3 Reasons Why Having More Money Will Not Solve Your Problems

Money. That is what most people in the middle class dream about. Very often, when people are asked what they want in life, they wish that they just have more money, and then they continue by saying that all their problems would go away.

That cannot be further from the truth. Having more money sure is a nice feeling, but I would argue that the feeling is temporary and most certainly does not solve all our problems. Here are 3 reasons why:

1. Can You Handle The Money?

What would you do if you were given RM1 million today? Most people would go on a shopping spree. Some would go traveling. Smarter ones would spend part of it, and then invest part of it. Many people dream about being rich, but never really gave much thought to how they would handle the money if they were truly turned out to be rich. 

I would argue that it is precisely because of this reason that those people are not rich right now. Their brains and hearts have are simply not ready to handle the money. Here is a real life example. A 10 million pound lottery winner attempted to commit suicide twice because his life was spiraling out of control. He was simply not equipped to handle the luxuries that so much money can bring him. 

A few years ago, I attended a seminar that talked about our "money thermostat". Everyone has their internal money thermostat. Just as thermostats controls the temperature of the room, our money thermostat controls the our wealth. The idea is that, if our money thermostat indicates that we are only ready to handle RM500,000. Even if we were given RM10 million today, eventually, we will end up with RM500,000 because our brain and heart is only equipped to handle RM500,000.

Here are other examples of footballers who bit off more than they could chew. Their rise to fame was not accompanied by their ability to handle it, and their lifestyles spun out of control and once they found that their money was not quite what it used to be, their lives became unbearable and they could no longer return to their previous living standards. 

2. Propensity to consume

So how does the "money thermostat" work? Economic theory suggests that consumers tend to have a general propensity to consume. That is to say that most people tend to spend a proportion of their income. So, as earnings/wealth increases, their earnings tend to increase proportionately as well. 

The challenge that most people have is that they are unable to control the urge to spend their sudden increase in wealth. Even if they do not spend it all at one go, just by knowing that they have a little extra in the bank, they have a tendency to increase their spending matters ever so slightly, "just to reward themselves" a little bit. This increased spending will gradually deplete their gain in wealth over time if they do not find a way to sustain their wealth. This brings us to the 3rd reason.

3. Can this "success" be repeated?

If your rise to fortune was more fortuitous than through skill, it is unlikely that the success can be repeated. Therein lies the danger. This is precisely what happens to lottery winners. They get a large windfall, but have no real ability to repeat that success, except to continue trying their luck at lottery, or worse, at larger gambling habits, believing that they are "lucky" enough. 

If you are lucky enough to be one of those people who win the lottery, the first thing you need to do is to invest in building the ability to handle that kind of money. If you choose not to, then at least, find someone capable that you can trust to manage that money for you. If you do not have the ability to repeat the success of making that much money, it is quite likely that your wealth will not be sustainable. Once you have depleted it, it becomes very unlikely for you to get back to that wealthy state. 

So WHAT CAN WE DO?

It is all well and good to sit around and criticize wealth and money. If money is not able to solve all our problems, then what should we do instead? Here are 3 essential techniques that you need to build and manage wealth:

1. Focus on Your Purpose

You need to find your core purpose in life. Your reason for being. This is of utmost importance because it gives you a reason to HAVE money. This will help guide your spending patterns. If you do not have a clear purpose, you will likely squander your newfound wealth. 

But if you have a purpose for having money, it is likely that you will channel your funds towards that effort. For some people, it could be their children or family members. They may save it for their children's education. They may save it for their parents' retirement. Or start a Charity Organization. Whatever it is, you must have your purpose for having money. Only with purpose can you make your wealth worthwhile. 

2. Focus on Adding Value

But having a purpose alone is not enough. It will not be enough to sustain your wealth. We still need wealth-sustaining techniques. I also strongly believe that a person's wealth is directly related to their ability to deliver value to others. 

For example, a doctor can heal illnesses. Doctors keep people alive. That is why they get paid so much. The value they add is in preserving life. Don't focus on making more money. That usually never ends well. Focus on adding value. 

Give people so much value that they have no choice but to pay you. Share your wisdom with them. Share your skills with them. Eventually, you will get your money's worth. One of my favorite quotes comes from the movie "3 Idiots":

"Pursue excellence and success will chase you, pants down."

The move depicts two friends who are searching for their long lost companion. They revisit their college days and recall the memories of their friend who inspired them to think differently, even as the rest of the world called them "idiots". I will let you enjoy the movie without any spoilers!

3. Can You Communicate Your Value?

The rest of the world may call this "sales" or "marketing". But the truth is, there is no point in being able to add value if you are unable to communicate it to the rest of the world. For example, even if you have the cure for cancer but do not inform the world, there is no way the cure can be put to good use. 

Apart from focusing on the technical skills required to generate value for others, you also need to develop the relevant communication skills to share your value. On our own, perhaps we can share with 10 or 20 or even 100 people. Imagine if we are able to generate value RM10,000 in value for 100 people. Then we are worth about RM1 million (RM10,000 x 100). But if we learn how to communicate the fact that we can generate RM10,000 in value for people to about 1,000 people, our value would immediately rise up to RM10,000 x 1000 (or RM10 million). 

Our wealth is a product of the value we can generate and the number of people we can communicate this value to. It is imperative that we pay attention not only on the technical skills to generate value, but also on the ability to sell/market our skills to the relevant audience. 

5 Lessons on Fatherhood

I had initially planned to write this upon the 1-year anniversary of Baby Michael's birth. But ever since I started the purposeful journey of knowledge sharing, I have decided it is much more beneficial to share as early as possible rather than later.

Baby Michael just became 9-months old. He is a wonderful boy, full of joy and laughter. And the part that I secretly enjoy the most: his unspoken character.

There is very little a 9-month old can do. Michael is not able to walk without assistance. He has barely learnt how to crawl. He has only mastered a couple of words: "Kai kai and 出去" (meaning, to go out for sightseeing), "Nen nen" (milk), "Mama", "Papa", and a few others. And yet, with some honest reflection, this little boy has certainly taught me a few things about life.

1. What Doesn't Kill You Makes You Stronger

As an amateur crawler, Michael requires supervision when he crawls as he has yet to experience the dangers the little objects around him can bring. Just the other day, he managed to "quietly" crawl off the edge of the bed, and earned his first bump on the forehead.

The pain and shock caused him to cry, but only for a few minutes. After that, he was back to his usual smiling and laughing nature, almost as if all was forgotten.

The lesson here is quite simply: Life is going to be full of bumps on the forehead. We will fall, inevitably. But with each fall, we become a little bit smarter, a little bit wiser. More importantly, we should focus on the joys that life can bring us. It is easy to dwell on the mistakes that we make. If he was a bit older, perhaps I may have even "blamed" him for behaving so recklessly. But because he quite simply did not understand the consequences of his actions, there was no need for finger-pointing. There is only room to look forward and to reflect on how we can make things better in the future.

2. Dare To Ask For Help

For most of my life, I have lived in a somewhat independent manner, refraining from seeking help for fear of troubling others, and often, for fear of appearing silly. Michael is not a very needy baby. He is almost as independent as I am, but he most certainly isn't afraid to ask (cry) for help when he needs it.

Babies have no imagined fear of troubling others and most certainly do not fear appearing silly. He isn't afraid to ask for a his milk. He isn't afraid to ask to go "kai kai". He isn't afraid to sound the alarm when his diapers need changing.

Michael is a constant reminder that in life, there will definitely be things that are outside of our control. As much as we would like to believe we are in control of our own circumstances, about 80% of the time, we are not in control. We can only control our response to each and every circumstance. We can pretend to be in control of the circumstances, but oftentimes, they are inevitable.

But when things spin out of control, remember that help is around the corner. Pretending to take on the world alone provides a temporary ego boost. But reality will harshly remind us that we need more support than we think. When someone else requests for help, it is very often that we are more than happy to assist. Sometimes it is out of generosity, and others, it is so that we make ourselves feel useful.

By this logic, seeking for assistance ALLOWS others to show their generosity and make themselves useful. This is not to appear self-serving. There is a big difference between feeling entitled to receive help vs. having the courage to seek help when needed. More often than not, we should be more daring when seeking help.

3. Remember To Appreciate

As a consequence of No.2, we must remember to show appreciation when help is given. Michael has yet to learn to verbally show appreciation, but when he is given what he needs, he does not hesitate to share his warm smile and cheeky laugh.

There is no doubt that the last 9 months has been an uphill journey. But it was made so much easier with the support of my family members as well as various fortunate circumstances. Below is a list of things that I am eternally grateful for:

i) Parents and in-laws

While I group our immediate family members together, my mother has played an integral role in supporting Michael's well-being. From the little things like cooking healthy meals to comforting Michael when he refuses to fall asleep. My father is ever-ready to bring Michael on educational expeditions to the park for his evening "stroll". I struggle to imagine how difficult life would have been if we did not have the support of our family members. I attribute the majority of Michael's rapid development in verbal skills to my parents.

ii) My wife

Imagine a good night's sleep. Now, imagine that good sleep being interrupted once every hour. That is what it feels like for the first 3 months for a new mother who is breastfeeding. My wife has persevered through the rough times of hourly wake-up calls of the baby, and we still experience the occasional wake up call as Michael is teething.

Moreover, she has now returned to work and we are continually challenged with interrupted sleep patterns. However, my wife has been solid as a rock and I have to admit that she has done more than her fair share in ensuring that Michael is well taken care of and growing very well!

iii) Pre-loved goods

Everyone knows that raising a baby is expensive. You have to get diapers, the baby cot, stroller, milk bottles, toys, and much much more. Fortunately for us, there is a very supportive community of mothers (and parents) on Facebook that are happy to let go of their pre-loved goodies at a discount from the original retail price. Most of the items that we bought for Michael were pre-loved. Some of the best items that we have were given to us for free! We are still using those items today. Michael really enjoys his walker that was donated by our very kind neighbor.

4. Rome Was Not Built In A Day

I remember the first day when we brought Michael home from Selayang hospital. Within 5 minutes of putting him into the car, he started crying and could not stop. He was crying for help due to the unfamiliar environment. He was a helpless little baby.

Fast-forward to today. Michael is now 9 months old. Usually,  after his nap, he will start crying due to either hunger or just seeking attention. Just the other day, after one of his naps, he woke up but he did not cry. He just kept repeating "抱抱" (Bao bao), which means to carry him.

I also bore witness to his journey of learning how to crawl. He started with supporting himself with his legs, but his arms were not strong enough. Eventually, he could balance himself on all fours, albeit a little wobbly. Then he learnt how to rotate to look around. Subsequently, he started to move, but could only move in reverse. Finally, he actually started moving towards the front. This entire process took almost 2 months.

Something as simple as crawling that we so easily take for granted took us 2 months to learn when we were infants. With that perspective, how long are we prepared to invest to learn the more complex skills in life to succeed? How long are we prepared to invest to learn financial management? How long are we prepared to invest to learn public speaking? Surely, those high-level skills would take more than 2 months.

5. Focus On What Is Important Not Urgent

Going after a crawling infant who is unaware of the dangers surrounding him can lead to a pretty stressful routine. Always chasing after him, panicking unnecessarily. It is also much harder to be punctual for our appointments with friends, families, etc. This is because we are at the mercy of Michael's nap times and we also now have to pack for an extra person before we go out.

Those of you who know me, know that I strive to be punctual for all my meetings/appointments. Having to rely on the readiness of an infant to be on time can be stressful. However, one of the most important lessons that Michael has thought me was to focus on the important things.

For example, it is more important to ensure that we bring his snacks, toys, extra diapers than to be on time for our appointment. It is also more important to ensure that Michael has enough sleep before we go out. Otherwise, he will be very cranky and will end up being very disruptive during our outing.

I have been working on this post for a number of weeks and am finally coming to the end. I am truly appreciative of the opportunity of being a father and a husband. More specifically, I am truly thankful of being Michael's father. While he has certainly added joy to our lives, he has also taught me more than a few lessons. I am really looking forward towards what else he can teach me.

5 Benefits of Being Married to a Doctor

Some of you may know, about 10 days ago, my son was born through elective C-section surgery. For those who don't know what this means, it is basically an operation near the abdominal area of the mother to remove the baby from the womb. It is a fairly straightforward surgery. Our doctor advised us that natural birth posed a higher risk for the baby, but less risk to the mother. On the other hand, surgery posed a higher risk for the mother, but had minimal risks for the baby. Based on that, we decided to take the latter route.

And over the last 10 days, while I was busy celebrating the joys of being a new father, I had some time to ponder our 9-month long journey that led up to the pinnacle of Baby Michael's birth.

There were many ups and downs but on hindsight, this ride was made so much smoother just because my wife is a doctor. I don't show it often enough, but I truly and greatly appreciate the fact that my wife is a highly skilled and knowledgeable physician.

The list below is the top 5 of many other benefits of being married to a doctor.

1. Free personal medical advice/medicine/medical documentation

No prizes for guessing that I get free medical advice. However, being a doctor in the government clinic, she also enjoys the benefits of knowing other doctors, pharmacists who can dispense medication/supplements during her pregnancy.

She was also working in Sibu, Sarawak, which is about a 2-hour flight from Selangor, where I work. As a pregnant lady, taking flights back to West Malaysia requires a doctor's note. And my wife flies home at least 1-2 times a month. Having to go to a clinic to get a doctor's note every time she has to fly would have been a pain in the butt. But since she is a doctor who works at the clinic, getting those notes became no hassle at all.

2. Calm in the middle of a storm

By now, some of you may be wondering how can a pregnant woman fly so often. That is the very nature of my wife. In general, I truly believe that doctors are trained to be strong and independent. To remain calm when everyone around them is panicking. Otherwise, they would never get past 5 years of medical school.

What I truly appreciate about this characteristic is that her calmness keeps everyone else around calm. There were so many unknowns and uncertainties throughout the 9 months of our long distance pregnancy experience. How often do we have to fly back and forth to see each other? What happens if the baby had to be born prematurely? Can she survive living practically alone for 8 months carrying a child?

On hindsight, the past 9 months have been a miracle. My wife has been a rock throughout the last 9 months (and more). We are both truly blessed that our son is born healthy.

3. Other doctor friends

One of the coolest things about being married to a doctor is that they have plenty of doctor friends. I attended a couple of wedding dinners of my wife's friends, and we usually get seated at a table full of doctors. Generally, I don't really understand 50% of what they are talking about, but that is OK because that also means I don't have to talk very much. Just nod and smile.

Jokes aside, one of the other cool benefits is that she knows a Obstetrician & Gynaecologist who gave us a very significant discount for conducting one of our scanning sessions. We decided to go to a private hospital to get a 3D scan during the 7th month of pregnancy just to see what our son looks like.

A typical checkup costs close to RM300, depending on the hospital. We got to do our checkup for a steal. We could not believe the bill when we saw it.

Another great example is that my wife's ex-boss is also a Obstetrician & Gynaecologist. A very good one at that. Because of this, we knew exactly where to go to deliver our son. We did not have to shop around at different hospitals to find the most suitable and affordable option. We went straight to her ex-boss at a government hospital and we got excellent service there. More on this later.

4. Willingness to save others first

This is definitely one benefit that cannot be oversold, especially once you become a parent. For the first few days, your entire world (and sometimes more) revolves around the needs of this "can't-be-reasoned-with" dictator. 

WARNING: DO NOT stand or look too closely when you change a baby's diaper.

With the arrival of a child, if not managed well, the needs of the child can often turn into a major source of conflict for both parents. Whose turn is it to change the diapers? Whose turn is it to pick up the kid from soccer practice? This kind of behavior can often lead to unsustainable marriage practices as discussed in my previous article.

The Wall Street Journal quotes a research paper:

About two-thirds of couples see the quality of their relationship drop within three years of the birth of a child, according to data from the Relationship Research Institute in Seattle, a nonprofit organization focused on strengthening families. 

Sorry for all that negative publicity for having children. What I am trying to say is that while we share in the joy of having children, very often, couples forget to appreciate one another, and start to revert to their instinct of self-preservation. They start placing their own desires ahead of the family's. 

However, it is my belief (stereotypical as it may seem) that doctors somehow are less susceptible to selfish tendencies. This belief is founded on the basis that doctors generally have to fork out about half a million Ringgit to pursue what is considered to be one of the most difficult programs in university. To top it off, for the investment in being a doctor to be financially sound, one has to complete his/her specialization and sometimes sub-specialization before he/she can earn the big bucks. By this virtue, I choose to believe that doctors inherently have some gene in their body to want to help others first. 

And that is why I feel reassured that my wife and I will be able to raise our child in a wholesome and happy family. 

5. Special privileges at government hospitals

Last and perhaps the most important is that we really do get special benefits/treatment at government hospitals. 

Anyone who has been to a government hospital in Malaysia will most likely experience the expected dread that is the bureaucracy of the Malaysian public sector. I am actually quite pleased to say that we had quite the opposite experience at the government hospital that Michael was delivered in.

During our final check-up before deliver, I was admittedly dreading having to do it at the government hospital. Even though our appointment was at 12.30 pm, my wife insisted that we had to be at the hospital by 10.30 am and wait there for 2 hours. This would have been completely unacceptable in most other circumstances, but this is what we have come to expect from the Malaysian public sector. 

However, during our registration, the administrative assistant at the counter told us that we could just come at 12.30 pm and we were definitely too early for our appointment. We would be the first in line in any case. The multiple steps required by the bureaucracy still existed, and we had to do a bunch of silly administrative chores. Ordinarily, we would have been served by nurses and medical assistants that had sour faces (perhaps due to overwork). 

The biggest difference I noticed was that every time they looked at our files, they immediately took notice of the fact that my wife was a doctor, and their sour faces turned into smiles (that exude rainbows and unicorns). They became extremely courteous and polite, serving us to the best of their ability. I noticed the same thing happening again during the day of Baby Michael's delivery. All the nurses kept referring to my wife as "The Doctor" like she was the Don of some Italian Mafia. I was pleasantly amused. 

On top of that, only a few days ago, we had to take Baby Michael for his jaundice check-up. We were concerned that his jaundice had spread to his legs and decided to go straight to the Trauma and Emergency Unit. The medical assistant at the gate had initially tried to turn us to the clinic before allowing us to seek consultation with the doctors at the emergency unit. However, upon finding out that my wife is a doctor, he quite promptly ushered us in without any further argument. Thankfully Baby Michael is just fine and we were informed that it was safe to go home.

There were many other small examples of how a government doctor really does have special privileges, but the above is just simply a clear exhibition of the "good fortune" that I have experienced just because my wife is a doctor.

It goes without saying, but I really must say that I am truly grateful and blessed with a loving wife (not just because she is a doctor) and I look forward to raising a very cute and intelligent son with her. 

5 Worrying Signs For Apple

Volume 4 Issue 25: Intelligent Investing

I am not an extreme tech enthusiast. Far from it. The Worldwide Developers Conference, or better known as the WWDC, is Apple’s annual event where they launch their new gadgets, or software and fun stuff like that. But based on yesterday’s news from the WWDC, I see a big sign of worry for Apple. Especially if you are an Apple investor.

As I said, I am not a techie. So if you were to ask me to discern the functionality of the iOS 6 vs the Android Ice Cream Sandwich, the best thing that I can probably tell you is that Ice Cream Sandwich has a far more enticing name.

But I pride myself in spotting macro-trends and here are 5 worrying signs for Apple as I see it:

1. Android x (Samsung + HTC)

As recently as three years ago, there was no serious competitor in sight to Apple’s iPhone 3 and 3GS. I am a (very unproud)owner of an iPhone 3GS and the only reason I got it was because there were no close substitutes to a web-capable mobile phone.

In 2009, Google tried their hand with the NexusOne and the reception was lukewarm at best. Google fanboys swarmed to it but Apple was still the king of pop when it came to “coolness”. Apple definitely got it right with ads like these:

Fastforward to 2012. Apple is no longer just up against the likes of Nokia, or Google’s half-hearted attempt at a smartphone. Samsung and HTC have combined powers with Google and have proven to be more than a challenge to Apple’s throne in the smartphone arena.

It is easy to see why. When you are the market leader, you can be certain that every one will be gunning for your back. And technology is one of the most competitive and fast-changing industries. Case in point: Nokia’s “demise” in the smartphone industry.

In fact, it is arguable that Samsung has definitely arrived at the “coolness” stage. The Galaxy S2, the Galaxy Note, the Galaxy Nexus, and most recently, the Galaxy S3 are more than serious challengers to Apple's iPhones. How do I know this is a legitimate challenge? This brings us to point No. 2.

2. Patent suits

The amount of lawsuits filed by Apple against Samsung just keeps increasing. While others may see this as a sign that Samsung "copied" Apple, I see this as Samsung is legitimately challenging Apple. Why else would Apple take Samsung to court over the most frivolous of disputes. How frivolous? Here are some samples:

a) A spokesman for Apple told Mobilized the Galaxy line infringes the 'Trade Dress' of the iPhone and iPad by using a rectangular design with rounded edges. Apple notes the black borders that adorn the Galaxy Tab are similar to those on the iPad.

b) They also believe Samsung has copied the use of small square app icons.

c) Even the slide-to-unlock feature that was first seen on a Nokia was disputed. 

After all, you could find thousands of other copycats out there, especially in China. Even Malaysia is getting on the tablet wagon with its 1Malaysia Tablet. The reason Apple has singled out Samsung is plain and simple. It is the biggest challenger and Apple is trying to take them out of the game. Being the cynic that I am, I think the main purpose is just to delay the launch of Samsung's products so that they can catch up. Yes, you heard me right. Apple is playing catch up right now. Samsung has come up with product after product with almost no real answer from apple after the iPhone 4.

3. No New Products?!

This one is sure to strike a chord with Apple fanboys. I am claiming that Apple has not launched anything revolutionary since the iPhone 4 and iPad 2. Since those two products, Apple has come up with the iPhone 4S and the "new" iPad. The iPhone 4S is just a souped up version of the iPhone 4 and is far from game-changing. It saw the introduction of Siri, which is more of a gimmick that has an entertainment value of two weeks or so, than an actual game-changer. There is great potential for voice-command, but more still needs to be done. The 3rd generation iPad, also called "the new iPad", is also just a souped up version of the previous iPads. There was nothing "gotta-have-it" about the new iPad. One has to question, did all of Apple's creativity move on to the next world with Steve Jobs?

The latest WWDC was again a let-down of sorts. While Apple is best known for its secret-keeping, the delay of the iPhone 5 hints of Apple's impotence in trying to catch up with Samsung. They took a look at the S3 and was like, "Holy Crap!". So it is back to the drawing boards for Jonathan Ive and his team of designers. The best they could come up with at the WWDC was, "We are going to upgrade the Macbook Pro" and "We will have our own version of Apple maps, but our web-based version will link you to Google Maps". By the time they come up with the Galaxy S3 beater, Samsung would be ready to launch their next Apple killer. The iPhone 5 is probably the last bet for Apple to flex its muscle. Without any game-changer ala Jobs, it does not bode well for Apple's future.

4. Cracking China

With 1.3 billion people in China with an increasingly bulging middle class, it is already a given that China is THE consumer market. All the big brands in all industries like BMW, Volkswagen, Adidas, Nike, Louis Vuitton, Hermes and Gucci want a piece of that Chinese pancake. But Apple finds itself a stranger in a country where imitation is free game. Apple has to come to terms with the fact that as soon as they launch a new product, some smart Chinese dude is going to get his hands on one, crack it open, reverse engineer the product and launch a rip-off that is half the price of Apple's product. And point No. 5 shows why this is a huge problem.

5. Fat Margins

One of the main reasons why ripping off Apple's products is a viable business is simply because Apple prides itself in charging fat profit margins. This is probably Apple's best non-kept secret. In the given link, page 43 of Apple's 2011 annual report (Form 10-K) shows that Apple's gross profit margin is over 40% while its net profit margin is about 24%. While most people may be OK with paying Apple that kind of premium, but economics dictate that such profit margins WILL be challenged. Samsung will continue to launch cheaper and arguably better products with HTC not far behind.

In an oligopolistic market, Apple is unlikely to descend into an all-out price war with the other two Asian upstarts. This partially explains why it needs to go through the patent-trolling route. It is fighting to separate itself from Samsung and HTC products as much as possible, to generate what economists call "perceived differentiation" so that it can continue to charge the fat margins that it has been charging all this while. Given the lucrativeness of this smartphone and tablet business, you can count on the fact that the competition is not going away. To be able to keep charging the premium that it has been charging, Apple needs to come out with equally deserving products. The iPhone 4S and the "new" iPad isn't going to cut it.