Are you a spender or an investor?

We need to spend. Our wealth creation destiny depends on how we spend our money. Money is a form of energy, it must flow. If it is kept, we are blocking the money energy from flowing. It will hurt us than do us any good. If we need to make sure our money flows out, we have 2 ways, either we spend it or we use it to invest.

Spenders are normally positive about the future. Hence, they hardly have any future plan because they believe things will turn out good in the future for them. They adopt instant gratification which they treat enjoyment more important than the future. They will spend more for luxurious items. They like big cars and houses. They are not very careful on spending because enjoyment comes first. This group of people hence will struggle more to meet the month ends. If they are not careful, they will easily fall into the credit card debts.

Investors are spenders too because they will spend their money on investments. They believe by spending on investments, the investments will in turn generate more incomes for them. Hence, they can slowly upgrade their lifestyle. They may not need to be frugal because the incomes for investors are normally higher. They are 2 groups of investors as well. One group of investors will invest using their hard earn money. The other group of investors understand the power of Other People Money (OPM), which allows them to invest using other people money.

• Ahmad, a spender, ends up every month with zero saving every month. He bought an expensive watch and ended up with RM 4,500 credit card debt.
• Adil, an investor, is able to save 30% of his salary every month, i.e. RM 3,000 per month. After 12 months, he used partial of his saving of RM 30,000 to purchase a low medium cost apartment at RM 300,000. He paid 10% down payment and borrowed the remaining 90% from the bank. Next, he rented out his apartment at RM 1800 per month. He sold his apartment at RM 400,000 after 3 years

Through this example, you see also two people, i.e. Ahmad and Adil are in debts. Why Ahmad has no money and is struggling while Adil is borrowing but is thriving with more money – rental and capital gain? Would you want to be spender or investor?

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