I would say that I agree with him 100%. Currently, everything is so expensive. At the same time, your increment (some do not get increment) is lower than the inflation rate and your monthly salary drains out even before the end of the month. To make it worst, you are heavily in debt with your credit card company. Yes, it’s tough.

With the above, is it too late for us to realise our dream to be financial independent even if you are 50 now?

Surprisingly, it’s never too late. However, we will need to learn something that is very very important, and is a common thing to have to all millionaires out there. This common thing would be SAVING. Yes, most millionaires keep their money either in banks, unit trust, etc. For me, this should be the first step to all steps. If you can’t save a Dollar, saving a million is much harder

Through savings, we can take advantage of the compounding interest. If you are not familiar with compounding interest, it is the concept of adding accumulated interest back to the principal, so that interest is earned on interest from that moment on. The act of declaring interest to be principal is called compounding. (source: Wikipedia).

For an example:
If, a 21-year old graduate works and uses RM1,000 every month to enjoy with his hard-earned earnings. He would have no saving at all. However, if he saves the RM1,000 every month with a 5% interest yearly. By the age of 41, he could have gotten RM416,631.02 in his account.

Who the hell can save RM1,000 a month right? Okay then, let’s just assume he keeps RM200 a month for 20 years at 3%, he could have gotten RM66,423.57 in his account - still better than nothing right. The point that I am trying to stressed out is: Saving should be the first step before everything and whatever that comes later. This is the simplest basic step (but not necessarily easy to be done) to be a financially independent. But here’s my two cents, the best way to save your money is to make a deduction from your salary even before it gets into your account every month e.g. deduction to your ASB, saving account, etc. Start little and increase it overtime when you are already comfortable.

I still can’t save? I have so many things to pay, therefore saving is hard? I have so many credit card to settle? Which one should you eliminate first? Should I save or pay my credit card?

More of this in Part 2: Financial Freedom