Translated by Felix Leong
[Link to original article (Simplified Chinese)]
A friend asked me would I be interested to buy a second-hand luxury car, saying that the car owner wants to sell it together with the license plate. It was a single digit license plate, which the owner had spent more than 30 thousand ringgit to win the bid for that particular number at that time.
Seeing that how much money was spent just to bid for that license plate, you can imagine what kind of person the owner was.
My friend told me that during those days the owner was a high income earner with monthly salaries that amounts to tens of thousands. So buying a 30-over thousand license plate wasn't a big deal back then. But now his income was far from what he earned in the past and he was forced to sell his car together with the license plate in order to relieve some financial burden.
This reminds me of what my friend, a high income earner, had said to me: Those in the high income group have a higher social standing, and therefore having their expenses being much higher compared to your average Joe.
In order to maintain a exclusive lifestyle, it would require a luxurious car and a classy house to match. These things were so expensive that even those who earned tens of thousands per month would have to take up a loan in order to purchase such luxuries. And the ability to repay the loan installments greatly depends on your future income! There's a potential to wreck financial disasters if you mistakenly overestimated your ability to earn money for years to come.
The taste of crashing down from the skies and having your face falling flat on earth is definitely not enjoyable at all.
And the sad thing is that those who are too full with themselves will never come to understand this.
Those who are successful in their careers will always think this way: My month income was more than ten thousand dollars, the load installments of my car is just a mere two thousand a month, wasn't that a "purchase with great discretion" already?
The real problem is on whether your income be able to outlast your installments.
The times when one is over confident is the time when he will overestimate his own abilities and only believes the the path ahead will only be smoother as he continues to walk ahead. He will never imagine or thought of the times of an unpredictable rainy day. And only when the storm comes that he will be shocked to realize that how inadequate he was in having himself prepared for such a situation.
Those who spends more than he earns will never be able to save at all! Savings can only happen when you tone down your lifestyle. Therefore, understanding how to trim the fat in your lifestyle is extremely important!
If a person earning ten thousand a month can maintain his lifestyle like those who earn eight thousand a month will be able to save at least two thousand a month. If a person earning five thousand a month can maintain his lifestyle like those who earn four thousand a month will be able to save at least a thousand a month.
Most importantly: Try not to upgrade your lifestyle/standards of living! Try not to attain physical luxuries beyond your means! Only that you'll be able to increase your savings.
So, will those who knows how to save will live happily ever after?
I had a friend who is working hard to save and works overtime almost everyday. His wife is also an office worker, so the total of their income is pretty significant. He told me that with their current income they can afford to let the family to live a comfortable life.
But calculating his children's education and considering that he had only about 10 years before he retires, he believes that he have to work even harder to save in order to achieve a golden future of their own.
The excessive amount of work has taken up all his time available, causing him to lose the opportunity to think on how to let the money to do the work of earning more money. Therefore, he only knows how to utilize the "him working for money" mindset to accumulate wealth, but never dared to think of how to "have money working for him".
"Working diligently before retirement is the only sure way to ensure the better days in his future", that's his belief.
Of course I believe that his "future" will be happy. But I also believe that his "present" is a bit arduous! Working diligently can only last for a short few years, but it is something that should never be done until retirement.
Does wealth accumulation really needs to be achieve through "us working for money"? Of course I don't believe that! I only believe that "having money to work for us" is the fastest way to amass riches. The starting years will be the time when money has to be earned through hard labour, but after that it depends on how you let your money to do that job for you!
Only through "having money working for you" will free yourself the time to enjoy life! Having less work, completely relaxed and being stress-free is the best life you can ever have! All of this can only happen if you learn how to let the "money working for you"!
Therefore I always advise my friends that so long that you don't rush yourself into improving your lifestyle, you'll be able to reduce your workload and spend the time to enjoy life and think on ways to let the "money working harder for you".
So long you understand how to let money working for you, our future will be full of bliss!
Too bad such a simple logic is rarely understood.