Little Book On Wealth Designed For Total Beginners Written By: Meng Teck This Is Not A Motivational Book. No. No. No. This will not be just another book where the expert boasts about his results or tell you how great he is. I am an educator & I have designed this book specifically for people who are just starting out to learn about investing. This little book will contain the important theories & strategies needed to understand how to generate massive wealth sustainably while, at the same time, allows you to enjoy life without the stress associated with generating such income. It will not be a long book as I want to keep it sweet & simple by giving you few key ideas that will instantly open your investment eyes & allows you to be a whole lot wealthier. I know this is a huge claim but I promise you by the time you finish reading this book, you ll know, making millions annually, is really not such a big deal. 1
1. Investing can make you very very rich. Secret of The Rich How do so many people get so wealthy? Is it because they are born smarter & more talented? Is it because they work extra hard compared to other people? Maybe. However, here s the secret. You do not need to be smart or talented or hardworking (Thank God!) in order to be rich. The secret is in making money work for you. (Which is not so much of a secret anymore) I am sure you have heard this a million times but have you actually heard how to do it specifically? I m gonna prove it to you in a moment. Imagine this.. Let s say, for every dollar you have, I will give you another dollar after a day?. What will happen after a day? Obviously, now you will have 2 dollars. It is the seeds that was planted by our forefathers that we now enjoy its fruits. Suppose you do not use the dollar that you earn, and I extend the same offer to you. What will you have the next day? For every dollar you have, you will get another one, since you now have 2 dollars, then you will get another 2 dollars and now you have 4 dollars in total. Simple, isn t it? Here s the Big Idea, suppose you do this continuously for a month, guess how much money you ll have? Just give a rough figure. You don t need to go out & reach for your calculator. 2
Revelation No. 1 = Power Of Compound Interest I know this is hard to believe but this is how much you will have More than 1 Billion. (Skeptical? You can reach for that calculator now) I can t believe it at first too. How can one dollar turn into a billion in such a small amount of time. How come? Well, it s maths. Day One - $1 Day Two - $1+$1 = $2 Day Three - $2 + $2 = $4 Day Four - $4 + $4 = $8 Day Five - $8 + $8 = $16.. Day Ten - $ 256 + $256 = $512.. Day Twenty - $262,144 + $262,144 = $524,288.. Day Thirty - $536,870,912 + $536,870,912 = $1,073,741,824 Formula Of Wealth Wealth = A = Capital R = Return on Investment 3
n = No of times compounded. Basically, the theory goes that, if your earning, which is the dollar that is given to you, increases with your capital, which is the 1 dollar that you start with. Then, as you have more capital, you will earn more. Eventually, these earnings become so big that your net worth will become very big. Imagine if you have parked your car on a downhill road and forgotten to pull the handbrake, your car will start to move downwards. You will notice that the speed is ever increasing as it moves down the hill. Imagine that speed as your income. That is what happens to your money when you enter the world of investing. The more money you have, the more you will earn The rich understand this. This is why, the rich will get richer and the income gap continues to widen and the middle class become poor in comparison. It is a very simple & easy concept. Make money work for you. Generate income, save them, invest, then from the income you generate from investment, re-invest them back. That s how you turbocharge your way to a million dollar mark. So you say I could become a billionaire in a month? Nope. Why? 4
I am going to give you very real life example here to give you a good idea of how long does it take to actually become a millionaire. Well, in reality, you don t get such a nice deal (You wouldn t think that the deal earlier actually exists, do you?) As a benchmark, the world s most famous investor & also top 3 richest person on earth is Warren Buffett and he has made his wealth, around $70B at the time of writing, mainly through stock picking. How much is he getting out of his capital? In the earlier example, we say that for every one dollar you have, you will get another dollar in a day. Warren Buffett Warren Buffett, is able to find deals so good that, for every dollar, he will get 20 cents per year & he has been able to do this consistently for more than 50 years. That is, turning every 1 dollar 50 years ago, into $9100. If you can do that, you can turn a capital of $1,000 into $9.1 million in 50 years without adding anymore capital. Using the formula of wealth earlier: = 9,100,000.00 That s the magic of investing. (I know I would lose some of you here, 50 years isn t sexy, but sexy is not what this book is meant to be, this book is meant to be the honest guide for proper investing for people like you and me.) Okay, I get it, according to the formula, I can become very rich if I can get 20 cent per year, consistently out of every dollar I invest, it will only take some time. 5
Side Note: The S&P 500 is an American stock market index (more on this in page 7) based on the market capitalisation of 500 large companies having common stock listed on the two largest stock market in America. However, that 20 cent per year is Warren Buffett s benchmark, (that is remarkable considering the S&P 500 average out to be 10% per annum) how can normal people like me become a millionaire? Well, normal people like us, do not just invest 1,000 and then forget it. Normal people like us will invest consistently and continue to put our savings into our investment so that we can have a better future. Yes, normal people, without proper investing training & experience will not be able to generate that kind of return. So what can normal people like us do? 2. Becoming a Millionaire is easy & anyone can do it. Have you heard of fixed deposit? It s basically like lending money to the bank and they will pay you interest annually. Well, you can get a return close to 4% or more with little or no risk. (Go ask your bank!) Is it possible if you just invest $850 per month? Why? Well, if you can do this, in 40 years time, you can become a millionaire. (How do I know that? Well, I use this cool app made by MSN below. Check it out yourself) (Link : http://www.msn.com/en-us/money/tools/timevalueofmoney ) 6
3. You can easily be more than a millionaire if you are willing to put in some effort and take some risk. What if I tell you, there is a way that anyone can achieve satisfactory return and become a millionaire in a relatively short period? What if I tell you, you don t even need to have much financial knowledge to do that and everyone has access to this thing? What if I tell you, you don t even have to do much to achieve this? Sounds too good to be true? Well, initially I thought so too, until one day, I come across this thing called, Exchange Traded Fund (ETF). Sounds high tech, right? ETF is actually a pretty simple concept. An ETF can help you track certain index. For example, the STI Index or the KLSE Index. (OMG, what s an Index?) An Index is basically a pool of investment units of a certain kind. For example, FTSE Bursa Malaysia KLCI index is based on top 30 companies in Malaysia based on market capitalisation that meets free float liquidity requirements, providing investors a highly investable and tradable index. However, you can t buy the index. What you can buy, is the ETF, which essentially is a fund that tracks the index. FBM KLCI ETF ( the Fund ) tracks the performance of FTSE Bursa Malaysia KLCI ( the Index ). When you buy an ETF, your earnings depend on the index. Complicated stuffs? Simply put, when you buy an ETF that tracks a country, like FTSE Bursa Malaysia, you are essentially buying the economy. So, if the economy of the country is well, your investment should do well too. How has the economy been doing? 7
Prices grew from roughly 2.2k from year 2005 to 3.5k in year 2015. Using the formula below, this translate into an annual increase of 4.75% Singapore (Source: https://sg.finance.yahoo.com/q/bc?s= %5ESTI&t=my&l=on&z=l&q=l&c= ) Over the past 10 years, the market has returned, (Reverse engineering the formula of wealth) = 1.0475 4.75% return per annum, excluding dividend! 8
Prices grew from roughly 900 from year 2005 to 1747.52 in year 2015. Using the formula below, this translate into an annual increase of 6.86% Malaysia (Source: http://finance.yahoo.com/echarts?s=^klse +Interactive#) Over the past 10 years, the market has returned, = 1.0686 6.86% per annum, excluding dividend! (Note: This is not to say that Malaysia s economy is doing better than Singapore, the stock market is just a rough measure) What does this mean to you? You can be ver y rich, ver y fast. 9
If you could save $1,000 per month & invest & compound it at this rate, you can be a millionaire in less than 30 years. (Source : http://www.msn.com/en-us/money/tools/ timevalueofmoney) Though no one can say for certain that the economy will do better, it is likely to trend up. Why? It is because economy has got a lot to do with productivity. The higher is our productivity, the better is our economy. As long as there is constant innovation & improvement in the way we run businesses, productivity is going to increase & the economy will be well. The question is, Do you think the economy of your country will do better in the future? If you think so, you can buy the ETF. 10
That s it. You ve just learnt the idiot s way to make money in the share market and become a Millionaire with very little to no risk in a reasonable period. Becoming a millionaire is that simple. You ve just learned what 99% of the population don t know. What s the next step? Sure, a return of 4.75-6.86% per year is good enough for most people, but it sure isn t going to make you massively wealthy anytime soon. However, a return of 15-25% per year would. With a return of 20% per year, it will only take 15 years to make you a millionaire. If you continue to invest at such return for another 15 years, you can get really really rich. ( $23 Million Rich) 11
So how do you do that? How do you generate 15-25% return consistently? Surely, there will be more work than this, it is not difficult but the book is getting lengthy and I will leave that for the future. But now, you ll be really skeptical? If it s so easy to be rich.why is it that most people are still struggling? 1. Most people do not know this. They know they should make money work for them only theoretically but not with the formula I ve given you and also the systematic way to do it. 2. Most people do not invest but rather gamble in the share market betting whether tomorrow s market will go up or down. That s the best way to get broke really quick. There s a method to make money systematically in the share market but more on this in the future. 3. Most people just don t care. Not everyone is as practical as you. Most people (especially the Gen Y & X) don t care about money & they have this You Only Live Once Mentality (YOLO). Probably they ve seen people being scammed before and investing got a bad reputation in their mind and hence, they stayed away from it. (I know you still can t believe this, take some time to digest it) So, I keep saying I ll show you more in the future. What is it about? Well, I ve created a really cool video to kickstart your journey in investing. In order to make more money in the share market, there are several simple steps to deploy in order to achieve that kind of return. I have taught these in my paid seminars & found that it is not difficult for people, regardless of their academic achievements, to replicate. But here s the thing. IMPORTANT : I do not like to spam. If you would like to receive the video, please register here or http:// www.savwee.com/successful-investing-101.html so that I know you re interested. If you do so, I will send you the video absolutely free. 12
I hope you enjoyed reading this book as much as I ve enjoyed making it for you. If you like what you ve learnt, don t forget to get my video. Thank you. About the author. Meng Teck is known as the youngest, wildest & highly sought after Value Investing Master Trainer in Asia. He is famous for helping his clients build sustainable wealth with peace of mind & confidence using simple & effective investing techniques without the need to learn how to read complicated chart or constantly chase hot tips. Over the years, he has conducted multiple training seminars & webinars to help his clients achieve total understanding of the investing philosophy as well as providing real life case studies that his clients can still benefit in. He is routinely invited as a guest speaker in other platforms, like universities (Universiti Teknologi Malaysia) and membership sites, a more recent one you might have heard of is a personal finance site, KCLau.com. This book is dedicated to people who will not settle for less than what they can be, do, share & give. To the people who will not bow down to the norm or to the social class. To the ones who disregards any limitation & make their life, truly theirs. P.S : If you like this book & would like to share it with your friends, get them to register at www.savwee.com, and I will send them a copy. 13