The American and the Fisherman

I have listened to this story many times and I would love to capture the lesson that I got from it. Here is the story first.

......................................................

An American businessman was standing at the pier of a small coastal Malaysian village when a small boat with just one fisherman docked. Inside the small boat were several large Asian seabass. The American complimented the Malaysian on the quality of his fish.

“How long did it take you to catch them?” The American asked.

“Only a little while.” The Malaysian replied.

“Why don’t you stay out longer and catch more fish?” The American then asked.

“I have enough to support my family’s immediate needs.” The Malaysian said.

“But,” The American then asked, “What do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take a short nap with my wife, stroll into the village each evening where I sip teh tarik and play guitar with my friends. I have a full and busy life, sir.”

The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, you could buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats, and eventually, you would have a fleet of fishing boats.”

“Instead of selling your catch to a middleman you would sell directly to the consumers, eventually opening your own can factory. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Kuala Lumpur where you will run your expanding enterprise.”

The Malaysian fisherman asked, “But sir, how long will this all take?”

To which the American replied, “15-20 years.”

“But what then, sir?”

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions.”

“Millions, sir? Then what?”

The American said slowly, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take a short nap with your wife, stroll to the village in the evenings where you could sip teh tarik and play your guitar with your friends…”

..........................................

I know that you may have read a slightly different version of this story but the lesson is still there.

Money, while it is important, is not everything. There are many things that are more important than money. For me, the most important thing in my life would be my family and I would rather spend more time with them. 

How about you? What is most important for you?

The 5 Pillars of Radical Ringgit

We have been doing a lot of soul-searching on what we would like Radical Ringgit to achieve because up until now, we do not have a real goal to move forward with. The last post on SMART goal makes us think a lot. We think about what is important in personal finance for ourselves and we come up with 5 pillars that we will focus on Radical Ringgit. The goal is to make personal finance accessible to all people who are looking for information.

These 4 pillars are not foreign to all personal finance people but to state it out clearly, we would be able to move forward with a better sense of direction and goal. The four pillars are as follow:

1. Reduce spending
2. Increase incomes
3. Invest wisely
4. Optimized everything
5. Protect your assets

Moving forward, we will categorize our new articles with one of the 4 pillars. 

How to set a SMART Financial Goal

It is always a good thing if we could have goals for our personal finance. But a lot of times, many people (me included), does not know how to set our own financial goals.

Today, we would like to share how we can actually set a SMART financial goal.

The Acronym SMART actually stand for the following Specific, Measureable, Attainable, Relevant and Timebound. Let us look a bit more detail into each of them.

Specific: State exactly what you wish to buy/accomplish with the money you save.

Measurable: Indicate the exact dollar amount you need to accomplish your goal.

Attainable: Identify the steps necessary to reach your goal.

Relevant: The goal must be meaningful or you may lose motivation to stick with your plan.

Time-bound: By when do you want to meet your goal?

16 Ideas to Kick Start Your Finance in 2020

With the start of the new year, there are some actions that you can take to kickstart your finance on the right path. I have prepared 24 ideas that you can take for the year 2020.

1. Declutter your house (or room)

We may have not noticed but over the years, we may have bought many things that we might have forgotten now. So, take a weekend and start cleaning and decluttering your house.

Items that you no longer need can be categorized into the following:

1. Trash to throw.

2. Stuff to donate.

3. Stuff to sell.

The idea is really simple because, once you clean and declutter your house, you will have more living space and for that stuff that you can sell, you will get some cash back. 

More importantly, you will get to see the stuff that you have purchased and not using (making it a waste of your money) and would give you a reminder to think properly before your next purchase.

Wahed Invest - Progress Review

Update 24 February 2020: Wahed Invest referral bonus has been reduced from RM 40 to RM20. 

Have you invested in Wahed Invest?

Well, I did. You can read my registration process here.

It has been almost 2 months and I am happy to say that I am very satisfied with how my investment has progressed.

3.65% or RM5.1 gain after 54 days. For me, that is a really good gain. What else can I ask for?

4 Ringgit Myths You Need To Know

Myth 1 - You have to be rich to start investing

In the mind of many, one has to be rich to start investing. Many thought that to start investing, one would need to have a sizable amount of Ringgit. But the fact that with new technology, investing has become easier and the minimum amount is lower. Robo-Advisors such as MyTheo, Stashaway, and Wahed Invest make it very easy to start investing with just RM100.

*Bonus: If you invest RM100 in Wahed Invest using my referral code (limwei1), both you and I will get RM40 bonus each after maintaining the RM100 for 1 month. 

How to Buy a Car Without a Loan

Everyone believes that it is impossible to buy a new car without a loan but that does not mean that it is really impossible. What actually requires is patience, hard works, and the right method.

Why should we buy a car without a loan is because the interest that we have paid by the end of the loan period will actually amount to almost a second car by itself? Also, a car is the type of assets that would depreciate in value over time. So, why pay even more for something that is depreciating in value. 

Firstly, we must work on how much can we afford to pay for the monthly installment. Can you pay RM 500 per month or RM 1000? If you can afford to pay this amount for a monthly installment, you should pay it to yourself first before buying that car.

Instead of buying that dream car of yours straight away, look for a decent second-hand car (as a temporary car) with an affordable value. A second hand Perodua Kancil will cost about RM 4000 (at the time of writing) and the good thing about the car is how fuel-efficient it is. So, if you can pay yourself RM 500 per month first, you can buy it on cash after 8 months of paying yourself.