Wednesday, June 10, 2009

Book's Gist: Book Start Late, Finish Rich

Decrease spending
Increase Income + Assets + Savings + Giving
Live rich

1. It's not how much U make, it's how much U spend
-Find Double Latte Factor, then reduce & control them
-Live Simple, Spend Less: Is it necessay? Can it be replaced with something more cost effective?
-Rethink Mobile plans, Internet plans, Club memberships, Bottled water, Satellite TV,  Two Cars, Eating Out, Lottery, etc.

2. Reduce Credit Card Debt, while saving (50% debt reduction / 50% pay yrself) & buying a home
-Pay >= minimum+$10 & on time & get annual fees waived
-Ask for less interest OR credit transfer to 0% card (offer period)
-Dont buy non-assets on credit if you can't afford to pay in cash

3. Pay Yrself First >= 12.5% (aim 25%) of Gross Income
-Find legal ways to take % from Gross Pay BEFORE TAX, eg. EPF & Life Insurance, SSPN, Education & Medical Insurance
-Make it automatic (EPF, insurance via CC, etc)

4. Investments should be boring
-Perfect Pie Asset Allocation: 1/3 Stocks, Equity Funds
+ 1/3 REITs, Properties including home less mortgage
+ 1/3 Bonds, Bond funds

5. Own your home
-Take 30yr loan
- Payback fast via 50% every 2 weeks, 13 mths payment pa

6. Increase yr income
-Would U hire U?
-7 Qs to ask yrself first:
i. What is the most important thing I do for my boss?
ii. What does my boss think I'm uniquely talented at?
iii. What would my boss be aftraid to tell me about my job or how I do it?
iv. What would my boss say I could do to add more value to my job?
v. What could I do to be my boss' "dream team" employee?
vi. Knowing what my boss has learned about me in all the time I worked here, would my boss hire me today?
vii. What would my boss say it would take for me to get a raise in the next 6 mths?
-Create yr own career & income goals OR wait to be forced into one
-Focus on growing the 20% of work that brings 80% of value, reduce the 80% of less worthwhile work

8. Start a business
-Home based
  * Buy 1 property every 2 years (live in it, move, live in it, etc.)
  * Downpayment 35% to 40% needed for positive cash flow,
   +assuming mthly rental = 0.5% of Cost of property
   + 3mths empty every 2 years rental agreement
   + 1mth's rental to agent every 2 years rental agreement
  * Decide where to focus, within 5 to 10 miles from home
  * Get pre-approved loan
  * Find broker
  * Go for "open houses"
  * Concentrate on CASH FLOW
-Direct Selling

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