{"id":1468,"date":"2020-12-30T23:45:15","date_gmt":"2020-12-30T23:45:15","guid":{"rendered":"http:\/\/people.utm.my\/zaid\/?p=1468"},"modified":"2021-01-01T13:07:34","modified_gmt":"2021-01-01T13:07:34","slug":"financial-education-how-to-avoid-being-broke-in-the-recession","status":"publish","type":"post","link":"https:\/\/people.utm.my\/zaid\/financial-education-how-to-avoid-being-broke-in-the-recession\/","title":{"rendered":"Financial Education: How to Avoid Being Broke in the Recession"},"content":{"rendered":"

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Hey everybody. It\u2019s me, Sir Zaid.<\/p>\n

If you\u2019re looking for ways to avoid being broke in the recession, this article is for you.<\/p>\n

I\u2019m about to reveal some easy ways to survive and thrive in this economic downturn without losing sleep, risking lives, or cutting ties.<\/p>\n

I understand that this recession can be a very stressful and challenging time. I remember all those struggles I had to face in the 2008 recession. Thank God this time around I’m in a totally different position. That\u2019s why today I\u2019m sharing with you 5 unusual tips to avoid being broke in the recession.<\/p>\n

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1. Get a Big Why<\/strong><\/h2>\n

Some people think this is a hocus focus kinda thing. But to me, it\u2019s really necessary for this situation. If someone comes to you and asks for financial advice, and you start with the usual stuff like save more money, make more money, or track your expenses, you\u2019re almost always leading him to failure, Why?<\/span><\/p>\n

In short, it\u2019s your current condition and the way we\u2019re conditioned.\u00a0<\/span><\/p>\n

Here\u2019s the irony in humanity…\u00a0\u00a0<\/span><\/p>\n

Before diabetes or any other chronic illness, for that matter, it\u2019s pretty hard for most people to eat clean. We simply can\u2019t control our diet. After diabetes, eating clean suddenly becomes possible.<\/span><\/p>\n

Before a divorce, before heartbroken, most people don\u2019t know how to love or make love properly. They simply can\u2019t manifest love. But after divorce, he\u2019s a changed man. She\u2019s a changed woman.<\/span><\/p>\n

The same thing goes for finance. Before they\u2019re broke, it\u2019s pretty damn hard to manage finance. But after they\u2019re broke, suddenly they CAN manage their finances.\u00a0<\/span><\/p>\n

Why is that? Is it that we don\u2019t know any better? Most of us already know the danger of having too much sugar. We already know love requires commitment. I mean, it takes effort to make love, give love, or get love. We already know a financial tip or two. But why are we still slacking?\u00a0<\/span><\/p>\n

Because knowing is not the same as experiencing.<\/span><\/p>\n

David Buss is one of the most quoted psychologists out there. He said that after the age of 25, it\u2019s hard for people to \u2018learn\u2019. It\u2019s very hard to change people when they\u2019re adults. \u2018You can\u2019t teach old dogs new tricks,\u2019 they say.\u00a0<\/span><\/p>\n

But before all you above 25 get depressed, there\u2019s still hope, he said. People in adulthood learn best through massive trauma. It rewires our brain. but sometimes it\u2019s too late, just like in the case of that diabetic patient earlier. If the trauma is massive enough, our brain will say \u2018enough is enough\u2019. That\u2019s when we have our Harajuku moment. That\u2019s where we have that drive to hustle, that REASON to overcome the odds.<\/span><\/p>\n

This is the very reason why most people can only get their act together after a big tragedy.\u00a0\u00a0<\/span><\/p>\n

If you\u2019re currently reading this, I bet you\u2019re looking for ways to avoid being broke, just like it says in the title. Most likely you\u2019re not broke yet, and hopefully, you\u2019ll never be broke. But, unlike the people who\u2019re already broke, your drive might not be as strong as theirs, because you haven\u2019t experienced a massive enough trauma yet.\u00a0<\/span><\/p>\n

Your advantage, compared to them, is that you still have the resources to work on. Your disadvantage, against them, is you don\u2019t have that strong drive they have. There\u2019s no Harajuku moment for you to capitalize on. This is your big problem.<\/span><\/p>\n

We work so hard to get comfortable. But when we indulge in it too much, we get soft, we get weak. We lose our willpower little by little. And that\u2019s the beginning of our demise. How many times you hear yourself saying \u201cit\u2019s just another sip of soda,\u201d or another bite of chocolate, or another puff of the cigar, or another buy on the net. It\u2019s okay, I can handle this. But before we know it, we wasted countless amounts of time, money, and resources on stuff that is killing us softly.\u00a0<\/span><\/p>\n

So is there a way for you to stay on course and avoid being broke in this economy, without experiencing a major tragedy?<\/span><\/p>\n

Yes. It starts by building a Big Why. Here\u2019s how…<\/span><\/strong><\/p>\n

Maybe you have done some of this before. But this time, you do all this with an awoken mind. That\u2019s a big difference. It\u2019s all about what you experience, the meaning, and how much and how deep you learn from them.\u00a0<\/span><\/p>\n

And maybe you can\u2019t afford to do some of this. That\u2019s alright. You can do the alternatives instead.<\/span><\/p>\n

Step 1:<\/span><\/strong>\u00a0Take a moment, a pen, and a piece of paper. Then ask yourself these questions:\u00a0<\/span><\/p>\n

1.\u201cWhat will I gain when I avoid being broke?\u201d<\/span><\/p>\n

2.\u201cWhat kind of pain will I experience if I become broke?\u201d<\/span><\/p>\n

Take some time. Give yourself some honest answers. Write from the bottom of your heart. Visualize whenever possible. Notice what you see, what you hear, what you smell, what you feel, kinesthetically, what you feel, emotionally, and what you think in both situations.\u00a0<\/span><\/p>\n

Stop reading, start doing. And get back to this when you\u2019re done.<\/span><\/p>\n

Step 2:<\/span><\/strong>\u00a0Actively find some true stories about both conditions.\u00a0<\/span><\/p>\n

Read some news, articles, non-fiction, or autobiographies.\u00a0<\/span><\/p>\n

Learn what the broke people are experiencing. How would their day be like? Give them the empathy they deserve.\u00a0<\/span><\/p>\n

Similarly, learn what the well-off are experiencing. How would their day be like? Give them the respect some of them deserve. Feel sincerely happy for them. Pray for them to receive more. Pray for yourself the same fortune.\u00a0 \u00a0 \u00a0<\/span><\/p>\n

Step 3:<\/span><\/strong>\u00a0Actively take a closer look at both conditions.<\/span><\/p>\n

Go to both rich and poor neighborhoods. Notice the difference. Hang out with rich people someday and poor people the other day. Make new friends if you have to. Get in touch with old friends in both categories. Do more charity. Talk to real people at the charity event, both the fortunate and the less.\u00a0<\/span><\/p>\n

Step 4:<\/span><\/strong>\u00a0Actively create some mini-experience of both situations for yourself<\/span><\/p>\n

Live like the rich some days. Then live like the poor some other days.\u00a0\u00a0<\/span><\/p>\n

Once in a while, book a nice Airbnb. The kind of place you\u2019d like to own in the future. Test-drive some luxury cars. The ones you\u2019re aiming for. Treat your honey with some fine dining, the ones that make you feel rich.\u00a0<\/span><\/p>\n

Go for some luxury vacations. These days you experience this once in a while. In the future, you might experience this every day. Do more charity. Give more donations like you\u2019re already rich. This will come back to you in manifolds…<\/span><\/p>\n

Do more fasting, be it intermittent fasting or spiritual fasting. Set a day or two where you refrain from buying a single thing, not even food or transportation. Go to the ghetto and live like the community there.\u00a0 \u00a0\u00a0<\/span><\/p>\n

If you can do all this, you\u2019ll learn that valuable lesson from experience. If you can do just half of this, you still learn the same lessons, but to a lower degree. If you can\u2019t do any of it yet, that\u2019s even a bigger reason why you have to avoid being broke. So you learn some lessons too.<\/span><\/p>\n

By the way, don\u2019t get too carried away, though. Do all this within your means, be it the lux or the hardship experience. Start small and make progress. For instance, do intermittent fasting once a month. Later, make it once a week. Book a staycation first. Later, book a 3-day vacation.\u00a0<\/span><\/p>\n

The knowledge and experience combined will build a strong reason to take good care of your financial wellbeing. Probably you\u2019ve done something like this before. But from today onwards do them with an awoken mind. Have that life-lesson connection in both situations. This makes it more powerful.<\/span><\/p>\n

<\/span><\/a><\/p>\n

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\u00a02. Stack up your cash reserve fast<\/strong><\/h2>\n

Now that you have the inner game handled, let\u2019s tackle the how-tos.\u00a0<\/span><\/p>\n

If you don\u2019t have enough cash, you\u2019re just one tragedy away from losing everything, Don\u2019t leave it to chance.<\/span><\/p>\n

How much money should you save?<\/span><\/p>\n

I hear many people say that you should save 6 months worth of your salary or income, so if something bad happens, you\u2019re still doing fine. To me, that doesn\u2019t quite hit the mark. That\u2019s only applicable if you regularly spend less than you earn. Most people don\u2019t.\u00a0<\/span><\/p>\n

And if you spend way less than you earn, that approach can be too time-consuming. It will take too long before you can get any piece of the action. You might lose a lot of opportunities to grow that money or invest some assets.\u00a0 \u00a0\u00a0<\/span><\/p>\n

I suggest you save 6-12 months of your expenses, depending on your risk appetite, regardless of how much you earn. Some people call this the emergency fund, and I have no problem with that. I like to call it the protection fund, \u2018coz I want to build better protection., not attracting more emergencies. Words have power, and I plan to capitalize as much as I can. But that\u2019s just me.<\/span><\/p>\n

Anyway, this should be the priority before anything else. If you haven\u2019t covered 6-12 months yet, forget about investing for the time being, let alone your dream car or dream home. Do this first. Take baby steps. That\u2019s the way we master anything.\u00a0<\/span><\/p>\n

This is why we just want to cover the expenses and not the income. You\u2019d want to hit this goal fast, so you and your loved ones are well-protected, and you can stack up another reserve for other things like investment, business capital, and luxuries.<\/span><\/p>\n

Right now you might be asking, \u201cWhy can\u2019t I start investing with this money right off the bat? Shouldn\u2019t I start investing ASAP?\u201d Yeah, but any worthwhile investment has risk, and you can\u2019t execute a good offense with a poor defense. Most importantly, in many cases, once you use the money to invest, you can’t liquidate or withdraw that money for other purposes like emergencies and stuff.\u00a0 This is like building a house of cards. It\u2019s shaky. That\u2019s why we need to stack this up fast.<\/span><\/p>\n

The only exception to this rule is if you can find some sort of unit trust that\u2019s guaranteed or backed up by your government, like ASB in Malaysia (can be translated as native\/indigenous trust fund). This means that the government guarantees its positive return, that if it doesn\u2019t give a positive return that year, the government will help make the return positive.<\/span><\/p>\n

If you can find that kind of deal in your country, and you\u2019re eligible, you can park this whole cash reserve in the trust fund. But keep yourself updated, \u2018coz the rules and regulations can change any time.\u00a0 \u00a0 \u00a0<\/span><\/p>\n

But bear in mind. The dividend from this kind of fund is not that high. ASB for example historically gives only 4-12% dividend since it started (not including the bonuses). While this is better than parking your money in the bank, it pales in comparison to the top-performing unit trusts and mutual funds out there. But for a no-risk \u2018investment\u2019, we shouldn\u2019t complain.<\/span><\/p>\n

For the relatively higher risk higher return investments, start only when you have enough cash.\u00a0<\/span><\/p>\n

The next question is, \u201cHow do I build this cash reserve fast?\u201d<\/span><\/p>\n

At any given moment, be it before, during, or after the recession, the equation is always the same\u2026<\/span><\/p>\n