ALSO BY ANDREW CHIA

Big Money Big Trouble

Money Lessons
Stock Market Secrets

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 Money Secrets
Revised Edition

How you achieve financial freedom and

create immense wealth even during an
economic downturn

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MALAYSIA • SINGAPORE • BRUNEI • SRI LANKA

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Chia, Andrew
Money Secrets/Andrew Chia
ISBN 978-967-10031-2-1
1. Finance, Personal. 2. Investments. 3. Successin business. I. Judul
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Money Secrets
Revised Edition

Introduction
My Little Journey in our money world
About the author
Acknowledgements

Chapter 1 Be hungry!
Chapter 2 90/10 rule of success
Chapter 3 The Dark Side
Chapter 4 Two most powerful forces
Chapter 5 Edgewater
Chapter 6 The great misunderstanding
Chapter 7 The difference
Chapter 8 The overlooked subject
Chapter 9 The foolish work for money
Chapter 10 Sorry, your Mum was wrong!
Chapter 11 A risky myth
Chapter 12 Opinions kill
Chapter 13 Secret of the rich
Chapter 14 Red line
Chapter 15 Eighth wonder of the world
Chapter 16 Breaking the “three-generation curse”
Chapter 17 The only way to retire
Chapter 18 We need two jobs
Chapter 19 Tsunami!
Chapter 20 Bucks ‘n’ dough
Chapter 21 It’s only words
Chapter 22 Eliminate guesstimations
Chapter 23 Get into the habit
Chapter 24 Strictly business
Chapter 25 Marketing 101
Chapter 26 Sold on selling
Chapter 27 Just do it!
Chapter 28 Investors vs Traders
Chapter 29 The magic of mistakes
Chapter 30 Super investors’ secret revealed
Chapter 31 The highest purpose in life
INTRODUCTION
In a sense, money is just a game. Wealth is when small efforts
produce big results, and poverty is when big efforts produce
small results. Here are some of the things you will learn in
this brand new subject of financial intelligence:-

• how you can escape from the rat race and find the joy of
financial freedom
• what most people mistake for assets are, in fact, liabilities.
• the new (and correct) definition of assets, and how it can
put you on track to financial independence.
• the practical difference between the poor and the middle
class
• why you should avoid operating your finances on the red
line, as in our car speedometer
• Einstein’s greatest mathematical discovery of all time,
and how you can use it to become very rich.
• the cost of your procrastination worked out mathematically
• the only way you can retire
• why you need “two jobs”
• what causes the downfall of rich and powerful people and
how you can avoid it
• how you can break the “three-generation curse”
• and much more...

This book is written especially for you if you are sick and
tired of running the rat race each day but don’t know how
to get out of it. You might hate to admit it, but over 90% of
our population comprises the poor and the middle class. As
I once belonged to this 90%, I can fully empathise with the
experiences of this group of people, and thus, I have taken
great pains to ensure that they’ll see the light at the end of
the tunnel. You will feel me personally guiding you through
each dark step until you emerge from the darkness and step
into the light.
You will learn what 90% of the people on this planet don’t
know and will never find out. You could be one of those who
have gone from hope in your younger days to disappointment
and disillusionment in your middle age, and now you are on
the verge of despair. You may have given up on your dreams.
You are sure you will never attain financial freedom in your
lifetime. You have been battered, bruised and beaten in our
money world. As you read on, you will begin to believe again.
Remember, your favourite chicken chef, Colonel Sanders,
started Kentucky Fried Chicken only at the age of 66. So, if
you are younger than that, I definitely, strongly believe that
there is still hope.

I will help you eliminate the mindset that holds you back by
exposing the myths of “money makes money” and “no risk,
no gain”. The more you read, the more you will feel the power
of finally having the knowledge to fight for your place in our
money world. Once the information is internalised, you will
not only be able to speak almost like an expert on any money-
making topic, you will actually start to make some serious
money. I recommend that you hold on to your investment
plans while you read and understand these secrets.

It’s taken me a long time to figure out all of the things that
you’re about to learn. I have spent years on this material and
found all the contents of this book to be true and faithful. This
book is meant to be used like an encyclopedia. It is meant to
be a reference. The best way to use it is to read and find
all of the parts that you like and note all of the ideas, skills,
and techniques that you would like to work on and improve.
Then take those sections and either write them down or print
them so you can review them and practice.

Success with money isn’t like success with learning how

to switch on a light switch. Success with money is more
like success with learning to play a musical instrument. It
takes practice. At first, maybe none of it makes any sense.
Sometimes it seems as though all of your practice isn’t mak-
ing a difference. But if you keep at it, eventually you’ll be
playing songs. And then you’ll be writing songs. Next thing
you know, you have become a master. So, take this book and
use it as a workbook. Come back to it often. Reread the parts
that you want to learn and integrate. And most importantly,
don’t stop reading until you are doing it.

Many people make the mistake of reading this book and then
saying, “I know that stuff” before they’ve mastered the infor-
mation through their experience. Don’t make this mistake
yourself. Keep reading and practising and using it until you
have it down. And do me a favour. Email me your ideas, com-
ments, and complaints. I want to know what you think. You
can write to me at andrew@andrewchia.com.

So, what will all this do for you? You will have more freedom
to choose what you want, when you want it and with whom
you want it. There are few words more important that the
word “freedom”.

Keep yourself in good health; remember to exercise daily.

And, keep that smile on your face.

Andrew Chia
Kuala Lumpur
2011
My little journey in our money world
Welcome to the world of money. You are about to embark on
a journey to discover one of life’s greatest mysteries – why
doesn’t anyone teach us about money?

Have you ever attended any class on Money 101? I bet you
haven’t. Neither have I. Yet, money is one of the most impor-
tant aspects of life. Some of life’s greatest enjoyments are
intimately linked to money, and some of life’s greatest dis-
appointments also result from our decisions about money.
You can never have true freedom without financial freedom.
Hence, it is never a mistake to learn how to make money –
lots of money.

Having little or no understanding about money may also

result in having too much debt. When you have too much
debt, the world takes everything - your time, your work, your
home, your life, your confidence and dignity – away from
you.

I started out working as a clerk for a Malaysian bank in the

early 80’s. After just two years in the bank I decided that
banking wasn’t for me. The main reason was that it seemed
like a rat race to me. There were just too many people in a
bank. Nevertheless, I was impressed with the skilful way the
bank motivated its staff to work for it. Every six months,
the bank had a promotion exercise. Of course, being a small
bank at that time (more than 20 years ago) with only 20
branches, not everyone could get promoted. Today, it has
more than 200 branches and 14,000 staff, and is one of the
biggest banks in Malaysia.

When we were not promoted, management really took the

trouble to pacify us and, at the same time, motivate us. We
were encouraged to study harder to pass banking exams, to
work harder and be patient. We were told many valid rea-
sons for not getting promoted, such as not having the neces-
sary paper qualifications. When we did, we were told there
were certain quotas to be met. When those quotas were met,
we were then told that there were a few seniors ahead of us
who needed to be promoted first. The ultimate motivational
quote was that if we were really good enough, it was only a
matter of time before we would get promoted, so, we just had
to wait a little longer. “Real gold can stand the test of fire,”
they said.

It took me another four years of working in the bank before

I could get my break to start out on something that I really
wanted to do – running my own business. While my friends
were waiting patiently for promotions, I was secretly learn-
ing and reading everything I could about business and man-
agement. I had to wait a long time before I got my chance
to start my own business because I came from a poor family
and did not have much capital.

While I was in the bank, I really did enjoy every minute of it

although some of the tasks were quite mundane. I remember
a time when it was my turn to emboss ATM cards. I did that
for two months. It was a really robotic job – I just needed to
key in the name, the card number and the issuance date. I
did it from 9 to 5, just names, numbers and dates. You would
imagine that I would have been bored to death, but I wasn’t,
really. They had piped in music, you see, but the problem
was that they had only tape, by Anne Murray. I didn’t mind
because I like her songs. I suspect my big boss must have
liked her very much. We had her 365 days a year, minus the
festive seasons when the New Year songs were put on. With
such merciless repetition, I could hear her even in my sleep!

Those were the days when computers had just been invented.
We had to work doubly hard during the transition from
manual to digital systems. I started work at 7 in the morn-
ing and finished at 10 in the night, almost every night. We
had a joke among our colleagues that life in the bank was so
tough that you work until you “see stars”. We literally saw
stars each night when we left the bank. There was a day when
the bank security guard had to chase me away when I tried
to enter the premises to work at 7 in the morning - it was
Chinese New Year’s day. My colleagues – most of them are
bank managers now – were great, I miss them a lot.

My break came when one of the bank’s customers felt that

I could complement his business operations and took me in
as his partner. I still remember I couldn’t sleep that night
because I was so excited. I tendered my two-sentence resig-
nation letter the next day.

I finally ventured out into the new world of business. I did

management services and IT. It was boom time during the
early nineties, and we sold a PC (personal computer) for five
thousand dollars, making a profit of one thousand. We sold
business software for good margins too.

We started with zero knowledge in computers and had a lot

of fun learning along the way. I still remember the first quo-
tation we sent to our customer. We quoted 2 megabytes of
RAM for one thousand dollars when it should have been two
thousand instead. (One MB RAM today might be selling at
no more than ten dollars.So much for inflation!) My partner
and I were kept awake that night worrying about the over-
sight. Luckily, the customer was forgiving, understanding
and sympathetic. He and I have been friends ever since. In
addition, we even managed to make a profit from that deal!
Each time we added a zero to our sales we had a little cel-
ebration. We broke our $10,000 sales mark, and celebrated.
Then we broke our $100,000 sales mark, and celebrated.
Yes, we broke the million dollar mark too. At our peak, our
turnover was in excess of seven million dollars a year, and we
made almost two million in profits.

You can guess what happened next. Despite everything we

had learned about business, success went to our heads. We
threw caution to the wind. We thought we were invincible.
Like many of our customers at that time, just before the
Asian financial crisis in 1997, we over-expanded. In fact, we
were over-everything. We over-budgeted, overspent, over-
celebrated, over-enjoyed and over-entertained our custom-
ers. We were over-confident, and soon, we had to run with
our tails between our legs.

When the crisis came, we paid for our excesses. The sales
that we forecasted did not materialise, while our expenses
were sky high. We had rented bigger premises and taken in
new staff. We had even taken a bank loan for our business
expansion. Fierce competition set in as everyone perceived
the new IT market to be very lucrative. Prices were slashed
drastically and profit margins became razor-thin.

One particular computer hardware dealer who sold second-

grade hardware at firesale prices started an unhealthy price
war. Customers just loved him because his goods were so
affordable. After pulling down almost every computer hard-
ware dealer in the industry, he had to make a quick exit when
he himself incurred catastrophic losses due to the price war
that he had started. His exit was so sudden that hundreds
of his staff found themselves locked out of their premises
early one morning when they went to work. Their boss was
nowhere in sight.

We never expected any of these events to happen. In our

hurry to expand, we did not pay attention to the need to pro-
tect our business against unforeseen circumstances.
We finally learned how not to run a business.

My partners and I were all but broke, but we were not poor in
a sense (there is a difference). The experience we had in busi-
ness, particularly in dealing with customers, stood us in good
stead. We could better spot opportunities and capitalise on
them faster. Within a couple of years, all of us had little ven-
tures with friends and were making some money. I started
to look for some investment opportunities. That was when I
learned my second, more painful lesson in investing.

Having been in business for ten years, I thought that I was

now a naturally good investor. That could not be further from
the truth. In fact, looking back, I didn’t have the foggiest idea
what investment was all about. My strategy was very simple:
I divided my money equally between property investment
and shares. I bought a condominium for $165,000, moved
into it, folded my arms and waited for it to appreciate. Today,
ten years on, it is worth $95,000. Yet, they still say property
always appreciates!

Well, so much for property investment. My share invest-

ment strategy was even simpler. I carefully chose a good
friend who had been investing (successfully) in the share
market for more than ten years and asked him for tips. I then
put the total amount of my entire share investment account
into one counter. Again, I folded my arms confidently and
waited. This time, I thought, nothing could go wrong. After
all, they said that if you buy penny stocks, they cannot go
down further. The stock that I bought was selling at 26 sen
only. Every friend I talked to shared the same opinion. Like
me, they didn’t know any better. (I think there is truth in the
saying, “your advisors are only as smart as you”.)

The stock started to go south the very day I bought it. I

held on. (Of course, I prayed.) It went even further south.
I prayed harder. After almost two years of waiting and pray-
ing, I was finally convinced that at the rate it was going, the
stock would soon reach the South Pole. I liquidated at 11 sen.

By the way, property and stocks were not my only invest-

ments. I did have a few other smaller investments which
went down the drain as well because my strategies were
equally silly, to the point of being naive. Some of my experi-
ences are too embarrassing to even mention. It may sound
funny but I assure you it wasn’t funny at all pouring hard-
earned money down the drain. I went through many emo-
tions: greed to begin with, confidence, then hope, then fear,
anxiety and agony, self-denial, blaming others, later blaming
myself, regret and remorse, hopelessness, despair and loss of
self-esteem. Finally, I just gave up.

Then, I did a post-mortem. I tried to identify what had gone

wrong with my investment plans. And more importantly,
what had gone wrong with me, as an investor. I found that
I had done a lot of things wrongly. I could not control my
emotions of fear and greed. I did not know that I had to bud-
get my investment account. For example, you should spread
out your share account to at least a few counters instead of
buying just one counter. I was also very impatient; I wanted
quick returns. I thought that the faster I put in my money,
the faster I would get the returns. I also thought that if I
wanted more returns, I had to put in more capital. More risk,
more gain, see? (At that time I didn’t know any better. I was
naïve.) In short, I did not do any homework. That was the
biggest reason why I had failed.

I was determined to learn everything about investment to

make myself a good investor, even if it was going to take me
another ten years. I started to read many books, and ask
other investors how they did it.
It was then that I was pleasantly surprised. It took me less
than two years to master the basics of investing, including
property and share investment, plus a few other forms of
investment like derivatives trading. Of course, that would not
have been possible if not for some world-class books written
by some of our very own local authors which really slashed
the learning curve by a great deal.

I have not had a day job for more than ten years now, neither
do I run a business. I am a full-time investor. I was strug-
gling at first, but investing has since become much easier.
It has been a long time since I wore a tie or a long-sleeved
shirt. Nowadays, I am more likely to be spotted in my Levis
and Tees, having a cuppa with either my investment sifus or
some old friends at my favourite Oldtown Kopitiam.

My investments are generating very encouraging returns in

the region of 20% to 25% a year. More importantly, they are
as iron-clad as they should be. I have also learnt how to use
almost zero capital to secure handsome profits in some proj-
ects. In a few cases, I use OPM (other people’s money). The
world of investment has now become a lot of excitement and
fun. That is why I am writing this book to encourage readers
to take on the challenge of being financially free by learning
how to invest.

There have been many books written on various types of

investments, like property and shares. However, I feel that
before you can learn about investment, there are a few basics
about money you should know. These are not covered in
most investment books.. They just assume readers know
the basics, which is often not true. We need to know some
basics about money, that is, financial intelligence. I hope that
you will be able to master the basics found in these chapters
before you launch out into your own investment ventures.
Also, from reading about the mistakes I made, I hope you can
avoid some painful lessons and save some of your precious
time on your journey to financial freedom. The time that you
save tearing out your hair could be spent at an exotic tourist
attraction with your loved ones.

The other thing that is missing from investment books is the

element of emotional management. Investment books usu-
ally concentrate on the particular topic of investment and
the specific skills involved. It would be beyond the scope of
these books to emphasise on how to manage your emotions
of fear and greed. However, our emotions do play a critical
role in ensuring the success or failure of our investments. In
fact, they can cloud our judgment so much that at times we
only hear what we want to hear. That is why when it comes
to money, common sense is uncommon and logic often goes
out of the window. It is sometimes quite shocking to see an
otherwise brilliant brain become so misaligned when it is
emotional.

Fear and greed, coupled with ignorance, make up the guar-

anteed potion for financial disaster. You will find in these
pages how even veterans whose technical skills are beyond
reproach, fall victim to their own emotions.

In addition, I believe financial IQ is comprised of 80% emo-

tional IQ and only 20% technical skills. This could be one
of the reasons why the rich may appear to you reluctant to
impart their knowledge concerning money. I assure you, most
of them they are more than willing to share their knowledge
with you. They are always willing and able to teach and share
with you the technical skills, but they may not be able to help
you with the emotional control. Financial success involves
emotional learning – you have first got to take baby steps for
six months to a year. You cannot grow up overnight, not if
you are human. After a year, you start learning how to walk.
Then, you finally learn to run.
One day, when it is your turn to teach your loved ones,
remember this, one of the most important lessons a teacher
must know is that true learning involves mental, emotional
as well as physical aspects. Studies by psychologists have
shown that emotions are about 24 times stronger than ratio-
nal thought.

In most markets there is no logic, only emotions of fear and

greed. For example, many people think they are privy to cer-
tain inside information. There is something about inside
information which seems to paralyse a man’s reasoning pow-
ers. His greed blinds him to the fact that the inside informa-
tion has failed the test of logic. For example, some companies
have poor financial track records, and their share prices have
been grossly over-valued. But because there is “inside infor-
mation”, people ignore the obvious risks and buy their shares
with the hope of reaping high returns, presumably within a
short time.

In these pages, I will try to take you through some of the

emotional roller coasters in our money world. You can then
gain an insight into your own emotions and harness them
to your advantage to become a better investor. So, sit back,
relax, and let us go for the drive of your life. Together, let us
learn money skills and become masters of our own financial
destinies.
About the author
Andrew Chia, MBA, California University FCE, Los Angeles,
California U.S.A. is a chartered strategist based in Malaysia.
He completed the Graduate Certified Programme in Business
Administration of The International Institute of Chartered
Strategists and was admitted as a Fellow Member of the
International Institute.

Andrew started his own business in management and IT in

1987, after working for six years in a Malaysian bank. He
went into business consultancy and has pursued studies in
various fields of investment since 1997. He was exposed to
various types of business setups, having worked with sole
proprietorships as well as public companies. He has been
a consultant to many business owners in industries ranging
from the service sector to the manufacturing sector.

He has been taken to the rural areas of Jengka in the state

of Pahang in Malaysia, and Pengkalan Chepa in the state of
Kelantan to help develop entrepreneur programmes under
the Federal Government of Malaysia. His company also
organised business tours to East Malaysia. Headed by the
former Deputy Minister of International Trade and Industry
(MITI), Datuk Chua Jui Meng, Andrew’s company led more
than a hundred businessmen from the Malaysian Peninsula
to Sabah in East Malaysia in search of joint venture opportu-
nities, particularly in Kota Kinabalu Industrial Park (KKIP).
His company also organised the first SMI Conference in
Malaysia, which was officiated by the former Minister of
International Trade & Industry, Tan Sri Rafidah Aziz, and
attended by 2,000 businessmen from both East and West
Malaysia.

During this period, he has seen small companies with very

humble beginnings grow into big players. Kami Food, for
example, operated from half a shop lot in the nineties. Today
their operations cover more than ten shop lots in Kepong in
the outskirts of Kuala Lumpur, the Malaysian capital and
have spilled over to a $12 million food-processing complex
in Ulu Yam, built recently with very little borrowing.

He has also seen profitable companies which expanded too

fast staggering close to bankruptcy after being hit by the
Asian Financial Crisis in 1997. Precision engineering, and
many other types of engineering companies, which occupied
huge complexes covering a few acres of land and employing
hundreds of workers were among the main victims.

Andrew is currently an active investor and financial educa-

tor. He manages funds for close friends and is a consultant
on marketing. In 2006, Andrew co-founded CharityMalaysia.
com, the first non-profit online donation portal in Malaysia.
He is currently also the technical advisor to BigSignboard.
com, a new online web-building portal.

Andrew believes that financial intelligence is sadly lacking

from our education syllabus. He is trying to fill this void by
sharing his experience in this book so that readers can be
more investment-savvy and gain financial freedom.

If you want more information on the subject of financial

intelligence, feel free to contact him at andrew@andrewchia.
com or visit his website at andrewchia.com.
Acknowledgements
Numerous people have chipped in to help make this book a
reality.

I would like to thank all my mentors who have helped in

my financial education, especially my taikoh (big brother),
Jimmy Kok, who first pointed me in the right direction to
improve my business skills. Thanks to Joseph Chey who
helped in strategies, Calvin Chelliah on delivery skills,
Kanicen, Marc Leong and Dechen Lau on Internet mar-
keting, Doris Yap from Rockwills for patiently guiding me
through financial instruments, Mario Singh on forex trad-
ing, Foong Mun Keong on options trading and Lee Mun Wai
from USANA on network marketing.

I am thankful to my students and friends who have trusted

me in managing their investment portfolios and for their
support in the writing of this book.

I am grateful to Adrian, Kenny and my classmate KC Yip

for their invaluable advice in the area of publishing. I am
indebted to Wendy and Carole for their untiring efforts in
making this book easier to read by meticulously proofread-
ing and editing.

Special thanks to many of my other mentors who have helped

shape my investment landscape. For various reasons, they
cannot be mentioned here but I am truly grateful to them.

Last but not least, I wish to thank my school mates from

Cochrane, especially Dr Christopher Heng, D Sc and Dr C
S Chin, and business associates who have given me encour-
agement and support when I needed them. This book was
originally written in the form of investment notes for them.
It is now dedicated to them.
 1
Be Hungry
Money, money, money
Must be funny in the rich man’s world
Money, money, money
Always sunny in the rich man’s world
... All the things I could do, if I had a little money
It’s a rich man’s world

- ABBA, Swedish pop music super group

One of the more popular Malaysian dishes - the char koay

teow, or fried noodles

I believe all of us would love to be rich. Some of us can

spend all day dreaming of being rich until it hurts. If only
our dreams could come true...
Andrew Chia 2

Before we get down to seriously learning about money, we

need to understand the first criterion for success in any
endeavor – hunger. Dreaming is not really hunger. There
are people who would love to be rich and successful but they
hesitate when asked to exert the slightest effort. Hunger and
passion are essential to produce excellence in any field, be
it making money, business, studies, sports, or, simply hob-
bies. Have you heard of the term “soul-searching”? It is usu-
ally used by sportsmen or their coaches. When a sportsman
repeatedly fails to improve on his performance, he does some
soul-searching. What do you think he is searching for? He
is searching for hunger and passion, among other things. He
asks himself whether he really wants to win that badly. He
asks himself whether he still has passion for the game. He
asks himself honestly. And if the answer is yes, he knows that
he can actually improve on his performance.

On the subject of passion, Randy Pausch says, “The brick

walls are there for a reason; to show us how badly we want
something. Because the brick walls are there to stop the peo-
ple who don’t want it badly enough.” For those of you who
may not be familiar with Randy Pausch, here is an introduc-
tion. He was a computer science professor who delivered
the lecture, “Really Achieving Your Childhood Dreams,” at
Carnegie Mellon University in September 2007, a month
after being told he had three to six months to live because
his cancer had returned. As such, his lecture was so highly
publicised that he became a runaway phenomenon on the
Internet. As at July 2008, he has been viewed 3.2 million
times on Youtube. His lecture is also known as “The Last
Lecture” and was turned into a best-selling book.
 3 Money Secrets

Randy Pausch was such an inspiration to young people,

encouraging them to realise their dreams

Randy Pausch died on 26th July 2008 at the age of 47.

One of the best ways to cure a hunger strike is to make a

beeline for KFC. It’s finger-lickin’ good.

What can hunger do? Imagine a boy reaching for a piece of

KFC chicken after having starved for twenty-four hours. His
stomach is rumbling and his digestive juices are crying for
food. You can see the saliva in his mouth. He is really hungry.
You can bet it is going to be finger-lickin’ good. Now, imag-
ine yourself reaching for a piece of chicken after having just
completed an eating contest. It would be difficult for you to
understand the satisfaction the boy derives from eating his
piece of KFC chicken.

Similarly, it is sometimes difficult for people to understand

Andrew Chia 4

passion in others. Like they say, what drives twenty-two guys

and a man in a black shirt to chase after a ball for an hour and
a half? Or, how insane is it for a man to stand under the hot
sun, or sometimes in pouring rain, to put a ball into a hoop
for hours on end, day after day? What satisfaction can one
possibly derive from such an unprofitable feat? That is what
Michael Jordan, reputedly the world’s greatest basketball
player, and thousands like him, do every day.

The two words that best sum up the success of the world’s
“madmen” are hunger and passion.

Have you ever wondered why motivational books and speak-

ers are so popular? Never mind if they don’t teach you a single
thing about money. The book stores are full of them. It is as
if people really need them. They try to create a right mental
attitude (RMA) in people. They promote positive thinking.
Without having the right mental attitude and thinking posi-
tively, you will not succeed in whatever you do. After reading,
the reader is immediately fired up but all too soon the fire
dies down and you would have to go hunting for a new moti-
vational book or a better author or speaker.

We cannot tell anyone how to get rich if they do not know why
they want to get rich. My friend, Eric, pointed out to me that
the word ‘motivation’ comes from the word ‘motive’. People
need a motive before they can actually be motivated. That
is why most motivation seminars do little to help you suc-
ceed. It is because the speakers do not tell you that you need
to bring along your own motive to their seminar. Contrary
to what most people believe, they don’t supply you with a
motive; they just enhance it for you. Now, if they told you
that, you wouldn’t go to their seminar, would you?

What inspires and creates the passion in you? What is your

motive? Do you want to succeed because you want to give
 5 Money Secrets

the best to your loved ones? Is it because you are trying to

ensure a lifetime of comfort for your beautiful girlfriend?
Is it because you want to prove something to your friends
and relatives? Or, is it simply because of the fear that you
are not able to provide for your family? What inspires you?
What creates a passion in you? What makes you hungry?
The answer is in strong emotions and desire.

I remember a popular Chinese novel from my childhood

days. It was Chinese martial arts fantamania and I was
crazy about it. The novel was entitled Lethal Weapons in the
Martial Arts Kingdom. If you are a fan of such literature,
you would know that there are only two famous authors of
Chinese martial arts stories. Lethal Weapons was written by
one of them.

David Chiang (left) and Ti Lung were the most popular

martial arts heroes of yesteryears. Both won Best Actor
awards for their roles during their heydays.

Let me tell you its storyline briefly, and how it could relate
to you and money. You would imagine Lethal Weapons to
be about swords and spears and other such weapons, but no,
the story is about emotions. The author illustrates clearly
(and of course, in a very interesting manner, with suspense
and all) how emotions evoke superhuman deeds in each of
the characters he depicts.

One of the characters in his story went through untold

Andrew Chia 6

hardship to train himself in kungfu because of pure hatred.

He was angry because his enemy had murdered his family in
front of his very eyes when he was just a child. His passion
for revenge was so great that he channelled all his energies
into becoming highly skilled in kungfu and eventually man-
aged to kill his enemy. Indeed, hatred and anger are power-
ful emotions.
Another character was overcome by the fear of being con-
quered by his enemy from another state. Day and night, he
was filled with anxiety for the safety of his kingdom. This fear
caused him to carefully prepare his army for the imminent
attack. When his enemy finally came, he had a highly disci-
plined defence which managed to repulse the attackers and
win the battle. Thus, he prevented his kingdom from being
conquered by his enemy. Fear is a powerful emotion.

A female character was obsessed with her own beauty. She

lived constantly in the fear of not being beautiful enough to
warrant the continued attention of the king. This created
jealousy of her other competitors which finally got the bet-
ter of her. Her plotting created intrigue in the palace and
eventually caused a kingdom to fall. Never underestimate
the power of jealousy.

Another of the characters went to war to restore family pride.

Such was his pride in his heritage that he managed to over-
come great obstacles and eventually returned triumphant.
Pride and ego, when properly harnessed, have been the fuel
to power many men on the road to success.

The author divulged what could be the most powerful and

lethal weapon of all – love. His character fell in love with a
beautiful maiden. He had to endure hardship and make sac-
rifices, including giving up fame, so that he could be with his
loved one in the secluded countryside.
 7 Money Secrets

A hero would give his all to ensure his princess lives happily
ever after. Would you give your everything to ensure your
wife and daughters get the best in life?

Take a deep look into your heart. Is it lukewarm with a tidak

apa (popular Malay word which means “never mind”) atti-
tude? Or, can you find strong emotions of love and hate?
Whichever the emotion, you can be sure it will cause you to
achieve something extraordinary in our money world.

Do the following statements of hate and love echo what is in

your heart?

I hate being poor. I hate being ashamed of being poor. I am

ashamed of living in a slum and moving around in a very old
used car. I feel small in the presence of friends with new and
expensive clothing, with me not having a single item that
is branded or remotely presentable. I feel tiny and doubt
whether I will ever amount to anything in life. I hate being
forced to work all my life. Working takes up all my time. I
do not have time even to do personal things like going to the
bank or to the Immigration Department to renew my pass-
port. It’s harder nowadays to be a good daddy or mommy,
fetching my kids from school, sending them to tuition, etc.
Don’t dream. I have got to take leave to do things like that.
Andrew Chia 8

Getting away to do some catching up with old friends, teach-

ers or relatives is the furthest thing from my mind. Work is
like a prison with invisible walls.
I used to tell myself, “I’ve got to work, man. Even Robert
Kuok has to work. Besides, I love my work; it’s my hobby.”
Well, rich people work differently; they can go on a holiday
anytime they like. They actually work because they like their
work. I am different – I am forced to work, hobby or no. I
don’t have a choice. I am forced to get up very early every
morning and trudge to the office. The only thing on my mind
is to play catch up with time and pay my bills at the end of
the month. It is the same month after month and year after
year. “Job” means just-over-broke, they say. I sadly agree. I
feel sick each day thinking that I am exchanging my time and
my youth for a miserable couple of thousand dollars. My life
seems to be draining from me. Job security is actually my
prison. They might as well name it “maximum security”.

I hate not being able to do what I want. I want to be able

to help all my loved ones who are in need financially. They
may have problems due to high medical bills or unforeseen
and unfortunate events happening to them. Some have been
retrenched due to no fault of their own. Some have collec-
tion problems with their business. It hurts me to see them in
trouble and being helpless to do anything except to look on
in anguish. When I look at myself, I find that I am not much
better off; I have been struggling just to put food on the table
for my own family for as long as I can remember.

I hate not being able to buy what I want. I am not going to lie
to myself anymore. I want to own that Rolex watch. I want to
feel it on my wrist. I am not going to tell myself it is a waste
of money. But, I am going to face the fact that I simply can’t
afford it. I am only going to say it is a waste of money when I
can afford it. Right now, I can’t.
 9 Money Secrets

I hate not being able to go where I want. The world is so big

and it was created for all of us. Yet, I feel like I am going to be
stuck in this one country forever. I want to visit the United
States, Europe and all the beautiful places that I can only
watch with envy and regret on National Geographic. I want
to bring my parents, my wife and kids along, too. (It brings
a tear to my eye now.) Who can break these invisible chains
that are holding me back?

I love being rich. I love being proud of being rich. I really like
the little conveniences that come with being rich. I like being
treated with respect at hotels and high-class places, instead
of cowering in embarrassment. I love the gates being opened
without question when I drive through areas of security in
a luxury car instead of being told to get out of my small car
and fill out a form. I love to be free to enjoy my hobbies. I
love to hang out at Starbucks and enjoy expensive coffee with
old friends and catch up on old times and talk about all the
adventures that we had when we were younger. I love to be
able to call on them any time I like. I would really love to fire
my demanding, slave-driving boss, stay up late and wake up
any time I wish.

I love to have the power to protect and help my loved ones.

I love to be able to lend a helping hand whenever they are
in need, without ever hurting my own wallet. I love to see
the smile of relief and gratefulness on their faces, with the
burdens lifted off their backs. I love being able to buy what I
want. I love being able to afford that fully-carpeted, air-con-
ditioned hilltop residence with my favourite Mercedes model
parked securely inside. Of course, I love having that Rolex
watch, too. That is compulsory.

What the rich want and do is exactly the oppo-

site of what the poor want and do
Andrew Chia 10

What I have just mentioned above are what most people are
thinking. I know it too well, because I have been through
those thoughts myself too. Actually, the truth is, many rich
people do not buy expensive stuff. (Some people would chop
off your hand together with that expensive Rolex watch if you
wear it at the wrong places.) These rich people are happy
simply because they can afford these luxuries.

My family, from time to time, organises family trips together

with my mother, to her favourite destinations in China. The
thought alone of a trip gives my mom great pleasure. That
is because, at one time during my childhood, we used to live
from hand to mouth. Having a fixed deposit account and
going abroad for holidays were just figments of our imagi-
nation. Thus, today, she feels like the richest and happiest
woman in the world.

However, because we lack the courage and the skill to become

rich, we comfort ourselves with the thought that we are the
most decent human beings on earth. That is because we are
poor. We tell ourselves that we are poor because we are not
greedy for money. Greed is a sin, they say. And rich people
(whom the majority like to believe are very greedy) are all
sinners. My dear friends, let us just do away with this kind
of thinking, shall we? It is not useful at all. Most beggars are
greedy and they are not rich, even though in Malaysia we do
have rich professional beggars. Furthermore, let me reveal
this, most rich people, some of whom are my friends, who
started and built their own businesses from scratch, are great
philanthropists. If being rich is a sin, being poor is equally
sinful.

What is money then? How do you feel about it? Is it just

pieces of paper– at times dirty and smelly – with the images
of some famous dead people on them or, worse still, is money
just a lifeless number in your bank account stored in some
 11 Money Secrets

remote computer? People living on the streets have gone to

live in bungalows. People driving taxis have switched to lim-
ousines. All this is because they have more of these pieces of
paper. Rich and mighty people have become paupers simply
by misplacing some of these pieces of paper.

This book gives you tips on how you can get more of these.
You can get whole loads of them, and buy your life back. Are
you hungry to know more? Read on.

1st Secret
Success belongs to those who are hungry and
passionate.

You live this life only once. To live life to the fullest, be the
best that you can be. Don’t do things half-heartedly. Always
choose the best – the best book to read, the best teacher to
follow, the best business to be in, the best investment to
make. Soon you will discover the passion and the hunger to
be the best that you can be. Remember, it is never too late
to be what you might have been. - George Eliot, renowned
English writer
 2
90/10 Rule of Success

To be Champions! It’s worth all the hard work and effort.

The 90/10 Rule of Success: In any field, less than

10% of people will excel. -- Andrew Chia

Observe the fields of study, sports, money-making or even

hobbies and you will find that this is not far from the truth.
Understanding this rule will encourage us to strive to be
among the 10% who succeed. It will also put us on our guard
against complacency as we do not want to be among the
90% who don’t succeed. 10% of the people in the world have
and control 90% of the money and assets. The Wall Street
Journal (13th September 1999 issue) says that 90% of all cor-
porate shares in America are held by 10% of the people. We
have reason to believe that these statistics do not change too
much now, and are also true in our country.
 13 Money Secrets

Statistics also show that 90 out of 100 businesses fail within

the first 5 years. 9 out of the remaining 10 fail in the next 5
years. Thought making money was easy? Now you know the
odds.

Many people do not have the real hunger to improve. A sim-

ple example is found at eating places. I am sure you know
of some restaurants or even food stalls that are packed with
customers all year round. Then, there are competitors nearby
or even next door that are swatting flies. Sounds familiar,
doesn’t it? There are many places like that - why is that so?

There are many reasons and theories given, including bad

location and of course, feng shui. Whenever people fail to
discover the reasons for their failure, they usually blame it on
luck. What they are actually trying to say is that they are not
incompetent, just plain unlucky. They should pay attention to
the great badminton player, Han Jian, when he said, “I play
with skill, not luck.” I think the simple answer is – their food
doesn’t taste good, and they have not improved after decades
of cooking. If you return to that shop even after a long time,
the food there will still taste exactly as it was – awful. They
have that kind of tidak apa (don’t care, never mind) attitude
and do not bother to find out how other competitors can cook
better and what their customers want.

So, 90 out of 100 business fail. But, don’t give up yet, there is
good news. Although less than 10% of people succeed, it does
not follow that the rest of the 90% have failed. You only fail
when you admit defeat. The sales of squash rackets, shoes
and squash balls go up every time our Datuk Nicol David
wins a tournament. Nicol has been the world’s No. 1 women
squash player for many years now. Young athletes in our
country are thrilled with their heroine winning competitions
easily and basking in the limelight. They immediately go out
Andrew Chia 14

and purchase their gear and rent squash courts to try to emu-
late Nicol and to embark on a career in squash.

Most of these would-be sportsmen and sportswomen give up

after just a few rounds of practice. Success seems too hard
to come by or they may not have the natural talent. The pain
of sacrifice may be too great, so they just hang up their gear.
Let me ask you a question; did all these people who quit fail?
No, they did not fail; they just quit. There is a difference.
They probably left squash to look for something they enjoyed
doing more.

For all we know, they may have performed better compared

to Nicol during her first practice. The difference is that she
stuck to it because she had more passion and hunger. She
must have failed a thousand times before she tasted success.
So, keep at it, friends. Whether it is business, or investing,
or sales closing skills, keep working at it. Don’t give up. You
have not failed. You only fail when you throw in the towel.
Don’t do it; you will be a champion yet. I hope you will catch
Donald Trump saying this at:
http://www.youtube.com/
watch?v=qg6wuiSIUJs&eurl=http://www.investing-secrets.
com/donald-trump-6/

(Donald Trump, a US billionaire investor who has written

several best-selling books, is also the star of The Apprentice
show.)

I remember the day when my school headmaster, Mr Seow,

popped into our Form Five class out of the blue. In all my
years at school, both primary and secondary, no headmaster
had ever set foot in our class. This headmaster just appeared
without warning, and without any introduction whatsoever,
proceeded to deliver a lecture to us. “Today I’m going to tell
you all about the difference between Fate and Fatalism,” he
 15 Money Secrets

said. I believe what he had to say was rather important so I

gave him my fullest attention.

We should take a lesson from the spider. It will not bother

how many times it takes to spin its web; it will complete it
somehow.

A lot of things in our lives may be fated. We may be destined

for a particular job, to marry our spouse, or to even strike
the lottery. But we should be careful, he said, not to fold our
hands and just wait for fate to dictate the course of our lives.
That would be fatalism. Instead, we should always strive to
do our best and be our best at all times. We should be like
the spider we had studied in primary school. No matter how
strongly the wind blows, it keeps spinning its web until it
is done. We should be like Abraham Lincoln who became
President after losing more than ten times. We should be like
Thomas Edison who succeeded only after 10,000 attempts.
We should be like the basketball legend, Michael Jordan,
who said, “I’ve failed over and over and over again in my life
and that is why I succeed.”

Failure is temporary, success is lasting.

Most people give up and admit defeat too easily. They say:
“Oh, we will never make it.” “We will never be rich.” “It’s just
Andrew Chia 16

too competitive.”

But they have forgotten that they have survived worse odds
than that! In insurance circles, they always tell you that
you have won the battle against more than a million people
before you were even born. The odds here are only one in
a hundred. You see what I mean? If you don’t, go ask your
insurance agent friends. Don’t be discouraged. Take up the
challenge and go for it. Make a commitment to learn some-
thing new about making money each day. The secret of suc-
cess in life is for a man to be ready for his opportunity when
it comes. People always complain that they are not given the
opportunity to get rich, yet more often than not, they are not
ready when the opportunity arrives. Let me give you a simple
example. I learned this while attending a property seminar.

Before she started her seminar, she took out some US$10
dollar bills and told the class, “I have a few US$10 bills here.
Who would like to exchange their RM10 bill for a US$10
bill?” Almost all of us were in shock. It sounded too good
to be true. Was this some kind of trick? Was there a catch
somewhere? A few of us managed to recover and run up to
the stage. (Not me. Being a slow coach, I was still trying to
analyse and figure out the bargain.)

There was no trick, no catch. It sounded too good to be true,

but it was! By using such an ingenious little exercise, she
gave us an important lesson which we will remember for a
long time. The Chinese have a saying that “there is no big
frog jumping on the open road (someone would have caught
it already)”. Well, I can tell you this – this Chinese proverb
is not true! Successful investing lies in being able to catch
that elusive frog. If you are not Chinese, the frog stands for
anything that is valuable. And as some of us learned that day,
it is so easy. Because almost everyone else believed in that
saying, only a few bothered to pay attention to that frog and,
 17 Money Secrets

they caught it.

At the same time, we learned another lesson; we have to be

prepared when opportunity strikes. For example, we must
know that US$10 equals to about RM35 (at that time), and
it is a good deal. (I have friends who are so behind time they
tell me that US$10 equals to RM45 instead of RM35.) Most
of us do not know at what price a property or a share would
be worth buying. We miss good opportunities everyday sim-
ply because we did not know that it was an opportunity. She
taught us that day to be ready with our calculators and when
that opportunity comes, don’t hesitate – grab it!

So be ready the next time opportunity presents itself. How

do you do that? Learn up all you can on topics related to
money-making, whether it is a particular business or indus-
try, or an investment topic, like property or shares. Adopt a
positive mindset. Get rid of the mental baggage that most
people carry. On one hand, they complain they are not given
money-making opportunities. On the other hand, they are
convinced they will never be rich no matter what. Hey, life is
complicated enough as it is. Don’t make it more difficult for
yourself than it really ought to be.

Poor people say they will never make it in life because they
have no capital. People who didn’t do well in school say they
will never make it because they are not highly educated, or
don’t know how to read or to converse in certain languages.
Highly educated people will tell you they are not well-con-
nected. They end up confused, discouraged and depressed.
Worse still, they may even end up sceptical and cynical. Don’t
allow this to happen to you. Always fill your mind with posi-
tive thoughts that you can succeed. Don’t get me wrong, you
can’t pretend to know something if you don’t. You can’t tell
people you know so and so if you don’t; that would be lying.
But you must always have strong belief that you are on the
Andrew Chia 18

way to success. After all, life is a stage, they say. We are all
actors. When we pretend we can succeed, we are on our way
to real success. Let me explain.

If you are an entrepreneur on your way to success, it’s imper-

ative you appear confident and knowledgeable when you are
trying to make deals with your business partners. You need
to appear professional, dress smartly and always be on time
for appointments. Only make commitments which you are
absolutely sure of being able to fulfill them. All these may
sound like common sense to you, but you would be surprised
to know that there are many businessmen who do not prac-
tise them.

To begin with, they arrive late for appointments and offer the
perennial excuse of traffic jams. They look unkempt and are
unsuitably attired. They light up without even seeking per-
mission from their non-smoking customers. They start off
a conversation by trying to impress but without giving any
convincing facts or figures to support their claims. More often
than not, they do not have a systematic proposal with all the
relevant decision-making points outlined for their customers
to consider. For decades, they try in vain to pin down the deal
that will make them millionaires, and yet, within minutes of
an appointment with their potential business partners, their
credibility has already flown out of the window.

Bosses, too, promote members of staff who carry them-

selves as if they have already been promoted. Think about
it; it is true. They dress like supervisors. Their behaviour is
different from that of their colleagues who decide they will
improve their grooming only after they have been promoted.
They work hard and have the right attitude, like supervisors.
They help their colleagues as if they were supervisors. They
are confident but not patronising. They are not bossy, but
request assistance from their colleagues just as a supervisor
 19 Money Secrets

would. They look every inch a supervisor and, before long,

they get promoted.

There you have it. When you are ready, you don’t actually
have to wait for the opportunity to come. You can attract the
opportunity. Do you know that people who hold the ‘oppor-
tunities’ are always looking for the right person to give it to? I
often hear of rich people who are looking for suitable person-
nel to manage their assets. They lament the fact that people
close to them, such as relatives and friends, lack the hunger
and the knowledge for the task. And there are some who have
the knowledge but their integrity is questionable. All in all,
rich people often meet many people but are not always com-
fortable in allowing their assets to be managed by them. Talk
about missed opportunities.

Success comes in small steps. That is why stairs were invented.

Imagine a wall that is twenty steps high. Now, don’t believe
it when someone tells you that they can use “light kungfu” to
fly or float up the twenty steps. If they can do that, then the
world record for high jump needs to be rewritten. No, even
the strongest athlete will not be able to jump twenty steps in
one leap. But a three-year old kid can easily reach the top of
the twenty steps by taking one step at a time. Success is the
accumulation of small successes. Take baby steps. (However,
if you are stuck financially it may be hard for you to even take
baby steps – you need a ladder to climb out of the hole first.)

Once, a troupe of kungfu performers from Shaolin visited

our country and displayed their skills at Sungei Wang Plaza,
a premier shopping centre in the heart of Kuala Lumpur.
When interviewed, their Elder had this piece of wisdom to
share, “Don’t be afraid of slow progress. As long as you are
learning and improving you are going to be fine. Just be
afraid of being stagnant.”
Andrew Chia 20

Don’t give up. Many of the world’s failures are people who
did not realise how close they were to success when they gave
up.

2nd Secret
You can be amongst the 10% who succeed.

The key to financial success is to keep climbing the steps

in accumulating new knowledge every day. As you keep
learning, you will soon find that you know more than 90%
of the population does. But you don’t need to look in front or
behind; you are not competing with anyone on the road to
financial freedom. Just keep making yourself better.
 3
Dark Side

There are always two sides to the moon, the one facing the
sun and the other side which is dark and cold.

There are many books written on positive thinking, right

mental attitude and self-help. This is because there is indeed
a force that chains people to the dark side so that they are not
able to succeed in our money world. “Whatever the mind can
conceive and believe it can achieve.” - Napoleon Hill, world
renowned motivator and author of the classic book Think
and Grow Rich. The reverse is also true. We cannot acquire
the skill to make $600,000 a year if we are trapped in an
unbelieving $60,000-a-year brain. The two most powerful
words on earth are none other than, ‘I can’t’.

You can choose to break free because it is our Creator’s will

Andrew Chia 22

that we live a life of abundance. Have you ever wondered why

some businessmen succeed when others don’t?

Have you ever wondered why some employees are paid more
than others? I once asked an accountant why some accoun-
tants are paid only $2,000 a month when there are accoun-
tants working for big corporations who are paid $20,000
a month? Is there a difference in their qualifications? He
told me that they read the same text books and sit for the
same exams. There are also other professionals like doctors,
lawyers and engineers who earn ten times more than their
counterparts. All are equally qualified.

I am not sure if he is right but he tells me that it is their

confidence level. For example, some accountants feel they
lack the experience required to work for a big corporation.
The big boys won’t hire them. But, then, if they don’t work
for the big corporations, they will never get the experience,
will they? That is why there are many professionals who are
stuck with small salaries until they retire.

There is indeed an Inner Game as well as an Outer Game in

financial success. The Inner Game is all about what is going
on inside your mind, body, and emotions. If you do not have
your Inner Game together, then almost nothing you do or say
is going to get you success with money. If you don’t have your
inner game together, then fancy techniques and cute invest-
ment theories will only waste your time. That is because the
people you are talking to - your customers and business asso-
ciates - will quickly see that you are not the smooth guy you
are pretending to be.

On the other hand, if you do have your inner game together,

then you can use almost any technique because your cus-
tomers will be able to feel that you are the kind of man they
have been looking for to do business with. Now, techniques
 23 Money Secrets

and strategies do work. In fact, I have found that customers

appreciate that you have taken the time to polish up your
presentation and business proposals and learn how to com-
municate in a smooth, interesting way. But you need to get
rid of any negative traits in your character and attitude, and
instill self-confidence and high self-esteem.

Which of the attitudes listed below do you associate yourself

with – the self-limiting ones or the self-liberating ones?

“The love of money is the root of all evil.”

The lack of money is the main cause of many of our
problems.

“We can’t afford it.” (Brain immediately stops working to

look for solutions to its problems.)
Now, how can we make sure we can afford it?
(Brain starts working – furiously and creatively.)

“The reason why I am not rich is because I have you kids.”

The reason I must be rich is that I have you kids.

“I can’t take risks, I have a family to think about, I must have

a secure job.”
I can’t risk having my family worry about their
future.

“When it comes to money, play it safe, don’t take risks.”

I shall learn to manage risks.

I’ll never be rich.

I am a rich man, even though I may be broke right
now.

“I am not interested in money. It doesn’t matter.”

Money is power.
Andrew Chia 24

Because of low self esteem, the poor work harder and take a
second job but accept a smaller pay. The rich are confident
and keep using their brains to think of new ways to make
money. Being bold and confident can make the difference
between whether we are rich or poor. The good news is that
once we make it across, the old thoughts stop screaming in
our heads, and in no time, these negative old thoughts will
fade away.

All of us have only one shot at life; let’s make it count.

For a quick check, people who are living in the dark side will
see only one word in the whole of Chapter 17 in this book.
That word is C-A-N-N-O-T. People making the transition to
the light will see at least nine ways of reaching there.

3rd Secret
You can break free from self-limiting attitudes.

Is the glass half full or half empty? Only you can decide.
Successful people always see the glass as half full.
 4
Two Most Powerful Forces

The Bull and the Bear symbolises the two powerful forces in
any market.

The two most powerful forces in our money world are fear
and greed.

Before we can be rich, we should learn how to control these

two emotions. Once they control us, we will end up working
for money and money will control us. Even some rich people
are controlled by fear and greed.

What can fear and greed do to a man with a day job? It will
simply cause him to be glued to the job for an indefinite
period of time. Why? Because his fear is that he won’t be
able to pay his bills at the end of the month if he doesn’t go to
Andrew Chia 26

work. This is true even for higher management staff because

they have more expenses. And greed will cause them to con-
tinually look forward to promotion, pay rise, bonus, allow-
ances, ex-gratia payments and overtime payments. They can
alternate between these two emotions of fear and greed for
decades, usually until retirement.

My entrepreneur friend, Joseph, has done a simple calcula-

tion to encourage people with day jobs to take the bold step
of venturing into business or investing in order to achieve
financial independence. I find it quite enlightening. Here is
what he says.

A great number of working people are running the rat race to

get promoted and achieve a higher salary scale. Now, let us
assume you are hard working and eventually get promoted
and earn a salary of $10,000, which can be considered rea-
sonably high. Many employees dream of a five-figure salary.
What happens next? Are you rich and financially indepen-
dent? Not likely. Let us see what a $10,000 salary can do.

For a start, your retirement fund (EPF or CPF) and income

tax will be deducted, leaving you with two thousand dollars
less. If you are earning $10,000, it is not likely you are driv-
ing a small car. You will be using a Merc or a BMW, or at
least a higher range of Japanese marque. That is another
two thousand dollars gone for instalments. (There are also
higher road tax and insurance expenses, not forgetting that
a bigger capacity car will consume more petrol.) It is also
likely that you are living in a semi-D house, or at least a dou-
ble-storey terrace house. Mind you, that is additional two
thousand dollars towards instalments. And you will need a
maid to take care of the house.

You will probably have a golf membership, or at least a fit-

ness centre membership. That is another one thousand or
 27 Money Secrets

so. With your salary and status you are not likely to be hang-
ing out at mamak stalls. In fact, most of the time you will
be buying lunch for your friends, colleagues and customers.
You may even be buying them beer at the pub. You think
a couple of hundred dollars here and there once in a while
won’t hurt, but you would be shocked if you added them up
one day. It runs into the thousands. And a person with a
$10,000 salary will be more likely to use his credit cards, too.
Just swipe and sign, remember?

Throw in the rest of the monthly expenses like food, clothing,

petrol, life insurance, cable television utility bills and the
like. Don’t forget to multiply those expenses to include your
spouse and kids. If you do the math now, you will find that
what my entrepreneur friend says is very true. There really
isn’t much money left over for savings and investment.

I go for a beer or two once in a while with my buddy, CT, who

has grown up with me since we were in Form One in second-
ary school. He has a string of degrees and holds a high man-
agement post in a leading insurance company in Malaysia.
He commands a monthly salary of more than $10,000. Being
buddies, we always have this heart-to-heart talk before the
beer really takes over.

He confides in me and, recently, when we were recounting

our financial status, he was ruing the many financial oppor-
tunities that he had missed. He should have settled his house
and his car instalments when he had the chance more than
ten years ago. Instead, he blew a lot of money over entertain-
ment and late nights. Now, his kids are “suddenly” growing
up and he has to start preparing for their college education.
And guess what, he has not yet settled his loans, both his
house and his car. Today, instead of living comfortably with
such a high salary, he is a worried man at times.
Andrew Chia 28

We must handle the fear of losing money and the fear of fail-
ure. We have to start believing in ourselves. Never say, “I am
not smart enough. I am not good enough. So and so is better
than me.” If you want to be very rich, you need to overcome
fear.

Great waves in the market are also caused by these two

powerful forces - fear and greed. We believe that economic
depression is also caused by two human emotions: anger
and sadness. Economic depressions could be synchronised
as emotional depressions. People are angry at themselves
because they are not getting ahead financially and they
are sad over their loss of time. All of us have a limited life
span. The thought of spending a big fraction of our precious
life span just to make ends meet immediately generates a
migraine of 6.0 on the Richter scale.

How do we conquer fear? One of the ways is to have a lot

of reserves. Save up at least six months of living expenses
as a buffer or cushion just in case your business venture or
your investment project meet with unexpected failure. That
way you will not be pressured into taking unnecessary risks.
How does an employee conquer greed? The figures above
have shown that it is quite futile to look forward to financial
independence just by holding on to a day job.

How does an investor conquer greed? Do your budgetting

carefully. For example, you should not have more than 75%
of your total funds in stock investments. You should have
some cash on standby. And you should not have more than
30% of your stock investment account in one counter only.
Greed is a useful emotion and when we set its boundaries, we
harness the monster in us. We will not fall in love with our
investments. Rather, we will be keeping track of, and control
over, our profits. We will be ruthless in cutting our losses.
 29 Money Secrets

4th Secret
To become very rich, you must conquer your fear
and greed.

Between fear and greed, fear is the stronger emotion.

 5
Edgewater

Money here, money gone tomorrow. That’s how some rich

people’s lives are. Financial intelligence is what you need to
keep your wealth.

Most people have a simplistic view of wealth. If they see

someone living in a big house and moving around in a big
car, they assume that person must be rich. My friend and I
were having lunch one day at The Ship restaurant in Kuala
Lumpur. We parked our car at the building next door. On
the way back, he commented, “This building looks run down
and the car park seems neglected. The owner must be quite
poor.” I replied, “This building belongs to Robert Kuok.” At
the time of writing, Robert Kuok is still the richest man in
Malaysia.

You see, things are usually not as they appear. A lot of rich
people in Malaysia dress very modestly and move around in
 31 Money Secrets

old cars. Datuk Tan Chin Nam, the owner of Mid Valley City
shopping complex in Kuala Lumpur, once said that buying
new cars is the worst investment. He never buys new cars.

Now, let us continue with the story of Edgewater, which is

also related to my story above.

Emotional control is not a state to be achieved; it is a daily

challenge. Emotional control was once the forte of Jesse
Livermore.

In 1923, a group of America’s greatest leaders and richest

businessmen held a meeting at Edgewater Beach Hotel in
Chicago. Among them were:-

• Charles Schwab, head of the largest independent steel

company
• Samuel Insull, president of the world’s largest utility
company
• Howard Hopson, head of the largest gas company
• Ivar Kreuger, president of the International Match Co.,
one of the world’s largest companies at that time
• Leon Frazier, president of the Bank of International
Settlements
• Richard Whitney, president of the New York Stock
Andrew Chia 32

Exchange
• Arthur Cotton and Jesse Livermore, two of the biggest
stock speculators
• Albert Fall, a member of President Harding’s cabinet

Twenty-five years later, all nine of them listed above, ended

up as follows:-

• Charles Schwab died penniless after living for five years

on borrowed money
• Samuel Insull died broke in a foreign land
• Howard Hopson went insane
• Ivar Kreuger and Arthur Cotton also died broke
• Leon Frazier and Jesse Livermore committed suicide.
(A lot of us in Malaysia who study technical analysis for
derivatives trading still read Jesse Livermore’s book. He
is considered one of the greatest stock traders of all time.
Although emotional control was once his forte, he lost
control of his emotions towards the end.)
• Richard Whitney and Albert Fall had just been released
from prison

No one can really say what happened to those men. If you

look at the date of the meeting, it was in 1923, just before the
market crash and the Great Depression in 1929. We suspect
that it had a great impact on these men’s lives. Although the
Edgewater incident happened far away, in USA, and a long
time ago, it is not unique. It is only more spectacular in that
the players were richer and more powerful. In every country
including our own, we can recall rich and powerful politi-
cians, businessmen, sports and other celebrities who went
from hero to zero.

We believe it is possible that these rich and powerful people

may at the same time lack financial intelligence. And money
without financial intelligence is soon gone. The man who gave
 33 Money Secrets

the world the three laws of motion, Sir Isaac Newton, was
both very intelligent and rich. But he did not have sufficient
financial intelligence and lost a lot of money in the South Sea
Bubble. Traumatised by the loss, he had this to say, “I can
calculate the movement of the stars, but not the madness
of men.” It is natural human weakness to amplify our own
successes and play down or ignore our shortcomings. That is
why when we have sudden wealth, we assume our financial
intelligence has increased. It could not be further from the
truth. We allow success to go to our heads, becoming proud
and unwilling to listen to advice.

You have probably heard of rich and famous sportsmen,

entertainment artistes or professionals, like doctors, who
have failed miserably in investment. They think that just
because they are rich, they will be good at investing. To some
of you, the phrase, “that’s irrelevant” may ring a bell. That’s
why world-renowned marketing consultant, Jack Trout (you
can google him and be impressed) says, “The seeds of failure
are found in success”. Even businessmen fall into the same
trap. You need to understand that being good at business
and being good at investing are two different things. For
example, our famous Asian squash queen, Nicol David from
Malaysia, may not be good at other racquet games like tennis
or badminton.

Without financial intelligence, people’s understanding of

investment is simply appalling. You can’t imagine the things
they believe in. Take, for example, the “money-game” trend
today. Numerous online scams like Swiss Cash and Sunshine
Empire have been uncovered and blacklisted by the authori-
ties of various countries in Asia. Entertain yourself by taking
a peek at this link while it is still active:
http://www.sc.com.my/eng/html/licensing/investors/
Alert_list.html
Andrew Chia 34

The question is, why are people so gullible as to believe in

astronomical returns? Everyone says it is greed. While that
is true, the answer is that people are also not aware of the
sort of returns they are supposed to expect when they invest.
What exactly do we mean when we say high returns? Nobody
told them the returns on investment (ROI) that the world’s
greatest investor gets is an average 23%, compounded for 50
years. The highest return that he got in a single year was in
1976 when he managed a whopping 60%.

(Throw that into a spreadsheet and you can see that he

started with only a couple of million dollars. That’s the power
of Einstein’s greatest mathematical discovery of all time.)

If you apply Rule of 72 on 23% returns, you will find that

your money doubles about every three years. Imagine put-
ting $1,000,000 into fixed deposits and withdrawing
$2,000,000 after just three years! It just takes a little bit of
financial intelligence to see how easily people are conned into
believing their money is being used by some super-investing,
fund-managing, syndicated organisation (if there is such a
thing) which can give them obscene returns like 700% or
more a year.

Convince yourself by visiting the thousands of money games

found in online forums such as MoneyMakerGroup, Talkgold,
Carigold, Nogold and Asamonitor. You will see there are
literally millions of posts to these forums. You may recog-
nise these schemes by fancy names such as HYIP (high yield
investment plans), or any other name that seems beyond
your understanding. You will be amused to view terms like
“non-paying sites” or “closed-down sites”. Now you see how
acute and urgent the need for financial intelligence is.

I know of a red-faced business lecturer with an MBA who

fell victim to one such site (while the site was still paying),
 35 Money Secrets

and lost quite a bit. Her husband who holds a PhD is equally
embarrassed. And I must not forget to mention my best
friend, Cheng (not his real name) who also holds a PhD and
operates an international audit firm. He, too, was a victim
of a scheme that stopped paying after eight months. He lost
a few hundred thousand dollars. The scheme paid out 11%
returns a month, which worked out to be 132% a year. Most
of the victims were white collar gentlemen who are either
teachers or professionals – there were a few ladies, too. They
met every week for training and recruitment at a posh hotel
in Petaling Jaya, when the scheme was still paying dividends.

Well, this didn’t hurt Cheng too much, you know, because
he rakes in a million dollars dollarsa year from his audit and
tax business. That underlines what I said earlier about being
good at business and being a poor investor at the same time.
(Now if you wish, you may consider business as a form of
investment too.) I can’t think of a single project that he has
invested in that has made money. Some of his investment
misadventures would make you keel over in laughter because
they really border on the ridiculous. And being the ultimate
sporting guy (that’s why he’s my best friend), he doesn’t at all
mind me poking fun at his silly investment ideas.

Now, before you dash out to enlighten your friends who

could be falling into the trap this very moment, let me douse
a little bit of your fire. Don’t bother. Let them find out the
hard way because pain is a good teacher. People who drive
with glaring headlights of greed and fear are not easily con-
vinced. They have become emotionally charged. (That may
also be one of the reasons why the rich are reluctant to teach
us financial intelligence - because they know people won’t
listen.) Financial ignorance is a silent killer.

Did I mention that financial intelligence and investing

involves a great deal of control over our emotions? It is not
Andrew Chia 36

only money skills. It is always the investor who is risky, not

the investment. When we are not financially intelligent, we
practice only one investment strategy, that is, the ultimate
Matchstick Investment Strategy. That investment strategy
will give the same result as gathering a whole pile of cash and
putting a lighted matchstick to it.

5th Secret
It is not how much you make; it is how much you
keep.

Some people are not aware that they are living dangerously.
Just because they are rich today, they let their expenses spin
out of control. Soon, their world comes crashing down and
they may take a long time to recover. In fact, there are some
tycoons who have never recovered from their losses, and
they live in depression for the rest of their lives. Personally,
I have seen and known quite a number of such persons.
 6
The Great Misunderstanding

Our money world can be quite confusing at times. When we

think we are making progress we could be setting ourselves
back with the debt we have taken on.

The Great Misunderstanding in our money world is thinking

something is an asset when it is actually a liability. Liabilities
like house loans, car loans, personal and business loans cause
recurring expenses such as monthly instalments, interests,
repair, maintenance, insurance, taxes and depreciation. An
asset does exactly the opposite. Assets like properties, stocks
or business generate rental and dividend income, profits and
royalties from patents and copyrights and create positive
cash flow for you every month.

Most people suffer financially when they buy liabilities and

think that they are assets. Ask anyone and he will tell you his
Andrew Chia 38

house is an asset. Still don’t really get the gist if it? Read the
previous paragraph again. Just stop thinking about appre-
ciation for a while. It is not putting any cash into your pocket;
instead, you are forking out money every month to pay for
your beloved house. I don’t mean that we shouldn’t buy a
house. We just have to understand that we need to accumu-
late assets to be rich, and our house, which we intend to live
in right now – is not one of them.

Who wouldn’t want to stay in a nice house like this one?

However, it comes with a price. The hidden expenses like
interests and maintenance could overwhelm us in the long
run.

This minor oversight may cause a lifetime of financial strug-

gle. Just because something is listed as an asset in your statu-
tory statements submitted to the government does not really
make it an asset. Don’t feel bad. Many people, including
very qualified professionals, always get asset and liability
wrong! This is because the accepted method of accounting
allows liabilities to be listed under the asset column. If you
have not attended an accounting class, you definitely have a
head start over those of us who need to unlearn our defini-
tions. I know that sounds really weird.

I hope I can explain this important concept of an asset by

using an example from property investment. There are a
 39 Money Secrets

number of books on the subject written by both international

as well as local authors. They extol the virtues of properties
that give positive cash flow, and give detailed calculations on
how a property can generate positive cash flow.

The Power of Passive Income from Property

Investment

At first, I was quite surprised at how much trouble they took

to outline numerous examples of how a property investment
can generate a positive cash flow of just a hundred dollars.
I found the idea so repulsive that I literally threw away the
books from my hands. But somehow I couldn’t get away from
it. Almost all these books are written by best-selling authors
and they all say the same thing. It was disgusting. Why did
they go to such great lengths just to teach you how to make a
hundred dollars?

Do you know why I had such a reaction? It was because I

was a businessman, and businessmen have overheads. My
overheads each month always ran into five figures. I had
to pay rental, salaries, utilities and a host of other monthly
expenses, particularly bank interests. Each day I woke up, I
was set back by a hundred dollars in bank interest, without
doing anything. Talk about passive income – to the banks.
All I understood was passive expenses.

Given my expenses, how much sales do you think I would

need in order to cover those overheads, not to mention mak-
ing a profit? And here were guys teaching me how to make a
hundred dollars. They are so excited when they find such a
property that they are like a kid who has just been given his
favourite lollipop. And I was supposed to be impressed. It
made my blood boil. With a hundred dollars, how was I ever
going to even get out of debt?
Andrew Chia 40

If you know how to multiply money, a hundred dollars can

be the start of a million dollars

Today, I jump for joy if I find a property that makes me a hun-

dred dollars. What caused this massive change in me – from
being repulsed at the idea of property authors/experts telling
me to make a hundred dollars a month to being delighted
now even if I make a smaller amount than that?

I have finally discovered the secret of getting rich. It is found

in just one word – assets. An asset is something that puts
cash into my wallet without me working. If we keep accumu-
lating assets, we will become rich in no time. The main dif-
ference between $100 and $100,000 is time, not to mention
effort. It is much better to earn a hundred dollars without
doing any work. I used to make quite a lot of money, but I
had to work for years to get it. And once you spend it, you
have to work again to get it.

Not convinced? Think about it. Once you have a hundred

dollars of passive income you have all the time in the world.
There is nothing else for you to do. What do you do when you
have time? You look for another source of passive income.
Yes, you keep doing that just a few times and you will never
 41 Money Secrets

need to work again for the rest of your life.

What’s the difference between PROFITS and

CASH FLOW?

Let’s look closely at that hundred dollars again. Being a busi-

nessman, I usually think in terms of profits. That hundred
dollars is not your profit. It is a lesser known, but definitely
more important, term called cash flow. It is cold hard cash
that goes into your wallet. If you are not impressed with that
perhaps, you may be impressed by fishing out a hundred
dollars from your wallet to pay bank interest. Is that real
enough for you?

What about profits? Well, your tenant actually pays you

$1,000 of his hard-earned money each month. Your bank
instalment may be $900. That is how you arrive at $100
positive cash flow. Do you think it is easy to find a property
that gives you positive cash flow? Think about it; why don’t
the tenants pay the bank $900 instead of paying you $1,000.
Furthermore, at the end of the day, you own their house.

The answer is simple; they just can’t afford the down pay-
ment. They also can’t afford the legal fees, stamping and loan
agreement fees. Most of the time, the amount required to pay
the down payment and all the fees is quite substantial. It is a
pity to see how the poor are penalised every day. The Chinese
saying (literally translated) - a poor man eats expensive rice
- is true. That is how the poor get poorer, and of course, the
rich get richer.

You can see that your profit is actually $1,000. Just put aside
bank interest for a while and imagine your property is fully
paid. You now have $1,000 positive cash flow.

If you have just five properties like that, your tenants will
Andrew Chia 42

be paying you $5,000 a month. An average Malaysian can

happily survive with that amount even with a family in a big
city like Kuala Lumpur today. You may then give yourself the
title “Financially Independent”. I have many friends and cus-
tomers who are doing just that. They are whistling every day
and laughing their way to the bank. My friend, Simon, owns
almost all the shops in the bustling commercial area opposite
the badminton hall in Cheras in the heart of Kuala Lumpur
city (and those beside and behind the hall). His inches-thick
stack of rental receipts lying casually on the desk in his office
would convert any unbeliever into a property worshipper.

What about appreciation? Like most people, I got it all wrong

too – initially. Most of us are on a quest for that one property
that is going to appreciate through the roof and make us a
millionaire. Somehow, we never find it. Now, eureka! It is
right here! A property that can generate positive cash flow is a
property that appreciates. The more positive cash flow it can
generate, the faster and higher it can appreciate. Sadly, the
reverse is also true. Many of my friends who bet their fortune
on their ‘asset’, namely their house, can never understand
why it doesn’t appreciate. That is simply because if they were
to calculate the Return of Investment (ROI) (which many
never do, because the majority don’t know what that is), they
would discover that it generates negative cash flow.

How even the enemy of inflation could be on

your side

Let us come back to the part about the loan. Being a bor-
rower, particularly with the kind of bad economy we have
been having lately, is such an advantage.

Imagine yourself as the bank. You lend me $100,000 and

I repay you in instalments for say, thirty years. Taking into
consideration inflation, the instalments I am paying you, as
 43 Money Secrets

time goes by will be worth lesser and lesser in actual value.)

Can you see that almost everything is working to your advan-

tage? Your loan becomes smaller as time goes by due to infla-
tion. Your property appreciates because properties are a very
good hedge against inflation. The price of building material
goes up together with everything else. In line with inflation,
you may increase your rental. If you are enjoying an ROI of
say, 8%, you will be elated each time you re-calculate your
ROI. It could even double. That loan that you worried so
much about earlier can get repaid much sooner than you
imagined.

Yes, I understand those ‘other’ fears that lurk in your mind.

For many years I had those same fears. You have seen some
of your friends buying properties which cannot be sold or
rented out. You have heard of numerous nasty tenants who
not only default on the rental but reduce your property to
something you cannot even recognise. Not only that, your
friends are tearing their hair out because those tenants have
locked their premises and are now not reachable, not con-
tactable, as well as not locatable. A frantic check with lawyers
reveals the fact that it is illegal to enter the tenant’s property
(it is your friend’s property, mind you) to evict him.

I have a friend, a very good businessman, who has invested

in almost twenty properties, totalling more than $3 million,
at various locations. But he is not as good a property investor
as he is a businessman. When the government in Malaysia
announced that it was abolishing real property gains tax
(RPGT) some time ago, I was so excited that I quickly gave
him a call. Now, RPGT is a tax to penalise you for making
profits selling your properties. To my surprise, he did not
show any enthusiasm at all. When I asked him why he wasn’t
excited, he said that nobody would be affected. Upon my
gentle probing, he said that since people would not make a
Andrew Chia 44

profit selling the properties, there would be no RPGT to start

with.

“Now, why would they not make a profit?” I asked. “Oh, none
of my properties can be sold for a profit!” he replied. For your
information, most of his properties are either located near
Timbuktu, facing a T-junction, have inauspicious address
numbers, or are ‘artistically shaped’. You may wonder how
or why that happened. It is due to his ultimate strategy of
buying things based on only one consideration – low price.
All his properties were bought at a discount from developers’
price. Not only are most of his properties not saleable; they
are also not rentable.

In order to know how to select a good property as well as to

select a good tenant, you need to have the knowledge about
property investment. How – you may ask. You should seri-
ously consider investing just a couple of thousand dollars in
seminars before you invest hundreds of thousands in proper-
ties. If you do not have that budget, the next best thing you
could do is to spend a few hours at the bookstore. Carefully
skim through investment books on the topic and then select
one or two good ones to take home for study. (Remember to
pay at the counter first.)

You see, I have identified a team of people who help me to

make money from my property investment. But don’t get me
wrong – these people are not on my payroll, meaning they
don’t work for me. They are professionals who are really
good at what they do. Let me give an example. My property
agents help with the fitting together of the other pieces of the
jigsaw puzzle. From negotiating with sellers, getting the best
deals from banks and lawyers, and screening for the best ten-
ants, their assistance is invaluable. One of my tenants whom
they secured for me is a Malay contractor who moved in with
his family two years ago. Rental for properties is usually paid
 45 Money Secrets

between the first and the seventh of the month. This tenant
is so good that he usually banks in his rental for me at the
end of the preceding month. If he is too busy, he will bank in
on the first of the month and he will call me to apologise for
being late.

I have also a team of handymen who fix up and maintain my

properties in tip top condition.

While my friend has a hard time renting out his properties,

my agents assure me that my properties are easily let out.
For example, my low-end properties, like apartments, are
located near public transport like buses and LRTs. In fact,
one of my properties is right next to the LRT. It really takes
less than sixty seconds to walk from the lobby of the apart-
ment block to the ticket counter of the LRT. For medium
and high-end properties, factors other than transport, such
as security, beautiful surroundings and good neighbourhood
are more important.

Let us come back to the problem of bad tenants. The prob-

lem is non-existent. Yes, you heard it correctly. Over coffee,
my property agents outlined three simple steps to evict any
naughty tenant. “In case you are still not convinced, we
guarantee collection for you for a small fee. Are you satis-
fied?” they asked. At first, I unloaded my burden on them.
After securing the first two tenants who kept banking rental
into my account promptly, I felt it unnecessary to pay extra
for guaranteed collection. There was no collection to be done
at all.

(If you are still curious to know what those three simple steps
are, just remember your homework. You are supposed to
view a hundred properties before you make your first pur-
chase. In that process you will meet up with at least a dozen
property agents. Most of them will be able to tell you those
Andrew Chia 46

three simple steps. Just think about this: property compa-

nies have hundreds of properties for sale or rent. They may
be collecting rental for many of the customers. Do you think
they have sleepless nights doing that? No, they don’t. In
fact, you may even use this as a test to find out how good your
agent is. If he cannot answer this question, you should be
careful when dealing with him. He may not be a good agent.)

So, treat your property agents well. Remember those high-

ROI properties? Regular bribes of coffee and an occasional
beer can do wonders. Once you establish yourself as a ‘ready-
buyer’, you will stand to gain all kinds of ‘unfair privileges’.
You will most likely be the first to know about juicy deals or
be given additional information about the seller or alerted
about certain conditions concerning the property. You may
not even have to pay legal fees for S & P and loan agreements.
For your information, ready buyers are getting hard to come
by as more agents enter this lucrative industry every day.

I hope I have made the concept of an asset clear enough for

you. Once you grasp the idea, you will find it very easy to
apply to other types of investments too.

What other investment vehicles do the rich use to get richer?

Besides property, the other more popular form of investment

is shares. By applying the concept of assets you will be sur-
prised how close the resemblance is between these two types
of investments. People spend countless hours researching
how to ‘stock pick’ to find that super share that will again go
through the roof.

In the US, it could be Microsoft. In Malaysia, most people

would think it is Public Bank or IOI. How do we know that
those are the shares to buy? The answer is the same – it is
in the cash flow. Stocks with high dividends will put a lot of
 47 Money Secrets

money into your wallet. Focus your attention on high divi-

dend-yielding stocks. Put in another criterion – the stock’s
track record. Ignore stocks that have given high dividends in
just the recent years. Find stocks that have been giving con-
sistently high dividends for the past ten years at least. You
would have found your potential winners.

This stock or stocks will give you just as much ROI as proper-
ties and you will be laughing your way to the bank again. But
wait! Don’t buy immediately. Identifying which stocks to
buy is only your starting point. You need to learn a few other
things like how to evaluate the business, how to calculate the
buying price, earnings, return on equity, PE ratios and debt
ratios before you can actually do stock investment. As you
learn these elements, you will again be surprised at the strik-
ing similarities between different types of investments.

It is an eye-opener if we think of business as just another

form of investment and apply the same concept of assets to
it. Almost everyone dreams of being a boss someday. You
only become a boss if you run a business. Now, what is so
great about being a boss? Let me see; if you work really hard
and smart, and manage the business well, you get to earn a
lot of money, to start with. You do very little or no work; your
staff does everything for you. With a lot of money and a lot
of time, your job is to enjoy yourself and be free from wor-
ries. Everyone respects you when you are the boss. Alright,
enough of just talking! Just thinking about being a boss is
so tempting – I will start my business and become a boss
tomorrow, you might say.

But of course, above is the simplified version of how and

what a boss should do. Now, let’s look at the cold hard real-
ity. As the boss of a business, you’ll get paid last. If rental is
not paid, you will have no premises to do your business in. If
salary is not paid, workers disappear. If staff EPF is not paid,
Andrew Chia 48

you will be sued, or at worst, you could be jailed. If overheads

like electricity, water and telecommunications bills are not
paid, your business comes to a grinding halt. Finally, if you
take a business expansion loan, interest will have to be paid.
You will only get paid when all the above expenses are paid
first.

When it comes to work you are totally disillusioned. You

are the first to arrive and the last to leave. Sometimes you
even have to work on weekends, not to mention lots of “ta-
pao”(takeaways), taking work back to your home, working
during weekends, etc.

Once you start losing control, you will have no money and no
time. For example, most of us have seen the cartoon depict-
ing the fat man who did business by cash, and the thin-look-
ing guy who did business by giving terms to his customers.
We all know that but we become victims of circumstances.
If we implement cash terms, customers leave us for other
suppliers giving them credit terms. So, we are left with no
choice but to give credit terms as well, which is like opening
up Pandora’s box.

Everything else is compromised, and businessmen end

up like total drunks, losing all direction. We have to make
customers, suppliers, bankers and even our own partners
happy. We even read in newspaper columns about consul-
tants teaching bosses how to make their staff happy. Do you
mean to say we even have to make our staff happy? Now, that
really starts us asking, who is the boss now? Or, what has
happened to the so-called boss who is supposed to be rich,
happy, enjoying life and respected by everyone?

Try asking an average businessman what his perception of

business is. You may be saddened by the answer. Most busi-
nessmen and ex-businessmen may be reluctant, but will be
 49 Money Secrets

forced to agree to the revised definition of business. Business

is tough, it is no fun and it is difficult to make money.
Furthermore, it doesn’t really command respect.

Wait, let’s pause for a moment. Now, back up a little, shall

we. We said bosses are supposed to be rich, do little work,
enjoy life and are well-respected, correct? That is called busi-
ness. There is no need to alter our definition just because our
experience says otherwise. The truth is simple – what we are
doing is not business!

The normal definition of business could be simply produc-

ing, buying and selling stuff and trying to make profits. In
that sense, everyone, from the newspaper vendor to big
multi-national corporations, is in business.

However, in the context of generating residual income, busi-

ness is all about setting up systems that run on “autopilot”,
and most businessmen have not got this basic concept cor-
rect. I do not blame them. All of us have preconceived ideas
just about everything. I, too, fell into the same trap. My
understanding of business was roughly the same as everyone
else.

To illustrate the point, I read about this so-called new defini-

tion of business from a book titled Cashflow Quadrant. It
first appeared on page 41. The author says that if you can’t
leave your business for a year you are not really running a
business. I missed the point totally, thinking that it was
either not important or irrelevant, but continued to read all
of the 359 pages of the book anyway.

I only realised what I had missed when I tried to extract

some points from the book to put it into investment notes
for my friends. (I mentioned this in my Acknowledgement.)
I still remember the moment when I realised this “minor”
Andrew Chia 50

oversight. I almost panicked, because it had serious impli-

cations on all the contents that came after page 41. It puts
business and investment in a totally different perspective.
Needless to say, I re-read the book, this time, slowly. I swore
to give up speed-reading thereafter. It is not how much we
know - it is how well we know the few essential things.

Maybe an example could clarify this for you. McDonald’s is

a business. The owners of the business do not need to make
burgers for their customers. They can go on a holiday for one
year and come back to find that there are more outlets than
before they left. They have set up a system complete with
guidelines for managers to oversee the daily operations.

The owner of a traditional food outlet appears to be running

a business. However, unless he has set up a system that runs
without him being there, his business is not actually a busi-
ness. Should he go for a one-year holiday, he may return to
find his business gone. His staff may not be able to maintain
quality control over his food and beverage products. They
may be lazy; the quality of their service to customers may
drop drastically, too, once he is not around. Worse still, they
may have even absconded with the daily cash collected.

You see, most businessmen are victims of circumstances.

Each morning they wake up, these are the things most of
them would say:-

i) “I have no choice, I have got to set up this factory

myself, nobody else knows how to do it.”
ii) “No choice, I have to have partners. I don’t have
enough capital or expertise. We need to pool our
resources together.”
iii) “No choice, we need to lower our prices. Competition
is just too stiff.”
iv) “No choice, we need to give credit terms because
 51 Money Secrets

everyone else is doing that.”

v) “No choice, we have to please our staff, otherwise
they won’t work for us. It is hard to find good staff
nowadays.”
vi) “No choice, we need to borrow from the bank. We need
funds to roll, because our customers are dragging our
payments.”

Very soon, businessmen will have no choice but to close shop.

In the course of my consultancy business I came across busi-

nessmen competing with each other to such an extent that
they say, “Let’s see who can outlive the others.” They fight
with one another over small projects with little profit mar-
gins and have to contend with giving lengthy payment terms
to their customers.

You should not be surprised to know that more often than

not, many of these businessmen first started their businesses
because they had no choice. They just had to do something
to put food on the table. They are not willing to work for oth-
ers, so, they have had no choice but to start a business.

I really miss my former classmate, Andy Chan, who has left

us to go to a better place. He was such a brilliant, friendly and
wonderful guy. All of us classmates miss him dearly. I have
yet to fathom his words of wisdom which keep ringing in my
ears even till today: “In life there is always an alternative.”
Many of the world’s financial woes (or other problems for
that matter) stem from these two words, “no choice”. “We
have no choice but to borrow more.” “We have no choice
but to give handouts to our citizens.” So, the next time you
are faced with a situation where you have “no choice”, think
again really hard. Remember the words of my eternal buddy.
Andrew Chia 52

If you have a piece of property that you can easily rent out,
you would be holding a valuable asset which can set you on
the path to financial freedom.

Just like property and shares, a business is supposed to gen-

erate positive cash flow month after month. Is it doing that?
Before you start a business, you must make sure that your
factory, shop or office is capable of putting cash into your
wallet without you working hard at all. You need to have
systems in place, just like businesses such as McDonald’s or
KFC. So, before you start a business, try your best to make
sure it is going to run like clockwork without you personally
running it. The systems must be in place. Do not start simply
because you have no choice.

KFC is a good example of a business. It has a system which

can run by itself with minimum supervision from the busi-
ness owner.

I am not saying you will succeed in business the very first

 53 Money Secrets

time. (Statistics show that most people succeed in business

only on their third attempt.) But whether you succeed or not,
you need to try to do things correctly the first time, and every
time. Before you can be rich, you have to be financially skil-
ful. First of all, being financially skilful means to be finan-
cially literate , that is, to be able to read financial statements.
With this skill, you may be able to create your own luck.

One who cannot read a financial statement will have the least
money and the biggest financial problems. An average inves-
tor cannot distinguish between a security and an asset. That
is why you must give up the idea of being just an average
investor. You have no choice but to excel, because investing
is mostly a zero-sum game. (Zero-sum game simply means
when there is a winner there must also be a loser. If someone
has won a million dollars, say, in the share market, another
guy must have lost a million. It is not a win-win scenario.)
Average investors will find it difficult to resist transferring
all their cash to super investors. Sometimes, they even do it
unconsciously. Your money life will spin out of control if you
have nothing under the asset column, and huge liabilities
and many items under the expenses columns.

Don’t worry if you are not an accountant. Learning how to

read financial statements is not really that difficult. We used
to train our new staff to do that within 24 hours. I still cannot
understand why some courses take two years to do the same
thing. I guess they are being taught a lot of advanced tech-
niques. In the process, students get confused and by the time
they graduate, they are not able to grasp the important points
of financial statements. That is why my buddy, Rico Ho, says,
“It is not how many things you know, but how well you know
the few important things.” If you lack the basics, then you
will have gaps of knowledge later on. They may come back to
haunt you every now and then. So, make sure you take time
to learn the basics of how to read financial statements well.
Andrew Chia 54

The concept of assets can be applied on a macro scale too.

Leaders and lawmakers in most countries make sure that each
project or each decision implemented will generate cash flow
for their people. Unfortunately, there are still lawmakers in
some countries who have not grasped this simple idea. They
have a hard time figuring out how to manage their country’s
finances. In extreme cases like in Zimbabwe, mismanage-
ment has caused inflation to spin out of control. There, you
have a value of a hundred billion dollars on a single note.

Assets can only be seen in the mind’s eye. For example, I

believe that 90% of a company’s assets lie in the brains of its
executives. It’s intangible, can’t be seen. The decisions, poli-
cies and activities made by its executives make a difference
between whether the company survives and thrives or make
losses and fall into hardship.

6th Secret
Don’t mistake a liability for an asset. It may cause
you a lifetime of financial struggle. Do not rest until
you get this right.

When it comes to assets and liabilities, many people have

trouble figuring out the difference. For example, some peo-
ple are afraid of buying cars because of the expenses they
will incur. Yet others think they need expensive cars to show
off before they can secure business or contracts. Which form
of thinking do you believe is correct?
 7
The difference

Once we understand the difference between the different

classes of people, we can start planning how to make the
journey to the “other side”.

Do you know the difference between the poor and the middle
class? Some of you may think you know the answer to this
question, but what I am going to share with you now may jolt
you out of the way you think.

You see, the poor mostly have expenses only. They do not
qualify for any liabilities like housing loan, car loan or credit
card. Whatever the poor earn as income is fully used to pay
bills and expenses. The poor live in fear of losing money, and
constantly try to be thrifty. An example of the poor would be
hawkers. They do not have “Form J”, “EA Forms” or “Borang
Andrew Chia 56

B “ – those documents that you need to submit to get a credit

card or to apply for a housing loan.

Liabilities will cause us to incur expenses.

Don’t get me wrong. I believe most hawkers are poor, but

there are exceptions. I do know of some hawkers who are
“loaded”. My favourite hawker is one who fries Hokkien mee
every night until 3 a.m. in KL, something he has been doing
since 1977. He lives in a bungalow, and moves around in a
Merc (he says it belongs to his wife). He collects rental from
many properties, has his own wine retail shop and people to
look after his plantation business. Wow. Talk about passion.
He seriously doesn’t need to do it, but he just loves frying his
Hokkien mee.

The same goes for my friend downtown who rents his shop to
Hong Leong Bank and owns six other shops nearby. He, too,
wakes up very early and serves bak kut teh to his customers.

These people started out as poor people who lived from hand
to mouth. Although luck and hard work played a part in their
success, it is their profound understanding of assets that
made them rich. That is the secret, my friend. The perenni-
ally poor are totally unaware of this. That is why they have to
attribute the success of every rich man to luck and fate. (The
rich are actually amused and usually play along, acknowl-
edging in public their success to be just a matter of luck,
although they know better. Besides, contrary to what many
 57 Money Secrets

people think, most rich people are humble and unassuming.)

By assuming that people become rich just because they are

plain lucky to be a fact, the poor will always remain poor.
The poor man who has grasped an understanding of assets
will soon be poor no more.

The middle class have liabilities besides expenses. The mid-

dle class guy even thinks that some of his liabilities (that is,
his house and his car) are assets. And of course, his credit
card is an asset to him. Why else would it be called a credit
card?

If we have more money but increase our expenses and liabili-

ties, we would not and cannot be rich. Not only the poor, but
the middle-class and even the rich, can all go broke if they
lose control of their expenses. The following is a survey done
by the US Department of Health, Education and Welfare
which I believe applies to Malaysia and Asia as well. By the
age of 65, for every 100 people:-

36 are dead
54 are living on government or family support
5 are still forced to work
4 are well off
1 is wealthy

It is the expenses and liabilities that stop many from becom-

ing rich.
Andrew Chia 58

7th Secret
The middle class have many liabilities and expenses,
instead of assets.

Donald Trump of The Apprentice once said, “The second

happiest day in your life is when you buy a yacht. The hap-
piest day in your life is when you sell your (expletive) yacht.”
He was referring to the heavy expenses of maintaining the
yacht, making it a huge liability to him
 8
The Overlooked Subject

Only until very recently, you don’t get a certificate for study-
ing the subject of Financial Intelligence.

Until now, Financial Intelligence is a subject still not

taught in our schools. You study Mathematics and Science
in school. You learn about History and Geography. You
study Languages, Arts, Physical Education, Engineering,
Law, Medicine, Agriculture and Architecture. Even Beauty
and Skincare, Flower Arrangement, Hairdressing and Auto
Maintenance are subjects.

Subjects take TIME to learn. It can take anything from 6

months – for example, Flower Arrangement or Ancient
Traditional Massage – to 20 years. To be a doctor you have
to go to school at age 7 and graduate only at age 27. We are
not born to innately know subjects, unless we are geniuses.
Andrew Chia 60

And even geniuses like Mozart had to study Music formally.

There is one critical subject that is not taught in school, nei-

ther is it taught anywhere outside school. That subject is
called Financial Intelligence. Some professionals mistake
this subject as Accounting, Financial Management, MBA,
Economics, Management, Commerce, etcetera. No, these
subjects may be part of the syllabus of Financial Intelligence
but they are not the subject. Financial Intelligence teaches
us things like Assets and Liabilities, the differences between
the Rich, Poor and Middle Class, and Investing.

Just like any other subject, Financial Intelligence takes time

to learn. Contrary to what most people believe, we are not
born with knowledge of this subject.

We do not know whether this subject is as important as

Medicine, Engineering or Law. But one thing is certain;
not knowing this subject may cause a lifetime of hardship.
One who has mastered this subject will have the power to do
good for mankind. In 2006, the world’s richest man, Warren
Buffett, donated 85% of his wealth of US44 billion towards
charity.

Financial intelligence is the study of how to create, accu-

mulate and protect streams of residual income. Residual
income is income that continues after we have stopped
working; yes, even after we die. The classic example is Elvis
Presley’s albums which keep selling year after year even after
his death. At last look, the King of Rock ‘n’ Roll is still the top
revenue earner on Forbes from album royalties.

(I have a word of advice to the Little Einsteins out there. If you

are thinking of googling “financial intelligence” to compare
the definition with mine, let me save you some time by telling
you it is a futile exercise. Because of the word intelligence,
 61 Money Secrets

you will arrive at results that remind you of either the CIA
or the FBI. You will be closer to Scotland Yard than under-
standing its meaning, even after scrolling ten pages down.
If Mr Google cannot help you, then I am afraid you will just
have to put up with this author’s definition.)

On a more serious note, the subject of financial intelligence

is likened to the subject of management fifty years ago. Do
not be surprised if highly educated people do not have any
inkling what it is. Until the legendary management guru,
Peter Drucker, came on the scene, no one had any idea
what the subject of management was all about. His books
The Practice of Management and Management: Tasks,
Responsibilities and Practices outlined the five main func-
tions of a manager for all other management writers to build
on later. I know this is going completely off topic, but just
to satisfy your curiosity, these five functions are planning,
organising, staffing, directing and controlling.

And on a very serious note, financial intelligence may become

the hottest subject post-financial tsunami. As the dust settles
and the finger-pointing stops, the world may realise that the
reason for all its financial woes is simply a lack of financial
intelligence, or financial education as some may call it.)

Author’s update: At the time when I first wrote Money

Secrets in mid-2008, the Dow Jones was at 11,000 points,
down from a high of 14,000 points. The economies and the
markets were only thought to have experienced a financial
tsunami when it subsequently went down to 6,500 points in
March 2009.

The opposite of residual income is earned income. A surgeon

gets paid for an operation, which is usually not repeated. A
dentist is paid for every tooth he extracts. A lawyer is paid for
every lawsuit engaged. An engineer is paid for every project
Andrew Chia 62

he completes. A merchant profits from every trade he does.

You see, for the examples mentioned here, a person usually
gets paid handsomely. But they get paid only once.

People who are able to earn huge incomes have a tremen-

dous advantage over those with lesser ability. All they need
to do is just to convert earned income into residual income.
(In fact, that is all an investor is supposed to do.) And that is
where financial intelligence comes in.

To give you a better idea of the subject, let us just take one
of the most common forms of investment - property. If you
have a property that is fully paid for and you are receiving
$5,000 in rental income a month, you should be financially
independent. You have the choice of retirement. But what
do you need to do before you can have a property that earns
you lucrative income? You need to perform at least three
critical tasks - identify your target property for investment
based on things like location, purchase it at the correct price,
and rent it to the right tenant.

Do you think these three tasks are easy? How much time do
you think you require in order to master these skills? Do you
understand that failing in even one of these critical steps may
result in the total loss of your investment, thereby plunging
yourself into the ocean of financial hardship?

That is financial intelligence, my dear reader.

On the other hand, financial ignorance is simply thinking

that once you have the money you can just buy any piece of
property, at market price, and rent it to any willing tenant.
(Most people think that since they are rich, they must be
smart. They may be shocked to learn that it is just the oppo-
site. That is because the richer they get, the more careless
and complacent they become. Pay heed to the proverb “pride
 63 Money Secrets

comes before a fall”.)

The above example of using financial intelligence for property

investment applies to almost every other form of investment.

Without financial intelligence, earned income from “blood,

sweat and tears” can quickly disappear into some black hole
in the form of bad investments or, worse still, investment
scams.

Without financial intelligence, billionaires (don’t be sur-

prised) have been known to have taken their own lives in
despair once their earned income disintegrated due to finan-
cial calamity in events like currency depreciation, or prop-
erty and stock market meltdown.

8th Secret
Do not overlook financial intelligence. It is a critical
subject.

Because our universe is so big, there are a lot of subjects

to be studied. However, financial intelligence must rank
among the most important subjects that one needs to study.
It is a universe by itself.
 9
The Foolish Work For Money

Smart people work for passion and to learn how to make

money.

The main reason people seek job security is that they were
taught to do so at home and at school – at a very early age, by
our parents. If you were born before 1930, this is good advice.
Life was very much different back then. For example, today’s
factories compete against each other to bring products to
customers. Back then, factories and steam engines had just
been invented and customers clamoured for whatever was
produced. Farmers were fighting for jobs in offices and fac-
tories. Everyone liked to “sit under the fan”.

Money is like drugs. If you become addicted to it, it is hard to

break the addiction. You know why? Just like when they are
on drugs, people are happy when they have money, sad and
moody when they don’t have it.
 65 Money Secrets

Look at government handouts; those, too, are a hard pat-

tern to break. Money is more than a habit, it is an addiction.
Most people think that having more money will solve their
money problems. It doesn’t, because money is just an idea.
It is not real. The more real you think money is, the harder
you will work for it. When people need more money, they
normally take on a part time job, but they do not get ahead
financially. They still do not have assets. If you want to get
ahead, one of the ways is to keep your day job and start a
part-time business.

Money is a drug. Therefore, don’t give money to your loved

ones! You can give them money for food or emergencies,
but it would be better if you give them financial intelligence.
If you keep giving your loved ones money, it is just like giv-
ing them drugs. Every time you give it to them, they will be
high for a while. When the effect wears off they will be down
again, because their money is finished; they need another fix.
They still don’t know how to make money. Drugs will kill
them eventually.

A rule of life seems to be: Those who work the hardest are
paid the least! Learn to spot opportunities and learn to read
financial statements. Security is a myth, meaning there’s no
security in any job. For example, people in South East Asia
used to think that working for a bank was like having an iron
rice bowl. When the banks started to merge at the turn of
the century, staff got retrenched. If working for a bank is not
secure enough, then working for smaller companies is even
worse. There are many people who have been in trouble ever
since they were retrenched during downsizing as they cannot
get another job now that they are older.

Therefore, don’t work for money. Keep learning while work-

ing on the job. You can then widen your choices, perhaps
Andrew Chia 66

start your own business, or be an investor. You will then be

on your way to financial freedom.

One day, my ex-boss at the bank pointed out to me, “Andrew,

there are some people who have been working here for ten
years but have got only one year of experience.”

They go about their jobs blindly every day, never bothering

to ask how or why certain things are done. They have the
wrong attitude. What happens in another department is
not their concern, and they don’t learn anything about other
departments. They think that in the process of learning they
would be helping the staff of that department do their work.
Soon, what happens to the company is also not their busi-
ness. They become contented just doing their job and getting
paid at the end of the month.

This kind of selfishness and short-sightedness is a common

attitude among staff everywhere. What they don’t realise is
that, after ten years, their salary may have increased due to
annual increment and inflation, but their knowledge and
skills have stagnated. They are now at the mercy of man-
agement who is forced to replace them with new staff mem-
bers who are younger, more energetic, has great attitude and
more knowledgeable. New workers are much cheaper to
employ and the savings in labour costs mean more profits for
the shareholders.

Security is a myth; learn something new and take on this

brave new world. Don’t hide.

A buddy of mine is a very keen observer of the times. For the

past twenty years, he has quite accurately predicted the ups
and downs of the world economy as well as local economic
performance. But he is a guy with absolutely no interest in
business or investing. His dream and ambition is to be able
 67 Money Secrets

to hang on to his precious job till retirement.

His other strategy for making money besides his job is to

make a “killing” by pulling through the sale of a big-ticket
item, such as a land bank, and earning a huge commission
from it.
He lost his job once and it really took a toll on his finances.
But, today, he has found himself a well-paying job in a Main
Board company.

At the time of this writing, the economy and the stock market
is taking a serious downturn. His prediction: it is going to
get worse.

But I pointed out to him that economic peaks and troughs

don’t really concern him because he is an employee. They
concern businessmen and investors. These two groups of
people would benefit greatly if they are able to know that
they are at the peak or at the trough. They would then be able
to make the correct buying or selling decisions.

As for him, a bad economy will only affect him seriously if

he is retrenched. That is why all his powers of prediction are
not really useful except for the thrill of being right.

However, with the thrill of being right comes also the realisa-
tion that employees without financial intelligence are actu-
ally sitting ducks. They will not be able to reap any benefit
from a good market because they are not selling anything.
They can only reap more benefits from their employers in
terms of bonuses and promotions. But if they are out of a
job they will have to dig into their savings and reserves, until
they find another job. And finding a job during bad times
may prove to be difficult.

That is why it is foolish to just work for money. We should

Andrew Chia 68

take advantage of our job (not to mention our employer) to

learn the ways of business and investing. Employees would
be wise to quietly accumulate enough capital and expertise
from their jobs so that they may become financially indepen-
dent, regardless of how the market behaves.

I am still encouraging my buddy to discard the myth of job

security, and take the bold step to learn how to invest and
grow his money. He would definitely be on a firmer footing
should he be struck by the unwelcome event of retrenchment.

9th Secret
Work to learn something new every day. Don’t just
work for money.

With age catching up, a lot of people are worried about get-
ting retrenched. Once they are retrenched,they would have
difficulty looking for a new job with the same pay. They
would then run into financial difficulties. The way out is to
keep learning new things, to keep up with the pack, to stop
yourself from becoming obsolete.
 10
Sorry, your Mum was wrong!

We always listen to our mothers because they love us. But

sometimes they could be wrong pertaining to matters about
money due to lack of correct information.

Money makes money, right? That’s what Mum used to say.

Hate to say it, but it was wrong! The idea that it takes money
to make money is one of the worst ideas there is. It just
means that if you are poor, you are going to be poor forever.
Countless people have risen from rags to riches. If it were
true that money makes money, this would not have been
possible.

Let us take a quick look at the many rich and successful peo-
ple who have come from very poor backgrounds.

• Malaysia’s Tan Chin Nam, the boss of Mid Valley City, a

Andrew Chia 70

leading shopping complex in Kuala Lumpur. His father

was a very rich businessman but lost everything in the
Great Depression in 1929, causing his family to live in
poverty.

• Thailand’s billionaire Charoen Sirivadhanabhakdi , son

of a friedmussel pancake street vendor. Named the 214th
richest person in the world by Forbes, Charoen owns a
liquor empire besides extensive real estate holdings.

• Singapore’s Kwek Leng Beng. His father, the late Kwek

Hong Png, left Fujian province as a penniless teenager
for Singapore and subsequently founded the Hong Leong
group there.

If money makes money, just imagine this for while. If I give

you $100,000, what returns can you give me? How long do
I have to wait?

Straightaway your mind would be wondering how to invest

the money. Put it in the bank? Buy property or shares? Start
a business? Invest in a get-rich-quick scheme? You see,
whatever you plan to invest in requires skill and knowledge.
It is what’s inside your mind that is making money. You just
can’t make money with money. So you have got to make sure
that your money brain is functioning in tip-top condition.

Here are more ingredients for getting rich:

• Hunger and passion

• Right mental attitude
• Financial skill and information
• Human skill
• Credibility and integrity
• Resourcefulness and ability to improvise
• Hard work
 71 Money Secrets

• Patience and perseverance

• Willingness to learn and being teachable
• Time
• Courage
• Connections in the right places
• Luck
• Last but not least, health - without it, nothing is possible.

These are the ingredients that you can leverage on to make

money. And when you have them, but not before, your
money capital will appear, magically.

Toys like this is beyond the reach of the average wage

earner.

During my childhood, I had this habit of “direct-shopping”.

I went through the list of things I had to buy and made a bee-
line straight for those items only. I didn’t bother to look at
anything else, especially the expensive and luxurious items.
I thought it was a pure waste of time because I didn’t have
the money.

It took my good friend, Eric, to change that habit. One day he

invited me to Naza Motor to look at a Ferrari. “Don’t waste
time, we can’t afford it,” I said. Knowing better, he said, “Just
taking a look won’t hurt. You’ll be surprised. After taking few
looks, we will be able to afford it.”
Andrew Chia 72

Because he is my good friend, I relented. I went reluctantly,

still feeling it was a waste of time for we had a lot of serious
work to do at the office. Anyway, off we went to Naza Motor
and when we reached there, we not only took a look but sat
inside the car and felt the leather cushion and the controls.
We admired the sleek design and luxuriated in the smell of
leather. All the while our brains were working furiously.
We asked ourselves a hundred questions, such as, “Who can
afford it? Why can’t we afford it when they can afford it?
What did we do wrong?” Finally, we asked ourselves, “What
can we do so that we can afford to buy it?”

It was indeed an educational and emotional experience for

me that day.

You see, you must not tell yourself that you have no capital to
invest. Go and take a look at that beautiful piece of property.
Don’t hurry. Take time to smell the flowers. Look at the
architecture of the building. Run through the figures of how
much income you can make if you rent it out. And with the
profits you can buy another piece of beautiful property. Go
on, ignore traditional wisdom. Count your chickens before
they are hatched. Visualise yourself as a successful investor.
That vision will inspire you to go to great lengths to make
sure you have all the ingredients that you need to make your
dream a reality.

Most people would be stopped dead in their tracks when

it comes to capital. In fact, they would give up before they
even start. “There is no point thinking about investment,
be it property or shares or anything else. We don’t have the
capital.”

Not so for Li Ka Shing, the richest man in Asia. His famous

investment technique is, “give me your ten money-making
 73 Money Secrets

ideas assuming capital is no problem”. That simply implies

that if your idea is good enough, he will give you the money
and share profits with you. Now you know why he is the rich-
est man. Most people, including me of course, would find
difficulty coming up with just one good money-making idea
in five years.
Let your brains go to work to come up with ideas to make
money. Worry about capital later. It will come. You can bet
on it.

10th Secret
You don’t need money to make money.

Money does not multiply by itself. You have got to invest

it. And you need knowledge in order to make an intelligent
investment.
 11
A Risky Myth

People’s idea about risk is usually founded on emotions. As

such, it is wrong and dangerous.

All of us have heard, “No risk, no gain.”

Even highly educated professionals like doctors, lawyers,

engineers and accountants believe this mantra which is usu-
ally handed down from their parents. They are not aware
of the danger of the black magic behind this little tune until
it strikes. Having programmed themselves from young that
they need to take big risks in order to make a lot of money,
the poor and middle class pass up chances of making good
money where there appears to be little risk. The rich blow
 75 Money Secrets

away their fortune in the process of trying to increase their

wealth by taking big risks.

The antidote to this myth is study. The more we know about

a particular investment, the less risk we have. Ask anyone,
“Is swimming risky?” The one who does not know how to
swim will answer yes. A good swimmer will probably just
give you a funny look.

You hear the term “risk tolerance” very often, especially from
mutual funds (they are called unit trusts in Malaysia) sales-
men who are trying to sell you their investment schemes.
Investment experts, including newspaper columnists, are
always eager to explain this term to you. What they are
basically trying to tell you is that if you want to make more
money, you should be prepared to lose more money. You
shouldn’t complain if you do lose money.

Every time I hear someone giving this advice to a new inves-

tor, it makes me cringe. I can afford to lose some money. I am
sure you can, too. But why should we be losing any money at
all? Haven’t you heard of the First Rule of Investing? “Don’t
lose money!” I hate it when someone starts chanting that
age-old mantra: no risk, no gain. I can see my friends losing
money all over again.

You really don’t need to lose money. If you are not con-
vinced, get a second opinion. This time, don’t ask another
investment salesman. Don’t even ask your banker. Look for
a successful investor and ask him to explain risk to you. You
will be surprised at the answer.

Risk decreases with knowledge. The more you know and

understand a particular investment or business, the less
risky it will be. Instead of groping in the dark and leaving
things to chance, you are able to grasp where an investment
Andrew Chia 76

can go wrong.

Some investors think they are sophisticated just because

they know how to use the word “contingency”. They want to
tell you that no matter how well you plan there are circum-
stances that are unforeseen. That is another way of saying, “I
am too lazy to study it from all angles.” You should allow the
fear of losing money to motivate you to study everything that
is required to protect your investment. A successful investor
will tell you that the higher his profits, the less risk they take!

I remember those days when I was working in the Loans

Department at the head office of a bank. It was our function
to approve loans submitted by our bank branches. One day,
my former immediate boss turned around from his desk (I
was sitting behind him) and said to me in an irritated tone,
“Andrew, can you please approve this loan on my behalf? It
is $500,000 only.” I looked up and said, “What’s the prob-
lem, Sir? I can’t approve such a big amount.” Anyway, my
boss knew that I had no power to approve any amount at all
because I was only a clerk at that time.

“Sure you can. Here, you go ahead and approve it.” He then
continued, “Anyone can work in this bank; you don’t need
any qualifications. I wasted my time studying for a degree.
Every loan we approve is fully secured. Customers give us
a property of $100,000 and we give them back a loan of
$70,000 only. There is no risk involved.”

My former big boss (the CEO of the bank) is one who does not
take any risks at all. Today, he is one of the most respected
bankers in the country. When all the other banks either
collapsed or made losses during the Asian Financial Crisis
in 1997, he made record profits. Today, he is still making
record profits every year.
 77 Money Secrets

You can imagine his fellow bankers saying that he is a scaredy

cat banker for not taking risks. You can hear his managers
and staff complaining. They are complaining because the
customers are scolding them. Customers are not happy
because their loans were either not approved or the amount
approved is too small. This is because everything is fully
secured.

Most of the richest people in our country like Teh Hong Piow
of Public Bank, Quek Leng Chan of Hong Leong Bank and
Tan Chin Nam of Tan & Tan, are well-known for their con-
servative investment styles. They always try to eliminate the
word “risk” from the investment equation.

No risk, no gain? Think again.

11th Secret
It doesn’t take high risk to make high gain.

The investor is the most dangerous factor in any investment

equation. An investor who is lazy or ill-informed will lose a
lot of money.
 12
Opinions Kill

Most people do not realise that opinions can be so danger-

ous that at times it can kill.

There are few lessons more important than this. Most peo-
ple’s lives are determined by their opinions, not facts. Many
struggle financially because they use opinions when making
financial decisions. To be successful, be sure you know the
difference between a fact and an opinion. A survey showed
that thinking is one of the seven most difficult things to do.
Most people accept opinions simply because they are too lazy
to think. It seems that the “cure” for this very difficult task
of thinking is simply to believe and accept opinions or even
rumours.

Make it a habit to let your brains work for you. There is a

lot of truth in the saying, “Luck is found between your ears.”
 79 Money Secrets

You can create your own luck and you will soon have the sat-
isfaction of discovering how ridiculous some commonly held
opinions are.
Every man has a right to his opinion, but no man has a right
to be wrong in his facts.

If you cannot verify that something is a fact, then to you it

is just an opinion. Former US President Ronald Reagan
said, “Trust, then verify.” When your friends tell you some-
thing, it is only polite to tell them you believe what they say.
Otherwise, they may feel hurt because you do not trust them.
However, you should not just take their word for it, espe-
cially when it involves huge amounts of money. You should
always verify whether the information given is factual or just
an opinion.

Numbers tell the facts. Your financial survival depends on it.

Financial blindness is when a person cannot read numbers.
If you can read financial statements, you can tell how an indi-
vidual or a business is doing. Financial vision lowers risk;
being financially blind increases risk. Have you heard of the
term “due diligence”? It is a term often used by accountants
and auditors. It simply means finding out what are opinions
and what are facts.

Besides numbers, charts also give us the facts. Regardless

of whether figures have been fixed or manipulated, charts do
tell a story if you are educated to know where to look.

For example, most people do not bother to look for a gold

price chart. They just believe it when their friends tell them
that gold price always goes up. Sounds familiar? Everyone
says gold price will always go up, isn’t that true? Google a
gold chart and see for yourself the ups and downs of gold
prices for the past 50 years. They tell a different story. If you
look closely, you can find the investment corpses of “heroes”
Andrew Chia 80

who bought at the peaks.

Examine the dangers contained in the following statements

which are common opinions:-

• Your house is an asset.

• The price of property always goes up.
• If you hold on to your house long enough, you will make
money.
• Stocks have always outperformed properties.
• You should diversify your portfolio.
• You shouldn’t diversify your portfolio.
• You have to be dishonest to be rich.
• Investing is risky.
• Play it safe.
• Gold is an asset.
• Find a secure job and stay there all your life.
• Highly educated people make a lot of money.
• They have a big house; they must be rich.
• There is no such thing as a free lunch.
• There is not enough money for everyone to be rich.
• Humans cannot fly.
• Humans cannot go to the moon.
• Share prices always go up before an election.
• Genting shares always go up before Chinese New Year.
• It is safer to invest in Main Board companies compared
to Second Board.
• His business must be very good because he has opened so
many branches.

Another danger is that opinions are often so ingrained that

words like “mindset” and even big terms like “paradigm shift”
need to be used to describe them. For example, you have just
completed a study of stock investing and are competent to
manage and reduce risk to a minimum. When your friends
ask, you tell them you invest in the share market.
 81 Money Secrets

“You mean you are playing shares?” “No,” you say. “Don’t
gamble on shares, it’s dangerous,” your well-meaning friends
tell you. You say, “No, I am not gambling. I am investing.”

“You are what? Be careful, you know. All my friends lost a

lot of money in the share market,” your friend replies.

You see, for some people the word ’investing’ is synonymous

to ‘losing’ in their dictionary. And it is impossible to explain
to someone the term investing without explaining Money
101. And to do that you need to explain Assets and Liabilities.
We all need to learn step by step. You have to give milk to a
baby for many months before feeding it semi-solids. If we try
to tell our friends how to invest when they don’t understand
money, then little or no communication is taking place. That
is because they are not on the same level of understanding as
you. Communication works best when two persons are on
the same level of understanding.

If you wish, you can try something simpler which our parents
have been telling us from young, that is, save money. Most
people can relate when you tell them to save money. Go easy
on the making money and investing parts. Reserve that for
later Keep singing the same tune of saving money with him
first, then gently hold his hand and help him to become a
more sophisticated investor.

Most poor and middle-class folks are brought up with their

minds thoroughly poisoned by the time they step into our
money world. Rich people are usually brought up differ-
ently. Unlike their friends on the other side of the tracks,
they have been brought up to understand that money is not
real. Money is just an idea. And they are smart enough not
to go around ‘educating’ their less enlightened friends who
love to struggle and stinge just to save a few dollars. Some
Andrew Chia 82

poor people are masters of “suffering”. They love to suffer in

silence -- working hard and earning little.

Poor and frightened people are systematically brainwashed

to believe that:-

• Money doesn’t grow on trees.

• You’ve got to work hard for every cent, otherwise you
don’t deserve it. (Tell that to Ananda Krishnan, the
boss of Maxis, who is a tele-communications tycoon in
Malaysia. Work means pushing the satellite into space
himself?)
• You must always be down-to-earth; that means don’t take
risks.
• You must never wear a hat that is too big for you; that
means don’t harbour any big ambitions – you will never
make it.
• You must study hard and get a good job. Then you won’t
need to worry about money because you will be on “auto-
pay” mode every end of the month.
• There is no big frog jumping around on the street, mean-
ing, if there was a money-making opportunity, others
would have grabbed it before you. This idea has even
spread to the West and goes by exotic names such as
Random Walk or Efficient Market Hypothesis (EMH).
Isn’t it surprising that people who are rich have always
managed to find their elusive Frogs? Laziness to think or
learn fuels the popularity of this belief.

A bit more on EMH. EMH is an academic theory claiming

that the price of each stock incorporates all publicly available
information about the company. With millions of investors
scouring the market every day, it is unlikely that severe mis-
pricings can persist for long. Sounds logical, right? Wrong.
This theory is a classic example of how academics can be
totally out of touch with the real world. An old joke has two
 83 Money Secrets

finance professors walking along the sidewalk; when one

spots a $20 bill and bends over to pick it up, the other grabs
his arm and says, “Dont’ bother. If it was really a $20 bill,
someone would have taken it already.”

Other examples of conditioned thinking involve less harmful

but widely-held beliefs like the following ones, which serve
to illustrate how we are brought up to accept many things
without bothering to question them.

• Myth: Dogs love bones. (Try an experiment yourself.

Place a piece of meat and a large bone side by side and see
which one your dog will go for.)
• Myth: All humans go through four stages in life: birth,
aging, sickness and death. (Actually there are many peo-
ple who don’t have the privilege of aging; they die young.
And some people are very fortunate to age and die with-
out any disease. So, that generally accepted sweeping
statement is not true.)
• Myth: Practice makes perfect. (Sometimes when we are
doing something the wrong way, we should stop practis-
ing immediately. The more we practise, the more difficult
it will be to correct the fault later.)

How do you recognise poor and frightened folks? It is simple

actually. I must say I was shocked the first time I saw their
reaction. When you try to tell them that a certain invest-
ment can make them rich, they will literally shout, “You can’t
do that!” (Other variations include, “You can’t do that in
Malaysia,” and “You can’t do that; it is illegal.”) It took me
some time to understand that reaction. They are not speak-
ing from their mind but from their emotion of fear. When
they say, “You can’t do that”, they actually mean they can’t
do that.

I learned something else from that experience, that is, when

Andrew Chia 84

we hear their feelings, we are speaking to the real persons

within. From then on, I tried to decipher from their words,
which really reflect the actual fears in their hearts.

Many poor and middle class folks have their minds badly
damaged by bad opinions. They end up with the helpless
and inevitable conclusion, “I can’t. I will never be rich.” And
off they go to the betting shops to try to change their destiny
in the only way they know how.

Make it a point to check that your investment decisions are

based on facts and figures instead of just opinions.

12th Secret
You must invest based on facts alone, not opinions.

Differing opinions can be confusing. To eliminate confu-

sion, always refer to numbers, financial statements or his-
torical charts like this one.
 13
Secret of the rich

The rich have freedom, especially time freedom to do what

they want to do and to go where they want to go.

The rich do not need to work because they have either money
or people working for them. We call these by difficult names
like assets, residual income and passive income, but the idea
is really quite simple. It is doing work once and receiving
income many times after that.

We all know about rags-to-riches tycoons like Li Ka Shing in

Hong Kong and Datuk Tan Chin Nam in Malaysia who do not
need to work because they can collect rental from their prop-
erties – their money in properties is working for them. Tan
Sri Teh Hong Piow, who operates a leading bank in Malaysia,
Andrew Chia 86

does not need to work because he collects interest from the

loans his bank gives out – his money is working hard for him.
Tan Sri Vincent Tan does not need to work because he has
many staff members working for him at his companies and
franchises, like Seven Eleven, Starbucks, Tai Thong Group
of Restaurants and many others. Warren Buffett puts his
money in shares and they generate huge dividends year after
year without him working.

We have seen from the first chapter that before you can suc-
ceed, you need to be hungry – very hungry, to be exact. We
naturally assume that the hungry will be fed. This should be
true but sadly, in reality it’s not always the case. There are
places like Africa or North Korea where people simply die of
starvation.

If you are hungry to be financially successful, you should

ask the rich how they did it. Ask sincerely, and you will get a
sincere answer instead of just a “standard” answer like hard
work or luck. If you do not know any rich people person-
ally, the next best thing would be to read about them. If pos-
sible, read books written by them personally. There are many
watered-down versions of success stories with exaggerations
which are meant to entertain rather than to educate.

Sportsmen around the world know the importance of having

a good coach to make them better in their respective fields.
Similarly, you need good mentors to become rich. There are
three categories of people who can give you advice on how to
be rich, or on any other subject for that matter.

The first category is people who have not done it before. They
can advise you because they have seen other people doing it.
Or, they have heard of how it is done. Or, they may have read
about it. But they have never done it themselves. Thus, the
advice they give may or may not be useful.
 87 Money Secrets

The second category is people who have done it before, but

failed. You may be quick to recall many friends from the
insurance or direct-selling industry who fall into this cat-
egory, but they actually exist in every other industry as well.
The advice they give is usually poisonous, even though it may
sometimes be mixed with genuine care and concern.

The third category is people who have done it and have suc-
ceeded in doing it.

You now understand why you have been receiving the kind of
advice from the people you have asked. Asking advice from
the wrong people may result in us dying in our hunger.

On a lighter note, there is a fourth type of people who give you

“wonderful” advice to take home. (Some people will never
tell you that they don’t know.) When you reach home and
ponder over them, these types of advice are silly nothings.
It is like the road signs in Malaysia, for example, a sign says,
“Kuantan, straight ahead.” You obey the sign and reach a
T-junction. There is no further sign there to tell you whether
Kuantan is to the left or right. My brother thus arrived at the
conclusion that these signboards are made for people who
already know their directions.

Let me reiterate some of ‘financial advice’ that you’re likely

to have received:

• You can be rich if your income is more than your expenses.

• To retire, you need to be financially independent. Now,
don’t you be rude, ok? Show respect to mothers. (When
someone says something that is painfully obvious, usu-
ally something which requires tremendous effort, the
Chinese will say, “Who doesn’t know that your mother is
a woman?” For example, “If you study ten hours a day,
Andrew Chia 88

you will do well in your exams.”)

• You can be rich if you save more than you spend.
• People who are rich know how to save and accumulate
wealth.
• Winning in shares is easy, all you need to do is to buy low
and sell high.

Some of this ‘financial advice’ reminds me of the mice who

had a conference and decided to tie a bell round the cat’s
neck to alert them to its coming. Great idea, but who’s going
to do the tying? Similarly, great advice, but who’s going to
show you how to achieve all that?

I once heard a remisier who was so “blur” that he gave this

advice to his client, “If the share prices don’t go up tomor-
row, they will go down.” Sounds perfectly logical, but that is
not too helpful, is it?

As I said previously, the rich have assets. What exactly is an

asset? An asset is something that puts money in your pocket,
day after day, without you working at it. The only work that
you do is to acquire it, and perhaps monitor it. Here is where
the confusion begins. Many people think their assets consist
of properties, shares or businesses. But their so-called assets,
though legally so-defined, do not generate positive cash flow.

What do I mean? For example, they have got to fork out cash
from their own pockets to pay for monthly bank instalments
for their property despite it being rented out. Or, they may
have to pump in cash from their own savings into their busi-
ness, instead of vice-versa. Also, they are tied down to their
“assets”, like their businesses. If they leave their business for
even a month, it may collapse.

If your assets do not allow you to stay away from it for one
year, you can hardly label it as an asset. You should be able to
 89 Money Secrets

exercise maximum control over it with minimum monitor-

ing or supervision. An asset thus labelled would make more
sense.

Examples of assets held by the rich are real estate or property,

stocks and shares, mutual funds or unit trusts, fixed depos-
its, bonds and businesses. The rich have real estate that gives
them rental income. They are unlike the middle-class who
receive say, rental income of $1,000 and have to pay monthly
instalments of $1,200. The rich are smart. They will always
have rental income in excess of their monthly instalments
plus other costs like repair and maintenance, insurance, quit
rent and assessment, and even taxation.

The rich have stocks that give them dividends. They seldom
meddle with margin and contra accounts which are liabili-
ties that erode their accounts with lots of interest, brokerage,
stamp duty and service charges.

The rich have mutual funds that also give them dividends.
They are very careful to factor in annual management fees
and hefty account opening charges. Unlike most investors
who do not have the knowledge and therefore place their
faith in fund managers, they have exceptional knowledge of
their mutual fund investment. They know exactly who han-
dles their funds, the person-in-charge, as well as his com-
pany’s track record. The rich have fixed deposits and bonds
that give them interest.

The rich have businesses that generate profits. More often

than not, they have managers reporting to them. They may
like to work themselves but, unlike the middle class, they are
not tied down to the daily operations of their business. That
brings us to another little known secret of the rich. The rich
may not have everything. But there is one thing that all rich
people definitely have, and that is time. In fact, it is true that
Andrew Chia 90

if one claims to be rich but does not have time, we cannot

consider him as being truly rich.

Truly rich people have a lot of time on their hands.

The rich became rich because they built up their assets. The
rich stay that way because they keep accumulating assets.
Your house is not an asset because it does not generate
income or put money into your pocket. Even paying it up
fully does not make it an asset. It must generate positive
income for you every month for it to categorised as an asset
to you.

Now I can see it in your eyes that you want to rush out imme-
diately and buy some assets. You want to buy properties and
collect rental like the rich. You want to invest in the stock
market like the rich. You want to call your unit trust agent
to buy some from him. And you want to start a business
straightaway.

No, I am not going to discourage you. You do not need to

wait another five years or read an additional 5,000 pages of
investment books or magazines.

But, would you like to know another very important virtue

that the rich have? Patience. I cannot stress this enough –
Patience. Do you have it? Let me exhort you. It is better to
wait five months for the right opportunity to invest than to
 91 Money Secrets

invest in a hurry today, and have to wait five years for your
returns, if there are any at all. All great achievements require
time – lots and lots of time.

In times of great economic uncertainties and political change

– not only locally but worldwide - there are always immense
transfers of wealth. You may think that people make a lot of
money during good times, but true, patient and smart inves-
tors make more money in bad markets. So, the good news
is, when you are ready, you are capable of making money in
both the up as well as falling markets. Let us take a quick look
at a current example.

Petrol price increases cause a lot of hardship for the poor

and middle-class.

The price of petrol has recently skyrocketed by 40% in

Malaysia (in mid 2008). Within weeks, the cost of building
materials had gone up by 30%. A house that cost $100,000
to build now costs $130,000. The rich who own choice prop-
erties and are currently renting them out and earning high
returns of say, 8%, are in for a windfall. The fact that their
properties can earn such high returns means that they are
strategically located. Not only will their rental rise, but they
may earn a 30% capital appreciation also.
Andrew Chia 92

13th Secret
The rich have assets.

Rich people have assets. The famous Donald Trump, who

hosts the show The Apprentice, generates a lot of cash by
renting out his high-end Trump Tower.
 14
Red Line

Most people operate their finances on the Red Line.

The maximum speed your car can reach is up to the red line
on your speedometer. If you go faster than that, your engine
may blow up. Many people, including some who are rich,
operate their finances constantly at the red line. They spend
money as fast as it comes in. Let’s consider the example
below, and you‘ll see the nature of how people spend their
money in tandem with their income.
Andrew Chia 94

Earn $800, take a bus

Earn $1,000, get a small car
Earn $1,500, get a medium-sized car
Earn $2,000, buy a condominium
Earn $2,500, change to a bigger car
Earn $3,000, plan to get married
Earn $3,500, have kids
Earn $4,000, get a “landed” house
Earn $4,500, spend more on credit card(s)
Earn $5,000, time to change car again
Earn $5,500, get a semi-detached house
Earn $6,000, buy a golf membership

I have discovered a variation of Murphy’s Law called the

Murphy’s Law of Personal Economics which states that
“one’s income is always less than one’s expenses.” Not enough
money? Do overtime, get a second job, do direct selling, et
cetera. (Well, there is nothing wrong really; it’s okay to do
direct selling. As we shall see, direct selling can be an asset.)
When these people reach retirement age, they still don’t have
any assets. Then, they say they are too old to learn, too old to
invest, too old to start over, too old for everything. It’s true
and I know it’s happening to people around you and me as
well. How sad.

A little known financial fact that many of us prefer not to

think or do not realise is that many people are only three
to six months away from getting their house auctioned off
or their car repossessed. Most of us take for granted that we
are healthy every day and are able to work. For some less for-
tunate ones, this may not be true, and they soon find them-
selves in serious financial difficulties.

One of the reasons why some people get themselves trapped

financially is that they simply cannot differentiate between
the two words – cash and budget. Let’s say you are an
 95 Money Secrets

employee and you have just got your pay of $3,000. You are
whistling while walking down the street to meet up with some
good friends. You want to buy them lunch. Now, can you buy
them a $300 lunch? Yes, you can, because you have the cash,
because you are holding $3,000 cash in your hands. But,
on the other hand, you also cannot buy them a $300 lunch,
because you don’t have the budget. Your $3,000 has got to
pay for rent or house instalments, car instalments, petrol,
insurance, living expenses and a host of other expenses. You
are probably left with only a budget of only $30 to buy your
friends lunch.

People shoot themselves in the foot and get into all kinds of
trouble when they are careless about their budgets.

“You don’t need to pay. Just swipe your card and sign.” Isn’t
that a symptom of one who cannot differentiate between
cash and budget? How many people fall into that trap? For
an answer, just look at the countless credit card salesmen (or
salesgirls) at the shopping complexes who are offering you
‘free for life’ (free annual membership fees for life) credit
cards. Don’t for a moment believe them; I have many friends
who got stuck in debt for life. I even have some friends on
breathing apparatus fighting for life – because of mounting
debts they couldn’t afford to pay - and the banks are chasing
after them for payment day and night.

And then there are a few big companies offering easy pay-
ment schemes for everything from electrical items to furni-
ture, and now even to mobile phones, to make sure you pawn
away your life.

I have also noticed that people holding a little extra cash in

hand (or in banks for that matter) have an uncontrollable
urge to spend it as fast as possible. I have seen wholesale
market hawkers with a huge cash collection making a beeline
Andrew Chia 96

for the casino, sometimes camping there. They feel relief

only after they have been relieved of their cash. I have also
seen educated people who can’t wait to ‘invest’, queuing up
at the stock market or property market, with the cold hard
cash they earned from their salary or business deals. They
then wait in vain for their elusive return- because they have
not bothered to do any homework on their so-called invest-
ment. Cash can do wonders to people, some literally spend as
if there is no tomorrow.

Doctors say that part of the problem today is stress, caused

by working too hard and not having enough money. One doc-
tor says that the biggest cause of health disorders is ‘cancer
of the wallet’. When people feel financial anxiety, what do
they do? They hurry off and bury themselves in their work.
And they work really hard. They just want to temporarily for-
get all their problems; they go shop for a house or a car, or
go play some golf. More money will not solve the problem if
cash flow management is the problem.

Bear in mind the Golden Rule of Personal Finance: pay

yourself first. When you receive your salary, don’t straight-
away pay bills or purchase liabilities. Pay yourself first and
use that money to buy assets. Put aside at least 10% of your
income in a separate account dedicated solely to savings. You
will be on your way to a better tomorrow.
 97 Money Secrets

14th Secret
You will have no money to buy assets if you con-
stantly live on the red line.

A lot of people today are living on a cliff’s edge. With the

burden of expenses and liabilities piling up, they are just a
step away from falling over the edge.
 15
Eighth Wonder of the World

Time is the most important element in compounding our

investments

Albert Einstein once said that the eighth wonder of the

world is compound interest. He also said that it is the great-
est mathematical discovery of all time! The simplest way to
riches is to save and invest. Save. Invest. Save. Invest. It’s
that simple! It may be boring to many, but I am sure you
have heard of some uneducated old ladies who have gotten
rich just by doing this, beating some college professors with
their sophisticated methods. Einstein was right.
 99 Money Secrets

$10 a day can grow into a million...

in 74 years with a fixed deposit rate of only 3%.

in 34 years with a good property investment rate of 10%.
in 20 years with a good stock market dividend and capital
gains rate of 20%.

It may not be the fastest way in the short run but in the long
run it is the only way. I understand that some of you could
be struggling right now just to put food on the table. This
idea of compounding may hold no appeal or interest for
you. You need a quick fix for your financial problems today.
(Who doesn’t need a quick fix, especially during these tough
times?) How you wish you could make some quick money. Of
course there are ways, you will find out in the coming chap-
ters. The purpose of this book is not to tell you that you can
only be rich in twenty years’ time.

The problem with compounding is that progress is hardly

noticeable in the early stages. 1 becomes 2, 2 becomes 4...
it’s still very small numbers we are talking about here.

I’m sure you remember how long it took for Rome to be built.
No? Me neither. But we can be sure it was not built in one
day. Take heart, my friend. Start learning and investing
today and you will not regret it 20 years from now. And,
believe me, it takes much lesser time to become rich and
financially independent that you think.

Our parents were right when they said, “Live on less than you
earn. Invest the surplus. Avoid debt – totally. Build long-
term security.” Meditate on that; it has a lot of wisdom. It
is not the exciting get-rich-quick rabbit but the tortoise that
laughs slowly all the way to the bank. Einstein foresaw it.

Did you know that if you can find a way to compound your
Andrew Chia 100

money at a rate of 20% a year, your $100,000 would have

made you into a millionaire in just thirteen years? There is
no work needed, just invest your money.

If you are able to repeat that performance for a period of

forty-five years you would have $360 million in your account,
having started with only $100,000.

The world’s greatest investor has amassed a wealth of roughly

$50 billion todate. His average return is only 23% over a
period of forty-five years. Working backwards, we can see
that he started off with a capital of only $5 million.

I am not sure these figures mean anything to you. But you

can benchmark your own capital and returns against them to
make a projection as to where you would be say, twenty years
from now. All this is done by understanding that the eighth
wonder of the world is, simply, compounded returns. It will
easily make you financially independent, and, as you can see,
it will also make you very rich indeed.

15th Secret (Part One)

The eighth wonder of the world is compound
interest.

The eighth wonder of the world is not a physical structure

but an understanding of how money (or debts) can accumu-
late at an amazing rate over time.
 101 Money Secrets

How Expensive Is Procrastination?

We shall now study the price of procrastination taking into
account the power of compounding. Take a breather and
take a look at the chart below. What do you see?

Annual Annual
Savings Savings
Year ($) ($)

1 10,000 0
2 10,000 0
3 10,000 0
4 10,000 0
5 10,000 0
6 10,000 0
7 10,000 0
8 10,000 0
9 10,000 0
10 10,000 0
11 0 20,000
12 0 20,000
13 0 20,000
14 0 20,000
15 0 20,000
16 0 20,000
17 0 20,000
18 0 20,000
19 0 20,000
20 0 20,000
You invested $100,000 $200,000
You get back $454,713 $350,623

(We assume an investment compounding of 10% p.a .)

Andrew Chia 102

The journey of two Savers

The above example shows the difference between investing

early and starting out late. We look at a period of twenty
years.

In the first example, Adam invested $10,000 a year for ten

years. Then he stopped investing. He received interests of
10% a year and allowed them to compound for another ten
years. At the end of twenty years, Adam would have $454,713
in your account.

In the second example, Ben only started investing in the

eleventh year. Instead of investing $10,000 a year, he dou-
bled-up his investment and put in $20,000 a year. He tried
to make up for the ten years’ time that he lost. At the end of
twenty years, Adam and Ben would have the same amount in
savings. Or, would they?

As you can see, if you start late, even if you doubled the
amount you save each month, your returns are still less than
if you had started out early!
 103 Money Secrets

The misadventure of a Saver who is just one

year late

Annual Last Year’s This Year’s

Savings Total B/F Total Int @ Total
Age ($) ($) ($) 10% pa ($)

21 10,000 - 10,000 1,000 11,000

22 10,000 11,000 21,000 2,100 23,100
23 10,000 23,100 33,100 3,310 36,410
24 10,000 36,410 46,410 4,641 51,051
25 10,000 51,051 61,051 6,105 67,156
26 10,000 67,156 77,156 7,716 84,872
27 10,000 84,872 94,872 9,487 104,359
28 10,000 104,359 114,359 11,436 125,795
29 10,000 125,795 135,795 13,579 149,374
30 10,000 149,374 159,374 15,937 175,312
31 10,000 175,312 185,312 18,531 203,843
32 10,000 203,843 213,843 21,384 235,227
33 10,000 235,227 245,227 24,523 269,750
34 10,000 269,750 279,750 27,975 307,725
35 10,000 307,725 317,725 31,772 349,497
36 10,000 349,497 359,497 35,950 395,447
37 10,000 395,447 405,447 40,545 445,992
38 10,000 445,992 455,992 45,599 501,591
39 10,000 501,591 511,591 51,159 562,750
40 10,000 562,750 572,750 57,275 630,025

The above example shows the big difference in final returns

of a delay of just one year.

If you start saving $10,000 a year at an interest rate of

10% per annum, when you are 21 years old, you will have
$$630,025 when you reach 40. Now consider this, you just
want to procrastinate by one year and start saving when
you reach 22. You say to yourself, “I would be slower by just
$10,000 when I reach 40. It is just a small amount; it won’t
make much difference.”

Look carefully at the table above. When you reach 40, you
would have only $562,750 instead of $630,025 in your
Andrew Chia 104

account. You have actually lost $67,275 instead of $10,000!

And that is for an interest of 10% only. When you become a
good investor, you will be able to generate between 20% to
30%.

The two examples above produce different responses in dif-

ferent people. Some are quick to grasp the implications. To
others they are mere numbers; they do not feel the urgency.
For example, I feel that ladies in general, with their inherent
need for security, would start off saving or buying insurance
policies earlier compared to men. They can visualise having
better financial security twenty years down the line.

15th Secret (Part Two)

Start learning and investing now. Delay is very
costly.

Procrastination is very easy to practise simply because you

actually don’t need to do anything. That is why it is not sur-
prising to find many people talking about building a better
tomorrow. They are not learning anything new or doing
anything to create a better tomorrow. They are just hoping
for a better tomorrow. Don’t fall into this trap. Tomorrow
won’t be better if you don’t start learning and investing
today.
 105 Money Secrets

16
Breaking the
Three-Generation Curse

There seems to be a curse which says wealth will not go past

three generations.

Most of us, particularly the Chinese, have heard of the phrase

“three-generation curse”. It is almost a proverb in Asian
countries: The first generation earns it, the second accumu-
lates it and the third spends it.

Some are lucky to be born on the right side of the tracks.

They are born with a silver spoon in their mouths. They do
not need to struggle financially; they always have the capital
to do business or invest. However, they never figured out the
way to get there, or rather, they never understood how their
parents got there. Building wealth (or anything else) takes a
lot of time but destroying it takes just a tiny fraction of that
time.
Andrew Chia 106

They soon find themselves back on the wrong side of the

tracks. And because they have not figured out the secret of
making money, they plunge back into the rat race reserved
for the poor and middle class. Often, they waste all their
parents’ hard earned capital on “match stick” investment
projects. They could even be well-educated graduates from
overseas with some new and exciting, “high-tech” marketing
plan to replace their parents’ “outdated” business strategies.

If you have a shop that is fully paid, located at a readily ten-

antable location, collecting $10,000 in rental a month, you
have an asset. Every month you are richer by $10,000 – in
cash.

But if you owe the bank and each month your instalment
is $12,000, you will have to fork out an extra $2,000 from
your pocket monthly to pay up your instalment. If you don’t,
the bank will take legal action against you and may auction
off your shop. Your tenant will be paying rental to the new
owner instead of paying to you.

Would you then call your shop an asset? Look at it another

way. If you are the boss and your salesman makes money for
you, he is an asset to you. If your salesman is lazy and draws
salary without being productive, you would not call him an
asset. You would just call him a liability.

How does the “three-generation curse” come about? The

answer is wealth destruction, or simply, asset destruction.
Instead of increasing the number of cashflow-generating
properties, a patriarch’s descendants would simply sell off
properties and spend on luxuries (expenses). They kill their
golden gooses.

In other cases, they pawn away their gooses. They re-mort-

gage their fully-paid properties to the bank, with the good
 107 Money Secrets

intention of obtaining more capital to expand their busi-

nesses. But little do they realise that they have now reversed
the equation. Instead of generating cash, their properties are
now sucking up their cash through bank interests.

It would be fine if bank interests were $2,000 and cash gen-

erated from their business is $4,000. But, as is often evident
from the “three-generation curse”, this is not the case. Assets
are eventually turned into huge liabilities and the younger
generations become poor and debt-ridden. They are then
left to figure out the equation all over again.

The next chapter will focus on the many ways you can create
assets for yourself. With assets, you will stay debt-free and
have your financial life under control. You will be able to
overcome the “three-generation curse”.

16th Secret
You can only break the “three-generation curse” by
accumulating assets.

We will fall prey to the “three-generation” curse if we do not

keep accumulating assets. However, some rich people with
assets have also fallen under this curse because they spend
money faster than they can earn it.
 17
The Only Way To Retire

Retirement - some people look forward to it whereas others

dread its coming

The Wrong Question

Most people have asked themselves this question at one time
or another, “How much money do I need to have before I can
retire?” This is a million-dollar question. The word retire-
ment evokes a lot of emotions. However, the quest for an
answer (or answers) to this seemingly simple question usu-
ally leads nowhere.

The problem is that people are asking the wrong question.

That is why they say you would already have half the answer
 109 Money Secrets

if you ask the right question. Do you ever notice that when we
are lost, we really don’t know how or what to ask?

A trip to Cyberworld will show you just how lost people are
when it comes to the topic of retirement. Join an online
forum (it is free). Google keywords like “malaysia invest-
ment forum” and you should be able to find some interest-
ing forums in Malaysia. Substitute “malaysia” for your own
country. Once you are inside the forum, look for threads
pertaining to retirement. (A thread is an Internet term for a
topic in an online forum.) If you find it difficult to locate such
a thread, don’t bother - just start one yourself. Post questions
like, “Can someone tell me how much money I would need
before I can retire?” You will find there are many members
who will immediately offer you advice including how to build
your “nest egg”, investing, interest compounding calcula-
tions, buying unit trusts, writing wills, and even bereavement
planning. You may also be bombarded with financial jargon
and complex formulae.

You will then observe how the emotions of greed, fear,

anxiety, insecurity, worry and despair distort numbers and
common sense. Figures are simply plucked from the air in
desperation. “You will need a nest egg of $1 million to start
with. Just put it into fixed deposits paying you 3% a year
and you would have enough money for your retirement.” Or,
“Don’t worry if you have only $100,000. If you compound
that with a 30% yearly return, your retirement fund would
be secured.” For most part, these people are actually talking
to themselves, not to you. You start asking yourself how on
earth you are going to get a million dollars to start with, or
how you are going to get a 30% return on your investment
each year. Even Warren Buffett can’t manage that.

Asking, “How much money do I need to have before I can

retire?” usually gets us nowhere. That is because it is like
Andrew Chia 110

shooting a moving target while on the move yourself. Not

since the days of Genghiz Khan and his Mongol troops have
people been able to do that. Different people have different
needs and wants. Not only that, our needs and wants change
with the money that we have. The line between necessities
and luxuries blurs with every change in our bank account.

A poor man will use his natural immunity to recover from

a bout of flu. Panadol is a luxury to him. However, once he
becomes rich, he may send his children to a specialist pae-
diatrician at the slightest fever. Even a general practitioner
may not be good enough for his kids.

To some people, a fitness centre membership is compulsory.

It is not a luxury; it is a necessity, a serious need. Tell that to
a guy who lives from hand to mouth and he will be cursing
you on the inside.

You can retire on just $5,000!

It is not really how much money you have that determines

when you can retire. It is how much money you will be get-
ting each month without you working! My favourite example
is my friend who gets rental income of about $30,000 each
month from his fully-paid up property. There is no work to be
done except the “difficult” task of writing an official receipt.
He needs to spend five minutes warming up the muscles of
his right hand before he does that.

Five thousand bucks should be enough to overcome your

“passive expenses” each month, even if you live in a city.
Your house and car instalments, your petrol and car main-
tenance bills, your food and entertainment bills (did I say
entertainment?) and your insurance payments should come
up to less than $5,000.
 111 Money Secrets

Therefore, if you have passive income (say, from rental) of

$5,000, you practically don’t need to work.
Needless to say, this retirement package comes with a little
discipline of living within your means of $5,000 a month.
Certainly, some people with monthly incomes of $50,000
each month spend in excess of even that amount. Discipline
is always an integral part of any financial package.

Your retirement plan based on $5,000 a month may be

jeopardised if you include green fees of a thousand dollars a
month as a “necessity”, should you immediately take up the
expensive hobby of golf.

I am sorry to disappoint guys who propose million-dollar

figures as the answer to the retirement question. Doesn’t
$5,000 seem more achievable to you compared to a million?
Can you see that you are now on course to retiring early? Of
course, retiring rich may be a slightly different matter. Then
again, once you are retired, you would not be too worried
about that, would you?

In this chapter I have listed nine common ways to get just

five thousand dollars in passive income each month. As you
progress in your financial intelligence, you will surely find
a few more ways yourself. The methods listed here are just
road signs in the right direction; they are by no means a
detailed map of the journey.

An asset means residual income. Yes, for those of you who

are still not exactly sure what assets are all about – assets put
money into your pocket. And that is what residual income
does!

Now, I am not against anyone with a beautiful plan to make

some active income, say, finding and executing a trading
Andrew Chia 112

transaction to make a million dollars. There is nothing wrong

with that. The problem is, I have seen many people who have
made millions but continue to struggle financially. People
have got a way of using up their hard earned income faster
than it comes in. And they are usually not so lucky with their
second million-dollar transaction. They might have to wait a
terribly long time for it to materialise.

Yes, residual income is the sure way to early retirement.

There is a more common term called ’passive income’, if
you like. My favourite term, which I feel is more accurate,
is ‘residual income’. It simply means that you get paid many
times for doing the work only once.

Before you say that there is no money-making advice found

in this book, I will outline for you the most common and
surefire ways of investing and making money:

1. Property investment

You buy a piece of property once and you get rental each
month for a very long time. Since almost every rich man
in this world either made or parked his money in prop-
erties, you should definitely learn property investment.
Unlike some other investments, you don’t need any quali-
fication to do this, but you need lots of experience. You
need to study or view at least 100 properties before put-
ting in your money to buy one or two properties. Come
on, that is not a lot work. Spend some time at property
fairs like MAPEX or Homedec. Don’t be in a hurry; spend
some time walking around to learn. Ask many questions
(such as location, price, prospective development, rent-
als, etc.) regarding the property that interests you to find
out more about it.
113 Money Secrets

There are many property agencies that can help you

purchase a good piece of property for investment.

There are many advantages to investing in properties.

Unlike shares, you seldom see your cash “vaporised” (due
to a market crash or picking the wrong stock) because the
land is still worth something, even if the building is burnt
down. Property can also be one of the best hedges against
inflation. You can take your investment to the bank and
ask for a loan but your banker might not be so welcoming
with your other investments, like shares. You don’t have
much leverage at all using shares or bonds as collateral.

Don’t fret if you feel you do not have the capital. (I under-
stand that feeling. Quite a number of people do not have
the capital to start investing.) But, the fact is, to start
investing, it normally takes less than you think. Let me
share this with you. I have a friend who invested about
$20,000 in a flat in Setapak, Kuala Lumpur. She rented it
to TAR College students for about $500 a month. Another
lady has a terrace house in Bukit Jalil which she bought
for $200,000, and for which she also gets about $500
rental a month. Now, what does that tell us? It is not how
much capital you have, but rather the property investing
skills you possess.

Sometimes, in property investment, what we need changes

Andrew Chia 114

our approach to a situation. A little improvisation on my

property investment helped me convert my loss-making
condominium investment from being a liability into an
asset. Instead of renting out to single or family tenants, I
rented the unit out to carefully-selected overseas students
who do not have a big budget and thus, are comfortable
with sharing the unit with other students. Thus, I was able
to collect higher combined rental. Furthermore, this left
me with two vacant car park lots as the students do not
need them. I managed to make another two hundred dol-
lars extra by renting out those car park lots. All in all, my
rental income now exceeds my bank monthly instalment
- voila, my house is finally my asset.

This simple technique is also used frequently by many

property investors, especially for commercial property. In
a soft market, an owner who splits up his shop into two
smaller lots and rents them to two tenants (usually selling
complementary products) will collect more in rental than
if the entire shop were to be rented to a single tenant.

Start your lessons in property investment by keeping in

mind two important formulae.

Your Return of Investment (ROI) should be roughly dou-

ble the existing FD rate. If the rate today is 3.5% p.a., (at
the time of writing) your ROI should be 7%. This is actu-
ally common sense because FD is 100% guaranteed, there
is no risk involved. Property investment, like any other
investment, comes with risks. But, as usual, common
sense is not so common. You will find a great number of
people who are happy with an ROI which is the same as
the FD interest rate or even lower. In property invest-
ment, your ROI is your rental receivable times 12 months,
divided by the purchase price of your property. (I use 10
months instead, for the reasons explained below.)
115 Money Secrets

Example:
Rental is $500.
Purchase price is $60,000 (medium-cost apartment).
ROI is 500 x 12 = $6,000 , divided by $60,000 = 10%.

The other formula that you should bear in mind is that

your 10 months’ rental income should cover your 12
months’ bank instalments. Remember, you have to take
into consideration that your property may be vacant
pending new tenants when your old tenants move out.
Also, there are costs involved in property investment such
as repairs and maintenance, interest, assessment and quit
rent, insurance, legal fees, survey and valuation, stamp
duty and, not forgetting, taxation.

That is the only way you can get positive cash flow from
your property investment, thus making it an asset.
Otherwise, you would have to fork out money each month
to pay for bank instalments because the rental collected is
insufficient. It would then be a negative cash flow invest-
ment and you would be caught holding a liability instead.
That is where the trouble starts for most investors.

Armed with these two formulae, you are well on your way
to success in property investment. However, I am afraid
that you will immediately run into problems. It would
seem that such a property as described in the two formu-
lae does not exist!

That is where you start your education in property invest-

ment. If such properties did not exist, then rich people
would not exist either.

Most of you would have heard of the term, ‘location, loca-

tion, location’. That seems to be the slogan for property
investment. Your friends would probably tell you that all
Andrew Chia 116

you need to know about property investment is found in

those three words.

Do you really know what that means? Well, I thought I

knew before I started studying property investment. It
turned out that all I knew about location was how to spell
it. If you can do better than that, I think you could become
a better property investor than me. (I recently bought
two properties both of which generate ROIs of about 10%,
with nothing down.)

All right, let us look at the first lesson on location. The

choice location you should only invest in properties is in
Kuala Lumpur, Selangor, Penang or Johor Bahru. The
reason is that appreciation rates are the fastest in these
cities. This is simply because of demographics, and popu-
lation concentration, in these areas. For example, with
the improvement of infrastructure, the population in KL
will keep increasing as whole families migrate en masse
from smaller towns to the capital.

What a relief, I thought. I am living in the Capital. If I

were to be from a smaller town say, Kedah, it would be
difficult for me to invest in KL as I would have to travel all
the way to study the property market in KL before I can
invest. Now I can just buy any property in KL, sit back
and collect profits.

I soon found out that KL is a big place, and not all loca-
tions in KL are the same. As I started mingling with prop-
erty agents and property investors, I found out that many
people are losing money investing in properties in KL.

Well, fine, I told myself, let’s just try to narrow down a bit
on the location. We’ll go by area: maybe Cheras, Kepong,
Taman Tun... OK, let’s try Ampang.
117 Money Secrets

Oops! Not all properties in those areas are the same,

either. Terrace houses in high-end areas cost much more
than in low and medium-end areas.

Right, let’s just try one area in Ampang, say, Taman Muda.
I called up the property agent and told him I wanted to
buy a shop. (Actually, it was just part of my homework. I
planned to study about 100 properties before I made my
first purchase, remember?)

I asked him how much rental a 4-storey shop in Taman

Muda could fetch. “$3,000 for the ground floor, and
another $2,000 for the rest of the floors.” came the reply.
“All right,” I told myself, “I’ve got it nailed this time.” I
asked for the selling price and some details like area and
whether it was freehold or leasehold. I then went to see
the property to do a survey.

The property looked almost the same as its neighbours.

The owner was out and the staff did not know about the
rental or selling price of the property. I was about to leave
after noting down the condition of the property including
the direction it was facing. (I brought along my compass
for the assignment. It is one of the tools you must have for
property investment, besides things like maps and mea-
suring tape.) But, something was bugging me. I had not
confirmed the price or the rental of the property. I quickly
went across to the next shop and tried to ask as casually as
possible, “How much is the rental around here?” “$2,000
for the ground floor, and another $1,500 for the rest of the
floors.” “What?!” I couldn’t stop myself from shouting, “I
thought it’s $3,000 for the ground floor?”

“Well, $3,000 is for the opposite row of shops. This row

can only fetch $2,000.” “But,” I found myself muttering,
“it’s on the same jalan (road). Why the difference?” “We
Andrew Chia 118

don’t know either, but it’s like that. You can ask the next
few shops; they are also renting for $2,000.”

I later learned that even properties located on the same

road may sell at substantially different prices. And that is
not all. Even shops on the same row may be selling at dif-
ferent prices. A shop located next to another shop selling
coffins for example, can expect to fetch a lower price.

When you start learning about property investment

you may soon find there is more to it than just location,
location, location. One of the leading cartographers in
Malaysia, Mr Ho Chin Soon from Ho Chin Soon Research
Sdn Bhd, who gives regular talks on property investment.
He says that in today’s market, buyers do not look at
location alone but buy based on other factors, like brand-
ing. For example, Sunrise is a preferred developer with
many signature projects such as Mont Kiara. Therefore,
if Sunrise were to launch a new project, people would buy,
regardless of the location.

Timing is another very important factor to consider,

besides location. This piece of wisdom comes from a very
seasoned developer, Tan & Tan. The company managed
to buy land and building materials cheap during an eco-
nomic downturn, and sold or rented its completed prop-
erties at very good prices just when the economy was on
the upturn.

It would be wise to consider property investment as one

of your main sources of residual income. The advantages
are just so many.
 119 Money Secrets

2. Share market

The share market represents one of the most popular

ways that people make money and earn residual income.

Do a lot of research to find a good company; buy its

shares at a low price and you will be rewarded with high
dividends and capital gains year after year.

Imagine this, if you buy a share at say, $5.00 and you get
a dividend of 4%. ROI would be 4% or 2 cents. If, after
a number of years the share has doubled to $10 and still
pays an annual dividend of 4% based on the market price,
your ROI would now be 8 %. I am sure you know of some
good companies whose share prices have been climbing
slowly and steadily. How you wish you had bought those
shares earlier. You would be tempted to “hold forever”
just to enjoy the dividends.

There you have it, one of the most important criteria, if

not the most important, is to buy shares with high divi-
dends. Start your education on share investment with
this in mind and you can’t go wrong.

Make sure you don’t make one silly mistake that I made.
Andrew Chia 120

I thought it was expensive to buy a certain guide book

and later regretted not doing so. Get all the tools that you
need for different investment projects. To do property
investment, you must buy things like maps, measuring
tape and compass. As a reference guide for stocks I rec-
ommend you to consider Dynaquest’s Stock Performance
Guide. Dynaquest is the company which compiles finan-
cial data for all companies listed on the stock exchange
in Malaysia. (Log on to Dynaquest.com.my for more
information.)

While we are on the subject of Dynaquest, I might as well

give you more tips. You see, they had this “Stars” rat-
ing system of classifying companies before 2007. The
company meticulously compiles and classifies financial
performance such as earnings, returns, dividends and
important ratios and then assigns ratings to them.

The stars rating system is very easy to use. The high-

est rating theoretically is 12 but in practice the highest
attained was only about 9. Less than 10% of the stocks
in BURSA Malaysia had 7 stars or more. There you have
it. If you are a newbie, you can start by studying these
companies first and ignoring the rest.

Have you ever wondered where the EPF and other big
institutions get the money to pay you high dividends?
Tip: stock investing is a zero-sum game. (Zero-sum
game was explained earlier in Chapter 4.) It gets even
worse if you factor in the brokerage fees.

If you are curious to know, the stock that I bought before

I learned to invest had a “U” rating. U means unrated!
That means less than 0 stars. No wonder I lost money.
Had I only been smart enough to invest RM65 to buy the
guide, and patient enough to do a little bit of homework,
 121 Money Secrets

I would not have lost so much money.

3. Doing business

Businessmen and industrialists, generate profits by hav-

ing money as well as people working for them.

Business is an investment, too.

When you begin learning about business, you should start

with a revolutionary definition: If you cannot leave your
business and go on holiday for one year, then it is not a
business! In fact, your business should be running bet-
ter and be more profitable than before you left for your
holiday. That was very hard for me to swallow at first
but I am now quite convinced that no other definition is
acceptable.

McDonald’s revolutionized the way people do business

by introducing the new concept of franchising.

My banker, Mr Nava, shared with me a little secret about

delegation. He uses the 4 D’s. (Not the 4-D that you
buy at the Magnum shops.) First, he Delegates. Then,
Andrew Chia 122

he Disappears! That’s where I find him, at the Royal

Selangor Club having a little shot of his favourite whis-
key. What does he do next? He Disturbs. He calls back
to his office to see whether his staff has completed all his
work for him. Finally, if tasks are not completed satis-
factorily, he Drills. He is the only banker I know who
stumbles into his office at irregular hours, just a wee bit
tipsy. Never mind his silly habits, his work gets done
(without him doing it) and the last time I checked, he had
been promoted to general manager.

I thought only my friend Nava uses such methods. I later

discovered that most successful businessmen adopt these
4 D’s unconsciously. The only difference is they don’t
have fancy names for what they do. Instead of disturbing
and drilling, they may call it follow-up and giving advice.
However, most of them do practise the “disappearing”
part.

Recently, I read in the papers of someone offering a semi-

nar teaching people the 17 steps of delegation. How ridic-
ulous. Imagine people paying for it. That is the problem
with people studying too hard. They confuse themselves
and their innocent victims. Nava would laugh until he
fell off his chair. Four steps were all he needed.

Business can be an extremely complex subject. It can be

likened to a group of hikers going into a jungle. Some will
be quick to realise that they are lost. Others will take a
long time to come to the conclusion that they are indeed
lost.

That is why you should always try to keep things very

simple.

What product should I sell?

123 Money Secrets

Go for products that are straightforward, and not high-

tech. The advantage is that they will not be outdated
soon. Some businessmen spend a lot of time developing
their business. They put in a lot of effort to build a stable
business with regular customers that generates steady
profits. Then, that particular industry goes into a sun-
set phase. New technology and trends take over. What a
pity.

Go for sole-proprietorships instead of having many part-

ners in your business. It will be less complicated. I do
understand that this is quite difficult if you need to pool
together resources of cash and expertise. You need part-
ners. But I have observed that partnerships come with a
lot of problems, especially in terms of business direction
and marketing strategies. There are many conflicts due
to differences in opinions. The last time I did a survey
and from my years of experience running my own busi-
nesses, I found that most successful businesses are either
done on a sole-proprietorship basis or there is only one
sole decision maker in the business.

Go for businesses done on cash terms. Avoid businesses

that need to give lengthy terms of more than thirty days
to customers. A lot of people tell me they can’t do it
because their competitors are giving terms. If they don’t
give terms, they cannot secure the business. That is why
you should consider not going into that type of business
in the first place. Once you are trapped you will find
yourself in a situation where “if all you have is a hammer,
everything looks like a nail”. You will be caught in a bad
situation trying all sorts of ways to salvage a sinking ship.

I do have customers who gave up to nine months’ terms

to hypermarkets when they first started out. Once they
Andrew Chia 124

were established, they conveniently said goodbye to

those slow-paying hypermarkets and trimmed down
their terms to either cash or one month.

I have one last piece of personal advice. If you are new

to business, remember to have all the cards to yourself.
What I mean is, you should not have anyone in your
company who is indispensable, whether he is your part-
ner, a manager or just a member of staff. When this hap-
pens, an extension of Murphy’s Law will come into play.
Murphy’s Law states that whatever can go wrong, will go
wrong. Whoever you rely on to keep your company run-
ning will give you problems if he is indispensable, even
if he may be your family member! That is how powerful
this law is.

Let me clarify. In business we must rely on people. We

always need to pool together resources. But the danger
begins when the person we rely on becomes indispens-
able. So, make sure you always have someone on standby
who can do what he does. If you don’t, be prepared for
some very unpleasant surprises.

The other alternative is to limit your bet. Protect your

business investment from harm by putting just a small
fraction of your total capital into it. Don’t put all your
marbles (or eggs) into one project if you need to depend
on people who are indispensable.

With that, I leave you to begin your studies on how to

start and run a successful business. You can find numer-
ous books written on the subject of business.

In conclusion, I would like to share with you two small

businesses which I consider to be successful.
125 Money Secrets

Pan Restaurant in Subang Jaya is operated by Mr How, a

good friend of mine. It has been running for more than
ten years. It is profitable and they have recently opened
another branch in Petaling Jaya. The curious thing about
this business is that the owner does not know how to cook
commercially – he is a land surveyor by profession.

I find it interesting because quite a number of my other

customers have closed shop when they relied on their
chefs who subsequently left their restaurants. I asked
Mr How (his real name) how he manages to run such a
business when he himself cannot cook. He simply replied
that whenever his chef resigns, he just advertises for a
new chef and there are a lot of good chefs waiting to be
interviewed. Now, I wonder why my other customers
couldn’t do that . I know it sounds hard to believe but
they simply resorted to looking and asking around for a
new chef instead of just advertising for one.

LKH Motors in Petaling Jaya has been operating for

almost three decades now. They are a very profitable
used car dealer, specialising in SAABs. I consider them
successful because it is the only partnership business that
I have come across where the partners are seriously on
kissing terms. I mean, they are like brothers even though
they are just friends.

They have an almost telepathic understanding when

it comes to running the business. On top of that they
have a very similar philosophy of life. They take things
easy, money is not everything. They really enjoy making
money and they really enjoy their partnership. They get
along like brothers. In fact, I feel they are closer even
than brothers. I have seen siblings fight over business. I
have even seen fathers suing their children over business.
I think these two guys are simply fantastic. Incidentally,
Andrew Chia 126

LKH stands for both their initials!

4. Network marketing

Network marketers can have hundreds or thousands of

‘downline’ associates working for them while they sleep,
and generate millions in residual income. Network mar-
keting is the current preferred term for direct-selling or
multi-level marketing (MLM). They all mean the same
thing. You may ask your ‘upline’ to explain to you why
this is so, but be prepared – he may become historical
and hysterical.

Actually, network marketing is the more accurate term. It

simply means that this type of marketing is done through
networking. The effectiveness and success of network
marketing is past the experimental stage, with leading
businesses like Amway raking in billions in profits each
year.

All of us practise network marketing without realising it.

If we come across a good restaurant, we naturally alert
our friends to it. The same thing goes for a good movie or
a beautiful tourist attraction. That is network marketing
in its purest form. It works. (Of course, it doesn’t work if
we do not have any friends or if we are so selfish that we
want to keep good things only to ourselves.) Now, extend
that to health supplements or any other product which
uses the network marketing system as its distribution
channel. If you are a person who finds it fun to enthusi-
astically recommend good stuff to your friends, you stand
a good chance of succeeding as a network marketer.

In fact, network marketers find it hard to understand

otherwise; the restaurants and cinemas are not paying
us any commissions and we still recommend them to our
127 Money Secrets

friends. Here is a wonderful MLM product and the com-

pany pays us for recommending it to our friends. Why
would we not do it?

Malaysia is one of the most popular network marketing

sites in the world. The majority of products, like health
supplements from the West make their entry into Asia via
Malaysia. One of the reasons is simply that Malaysians
are multi-lingual. Unlike places like Thailand, Indonesia,
Singapore or Philippines, Malaysians are proficient in
Chinese, English and Malay which are languages used by
all the countries in this region. They can conveniently
sponsor and expand their network.

Therefore, Malaysians are much more mature when

it comes to direct-selling. (That is the commonly used
term in Malaysia.) Almost everyone has been involved in
direct-selling at some point of time.

Direct selling is a proven business model which has cre-

ated millions of millionaires across the world. Traditional
businesses seldom makes the staff millionaires, only the
bosses. Anyone who participates in direct-selling has the
opportunity to make a lot of money. For the operator,
the model eliminates the necessity for having staff. Every
dealer is his own boss. Robert Allen, who has written four
international best-selling books on making money over
the past twenty-five years, says that he hates any busi-
ness that involves staff. Staff members are a permanent
headache.

There are many objections to direct-selling. To be suc-

cessful in running a direct-selling business, we need to be
able to educate our customers who wish to be involved in
the business. Education and training today is easier with
the Internet as information is easily sent to the customer’s
Andrew Chia 128

doorstep with a touch of the keyboard or a click of the

mouse.
“Direct selling is a pyramid scheme. It is illegal. The top
people make all the money from the people down the line.
It is exploitation.” This is a common objection. Well,
there is nothing wrong with pyramids; it is the strongest
structure known to man. If people care to look, there are
pyramids everywhere. In any company there is only one
CEO, sometimes with hundreds or thousands of staff. We
all know that some CEOs get paid ridiculous amounts.
In an army there is a general with thousands of soldiers
under him. In a school there is only one headmaster. In
a university there is a chancellor. There is a president or
prime minister for a country.

USANA is one of the most successful direct-selling com-

panies in the US.

Any direct selling business may be accused of being a pyr-

amid scheme. USANA from the US, one of the leading
network marketing companies in Malaysia, which won
the best compensation plan in America for eight years
in a row, according to industry standard magazine MLM
Insider, was recently sued for running a pyramid scheme.
The story is easily available by searching Google. USANA
is a down-to-earth company selling very potent health
supplements. Its products obtained the highest ranking
among 1,500 leading products in the US, Canada and
129 Money Secrets

Australia, scoring 96.1 points out of 100. Incidentally,

this is also one of Robert Allen’s favourite direct selling
companies.

“It is very hard to succeed at direct selling.” Why, it is

very hard to succeed in anything at all, don’t you think
so?

The key to success in direct selling is training. Similarly,

the reason why people do not succeed in direct selling is
because of lack of training. Unfortunately, most people
do not know this, and they will never find out. Most peo-
ple do not know the reason why they are not succeeding
in other endeavours as well.

You need to be trained how to sell products and recruit

‘downlines’. The mere mention of these two tasks con-
jures up images of pain that comes in rainbow colours.

You recall the incident of your neighbour who was all

fired up after attending a direct-selling talk. Full of zest
and excitement, he comes home and immediately sum-
mons his sister. He dumps the sales kit along with the
full range of products and the application form to join as
a distributor and commands her to sign up so that they
can make tons of money together. He does not even
bother to ask her permission and least of all, her opinion.
After all, it is all for her own good. He would never harm
her. She should simply trust him. Furthermore, he has
personally attended the talk and was convinced that the
company was solid. The products are first class and the
compensation plan marvellous.

He is totally taken aback when his sister gives him the

chewing out of his life. “I hate direct selling!” she says,
running back to her room and slamming the door behind
Andrew Chia 130

her. How mean of her. How hurtful it is. “I just wanted

something good for her and this is how she treats me.”

These two siblings have not been on talking terms since.

Tragic, isn’t it?

Other scenes of horror also come to mind. A good friend

pesters and begs you to buy products. Another friend
corners you at McDonald’s, whips out a stack of A4 paper
and starts furiously drawing circles and triangles with
pyramidal shapes while you are trying your best to stifle a
yawn.

Or, this classic: Your childhood friend approaches

you with, “Are you free tonight?” Being Malaysian (or
Singaporean for that matter), you immediately sense it
coming. “No, I have something on.” “How about tomor-
row night, or next week?” “Where do you want to take me?
Is it ABCXY direct selling company?” “No, definitely not!
Believe me, it is a very good money-making opportunity.
Don’t you trust me?” You sacrifice your dinner with your
sweetheart, resist the urge to take a bath because there
isn’t enough time, get caught in the after-work jam, curse
at the toll booth, curse louder at the petrol pump, run out
of curses after paying for parking and being unable to
find a parking lot, and guess what? You land right in the
middle of the ABCXY direct-selling talk.

Now, you see what I am trying to tell you? Training. All

the above scenes would not have happened if a network
marketer was well trained. I know it is hard to believe
that so many network marketers are poorly trained. That
is exactly the point. Most network marketers believe
they do not need training; they are good enough already.
Training is a waste of time. After all, salesmen are born,
not made, they thought.
131 Money Secrets

It is not possible to delve into any aspect of this vast topic

of training in any depth at the moment. However, a simple
illustration will set you thinking. Refer back to our ear-
lier example of the movie. You have just watched Indiana
Jones and you feel that it is such a fantastic movie. You
also know that your sister hates action movies; she loves
romance and soap operas. She often finishes your box
of tissue in one sitting. Now, would you be in a hurry to
recommend Indiana Jones to her? Would you be so kind
as to buy a ticket for her in advance?

I bet you would approach your brother instead. He shares

your passion for action movies. You would probably be
scolded for watching it without him.

The above process is called “qualifying your prospect” in

network marketing. You find out who would like to buy
your products, and sell to them. You are allowed to give
information and consultancy pertaining to your products,
but the moment you sense that they have no interest, you
would have to leave it at that. You do not “hard sell”. In
fact, you do not even offer to sell your products because
you have discovered that your prospect is not interested.
You move on to the next prospect. You will find that you
have conquered what salesmen fear most - rejection. You
have not been rejected simply because you have not even
offered to sell anything. You only sell to those who wish
to buy.

The same thing goes for recruiting. Some of your cus-

tomers or ‘downlines’ may want to buy your products but
they have no interest in doing the business. So, you do
not keep persuading them to do the business.
Andrew Chia 132

5. Licensing

Bill Gates licensed his software to IBM and many other

organisations and individuals, including you and me. He
also gets paid millions of times.

Licensing was a brilliant move by Bill Gates. It made

him the richest man on the planet.

You can find numerous books on property and share

investment but licensing is relatively unknown. That’s
why I think I should give you an introduction to this won-
derful stream of passive income.

The year was 1928. A train from New York to Los Angeles
carried Walt Disney and his wife home from a meeting in
which they learned that they had lost the rights to Walt’s
cartoon creation, Oswald the Rabbit. The news was dev-
astating - they were out of business.

But a stray mouse on the train inspired Walt to come

up with a new idea. Walt wanted to call his cartoon cre-
ation Mortimer Mouse, but his wife prevailed, so Mickey
Mouse it was.
133 Money Secrets

The Mickey Mouse is an all-time classic.

With this idea, Walt and his brother, Roy, started busi-
ness in a one-car garage on the wrong side of the tracks in
east LA and it grew into the largest entertainment organ-
isation in the world. (Who says it takes money to make
money?) Walt and his brother wanted to be moviemak-
ers, but movie-making is not the biggest money maker
for Disney these days.

Licensing began as an accident, an afterthought. It came

in the form of an enterprising businessman trying to ride
on the coattails of the Mickey Mouse phenomenon. He
approached the brothers and asked permission to silk-
screen the image of Mickey onto 10,000 wooden pencil
boxes.

Permission was granted, and thus was launched the

modern concept of licensing. Disney Licensing and
Merchandising Division eventually became the most
profitable division of Disney. At first the cheques were
small, but licensing soon grew into major streams as
Mickey began appearing on Lionel trains and Hallmark
cards and in Little Golden Books. It wasn’t long before
the brothers Disney recognised their gold mine. With
little effort or risk on their part, they could generate huge
streams of income!
Andrew Chia 134

In effect, the Disneys sold that original businessman only

the right, or license, to attach an image to one of his prod-
ucts to enhance its sales potential. The businessman did
all of the manufacturing, marketing, and the movement
of product from seller to buyer. He took all of the risks,
managed all the money, and simply sent Walt Disney a
fee for each product sold that carried the image of Mickey.
Think of it: no manufacturing, no setup costs, no inven-
tory, no sales costs, no sales force, no distribution costs,
no employees, no risk, no money and little or no invest-
ment of time and energy. And yet, they always maintain
control of product quality. Today, billions of dollars
worth of Disney merchandise is marketed throughout the
world - all from the genesis of that idea. It is the ultimate
form of leverage.

Licensing is the most powerful and yet least understood

form of intellectual property in the world. Just saying the
word brings blank stares from most people. If you men-
tion about property, they understand. Shares and even
directselling, majority would have heard of. But, just
what is licensing?

The Story of Hang Ten

After Walt Disney’s successful foray into licensing, in the

1960’s a local San Diego surfer came up with the idea of
manufacturing swimming trunks for surfers – trunks
made of sturdier material than the flimsy swimsuit mate-
rial popular at that time. He started with a prototype
sewn from rough canvas. His logo showed 10 toes hang-
ing over the edge of a surfboard. He called his new brand
Hang Ten.
135 Money Secrets

(‘Hanging Ten’ is a surfing manoeuvre, considered one of

the most impressive and iconic stunts one can perform
with a surfboard. Hanging ten is when the surfer posi-
tions the surfboard in such a way that the back of it is
covered by the wave and the waverider is free to scoot to
the front of the board, hang all ten toes over the nose of
the board, while holding two “high fives” up in the air as
a celebratory indication of this feat.)

A lot of people have seen or heard of the Hang Ten busi-

ness, but few understand it.

As time went by, the company grew larger and larger as it

manufactured surf-related clothing. At its peak, Hang Ten
had thousands of employees in various plants throughout
Southern California.

Today, the manufacturing plants no longer exist. Hang

Ten is down to only one building with a fraction of the
number of employees compared to the old days. It might
sound like things are not going so well. Not so. In 2003,
Hang Ten collected over US$300 million in licensing
revenues worldwide! And what do they license? They are
just licensing that silly “10 toes” logo.
Andrew Chia 136

Clothing manufacturers all over the world pay Hang Ten

millions of dollars just to attach the Hang Ten logo to
T-shirts and surf wear of all kinds. Hang Ten employees
no longer focus on making clothing. They focus instead on
making sure that copycats don’t knock off their designs.
And all of this is a result of licensing.

The DOS Story

The year was 1979. A geeky computer nerd by the name

of Bill Gates came up with the same concept as Hang Ten
and paid $50,000 to buy the exclusive rights to a new
computer program called DOS, the disk operating system
for minicomputers. It would turn out to be the deal of the
millennium.

Bill Gates became the richest man on earth simply due to

a shrewd business decision.

Gates then licensed the non-exclusive rights for DOS to

IBM to use it in its very first minicomputer, the PC. (He
didn’t sell it to IBM, he licensed it to them.) Gates then
licensed the non-exclusive rights for DOS to IBM clones.
That simple shrewd decision is the reason that the mar-
ket value of Microsoft is greater than the market value
of IBM, General Motors and most of the Fortune 500
 137 Money Secrets

companies. Going from zero to billions in about 10 years,

Bill Gates is the richest human being on the planet simply
because he had a little foresight.

If he had sold his idea to IBM, he would have made a

nice chunk of cash. But he wasn’t interested in chunks of
cash... he wanted streams of income. The only way to do
that was through licensing. He doesn’t have to manufac-
ture any of those complex computing machines that use
his software. He just sells the right to install his operat-
ing software on every computer built – and then he gets
to sell upgrades to all of these computer owners. Smart.
Really smart, isn’t it?

From the legal aspect, there is a lot of difference between

franchising and licensing. However, in terms of intel-
lectual property, they are quite similar. We have many
franchise success stories in Malaysia, like Secret Recipe,
and of late, Oldtown White Coffee. The franchise has
increased from about RM50,000 to almost RM500,000
for major outlets. The billboard advertisements are a
testimony of how fast it is growing. Some outlets are get-
ting more beautiful and appealing, like the one on Jalan
Burma in Penang.

6. Write a book

JK Rowling, the author of the Harry Potter series, has

become one of the richest people in the UK just by writ-
ing books.
Andrew Chia 138

Harry Potter was a runaway success. Its books have

been made into movies.

You may not know it but you can write a book, too. You
may not be able to sing, dance or act but you can certainly
write a book. That is because all of us have a book inside
us. Our lives are full of experiences. There is certainly a
part of it that is unique and that others would like to read
about.

You may not become a writer overnight but you can start
learning. For a start you may try to google “ghostwriter”.
No, I am not joking; it has nothing to do with the seventh
month on the Chinese calendar when underworld char-
acters are free to roam the earth. This is from Wikipedia,
“A ghostwriter is a professional writer who is paid to
write books, articles, stories, or reports which are offi-
cially credited to another person.” A lot of books in the
bookstore are actually written by ghostwriters. You must
have wondered how some people can write thick books on
technical subjects like feng shui and get it on the shelves
like greased lightning. They have ghostwriters to help.
139 Money Secrets

Next, you may try googling “copywriters”. You will be

pleasantly surprised to discover that they can actually
teach you to be a copywriter. (And you can earn money
from it.) Of course, if you can be a copywriter, you can be
an author. Food for thought, isn’t it?

The only thing that may stop you from writing a book is
self-confidence, or the lack of it. Once you beat out fear
and self-doubt you will be rewarded. You can only go as
far as you think you can. Let me share with you the true
story of a courageous lady who defied the odds and pub-
lished her best-selling book.

Cindy Cashman made a million dollars by taking an old

idea and adding a twist to it. This is a true story and Cindy
now lives in a huge mansion on a lake in Texas. She mar-
keted her specialty book all by herself without a pub-
lisher. The name of her now famous book is Everything
Men Know About Women by Dr Richard Harrison, her
pseudonym. By now, she has got a real life, well-known
American psychiatrist Dr Alan Francis to be the author
of her book. The book is simply amazing – there isn’t a
single word printed on any of the 96 pages! (Talk about
courage - would you dare to do that?) Yet, women bought
it by caseloads to give to their friends.

Cindy made enough to retire; she doesn’t have to work

another day in her life. She has since gone back to Texas
and worked on a video version of her best-selling book.
Guess what? It’s also blank.

One of my favourite authors has written fifteen books

which sold over 26 million copies at last count.
(Ref: http://en.wikipedia.org/wiki/Robert_Kiyosaki.)
Andrew Chia 140

Everyone would agree that his style of writing is boring

and repetitive , but I was told his sales are even higher
than when he first published his book. This is simply
because his contents are very educational even though
his literary skills leave much to be desired. Now, imagine
that reward for your effort. Wouldn’t you like to make
publishing another way of generating endless income?
Wouldn’t that be a wonderful asset for you?

Talking about authors who are no good, John Grisham,

the mega-seller who has written more than twenty nov-
els, was rejected 15 times before his first book was pub-
lished. John Grisham was the best-selling novelist in the
world before JK Rowling overtook him.

Your direct-selling motivator would have probably told

you stories like that of a grasshopper which was kept in
a glass container for a long time. Each time he jumped
he touched the invisible ceiling. When the glass was
removed, he still jumped the same height, and no higher.

Or, he may tell you the story of the elephant that was tied
to a tree for a long time. When the rope was removed he
was still standing by the tree because he was so used to it.

Let us break free from the bonds that bind our minds.
There are no invisible glass ceilings and no ropes to hold
us back from success, just break free. (You have my per-
mission.) Do you have your own bondages and mental
blocks?

7. Internet marketing

Our local Internet marketing gurus like Dechen Lau and

Sen Ze sell products and services over the Internet and
get income over and over again.
141 Money Secrets

The advent of the Internet has caused great disturbance

in the marketplace. Today, all forms of investment can
take advantage of the conveniences of the Internet in
obtaining information and speeding up communication.
It pervades the sphere of influence of almost every aspect
of life. Yet, a lot of people are all but oblivious to it.

Whatever you sell online, you would need a website like

this one to tell your customers about your company and
your products.

Businessmen who resist change can keep telling them-

selves that their customers are IT illiterate, they don’t have
a computer, Internet access is slow, broadband access
is not popular and is expensive, and the rest of it. They
refuse to notice that people today are not only accessing
the Internet from Starbucks but from the mamak stalls!
And every statistic relating to the Internet gets hopelessly
obsolete by the time it goes to print.

Let us run through some of the advantages of marketing

on the Internet versus traditional marketing. Business
people are quickly migrating to the Internet and these are
the reasons why.
Andrew Chia 142

Traditional Marketing vs Internet Marketing

Normal mail is slow, expensive, unreliable and wasteful

E-mail is fast, cheap, reliable and efficient
Mailing costs are high
Zero mailing costs
Long delivery time
Instantaneous delivery
Inflexible business hours/days
24/7/365
Limited to local geographic area
Planetary access
Limited, shrinking customer base
Unlimited, expanding customer base
High overheads
Almost zero overheads
Real time, real contact
Store-and-forward time (via autoresponders)
Usually caters to average customers
Internet-literate customers are usually upscale,
wealthy and intelligent
Long enquiry time
Instant response time
Dress up/go to the office
Stay home in your T-shirt and shorts
Mass marketing
Personalised, one-on-one marketing
Impulsive customers must wait
Impulsive customers get instant gratification
Old and traditional
New, exciting and mysterious
Intrusive marketing – interrupts the customer
The customer is in the searching mood – he
always feels welcome
One-way marketing
Interactive marketing
143 Money Secrets

One-dimensional marketing
Interactive and multimedia marketing
Ads disappear quickly
Ads are as permanent as you want
High entry costs
Low entry costs with level playing field
High cost of failure
Low cost of failure
Operates from a fixed location
Operates from any computer in the world
Need to be a big player with big money
You can be a nobody with little or no money
High barriers to entry
No barriers
Highly visible/public
Private/anonymous between buyer and seller
You are judged by age, sex or how rich you are, your looks
and your race
You are judged only by the quality of your ideas
Uncool
Cool

Most people think that Internet marketing means mar-

keting products or services over the web. That is, of
course, true. But most people do not realise that Internet
marketing is more than that. In fact, it is the name of a
new subject! Some of the topics under this brand new
subject are:-

1. Building a Minisite

2. Payment Methods:-
Paypal
2CheckOut
Stormpay
Commercial Payment Systems
Andrew Chia 144

CCAvenue

3. Internet Marketing Strategies:-

Affiliate Programmes
Articles
Banner advertising
Blogs
Classifieds
Clickbank
eBay
E-mail marketing
E-zines/newsletters
Forum
Joint Venture
Linking
List Building
My Space
Pay Per Click (PPC)
Press Release
Search Engine Optimisation (SEO)
Squidoo
Viral
Google Adwords
Google Adsense

If you have not attended an Internet marketing class yet,

most of the above terms may be Greek to you. That is
why it is a new subject.

Let me introduce you to some of this Website Techie

Lingo first, just to get your feet wet. I’ve compared the
online terms with things that we use in our daily lives.

Offline Term Online Term/Jargon

Apartment Hosting (space)
145 Money Secrets

Address Domain name

Kitchen, toilet, rooms, etc Web pages
Doors for people to walk in Bandwidth/Traffic
and out
Landlord/Gardener Web designer/web
master
A sports car to reach apartment ISP eg. streamyx
Mailbox E-mail of domain
name
Answering machine Autoresponder
Mailman cgi/php script to pro-
cess forms
Comfy relaxing furniture Site map
Shopping basket Shopping cart
Cash register Merchant account
Security system Secure certificate, e.g.
Verisign, SSL
Good advertising SEO (Search Engine
Optimisation)
Signage at doors Banner ads
Grand Opening Notification Press Release
Neighbourhood www
Private room/conference Intranet
Buzzer/Doorbell Firewall
Basement Database, e.g. mysql
c/w php
Hallways Hyperlinks in your
website
Phone line Hyperlinks to other
sites
Decor/Interior Design css, php, html, Flash
Tech, Javascript
Guestbook Cookies
Moving companies FTP (File Transfer
Protocol)
Art, pictures JPEG, GIF, PNG
Andrew Chia 146

Key to open apartment Password

The noisy drunk down the hall Spam
Gossipy neighbour Search engine

If you are too busy to attend an Internet marketing pre-

view, I can give you an inspirational story here. This story
is usually told at Internet marketing seminar previews to
attract participants to sign up for a full course. It is a true
story, although I have forgotten the name of the hero.

The Iguana Story

Tom loved his pet iguana so much that his wife got jeal-
ous. Maybe he was spending more time with it than with
her. One day she threw him a challenge, “Can you make
money just playing with the iguana?” Tom took up the
challenge. Instead of abandoning his iguana to make
more money, he decided to write a book on iguanas.
147 Money Secrets

You can make money from the Internet even though

your hobby is just keeping iguanas

He went and participated in Internet forums on iguanas.

(By the way, if you don’t know how to find forums, it’s
simple. Just type in your favourite hobby, say Basketball,
in your preferred search engine, which is usually Google,
and add the word forum behind. You will get a list of all
basketball lovers’ forums throughout the world, with the
biggest and most popular forums displayed on top, of
course. You can then just join in and start talking to all
your new friends sharing the same passion.)

Now, back to our story. Tom went and asked at the

forums and compiled a comprehensive list of questions
and problems faced by iguana lovers. He then took the
list and went to see his local zoo keeper who happily
answered all his queries to his heart’s content.

Instead of taking the answers and just throwing it back to

his forum friends, he carefully compiled it into an e-book
and offered it for sale at the forums. He made quite a bit
of money.

The Iguana story, Making money - Part Two. Our friend

cleverly omitted the most important tip from his book. He
then told his readers that he had a second book coming
out – the secret of how to make your iguana live longer!

Actually, the secret is very simple. His zoo keeper friend

told him that iguanas can live up to fifteen years in the
wild but die in less than ten years as a pet. His second
book, which is more expensive than the first and with
fewer pages, explains that iguanas actually need protein.
Pet lovers just assume that iguanas are vegetarians and
feed them with vegetable, fruit and leaves. Protein is
Andrew Chia 148

what they need, and that’s the secret.

Now, for the finale. Where to buy protein for iguanas?

You got it. You can buy from Tom! And our friend, upon
advice from the zoo keeper of course, just buys all the cat
food and dog food that are naturally rich in proteins, and
re-packs them under “Special Diet for Iguanas”...

How to make money $24,000 LIVE in the TV

show

Of all the money-making gurus and authors, there is

one that stands out – Robert Allen. The reason is that he
actually shows you how he does it. Live. He may be in
America but the simple technique he uses is applicable
elsewhere, too.

In 2000, Robert made this challenge, “Sit me at the key-

board of any computer in the world with access to the
Internet, and in just 24 hours, I’ll earn at least $24,000
in cash.”

He was put on the show “Real Streams of Cash” produced

by Guthy/Renker Corporation, one of the world’s lead-
ing producers of infomercials. In fact, the producers of
the show were quite sceptical and asked him to lower the
figure, “A thousand dollars an hour is still quite a lot of
money to the average person.”

The show was on in the afternoon and just 6 hours

later, the figure was $46,684.95! Robert slept peacefully
that night. When time was up, the figure had reached
$94,532.44.

You see, Robert did not pull off that stunt overnight.
 149 Money Secrets

He had done a lot of homework prior to going live. In

fact, his preparations took place a few months before the
actual event. What he did was simply to send out notices
to his database of customers who had earlier bought his
books, tapes or CDs, or had participated in his seminars.
He then alerted his online audience to the event that was
going to take place on that particular date and time. To
top it off, he made them a special offer in terms of dis-
counts for all his products if they were to buy from him
during that event.

Keep improving on your Internet marketing skills. (The

Internet is here to stay.) As in any other form of invest-
ing, do keep an open mind when learning new skills.
Business on the Internet may prove to be different com-
pared to offline methods. For example, I usually prefer
writing a sales letter that is short and to the point. But
research shows that for online business, long sales let-
ters work better than short ones. In fact, very long sales
letters work even better. It took me quite a bit of time to
get used to this. And I had to learn the technique of writ-
ing long sales letters that have got to be interesting and
persuasive at the same time.

8. Recording an album

Elvis Presley went into the recording studio once and got
paid each time – and that means millions of times – his
album was bought. He has been receiving great amounts
of money untill today. I beg your pardon, I mean his
descendants are still receiving the income...
Andrew Chia 150

The King of Rock and Roll is still very popular even till
today.

You do need some vocal and showmanship talent for this.

Training can greatly improve your talent but I still believe
you have got to be born with musical talent. I am one of
the unlucky ones who will never make this my stream of
passive income. I am a born bathroom singer.

9. Making a movie

I am sure most of you love Pirates of the Caribbean. Walt

Disney made Pirates of the Caribbean once, and each time
it is screened anywhere on the planet, Disney gets paid.
Of course, Johnny Depp and the lovely Keira Knightley
get paid, too.
 151 Money Secrets

Johnny Depp is one of today’s more popular actors,

starring in the Pirates series.

You may need even more talent for this. If you are one of
the lucky ones endowed with acting talents, you have my
congratulations.

Finally, remember not to fall in love with any of your invest-

ments – be it property, shares or even business. Put things
in proper perspective. Be ready to sell at your targeted price.
Be wary when you have friends who say things like, “My car
is my wife,” or, “My house is my wife,” or, “That is a good
share; I think I’d better hold on to it a bit longer.” Being
emotional will cloud your judgment and override your cal-
culations which are based on the figures that will make your
investment profitable.

Even though all the above types of investments are different,

the underlying skill of managing risks is inherently similar.
With the above streams of income pouring in for you, retire-
ment is now well within reach. While you may learn all the
ways of investing at the same time, it is wise to concentrate
on one particular form of investment first and become good
at it.
Andrew Chia 152

17th Secret
In order to be financially free, you must learn, prac-
tise and master at least one way of generating resid-
ual income.

A lot of people find posters of their favourite “retirement

poses” like this one very motivating. They have one close
by to remind themselves to work towards it in the shortest
possible time.
 18
We Need Two Jobs

We need to be hardworking as the ants but having two jobs

may prove to be too strenuous for most people.

Working to earn an income means working for our company.

Working to pay tax means working for the Government.
Working to pay our liabilities means working for the bank.
We should work for ourselves!

In 1974, Ray Kroc, the founder of McDonald’s, stunned the

world when he said, “My business is actually real estate
and not hamburgers!” Today, many people know that
McDonald’s makes more money from real estate than selling
burgers, thus real estate is their actual business. We can take
a lesson from this revelation.

If you do not have passive income, you will not be able to

retire. (This is true, unless you have inherited a handsome
amount of money from your ancestors, and you are spending
Andrew Chia 154

it at a controlled pace.) It makes no difference whether you

are an entrepreneur or just an employee, you will have to
continue working to support yourself. You may need to con-
tinue working even after your retirement if you have to sup-
port your loved ones.

The problem of not having passive income is more serious

than you may think. It is not just about being unable to
retire. Imagine what will happen if you fall sick and are faced
with a sudden loss of income. You will run into problems
immediately, and your retirement may still be a long way off.

Most people have a secret fear of sickness and disease. This

fear is compounded when one thinks of the subsequent loss
of income that may arise.

You will need to heavily insure yourself to protect against

sudden loss of income. The irony is this – people who need
insurance the most are often the people who can’t afford it,
and vice-versa.

In order to be rich, we need to look for another job for our

 155 Money Secrets

money to work at, while we are doing our daily work. That
should be our actual business, not our day job.

If you are an employee, you must make a serious attempt

to re-evaluate the term ‘job security’. We all need financial
security but is it really true that financial security is found in
job security alone? That is what all of us have been taught
in the family or in school. Money working in the bank’s fixed
deposit account will pay a mere 2.50% a year (currently),
with no other benefits. Money working in properties may
pay out 10% a year in rental plus high bonuses in terms of
appreciation. Money working in the stock market may earn
dividends, bonuses in the form of capital appreciation, and
other benefits such as rights and bonus issues. Money work-
ing in a business as capital may get paid in profits.

Don’t find another job for yourself; find a job for your money
today. That is how the rich do it.

If you are an investor, that is all you need to do – make your

money work hard for you.

Statistics show that most people have at least $100,000 in

their EPF or CPF when they retire. It also shows that they
spend all their retirement money within three years after
they retire. The amount they spend on living expenses or
blow on bad investments vary with each retiree.

Everyone who retires would love to have their money work

for them. They dream of “money making money” for them.
However, most people are not aware of the danger of wrong
investment decisions. In their haste to generate returns,
risks are non-existent. They soon find their bank account
depleted and are left to mourn their loss. They may then
have to postpone their retirement plans, usually after putting
the blame squarely on fate.
Andrew Chia 156

I hope I can show you an example of making money work for

you that could apply to any retiree.

First of all, I assume that you have only $50,000 in your

retirement account. I believe more than 90% of people
would have this amount.

Now, what can you do with such a small amount? Let us

take one of the most common forms of investment - prop-
erty. Well, you may say, “What can I buy with such a small
amount?” You will be surprised.

Commercial properties generally give you the highest rent-

als as well as capital appreciation compared to other types
of property. It should be the aim of a property investor to at
least own one commercial property. However, this type of
property is not affordable to investors with small capital like
in our example. But most property investors do not venture
straight into commercial properties; they start small and
build up their knowledge and confidence from there.

So, we are going to start with what we call the “entry-level”

type of properties, that is, apartments. These are currently
valued at around RM50,000 to RM80,000 in Kuala Lumpur.
You cannot go much lower than that; so that would give you
no excuse to say that you don’t have the capital.

Currently, you may borrow up to 90% of the value of the

property. (You may have to park your properties under the
names of your children who are younger and can qualify for
a longer loan repayment period, thus lowering your monthly
instalment amount.) If you buy a property valued at say,
RM60,000, you would need cash of RM6,000 only. Let us
say that the other costs such as agreements, stamping, etc.
come up to another RM4,000, making it a total capital outlay
 157 Money Secrets

of RM10,000 which you would have to come up with. With

a retirement fund of RM50,000 you can actually buy five
properties!

Anyone can do it. Believe me, there is no catch. But you need
to make sure the following criteria are first met:-
1. As mentioned in the earlier chapter, your return on
investment (ROI) must be at least double that of the pre-
vailing fixed deposit rate.

2. Your ten months’ income from rental must be sufficient

to pay twelve months of bank instalments.

3. One of the critical features of your property (because it is

a low-end property), is that it should be located near to
public transport systems such as buses, LRTs or MRTs.
This would ensure that it would be easily rented out.

4. You must learn how to secure a tenant that pays promptly

and regularly. You need to also learn how to quickly
evict a delinquent tenant, because despite what you have
learnt, and no matter how careful you are, you may still
come across these bad guys.

Just a reminder: do not think that the few paragraphs above

can exempt you from doing your homework of viewing a
hundred properties before you succeed in property invest-
ment. You may consider this the catch, if you wish.

Let us fast forward ten years now. You are still in your six-
ties; hardly considered old. You have five properties, assum-
ing you have stopped buying. Each property is generating
positive cashflow of say, RM50 each a month, making it
RM250 of passive income each month. Although this can
hardly be considered impressive, remember, you are not
doing any work. If you have done your homework properly,
Andrew Chia 158

your tenants should be banking in rentals into your account

promptly each month.

Your loans for the five properties would have been reduced
from RM54,000 to RM35,000, assuming you borrow 90%
for only twenty years at a high interest rate of 8% p.a. Rental
is RM500 and monthly instalment is RM450.

Research suggests that your type of property doubles its

price at an average of about eleven years. Your property may
worth about RM500,000 and you are only owing the banks
RM175,000.

By now you are a savvy property investor. The word risk is

like an animal under your total control. You would not hesi-
tate to approach the banks and leverage your RM500,000
worth of properties to secure more income-generating assets.

Treat your money as slaves; drive them mercilessly. Make

them work hard for you. But first, you must get them a good
job. Property is just one of the better jobs. You may find
other equally high-paying jobs for your money.
 159 Money Secrets

18th Secret
Get a good job for your money today.

People are reaching their breaking point both physically

and mentally by taking up extra jobs besides their day job.
Don’t do that; it is bad for health. Don’t get another job for
yourself. Get one for your money. Soon you will not need
to work anymore.
 19
Tsunami!

The tsunami is one of nature’s most powerful phenomena.

Have you seen a tsunami before? Most of us haven’t. Those

images that you see on the e-mails sent by your friends don’t
count. Have you actually seen the waves coming in from the
sea and hitting the shores?

It was just like any other day. Men and women were going
about their daily chores. The kids were happily playing on
the beach, oblivious to any impending danger. Suddenly an
old man felt the slightest of tremors going through his feet.
He flashed a hurried glance at the horizon. Something was
amiss. Instinct told him that something unusual was about
to happen.

He had been there before in his younger days and he had

barely survived when the monstrous waves had hit his
humble home. He shuddered as he recalled the images of
 161 Money Secrets

horror those waves had brought. Now, he kept his cool and
patiently surveyed the seas one more time. Its unusual calm
worried him as he looked for more signs. Far at the horizon
he spotted it.

He began to alert his friends but they failed to see what he

saw. He grew more impatient and agitated with each pass-
ing second. He started to shout at the top of his voice to get
people to evacuate. For some, his panic was getting becom-
ing infectious as they saw the terror in his eyes. They started
packing and running.

However, most just stayed on and busied themselves with

their daily chores. They were busy, that is why they ignored
the paranoid old man who was shouting crazily. It was almost
half an hour later when some people noticed the strange
sight out at sea. Never before had they seen anything like it.
It looked like a wave but no wave could ever be that big. The
sight was marvellous. In fact, it looked anything but deadly.
Everyone was rooted as they admired this seemingly won-
derful creation of nature.

Too late! It was only when the waves started to rip apart
boats like matchboxes in the distance that they realised the
force and fury of a tsunami. People started panicking and
screaming as they ran away from the shores.

About 300,000 people from eleven countries died in that

tsunami on December 26, 2004.

Have you experienced an economic tsunami before? Most

of us have not. The last time it hit was more than 80 years
ago when most of us were not even born yet. The year 1929
is firmly etched into the memories of every economics stu-
dent. It was the year of the Great Depression in the US. It
was Black Tuesday on 29th October 1929, when the US stock
Andrew Chia 162

market crashed, ushering in the unforgettable era called the

Great Depression which finally ended about a decade later,
around 1939.

Black Tuesday was the day the tsunami crashed onto the
shores but the tidal waves had been created much earlier,
although no one seemed to notice. Amongst other factors
was the very high debt that people owed at that time. And
the stock market was making all-time highs every other day.
Most stocks were over-valued by almost 25 times!

Most of us here in Malaysia are not aware of the debt that

Americans are allowed to carry. Take housing loans for
example. Most of you would understand that the banks
allow you a third of your income to go towards servicing
monthly instalments. If your salary is $3,000, your monthly
instalments should not be more than $1,000, otherwise your
application for a housing loan would not be approved. In the
US you are allowed two-thirds, that is, $2,000 out of a salary
of $3,000. Does that make any sense to you?

In the old days, most loans were repaid within fifteen to

twenty years. Today, you may borrow up to age 65. If you
are 25 years old, that makes it a 40-year loan. In the US, you
may borrow up to 50 years! Again, does that make any sense
to you? Is it any mystery why they have a subprime crisis?
Subprime is their word for housing.

If you think the problem is contained within the US alone,

you will be surprised to know that most of Europe adopts
the same banking policies as the US. Is it any wonder that
giant banking institutions, such as Bear Stearns in the US
and Northern Rock in the UK, have fallen and require mas-
sive bailouts from their governments? Now, if you are unable
to pay your housing loans, you can always rely on your credit
cards. Fortune magazine estimates these two “animals” to
 163 Money Secrets

be worth US$900 billion each. Yes, Fortune says subprime

problem is $900 billion, credit card problem is also $900
billion. Total $1.8 trillion. Because it is just an estimate, the
actual figures could be more than that.

Look at the horizon again. Do you see anything? What about

the lifestyle of the Americans? Their savings rate is a mere
1% of their GDP compared to about 30% in some Asian coun-
tries, like China and Malaysia. Japan has got the highest sav-
ings rate in the world. What does that tell us? Americans are
spending as if there is no tomorrow. It would be fine if we
spend within our means, but if we spend borrowed money,
like on credit cards, we should expect problems later on.

Let’s take a look at the Dow Jones. (I know some of you may
be more familiar with Tom Jones.) The Dow Jones Industrial
Average (DJIA) is the US equivalent of our Bursa Malaysia
(previously known as Kuala Lumpur Composite Index
(KLCI). They measure the general performance of stocks in
the countries. DJIA has a history of more than 100 years. In
2000, it reached a historical high of about 12,000 points. We
all know what happened after that. Dotcom crash, remem-
ber? If stocks were over-valued at 25 times during the Great
Depression, it was 100 times during the Dotcom Crash. Does
that make any... ah, never mind.

The DJIA continued its drop for three years. It went from
12,000 points and reached to about 7,000 points in 2003
before rebounding back. In late 2006, it surpassed the high
created in the year 2000. The Bull Run was so impressive
that it even surpassed the 14,000-point mark in late 2007.
When this book was first written in mid-2008, the DJIA is
hovering around 11,000 points. It crashed down to 6,500
subsequently. Today it has somewhat recovered to 12,000
points again. However, those problems that we have men-
tioned earlier such as high debts, low savings rate and bad
Andrew Chia 164

spending habits have not been addressed yet. In fact, it has

gotten steadily worse.

Are you feeling slightly nervous now?

There are many other creatures of the night hiding in

the closet of the US economy. The biggest problem being
Medicare, followed by Social Security, the huge current
account deficit, and the list goes on. If you are wondering
what the US has got to do with us, ask any economist. He will
most probably tell you that the US will bring down almost
everyone else with it, just like it did in 1929.

Let us rewind the tape to take a look at the previous dev-

astation in 1929. Overnight, businessmen and investors
lost everything, including their pants. Brokers were fished
out of the Hudson River by the dozens. If you lived around
that time, you would probably have heard of the term ‘high
jumpers’. No, they were not athletes or bungee jumpers,
but brokers who jumped off high buildings. Millions were
retrenched from factories. Scenes of unemployed people
lining up by the hundreds to get a piece of free bread and
a cup of hot coffee were common. Construction came to a
grinding halt. International trade declined sharply, as did
personal incomes, tax revenues, prices and profits. Massive
withdrawals followed the run on the banks as depositors
panicked. 9,000 banks failed and depositors lost USD$140
billion in deposits. Crime rates shot up and people were liv-
ing in fear.
 165 Money Secrets

Unemployed people lining up for donuts and a cup of hot

coffee during the Great Depression.

If the above is not enough to frighten you, let me now let loose
the ‘old man’ who has been there before. He tells us that
the coming economic tsunami will be worse that the Great
Depression. Thanks to the Information Age, you can read all
about him, his prophecies and updates at www.georgesoros.
com. (Of course, when this book was first written, his predic-
tions have not yet been proven correct. It was subsequently
correct on every count.)

Mind you, he is not the only ‘old man’ saying this. The Asian
financial crisis may still be fresh on most people’s minds.
It started in Thailand with the currency and stock market
crash in April 1997. Not many people in Malaysia bothered;
after all Thailand is ‘so far away’. The ‘Tomyam Effect’, as it
was nicknamed by economists, infected South Korea before
hitting Indonesia and Malaysia. We felt the full effect in
September 1997, when our stock market crashed.

The signs then were almost the same as before any stock
market crash as almost everyone over-borrowed. It was very
easy to get business loans approved in the couple of years
Andrew Chia 166

before 1997. Most businesses in Malaysia were heavily in

debt, yet at the same time there was euphoria because mar-
ket sentiment was very good. Suppliers trusted customers,
and banks trusted borrowers. There were jobs and projects
all around. High-end eating places were always packed. Spa
operators were really raking in the cash as speculators went
for their ‘sparring’ sessions in groups immediately after 5
o’clock each day, after making their killing in the stock mar-
ket. the stock market was at an all-time high at 1,400 points,
with the whole bourse acting as one big Bull’s Eye.

What goes up must land somewhere. Malaysia had to resort

to Danaharta to solve the banks’ NPLs problems. (Some
people think that the Danaharta idea was very innovative.
Actually, it was copied from the Resolution Trust Corp of
the US which had the same problem much earlier in 1989.)
NPLs means non-performing loans or loans that have gone
bad. Billions of loans had to be thrown into Danaharta in a
massive exercise to clean up the banks’ balance sheets.

I was trying to apply for a business loan from a bank on behalf

of my customers during that time. One banker told me,
“Your customer’s balance sheet is stronger than our bank’s.
We now have negative NTA because of our NPLs.” (NTA is
net tangible assets.) Needless to say, the loan was “rejected”.

The Malaysian stock market then went down from 1,400

points to 286 points!

I have always preferred comedies to horror movies. So, don’t

get me wrong, it is not my intention to frighten anybody. Let
us set a few points straight.

Lesson No. 1 - Never make predictions on timing. We may

know for certain that an event such as a recession is about
to happen. But we will never know when. There were many
 167 Money Secrets

‘heroes’ who correctly predicted market timing. But among

the miserable failures were notable economists, central
bankers and some of the world’s greatest investors.

For every “doomsday” prediction, there is an equally sunny

prophecy, although some may sound far-fetched. Some say
crude oil, which is considered very expensive today, will soon
be used for bathing purposes only, as they find alternative
sources of fuel such as nuclear (as in Iron Man, the movie),
or water. Larry King just interviewed a professor who is pos-
itive he saw a UFO. Aliens, it seems, have been around Earth
for quite some time now. With their superior technology,
problems like global warming will soon be a thing of the past.

There is one thing about scientists though; these guys are

really capable. One of the things that they might have dis-
covered is scalar energy. As in scalar pendants - have you
heard of them? (Shhh... some say it’s a scam.) Not only can
it solve the oil problem, it can also cure all diseases. If you
do happen to have a sleepless night, entertain yourself with
these...

http://www.prahlad.org/pub/bearden/scalar_wars.htm
http://www.rense.com/general39/scalarenergy.htm

But don’t get carried away, though. For example, if they really
had super heroes, they would have brought on Ultraman to
put out the fire at Bear Stearns, the gigantic bank. Instead,
the US government had to resort to good old bailout.
Andrew Chia 168

Who could have saved Bear Stearns? None other than Ultra
Man!

Lesson No. 2 – Be prepared. (There is great wisdom in this

Scouts Motto which we learned in school.) Gamblers and
speculators predict. They may fold their hands and wait until
the cows come home for their predictions to come true. True
investors get prepared. What can we do to get prepared for a
tsunami? Run to higher ground. Now, how do we do that?

Go into austerity mode. Start saving. Cut down on unneces-

sary spending, but don’t stinge. Spend cheerfully on neces-
sities but avoid expensive meals and go slow on vacations,
especially overseas ones. Curb your addiction to gadgets like
fashionable cameras and mobile phones. Stop pretending
to be the next Malaysian Idol by having a unique wardrobe
for each of the 365 days in a year. Don’t deceive yourself
by thinking your expensive car consumes as little petrol as a
Kancil.

Start shopping for assets. Look for cash flow generating

properties to buy. Scoop up high dividend-yielding shares
selling at a fraction of its valuation. If you can’t find them
yet, wait. Study viable businesses selling essential products
to the rich. (Many people make the mistake of trying to run
businesses catering to the poor during bad times. Succeeding
 169 Money Secrets

is possible, but not likely. It is simply difficult to make money

from the poor because by definition they don’t have much.)

When investing, plan your exit by asking yourself the ques-

tion, what will happen if a tsunami arrives tomorrow and
my investment gets stuck for ten years or more? Work out
your strategies from there. The most successful investors in
the world constantly ask themselves this question. They are
masters of the little-known art called “eventuality planning”.
Well, you may ask, what is the difference between planning
by taking into consideration a tsunami is coming, and nor-
mal planning? There you are – you have just uncovered the
secret found in this chapter – there is no difference.

You should save regardless of whether a tsunami is coming

or not. You should also be thrifty at all times. You should
always invest by assuming a tsunami is coming because it is
risky to do otherwise. Meditate on this: your profit is made
when you buy, not when you sell.

You should learn everything about business and investing

whether or not a tsunami is expected to hit us tomorrow. The
only difference perhaps is that we should inject speed into
the equation. The more convinced you are that a tsunami is
hitting us soon, the faster you will hurry to equip yourself and
accumulate assets. Imagine this, if the stock market crashes
tomorrow, which shares would you buy? I’m sure you would
have heard this, “If I knew, I would have bought Maybank in
1997 when it was RM3.00.” The phrase “if I knew” is one of
the most worn-out phrases in investment terminology.

Bear in mind, the stock market does not crash from 1,400 to
286 overnight. What would you do when it is at 1,000, 800,
600 or 400 points? Would you buy, sell or hold? Remember,
at any point in time you would not know what will happen
the next day or the next month. There could be a reversal. A
Andrew Chia 170

reversal is a technical term for market changing trends.

Performance of the Kuala Lumpur stock exchange from

1994 to 2008.

Be prepared now; which shares would you buy, when and

how much should you buy them at? What would you do after
you have bought if a share is going up, down, or sideways?
Would you continue to buy, sell or hold? What if there is no
crash? Would you have bought the same shares? All these
questions are food for thought, aren’t they? Go on now, be a
good investor. Do your homework so that you will be ahead
of others should a tsunami arrive tomorrow.
 171 Money Secrets

19th Secret
Be prepared for an economic tsunami.

Some people would start running when a tsunami is a hun-

dred miles away. Some would only run when it is a hundred
feet away. How about you?
 20
Bucks ‘N’ Dough

The idea of financial freedom is not new; it has been discov-

ered even in the days of the ancient hunters.

In the olden days, hunters got up each morning, kissed their

wives goodbye and set out to hunt for deer. Now, a male deer
is called a buck and a female deer is called a doe.

Today, hundreds of years later, nothing has changed. Modern

men, and women, are still charging out the door after saying
goodbye to their loved ones. They run off to work to get a
few bucks so that they can have enough dough to put food on
the table. The difference is that they sometimes carry papers
or notebooks instead of bows and arrows. (Even notebooks
used to have a different meaning not too long ago.)
 173 Money Secrets

Let’s go back to the past. One day, our hunter had an idea.
Why waste time chasing bucks? He took time to build a fence
to form a holding pen. Then he went and captured some deer
and put them there. His friends laughed at him for working
so hard. You know, on top of his day job of hunting deer he
had to work overtime to build the pen. This was hard work.

His deer grew, he took down his original pen and built a
larger pen. Even more work. But he never grumbled. He
fed and cared for his deer. Soon, his herd grew to large num-
bers and he never had to hunt again. He then kept selling his
deer and he and his wife lived happily ever after. The End.

More than 90% of the world’s population today are like our
hunter in his early days. They slog day and night just to earn
a living, never giving any thought to how they can live with-
out working. The idea is simply way over their heads. When
the hunter was building a pen to hold his deer which would
be giving birth to more deer, they simply laughed at him.
They just could not figure out what he was trying to do, even
though the idea was staring them in the face every day.

You should not be surprised to find that even after his friends
had bought deer from him, most of them were still hunting
deer instead of setting up a ranch like he did.

Similarly, when you are trying to build a stream of residual

income, most of your friends will not understand what you
are doing. You do not need to be secretive about it at all; you
don’t need to worry that they may be jealous of you getting
income without working. (Usually they would be either skep-
tical or cynical.) Instead, you should try your best explain-
ing to them, and in the process entertain yourself with their
blank stares. Only when they have grasped the idea of assets
and liabilities as outlined in Chapter 6, will they start to
understand what you are trying to do.
Andrew Chia 174

Never underestimate the subject of financial intelligence

that you are studying right now. Just as a student would not
understand multiplication and division without first under-
standing addition and subtraction, one would not under-
stand residual income without first understanding assets
and liabilities.

The pen that the hunter built represents the streams of resid-
ual income that are detailed in Chapter 17.

20th Secret
Things only become better after they become worse.
- Rico Ho

May you have huge streams of income that never end.

 21
It’s Only Words

Words are one of the most powerful things in the Universe

The Bee Gees sang, “It’s only words, and words are all I have
to take your heart away.”

That is the power of words.

Words, or vocabulary, can help us make money. Doctors,

lawyers and engineers, computer programmers and car
mechanics, all have their own vocabulary. This techie lingo
or technical jargon helps them communicate important ideas
efficiently. A single word may take an hour of explanation.
Similarly, in the money world there are certain words that
Andrew Chia 176

can cause money to appear seemingly out of nowhere.

Without knowing some of these words, it would be very dif-

ficult to make money. These are the words we use in our
money world. Sometimes you could be missing out real
opportunities to make money simply because you are not
able to understand what your businessmen and investor
friends are talking about. They could be using common, but
very important, money lingo such as ROI. You just stand
there “blur blur” as they say.

The more of the following words you understand, the richer

you could be. It’s funny how people want to play the money
game yet don’t understand important terms like “Rule of 72”.
Here are more such important words:

Assessment, Bulls/Bears, Candlesticks, Cash flow, Call and

Put, Capital Gains, Circle of Competence, Compounding,
Contract, Dividends, Double Tops and Double Bottoms, Dow
Jones and S&P, Earnings, EPS, Forex and Commodities,
Freehold/Leasehold, Fundamental and Technical Analysis,
Hedge, Instruments and Vehicles, Margin of Safety,
Motivated Sellers, Moving Averages, NPM, NTA, Options
& Futures, Patents, P/E Ratios, Positioning, Quit Rent,
Reversals, RPGT, ROI, RSI, Share Splits, Ticker Symbols,
Trends, USP, Transaction Volume.

With the advent of the Internet, information is now easily

available to anyone with broadband connection. It would
be worth your while to google the above terms used in the
investment world. An increased investment vocabulary will
open up a whole new world of opportunities. You may treat
this exercise as your homework for today.

A comparison of the words used by the rich and the poor is

found in a later chapter.
 177 Money Secrets

21st Secret
Words and vocabulary are essential in making
money.

The key to successful investing is to know more of the impor-

tant jargon used by financial people so that you are able to
recognise and capitalise on opportunities when they come
your way.
 22
Eliminate Guesstimations

Guesswork and estimations are very dangerous in our

money world.

Carelessness with figures can cause us to lose a lot of money.

I believe it is very easy for people to lose track of their money

if they are not careful. For example, a guy may have $10,000
in his account. He then spends a few hundred bucks here
and a few hundred there. He may then have a rough estimate
that his bank balance is say, $8,000. “I didn’t really spend
much money; only a few hundred dollars once in a while.”
When he actually checks, he may be surprised to find that he
has only a balance of $5,000 left, or even less.

The results become worse when opinions are mixed with facts
and rough estimates taken for actual figures. Throw in some
emotions and we can see how some poor people remain poor
all their lives. Let us take a look at some common scenarios
 179 Money Secrets

and compare the thinking habits of the rich and poor.

The poor says, “Winning in shares is simple - just buy low

and sell high.”
The rich asks, “Exactly how low is low?”

The poor says, “I really love this house that I’m staying in
right now. My family feel very peaceful and comfortable.”
The rich asks, “How much did you pay for all the
renovations? Would you be able to sell it at a good
price should you need the cash?”

The poor says, “ABC Company has just secured a contract

to supply goods to the government. Its share price will sky-
rocket tomorrow once the other guys get to know about it.
You should buy now!”
The rich asks, “What are the goods involved? How
big is the contract? How much money will they
make, within what time frame? With this earning,
how much would their share price be worth?”

The poor says, “That is a good share. Everyone says so. We

should buy it now and make a killing before it is too late.”
The rich asks, “What is the price today? What is the
actual value of the share that we should be buying?
When exactly should we be selling?”

The poor says, “My friend receives a lot of money from prop-
erty rental. We should buy a property, too, and start making
money. Collecting rental is very good business - you don’t
need to work at all.”
The rich asks, “What is the ROI for this property
you are going to buy? How much can we rent it
for? What is the monthly instalment?”

The poor says, “If you buy that property from the developer
Andrew Chia 180

at a discount, you can resell it at a very high price and make

lots of money. That is almost like instant cash.”
The rich asks, “What are the discounted buying
price and the forced sale value for that property?”
The poor says, “If we put in big capital into this forex trade,
we can make a huge killing in a very short time.”
The rich asks, “What would be the highest possible
return on my capital invested in this given time
frame? At what point should we cut losses?”

The poor says, “If we have the capital to start this business,
we would be able to capture and monopolize the market.
That simply means ultra profits.”
The rich asks, “Do we have a unique selling propo-
sition for our product? How fast can our competi-
tors come up with a similar product? What if they
start a price war?”

The poor says, “The proposed property is very near to town;

there is tremendous potential for development. Quick, we
should buy it before anyone else does.”
The rich asks, “How many kilometres is it located
from town? How many metres is it above the trunk
road so as to be visible to traffic? Exactly how many
entrances can the property be accessed from? How
many parking lots would there be?”

The above are just a few common examples. We will come

across numerous examples in our everyday life where people
are just careless when it comes to facts and figures. I person-
ally think that this is one of the main contributing factors
that prevent people from having financial success.

The other dangerous word is “assume”. To make things

worse, sometimes we make assumptions without even know-
ing that we have made them. For example, one day I made
 181 Money Secrets

an appointment with a friend to meet at the Shell petrol sta-

tion at Taman Danau Kota. I was not aware that there are
two Shell stations at that taman. I waited for my friend at
station one and he was at station two waiting for me. He,
too, did not know that there were two Shell stations. You can
imagine the shouting match that ensued before we finally
managed to meet up.

The above is just a trivial example. Imagine buying a prop-

erty and assuming you can fetch a rental of RM2,000 when
that is the rental going for the adjacent block of houses; yours
can only fetch half of that! That is why whenever substantial
money is involved in an investment, we must double-check
not only our facts and figures, but also our assumptions.

22nd Secret
You must be careful and accurate with your facts
and figures, and also your assumptions.

It is always dangerous to assume things in our money

world.
 23
Get Into The Habit

Habits determine our destiny.

Habits control our lives. If we want to be successful, we

need to build good habits. Busy people are often lazy people!
People stay busy to avoid something they do not want to face.
Sometimes stopping for a moment is harder than staying
busy. Don’t be lazy because dreams come true only for those
who really try.

Saying something is risky may also be saying, “I am too lazy

to study the subject.” However, there is a cure for laziness. It
is to get a little greedy. If you are working at a day job, culti-
vate a habit of asking and learning everything about your job.
This knowledge may one day enable you to be your own boss.
Once you know everything about your job, your company,
your products and your industry, you are an expert in your
 183 Money Secrets

field, and the possibilities could be endless.

Good attitudes, like being humble, will help us keep an open

mind and learn. When we are proud, we start thinking that
what we don’t know is not important. When we pretend to be
smart, we are at the height of our stupidity. We should not
allow our schooling to get in the way of our education.

Renowned futurist writer, Alvin Toffler, who visited our

country during the middle of 90’s, he had this to say, “The
illiterate of the 21st Century will not be those who cannot
read and write, but those who cannot learn, unlearn and
re-learn.”

Here is a glaring example of this. Today, there are many

three-year- olds (I personally have seen them myself) who
can switch on the computer, key in the password, call up
the browser, click on their favourite online game and start
having fun. In contrast, there are a lot of highly educated
professionals who are unable to perform even the first task,
that is, switch on the computer. They have simply become
“illiterate”. They freeze at the thought of having to send an
e-mail. Of course, the thought of having to receive an email
is equally terrifying.

When it comes to money, don’t be shy to say, “I don’t know.”

Between being embarrassed and losing money, always
choose being embarrassed – it’s cheaper. I have discovered
two magic words, “Teach me.” Whenever I recite these two
words, I am always amazed at how fast people come to help
me understand what I don’t know. It works better than,
“Open sesame!” or even “Abracadabra!”

One of the humblest guys I have ever come across is Tan

Sri Dr Lin See Yan, the former Deputy Governor of Bank
Negara. When we invited him to be a speaker at one of our
Andrew Chia 184

SMI seminars, we had to go to Bank Negara to brief him on

the topic. When my partner and I reached Bank Negara, we
were surprised to find that the security guards at the lobby
had been told about our appointment with him. We were
escorted up the lift to his office. In the middle of his office
was this awesome tropical hardwood table that was cluttered
with books and journals about a foot high. I reckoned there
were easily more than a hundred books. We casually asked
whether he had time to read so many books. He informed us
that he had contributed articles in every single one of those
books and that all those books had been sent to him as com-
plimentary copies!

We fished out our profile on Tan Sri Dr Lin. His profile reads,
“Tan Sri Professor Dr Lin See Yan, Deputy Governor...” As we
needed to introduce him properly on the day of the seminar,
we proceeded to ask him how we should address him, since
he has such a long title. He said, “You can call me Tan Sri, or
Professor or Dr Lin. Or you can just call me Mr Lin.” Such
humility! We were impressed and thankful that although he
was such a busy man, he still had the time to enlighten us
with a little lecture on the banking system. Today, we call
him “Dr Lin” whenever we see him at one of his favourite
eateries in Kuala Lumpur.

Choose our circle of friends carefully

To cultivate good habits and attitudes, we should also

choose our friends carefully. Spend time with people who
have knowledge. Don’t listen to poor or frightened people.
Sometimes we need to stop doing what we are doing. If we
are using a formula that is not making money, please Stop!
The definition of madness is: doing the same thing (and the
wrong thing) over and over again, and expecting a different
result. There is a Malay saying, “kembali ke pangkal jalan”
 185 Money Secrets

which means that if we are on the wrong track, we should go

back to the starting point. People think that since they have
already started, they would reach their destination faster if
they just continue from where they are, even though they are
on the wrong track. Actually, it is faster if we start over again.

You will find a lot of people swallowed up in over-crowded

businesses like printing or selling mobile phones. They
keep complaining that it is too competitive and margins are
razor-thin, but they make no effort to start anew in a bet-
ter environment. The mobile phone guys are saying it is too
late to change because they are too old and don’t know any
other trade. Mind you, they are only in their twenties. And
the many from the printing industry are collapsing under
the weight of giving too many terms to their customers.
They make enough just to keep paying instalments for their
beloved Heidelbergs. (A well known German-made brand
of printing machine) Of course, these guys won’t change
because they are usually in their fifties.

Make it a habit to think; use the power of your mind to make

you rich. Instead, too many people use the power of their
minds to make themselves poor.

Make it a habit to take action immediately once you learn

that some changes need to be done in your way of making
money. The most life-destroying word of all is the word
“tomorrow”. It destroys more lives than any other word.
Tomorrows only exist in the minds of dreamers and losers.
Winners take action today.
Andrew Chia 186

23rd Secret
Develop good habits today. They go a long way in
helping you achieve financial success.

If we are not successful financially, one of the first things we

should look at is our daily habits.
 24
Strictly Business

Business is the crucial link to making money in our world

You want to make money by investing but don’t want to learn

about business? Well, it is like saying I hate chicken but I
like KFC meals. What has business got to do with making
money and investing? Everything.

All investments can ultimately be traced back to business.

You will not be able to invest in properties without under-

standing the business and development of the particular
location. Warren Buffett does not invest in shares; he invests
in the business of the companies. Li Ka Shing only invests
in property when he feels that the location has got business
potential. The interest rates of banks and mutual funds
are also determined by demand and supply in the business
marketplace. Even employees work for bosses who are in
Andrew Chia 188

business.

Investment is most intelligent when it is most businesslike.

Business is a very complex topic because it involves people.
But before you give up, rest assured that you do not need a
business degree before you can start making money. To be
a scientist, a doctor, an engineer or a lawyer, you need to
have high IQ. Successful investing does not require high IQ,
unusual business insights or inside information.

There are many books written on this vast topic of business.

I will not go into any detail except to outline for you the sub-
topics and what they cover.

But first let us remind ourselves the sage advice found in the
book Never Say I Assume! It states at the onset that no book
can make us a success in business.

Broadly, business involves marketing, production and

finance.

Marketing is the study of how to get customers to buy your

products or services. Therefore, all books on marketing are
business books. Among the topics covered under market-
ing are positioning, branding, differentiating your products
against your competitors’, pricing, different ways of distrib-
uting your products and packaging.

Once your customers buy from you, you need to ensure your
products or services are produced and delivered efficiently to
them. Among the topics covered under production are plan-
ning and forecasting, quality control, production systems
such as JIT (just-in-time) and ISO 9000, communicating
and motivating your production staff, customer service, and
many others.
 189 Money Secrets

The financial part of business is also very important.

Allocation of capital and securing loans for the business
could be an important part of the equation in ensuring that
your marketing war gets the appropriate funding and your
production system is efficient.

All the books covering the topics and sub-topics mentioned

above fall under the category of business.

I will now attempt to give you a few tips about business on

topics which I feel are not well-covered in books about busi-
ness. But before I start I would like you to ask yourself an
important question prior to starting a business, “Would I
do my best to ensure that I succeed in business on the first
attempt?”

Why do I want you to ask yourself that question? It is to

save you time wasted by sloppy thinking. Even the best busi-
nessmen today usually do not succeed on their first attempt.
That might prompt many people to simply jump into busi-
ness without meticulous planning. “Well, chances are I am
going to fail anyway. So why bother so much? I am going to
just give it a try and learn from my mistakes along the way.”

Well, first of all I must congratulate you for taking action.

Taking action is one of the important characteristics of any
successful person. But if you jump into the wrong business
at the wrong time and without proper planning, you are
going to have a lot of heartache later. The business that you
have set up usually cannot be abandoned just like that. You
may have paid for dealership. You have spent lots of time
learning about the industry. Changing industry is painful.
You may have hired and trained many staff. You might find it
hard to sack all of them. You may have customers owing you
money. If you stop business, they may stop paying you. You
may have partners who would like to continue the business.
Andrew Chia 190

You see the amount of baggage you are going to carry later
on?

The words of my property mentor will always be in my heart.

“Do it right the first time, and every time,” she says.

Perhaps you would like to consider the following few points

before you start your business?

Trend. What is a trend? Why is trend important? What

drives a trend? What is the trend today? A trend is like
waves of the ocean. The first wave hits the shores and you
can be sure all the other waves are going to follow soon, one
after another. It is important to stay in front of the trend,
simply because it takes less effort to succeed. I have a friend
who joined the insurance industry a couple of years back.
Her company had just launched a new product which allows
their customers to save money with good returns, using their
statutory retirement funds. She did not have any prior sales
experience but still managed to make almost a million dol-
lars in commission. Today, her sales skills are still far from
impressive.

When one stays in front of the trend the chances of success

are greater. On the other hand, if one enters an industry that
is matured, he can still succeed, but it may require greater
skill, intelligence and hard work.

In the US, it is the “baby-boomers” that drive and control the

trend. In other parts of the world, this group of people also
plays a very important role in generating trends. Baby boom-
ers are defined as people born between the years 1946 and
1964. For the past few decades, they have been the people
with, perhaps, the greatest buying power.

When this group of people were young, baby and adolescent

 191 Money Secrets

products such as baby food, diapers, school uniforms and

toys were in great demand. Factories producing them made
good profits. When they were growing up, universities and
colleges made a lot of money educating them. When they
started working and got married, there was a housing boom.
They also needed cars. Today, they are reaching retirement
age and they need stuff like health care, weight-loss and
anti-aging products as well as financial security and retire-
ment planning. This list is by no means exhaustive. (For
example, they may need to learn how to use the Skype or
QQ programmes on the Internet so that they may be able
to see and talk to their grand children studying abroad.)
Businesses venturing into these industries right now have a
better chance of success. Five to ten years later, these indus-
tries may be too crowded and price wars may start.

Let me briefly mention the consequence of people who

entered into business without being aware of the trends.
Factories manufacturing baby products closed down because
they expected a continued demand of these products even
after the baby boomers had grown up. At one time, hous-
ing was in over-supply as developers extrapolated the hous-
ing trend, expecting the growth to be in a straight line. The
subsequent supply of houses was not taken up as they were
behind the trend. All these baby boomers have already
bought their houses.

Remember to stay in front of the trend, and your business

will have a better chance of success. Better still, stay in front
of the trend and look for a monopoly business and you will
be “shaking legs” for a long time. Is that too much to ask of
a new businessman? You are only limited by your boldness
and courage.

Lifespan. Many businesses have a lifespan. I have not come

across a business book telling you that. We love to assume
Andrew Chia 192

that the business that we start will continue for at least a

hundred years. We have seen some products which proudly
boast on their labels - established in 18xx, or even 17xx.

Technology is the main culprit in causing businesses to close

shop. Conventional cameras are replaced by digital ones.
Photo films are fighting extinction. Fax machines have been
replaced by e-mail and scanners. (Faxes usually cannot
transmit documents in colour.) People selling greeting cards
find it an uphill task going against e-mail and text message
greetings. If you are selling television sets, you may be luck-
ier; black and white TVs are replaced by colour sets, colour
sets are replaced by plasma and LCDs, the heavier sets are
replaced by lighter ones … but you are still selling TVs!

There are a few other factors that can cause a whole industry
to go out of business. For example, the advent of supermar-
kets and hypermarkets has caused a lot of sundry shops to
close. The rise of the upscale coffee shop chains is also caus-
ing many problems to the traditional coffee shops and even
mamak shops.

Be realistic, ask yourself how long you would like to operate

your business and take the necessary steps to make sure you
operate profitably beyond that.

In order to maximise returns and ensure efficiency, many

businessmen today do not consider their business as busi-
ness, but rather as a project which should be completed
within a certain time frame. When their project nears com-
pletion, they look for and embark on a new project.

Exit. This is something which almost no businessman

plans for. They think that exit means closing down. Nobody
starts a business with a plan to close it down. That would be
ridiculous. But exit does not mean closing down. It means
 193 Money Secrets

removing your winnings from the table. Businessmen need

to take a lesson from the professional gambler on Gambling
101 - your winnings are not your winnings until you have
removed them from the table.

A gambler can keep winning and have $100,000 on the

table. But until and unless he removes that $100,000 and
leaves the table, there is every chance that his $100,000 will
be given back to the banker.

Business (and every other form of investment for that mat-

ter) is the same. I have come across hundreds of business-
men in the course of my consultancy career, who have made
millions and lost it all; some even ended up as bankrupts.

These businessmen invariably expanded their operations

during good times when demand was strong. They failed to
answer questions (perhaps they never even asked) like: what
is the size of the market? Will there be a glut in supply if all
of us expand our operations? What if there is a recession in
the countries which are buying our stuff? In their excitement
and greed, they just expanded their factories, increased their
staff, and of course their bank loans together with the inter-
est payments.

However, what is mentioned in the above paragraph is

besides the point. They just failed to remove their winnings
from the table. They do not understand that financial intel-
ligence teaches us to gradually remove the profits and cash
flow from our businesses to put into our personal savings and
investments. Most businessmen do it the other way round.
During good times they take all their savings, mortgage their
bungalows and dump all these as capital to expand their
business. Money makes money, remember? And, if you want
more profits, you need more capital. They have not read our
earlier chapter which debunks this myth.
Andrew Chia 194

When bubbles burst (there are bubbles in almost every coun-

try on the planet), they start panicking and realise that their
business strategy is found wanting. Quite often, all their
funds are parked with a few “valuable” customers to whom
they have offered terms up to six months, with very high
credit limits. These are the customers who then default on
their commitments. I had a customer who lost $10 million
just like that, when a few of his main customers folded up.

When you start planning for your exit, that is the time when
you realise that you need a system to run your business.
Otherwise, you may be stuck at the table where your business
becomes one big casino with no exit in sight. When you start
planning for your business to run without you being there,
you are on course to becoming a successful businessman and
investor. Your business would then be your investment.

Of course, planning for an exit does not mean that you actu-
ally sell your business. You may choose to keep running your
business forever. But you have a choice.

If you are planning to start your own business, I wish you

all the best and much success. Lastly, remember, be careful
of paralysis of analysis - that is, do not analyse too much.
When you start out there will be a lot of things you will not be
able to foresee due to inexperience, despite careful planning.
Once you think you have done all the planning that you can,
take action! You may then look back and laugh at yourself at
all the silly mistakes you made; some of them will be really
naive. But you will taste the ultimate joy of business success.

24th Secret
Start learning about business today. Anything
that makes money can ultimately be traced back to
business.
 195 Money Secrets

The secret of making a lot of money is to have an intimate

understanding of the business world.
 25
Marketing 101

Coca Cola is one of the most successful marketing stories.

Business is about people, in particular, customers. Without

customers we would have no business. So, let us do first
things first.

Business shareholders, management and even staff will have

to take a number. Suppliers are very important people too. In
fact, sometimes we treat suppliers with more respect because
we really need them to provide products or services to our
customers. I remember the days when we were doing busi-
ness; we never expected our suppliers to come to our office.
They didn’t need to remind us to pay them. We personally
drove over to see them to hand over our payments. But they
too, will sometimes have to play second fiddle to customers,
 197 Money Secrets

who must always come first. No matter how important sup-

pliers are, it is the customers who pay us.

Bankers, lawyers, accountants, associates, government

authorities and everyone else, hang on. Let us focus on how
to get our customers in. That is what we have to learn in the
important topic of marketing. The most important special-
ised skills that you need to have are selling and understand-
ing marketing. We will cover selling in the next chapter. Let
us now explore the critical topic of marketing.

Before we go further, you should not confuse marketing with

sales. Sales may mean many things like one-to-one selling, or
a special offer that you normally see at shopping complexes.
Marketing is a big topic covering mainly strategies. Besides
that, it covers things like branding, choosing a name for your
product, advertising, pricing, packaging, quality, look and
feel of the product, or choosing your channels for distribut-
ing your products. For example, you may need to consider
whether to use a dealership network or multi-level market-
ing (MLM) system to sell your products.

Now, you may ask, “Marketing is such a vast subject, where

do we start?” That is true. Degree and diploma courses
take a few years to complete. And they have to do in-depth
studies on stuff like “The 4 P’s”, “SWOT Analysis” and even
“Positioning”. How much time do we need to spend study-
ing this important topic? Is there any shortcut? You are anx-
ious to know.

I have good news for you. You can now formulate market-
ing strategies just by applying the simple formula outlined
below. You may use this strategy in your daily observations
to analyse why other businesses are succeeding or failing. In
fact, it is a concept popularised in the 60’s by the chairman
of an advertising company by the name of Rosser Reeves.
Andrew Chia 198

Here is how he does it. He calls it the USP or Unique Selling

Proposition. We have modified it slightly to make it even
more powerful.

Rosser Reeves - the man who invented the famous USP

formula.

U = Ultimate Advantage (that differentiates your product/

service from your competitors). What is it that your
company or products have that others don’t? Most peo-
ple are unable to answer this but go ahead and run the
business anyway. (Again, laziness to think is the prob-
lem.) Stop! I am afraid you have no choice. You must
answer this. Your customers must understand clearly
and simply that they are buying from you because of
the one difference you have compared to your competi-
tors. No, “cheap” is not a differentiating factor. A lot of
people fall into this deadly trap. You should only start a
price war when you have absolutely no other alternative,
because in war there is always bloodshed.

S = Sensational Offer (the world today is spoilt for choices

compared to yesterday). An example is Air Asia’s free
tickets. Think of a way to make your customer an offer
they simply can’t refuse.

P = Powerful Promise (back up your offer with credibility).

 199 Money Secrets

Usually this involves money-back guarantees which are

less popular in Asia compared to in developed coun-
tries. The idea here is to eliminate the question lurking
in customers’ minds, “Why should I trust you?”

Discover your ultimate advantage. Create a sensational

offer. Back it up with a powerful promise. Then you can be
confident that you have done more for your business than
90% of bosses of all other businesses! With this formula, you
may start to analyse and dissect businesses to understand
why they succeed or fail. It may take years of practice and
a lot of failed hypotheses and theories. But after some time
you will become quite good at it.

Having a USP does not guarantee success. A business with-

out a USP also does not mean it will definitely fail. The USP
is just a general guide.

In fact, though we are not sadists, sometimes it is easy to see

that certain new business startups fail because their market-
ing is done wrongly. They just jump into a very competitive
business, like selling mobile phones, with nothing to differ-
entiate their products from those of their competitors’.

The other common example is entrepreneurs opening new

eating outlets in areas where there are already an over-sup-
ply of eateries. They sell food that is quite “homogeneous”,
meaning there is nothing special to set their food apart from
the competitors. They soon find themselves struggling to pay
rent, and die a natural death. After studying a lot of success-
ful business models, you will be confident because you would
have grasped most of the ingredients required to make a
venture successful. You will be on your way to becoming a
successful businessman yourself.

But you really need to get your hands dirty. Studying alone
Andrew Chia 200

will not do.

I hear, I forget; I see, I remember; I do, I understand,

Confucius once said. I can’t agree more.
That does not mean you will be successful the first time.
Knowing theories does not guarantee success. Learning how
to do business is like learning how to ride a bicycle. Galileo,
the Italian philosopher, once said, “You cannot teach a per-
son anything; you only help him find it within himself.” No
one can teach you how to do business but you can learn how
to do business yourself. You have got to experience and feel
it yourself. And be ready to get yourself bruised in the first
attempt. The experience will be invaluable. And once again,
don’t bet your horse on your first attempt.

25th Secret
You can now analyse any business using the USP
formula.
 201 Money Secrets

The word “branding” is so important that a lot of people use

it interchangeably with marketing.
 26
Sold On Selling

Selling is one of the most important personal skills.

Selling equals communicating.

Making money and investing are related to business.

Business is related to people. They are intricately linked. We
need to communicate with people. When one says he can’t
sell, what he is really saying is that he can’t communicate.
Great businessmen are great leaders, and great leaders are
good communicators. If we cannot communicate well, we
will not only have difficulty making money but we will not be
able to effectively convey our care and concern to our friends
and loved ones.

I have noticed this: In a company where the CEO lacks sell-

ing skills, that company usually has problems surviving.

The ability to express an idea is sometimes more important

than the idea itself.
 203 Money Secrets

Speaking or writing perfect English is not communicating.

Using wordy phrases or bombastic language is not commu-
nicating. In fact, renowned English writer, George Orwell,
goes so far as to say that it is barbarous to use big or difficult
words. So, let us all remember to always use simple language
that people can understand. We do get carried away easily
at times. Communication takes place only on the same level.
The best example is when you talk to babies. You just have
to make noises like da da. That is all they can understand.

In order to improve our selling skills we must understand

the process of communication.

Similarly with the people we want to sell to. If our customers

do not understand our organisation or products, we have to
go down to their level and explain ourselves to them. We
then bring them to the same level of understanding as us.
That is where communication takes place. It will be easier to
close a sale then.

My friend Mr Kimosawi was a very decent lad in school. He

was always polite and never cursed or swore. We were look-
ing forward to seeing him for the first time at his parents’
shop after he graduated with two degrees from Canada.
Upon reaching his shop, we were shocked with the vulgari-
ties that came blasting out of his mouth, aimed at a group
Andrew Chia 204

of his foreign workers. Satisfied that they had got his mes-
sage, he turned around and welcomed us as if nothing had
happened. “Guys”, he said matter-of-factly, “that’s the only
language these fellas understand. It’s good to be back; I miss
you all.”

Selling is all about communication, and communication

works best on people with the same level of understand-
ing. You communicate with a foreign worker at his level, not
yours. You should communicate with your prospect at his
level, too. That is the only way you can get him to understand
you and your product, before he makes the buying decision.

“Persuasion is the art of guiding one’s mind through a field

of ignorance, misinformation, or misunderstanding to a des-
tination where there is enough information and understand-
ing to make a logical choice to do what is in the best interest
of the person being persuaded.”
– Steven Scott, one of America’s most successful business
entrepreneurs and self help writers

Closing a sale is rather like a thief trying to get into a locked

house. We would wonder at the intelligent man who, upon
finding the front door of a house locked, merely stood there
and beat on it. Why would he not try the back door, the win-
dows or the porch door? Some thieves even try to enter from
the roof or by digging underground.

But, is he any less sensible than the salesman who knows

or uses only one closing technique? We have salesmen who
drive and drive the same selling point always attempting to
get the prospect’s order with the same technique, even after
it has failed time and time again.

Do not laugh. Life is filled with examples of loving parents

trying in vain to get their children on the “right path” by using
 205 Money Secrets

the wrong technique over and over again. The right path
could mean getting their children to stop making friends with
dubious characters. Or, it could mean getting their children
to study medicine instead of interior design. Sometimes,
family members may be anxiously trying to prevent their
loved ones from losing money in doubtful investment ven-
tures. I am sure you will agree that a lot of people fail miser-
ably because they have not discovered the right technique.
This “using one technique” problem has resulted in numer-
ous tragedies that we see and hear every day. It boils down
to a lack of sales closing skills. Counselling experts may use
the term “lack of communication skills”. I hope you are able
to see that communication skills mean sales skills.

The world will be a different place if we can disagree without

being disagreeable.

And sales skills mean knowing many ways of closing a sale,

not just one.

There are indeed many ways of closing a sale, just as there

are many ways of extracting your favourite fruit. You don’t
cut open a durian the way you cut an apple or an orange.
You have got to look for the “line”, then insert your knife in
and then pry it open. You can’t peel your rambutan the way
you peel your banana. The closing technique that we choose
depends not so much on us, but rather on the prospect.

However, sad to say, a lot of sales people know only one tech-
nique. The most common is persuading, as in harassing or
begging. It is often annoying to the prospect. Persuading is
supposed to be a fine art.

The other common technique used is reverse psychology.

Here, the salesman pretends to be indifferent. By doing so,
he tries to make the prospect impressed that his product is so
Andrew Chia 206

good that people will buy without him saying much. Little
do they know that they are trying to use one of the most
sophisticated sales techniques available. Furthermore, it is
supposed to be used sparingly, say, for one in twenty pros-
pects. These salesmen use it every single time because that
is the only one technique they think they know.

Many of society’s problems – including the escalating rate of

divorce – may have resulted indirectly from the fear of sell-
ing. Most people understand that if you can’t communicate,
you can’t sell. What they don’t realise is that the reverse is
also true: if you can’t sell, you can’t communicate.

What doesn’t kill you makes you stronger. Selling is a skill

you learn, you are usually not born with it. If you can sell
property it doesn’t mean you can sell computers.

After learning telemarketing skills, it became so easy. And

you make a lot of money with this skill.

Most people have to get over many negative ideas about sell-
ing. A common problem is that people think they are beg-
ging when they are selling. That is not true. Well, it is true
if what you sell has no value to your customer, and you are
only eager to earn your commission. (When you think about
this, you start having cold feet or butterflies in your stom-
ach.) Otherwise, you should see it as offering your customer
the privilege of owning something he really needs or wants.
There is no begging here; it is mutual gain.

Once you understand that you are stretching out your hand
and giving your customer something useful instead of taking
something away from them, your fear of selling will slowly
disappear. It is this fear of selling that we see evident in
our corporate literature. Even big corporations are some-
times not able to write convincing sales letters, proposals or
 207 Money Secrets

brochures. This is partly because they are taught by academ-

ics who are afraid of the word “sales”. (Maybe, that’s why
best-selling author Robert Kiyosaki co-wrote the book If you
want to rich and happy, don’t go to school.)

Look at our business proposals today and you will realise

that they are so stereotyped. You have Executive Summary,
Background or History of the Company, Our Products &
Services, Our Management Team, Our Mission Statement
and Our Vision. Does anyone know what is wrong with that?
Actually there is nothing wrong except that it can’t sell. Why?
The basic selling features of the proposal are not structured
properly. It focuses on ourselves, our company and prod-
ucts, not on the customers. Let me elaborate.

Statistics show that men think about sex every six seconds.
Well, we are not sure where that statistic came from or how
true it is. But, one thing is certain; we have so much to focus
on every day that proposals are definitely not on the top
of our list. Let’s face it. People are not interested in what
we say or write. They are also not interested in our com-
pany, products or services. What are they interested in?
Themselves. Therefore, every section of our proposal must
talk about they, them and themselves only. Any other topic
would cause them to immediately lose focus. Let me give you
another tip to illustrate further.

Feature: Do you know that the headlights our

company is selling has got state-
of-the-art HID technology?
Customer Answer: Don’t know. Don’t care.

Advantage: Do you know that our company’s head-

lights shine 30% further than conven-
tional headlights?
Customer Answer: Don’t know. Don’t care.
Andrew Chia 208

Benefit: You can driver more safely at night with

our headlights.
Customer Answer: Tell me more.

Always tell your customers the benefits they are going to

get from buying what you are trying to sell. (It applies to
whatever you want to sell to your friends and loved ones, too.
Things like care and concern, or education. You can’t shove
it down their throat; you have got to sell it to them.)

Another classic example of communication can be found in

one of Aesop’s Fables where the Wind challenged the Sun as
to who could make a boy take off his shirt. The Wind blew
with all his might but the harder he blew, the more tightly the
boy wrapped his shirt around himself. The Sun then gently
increased his rays of heat and the boy naturally took off his
shirt. In a nutshell, the soft approach works better.

Thus, we should not raise our voices; we should improve our

arguments. We need to appeal to people’s emotions such as
fear, greed, pride or compassion in order to communicate
and sell, not to their intellect. Our arguments must be clear,
sharp and logical, for as they say, intellect opens the mind
but emotions open the wallet.

Selling and communicating skills are acquired, they are not

inborn. You can be a good communicator if you constantly
work on the skill. It is one skill that we have to polish till the
day we die.
 209 Money Secrets

26th Secret
Develop your selling skills today. That is the only
way to develop our communicating skills.

Christopher Columbus had to sell the idea of his explor-

atory expedition to the Queen of Spain before he could get
the funds needed to start the journey. We all know what
happened after that. He found America (accidentally) and
history was created. That would not have been possible if
he had lacked selling skills.
 27
Just Do It!

One of the biggest barriers to success is hesitation. Just do

it!

OK, I have learned a lot about how to make money but where
do I start? What do I do next? Here are some activities for
those of you who are anxious to start out immediately.

1. Study. Choose a money-making project and start study-

ing. Some examples are properties, shares, options or
other derivatives, Internet marketing, licensing and
other intellectual properties, and finally, business proj-
ects. When you have mastered a formula or way to make
money, learn another new way to make more money.
 211 Money Secrets

Yes, I can hear some of you moaning and groaning

already. I am too old to learn. I don’t have the time. I am
not smart enough. I don’t have a degree. A lot of people
with degrees have failed in investment; what makes you
think I can succeed? I don’t have the money to attend
courses or even buy books. Even after I have learned how
to invest, where do I get the capital?

Let me encourage you, my dear friends. Time passes

quickly. If you start improving your financial intelligence
today, I assure you that five years down the line, your
friends will be envious of your financial and investing
skills. Haven’t you heard of the ancient Chinese proverb?
“The best time to plant a tree was twenty years ago. The
second best time to plant a tree is today.”

If you have not started learning about money, start today.

If you have missed an investment opportunity, don’t fret.
Start looking for another chance today. Remember the
boss of your favourite fried chicken, Colonel Sanders?
Well, he started Kentucky at the age of 66. Yet, I can still
hear some of you saying you are too old to start. Now, if
you think financial education is expensive, try ignorance.
Sometimes, I wonder what our priorities are. I once
heard a course mate complaining about a property semi-
nar fees. It cost only $1,000 at that time and yet he said
it was expensive. He had just lost more than $100,000
by investing in the wrong property. Anyway, although he
complained, he paid for the course so we can’t hold that
against him.

2. Manage your time. Because time is such an important

and scarce resource, allow me to share with you a little
bit more on this crucial topic. Be ready for a surprise in
this sub-section because you are about to receive some
unconventional advice on time management. First, let
Andrew Chia 212

us run through some common advice. You get these at

courses conducted by PhD holders and you’ve got to pay
a lot for them. I get these contents by attending a lot of
time management course previews. I usually get that
sinking feeling, like they are throwing a manual on how
to swim to the guy struggling in the water.

Generally, the time management courses that we attend

and books that we read about time management offer
advice that broadly falls into the following categories:-

• Setting goals
• How to organize your work
• How to prioritize between what is urgent and what is
important
• Tips on how to cram more work into a day – Part One
(working faster)
• Tips on how to cram more work into a day – Part Two
(multi-tasking)
• More advice like, “Don’t procrastinate”
• Even more advice, bordering on the ridiculous, like
breathing exercises and meditation to relieve stress

In my humble opinion, if you adopt the above advice,

time management could be like shooting a moving target.
You are not addressing the root of the problem.

Now, let me share with you something more practical that

will seriously alter the way you look at time management.
213 Money Secrets

a. A Good Tip from Parkinson

Work expands to fill time. That is Parkinson’s Law,

discovered by Professor Cyril Northcote Parkinson.
The law itself is self-explanatory. Knowledge of the
existence of this law itself will enable us to use time
more effectively.

Cyril Northcote Parkinson, author of some sixty

books, the most famous of which was his bestseller
Parkinson’s Law

“How do I apply this Law?” It is simple; after you

have set your goal – I assume you know how to, you
also need to set a time required to complete the task.
If you do not set the time, or if you set too long a time,
the task will take more time to be completed than it
should. Time would then be wasted. For further ref-
erence, you may Google Parkinson’s Law.

b. A Better Tip from Pareto

Pareto’s Principle is the 80/20 Rule. In 1906,

Italian economist Vilfredo Pareto discovered that
20% of the people in his country owned 80% of
the wealth. This discovery was named the Pareto’s
Principle or the 80/20 Rule, not by him but by
Andrew Chia 214

someone else, and the name has since stuck.

Numerous people have found that this principle
can be applied to many areas in life, from the triv-
ial to the critical. For example,

i) We spend 80% of our time with 20% of our

favorite friends.

ii) 80% of your revenue will be the result of

sales made by 20 per cent of your sales staff.

iii) Ray Kroc, founder of McDonald’s, sold what

most customers wanted to buy and trimmed
down his menu to just those few items.

iv) In computer science, the Pareto principle

can be applied to resource optimisation by
observing that 80% of the resources are typi-
cally used by 20% of the operations.

Pareto’s Principle reminds us to stay focused on

the “20 per cent that matters”. If anything in the
list of activities and action items has to be left
undone, make sure it is not listed in that critical
20 per cent.
215 Money Secrets

Vilfredo Pareto, Italian economist and philoso-

pher. Pareto’s Principle or the 80/20 Rule, was
named after him

Prioritising our tasks based on the Pareto princi-

ple is the cure for “doing faster” and “multi-task-
ing” which create stress and produce only 20% of
the desired result. This principle is the basis for
the Pareto Chart, one of the key tools used in total
quality control, and the famous Six Sigma used by
General Electric and other giant corporations.
Most people are able to prioritise their tasks. If
you are one of those who have difficulty differen-
tiating between the urgent and the important, this
is what you should consider. Many of our daily
tasks are urgent, for example, chores required of
us by our boss and our customers. Sometimes,
friends too, need our help urgently. However,
although these jobs keep us very busy day after
day, they do not help at all in furthering our career
or building our business. Things like learning new
areas of our job or getting familiar with new tech-
nology and building important contacts are actu-
ally more important.

Therefore, we should not allow urgent tasks to get

Andrew Chia 216

in the way of these important things to do.

Knowing the above is the first step. Doing it could

be extremely difficult, and involves sacrifice. This
is where most people fail. They would rather fin-
ish all the urgent tasks every day in order to keep
making money for survival and to avoid getting
scolded for not finishing scheduled tasks. After
some time, they find that they are stuck in a rut
and have developed the bad habit of always not
doing things that are important. They lose direc-
tion. A typical example would be an Internet
marketer who spends time reading unnecessary
e-mails which seem urgent instead of concentrat-
ing on the task of improving his skills. For further
reference, you may google Pareto’s Principle and
Six Sigma.

c. The Best Tip from Al Casey

Al Casey, considered one of the most success-

ful and original American businessmen of our
time, invented Casey’s Law in answer to the more
famous but negative Murphy’s Law. Most of us are
well-versed with Murphy’s Law which states that
“whatever can go wrong, will go wrong”. Casey’s
Law states that “whatever can go right, should go
right”.
217 Money Secrets

Al Casey, former Chairman of American Airlines

and one of America’s most successful business
leaders.

Given the stature of the man, we should pay close

attention to his time management technique. He
mentions that his secret of success is “doing first
things first, and second things never”. This tech-
nique may blow the minds of most people because
it sounds kind of weird. But, as we mature in busi-
ness, we realise that this is indeed a powerful tech-
nique. The reason is simply because it amplifies
Pareto’s Principle which involves sacrifice.

How do we apply this technique? At any time,

most of us may have ten important tasks to
choose from. Pareto’s Principle will encourage us
to choose only two. However, at any given time,
we can only focus on one task. (Just forget multi-
tasking. You can use it on trivial tasks but it is
dangerous to practise that for important tasks.)
So, normally, we tell ourselves, “I’ll finish Task
One quickly; after that I’ll handle Task Number
Two.” The problem quickly arises because while
we are performing Task One, our mind is think-
ing of how to tackle Task Two. This unconscious
Andrew Chia 218

multi-tasking causes us to lose focus.

Therefore, the highest technique involves sacrifice

and full concentration to complete only one task
at any given time. Highly successful people do
this.

On the other hand, I have observed many intel-

ligent people tackling multiple tasks simulta-
neously. These people are usually MBA or PhD
holders. Some of these people are my former cus-
tomers. I remember one guy went to the extreme
by doing ten projects concurrently. Of course,
they typically end up failing miserably. I can only
guess what makes them think they can succeed
by working in such a manner. Perhaps they think
that if they can score at ten subjects in school, they
can handle ten projects at one time. Anything less
would be a disappointment.

We should be focused. Try this experiment: take

a handful of darts and take aim at the bull’s-eye.
Chances are none of the darts will hit the bull’s
eye. But if you take aim one by one you may hit it
more than once.

Most successful people whom I have come across

do one thing at a time. They agonise over detail
and are meticulous in planning. Patience is their
forte. It always appears that they are slow but
before you know it, they have completed their
money-making project. Or, they have acquired a
new money-making skill. Then, they move on to
the next project. By doing one project at a time
and sacrificing the rest, they end up completing
all their projects in the shortest time. For further
 219 Money Secrets

reference, you may google Murphy’s Law and

Casey’s Law.

3. Select daily activities that help our minds, for example,

seminars, books and tapes to increase our knowledge.
Find friends who can share money-making ideas with
you. Do not indulge too much in trivial talk. When great
people get together, they always talk about ideas. Normal
people talk about events such as politics or football.
Mediocre people talk about other people, i.e., gossip. I
usually stay away from people who have no other topic
except to talk bad about other people. Some people
are baffled why they do not get ahead financially. It has a
lot to do with whom they hang around with every day.

4. Find a mentor. Follow your investment hero, for exam-

ple, Li Ka Shing, Quek Leng Beng or Teh Hong Piow.
You can even have different mentors to teach you differ-
ent skills, for example, Internet marketing. I have three
Internet marketing gurus because I am really a dummy,
an Internet dinosaur. When one guru gets angry with me
for being too slow or dumb, I quietly go and approach the
other two.

Tip: Learn from the best. In whichever subject of invest-

ment, choose your gurus and mentors carefully. Once
you have made your choice, learn as much as you can
from them. We can see further by standing on the shoul-
ders of giants.
Andrew Chia 220

Smart people learn from mistakes. Wise people learn

from other people’s mistakes. – Ichak Adizes

5. Teach someone. The more you try to teach other people,

the more you will learn yourself. You are refreshing your
memory in the process. Sometimes when your friends
disagree with you, you are able to see things from a dif-
ferent angle too.

6. Learn from others’ experiences. Find someone who has

done what you want to do. Learn new ideas. Take peo-
ple who have the experience to lunch and ask them for
secrets and little tricks of the trade. (And, I mean you pay
for the lunch.)

7. Watch your words. “Slow” words: High-paying job,

Save money, Appreciation, Avoid risk, Buy shares, Go to
school.
“Fast” words: Cash flow, Make money, Depreciation,
Gain control, Sell shares, Go to seminars.

8. Trust in yourself. “When you hear a voice within you say,

‘You cannot paint,’ then by all means paint.” – Van Gogh.
221 Money Secrets

Vincent Van Gogh, probably the world’s best-known

artist

I have a friend who has a passion for music and singing.

She wanted to take part in the Astro annual singing com-
petition, so she worked hard. She took music courses
and attended singing classes in Imbi given by a renowned
composer from Singapore. The lecturers there praised
her as the best student in the class with a lot of potential.

I met up with her one day and asked, “Are you taking part
in the Astro competition this year?” “No, I did not reg-
ister myself.” “Why?” I asked, surprised. “You worked
so hard to prepare yourself.” “I didn’t have the courage.
I don’t think I’m as good as the other competitors.” It
was not talent she lacked, but confidence. Life’s race does
not always go to the strongest or the most skillful. If you
think you can, you can always accomplish everything.

“Twenty years from now you will be more disappointed

by the things you have not done than by the ones you did
do.” - Mark Twain

Success lies in taking action, not just by arming ourselves

with more knowledge and skills . I came across a very
Andrew Chia 222

harsh Zen saying which goes like this, “If a person says
that he knows but doesn’t do, he actually doesn’t know.”
The final crunch always comes in taking action. This is
where many are found lacking, and the strong are differ-
entiated from the strongest. Some of the finest business
graduates will just freeze if you tell them to be enterpre-
neurs themselves. For all their knowledge, they do not
have the confidence to start out on their own. The only
thing on their mind is to work for other people.

Taking action is half the battle won. Have faith in your-

self, my friend. Believe me – you are better than you
think.

9. Don’t rely on others or blame others for your failure.

That is not the right attitude. I have come across people
who received assistance up to 95% for starting a busi-
ness but are bitter men. They always ask, “Why didn’t
they help me a bit more? It is only another 5%.” I have
also come across better men who were thankful for the
10% assistance that they received. These are resource-
ful entrepreneurs who will solve the problem of the other
90%. And you may hear many entrepreneurs who started
with absolutely nothing, and still succeeded despite all
the odds stacked against them.

10. Be professional. Well, what does that mean? Being pro-

fessional simply means putting your personal stamp on a
task. You are not afraid to tell the world that, yes, this job
is completed by you and you did it your way. You have
done your very best; you could not have done better and
you are proud of your work. Apply this test of profession-
alism and you will always have that sense of fulfillment.

One should always aim to be “world-class”. It may sound dif-

ficult, but it really isn’t. You don’t really have to look at your
 223 Money Secrets

competitors all the time and be better than them . All you
have to do is to create a habit of bettering yourself each time.
Before long, you would have beaten everybody else.

Getting rich begins with the right mind set, right words and
right plan. Action steps are easy.

27th Secret
Just do it!

Some people can never make up their minds. Being fickle

minded and indecisive can be a great hindrance to success.
For better or for worse, make up your mind. If your deci-
sion is wrong, you can learn from it. You will never know
if you hesitate. Do not be a victim of paralysis of analysis,
which means analysing so much that you fail to take any
action.
 28
Investors vs Traders

Investors love the golden eggs from their golden goose.

Do you know the difference between being an investor and

being a trader? An investor buys a cow for its milk and calves.
A trader buys a cow to slaughter it. An investor buys to hold,
a trader buys to sell.

In properties, an investor buys a property for rental and

appreciation. A trader practises ‘flipping’, a term that means
to buy and sell quickly for a profit.

In shares, an investor buys a share for dividends and capital

gains. A trader tries to make a ‘killing’ by hoping to buy low
and sell high. A person who buys a share hoping to sell it and
make a profit within one year should not consider himself an
 225 Money Secrets

investor. He is, more often than not, a speculator. An inves-

tor will win in the long run because he will have cash flow
and passive income. A trader will need to continue working;
he cannot stop.

One of the participants at a recent share investment semi-

nar asked the million-dollar question, what shares should we
‘invest’ in now? Given the context of the speaker, who was
commenting on the volatile behaviour of the world market
at that time, the question should be, what shares should we
‘trade’ now. Obviously the participant didn’t know better as
most people cannot tell the difference between investing and
trading. A little example from the game of soccer may clarify
it for you.

As we all know, Spain won the Euro 2008 and soccer fans
may recall the many memorable moments of that event, espe-
cially the beautiful goals scored. Among them, undoubtedly,
would be the wonder goal scored by the German, Philipp
Lahm, who is a defender. Now, the main role of a defender is
not to score goals. Hence, Lahm’s goal will be remembered
by fans, especially Germany’s fans, around the world for a
long time. He ran around his Turkish opponent as expertly
as any striker could and coolly slotted in his goal, giving the
keeper no chance at all.

Philipp Lahm is one of Germany’s better players.

Andrew Chia 226

We can say Lahm is like an investor. When an opportunity

presented itself to trade, he did it. Similarly, we should start
off as an investor, buying shares to hold for long term with a
view to earning dividends. However, we tell ourselves that if
the share price were to suddenly shoot up by say, 30% within
the first 12 months, we will just sell it and make a capital
gain.

Do you see the difference? You did not buy the share solely
for the purpose of trading it; you bought it for the long term.
You are an investor. But being a flexible investor, you became
a trader when you had the chance.

Having said that, you could even have done it in reverse; that
is, you could have bought shares hoping to trade them for a
profit within a year. However, you would have no qualms
about holding it for the long term should the price not reach
your desired selling figure. In this case, you would be like a
striker who runs back to help in the defence.

Just as a player needs to know whether he is a striker or a

defender, you need to know whether you are investing or
trading. Confusing the two would quickly lead to a depleted
bank account. You may even score an ‘own goal ’ Many trad-
ers make the mistake of thinking they are investors. Soon
after they buy a share, the market usually dips. Sounds
familiar? They then panic and quickly sell, at a loss. The
price then rises steadily, for months and even years. They
had been right at the beginning; they should have held on
to their share. They finally realise, too late, that they are not
investors but just traders. They have scored an “own goal”.

Besides knowing the difference between investing, trading

and speculating, you will need to know a few other basics
before investing. For example, in shares investment, you
 227 Money Secrets

need to first of all understand that you are ultimately invest-

ing in a business, not the shares of the company. You need to
spend time to really understand the business. Many inves-
tors including so-called professionals don’t do this. Learning
the business is just too difficult and time-consuming. You
can almost immediately recognise it when they advise you
to buy certain ‘good shares’. To start with, there is no such
thing as good shares, only good companies or businesses.
There are, however, cheap shares.

Here we come to a very important part called ‘valuation’.

Once we identify a good company’s shares to buy, we need
to know at what price to buy. Even CNN or Bloomberg will
not teach you this. They will simply say, this share is recom-
mended as a ‘Buy’ share. You assume that means you should
buy at today’s price, even though today might be a historical
high!

Not many people can answer the questions, “How low is

low?” or, “How high is high?”

The other silly thing that I recently came across in the

newspapers is that someone is selling stock simulation pro-
grammes. Hey, you are supposed to be simulating or back-
testing options, futures, forex or other derivatives. You can
do those for free online. You may use FXCM, interactive-
brokers, thinkorswim, or optionsxpress, and many others,
depending on your personal preference. Some of you may
not like popular sites like FXCM at all.

Stocks are too slow to be simulated, unless you are really an

expert who can identify those few stocks with big volumes
and swings. Simulation programmes make use of technical
analysis, not fundamental analysis.

You are supposed to apply fundamental analysis (long-term)

Andrew Chia 228

and not technical analysis (short-term) to stocks. Put sim-

ply, Warren Buffett says if you are not prepared to hold a
stock for five years, don’t buy it. He always holds forever.

And do you know the trend for unit trusts today? It is called
‘switching’. If the share market is going down, you are sup-
posed to switch to bonds and vice-versa. So everyone is
watching the market every day, with adrenalin pumping.
They get very high at times. “We have to watch it ourselves,”
they say, “the agents are too busy.”

Hello! Time out, please. I thought at one time they said you
are supposed to invest in shares, not speculate. And unit
trusts are supposed to be a “basket” of shares, which means
they should be more stable and even more long-term than
shares. Since when do we need to watch it every day? Again,
greed and ignorance take control, and my poor friends usu-
ally end up saying, “Sigh, we should have switched earlier.
Now we have lost money.” What do they mean by earlier
anyway? They don’t have any idea how to read a chart to find
the trend. They have not heard of either SMA (simple mov-
ing average) or EMA (exponential moving average). They
don’t know the significance of a 20-day average, or 50-day
average. These are the technical indicators to guide you to
the right timing to buy or sell.

Be patient, my friend. Invest so that we can have it all –

security, income, appreciation, tax breaks, etcetera. You can
even have your “killing” in the end.
 229 Money Secrets

28th Secret
You need to become an investor to achieve financial
freedom.

An investor goes for the eggs instead of slaughtering the

chicken. We should always go for repeat income instead of
one-off profits.
 29
The Magic of Mistakes

We should treat mistakes as our best friend, and ponder

over them.

Investing and financial analysis cannot be learned by read-

ing only. It is more like riding a bicycle. It is the ultimate
hands-on experience. And the probability of making at least
one mistake at some point in our investing life is virtually
100%. Therefore, take time to learn from mistakes, there is
magic in them.

We seldom learn much, if at all, from success. Success is

really a poor teacher. In his book, Never Say I Assume! Datuk
Tan Chin Nam revealed many of the mistakes that he had
made in his business ventures. He painstakingly analyses
how those mistakes were made so that readers can benefit by
not making the same mistakes themselves.
 231 Money Secrets

Here are some of the biggest mistakes ever committed and

how brave men converted them into opportunities and suc-
cess. Thomas Edison ‘failed’ 10,000 times before succeeding
in inventing the electric light bulb.

i) Berkshire Hathaway, the highest-priced stock in the

world was one of Warren Buffett’s biggest investment
mistakes. Today Berkshire shares are selling at a high
of $130,000 per share! Google shares are only $600.
Berkshire Hathaway was a shirt-manufacturing com-
pany that was slowly going out of business when Warren
Buffett took over. He thought he could turn it around.
He couldn’t, and the company eventually failed as a
manufacturing company. However, he managed to con-
vert it into the world’s biggest investment company.

ii) Strauss headed for the gold fields of California to strike

it rich in mining. However, he was not a good miner.
Instead, he began sewing pants out of canvas for the
miners who were successful. If not for his failure as a
miner, the world would not have its Levi’s jeans.

iii) The Diamond Fields company did not find diamonds; it

found the largest nickel deposit instead.

On the street you make the mistake first, and then find the
lesson, if you ever find it. Why? Because, at times, we really
do not know what went wrong. Consider yourself blessed
if you have friends who are kind enough to point out your
mistake to you. And mistakes are only mistakes if we don’t
learn from them. You would probably have heard this, “Good
judgment comes from experience; experience comes from
bad judgment.”

Some people avoid mistakes, which is the bigger mis-

take. Some make mistakes, fail to find the lesson and keep
Andrew Chia 232

repeating the mistakes. In school, you are considered smart

if you don’t make mistakes. In real life, it is entirely differ-
ent; each time we make a mistake, we learn something new,
called experience.

Be prepared to be disappointed. Inside each disappoint-

ment lies a priceless gem of wisdom. Don’t hold grudges for
too long. Don’t allow disappointment to overcome us and
don’t say, “I’ll never do that again.” It simply means that you
have stopped learning. There is a reason why there are so
few self-made rich people. It is because only few can tolerate
disappointments.

However, some people are very ‘experienced’ because they

make the same mistake over and over again. (When we have
done something many times, we are experienced.) Keep a
record of your mistakes so that you won’t have to go through
the pain of committing them again. If we forget our mis-
takes, we are condemned to repeat them. That is why pain-
ful lessons are a blessing in disguise because we will always
remember them.

29th Secret
You sometimes need to learn through mistakes.
 233 Money Secrets

There are usually only two consequences for any mistake

we make in business or investing; either we lose money, or
we lose “face”. An investor should start out by first coming
to terms with these consequences. He would then have the
presence of mind to analyse and learn from his mistakes.
 30
Super Investors’ Secret
Revealed

Sometimes we think rich people are supermen because they

seem so smart and powerful.

Shopping.

That is the secret! That is what they do. And that is what the
poor and middle class do, too. The difference is that the rich
shop for assets whereas the poor and middle class shop for
liabilities and expenses, like nice houses and beautiful cars,
branded attire and groceries to stock up, jewellery and golf
memberships, the cheapest airfare and travel package, as
well as the latest gadgets and gizmos, from mobile phones to
cameras.
 235 Money Secrets

Good investors find great bargains the same way any shop-
per finds a good deal, in the way that they have trained their
brains to see what others do not see. To make money, you
need to be a professional shopper. Start learning how to spot
the characteristics of a good piece of property. Learn how to
analyse a good company’s stock to buy. It takes practice, but
at the end of the day, you will be proud and satisfied with
your choice. Don’t leave it to so-called professionals. Some
of them are just salesmen out to earn your commission.

The secret of becoming very rich is found in eight letters:

F-I-R-E-S-A-L-E. Rich people are forever on the lookout for
firesales. It is in their blood. They even do it unconsciously
sometimes. Firesale is not the same as buying cheap. It is
buying something valuable at a cheap price. We need to first
identify what is valuable.

Even smart people often overlook an important bit of arith-

metic; profit is a function of buying price. For example, you
sell a Maybank share at $10.00. If you bought it at $8.00,
you would have made a profit of 25%. Now, if you had
bought it at $3.00 (as in 1997), you would have made a profit
of 233%. When we put it this way, it looks painfully obvious.
However, when people go out to buy a share, they do not con-
sider this. In their haste to make profits, they simply forget
and just buy at a high price.

As George Carlin says, “Today, we have more degrees but

less sense.” George Carlin (1937-2008) was an American
stand-up comedian, actor and author who won four Grammy
Awards for his comedy albums. If you are interested, you
may hear more of what he has to say about people of our
times at andrewchia.com/archives/georgecarlin.html.

You must always remember this word, firesale. To help you

etch it firmly in your mind, I will share with you a graphic
Andrew Chia 236

and grotesque remark from the world’s greatest investor,

“Bad times in a stock market are fantastic for an investor. It
is like an over-sexed man visiting a whore house.”

When times are bad, you can find firesales everywhere. That
is why you should not be afraid of bad times. In fact, you
should look forward to it. That is how you can become richer.
Do not be surprised if you find yourself uttering “firesale” in
your sleep one day. When you buy valuable investments for
a song, you will be reaping rewards for a long time to come.
Now, how do we identify valuable investments and how do
we know at what price we should be buying? Do not start
investing if you have not figured out the answers to these
two questions. Let us just discuss the two main investments:
property and shares.

For properties, just remember the two formulae that I men-

tioned in Chapter 17. That will help you put a price tag on
the property that you have identified as valuable. To train
your eyes in looking for valuable properties, you need to read
as much as possible and do site visits. A hundred properties,
remember? In properties, firesale is usually pronounced as
“motivated seller”. (For those of you who are newbies in
investing and have not read a book on property investment,
‘motivated seller’ may sound like a technical term. It sim-
ply means the seller is very desperate to sell. He could be
cash-tight; he might want to migrate overseas in a hurry; or
perhaps he is on the verge of a divorce with his spouse and he
does not want her to have half the house.)

For shares, the formula I usually use has proven to be invalu-

able. I would not have survived without it. Another highly
recommend reading material which I personally feel is a bril-
liant book, is written by a Malaysian author, Ho Kok Mun,
titled How To Make Money From Your Stock Investment
Even In A Falling Market.
 237 Money Secrets

Just as he has always advised me against using formulae

blindly, I would advise you to study companies and busi-
nesses carefully before making your share investment deci-
sions. A classic that can help you do that is The Intelligent
Investor. It is a 623-page, easy-to-read book. Now, I know
you will not believe me. (No way, Andrew. Six hundred-
over pages, you must be kidding me.) That is why I have
put up a sneak preview of the book for you at andrewchia.
com/freedownload/TIIsummary.. I summarised some of
the important points found in the book. I hope you will find
them interesting and helpful.

Dear reader, I wish I could make life easier for you but this
is the best I can do. Spoon-feeding is prohibited. You really
ought to work hard for success. But, be assured that once
you have done your homework, you can catch up with your
friends every day at the yamcha or teh tarik shops. Or, you
can relax by the beach if you want. Yes, and you will call me
when you are on the way to the pub, won’t you? I’ll give you
my number. Or, you can go to the movies every Wednesday,
like I do. (You know that on Wednesdays, tickets are about
half the normal price at every cinema.) You would have mas-
tered the basic tools of investment and you deserve a break.

For all your hard work, you may even give yourself a pat
on the back knowing that you are now better off than some
investment bankers, hedge fund operators, economists and
even law makers who run a country. Why do I say that? Take
a look at the financial mess these people have created all over
the world, particularly in the US and Europe where even
some Nobel laureates for economics reside. In Hong Kong
and Singapore alone, thousands of people have lost their
entire life’s savings investing in shares of these banks that
have collapsed. They were told by men in suits and ties that
their investments were “very safe” and profitable.
Andrew Chia 238

The subprime mess alone is a $1 trillion beast. (To be more

accurate, it is $900 billion.) It has already wreaked havoc
around the globe. People are holding their breaths to see
how we can defeat it. Little do they realise that there are
other monsters on the way to Planet Earth. Estimated time
of arrival – could be any time within the next few years. The
Credit Card Monster is another $900 billion. The Medicare
Monster is $34 trillion! Come on now, where is the fire extin-
guisher? Call the Fire Department, quick!

People who run giant corporations and even countries have

focused most of their energies in accumulating expenses
and liabilities (borrowing) for everyone. What happened to
assets? Could it be that despite all their learning, they have
got it wrong? True assets are not physical items, neither are
they just numbers on a balance sheet. (The fact that they
can just disintegrate overnight proves it.) They are seen in
the mind’s eye. They are seen by one trained in the subject
of financial intelligence. When you can identify valuable
properties or shares and put a value to them, my friend, you
would be truly financially intelligent.

You must not only work hard but you have got to work fast,
too. You need to get ready and prepared. This is because
we do not know when there will next be a firesale. The date
and timing is beyond our control. Imagine there is a firesale
tomorrow, and you have not identified your investment nor
calculated your buying price. You would miss out on great
opportunities.

However, even when you are prepared you may need to wait
for a terribly long time. (Some say, that is Murphy’s Law.)
The greatest stock investor I know did not buy a single share
for a period of fifteen years. That is simply because he did
not find anything closely resembling a firesale in a prolonged
 239 Money Secrets

bull market.

Perhaps for this reason, many people choose to become

traders. They do not want to be investors; they buy and sell
quickly to make a profit. Hedge funds, for example, are out
to make a killing. In fact, most people who invest in stocks
are out to make a killing. Of late, you find a lot of them get-
ting killed, don’t you? My favourite martial arts exponents
in kungfu movies say, “They that live by the sword shall die
by the sword”.

Then, you have Bloomberg, CNBC and rating agencies who

practise mass hynopsis. They give advice on what shares to
buy without telling you at what price you should buy. Greedy
and lazy people lap up the news and make a beeline to their
brokers to place their orders with the hope of getting quick
profits. They often buy at prices that are unrealistically high.

Patience is a virtue. It stuns me to hear, “The project sounds

great but it will take me three years to be rich. That is not
acceptable; it is too long.” And the guy who is saying it is
usually one who has been trying numerous get-rich-quick
ways in vain for thirty years. Ever since the invention of
Maggi mee, any proposal to educate ourselves or to acquire a
new skill in more than three months is considered too long.

Humans are very imaginative; it is this imagination that

took us to the moon. But, it is when we start believing in
some kind of “Super Pill” that can make us well overnight
no matter how sick we are, that I feel we’ve really stretched
it. Take the US economy for instance. Numerous people
think that whatever problems the US has will be over almost
immediately. For decades, it has indulged itself in all sorts
of vices. It has got balance of payment or current account
deficit problems, low savings/high spending rate, subprime
and credit card problems, Medicare and numerous other
Andrew Chia 240

ailments. It is like a man who is a glutton; now he is obese,

he has got hypertension, diabetes, cholesterol, and you name
it. And we seriously believe that if he takes a Super Pill, he
will wake up tomorrow with a clean bill of health. All this is
the fallout from the Maggi mee revolution.

We have become a very indulgent race. Working hard and

delayed gratification (meaning, putting our enjoyment on
hold) is certainly not for us.

I am sure each day in your commuting, you do pass by some

infrastructure construction. Stop for a moment and ponder
on this. It takes a long time to lay the foundation of say, a
bridge. For months or years on end, nothing seems to be
happening. But you can be sure either someone is working
on the foundation or it is waiting to cure or dry. Then one
day, you suddenly see workers actually putting up the bridge.
In almost no time - Voila! - the bridge is up and motorists
are happily moving along, saving a lot of time with the new
flyover.

It is the same thing when we build money bridges to take us

from poverty to the other side. Your friends may not realise
it, but you have tuned your investment antennae and are now
able to see with your mind’s eye what others cannot see. You
now have a keen understanding of what an asset is all about.

You may take time to sift through all your investment oppor-
tunities. (You can bet there are so many that you are spoilt
for choices. Just ignore those who tell you that once you miss
an investment opportunity, you will never get it back.) You
may then need to wait for the right timing, either for a seller
to get “motivated”, or for the market to plunge, before mov-
ing in to take a position. Or, for a businessman to get so
desperate that he sells you his perceived non-viable business
at a big discount.
 241 Money Secrets

Once you have secured your investment, it is your friends’

turn to be surprised at your newly acquired asset which is
generating residual income. They will not be able to figure
out how you did it. Simple, you’re plain lucky, they will say.
That is what they think. And you bet it will take some explain-
ing, if you bother to do so.

But, by then you will be busy tuning in to your next invest-

ment which is calculated to generate another stream of
income. If you follow the rules taught by your property,
shares, Internet marketing or other gurus, your streams of
income will flow for a very long time. Even if one stream of
income stops, you will have others flowing. You will truly be
a free man, financially.

“What do you do when you don’t have any money?” The

answer is the same “Go shopping for assets.” When you
discover assets you may be amazed to find money appear-
ing magically in your hands. Asking questions and analys-
ing deals is how we get our financial intelligence. Analyse
investments, hundreds of them, and your vision will slowly
improve. Great investments are seen in the mind’s eye, it
takes dedication and practice. As they say, “If you can’t see it
in your mind, you won’t feel it in your hands.”

Financial intelligence means knowing what to look for – the

things average investors miss.

30th Secret
You can learn to be a super investor by shopping for
assets every day.
Andrew Chia 242

There are many opportunities in the stock market due to the

manic depressive nature of human beings. They wake up
on the wrong side of the bed one morning and decide that
the share price must go down today. (This statement may
sound frivolous and even incredible but that is exactly how
Benjamin Graham, Warren Buffett’s teacher, described it in
his famous allegory, Mr Market. The story is found in his
classic book, The Intelligent Investor. Go on, google it; it’s
highly educational.) That is where your patience pays off
and you move in to buy an income-generating asset at a
low price.
 31
Highest Purpose in Life

“There is no higher purpose in life than to love our fellow

men and creatures.” - Andrew Chia

Giving back. That is what we should do. I believe no book on

financial intelligence would be complete without telling the
reader that he should contribute to society and nature after
he has achieved financial success. Too many people are “lost
in existence”, not knowing why they are here on this planet.
We should always remind ourselves that we become happier
by making someone else happy.

Passion holds the key not only to financial success, but suc-
cess in life in general. But compassion holds the key to the
meaning of life itself.

Billionaire John Rockefeller, who is the richest man in the

Andrew Chia 244

world of all time, taught his five kids the importance of char-
ity. “Give away the first 10% you earn,” he said. Some rich
people indulge only in themselves after they have achieved
financial success. To some of them, life is just “wine, women
and song” and nothing else. But happiness is found not only
in pleasing ourselves but others as well.

My favourite charity - Sunbeams Home, with more than

a hundred under-privileged kids, founded by my former
teacher, Mr Tan Ooi Seng.

It is sad to note that so many rich people do not impart their

valuable knowledge and experience in financial intelligence
to others. For some unknown reason, they do not feel it is
their responsibility. Be compassionate once you have enjoyed
financial success. Do not forget those who are less fortunate,
especially those who are less talented than you. Unlike you,
they have not yet learned how to convert their ideas into
cash. They may still be trapped in the thinking that you have
to work to earn every single cent. Allocate your time and be
patient to guide them along.

We are grateful to people like Datuk Tan Chin Nam, who in

his twilight years wrote books like Never Say I Assume! In
it, he unselfishly shares his precious experience in our money
world. He has taken real pains to organise his material in
a manner which I feel is the most systematic way to teach
a newbie about the world of business, although he declares,
“No book can make you a success in business.” I would have
no choice but to assume he is doing it out of love.

Select your favourite charity, be it the Kidney Foundation or

Cure for Cancer, or Children’s or Old Folks’ Home. (Andrew’s
favourite charity is Yayasan Sunbeams Home – an orphan-
age as well as old folks’ home headquartered in Ampang.)
Then, dedicate not just your money but your time as well
 245 Money Secrets

towards it. You will find your life so much richer by doing so.

31st Secret
When you contribute to society and nature, you will
find your purpose in life.

Every human being that comes into this world is special.

You were born to succeed in our money world. And after
achieving success, give a little back.
Andrew Chia 246

Money Secrets

1st Secret
Success belongs to those who are hungry and passionate.

2nd Secret
You can be amongst the 10% who succeed.

3rd Secret
You can break free from self-limiting attitudes.

4th Secret
To become very rich, you must conquer your fear and greed.
5th Secret
It is not how much you make; it is how much you keep.

6th Secret
Don’t mistake a liability for an asset. It may cause you a life-
time of financial struggle. Do not rest until you get this right.

7th Secret
The middle class have many liabilities and expenses, instead
of assets.

8th Secret
Do not overlook financial intelligence. It is a critical subject.

9th Secret
Work to learn something new every day. Don’t just work for
money.

10th Secret
You don’t need money to make money.
 247 Money Secrets

11th Secret
It doesn’t take high risk to make high gain.
12th Secret
You must invest based on facts alone, not opinions.

13th Secret
The rich have assets.

14th Secret
You will have no money to buy assets if you constantly live
on the red line.

15th Secret (Part One)

The eighth wonder of the world is compound interest.

15th Secret (Part Two)

Start learning and investing now. Delay is very costly.

16th Secret
You can only break the “three-generation curse” by accumu-
lating assets.

17th Secret
In order to be financially free, you must learn, practise and
master at least one way of generating residual income.

18th Secret
Get a good job for your money today.

19th Secret
Be prepared for an economic tsunami.

20th Secret
Things only become better after they become worse. - Rico
Ho
Andrew Chia 248

21st Secret
Words and vocabulary are essential in making money.

22nd Secret
You must be careful and accurate with your facts and figures,
and also your assumptions.

23rd Secret
Develop good habits today. They go a long way in helping
you achieve financial success.

24th Secret
Start learning about business today. Anything that makes
money can ultimately be traced back to business.

25th Secret
You can now analyse any business using the USP formula.

26th Secret
Develop your selling skills today. That is the only way to
develop our communicating skills.

27th Secret
Just do it!

28th Secret
You need to become an investor to achieve financial freedom.

30th Secret
You sometimes need to learn through mistakes.

30th Secret
You can learn to be a super investor by shopping for assets
every day.
 249 Money Secrets

31st Secret
When you contribute to society and nature, you will find your
purpose in life.
Andrew Chia 250

At Galaxy Connections we provide the following solutions

specially catered to help you attain financial freedom:-

Publications
Money Secrets
Big Money Big Trouble (expected release mid-2011)
Money Lessons
Stock Market Secrets

Courses
Financial Literacy Workshop (full-day)
Stock Market Secrets Workshop (full-day)
Basic Enterpreneurship (full-day)
SMI (small and medium industries) Development (half-day)
Internet Marketing (half-day)

Consultancy
Business and Marketing

Personal financial Coaching

Mentorship

Contact us at:-
Galaxy Connections
No. 502 Jalan Riang,
Happy Garden
58200 Kuala Lumpur
Tel: 603-7983 1126, Fax: 603-7983 1323
Email: admin@galaxyconnections.com
Call/SMS: 012-358 8122 (Nicolas)