Your lifestyle has to accomodate your pocket irregardless how much you earn. When opportunity arises, your have the liberty to tweak your lifestyle. i.e: still spending within your means.

Who doesn't want to be a millionaire? There are many reasons why many people are earning the average. I do not agree that average earners skim/compromise on their lifestyle, just because they didn't live extravagantly. Many people are earning average doesn't equate with everyone is earning the same. The examples are flawed (now I realised thats not your examples, paiseh), how can one compared a person earning 1K vs 10K vs 100K?

I didn't doubt you a person can earn 100K a month. But, how many actually earn this much? Are you earning 30K a month? If people are earning 100K a month, do you think they have qualms flying on first class, fine-dine as and when they like?

As much as we want to dream big, think big and LIVE BIG, we must be honest with ourselves. Be realistic.
As much as they are many successful stories which are inspirational, they are also many stories ended in failure which serve as valuable lessons to all.

Have you considered that the majority of the people in this can't achieve a big bank account and lifestyle, either due to their ability or luck? 

The world isn't really overrun with millionaires you know. That is why the 1% is called the 1% and the other 5% is called the 5%

And if you fall under the 95%, live accordingly. Being in the 95% and try to climb into the 1% or even the 5% bracket is not as easy as you make it to be. 

Beachkid,

I don't think anyone is disputing that there are exceptional individuals who are capable and can in fact earn to such an extent that they can enjoy the type of lifestyle that is conventionally admired i.e. driving a Porsche, sipping champagne and eat meals prepared by Michelin star chefs.  It is the tone of your post that people take exception to.  The manner in which you wrote pours disdain on people who post on cutting down expenses as a prudent step in personal finance management.  Most of the posts on expense cutting were answers to people who posted their current income and expense and asked for advice on how to manage their finances better.  Whether a person earns 2K or 50K a month, they still need to manage their finances and part of that is managing their expenses.  A person who earns 5 million a year may think that they don't need to cut expenses but if they are spending 6 million a year, then the advice would be the same : cut expenses. Not many people would advise just maintaining a unmanageable lifestyle and just to earn more.  Cutting expense can be done immediately but earning more takes time and depends on the ability of the individual, opportunities at hand and even luck.

The book "Your money or your life" by Joe Dominguez should be read for all aspiring gung-ho $ chaser.
It gives a point of view where by simplifying one's life, one gets "MORE life", not pains of being unfulfilled.
To me, the best parts were:
a. If we are off making a living everyday so much, how come we come back tired, not full of life?
"Making a living" wor.. or are we "making a dying" instead? ie. exchanging life energy/time for $

b. What is $? The UNIVERSAL undeniable specific truth.
Nope, not an exchange of value as a person may not want your $ in exchange for their product/service/life. Thus, $ to that person is of no value.
The universal undeniable truth - $ is an exchange of our life's energy. To get or make $ (even investing or biz), we spend time/effort/skill, even 1 hr per day for multi-millionaires, to make $. Thus, it is an exchange of life's energy for $.

c. If we live a life where we don't have to vacate (vacation) or "get away" from it, do we actually need that much more $?
ie. earn more (stressed) by exchanging life energy/time for paying our vacations / "get aways" VS just simplifying life (LIFEstyle, not lifeSTYLE)

Just a thought - interesting perspective, not 100% gospel truth yar
BTW, google about Joe Dominguez - U'd be surprised about his rags to riches then gave it all up for a simpler life, focused on what he is passionate about.

Using same analysis of my idea running a stinky tauhu stand at pasar malam,

Running a stinky tauhu
Signs that the market is bad:
• There are already lots of other stinky tauhu stands in your area, so you would have to fight
for customers. ( None seen so far in Penang)
• The weather is raining, so people may not want to go pasar malam. ( True. Raining better sleep at home)
• You live in an area where few people like stinky thing, so there might not be enough customers. (Not true. It is like durian, u never try before u never like it, once tried addicted. Stinky tauhu is selling like craze hot cakes in Hong Kong and Taiwan streets)
• For some reason, people in your area don't like stinky tauhu very much. ( Cannot be help. Maybe 1 out of 10 dare not try thus forever don't like. Fear and Dare factor.)

Signs that the market is good:
• Nobody else is doing this in your area, so the customers will be all yours. ( Ya, first to penetrate the night market business selling stinky tauhu. No competitor. Price fixing the profit can be control)
• Once a week only pasar malam at one place, the other night pasar malam at another place so people will be addicted mood for stinky tauhu. ( They will buy more)
• You know of a great spot for a stand where lots of people wander by all day. (Pasar malam a lot of ppl wander around but stinky tauhu stalls must be at far end corner not near any other stand of business in pasar malam)
• Stinky tauhu is always popular where you live. ( Not sure. Its worth a try to explore new market segment. Ah Kau can make it by selling newspaper at road side so can I  )

This is part of financial management, how to diversity earning partime to increase income. 

investment always landed me hitting the wall....if like that I better go genting buy big small chance almost 50-50

thus I am not greedy, not looking double my income..

if halal way, I work night time selling stinky tauhu at pasar malam, I earn every single sen and dollar to increase or double my income I am ok..

same theory as

buy an egg, hatch the eggs to get little chicken, feed them, they grew big sell them to buy a kid goat, feed them grew big sell the goat, buy some calves , feed them grew big sell the cow (300% profit) .. 

I like this...Jadi Along
http://earlyretirementextreme.com/the-thre...-is-enough.html

definition of investment
http://earlyretirementextreme.com/wiki/ind...tle=Investments

I am not informed investor thus I like acquire more money through labor acuity than investment acuity since I have little money. Once enough money I prefer buy property in cash.

http://www.wisebread.com/the-pros-and-cons...ash-for-a-house

i am not scared of income tax. I should be happy as the more I earn, the more I get tax. If I am not earning that much, I cannot get tax.

Old ppl sit at coffeeshop drink kopi o drive Mercedes
Young ppl go Chatime drink bubble milk tea struggle to pay instalments for Myvi

Think...

The soap story is must one of many. It's the mentality that is important, not the calculation on how much you save out of that soap. While i personally don't subscribe to such extreme ideas (maybe thats wh i'm not a millionaire... Yet) it's interesting to understand their thinking.

In the story, they also spend time at the coffee shop, drinking coffee, reading free newspaper, and using the shops electricity instead of their own. We may laugh at this as being trivial, but similarly with compounding interest, the effects will be there over a long period of time.

Rich ppl focus on high earnings AND living well below their means.
Poor ppl focus on spending what they have earned, now and future earnings.

There is no point earning high but yet spending is high too right? One will LOOK rich but actually have not much net worth. Look at well paid footballers and you'll see. Few hundred k per week, but yet some of them are bankrupt.

That book mentioned in the second link is a fantastic book. It really does give insight to how millionaires think and i think some of the principles can be applied here too. I mean, things like millionaires cutting out discount coupons, going for survey just to earn a hundred bucks, these are beyond my normal comprehension but it shows their mentality towards living well below their means and that is inspiring.

No, it's not about the soap.

For many millionaires, their savings habit comes naturally and they tend to apply it across the board, for all items big or small or tiny. It's a natural part of their mentality, their thinking, their instincts, as someone already mentioned.

But for others, savings does not occur that naturally - it's something they have to make an effort to focus on. In such cases, it is better to focus on and start with the things that make can actually make a difference as opposed to things that are insignificant. Drinking kopi at a kopitiam as opposed to drinking at Starbucks is going to be far more significant in savings. One cup's savings will probably equate to many months, if not years of saving that tiny little piece of soap. Even more so if you drink regularly.

So, no, it's not just about the soap.

Follow AFISH formula,

A- ASN, ASB, ASW2020, Sukuk, bond, etc
F - FD
I - Insurance
S - Share
H - House / Property

how much earn is not a real concern. It is like seizing opportunity. Good time saves more, bad time recession history shows almost 8-10 yrs once, shares goes down buy more, if enough cash buy property - commercial or residential get one for passive income - rental

stinky tauhu business I not yet start.. that is why I just calculate my net profit savings per year that I set is RM25K, after minus everthing personal expenses, etc
parents rich will inheritage at least one residential and one commercial property to take care of inflation- father said so....

At the moment I planning to go for another property around RM200K just waiting for recession time. If to buy a RM400K property- I will move in there to stay, I will pay downpayment RM200K and borrow RM200K, the existing condo rent out to finance the installment of the RM200K...I like financial freedom...continue with my plan the RM2K savings per month without fail ..

if suddenly company lay me off, i just pack my bagpack and go back hometown just add a pair of chopstick eat only...passive income from rental existing condo and some cash in hand interest should be able to sustain daily expenses..Siu sa go back hometown become juru ukur tanah...wait for recession to go away in same time can do business like selling stinky tauhu, etc

Second stage - I follow my parents steps , acquire property in cash that is hard earn and savings one... then holding power long collect rental to sustain life.. if price property go up high high sell lo, keep the cash, wait for next recession time enough money to buy 2 more. I hope I can buy a property every 10 years lo... Now 33 yrs old got 1 oledi, plan to get another 1, at age 43 get another 1, at age 53 get another 1.. Think about it also happy got 1+1+1+1 = 4 properties liao at age 53

I have a target is to achieve RM2 million in 10 yrs time earlier mention  the plan + ( 1 hse + 1 commercial shop - this one dunno when can get, no hurry one) inheritage from parents to retire... [coz with 2 million either I cash out] or [existing 2 property I just rent them out and with around RM300k cash and move back hometown] stay with parents to look after them..
I calculate very simple to achieve the financial freedom

RM2 million 5% interest is RM100K
RM100K divide by 12 months - Each month around RM8K, should be sufficient for daily expense for retirement? don;t u think so?

I now like savings RM2K per month I also can live, if I have 4X more money to spend, should be able to happily retired right?

Do inflation happens 4X?

Of course in real life, I do not hold all RM2 million in cash, I put some in property, some in shares that gives good dividen like Public Bank shares, some in bond, here n there..

So u see based on my calculation got so many properties, but I need to diversify my financial management.....I do not like to call it investment because I prefer min. risk type.

Later I go back hometown, I go meet those millionaire old man sitting at coffee shop every morning to ask them more advise on financial management...

they also very kiamsap one...

they go jogging every morning, then go coffee shop order kopi o satu, sit one table together read newspaper for free, chit-chat with friends and enjoy the fan for whole morning...They tell me cheap lo just need to pay the kopi o one glass only ma, can read newspaper and enjoy the fan..home no need order newspaper and waste electricity on fan...can enjoy some more chatting with friend..then 11 smtg the go round round their business...Crazy lo...u see their Ah Mat come big car benz pick them up one..

then we one day talking how long do u use the soap (sabun). I tell them I use till very thin, then I throw away already...they laugh at me...They tell me the secret to become millionaire is u stick the thin soap onto a new soap and continue using till the end no waste....HAhahahaa......No wonder they so rich...they really practise a simple life yet when look at their lifestyle they really pay attention to details on waste management...

But some uncles in small towns really don't have anything to do and can afford to sit 6 hours at kopitiam... Their business is run by workers, and they probably have lots of land. Read in newspaper article some small town where ppl buy properties in CASH. And we're talking about 500k to
1m properties.... 

I humbly disagree though on the lavish millionaires. If there is no discipline and personal finance, i'm pretty sure they will end up overspending and will sooner or later end up a non-millionaire. The world is too good at encouraging one to spend lavishly. Few m on diamond rings, few m on sports car, few m on a yacht... And it's gone. Unless you're talking about super billionaires, no matter how they spend also cannot finish their money.

Unfortunately i think most of us normal joes will not be in the super millionaire category, (that's why we're here!), so i believe the stankey danko type of millionaire is what most of us can aim for... Has anyone ever tried to do a survey on malaysian millionaires like stanley danko? Would be interesting to see if they buy new cars, drink starbucks or buy rolexes.

And just a curious question, how do you guys budget effectively? I have been trying to do that but it's extremely hard to keep track of expenses... Write down somewhere each time money is spent? Review daily?

U have been frank here so I wouldn't refrain being frank with you.

This thread is called "Personal financial management", not "How to make it big and get rich".

Anyone with a sense of logic would tell u that people who hang around here needs help to manage their finances better, esp thru controlling their expenses.

Your "I-made-it-big-and-I-do-not-see-merit-in-living-frugal" attitude is very unwelcome here

From the Standard:

"Unhappy mainlanders count their riches

Wednesday, January 16, 2013

The richer they are, the less happy they feel.

That is a key finding of the inaugural Millionaire Happiness Report - a sub- report of the Chinese Luxury Consumer Survey 2013 - which documents the satisfaction that Chinese millionaires have in their lives.

And they don't sleep that much - just 6.6 hours on average during the working week.

The Chinese super-rich fall into two categories: those who are workaholics; and those who are winding down, supposedly toward early retirement.

Men consider setting up their own company as the happiest moment of their life, whereas women consider theirs to be falling in love.

Self-made female millionaires are more likely to be divorced - 35 percent of the respondents, with an average age of 37 years, are either divorced or remain unmarried which is twice the figure amongst their male counterparts.

Both male and female millionaires are dissatisfied generally with their health and want to spend more time with their children.

Millionaires and the super-rich are better educated than expected, with 43 percent and 56 percent respectively claiming to have a post graduate degree, mostly executive MBAs."

It is important to work for goals and not just money per se.  Once a certain amount of money is acquired, anything more does not make a person happy. Money is a tool. Use it to achieve concrete goals.

A longer elaboration on the same article:



"SHANGHAI: China's super-rich suffer because of the pressures brought about by their fortunes and are less happy than ordinary millionaires, according to a survey by a leading wealth magazine.

"The richer you are, the less happy you are," concluded the poll of more than 500 Chinese millionaires by the Hurun Report, which compiles an annual list of China's richest people.

The survey defined "millionaires" as those with personal wealth of 10 million yuan ($1.6 million) or more, and the super-rich as those with 10 times as much, 69 of whom were included.

"Money also brings you problems," said Hurun Report founder Rupert Hoogewerf.

"These problems could be pressure to perform, pressure to satisfy your customers, pressure from all these different aspects that come about when you have a big business," he told AFP on Wednesday.

Nearly 30 percent of all those surveyed said they could not balance work and life, the survey showed. More than half were unhappy about spending so little time with their families.

On well-being, more than a quarter were unhappy with their health while more than a third believed they did not exercise enough.

Chinese millionaires only sleep an average of 6.6 hours a night during the working week, the report found, with some 27 percent sleeping for less than six hours.

Male and female millionaires were split on some issues.

Men considered setting up their own companies as the happiest moment of their lives, while women put falling in love as number one, the survey said.

Self-made female millionaires were more likely to be divorced with 35 percent of them divorced or unmarried -- twice the statistic for male millionaires.

The figures come after the daughter of China's richest man, beverage magnate Zong Qinghou, lamented in an interview that she was over 30 and had never had a boyfriend.

Chinese media said Zong Fuli, who helps her father run the Wahaha company, was still single because she could not tell whether potential suitors were chasing her for love or money.

In September, the Hurun Report estimated Zong Qinghou to be worth $12.6 billion."

Sure. But how many can achieve it realistically? 

The truth was, for most of us, the basic path to financial security best summed up by earning >>>>>> spending.

Do that and you will be safe and you would do well financially.

Anybody says otherwise is trying to sell you books on tips how to make loads of moolah without sweat or real work. 

It is not a very good analogy for the rest of us to follow in order to get "rich". And in fact, I never heard anyone getting rich because of that. Maybe there are some, but I never met any of them. Those I know doing very well financially, don't even really care savings like few cents. Many of them will just think how to get few zeros more to cover for the loss of the few cents. And yes, none of them will be so free to sit at kopitiam reading newspaper, just to save some few RM on newspaper and electric bill. And yes, they are not AK and Yeoh level, but they are high income earners. The point is, you won't get rich by savings every little penny. If you want to get rich, you have to earn more or find ways to make more money. The same goes to be financially free. You cannot just save, and spend time and effort saving penny. It will bring you nowhere. You would be well off spending time and money on business or investment. It is very wrong idea to alwiz instil "stinginess" just to be financially free because it won't happen. I have many examples of the "flops" that scrimp their lifestyle, but they are poor in both lifestyle and wealth. Not that I encourage spending lavishly, it's just wrong to say that skimping lifestyle will lead you to financial freedom. It will not. Only by making more money and optimizing the money only you can achieve that.

Ahh...that is the problem isn't making...the CORRECT and SAFE ways to make more money?

Unfortunately, there is no sure fire way that everybody can safely and accurately make more money to in order to achieve financial freedom.

"Making more money" is NOT guaranteed. You could easily lose money than gain money in one's quest to make more money.

The number of idiots that got scammed by Genneva alone proved it.

However, what is guaranteed way to financial freedoms that is within your control is to manage your wants and live appropriately to your income, and never spend above your income, no matter what it is.

Of course, I am not suggesting that one should not try expand one's income if able. But the sad truth is, not everyone could do so due to fate or ability in life.

My point is, making more money is secondary priority only to watching your expenditures.

Master your expenditures, curb your wants, then only figure out how to "make more money", whatever that is.

I agree with this view. Since this thread is about personal finance management, I think we can safely exclude those who are really earning super high incomes, living a high consumption lifestyle (they can afford it, no problems). Majority of people will be normal wage earners, striving to improve their personal finance status.

Obviously, there are some opinions that one should strive hard to earn more money, and therefore don't have to live the frugal life, but some people do not see the point in spending excessively in things which they feel is not needed. Meaning they actually feel happy living a frugal life, not a poor sad state of existence trying to be a millionaire by using soap shavings and reading free newspapers.

I hear all those stories about fresh grads coming out to work, earning say 2k per month and then jumping in to buy new car on 7-9 year loans, drinking starbucks,chatime, buying the latest iphone/samsung galaxy costing their 1 month salary or other expensive branded goods on credit. Those are all scary situations, and I'll admit that I was once like that too. Just looking at nicer cars, and calculating whether I can afford to own/loan it through a 5 or 7 year loan - as long as I can afford to pay the monthly installment, then there is a high probability to get it.

We are conditioned by the consumer market we live in, and some by peer pressure and some by lack of awareness. Many would have gone through the buy-new-car-on-5-year-or-more-loan mistake for example and then scratching their heads wondering why they don't have much money...

Let me try and ask a question, assuming now someone gave you RM500k and told you it's yours, free for you to do anything with it. What is the first thing you would do? Answering this will probably reveal a lot about how the person thinks in terms of personal finance management.

RM2.8K is not gross income. RM2.8K is after deducting epf, etc that I work some OT and part time. I managed sometimes can get around  3K , 3.2K, 3.5k

RM2K is savings, RM800 is my spending. If not enough to spend I work harder already mention ma.

I lucky no need give to parents $, coz they are a lot richer than me. They fully retired with many properties to collect rental. U guys did not see when I post my parents is on the tour around the world. 

Read this Post #1768..This is how u do it.  The forumer give his parents RM500 per month too. Read from the post #1768 onwards, you can see other forumer reply how they managed to cut on expense too. 

http://forum.lowyat.net/topic/1577849/+1760
I got post here yes looking into relation, Me low income? A guy with RM200K cash in hand now can easily buy another property cash to collect rental at least RM 800-1K per month. Don't u agree? U must read my current post, I am a Technician but recently only promoted to Engineer. So with passive income RM800-1k per month extra, don;t u think I still can save RM2K per month..

Let say a property is RM300K, I just need to borrow RM50K from my dad and another RM50K from my mom, I calculate back interest 5% for them, I can easily settle the loan RM100K within 4 years or less. Thus I do not need to take bank loans at all.

Even bank don;t want to loan me RM100K for property if I tell them I settle it within 4 years. They wanted me to loan longer so can collect more interest from me. They just ask me to take personal loan.

I do not require to pay my parents. The few lucky ones.
The plan how I do extreme savings RM25K per year, when economic crisis I go buy some good shares. In 1998, I purchased some Unisem shares. It bullish go up up up. Sell before the bubble burst. Then after savings until year 2008. I able to purchased the current condo I living now at low price RM230K. 2008 is bad time when Penang factory start retrench..I got buy some shares too during 2008 time too. so with AFISH formula I should be looking at property buying again when the price drop.

Look at the table in the 6 years should have at least RM170K.

The time when I do the savings fd is high, even today if u save at bank rakyat u can get 4%. Basically my calculation I use 5% is really not that hard to achieve. I got purchase those Sukuk also 5% return.

Parents own >10 properties all loan settle. Last year dad just get another condo in KL RM500K+

They should have achieve millionaire status..coz I see my dad go bank no que one..the branch manager always invite him in drink coffee one..They go on world tour must got money only can go travel so much ma..1 year go few months is a lot oledi.. 

I dunno the returns, I never ask...anyway it is my parents money not mine...

I independent do not like to relly on parents much that is why I choose to move out and earn a living on my own when start to work..

10 properties in Ipoh not good yield. My father also has 10 properties in ulu, the net worth only about RM 1million.