Welcome to Yap's Money Life Show. Thank you again for your interest and support.
Today I've got good news to share. You see in less than one month,
Whitman's show or Yap's Money Life Show, managed to get more than 100 subscribers.
So, with that I would like to say a big thank you to everyone of you who is
watching this. Secondly, I also would like to say congratulations.Why do I want to say
congratulations to you? That is because despite Yap Ming Hui's got no pretty face, there is no
entertainment content in this show, there's no sophisticated special effect
or graphic, you still pay attention to the content of this show. So what it means
is that you are really serious about achieving financial freedom, about
learning how to invest money and about growing your money high certainty.
So, if you continue to do so, I am very sure you will join the minority group of
people who's on track to achieve financial freedom.
Today I'm going to talk about why Robert Kiyosaki's advice may cost you your financial freedom.
Now of course Robert Kiyosaki needs no further introduction. Everybody knows him.
Now, I must also confess I am also a fan of Robert Kiyosaki.
When I was much younger. I am actually inspired by him of the idea about investing, about the
idea of achieving financial freedom. I especially like his concept about
employee, self-employed, business owner and eventually we should all become investor.
However as I practise my professional practice, as I talk to more
clients, I discover some of his advice could be quite dangerous and may not be so
applicable in Malaysia situation. Today, I will share one of these advice. You
see he always say that the only way to get out of the rat race of
the middle class is to become rich and for him to become rich is to take on
good debt. For example you must take loan to
leverage on the loan, to invest into properties. However, good debt or bet debt,
to me, it is still a debt. It is still a loan, it is still a liability and it is still a risk. When
your loan, when your debt is small and it is manageable, then that is okay.
But if out of your total investable
asset, you actually invest into like 95% of it into properties
or those properties that you actually invest into it, you take up to say,
90% of the loan and then in this case you are taking excessive risk. So
when you are not able to sell the property or flip the property, when you
are not able to rent the property, then you may not be able to pay the repayment
to the bank loan and there is a chance that the bank may reprocess the property, force sell
it and if the loan is too big, chances are you may become bankrupt instead of
becoming rich. So don't get me wrong, I'm not against property investing. It's just that
I believe moderation is the key to successful property investing. So if we
were to take moderate approach in property investing, I believe we can also achieve
success in financial freedom. Say for example, maybe invest in
properties, I would suggest that we don't invest more than 50%
of our total investable asset into properties. When we take loan, I would
suggest we don't take more than 50 percent of the loan on the total
asset that we have. By doing so we will still be able to grow our
money with high certainty to achieve financial freedom. And we can do that by
taking very minimum risk. My question is why not?
In this section, I will answer the questions that I have received from the
viewers. Now I have a question from Leonard, Subang Jaya. His question goes like
this : I expect to have RM 10,000 per month retirement lifestyle, is RM 3 million enough
for my retirement fund? Wow! RM 3 million. Now, you see first to answer
this question, I need to make a few assumption. No.1 assumption is that
inflation rate is 6% and Leonard is going to live say 30 years after his
retirement, say maybe at 55 up to 85 years old and
we also assume that this RM 3 million will be used to fund his retirement lifestyle and
then to be liquidated along the way and eventually when he's 85 this money will
become zero. So this is the 3 assumptions that we have and on how I'm
going to answer these questions. So with that 3 assumptions there, then my
answer will be very much depend on what kind of investment return, what kind of
investment ROI (return on investment) that Leonard you manage to achieve for your retirement
asset. You see if your expenses now are RM 120,000 per year for your retirement
lifestyle and your return is only 4% per year. Based on my calculation, it would
not be enough to fund your 30 years of retirement lifestyle. Your money would
last you at the end of 17 years. And for that matter, if you want
the money, the RM 3 million to last for 30 years, you need to lower your
retirement living standard or reduce your retirement living expenses.
So if your expenses are RM 120,000 per year and your ROI is 8%, that will be enough
for you to fund 30 years of retirement lifestyle. So we can see, it all
depends on your ROI. If your ROI is low, in that case you need to adjust
and you need to lower your retirement living standard.
So Leonard, my urge to you is that we should not accept low return and
for retiree also, not only for Leonard, for all the retirees we should not accept low
investment return. We must learn how to find ideas, how to find good investment
alternatives in order for us to generate a decent return, to generate
return which is higher than inflation, higher than 6%. By doing so, we can grow
our retirement asset bigger and we can also enjoy a better retirement lifestyle.
She said that, in episode 6, you talked about well-disguised scams. Why is it so important to avoid them
and what is the impact to my financial freedom if I were to invest into this well-disguised
scams. Now you see when we want to grow money with high certainty. When we
want to be very sure about getting good result for our investment, we need to
know how the losses impact our investment result. You see when you lose
5% ,when you lose 10%, when you lose 15% of your investment capital
when you invest, you feel painful. But you know when you invest the money, this is
pretty normal. As long as whatever that you lose,
it will rebound. Then you are okay. But what you cannot accept is that, is to lose not
only 10%, 30% but you lose 100% of your capital. And when you
lose your 100 % of your capital, you'll lose it forever. That is not acceptable. If you
remember what Warren Buffett always says, rule no 1, never lose money and
rule no 2, refer to rule no 1. If you invest into a scam whether is a
obvious scam or well-disguised scam, there is very high chance that you may lose
the whole capital of your investment. So my investment principle is, No 1,
when we invest into investment, we want to make sure that we may lose money,
investment value may drop but it got to be resilient that it will rebound
back and make a gain. That's No. 1. No. 2 principle that we have in
investing, for myself is that, there must be some protection measures to
ensure that my investment capital is always safe. We must know that to get
a gain, to get the return, this is something that we can't control but what we can control
is about the risk. And risk can be managed and controlled. So the truth is
wealth management is always more on risk management than return management.
For more infomation >> How good are you at spotting phone scams? - Duration: 1:42. 
For more infomation >> #7 Part 1 - Robert Kiyosaki's advice may cost you your financial freedom - Duration: 4:53. 
For more infomation >> Deb Guyot Herkimer "Diamond" Quartz Sleek Earrings - Duration: 3:47. 
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