Do you think yuour friends Rich enough???

How to become RICH?
All of us know that we might not targeting on to become rich, but we want to be at least financial freedom and we want that no matter how much money that we spend, we never running out of it. Is that what we all want isn’t it? Spend a lot, and yet we still have tons of it. We all wish that it will be true, but back to the real world here, we ca not predict what will happen in thefuture. In that case, we need to save our money for the future.

Money not come easy and it take effort and full of commitment to gain it. Many of us work very hard in order to gain a lot ofcash for our saving and to spent according to our needs and also to satisfy ourselves. People usually try to act that they are rich but in reality they are not. For example, you see your friend just got a job as an engineer in one of the stable company and after just few months he manage to buy a BMW car with the latest version. What will your point of view by seeing that kind of things happen direct in front of your eyes? Sure you will e saying that “ Wow Zan, looks like you have becoming a millionaire huh? With great job and very cool car here…”.

Of course who ever that see Zan driving that car, for sure they will said that he is a rich guy. I don’t know about you but for me I don’t get too easy to be fooled by this kind of people showing that they are rich by wearing branded clothes and driving a fancycar

Let me explain what did I mean…

Take as a example of this situation, there are two friends here, Azeanand Farid. They both just graduated from university and to make it simple, both of them get offer in the same year for their first job. Azeanbecome an accountant and Faridis an engineer, and to make it simple again, both of them earn RM2500 each for their salary.

After 1 year working, each of them manage to save RM1000 per month and for a year they save for about RM12000 per person. Azeanhas decide to buy a new Toyota Vioswhich cause her RM85000 with down payment of RM10000 and monthly payment of RM800 for 9 years. How ever, Fariddo not want to spend his money to buy anything because for him motorbike should be okay for now. But, he take his RM10000 and invest into mutual fund that he confident with.

After one year, Azeanis still paying for his brand new car for RM800 per month. Fortunately, for Faridthe fund that he invested early is worth it when that fund announce the dividend or capital growth for about 15% for that one year. And you know what, this dividend keep on continue to benefit Faridfor 9 years. After 2 years, then only Faridbuy a second hand car which is cause him about RM20000 with down payment for RM5000 and monthly payment for RM400 and Azeanstart to save her money in the same mutual fund after the same 2 years with saving RM6000.

 

As you can see the table below:

Azeanlost after 9 years is RM17200 and Farislost RM9500 because of the monthly payment of their car. in the investment column , as you can see, Faridwhich is invest his early money RM10000 with the return of 15% for about 9 years that give him RM35k compare to Azeanthat invest only RM6000 where she can’t afford to invest more because of the commitment for her new car and as a return, she gain profit only RM20k. This is mean that Azeanlost about RM10k compare to Farid.

So who is rich in this case? As you can see both of them has a car, and don’t you forget no matter how new is your car, the depreciation of the car will cause you lost of value of the car each year. This is mean that, each year, your new car will has a reduce amount in price. If you buy the second hand car which is I think not so bad to drive, you will not feel so bad about the effect of the depreciation compare if you buy a newcar.
You see here, other materials will have their depreciation except if you are buying house or invest in real estate which is the price is keep increasing from year to year.

Both of them has a car, no matter what brand it is but it still a car. How ever, what make both of them different is that their saving. May be people will say that Azeanis a rich women by driving a new Toyota car, but the fact is, Faridis much more richer than Azeanwith having extra RM15 from Azeanin his saving.

So what I mean is, you don’t have to show off when you are still not afford to buy something that is luxurious and what is the point when you having a luxury car with small saving in your account compare to others which still has a car, but has a lot in their saving accounts. How ever, it is depends on how you see the situation here, if you are more into materialistic such as cars, branded clothing and going for an expensive holidays, than its your choice. For me I want to be like Faridwhere we invest or save first with what ever we have and after we have gain profit than its okay for us to spend a bit of the profit as a reward for our self.

So for people out there, think wisely and don’t follow your environment even though it is hard to avoid the trend but you have to try to do it, and once you have start it, then you will know how benefit it will be.