HAPPY NEW YEAR!

What better topic to start the new year than “My New Year Resolutions”? Last year was a good year for me. I hope this year will be even better. Here are my goals for 2009.

Financial
1. Save RM65k in CD by Feb 2009. This amount is allocated the down payment for buying property.
2. Buy insurance by Mar 2009 in anticipation of buying a property in May 2009.
3. Earn a side income of RM6,000/mth by Apr 2009.
4. Buy a property in May 2009. (Timing is flexible though.)
5. Earn a side income of RM8,000/mth by Jul 2009. Quit my job once this threshold is achieved.
6. Side income of RM10,000/mth by Oct 2009.
7. Trade up the value of my stock portfolio from RM8k to RM16k.

Love
1. Get out more often and get to know more friends of the opposite sex. This will increase my chances of finding The One.
2. Participate in speed dating, at least once

Friendship
1. I should start tracing my lost friends. If not, then I’d be lonely after I quit my job. What are friends for?

I started this blog about five months ago. At that time I came up with a list of short and long term goals. Today, I will review my short term goals and see how I have performed.

Short-term Goals

1. Increase my part-time income to RM4,000 a month.

(Review: Achieved. My part-time income now is about RM4,000 a month. Though there were some hiccups and setbacks along the way, I am happy that I was able to accomplish this feat.)

2. Double up my part-time income by end 2008. Then resign from employment to concentrate on my part-time venture.

(Review: Yet to achieve. I was not able to boost my income as fast as I had expected. Sometimes things just don’t go the way I want them to be. This will remain a goal for 2009.)

3. Save RM60,000 in CD by Jan 31, 2009. Currently I have RM30,000 in CD. I need to add RM5,000 CD a month until Jan 31, 2009.
(Review: On going. As of Dec 2009, I have RM55,000. I will bank in another RM5,000 into my CD account next month. So, I am very much on track with this goal.)

4. Buy life and medical insurance.

(Review: Yet to buy: I have decided to buy a life insurance when I buy a property. Because that is when I will start to have financial commitments. As for medical insurance, my employer has already bought medical insurance for me. However, since I am thinking to resign from my job, I will have to buy a medical insurance for myself. I should look into this together with my life insurance.)

5. Use my CD to buy a residential property by Apr 2009.

(Review: On going. I should start researching on properties already. However, the general consensus is that the real estate market will soften next year, hence the prices should be lower. I should be flexible on the timing of buying the property so I could take advantage of the market conditions. I should also not limit myself to buying residential properties, but also consider commercial properties.)

All in all, I am satisfied with my performance in 2008. This is also the first time that I have actually set goals for myself. Amazing isn’t it how a little financial planning and goals setting can contribute to one’s life?

Have you ever dreamed of winning millions in the lottery and how you life would change? Chances are your life would probably be the same. Studies have shown that majority of the lottery winners squandered their winnings and in a few years they have gone back to where they were financially before their windfall.

I came across an article at MarketWatch explaining why people squander their windfall, whether it is lottery winnings or inheritance. In my opinion, this article did not answer the question, which is “Why do these people squander their windfall?”

The answer is simple. It is because these people were not ready to become millionaires. Rich people have different mindsets compared to the middle and lower income group. A person who does not have the millionaire mindset will not be able to manage the windfall and hence, he will squander away his money and end up where he was before. To keep his millions, he would have to change his mindset. He would have to think like millionaires.

Here is a simple analogy. Imagine a 1 liter bottle. This bottle can only keep up to 1 liter of water. Suddenly you receive a windfall of 5 liters of water. But your bottle can only keep 1 liter. The other 4 liters are spilled as you pour the water into the bottle. To keep more water, you need to change the bottle to a bigger bottle.

In this analogy, the bottle is your mindset and the water is your wealth. If you keep thinking you are worth $1 million then you would only be able to keep $100,000 even if you receive a windfall of $500,000. To keep the $500,000 you need to change your mindset. If you keep your mindset at $100,000, you will manage your money in such a way that you will only be left with $100,000 in the end.

Let me share my personal experience. For many years, I have been chasing wealth. I was greedy. I wanted to be wealthy as quickly as possible. I invested my money in get rich quick schemes and also gambled with all my wealth to the point I was borrowing money to gamble with. I gambled all my wealth away and was only a step away from being a bankrupt.

The problem was my mindset was a poor man’s mindset. Rich people do not gamble with all their wealth. Rich people do not leave their fate to others. I was not managing money like rich people. My mindset was “either zero wealth or double my wealth”.

After this period, I changed my mindset to, “$10,000 wealth”. I began clearing my debt and saved some money. Eventually I saved $10,000. Then, as if history repeats itself, I found that I was squandering money again. For months my wealth would not rise above $10,000. Because my mindset was at $10,000, I managed my money in such a way to achieve the $10,000 figure in my mind. I saw this problem and increased my mindset to “$20,000 wealth”. Immediately I saw a change in the way I manage my money.

Over time, I have gradually increased my mindset and my wealth has followed suit. I recommend you to read “Secrets of the Millionaire Mind“.

Of late, I often see images on the news showing the stock index board either a sea of red or mostly green. Red when the bears command, and green when the bulls charge. What would a color blind see on the stock index board?

According to Wikipedia: a color blind is a person or animal unable to distinguish between two or more primary colors (usually red and green)

This leads me to wonder if not being a color blind is a prerequisite to become a remisier.

The Dow Jones Industrial Average surges ahead.

The power window on the driver’s side of my car broke down yesterday. Luckily for me, my father knows how to repair the faulty parts.

My father is a mechanic and sometimes he salvages some good spare parts when his customers replace faulty sets with new sets. He changed the motor of the power window within minutes and it works just like new. He saved at least RM70 for me.

Last year, my brother started his business. He moved into his new office and we all helped to paint his office, installed lightings, cleaned the place and fixed up the furniture. This saved my brother at least hundreds, if not thousands. I am sure this helped to free up his limited capital for other important expenses.

We are all experts in our own areas. It’s a blessing to be able to tap into the different advice, skills and knowledge of the people around us. We should treasure and be thankful to our family, relatives and friends who help us.