I happen to be rather fortunate to chance upon a seminar which I attended recently about personal finance and investment. The seminar basically talks about the classical investment philosophy about efficent market theory, which I have picked up knowledge prior to this seminar through a book, can't quite remember the name but I wouldn't recommend it as a must read because most of it is rather information that you can just find out off the internet, sites like investopedia for example. What is efficent market hypothesis. Wouldn't dwell through the nuts and bolts of the classical theory as that should be the job of the books and the internet site to teach you rather than me. Basically I would say it to bring me forward to my next point which I would discuss over here. EMT is a theory contrive by some investment brokers in the past that suggest that the markets are efficent and that all information are already reflected in the price of the stock, and that no effort of market timing could beat the market. The list goes on and on as both school of thoughts argue it out. Alas, the seminar is mostly about EMT with regards to investment, however, the speakers of GYC are actually CFAs or Financial planners to make things simple. Investment is just a component of wealth management and good financial planning will result in sound wealth management. Thus, these people also brought about certain interesting points which I will highlight in the next paragraph.
Power of compounding, delaying instant gratification and put off luxury in view of the future. I'm sure many forums and blogs around have advocate this approach. Just to sidetrack a bit, I am intending to read up a blog on how someone is planning to achieve the million. However, I don't have the time to do so yet but keep in tune to here. I'll post it as soon as I read them and echo some of the views of the author of that blog. Coming back, the lesson learnt here was that certain luxuries like cars and houses should be delayed to as late as possible. Some other circumstances such as the need to support your parents are also factors that can contribute to whether you hit that million at a earlier age or later. However, I second what the speaker mention that all these wouldn't have been possible if you do not even think about it and work out Goals that are SMART- Specific, Measurable, Attainable, Relevant and Time Frame. If you just sit there thinking about when are you going to get rich or when is the million going to appear through years of being in the rat race cycle where you just go around in circles just like a hamster in an exercise wheel, you never get there! Why? Because for example, taxes. Taxes are aimed to bring down the Gini co-efficent in the country or in other words, the income inequality of the country. But, just a food for thought. Wouldn't those who are rich have already circumvent the pitfall of being taxed heavily? In the end, it is usually the one in between the extremely rich and the extremely poor-due to good govt care for them, that suffers the burden of income taxes.
Pycmalion effect: What you expect is what you get. Certainly something worth stopping to ponder about. If you expect to get a million and desire to get a million, you will get it. Therefore, people, in order to get your goals, you have to want them.
Then I will also share an interesting diagram but it is impossible to draw over here. Your personal comfort zone. At first, it will become a 'combat zone' as mentioned by the speaker, then, it would gradually become your comfort zone. Please mail me if you really wish to know what the diagram is. I just can't define any methods to put it together with the blog post.
Lastly, do enjoy your coming week. As for me, Life isn't just that pleasant as I have failed my first Practical Test.
~Cheers and enjoy :)
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