To kick off this topic, let's talk about the way we naturally behave and approach matters, even before we dive deeper. I will separate this topic into two posts. I might tend to go a little off-topic at some points, so try to see the whole picture and you will see where I am coming from.
To understand this, we first need to understand our thought process. See,
Our brain's instinctive function is to protect us from danger. Hence, when it comes to money, the path most well-travelled by the many is to get education then get a ______. Seek safety and security yes?
As, with a job you put in $0 and yield returns. You sell Time to gain Money, risk free!
Unlike other people, I will tell you that in many ways, a job really is the best Returns On Investments. You gain money but risk $0. You can take my word personally on this, having been on all quadrants of the ESBI. This btw, is the technical definition of 'Infinite Returns'. It's a bit of a joke, I know. Anything multiplied by 0 = Infinite. By this definition, finding 10cents on the floor is also making Infinite Returns. With all the hype built up, I almost wanted to punch the person who told me this in the nose when I heard the answer.
Fun facts aside, as an investor, what you are really trying to do is similar to when your brain naturally knows; lower your risk and maximize your returns. Lowering risk can come in several forms:
1. Monetary/ Financial/ Cost
2. Project soundness/ Viability/ Implementations/ Exits
3. Management/ Macro-factors
Financially, what can be lower than not putting a single cent in? Seeking employment as a way to gain money over other ways (ie. Trading, Business, Investments etc) is therefore the safest way to yield returns.
I don't care what other people tell you about starting a business and make it sound so simple. It really isn't as simple as ABC. Anyone who tells you otherwise is telling you half-truths. You need A WHOLE LOT of special SOMETHING to be a business person. (Note: I did not even mention the word Success yet.) Don't get me wrong. Anyone can make it, IF (And only IF) they set their minds to it. But for most people who have trouble even balancing personal life with employment, Business requires A LOT from you. If you cannot give that, be happy with a 'normal' life, Business might not be your cup of tea.
I will talk about Learning about Financial Education and Mastering Money management in my next post.
Until next time.
Your Fellow Investor,
Martin Sim
Previous Updates
6 Evaluating Risk
5 Why is ‘Playing Safe’ the riskiest thing you can do with your money?
4 Inflation hits highest level since 2008
3 Why you MUST Invest!
2 Are you your parents' financial photocopy?
1 Taking retirement into your own hands
To kick off this topic, let's talk about the way we naturally behave and approach matters, even before we dive deeper. I will separate this topic into two posts. I might tend to go a little off-topic at some points, so try to see the whole picture and you will see where I am coming from.
To understand this, we first need to understand our thought process. See,
Our brain's instinctive function is to protect us from danger. Hence, when it comes to money, the path most well-travelled by the many is to get education then get a ______. Seek safety and security yes?
As, with a job you put in $0 and yield returns. You sell Time to gain Money, risk free!
Unlike other people, I will tell you that in many ways, a job really is the best Returns On Investments. You gain money but risk $0. You can take my word personally on this, having been on all quadrants of the ESBI. This btw, is the technical definition of 'Infinite Returns'. It's a bit of a joke, I know. Anything multiplied by 0 = Infinite. By this definition, finding 10cents on the floor is also making Infinite Returns. With all the hype built up, I almost wanted to punch the person who told me this in the nose when I heard the answer.
Fun facts aside, as an investor, what you are really trying to do is similar to when your brain naturally knows; lower your risk and maximize your returns. Lowering risk can come in several forms:
1. Monetary/ Financial/ Cost
2. Project soundness/ Viability/ Implementations/ Exits
3. Management/ Macro-factors
Financially, what can be lower than not putting a single cent in? Seeking employment as a way to gain money over other ways (ie. Trading, Business, Investments etc) is therefore the safest way to yield returns.
I don't care what other people tell you about starting a business and make it sound so simple. It really isn't as simple as ABC. Anyone who tells you otherwise is telling you half-truths. You need A WHOLE LOT of special SOMETHING to be a business person. (Note: I did not even mention the word Success yet.) Don't get me wrong. Anyone can make it, IF (And only IF) they set their minds to it. But for most people who have trouble even balancing personal life with employment, Business requires A LOT from you. If you cannot give that, be happy with a 'normal' life, Business might not be your cup of tea.
So you should be very happy being employed...Are you?
As an employee, (And mind you, I did really went all out being an employee too. But..) I always had this sinking and helpless feeling of unfulfillment as whatever I was doing ultimately doesn't belong to me. However much I tried to convince myself otherwise. Same for you? However much you give at your job, an employee will never understand nor commit the kind of devotion, like that of your own convictions.
Here's what most people would do; Get a job >>> Climb the ladder >>> TRY their very best to maximize as much gains from a single income stream (Employment) as possible or Job hop to higher income/ better prospects/ greener pastures etc. Then one day, some years down the road, with the family, the kid/s, the house, the car, keeping up with the Chans, the lifestyle they have gotten so accustomed to...They find themselves without the option to slow down.
a) For some they might hit this situation during bad times, becoming too expensive for the company employing them and face job insecurities and hungrier young people who can work twice as hard and get half the pay. Familiar story? And you can be certain that in the world we live in today, boom/bust cycle is inevitable.
b) For some others, with the $2500 paying job, they are spending $4000. And as they go along, their expenditure snowballs.
Both cases, they end up working harder, longer, look for better pay, still finding themselves playing catch up with their expenses. And they do this year after year after year, next thing you know, 40s-50s are here, stuck in the middle of neither here nor there, very afraid someone comes along and take away their job because they still have housing loans, kids' loans, bills (or worse DEBTS) to pay....
The problem with a JOB is...there is only 1 of you and for that matter, you have only 1 income stream.
Money really shouldn't be a sensitive topic, it should be a transparent topic. Money shouldn't be something you shun or be ignorant about and hope for the better; Just like your health, it should be something you constantly maintain and take care of. Understanding Financial Education comes in 5 parts
1. Income - Expenses = Positive/ Negative
2. No excess vs Additional income
3. What you want to achieve and Putting your money to work.
4. Passive income and being a Money manager
5. Understanding about the world around you and how marco-events affects your pocketsAs an employee, (And mind you, I did really went all out being an employee too. But..) I always had this sinking and helpless feeling of unfulfillment as whatever I was doing ultimately doesn't belong to me. However much I tried to convince myself otherwise. Same for you? However much you give at your job, an employee will never understand nor commit the kind of devotion, like that of your own convictions.
Here's what most people would do; Get a job >>> Climb the ladder >>> TRY their very best to maximize as much gains from a single income stream (Employment) as possible or Job hop to higher income/ better prospects/ greener pastures etc. Then one day, some years down the road, with the family, the kid/s, the house, the car, keeping up with the Chans, the lifestyle they have gotten so accustomed to...They find themselves without the option to slow down.
a) For some they might hit this situation during bad times, becoming too expensive for the company employing them and face job insecurities and hungrier young people who can work twice as hard and get half the pay. Familiar story? And you can be certain that in the world we live in today, boom/bust cycle is inevitable.
b) For some others, with the $2500 paying job, they are spending $4000. And as they go along, their expenditure snowballs.
Both cases, they end up working harder, longer, look for better pay, still finding themselves playing catch up with their expenses. And they do this year after year after year, next thing you know, 40s-50s are here, stuck in the middle of neither here nor there, very afraid someone comes along and take away their job because they still have housing loans, kids' loans, bills (or worse DEBTS) to pay....
The problem with a JOB is...there is only 1 of you and for that matter, you have only 1 income stream.
Most people get Technical and Professional Education, for them to get a job and earn loads of money. BUT those that don't know how to manage money and tend to squander it all away or even worse, rake up huge amounts of debts.
And there is the other group, with the lack of Financial Education (like me once), they don't know any better so they
And there is the other group, with the lack of Financial Education (like me once), they don't know any better so they
- spend less and save,
- want to invest but scared,
- want to buy but don't know any better to decide,
- want to move right or left, they are also unsure.
- want to spend the time to learn about all these seems like a whole lot of effort for something so non-core income function,
- seek safety but want high returns, often committing to the wrong investment,
- get stuck in employment and forever are neither here nor there, have a sit-on-the-fence approach in their lives, only to look back and every turn and exclaim to the likes of "If only I did that...."
- behave like babies and complain about the government as they view everything as the government's fault.
Money really shouldn't be a sensitive topic, it should be a transparent topic. Money shouldn't be something you shun or be ignorant about and hope for the better; Just like your health, it should be something you constantly maintain and take care of. Understanding Financial Education comes in 5 parts
1. Income - Expenses = Positive/ Negative
2. No excess vs Additional income
3. What you want to achieve and Putting your money to work.
4. Passive income and being a Money manager
I will talk about Learning about Financial Education and Mastering Money management in my next post.
Until next time.
Your Fellow Investor,
Martin Sim
Previous Updates
6 Evaluating Risk
5 Why is ‘Playing Safe’ the riskiest thing you can do with your money?
4 Inflation hits highest level since 2008
3 Why you MUST Invest!
2 Are you your parents' financial photocopy?
1 Taking retirement into your own hands
