#165. Modern Employees And Ancient Slaves

Are There Any Differences Between Now And Then?

Having watch the Rome movie series by HBO, I have learned that thing has not changed much during Julius Caesar's time and today.

So, here's my observations and take on slavery. And the comparison between the Julius Caesar Roman times and our world today.

Then: A wealthy person can own many slaves.

Now: A wealthy enterprise or business owner can employ many workers.

Then: A slave served their master/owner till either of them died.

Now: An employed person works their backside off till they retire. And then their children continue to work sometimes for the same enterprise or business owner. It can go on for a few generations. This is worse than in Julius Caesar's time.

Then: The master could sell the slave off to someone else if he is not happy with the slave.

Now: A working class citizen can be fired from the company he works in. And has to look for another employment opportunity elsewhere.

Then: The slaves had to provide sexual favours to the masters when required.

Now: The employee brings the boss a cup of coffee when asked to. And other personal favours that are usually not a pleasure to perform. A survey I read somewhere said that employees dislike doing personal favours for their bosses. They don't mind doing job related favours, but not personal favours like going to the banks to pay their bosses' bills.

Then: There was usually a master slave that look after the other junior slaves. The master slave, knowing very well that he is of the slave rank, treated his fellow slaves kindly.

Now: Some managers have many subordinates reporting to them. Some know that they are salaried workers just like the rest of his subordinates and treat them kindly. Others treat their subordinates like slaves and with disrespect.

Then: The slaves' survival lied on the master providing food and lodging.

Now: The working class gets their salary month after month so that they can continue to live, eat and have a house to live in.

Then: The slaves lived in their masters' houses.

Now: Many domestic helpers lived in with the employers.

Then: Some slaves were sold off by their parents to wealthy people to pay off the debts that they had.

Now: Some people are in heavy debts, mortgages, credit card debts and so on. And they have to continue working for business owners in order to earn some money to pay off those debts.

Then: Slaves wore tags to show who they belonged to.

Now: The modern slave, I mean the working class now mostly wear a tag to access to doors in their office buildings. The tag also has their employer's name on it.

Then: When a slave met another slave, he would introduce himself as "I am Sheila of the Julii's house."

Now: People introduce themselves as "I am John, working with ABC Company."

Then: The slaves helped their masters in their businesses such as selling some fruits or goods.

Now: You see salespeople of all kinds. Even financial planners with the banks are selling you something, neh?

Can you think of more? Just would like to share the above with you. And see? Things are not much different today from 2,000 years ago. Can we still be proud to work for XYZ company today knowing that underneath we are just slaves?

Some people admire their friends who work with large multi-national companies (MNCs) saying it's a better job. Don't be, it's the same old thing ~ slavery! I know people working with large MNCs who are not happy with their jobs. Nor those in smaller companies any happier.

Take action today to break free! Have a plan.

#164. Millionaire Investment Plan 2

It's A Good Plan, Where To Get That RM50,000?

Last night, over some Iced Caffe Mocha I shared the Millionaire Investment Plan with my friend.

Me: If you multiply RM50,000 by 10%, and keep going on, how many times do you think we need to reach RM1,000,000?

Friend: How many? 

Me: Just 32 times. Now, if you have 5 chances of making 10% profit in a year... you just need about 6 years to be a millionaire. I have been working for 12 years now. So, I might be a millionaire now if I have known about this plan. 

Friend: But where do you get this RM50,000 to begin with?

Me: After I graduated from the university, in my first job I was only riding a motorbike. I was earning RM2,000 and yet I can save RM1,000 away every month. In a year, I can save RM10,000. If I went on like that, at the end of the fifth year, I would have my RM50,000. And now on my 12th year of working life, I would have been a millionaire last year ~ on my 11th year of working life.  (5 years to get RM50,000 and another 6 years to make it to RM1,000,000.)

Friend: You are right! How come no one told us this? 

Me: We are all ordinary people. People always tell us to study hard, go to the university, get a good job, work hard. That kind of advice. We are surrounded by ordinary people. Even our lecturers are ordinary people who are still working from paycheque to paycheque. 

Friend: Yeah.

Me: Of course then... as we progress further in our working life, we want to buy a car. We want to buy a house. We want to get married. We want to do a lot of things. So that's where I never get to save up that first RM50,000. People say buy house. We need a house.

I say we should rent. Anyhow, succumbing to the pressure of spouse and those around, I bought a house. My advice is, don't ever buy a house. Save up that money for your investment. You will be a millionaire faster. 

You know what's the real meaning of real estate? 

Friend: What?

Me: Have you heard of Read Madrid (the football team)? 

Friend: Yeah.

Me: 'Real' is a Spanish word for Royal. In the middle ages, people had to pay the Royal Families royalty fees to own a piece of the King's estate or land. It's therefore called the Royal Estate or Real Estate. 

Many people mistaken real estate for something real and tangible. That's not the original meaning. It's just bollocks. It's a fee you pay to someone just so that you can live on that land. 

Friend: I see.

Me: Today, it's the same. When you buy a house, you have to pay tax to the Government and pay your mortgage to the bank. 

Let me tell you what is the real meaning of mortgage. Mortgage means mort and gage. Mort as in rigor mortis. You are a doctor, you know the term. It means death. Mort ~ death. Gage means to engage in something. To pledge to do something. Mortgage therefore means 'to engage in something till your death'. 

Think about it, today's mortgage of 30 years is a long time. Something you engage almost to your death. 

Friend: You are right. 

Me: If you buy a house or RM250,000, buy the time you finished paying your mortgage 30 years later, you would have paid more than half the price to the bank. About RM500,000 or more.

I pay about RM1,300 to the bank every month. I can save those money by renting a cheaper property and invest the extra away and be a millionaire sooner than I can. And I can take part of that million Ringgit to buy a house if I so wish for one at that time.

Friend: Yes, I have thought about it. Why would people want to pay so much for a house and pay for so long? It just doesn't make sense.

Me: Now, see here. (I was showing the price of gold to my friend on my iPod Touch using Starbucks' wifi.) Price of gold is now USD997. I bought when it was around USD901 on 30 January 2009. It's not even a month. 10% profit is achievable in investing in gold. We just need to buy at the right time. And sell at the right time.

Friend: OK. I will start to invest. My... why no one tell us this?

Me: People don't spend their time wisely to study how to invest. They rather watch TV. They surf the internet watching YouTube to get entertainment. They play Facebook. They play online games. They are wasting their time. 

I use the internet to get knowledge, to learn how to invest. There are a lot of knowledge on the net. And we just need to read. 

Friend: Yah, people just like to watch TV and those stupid dramas.

Me: Oh, and one more thing. 

It's all bollocks. Those that still think you need to buy a house. You can just rent and still have a roof over your head. A house is for what? It's just to provide us a roof over our heads. If you have money, why worry? You can live anywhere you want. There will always be places where you can rent. 

They say 'oh, if you don't have a house, it's not safe.'

If you stop paying the bank for 3 months, what will happen?

Friend: The bank will take it away.

Me: Yes, exactly. And you lose all your downpayment money, you lose all your legal fees. You lose all the years of mortgage payment.

But if you don't pay your rent for 3 months, you have saved 3 months of rental! Haha.

Friend: Yah. 

Me: So, everyone. Those ordinary people continue to live their lives as slaves for the banks. They continue to be the slaves at the companies they work with. 

I always tell people don't buy a house! What if you lose your job? In this kind of time we are in, where to find a job immediately? You will have a mortgage to worry about when you are jobless. Our job is never secured. The longer your mortgage is, the worse it is. You make sure you can continue to have a job to pay for your mortgage for the rest of the tenure.

Friend: Uh huh.

Me: If we are debt free, no mortgage, we can move anywhere we like. When the neighbourhood turns bad, you just move without worrying the value of the house is going to depreciate. 

Speaking of that, you also have to maintain your house. Spending more money. Painting the house when the paint gets old. I would rather save it up and invest. Haha. 

RM50,000 is everywhere

That first RM50,000 is always elusive. I have shown to you that I can save RM1,000 every month even while I was earning RM2,000 a month! There are people earning more than that today that can't even save a thousand every month!

You need to have discipline. Brutal discipline. No mercy for yourself. Delay all your spending if you want to live a luxurious life later. Otherwise you will just be a slave for the rest of your lives. That's why majority of the population are working class and they are what I call ~ slaves and minions. 

You can have your first RM50,000 within the first 4 or 5 years of your working life if you save hard. And make real good use of the following 6 years to flip it to a million. If you start working at the age of 21, add 5 years and add another 6 years ~ you will be a millionaire at age 32!!

Most of us are above that age and are still slaving away everyday at our office proudly. Stuck in the morning jam and the evening rush hour. Where's the fork? This is not the life that we should subject ourselves to. 

Now that you know this plan. Start taking action. Don't waste the rest of your life away. What do you think?

A disclaimer: Invest wisely. Don't go sell your house to get that RM50,000 and invest wrongly in some investment and then put the blame on me. This are just my thoughts. And all the writings on this blog are just personal thoughts of the respective writers. You make your own decision.

#163. Millionaire Investment Plan

Buy And Hold Or Buy And Sell (Revisited)



I have written about Buying and Selling and Buying and Holding previously. Here's a relook in a different way.

Many unit trust agents will share the power of compounding with you. They will also show you a small chart that displays how many years it take to make a million with your investment at a certain X% return per annum.



One question. Can the agents promise that consistent X% return per annum every year till you make that million Ringgit/Dollars?



Nevertheless, it's good to have a plan.



Here's my plan.



If you have RM50,000 to invest. And if you make 10% profit with each buying and selling, and then reinvest that profit, how many times will it take to make you a million?



Using a spreadsheet on the computer, on the 32nd time, you will have RM1,055, 688.84. Now, if you make 10% profit per annum and compouding that earnings, you will need 32 years to reach the 1 million mark.



Now, what if we can speed this up? What if in a year, we have 5 times of these kind of opportunities to make 10% profit each time. 32 times will only take you about 6 years to be a millionaire.



I remember a friend once told me a long, long time ago: It's hard to get your RM50,000 but once you have it, making a million is easy.



Now I understand his meaning.



How can I reach that million mark? Buy and sell. Start with an investment sum of RM50,000. Make 10% profit on each trade. Do it 5 times a year. That will be 30 times in 6 years. That will make you compound close to a million in 6 years' time.

Buying and holding it for long term won't make you see 1 million. In 6 years time, your RM50,000 has to see a price jump of 2000% in whatever you invest in. In gold is now RM107, you need to see a price of RM2140 per gram 6 years later! Is that possible?

Back to the story of how do you eat an elephant (not that we really want to eat it)? You cut it up into small pieces and eat it one piece at a time. For investment, the same thing is true. If you want to make big profit, make small profits constantly rather than hoping for a big price jump!

CK posted in my comment section in post #160:

However from my perspective, I'll treat gold investment as a long term (a better alternative than FD) which could be a year or so, or even treat it as one of the retirement funds. I believe we will be surprised to see the amount at the time of withdrawal (10, 20 or even 30 years later). Of course it could be the lowest price at the time we sell them years later, then we could have blame ourselves why we didn't sell it when it is in the peak. If we are really that unlucky (like what happen in 1980s), then you may consider to pass it to your next generation because it is not the only retirement fund we have. (Can a bank do a name transfer for gold account then? Ha). But I still don't think gold will depreciate as demand will be higher after years.

Well, here's my response and I reproduce it here.


Thanks for your analysis. Your comments are valid. Sure, if I have hold on to my gold that I have bought at RM86.03 on 28 Oct 08, I will be grinning ear to ear now. A big profit.

However, we will never know what the price is going to be. I would like to take profit when I am at the top. And buy when the price is at a low.

Of course, unless you have the foresight knowing that the price will be at this level now, RM107.42, you would have kept it till now.

We never know what the price is going to be. The price may dip and go down for many months. And your money will be stuck.

I don't want my money to be stuck. That's why I rather buy and sell at a short period even if I get a lower profit.

Another thing, if you take 10,000 and multiply by 10% five times. 10,000 X 10% X 10% X 10% X 10% X 105 = you get 16,105.10.

If you hold it and make 50%, you will only get 15,000. Nevertheless, markets or gold price don't usually make a big jump of 50% in a year. However, it goes up and down and when you catch the waves at the right time, you will get that 10% five times within a year like I mentioned.

In 2008, gold price started on 2 Jan 08 at USD846.75 and ended on 30 Dec 08 at 869.75. That's a mere 2.7%. Buying and holding sure is not a good strategy here when you see the 2008 chart. You could have easily caught 5 to 6 times of 10% profit.

There is the power of compounding if you make constant small profits.

OK, let's look even longer term. Of course, provided if you hold your gold that long.

In 1979 (30 years ago), the average price was USD306.68. In 1989 (20 years), the average was USD381.44 and 1999 (10 years) was 278.98.

See? If you have bought in 1979 and hold it for 20 years till 1999, you are at a loss from USD306.68 down to USD278.98. And you have to hold it for another 10 years till 2009 to see good profit. But I doubt that you will hold another 10 years or have faith for another 10 years once you saw that your 20 years effort has gone down the drain.

And from the Elliot Waves, if you study it, you can see that once price has reached a top, it can come down to a very low. That can happen in a very long term period. That's why you see a drop in price from 1979 to 1999.

One more thing I would like to add. Gold investment does not reap any interest or dividend if you hold it long term. Your money simply doesn't compound while it sits in physical gold or PBB GIA. The only way your money can grow massively is through the power of compounding. Buying and selling. It is as simple as that. I have mentioned in a previous post. The simple true objective for any investment is to achieve a growth in wealth. The best way and fastest way is to compound your earnings. (http://www.unit-trust-investment.com/2008/12/145-philosophy-of-unit-trust-investment.html)

Again, we never know what is going to be in the future. Who knows? Perhaps one day we don't need any money any more. People will learn to live in peace and work together in a peaceful community and no money is required. What will happen to your gold then? It's going to be just a piece of metal. That's all. Read about the coming 2012 Earth change and stuff like that, Planet X, Nibiru, Pole Shift. If you believe in any of them. We'll never know.

Topping up? You mean Dollar Cost Averaging? It's a fallacy. This strategy is for those who clearly don't know about the market. It's a 'trick' in the Unit Trust industry to get people to invest constantly so that the unit trust companies have constant supply of income. Best to buy and sell. When you have more money to invest, wait till you have sold everything, and want to buy again. Then pool all your money together and buy.

If you are a businessman, would you hold your stock for long term and wait for 5, 10 years for the price to go up before selling it? Or would you sell your stock at a small profit, take the money to buy more stock and sell it and repeat the process? We have to run our personal finance the way a business runs it. That way we will see profit.

Property investors are the same. The smartest one I have seen are usually those that buy and sell. They don't hold it long term unless it generates good rental income. In gold investment, you don't get 'rental income'.

My mom-in-law bought a house to live in and still living in it after more than 30 years. So what if you tell me that the price of the property has appreciated so and so much. It's all only on paper, unrealized profit. The wiser thing to do is to sell it and invest in another better property at a better location. Price of property in Kota Damansara for instance and Bandar Utama too, appreciated a lot if you have sold your old property and bought these. The old property's price has just stop growing much after it reaches a certain age.

Your gold investment is also unrealized profit if you just keep it for long term. You don't see the money. Once in awhile, take some profit out and enjoy a holiday trip. That's what I will do.
There are many other things I can discuss with you on buy-and-sell strategy. Many more examples. I hope you understand my points. :-)

#162. Gold Rush In Turbulent Times

Why Is Gold Bullish Now

You must be noticing why is this Unit-Trust-Investment.com lately talks only about gold investment. Hmmm, my interest is now fully on gold investment during this economy meltdown. Gold has always been the investment that people rush to during economy downturn. 

I get more and more excited each day when news are saying that gold is forecasted to go up higher this year and next year. The recent one from Merrill Lynch is saying that gold will be up to US$1,500 per ounce in the next 12-15 months! Gold is now at US$911.40 at the time of writing this. Wow! So much profit to be made.

Now, if it is true that the gold price will be going up to those levels, when we reach there and look back, you will think the price today is cheap instead of expensive. 

Eric Hommelberg has listed down all the points that show why gold is so bullish at this time. You can read his article here.

Michael St. Clair predicts even higher price for gold: "The Federal Reserve and the house of cards falls by end of 2010. Gold will trade between $1,700 and $2,000 by 2011."

An old article that I have published has said that it was predicted that gold and silver will be used as currency. This will happen after the US Dollars collapse because of the oversupply of the Dollars in the US economy system. IMHO, when that happens, countries worldwide will turn to gold and silver to calculate the exchange rates. At this moment, all the world's currencies exchange rates are still being quoted against the US Dollars. For example, Ringgit Malaysia is 3.60 against the US Dollars. Something like that. 

Wait, that's not all.

Alf Field, using Elliot Waves method, has charted an even higher price prediction on gold. Can we see a US$10,000 per ounce price? Whatever price it is going to be, US$1,000 or US$1,500 or US$2,000 or US$10,000, I am all the way on gold for now as long as the economy does not recover to its previous prime health. 

Alright, I hope today's article is enough to keep you busy. Please click on all the links in the article and read them. Then let us know your decision whether gold is a good buy at this moment.