4
STEPS TO
FINANCIAL
FREEDOM A GUIDE TO YOUR FINANCIAL DESTINY
Learn Why the Rich are Getting Richer and Healthier
SEAN TOH
Published by Sean Toh Copyright 2007 Sean Toh Publication Consultant: Rank Books (www.rankbooks.com) Edited by Phua Wen Yi Design by Nathania Fransiska Susilo First Published January 2007 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. This book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, re-sold, hired out, or otherwise circulated without the publisher’s prior consent in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent purchaser.
ISBN 978-981-05-7613-4 Printed in Singapore Disclaimer: This book contains the ideas and opinions of the author. It is not a recommendation to purchase or sell any of the securities, businesses, or investments discussed herein. The author and publisher are not stockbrokers, broker dealers, registered investment advisors, or health experts in the field of fitness and nutrition nor registered physicians or practitioners. We do not recommend any particular stocks, investments or securities of any kind. If particular stocks and investments are mentioned, they are mentioned only for illustrative and educational purposes. We also do not recommend any health and nutritional plan. If a particular plan or exercise regime has been mentioned, they are mentioned only for illustrative and educational purposes. Please consult a proper physician before embarking on an exercise regime and health plan. The publishers and author assume no liability for any outcome, including losses and/or health damages, incurred by readers using information from this book.
Special Thanks to: Sam Choo Dr Ben Chan Dr Rita Goh
In Dedication to: my daughters, Jessica and Tranyce Toh
Acknowledgement I would like to thank my parents, Swee Chong and Ah Chya, for having given me their unconditional love and support throughout the years, allowing me to be the best that I can be. I especially thank my wife, Heather, for being so understanding, and for having served as my source of inspiration and strength. Without her, I would not have achieved so much success in my life. To my daughters, Jessica and Tranyce, thanks for making me smile, motivating me to be the real father that I can be, and helping me live my life to the fullest. I am grateful too for the brotherly support and friendship that my brothers, Thomas and Steven, have given me all this time. In addition, thanks goes to my relatives and friends for having helped my family and me in multiple ways, and for offering their emotional support and belief in me. I would also like to thank all the great leaders of Singapore who have shown great leadership in governing this country, especially, Prime Minister Mr Lee Hsien Loong, Minister Mentor Mr Lee Kuan Yew, Senior Minister Mr Goh Chok Tong, and Education Minister Mr Tharman Shanmugaratnam, who have made Singapore a country of opportunities, allowing even the poorest to succeed. Thank you also to all the principals, teachers, and lecturers from Westlake and Henderson secondary school, Singapore Polytechnic, Nanyang Technological University, and National Institute of Education, for having played a tremendous part in shaping
me into who I am today. Special thanks goes to Dr Ben Chan, Mrs Yeo Chim Nam, and Mr Koh Nai Theng, to my mentors and idols whom I chose to use to motivate myself to achieve success at different points in my life, and to my friends, Roland Tan, Eileen Ang, and Clive Tan, with whom I enjoy great friendship and exchange of ideas. To all the Singapore national bodybuilders, especially Ibrahim Sihat, thanks for having given me all the bodybuilding tips, training, and dieting techniques for contest preparation. To Paul Chua, from IFBB (International Federation Of Bodybuilders) and Vice President for Asia Secretary-General Asian Bodybuilding Federation and Commonwealth Bodybuilding Federation. To Arnold Schwarzengger, Warren Buffet, George Soros, Robert T Kiyosaki, Suze Orman, Sir Richard Brandson, Dr Andrew Weil MD, Alex Mandossian, Armand Morin, Aaron Sim, Robert G Allen, and Adam Khoo, I acknowledge them for all the invaluable strategies of building wealth and success, which I gleaned from reading their books and attending their seminars. Finally, thanks to the management and staff of Mentor Wealth Pte Ltd, especially Aaron Sim for showing me the power of Internet marketing. To Dr Rita Goh and Sam Choo of writers.sg, thanks for having shown and given me the inspiration on how to go about writing my first book and getting it published.
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Contents Get Healthy And Strive For Great Health 1
Chapter 1
My Personal Experience
Chapter 2
Why Your Health Matters In Wealth Creation
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Chapter 3
Your Body Is Ready To Learn Now
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Adopt An Open Mindset To Learn
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Chapter 4
A Successful Open Mindset
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Chapter 5
Take Actions By Practicing What You Learn
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Invest Your Time In Financial And Health Education
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Chapter 6
Zero Financial Education
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Chapter 7
Start Your Financial Education
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Enjoy The Wealth That You Have Created
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Chapter 8
Enjoy Your Wealth Young
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Chapter 9
Learning To Give
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Chapter 10
Summaries Of Success Secrets
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References
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About The Author
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Credit Plus Health’s Website
147
Contact Sean Toh
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CHAPTER 1 - MY PERSONAL EXPERIENCE
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CHAPTER 1 - MY PERSONAL EXPERIENCE
My Personal Experience
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Hi, I’m Sean Toh. Before I introduce myself and share with you my background and personal experiences, I would like to congratulate you for taking the first step in reading this book. “4 Steps to Financial Freedom” is a comprehensive book that comes with a ten-hours, life-changing selfstudy audio programme that will teach you proven principles and timeless wealth building techniques, combined with simple, practical, and proven financial strategies used by thousands of people to create a life of abundance. If you allow yourself to practice these four steps, it will change your life, as you make the decision to take actions to go on this journey of creating wealth for yourself. “4 Steps to Financial Freedom” is a philosophy of mine that I practice, which allows me to go on the journey of creating wealth for myself.
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The “4 Steps to Financial Freedom” consists of:
Step 1 – Get Healthy and Strive for Great Health Step 2 – Adopt an Open Mindset to Learn Step 3 – Invest Your Time in Financial and Health Education Step 4 – Enjoy the Wealth that You Have Created As I continue to gain more wealth, I still firmly believe in these four steps and continue to let them influence me and be part of me. These four steps can be immensely strong and overwhelming if you allow them to be or they can mean nothing to you if you decide not to practice them.
My Humble Beginnings I have a father who was a gambler and a mother who was a production worker. Both my parents were not highly educated. As a young boy, I was never happy because my family was always having financial problems. My father would take loans from loan sharks when he could not pay his debts. I always remember those days when my mother had to work long hours in a garment factory to bring in more money for our family. However, that extra money would be snatched away by my father to pay his debts. As a result, my parents were frequently fighting over money. Although as a young helpless boy I did not know how to handle those situations, I did learn one thing — money is an important resource in our life.
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Hence, money never came easy for me. I spent my childhood looking for money to support my family and myself, and to put myself through school. At the same time, I was interested in bodybuilding as I thought bodybuilding would help me build muscles that would allow me to take up manual jobs such as those in construction sites. I chose to work in construction because it paid me a bit more money, but the job was hard and dangerous. Over the years, I have worked during school holidays as a waiter, dishwasher, construction worker, salesman, jeans promoter, personal trainer, part-time model, etc, all for the sake of paying debts for my father and to finish school. At 22, I had to serve my national service after I graduated from Singapore Polytechnic with my Diploma in Electronics and Communication Engineering. My dream then was to land myself a job in engineering after my national service. But never did I expect my father to gamble even more when his business as a pork seller in the market worsened. He got into a bigger debt and ended up taking a big loan from a loan shark. Hence, instead of finding a job in the engineering field I studied, I became a flight attendant with Singapore Airlines so I would have more money to pay off my father’s debt. Why did I not choose an engineering job instead? Because the interest rate from the loan shark was ridiculously high, I had to raise $60,000 from friends and relatives to pay off the loan straight away, for if not, my family would be endangered. Once I paid off my father’s debt, my next thought was to pay off the loans I had taken from friends and relatives with a job that paid well. The Sean I
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was at 25-years-old had so many dreams, one of which was to travel the world. As a flight attendant, I could fulfill my dream and pay off all my loans. My greatest achievement was that I managed to pay off my father’s debt and save $30,000 to pursue my degree in Electrical and Electronics Engineering at Nanyang Technological University in Singapore after working in Singapore Airlines for two and a half years. Read My Travel Experiences: http://bestexperiencest.blogspot.com/
Pursuing My Dream of Bodybuilding I was determined to achieve my dreams. With perseverance I have grown in character through various challenges, including my bodybuilding training. Since young, I also learned to be very observant in spotting opportunities. I enjoyed every aspect of my life and wanted to achieve a lot in life. As a young boy, one of my dreams was to become a bodybuilder. I just liked the look of a great physique. Hence, Arnold Schwarzenegger was naturally my favorite idol, and still is. I started bodybuilding when I was 16-years-old. I learned from any available magazine and book that I could find about bodybuilding. I was so crazy over bodybuilding that I would talk to every national bodybuilder I met in Singapore, and I learned and experimented with all the little tips
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A Front Lat Spread pose at ‘Muscle War 98’. I fulfilled my dream of being a bodybuilder. they gave me about training and nutrition. It was a long process trying to build my physique, and it took me more than ten years to be able to compete in my tertiary bodybuilding competition in 1998. I emerged third in the competition. It was not the winning that I was happy with, but the satisfaction I derived from the process of trying something that initially looked impossible to most people. From this I learned that as long as I am passionate about what I like to do, no matter how hard or difficult it is, I have what it takes to achieve it as long as I believe in myself, proceed with perseverance and a strong will, and never lose faith in what I’m doing.
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A Front Double Biceps pose at ‘Muscle War 98’. In pursuit of my dream — I discover the real Me.
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Lessons in Bodybuilding At this point, you will be asking why I am sharing my bodybuilding experience with you now. Regardless of whether it is bodybuilding or building your financial wealth, your success is actually determined by your attitude and belief in yourself. What is important is taking little actions to achieve little goals one at a time, to achieve in the end the completion of your big goal. It’s the vision I had for myself — that I could become a bodybuilder — that motivated me to train hard to build up my muscles in order to look like a bodybuilder. Without this vision and belief that I could be a bodybuilder, I would not have been able to go through all these years of training just to build up a physique that allowed me to compete as a real bodybuilder. How can we relate bodybuilding to building your financial wealth? The process is actually the same! If you do not have an attitude to envision yourself as a financially wealthy man, can you ever become wealthy? It is this vision and belief you have for yourself that will motivate you and drive you to take the actions to become wealthy. It’s these actions that cause you to be wealthy. For example, you will start taking actions like looking for books to learn how you can become wealthier, and further apply those wealth creation strategies to truly make you wealthy. Hence, you can see there are similarities between bodybuilding and building your wealth. Building the bicep muscles is like saving $1 dollar every day in your savings box and building those quadricep muscles is like creating your financial portfolio of investing in different instruments like cash
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A Side Triceps pose at ‘Muscle War 98’. I envisioned my success beyond my built! deposits, unit trusts, stocks, real estate, etc. The process of building your wealth is the same as for bodybuilding.
Meeting My Life Partner As I was pursuing my degree in the university, I continued to work parttime as a waiter in an American Restaurant called Tony Roma’s Ribs. Though this job didn’t pay me very well, I enjoyed serving customers from all walks of life. It was through this job that I met my wife, Heather, who was one of my customers at the restaurant. We got married in 1998 when I was finishing my last year of university. 10
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I invited my friends from the university for my wedding, and they were surprised, because in Singapore, people will not get married without having stable careers and financial stability. I was able to do that because I had been saving over the years. It was so much easier for me to save when I was single then after marriage. I just needed that discipline to save a portion of my income from my part-time job every month as I was living with my parents, who were handling all the expenses in the house. Now, I have two daughters and my wife doesn’t have to work, whereas many of my peers and friends have just gotten married and have no children or are still single from choice. I have two girls: Jessica, who is seven, and Tranyce who is four. As Heather is from Australia, we make an effort to see our parents once a year in Sydney and in Perth.
Going Broke and Getting My Financial Awakening After getting married, I was broke because I used up all my savings for the wedding. In addition, I had to take a mortgage for our home, renovate the home, buy all the appliances and furniture, pay all the bills, and give my parents $600 monthly. Every month, I struggled to make my ends meet. I was using credit to roll over credit, and this made it worse because I was in debt. When I was in debt and working as a lightings designer, it was additionally stressful as I had to manage multiple projects, while at the same time I had more arguments with my wife over not having enough money. 11
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One day, I saw a book called, “Rich Dad Poor Dad” by Robert Kiyosaki, in the bookstore. I had heard so much about this book as it was a New York Times bestseller. I was doubtful about a book giving me financial advice, but I decided to give it a try. I bought the fifteen-dollar book and started reading. As I read it, I could not stop because it got so interesting that I decided to give dinner a miss and try to finish the whole book. This book doesn’t provide you all the details on how to make your money but it is an eye-opening book that can make you realise what is wrong and that you actually know very little about money matters. After reading it, I had two paths to choose from: I could take no further action, or I could decide to find even more materials to educate myself on how to change my life to rid myself of my debt and start my journey to building wealth. I chose the latter. All this time, I thought that buying a big expensive house is actually an asset. After reading “Rich Dad, Poor Dad”, I found out that buying a big expensive house is actually a liability, not an asset. If instead you buy a house to rent out for rental income, it will be considered an asset because your investment will help you create passive income. You also gain capital appreciation when you sell off your house at a higher price compared to the price you bought it at.
On the Road to Financial Awakening It took me three years to educate myself about financial matters, and I still continue to invest in books, videos, and seminars to further my 12
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financial education. I’ve read over 200 hundred books from the library and practiced the ideas I got from these books to get rid of my debt and slowly save some money to start my investment. I went through trials and errors to learn the valuable lessons of what worked for me, and abandoned strategies that didn’t work. Slowly, I managed to get returns from applying the right investment strategies to create the wealth that I have now. I used many strategies for my own financial planning. For example, I learned to use the concept of modern portfolio theory to allocate assets according to my personal risk profile when I managed to clear my debts and save some money. As I have a long time horizon to achieve my investment objectives, I am pretty comfortable taking some risks. I typically allocate more assets in equities or stocks to help give me more returns compared to assets like bonds. I also allocate 40 percent of my financial portfolio in assets like bonds and cash deposits to diversify some of the risks so that my investment capital in my overall portfolio is still there if the stock market is really bad. The first rule of investing is the preservation of your investment capital by applying the application of modern portfolio theory. I have realised that the more I’m willing to learn and apply what I’ve learned, the more successful and wealthy I can become. What Robert Kiyosaki, the author of “Rich Dad Poor Dad”, says is true. We spend ten years educating ourselves in primary and high school on academic subjects and another ten years on professional training in higher 13
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learning institutes to learn the professional skills to help us get on with our career, but we invest very little on financial education. Hence, we fail to manage the money when the money comes. At this point in my life, I have managed to build enough financial wealth to do most of the things I like to do. Although I am financially sound and don’t have to worry like I used to, I still choose to continue to work as I continue to invest heavily in my financial and health education to create even more wealth, which allows me to share with people who are struggling financially trying to meet their end needs.
My Definition of Financial Freedom Most people define financial freedom as the state upon which one has accumulated sufficient assets that generate sufficient passive income such that we no longer have to rely on our job to support the lifestyle we want. In other words, you will not have to worry about money as you have sufficient assets to continually generate money that allows you to live your lifestyle.
Financial Freedom is About Building Financial Muscles I define financial freedom differently. My personal definition of financial freedom is when I have accumulated sufficient financial education to empower myself to make careful investment decisions to create even more 14
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wealth from my investment capital. In short, financial freedom means arming myself with the tools and skills to use money to make money! It is about building your financial muscles — and just like bodybuilding, it’s all about muscle building. I prefer my definition of financial freedom because I believe it is more powerful and practical. Knowing how to fish is more powerful than only having the fish. In bodybuilding, once you know how to build muscles, you can choose where and what kind of muscles you want to build. You can choose to build muscles with more separations and definitions. You can also choose to build more slow twitch muscle fibre for endurance activities or fast twitch muscle fibre for short, fast bursts of power. In the same way, once you have the financial muscles, you can decide what kind of investment instruments you want to use to create your wealth, what kind of tools you can use to succeed, how much money you want to make, and in what time period. Once you are empowered with the right financial education, you will be on the route to wealth creation.
“The difference between the rich and the poor is that the rich have more financial muscles than the poor.” Sean Toh
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Dare to Dream and Emulate Successful Idols I have so many dreams in life that I am going to share one with you now. My next dream is to own real estate in different parts of the world and travel with my family whenever we like to. Though I have not succeeded in achieving this dream yet, I am using new idols like Warren Buffet, Li Ka Shing, George Soros, Robert Kiyosaki, Suze Orman, Bill Gates, Anthony Robbins, Alex Mandossian, and Armand Morin, to learn from them and motivate myself to achieve what I set out to do. Why you must dare to dream? If I did not dare to dream to be a bodybuilder and use my favorite idol, Arnold Schwarzenegger, as my main motivation to be bodybuilder, I would not have gone through that process of building those muscles with all my passion, time, and energy to fulfill my bodybuilding dream. In order for me to be financially successful, I have to dare to dream to be like Warren Buffet so that I can emulate his success in investing. If you want to fulfill your dream of success you must dare to dream and use those idols who can help guide you become who you really would like to be. At this point in my life, I have not achieved the big dream stated above. Nonetheless, I have achieved enough financial stability to be able to share with others. I was not born rich, but I struggled through life to achieve financial freedom, which I believe is possible for everyone to attain. I will 16
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always remember my humble beginnings even if I’m a billionaire, just as I respect and admire my next idol, Warren Buffett, the world’s greatest investor! Before I end this first chapter, I want you to know why I’ve shared my personal experiences first instead of getting into the details of other matters. I want you to know I am just an ordinary person like you, someone who made the mistake of using credit to roll over credit in my life. We don’t have to regret past mistakes we made, because those failures serve as platforms for us to reflect on life, enabling us to achieve even more. Before I leave you in this chapter, I have ten tips that I used for my bodybuilding success, which you can use as the learning points for this chapter and apply them to empower you to be more successful in your life.
Ten Secrets for You to Master and Achieve Success Most successful people have ten traits in common. And these ten traits – together – help successful people meet their goals and turn their dreams into reality. How many of these ten traits do you have?
Secret No. 1 How you think is everything. Remember to think positive at every opportunity. Visualise success, not failure. Avoid negative environments and people. You are what you think. 17
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Secret No. 2 Decide on your dreams and goals. Be specific about your goals. For example, say, “I will clear my debt next year,” rather than, “I would like to clear my debt some time.” Create a plan to reach your goals, and stick to it.
Secret No. 3 Take action. Goals alone have no meaning; you need to take action to make them real. Don’t let fear hold you back. Just do it.
Secret No. 4 Never stop learning. Take classes, go back to school, read books, or join a discussion group. If you are interested in a subject like, “4 Steps to Financial Freedom”, make time to learn about it. Keep acquiring new skills.
Secret No. 5 Be persistent and work hard. You’ve probably heard the expression, “Success is a marathon, not a sprint.” Keep your eye on the goal, and keep working toward it. Slow and steady wins the race. Don’t give up.
Secret No. 6 Learn to analyse details. Get all the facts, and ask for input. You will make wiser decisions. 18
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Acknowledge your mistakes, but don’t beat yourself up. Learn from your mistakes.
Secret No. 7 Focus your time and money. When you believe in something, put your attention and energy there. Don’t let people or other things distract you.
Don’t be afraid to innovate; Secret No. 8 be different. Be true to yourself, and have your own ideas. Following the crowd is a path to mediocrity.
Deal and communicate with people Secret No. 9 effectively. No person is an island. Communicate your thoughts and desires honestly, and encourage others to communicate honestly with you. Practice understanding and motivate other people.
Be honest and dependable; Secret No. 10 take responsibility. Never cheat or lie. When you make a promise, keep it. When you screw up, admit it. Without honesty, dependability, and responsibility, the other secrets for success won’t matter. 19
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Summary of My Success Health Education Healthy Regime 1. Exercise 2. Diet 3. Mental Well-Being 4. Health Is The Most Important
Pick The Best Idols From The World For Motivation
My Success
Family Never Work and Neglect Family Relationship
Financial Education
Family Protection Using Insurance
Characteristics For Successful Investing Rank 1. Discipline Rank 2. Perseverance Rank 3. Willingness To Learn Rank 4. Patience
Create Multiple Sources Of Income •Taxed Earned Income •Portfolio Income •Passive Income
Planning
Ten Secrets for You to Master and Achieve Success Secret No. 1 – How you think is everything. Secret No. 2 – Decide on your dreams and goals. Secret No. 3 – Take action. Secret No. 4 – Never stop learning. Secret No. 5 – Be persistent and work hard. Secret No. 6 – Learn to analyse details. Secret No. 7 – Focus your time and money. Secret No. 8 – Don’t be afraid to innovate; be different. Secret No. 9 – Deal and communicate with people effectively. Secret No. 10 – Be honest and dependable; take responsibility. 20