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Is there a secret formula to getting rich? (Wealth is attracted or repelled by habits.)

Tuesday, April 21, 2015

WARNING (Added on 6 Jan 17):

If you are a "jin satki" (very capable) person, you might want to skip this blog because you might find AK's peasant mentality to wealth building distasteful. 

You have been warned.

As my blog becomes more popular, it disturbs me that people think that I am some investment guru. 

Of course, I am not. 

I might be a bigger retail investor than most of my readers but I think that is where the difference mostly ends.

Regular readers know not to expect magic from AK. 

I don't even have a working crystal ball. 

Well, I try to get my bowling ball to talk to me sometimes but I haven't had much success, have I?

Is there a secret formula to getting rich?

To me, there is no secret formula to getting rich. 

Honestly, to be financially secure and, then, financially free later on, it all starts with being financially prudent and that is where a big part of my level of rather attainable wealth by the common man has its source. 

It is about being sensible when it comes to personal finance matters. 

A dollar saved is a dollar earned and, believe me, it adds up.

Dinner for $2.80.

Even as I make more money in life, I try my best to keep my needs simple and my wants few. 

I try not to be frivolous with money. 

If we do a good job of this, money will stay with us. 

In the last five years, I have heard from readers who changed their habits including one who gave up having Starbucks coffee every day and one who convinced the whole family to cut back on restaurant visits. 

They saw how, in just a matter of weeks and months, the changes they made in their money habits improved their personal balance sheets.

Wealth is attracted or repelled by our habits. 

If we want to attract wealth, then, we have to make sure we have the right habits. 

The results might seem magical but, really, magic is not the reason. 

Discipline is.

Added on 6 January 2017:

I saw on Facebook and I had to kaypoh.

The statement above which I took issue with:

"Skipping Starbucks to get rich is really bad advice, my view. It give (sic) you a poverty mindset that I can't afford it..."

OK, I must say I rarely comment on other people's FB wall or even blogs.

If people want to drink Starbucks kopi, it is their choice. 

I might nag but it is their choice.

However, when I read the claim that skipping Starbucks kopi to get rich is bad advice because it gives us a poverty mindset, that, to me, was a judgement which I could not agree with.

A frugal mindset is not a poverty mindset.

We can make a lot of money but if we are careless with money, it will only set us back if we are working towards financial freedom.


apex property investment said...

Wealth is indeed shaped by habits. The desire to get our of the rat race is strong, the will to change is strong. I've not upgraded my ride for a long long time.. haiz for the belief that in future, the cost of the rides, would be borne by my tenants.

Thanks tenants!

Siew Mun said...

My habits have changed to be more frugal and prudent for 1+ year painful at the begining and become second nature now. For example, I pack lunch and coffee to work everyday with exceptions to treat my dept quarterly lunch or tea time snacks. I stair climb for cardio and do push ups strenght for exercise instead gym. I did not buy any clothes for the last year. We went to nearby Kukup family of 4 children for holidays. For the last 3 months I am minimizing my stuff by selling or giving them away. We tend to have more and more stuff as we grow older. As your stuff increases you look for bigger apartments or spend $200+ per month for offsite storage (which I did). Selling my stuff increases my income would otherwise left just sitting around :-p

Ray said...

OK! I will cut my lunch at economic vege rice stall from 2 meat 1 veg to 1 meat 1 vege! Every cent count!


AK71 said...

Hi Siew Mun,

You continue to amaze me with the stuff you have done to improve your financial health. I am sure your comment will inspire many readers here to take action. :)

Yes, it is not easy at first. I was not always sensible with money. Face was so important to me in my youth. Now, it is hard to think of living my life differently from how I do now. :)

AK71 said...

Hi Ray,

Yes, every cent does count.

However, don't cut back on what is necessary. So, if rice with 2 servings of vegetables and a serving of meat is what you need to keep you going in the afternoon, don't cut back. :)

I keep my needs simple. I don't minimise my needs. ;)

Flyingsaucer said...

I think the path would be easier if we could find 1-2 friends that think the same way as us, but that is not easy.

If you have friends who often like to go out to expensive places and spend a lot, you would slowly drift apart from them if you try to save money. You could say just go once in a while with them but over time this will cause you to drift apart from your friends...

There are also sometimes social events like weddings, funerals where you would have to give angbaos or white money as a small token.. haiz

Unknown said...

I am new to this blog and found it interesting. Always live below your means as it is almost impossible to downgrade your living standard unless forced to. Separate needs from wants. Most people spend out of habit and herd instinct. Once in a while I review my grocery bills to compare against inflation and budget. Minimise storage space at home so you need to clear something in order to get a new one. Small action like this helps to keep things in check and manage the perspective.

Ray said...

I wish I read your blog when I was in my early 20s.
I was such a spendthrift back then, going to restaurant every other day.

But one can only look forward. Still got time to build a nest egg :)

AK71 said...

Hi Flyingsaucer,

I believe that this is a valid concern but we must get our priorities right and maybe we could try to influence our friends in the process? ;p

I blogged about this before:
Are you sometimes forced to be extravagant?

You might be interested in related post number 1 in the abovementioned blog post too. :)

AK71 said...

Hi Michael,

Welcome to my blog. :)

Instead of upsizing, I actually downsized my home and, now, more than ever, living in a tiny apartment, before I buy anything, I would think twice. ;p

I shared in a blog post that:
Now, having lived in a shoebox apartment for a while, I find that they are, actually, very livable. The trick is not to clutter up the apartment with stuff. Staying in a shoebox apartment makes people think more carefully about what they buy for their home. The question "Is this necessary?" takes on another layer of importance.
Why my shoebox apartment makes sense?

AK71 said...

Hi Ray,

My blog is only 5.5 years old. I don't know if it existed when you were in your early 20s. ;p

Each of us will, hopefully, awaken to the need to be financially prudent at some stage in life. Then, it is about working towards greater financial security and, ultimately, financial freedom.

I believe that you still have plenty of time on your side. So, not to worry. Gambatte! :)

Unknown said...

Hey AK,

Has been following your blog recently. The more i try to save, end up i spend more esp on my kids.
Kids tuition fees are so expensive nowadays, so how to save on that. FYI, i don't have the patience and knowledge how to teach. Its so complicated.
I am still on the learning process of being able to be financially healthy.

Unknown said...

Hi AK,

The more i try to save, the more i spend instead. Esp on tuition classes for the kids. i am not able to teach them myself as the syllabus is so different from last time. Plus tuition fees are so expensive.
I am still learning how to better manage my money in order to have financial freedom when i retire.

AK71 said...

Hi Celia,

The first thing I tell parents who think that their kids are falling behind in school is to tell the kids to ask their school teachers for help. Help will be given. Seriously. :)

There are instances when private tuition is necessary but the first line of action is always to seek help from teachers in the school. Remedial classes or extra classes are organised to help students who need extra attention.

Ray said...

I totally agree with AK on this. We should not condone teachers (or the education system as a whole) that pass the buck of remedial to tuition industry! What's the point of having schools and teachers then?

pf said...

Actually, unless the kids are failing their subjects left right center....just give them a break. It's ok to do average in school. it's really time to move away from the pursuit of academic results.

Imagine what the kids would be like....more than 10 years of being drilled to focus on results. No wonder ppl say know how to study but not know how to be a person.

AK71 said...

Recently, someone told me I always attacking Starbucks. Alamak, where got? OK lah, today, I change target.

Friend: "Let me buy you a drink. Look, there is a Coffee Bean."

AK: "Aiyoh, Kopi Bean is very expensive lah."

Friend: "Then, go where?"

AK: "Go to that shop in front. Support my business lah."

Friend: "Wah, you know this place so well."

Support AK's business.
Teh-O @ $1.20 each.
2 cups = $2.40.
How much is teh-o in Kopi Bean?
I help my friend save money and support my business too! ;p

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