"From Bankruptcy to Multi-Millions in 7 Years" by Jerome Tan

The book "From Bankruptcy to Multi-Millions in 7 Years" is written by Jerome Tan. This book is an inspirational and insightful read for those who are interested to attain financial freedom. 

The key learning points:

CHAPTER 1

1) If you want something, don't just talk about it but TAKE ACTION

2) In materializing a wish, you need to persevere

3) Never give up no matter how difficult the circumstances

4) If you don't want to live in poverty, think of ways to escape from it. Start cultivating the habits of earning and saving

CHAPTER 2

1) If you start/run a business without the knowledge, you are bound to fail

2) If you want to be rich, the fastest way is to get correct knowledge from the right people and apply it

3) In insurance sales, you learn how to sell. However, knowing how to sell is not enough to build a business. You need to know how to manage your money, how to build a team, how to find the right business partner, how to market your products and services etc.

4) Wanting to look good/successful will cause you to buy many liabilities which is counterproductive to becoming rich (you should be buying assets instead)

CHAPTER 3

1) People go bankrupt because they take on too much bad debt (student loan, car loan, wedding expenses, housing loan, having children on borrowed money etc). You must learn to manage your money. Otherwise you might end up in a situation whereby you are not making enough money to pay the bills. You might be spending most of your paycheck on minimum payments required to service bank loans.

CHAPTER 4

1) Learn to let go of your ego so you can cope with setbacks e.g. bankruptcy

2) Get yourself educated from successful people who can teach you how to transform your life through personal development

3) Keep an open mind

4) Network marketing is a low cost way to start a business. Don't think of it as a "Pyramid Scheme" or a scam. Choose a network marketing company with a good track record, debt-free, with good products, consumable products, no front loading, strong and able to educate its distributors. Follow a good leader who is positive, charismatic and able to motivate downlines in achieving common goals. Always remind yourself never to fall into the get rich quick scheme.

5) Stay positive, feel grateful, learn to appreciate instead of keep complaining

6) When you are grateful about life, wonderful things will be coming your way as this is how to universe works

CHAPTER 5

1) By being creative, you can find many ways to make money with little capital. For e.g. you can help other people to sell their programs/products. 

2) If your idea is good, you can always sell it to an investor for him to come up with the money

3) You can google a product or service and contact those websites that are at the bottom rank. They are obviously not doing well in marketing or sales. Contact them and tell them you'll help them to market their products and services. 

4) All you need is a bit of creativity, the guts to ask, the courage to take risks and the effort of execution

5) Employees make powerless income, may be laid off anytime, find it hard to get rich

6) Employers or bosses decide their own schedule and have control of their time

7) The rich use money to buy time, the poor use their time to earn money

8) Manage your own money well. Own investments. Have savings. 

9) Many people like to buy things they do not need with money they do not have to impress other people who do not even care!

10) Be willing to take risk to venture out and earn more. Take note not to fall prey to Get-Rich-Quick Schemes and end up losing everything due to ignorance.

CHAPTER 6

1) Be willing to change your mindset

2) Reinforce positive thinking. Make affirmations to yourself every day. "Money comes to me easily and effortlessly"

3) "I do not save money for rainy days, I save money for opportunities"

4) Be aware of the power of your subconscious mind.

5) Overcome your destructive ego. Don't think of stuff like "why am i not promoted?", "why am i not getting a pay rise?". Instead, ask, "what can i do to get promoted?", "what values can i add to myself to become a better person?"

6) Don't let your ego cause you to feel you're always right. If you feel that way, you will never change for the better

7) Start with small changes day by day

CHAPTER 7

1) The rich network, the poor just work

2) Attend transformational seminars

CHAPTER 8

1) Learn to make money in properties. Work with others. 1 person can pay the downpayment, the other can qualify for the loan. 

2) Eliminate negative patterns.

3) Read up on personal development

4) Thoughts create the words you use, the words you use create your actions, your actions become your habits, your habits will then create your character and your character will determine your destiny

CHAPTER 9

1) Be who you are

2) When you do something, always think about the other party

CHAPTER 10 

1) Financial Freedom Account (check previous blog post)

CHAPTER 11

1) You can learn how to manage a business. Learn to think out of the box, do sales and marketing, build a team, surround yourself with right people, understand strengths and weakness of staff, create a system etc

2) Greatest challenge is in changing your character and mindset

3) There is a learning curve. You will go through a rough time in the initial period but once you pass that difficult phase, you will never ever want to turn back

CHAPTER 12 - The Elements of Business

1) Sales and Marketing - gain experience by working in Profit Center instead of Cost Center if you are working for a company

2) Good Leadership Skills (Position Leadership vs Permission Leadership vs Production Leadership vs Personal Development Leadership vs Personhood Leadership) Position Leadership is bad, authoritative, people follow you because they have to. Permission leadership is not that good either, people follow you because you are nice and let them do what they want. Production leadership - people follow you because you can produce results. Personal development leadership - good and charismatic leaders who act as mentors to develop people to outgrow themselves. Personhood leadership - highest level of leadership where people follow you for who you are

3) Build a team. Find people who are self-motivated, committed to develop themselves and want to do more in life. 

4) Set a system

5) Keep learning -  the more you know, the more you know you don't know

Jerome Tan's Personal Finance

Divide your income into 6 different jars

Jar 1 - 10% for Financial Freedom Account (for investments to create residual income)
Jar 2 - 10% for Play Jar (pamper yourself with movies, fine food, spa, massage etc)
Jar 3 - 10% for Education (learn how to make more money, invest your money etc)
Jar 4 - 10% for Charity
Jar 5 - 10% for Long term savings (for long-term plans such as long distance trips, deposit for car, down payment for house etc)
Jar 6 - 45-50% for daily expenses

ALWAYS remember to save the first 10% of your income into your Financial Freedom Account! This is the top priority because you need to pay yourself first. Many people pay their expenses first and end up having no savings. By saving first, you make sure you are growing your money. If you save first and end up not having enough money to pay your expenses, think of ways to make more money.

Divide your Financial Freedom Account Jar into 3 Buckets

Bucket 1 -  6 months living expenses (serves as an emergency fund)

This money can cover your living costs for at least 6 months in case something unfortunate happens. If your monthly living cost is $5,000, you need $30,000 in this account.

Put this money in a bank account that generates a higher interest rate (e.g. Australia).

Bucket 2 - Buy and Hold

After the first bucket is full, put 80-90% of extra money in this account. This money will be put in properties that give good cash flow or blue chip stocks with good dividends.

Bucket 3 - Momentum Investment

After 2nd bucket is full, the remaining 10-20% will be used for high-risk high-return investments such as speculative stocks.

Other Advice

Don't dabble in options.

Use credit cards to get discounts, accumulate points for free gifts but always settle the bills by the end of the month.

Understand that there is good debt vs bad debt. Good debt is when your returns are higher (for eg you use the money to invest for 10-15% returns) than the interest rate (e.g. 3-5%). Bad debts are when you spend your borrowed money on luxury items like holidays, bigger cars, bigger houses, things you don't need etc. Taking on good debt by borrowing money to generate higher returns is an important way to get rich by employing leverage.

Trump 101 - The Way to Success

1. Passion leads to enthusiasm, motivation, action and long-term success. Find out what do you do voluntarily. What do you love doing or learning about? What do you dream and think about when your mind drifts? Can they be turned into a source of income? Take note that passion must be managed because if passion is not controlled, it may blind you.
2. Set high standards. Aim for perfection. Always ask how you can make it better.
3. Think big.
4. Be persistent. Plan and be prepared for crises.
5. Keep learning knowledge (from books, articles, websites AND people i.e. successful people, authors, experts, insiders - meet them or ask for advice. find them at conferences etc). Make files to save important information you read. File the names of authors, business movers and shakers. Learn about their accomplishments

Donald Trump - Think like a Champion

This book is about the mindset of a champion in business and in life.

1. Believe in the beauty of your dream. Have the determination to realize your dream.
2. Be true to yourself and stick to your own convictions. Produce work from your heart.
3. Innovate by assembling different things together
4. Teamwork is important. Keep the team spirit alive in personal and professional lives.
5. Have gratitude and realize that we all have a lot to be thankful for.
6. Keep learning. Train your ability to think.
7. Be able to think on your feet and be self-reliant
8. Strive for wholeness and keep a sense of wonder for your projects i.e. perfection
9. Life is an adventure. Give your higher self a chance to achieve something great. Find out what is the unique thing your higher self can offer and work at it with passion.
10. Read the Art of War. Gain wisdom.
11. Have an expansive mind. Know that there is a lot to learn.
12. Think like a champion. Go the extra mile. Aim to be the best. Aim for the highest you can achieve. Make an effort to exert yourself every day and really focus all your thoughts upon the work at hand.
13. Make your work an art form and make it the best
14. Build connected thoughts. Learn classics in literature or history or something outside of your range of interests.
15. Confront your fears. Replace fear with a problem-solving attitude, faith in yourself and hard work.
16. Have imagination and vision and the ability to execute
17. Business success is a combination of aptitude, work and luck
18. Communicate concisely and succinctly
19. Have the right mindset. Includes responsibility and focus. Look at yourself first when things go wrong. Emphasize solutions not problems. Be a team player. Find remedy instead of finding fault.
20. Keep your momentum going
21. Learn from setbacks and mistakes
22. Tell people about your successes. Have an ego and acknowledge it. It is healthy. No ego would lead to little life force. Too much ego would be dictatorial. Have a moderate amount of ego to keep your momentum moving forward and keep yourself vibrant and productive. Be your own best friend and be comfortable with your own approval. Be steadfast in self-respect. Say great things about yourself until you have people to say good things about you.
23. Develop your gut instincts / prescience / foresight.
24. Things are cyclical. Be resilient, patient, creative and positive. he sea gets sick but never dies.
25. Understand finance and the financial sector
26. Know that there may be delays and detours along the way. Destiny and the unanticipated has a part to play in your life.
27. What lies behind us and what lies before us are tiny matters compared to what lies within us. Give your inner self a chance. If you had nothing to do at all, what would you do? What would you do next? And next?
28. Do what you are suited for. If you are doing the wrong thing, stop and move on!
29. Have the strength of character to withstand discouragements as well as disasters so you don't give up. Never give in except to convictions of honour and good sense.
30. Get the best people you can. People who are trustworthy and competent. Know about people.
31. Dare to deal with problems and challenges
32.  Be true to yourself
33. Develop a tempo
34. Be enthusiastic
35. Take your work seriously, take yourself less seriously. Take some chances and go for a good time
36. be tough, be smart, be personable, but don't take things personally
37. Think like a genius with curiosity and think in patterns/opposites
38. Be groundbreaking, be original , be different
39. Think positively, stay persistent, don't settle for anything less than you envisioned
40. Find the most productive way you work. Build the habits and patterns for achievement and stick to it.
41. Discover and live your purpose
42. Ask yourself: What is your creative capital? What do you have to offer? What have you acquired in your experience and in your studies that makes you valuable? Are you aware of your own potential? Will you be equipped to make a difference when the time comes for you to step forward? Set your own standards, acknowledge your own value and remain positive from inside out.
43. Trust your intuition.
44. Know your audience. Prepare yourself every day to impress your audience
45. Stay calm during turbulence. There is wipeout but know that you can survive.
46. Build a reputation on intelligence, responsibility and results. Professionalism, loyalty, high standards.
47. Diligence is the mother of good luck - Benjamin Franklin
48. How to get rich? First, find something you absolutely love to do. Or continue finding it. In the meantime, learn everything you can about as many subjects and businesses as possible. Be able to take risks - reduce the risk with ample preparation and organization. Be efficient. Set time limit and be disciplined so as to not waste time. PASSION + EFFICIENCY = SUCCESS.
49. Make your working environment pleasant and effective. Be a magnet for the right people
50. IMPORTANT TRAITS: Integrity and negotiation and passion and persistence (tenacious/ never give up), integrity of purpose, attention to global events, accept responsibility, know that you can be topped and that you can be topped over.

Academic Qualification is only the beginning

You will not be successful if you think you can be successful because of your degree or diploma.

Getting a degree is only a first step, and in no way ensures success.

Other requirements include:
1) Great work ethic / willingness to work hard
2) Determination and perseverance
3) Good luck
4) Enjoy your work and smile

Success will come.

During university, it is important to enjoy your time. Keep a positive attitude. Try new things. Maybe start a business. Do stuff. Learn stuff. Make friends.

The Concept of Financial Freedom

What does it mean to be financially free?

A person is truly financially free (and living a good life) when his income-generating assets are generating for him enough income to cover for all his expenses comfortably without him needing to work.

And at the very core of the whole notion of achieving financial freedom is the importance of owning assets. Assets can be in the form stocks, property, websites etc.

It takes time and/or money to build/acquire assets.

How to Actually Get Rich

There is a good article I read on Bold & Determined.

In it, the writer, Victor Pride, sought to rectify many people's misconception that saving is the key to getting rich. As he puts it:

"You don’t get rich by having a limited income and saving a portion of that limited income."

Instead, the most important thing that we need to do to actually get rich is by rapidly increasing our income.

"The key to wealth is to make more money by owning income producing businesses and assets, not by saving a portion of a limited income from a limited paycheck."

Money Wisdom from Li Ka-Shing

The following article is re-posted from e27.co.

This article is translated from the original Chinese by Edmund Ng at CeoConnectz.

Suppose your monthly income is only RMB 2,000, you can live well. I can help you put money into five sets of funds. The first $600, second $400, third $300, fourth $200, fifth $500.

The first set of funds is used for living expenses. It’s a simple way of living and you can only be assigned to less than twenty dollars a day. A daily breakfast of vermicelli, an egg and a cup of milk. For lunch just have a simple set lunch, a snack and a fruit. For dinner go to your kitchen and cook your own meals that consist of two vegetables dishes and a glass of milk before bedtime. For one month the food cost is probably $500-$600. When you are young, the body will not have too many problems for a few years with this way of living.

Second set of funds: To make friends, expand your interpersonal circle. This will make you well off. Your phone bills can be budgeted at RMB 100. You can buy your friends 2 lunches a month, each at $150. Who should you buy lunch for? Always remember to buy lunch for people who are more knowledgeable than you, richer than you or people who have helped you in your career. Make sure you do that every month. After one year, your circle of friends should have generated tremendous value for you. Your reputation, influence, added value will be clearly recognized. You’ll also enhance your image of being good and generous.

Third set of funds: To learn. Monthly spend about RMB 50 to RMB 100 to buy books. Because you don’t have a lot of money, you should pay attention to learning. When you buy the books, read them carefully and learn the lessons and strategies that is being taught in the book. Each book, after reading them, put them into your own language to tell the stories. Sharing with others can improve your credibility and enhance the affinity. Also save up $200 per month to attend a training course. When you have higher income or additional savings, try to participate in more advanced training. When you participate in good training, not only do you learn good knowledge, you also get to meet like-minded friends who are not easy to come by.

Fourth set of funds: Use it for holidays overseas. Reward yourself by traveling at least once a year. Continue to grow from the experience of life. Stay in youth hostels to save cost. In a few years you would have travelled to many countries and have different experiences. Use that experience to recharge yourself so that you’ll continually have passion in your work.

Fifth set of funds: Invest. Save the $500 in your bank and grow it as your initial startup capital. The capital can then be used to do a small business. Small business is safe. Go to wholesalers and look for products to sell. Even if you lose money, you will not lose too much money. However, when you start earning money, it will boost your confidence and courage and have a whole new learning experience of running a small business. Earn more and you can then begin to buy long-term investment plans and get long-term security on your financial wealth being of yourself and your families. So that no matter what happens, there will be adequate funds and the quality of life will not decline.

Well, after struggling for a year and if your second year salary is still RMB 2,000, then that means you have not grown as a person. You should be really ashamed of yourself. Do yourself a favour and go to the supermarket and buy the hardest tofu. Take it and smash it on your head because you deserve that.

If your monthly income is at RMB 3,000, you must still work very hard. You must try to find a part time job. It will be great to find part time sales jobs. Doing sales is challenging, but it is the fastest way for you to acquire the art of selling and this is a very deep skill that you will be able to carry it for the rest of your career. All successful entrepreneurs are good sales people. They have the ability to sell their dream and visions. You’ll also meet many people that will be of value to you in the later part of your career. Once you’re in sales, you will also learn what sells and what not. Use the sensitivity of detecting market sentiments as a platform for running your business and in the identification of product winners in the future.

Try to buy minimal clothes and shoes. You can buy them all you want when you’re rich. Save your money and buy some gift for your loved ones and tell them your plans and your financial goals. Tell them why you are so thrifty. Tell them your efforts, direction and your dreams.

Businessmen everywhere need help. Offer yourself to do part time for any kind of opportunities. This will help to hone your will and improve your skills. You will start to develop eloquence and soon, you’ll be closer to your financial goals. By the second year, your income should be increased to at least RMB 5,000. Minimum it should be RMB 3,000, otherwise you would not be able to keep up with inflation.

No matter how much you earn, always remember to divide it into five parts proportionately. Always make yourself useful. Increase your investment in networking. When you increase your social investment, expand your network of contacts, your income also grows proportionately. Increase your investment in learning, strengthen your self confidence, increase investment in holidays, expand your horizons and increase investment in the future, and that will ultimately increase your income.

Maintain this balance and gradually you will begin to have a lot of surplus. This is a virtuous circle of life plans. Your body will start to get better and better as you get more nutrition and care. Friends will be aplenty and you will start to make more valuable connections at the same time. You will then have the conditions to participate in very high-end training and eventually you’ll be exposed to bigger projects, bigger opportunities. Soon, you will be able to gradually realize your various dreams, the need to buy your own house, car, and to prepare an adequate education fund for your child’s future.

Life can be designed. Career can be planned. Happiness can be prepared. You should start planning now. When you are poor, spend less time at home and more time outside. When you are rich, stay at home more and less outside. This is the art of living. When you are poor, spend money on others. When you’re rich, spend money on yourself. Many people are doing the opposite.

When you are poor, be good to others. Don’t be calculative. When you are rich, you must learn to let others be good to you. You have to learn to be good to yourself better. When you are poor, you have to throw yourself out in the open and let people make good use of you. When you are rich, you have to conserve yourself well and don’t let people easily make use of you. These are the intricate ways of life that many people don’t understand.

When you are poor, spend money so that people can see it. When you are rich, do not show off. Just silently spend the money on yourself. When you are poor, you must be generous. When you are rich, you must not be seen as a spendthrift. Your life would have come full circle and reach its basics. There will be tranquility at this stage.

There is nothing wrong with being young. You do not need to be afraid of being poor. You need to know how to invest in yourself and increase your wisdom and stature. You need to know what is important in life and what is worth investing in. You also need to know what you should avoid and not spend your money on. This is the essence of discipline. Try to avoid spending money on clothing, but buy a selective number of items that have class. Try to eat less outside. If you were to eat outside, do make sure you buy lunches or dinners and foot the bill. When buying people dinner, make sure you buy dinners for people who have bigger dreams than you, and work harder than you.

Once your livelihood is no longer an issue, use the remainder of your money to pursue your dreams. Spread your wings and dare to dream! Make sure you live an extraordinary life!

Famous theory from Harvard: The difference of a person’s fate is decided from what a person spends in his free time between 20:00 to 22:00 . Use these two hours to learn, think and participate in meaningful lectures or discussion. If you persist for several years, success will come knocking on your doors.

No matter how much you earn, remember to split your salary into five parts. Take care of your body so that it will still be in good shape. Invest in your social circle so that you will constantly meet new people where you can learn new knowledge from. Expanding your network will also have an important impact in how much you earn eventually. Travel every year and expand your horizons. Also keep abreast with the latest developments in the industry. If you follow this plan diligently, you will soon see big surplus in your funds.

Whatever happened in the past is over. Do not dwell on past mistakes. There’s no point crying over spilt milk. Everybody makes mistakes. It’s what you learn from the mistakes, and promising yourself not to repeat those mistakes that matters. When you miss opportunities, don’t dwell on it, as there are always new opportunities on the horizon.

Being able to smile when being slightly misunderstood is good upbringing. When you’re wronged and you smile with calmness, it is generosity. When you’re being taken advantage of and you can smile, you’re being open-minded. When you are helpless and you can do a philosophical smile, you’re in a calm state. When you’re in distress and you can laugh out loud, you’re being generous. When you’re looked down and you can calmly smile, you’re being confident. When you’re being jilted in relationships and you can smile it off, you’re being suave.

There are many people who are struggling to make ends meet. It doesn’t matter if you are rich or poor. There are lessons for all to learn from Li Ka Shing.

How did I decide on my financial goal?

My experience has taught me that having a clear, achievable goal is consistently better than having only a vague vision. Also, Napoleon Hill wrote in the book "Think and Grow Rich" that it is important to have a definite, specific financial goal. Thus, I knew that I needed to set a financial goal.

Moving on, I had to decide on the amount of net investable assets that I aspire to accumulate. Eventually, I decided on aiming for 30 million dollars of net investable assets because that is the amount that will qualify me to be part of the "ultra rich club". According to Investopedia, the definition of an Ultra High Net Worth Individual (UHNWI) is:

"Persons with investable assets of at least US$30 million, excluding personal assets and property such as one’s primary residence, collectibles and consumer durables. Ultra High Net Worth Individuals (UHNWI) comprise the richest people in the world and control a disproportionate amount of global wealth. Ultra high net worth is generally quoted in terms of liquid assets over a certain figure. The exact amount differs by financial institution and region."