Financial Literacy – your insurance to living

“DR AZAM, 28, had it all: two flashy cars, a beautiful home and a flourishing career. He wore expensive clothes and lived extravagantly on credit.

He renovated his mother’s home and decorated it with expensive Italian furniture. He took a loan for the renovation and bought another house.

Without realising it, Dr Azam owed creditors RM400,000 in housing loans, hire-purchase loans and credit card debts.

Stuck, he approached the AKPK for help. Being single and with his mother being the only dependant, Dr Azam was advised to sell his house. He moved in with his mother and sold one of his cars.

In the end, Dr Azam was able to save 45% of his monthly loan payment.”

This is a typical example of living beyond your means and spending your money before you even earned it. At least Dr Azam can still be rescued and live a comfortable life. Lets look at the next example:-

“BEFORE the economic crisis of 1997, Allen was a sales manager earning a five-figure monthly salary, living a comfortable life. However, the economic downturn forced his employers to shut down operations in Malaysia.

At 43, it was hard for him to find a new job. To complicate matters, his wife has a medical condition.

Allen turned to loans and credit cards to fund his lifestyle. Soon enough, creditors began hunting him and threatening bankruptcy.

Suicidal, Allen turned to odd jobs, making less than RM1,000 a month. He skipped meals to ensure his wife had something to eat.

His wife changed his mind about suicide and suggested that he seek the help of AKPK.

Allen had RM200,000 in his EPF, although he could only withdraw the money at 55.

With a debt of RM130,000, AKPK advised him to consider bankruptcy as an option, so that he would be able to settle all his debts when he turns 55.”

I truly empathised with Allen. Earning a five-figure income in the 90s is a lot of money but obviously he did not foresee the economic crisis. What we can do now is to learn from this very painful lesson.

A good friend of mine thought me to use the “Worst Case Scenario” method of looking at every situation. Do a “worst case scenario” of your financial situation. How much mortgages, loans, debts do you have and if you were to lose your job today, how are you going to survive. Do you have “Plan B”? Really look at it, it is scary but it is necessary.

Change your ways. Do not spend indiscriminately or at your wimp and fancy. Think before you spend.

CHANGE

Time and again, we need to change but change is hard.

Sometimes we change due to living changes

or we will wait for “hurt to change”

but never wait till you have to “despair to change”.

It may be too late or too drastic, like in Allen’s case.

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3 Responses to Financial Literacy – your insurance to living

  1. Creative Wealth International (formerly, the Money Camp) is a nationwide (and becoming worldwide) financial literacy 501(3)c nonprofit organization dedication to empowering kids and teens to create financial freedom in their lives.

    The word empower means to: "To equip or supply with an ability; enable".  Creative Wealth International’s mission is to "EQUIP" kids and teens with the information and tools so that they have the "ABILITY" to create financial freedom in their lives which makes them "ABLE" to live their dreams, automatically "ENABLING" them create good in the world.

    Unfortunately, too many kids are being raised by parents who do not know how to manage their finances or invest their money wisely.  We have been taught our entire lives to live as "consumers".  Money makes the world go round, right?  It does, but what most people do not understand is they are making their money go round for other people.  They are providing the owners of large corporations the ability to earn, earn, earn while they are lowering themselves deeper into consumer debt, which is a leading cause of suicide, divorce and depression.  We understand that no one has this agenda in mind when they raise their beautiful little children.  Of course, parents just want the best for their kids, they want them to grow up and have more than they had, and be given more opportunity than they were given.  But when you place a child in school, they don’t teach them about money, except for how to balance a checkbook.  They don’t tell them that when they turn 18, they are going to be offered credit card after credit card, not knowing which one to pick to work for them, or how to spend wisely.  They don’t tell your kids that when they graduate college, they are going to be saddled with a ton of education debt that is going to force them to join the workforce where they will trade their time for a paycheck.

    WE teach kids that passive income is the key to financial freedom and you develop passive income by investing in Real Estate, the Stock Market and Business Ventures.  WE teach kids about credit cards and how to pick ones that will pay for vacations and how to spend WISELY so that they can pay off the balances every month.  WE teach kids about starting businesses so that by the time they are in college, they can pay for it themselves so that when they graduate they have a choice to work, or travel or start their own companies.  WE teach teens how to Move Out and Stay Out!  We are dedicated to raising fiscally and emotionally responsible adults that can give back to their communities, not take from them because they were never taught how to succeed.

    Creative Wealth International is a Santa Barbara, CA based 501(3)c nonprofit organization.  Our goal is to have Creative Wealth programs in every major city in America by 2010 and every country in the World by 2012.  We know that that is a lot to accomplish but every year we meet and train hundreds of people that are just as driven as we are to change the way kids grow up.  Our unique Train-the-Trainer program trains people from all walks of life to implement and teach our unique programs in their own communities.

    What makes our programs so unique?

    We despise PowerPoint presentations.  We don’t use overhead projectors.  The only tables at our events are the ones that hold the apples and pretzels.  What do we use?  Music, games, activities and real life simulations.  What is this amazing teaching method called?  Accelerated Teaching Techniques.   These amazing techniques have been PROVEN to hold participants attention while they retain 90% of the information, without ever taking a single note!  And guess what, they have a TON of fun doing it!

    Our Train-the-Trainer program prepares individuals to teach Creative Wealth programs their communities. They master the Accelerated Teaching Techniques and at the same time, learn the curriculums and how to run Creative Wealth programs.  Our participants are never disappointed in this training and have described the training as "life-changing" and "inspiring".  They leave licensed Creative Wealth coaches and take with them a completely new outlook on their lives and how they have been living them.  They always walk away with goals, visions and a passion for things that have escaped their conscious.  We Guarantee It!

    We are introducing a brand-new program, Wealth Rules! this February 15-17, 2008 in Los Angeles, CA.  We are in the midst of scheduling one in Canada, Florida and on the East Coast as well.  This program will be a large-scale (200 teens and parents) financial literacy event where teens will be starting businesses, participating in their own stock market, and well, we don’t want to give everything away.  We are currently looking for sponsors, companies to joint venture with and people that just plain agree with our mission and want to help spread the word.

    Check us out at: http://www.creativewealthintl.org or contact us at 800-928-1932

    The Creative Wealth International Team

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