Secrets of the CPAs(Text)

May Moon and the Secrets of the CPAs includes

How to feed and water your pocket money

Getting money by spending it

How to become one of the richest people in the world in less than five minutes

The three most important S-words in the world

Two pieces of actual magic

The secret of happiness

May Moon and the Secrets of the CPAs

Paperback

ISBN: 978-962-746619-2

Text and illustrations © 2005

The Hong Kong Institute of Certified Public Accountants

www.hkicpa.org.hk

Second edition 2011

All rights reserved. No part of this book may be reproduced in any form or by any electronic means, including information storage and retrieval systems, without permission in writing from the publisher, except by a reviewer who may quote brief passages in a review. The right of Nury Vittachi to be identified as the Author of this Work has been asserted as have his moral rights with respect to the Work.

Sam Jam’s full name is Nury Samjam Perera de Lacey Vittachi but his children just call him Mr. Jam. He writes for grown-ups using the “outside bits” of his name. Contact him through www.jam100.com.

To Kelci

Dear readers,

We are delighted to share with you the story of May Moon and how she learned the secrets of the CPAs, or Certified Public Accountants.

A career in accounting is fun and interesting. Every business in the world needs an accountant. You can work in any kind of business you like in Hong Kong or around the world and you can always find a new challenge. As CPAs we are proud to belong to this profession because we help make business fair for everybody.

Hope you’ll enjoy this book and the adventures of May Moon—who knows, it might help you decide to become an accountant, too!

Sincere regards,

The Hong Kong Institute of CPAs

Chapter One

Do not burn down your school. And especially don’t do it the day before the new term starts.

It doesn’t matter whether this is in the official list of rules at your school or not. You just shouldn’t do it.

And if you won’t listen to me, you should definitely listen to May Moon, aged nearlyfourteen, who actually did it.

(By the way, she’s described as being nearlyfourteen, because that’s how she pronounces it.

“How old are you?”

“Nearlyfourteen.”

“So you’re 13?”

“No, nearlyfourteen.”

“Okay, so when are you fourteen?”

“In fifteen months, three days and four hours.”)

* * *

Yes, May Moon burned down her school.

It was a cold place, on top of a hill near the sea.

Just before winter term started, she tried to persuade her father, who was the school principal, history teacher and custodian (it was a small school), to go in and switch on all the heaters one day early.

She wanted it to be warm when all the children arrived the next morning.

But he showed no interest. So she went in and turned on all the heaters herself. She’d forgotten that children should stay well away from anything to do with fire.

Two hours later, she and hundreds of other people watched as the school burned to the ground. The beginning of the new term was postponed.

“Hooray, hooray, hooray,” said the big kids, who could now do the exam revision they had not got around to doing over the holiday.

“Hooray, hooray, hooray,” said the middle-sized kids, who could now do the homework they didn’t do over the holiday.

“Hooray, hooray, hooray,” said the small kids, who copied everything the middle-sized kids did.

“Who, who, who?” said the principal, who was furious that someone had burned down his school.

“May, May, May,” said the big kids, the middle-sized kids, and the small kids.

“Er, maybe,” said May. * * *

And this is where our story really starts. You see, May’s father lost his job.

“Sorry, Dad. l guess you can’t be custodian of the school any more,” May said. “There’s nothing left to custard.”

Worse, still, the education department wanted May’s parents to pay for a new school. So her mother cancelled her $25 a week pocket money for one million weeks—that’s how much it would cost to build a new school.

A million weeks is a long time. This is going to be bad, May thought to herself as she headed to her new school on her first day.

But she didn’t realise just how bad.

The new school she had to join was popular with rich families.

At that school, the parents had loads of money.

The kids had loads of money.

The teachers had loads of money.

The toddlers in reception class had loads of money. Even the babies in the day care room had loads of money.

On bring-a-cake days, all May’s classmates had enough money to buy two or three. May pretended she hated cake.

At playtime, her classmates used cash or cards to buy fizzy sweet drinks from the machine. May pretended she preferred water.

At the school shop, her classmates bought fancy stationery items decorated with famous cartoons. May pretended she hated cartoons and used the edge of her exercise book as a ruler,

Her first week was horrible. The only treat she bought herself all week was a packet of chewing gum.

The second week was sure to be even worse. She had used up almost every coin in her savings box. And she wouldn’t be getting any more pocket money for another 999,999 weeks.

How can people live without money?

from The Secrets of the CPAs (page 3)

LIFE WITHOUT MONEY by CPA Gordon

For thousands of years, people lived without money. Money was invented because someone did not like fish. (Or it may have been cheese.)

In the old, old, old days, which means about 3,000 years ago, if you wanted something, you swapped something for it. This was called the barter system—barter means “swap.”

For example, if you were a fisherman, you swapped fish for whatever you needed: clothes, bread, shoes, firewood.

But there came a time when a fisherman, probably in China, wanted something—perhaps it was some sort of flatbread or cake—from a person who did not like fish.

“No thanks,” said the baker. “I don’t like fish. You don’t make shoes, do you?”

He didn’t. What could the fisherman do?

The fisherman made a token, probably a seashell with his signature on it, which he gave to the baker. “This token is worth one fish. I’ll give it to you for one loaf of bread. You can use it to buy shoes, and the shoemaker can use it to buy fish. He likes fish.”

So the fisherman got the bread he wanted.

The baker got the shoes he wanted.

And the shoemaker got the fish he wanted. And that was how the first money was invented.

Chapter Two

On Monday morning, May Moon carefully counted out all the money in her box: a two-dollar piece, a onedollar piece, and a 20-cent coin.

She had only $3.20 to get her through the next 999,999 weeks. Not even enough money for another pack of chewing gum. What was she going to do?

On her way out of her apartment, her neighbour, a spiky-haired boy called Peter stopped her. “Hey, May— where’s the money you owe me?”

May scowled. She had hoped he had forgotten. She had borrowed two dollars from him to buy a Neomon card the previous weekend.

“Can I pay you later?” she said. Like several years later, she added silently in her head.

“No. I want it now.”

Slowly and reluctantly, she took two dollars out of her pocket.

‘Are you sure I can’t pay you later? I’m a bit short just—”

“Now.”

She handed it to him. He slipped it into his pocket, which was so heavy with coins that it bulged, and he ran downstairs, jingling at every step.

May sighed and followed slowly, clutching her life savings, which had now shrunk to $1.20, in her hand.

Outside the front gate, she saw an old man with a shaggy beard who looked like a street-sleeper. “Spare a dollar for a hungry old man?” he asked.

You can imagine how May felt about this request. “No,” she said, furiously. “Actually, I can’t.”

“Just lend me a dollar then,” the man said. “I’ll pay you back $2 tomorrow.”

“Yeah, right. Go away.” She tried to brush past him. He stepped right into her path.

“Look,” she thundered. “This is all the money I have to last me probably for the rest of my life.” She opened her palm to show him a one-dollar coin and a 20-cent coin.

To her horror, he took this as an offer and grabbed the one-dollar coin. “Thanks, miss,” he shouted over his shoulder as he hurried away.

Her first impulse was to run after him. But for one dollar?

What was the point?

May decided that God or destiny or whoever was up there wanted her to be flat broke—completely and utterly penniless.

So she picked up the 20-cent coin between her finger and thumb and threw it away, sending it flying into the air.

“I wish I knew what to do about this horrible problem,” she said to herself as she saw the little bronze

coin flashing in the sunlight as it spun. And then it disappeared into a small patch of scrubby woodland on the side of the road.

Now she was as completely free of money as it was possible to be.

from The Secrets of the CPAs (page 5)

BEFORE MONEY EXISTED by CPA Peter Communities around the world switched from swapshopping to using money to buy things between 2000 and 4000 years ago.

The old system had too many problems. For example, what did you do if you wanted to swap a quarter of your cow one year, and another quarter the next?

But they didn’t switch to money like we have. The first things used for coins were shiny, curled seashells called cowries. Other tokens used for money include: Beads, drums, eggs, kettles, pigs, cows, rice, salt, gongs, hoes, thimbles and axes.

Halfway to school, May’s shoulders started to ache, and she felt that her bag was heavier than usual.

Had she got some new text books recently?

Or had her mother given her a brick for lunch?

She stopped and took her bag off. Inside, she found a package wrapped in blue paper.

“Open it up. See what’s inside!”

May looked around to see who had spoken. But there

was no one visible nearby.

“Come on. Hurry up.”

“Who said that?” May asked. She glanced around again. There was no one to be seen. Someone is spying on me, she thought.

She picked up the package and the bag and hurried away.

When she reached a bench under a tree in the park opposite the school, she stopped and sat down.

“Okay, now are you going to open it?” said the voice.

May sprang up and searched everywhere. She stared up at the branches above her head. She examined the space below the bench. She peered around the edge of the tree trunk. She seemed to be alone.

“Come on, I haven’t got all day,” the voice said.

“Where are you?”

“In here.”

May ripped the paper off the parcel and discovered a thick book inside. It was called The Secrets of the CPAs

She opened it and flipped through it. It was filled with short chapters.

The first page featured a picture of a small man wearing glasses. He winked at her and raised one thumb.

“Thanks,” he said. “I like a bit of fresh air now and then.”

“You’re just a picture. How come you can talk?”

“Just a picture?” He sounded affronted. “I am a professionally rendered illustration, I will have you know.”

“Well, illustrations can’t talk.”

“This is a talking book. Have you never seen one before?”

“No. Who are you? What are you?”

“My name’s Page,” he said. “Contents Page. But my friends and I would like to welcome you to The Secrets of the CPAs.”

“What kind of secrets are those?”

“Money secrets.”

“Really?”

“Yes indeed.”

“So can you teach me how to be rich?”

“Sure. If you want.”

May was stunned. Even if this was a hallucination, it was an intriguing one. “But this must be some sort of dream. You can’t possibly be real.”

“Can’t I?” the man said, looking down at himself. “That would be a shame.”

“I’ll make a deal with you,” May said. “Let’s keep this thing going until I wake up. After all, I might learn something interesting.”

“You might.”

“But listen, I don’t want to just learn about money. I want to get some. I need to get some.”

“Learning about money and getting money is the same thing,” said Mr. Page. “Money comes in small or large amounts to everyone. But it sticks only to people who understand it.”

May’s eyes were wide as saucers. She thought of the rich people she saw on television and in the newspapers. “I want to be as rich as Mr. Loo the property developer. Or Mad Mak the supermarket king. Or Mr. Wan the restaurant man.”

Mr. Page scratched his chin. “This book is full of advice from people we call CPAs.”

“CPAs?”

“A full range of CPAs, from big, middle and small firms. We also have some which are COOs and some which are CFOs and CEOs.”

May was lost. “I don’t understand.”

“Just think of them as guardians of wealth,” Mr. Page said. “Some people call them accountants. Try the man on page 19,” he added.

from The Secrets of the CPAs (page 19)

THE NATURE OF MONEY by CPA Leslie

Money is attracted to certain kinds of people. It jumps into their laps like a puppy.

And it runs away from others. It slips through their fingers like water.

It depends on what sort of person you are.

How do you make sure you are the sort of person money likes? Well, first you have to make a serious promise that you are going to be sensible about money, and put some serious time and thought into handling your own money.

You have to “change your mindset” about the subject. What that means is: deliberately altering the way you think about money and things connected to it. You learn to respect it and it learns to respect you.

You have to be serious about it. Could you be serious about it, May?

* * *

May was somehow not surprised to find that the man talking to her from the book knew her name. After all, this was a seriously weird dream.

She flipped back to Mr. Contents Page.

“The man on page 19 is quite interesting, I suppose. But not practical. I need to get some money quite quickly,” she said. “I don’t have any at all. Not even one dollar. I might starve to death or something.”

“I wouldn’t worry about that,” said Mr. Page. “There’s a section in here called: How to Become One of the Richest People in the World in Less Than Five Minutes.”

May could hardly believe her ears.

“Tell me,” she yelled. “Where is it?”

The little illustration in the book shook his head and tapped the watch on his wrist.

“Nope. It’s time for school. School is important. I want you to shut this book and go to school and study hard. It would be awful if this book distracted you from what was really important. I’ll tell you what. You do your schoolwork and homework, and I’ll give you money lessons every morning. Is it a deal?”

Before May could answer, the picture froze—and suddenly she was holding an ordinary book in her hands.

from The Secrets of the CPAs (page 14)

WHY IS “S” SHORT FOR “DOLLAR”? by CPA Richard

This is one of those things that is really weird, although some people go through their whole lives without noticing how odd it is.

About 250 years ago, the most popular coin was a Spanish one called the Eight Reales Piece. Sometimes people cut them into eight pieces so they could spend them in bits. In America today, you still hear people saying that something costs “two bits,” a term they use to mean “a quarter,” which is a 25­cent piece coin.

Pirates loved these Spanish coins, which were made of real silver, and would dream of finding treasure chests containing “pieces of eight.” In old Spanish, the term was “piastres.”

These terms were shortened to Ps. When sellers wrote prices down, people scribbled the P and the S so fast that they ended up on top of each other and became the dollar sign: $.

But some people have other theories, and say that the dollar sign is a picture of a pillar with a snake climbing up it!

Chapter Three

May Moon couldn’t decide whether she had gone mad—or whether something magical had happened. She hoped it was magic, but had no idea how a talking book could have got into her bag. It must have been put there by some sort of fairy godmother, she decided.

May studied hard all day, did her homework that evening and went to sleep feeling better than she had for weeks.

The next morning, she left her home to go to school early, and sat in the park and opened the book.

The image was completely still: just a drawing, like any other.

“Hullo? Are you there? Mr. Page? Will you talk to me again?”

He remained flat and unmoving. Had she imagined the whole thing? Just then, the picture moved.

“Good morning, May,” said the picture, coming to life with a yawn. “Did you sleep well?”

“Yes, thank you. Did you?”

“Oh, yes. Illustrations always sleep well. We’re very

good at keeping perfectly quiet and still, you know.”

“Will you teach me the thing you said you would teach me yesterday?”

“Ah, yes. How to Become One of the Richest People in the World in Less Than Five Minutes. That was the one, right?”

“Yes, please.”

“To begin with, we need to decide where we are starting from. How rich are you at the moment?”

“That’s easy,” said May. “I’m not rich at all.”

“Okay. That’s a good starting point. Let’s do The Rich Test to check it out. Turn to page 27.”

May couldn’t help but scowl. Impatient as ever, the last thing she wanted to do was some sort of boring exam.

But when she looked at page 27, she noticed it only had one question on it. She bit the end of a pencil for a few seconds and then chose an answer. * * *

from The Secrets of the CPAs (page 27)

THE RICH TEST by CPA Samuel

Part One: How rich do you think you are?

(a) Super Rich

(b) Rich

(c) Okay, pretty comfortable

(d) Medium. Not that rich, not that poor

(e) Poor­ish

(f) Really, really poor * * *

May’s first instinct was to tick the last box: really, really poor

But then she realised that there must be people poorer than her. There must be children who don’t even have enough to eat.

She thought out loud—it seemed the right thing to do when filling in a worksheet in a book that talked out loud to her. “Hmm. Let me think, I’m definitely not rich or super-rich, or even rich-ish. But I’m not sure if I am in the very poorest category.”

She pondered for another half a minute and then ticked the second to last category: (e) Poor-ish.

“Fine,” said the book. “Now turn to page 28, where you’ll find part two of the test. It’s longer, but it’s also really easy.”

May filled her test sheet very quickly.

from The Secrets of the CPAs (page 28)

THE RICH TEST by CPA Denys

Part Two: answer yes or no

 Does your family have a telephone?

 Does your family have a computer?

 Can you have something to eat, if you want it, three times a day?

 Do you have a television?

 Do you have an internet connection?

 Does any member of your immediate family have a car?

 Do you have $15 or more which you could spend today if you wanted to?

 Have you ever flown in an aeroplane?

 Have you ever travelled to somewhere where you have to show a passport or similar identification document?

 Does someone in your family have a mobile phone?

When May had finished, she put her pencil in her mouth and sat back, waiting for the man on that page to examine her answers.

“Interesting,” he said. “The answers you gave to part one and the answers you gave to part two don’t match. In fact, they totally contradict each other.”

“Huh?”

“Well, you didn’t tick Rich or Super-Rich in part one.”

“That’s because I’m not.”

“But in part two, if you ticked the yes box for five or six items, it means you belong in the rich category. If you ticked the yes box for between seven and ten items, you belong in the super-rich category.”

“I’m sure I’m not rich,” May said.

“You ticked yes for eight questions. That means you are among the top two percent of the wealthiest people in the whole world. If you have $15 to spend, you are already richer than three billion other people—grownups and children—on this planet. Remember, May, more than half the people in the world have never made a phone call. And if you have an internet connection and computer and mobile phone, you are richer than about 98 percent of people in the world.”

“Really?”

“Really. Congratulations, May. Your score officially

puts you among the super-rich,” said CPA Denys.

May was amazed. “Wow. That’s nice, I guess. But I don’t feel super-rich,” she said. She turned back to Mr. Contents Page.

He smiled at her. “Did I hear you say you don’t feel rich? We’ll get to that later. But now you are in the top category of the wealthy, we are ready to learn an important law. You’ll find it on page 26.”

* * *

from The Secrets of the CPAs (page 26)

THE TWO WAYS OF GETTING RICH by CPA John

There are two ways of getting rich: one is to get a lot of stuff. The other is to realise just how much stuff you already have.

* * *

May copied the sentence down in her notebook, and then stared at it, chewing her pencil.

CPA John, who had a soft voice, added: “1 want you to think about it for a couple of minutes, and then we’ll go on to something else.”

May was too impatient to obey. She flicked through the pages and stopped on page 31, where there was an interesting section of vocabulary that she decided to start learning.

* * *

from The Secrets of the CPAs (page 31)

USEFUL MONEY WORDS FOR YOUNG PEOPLE by CPA Thomas

Changing the words you use is a good way to change your mindset.

The word “money” itself is not always the best word for money. Try sometimes to use the word “capital” instead. You will immediately sound like someone who will successfully make money. Capital means “Money I will make grow.”

Another really cool business­y word is “allocation,” which just means “chunk.”

Before: “Where’s my pocket money?”

After: “Mother, may I withdraw my capital allocation for this week, please?”

“Expenses” is another good word, and “F&B” is how business people talk about food.

Before: “Can I have my lunch money?”

After: “I require $15 a day for F&B expenses, please, Mother.”

“List?” No, try “budget.”

Before: “Is that your shopping list, mom?”

After: “May I help you with your weekly retail budget, Mother?”

“Stuff?” No, try using the word “goods” or “commodities” or both. They mean the same as “stuff” except that they imply things which can be sold.

Before: “I picked up the stuff on the floor of my room, mom.”

After: “I tucked my diversified selection of goods and commodities under the bed but expect soon to find a buyer for some of it, Mother.”

Another good word to use is “income.” If you get money every week, you can call it “recurrent income.”

Before: “Mom sometimes gives me $15 to wash the car.”

After: “My vehicle cleansing operations will produce $15 in recurrent income.”

Never use the word “bit” or “piece” or “bite” for something you are selling. Always use “unit” instead, It sounds much better, and you can get a better price.

Before: “I’ll give you a bit of my chewing gum for $1.”

After: “I have divided my chewing gum into units, each of which may be purchased for $2.50.”

Promises about money should always be written down.

Before: “You’re sure you’re gonna give me back my $5 by the end of the week?”

After: “You can have this $5 after you have given me a written IOU (I owe you) with a maturity date of Friday. There will be a penalty surcharge if you are late paying it back.” * * *

“To make money, it’s easier if you have some to start with,” CPA Thomas said.

“But I don’t get any pocket money,” May complained. “Not one dollar.”

“That doesn’t matter. Pocket money isn’t free money. Children who get pocket money nearly always get it for

doing something. Sometimes it is something vague, such as behaving well. Sometimes it is something specific, such as keeping their room clean or doing certain chores.”

“That’s true,” said May. “I had to make my bed and stuff to get my pocket money—in the old days, when I used to get pocket money.”

CPA Thomas nodded. “So you see, pocket money is just a system where parents pay money to you for something they want you to do. You can restart the system by offering to do extra chores. Do the washing up, clean the car, run errands. Money for chores is the same as pocket money. It’s regular income for behaviour which pleases your parents.”

“Okay. Say I can get probably $20 or $30 a week by doing chores for Mom. That still won’t make me feel rich.”

“You need to have as many sources of income as you can. Find another adult and do some work for them. When you are a little older, babysitting can be a big wageearner. But for now, you can walk your neighbour’s dog, or clean out her storeroom, or paint her apartment.”

CPA Thomas leaned right out of the book and wagged his finger at her. “A bit of advice about accepting paid jobs: Never accept a one-off payment for a one-off job unless you have to.”

“What does that mean?”

“Don’t offer to take the dog for a walk for $20. Offer to take the dog for a walk for $20 a week.”

‘Aha,” said May. “I understand.” So that’s what she did. That night, she made a deal with her mother to wash the dishes every night for $15 a week, and the

car every Saturday for another $15. Then she offered to take the dog of their neighbour, Mrs. Chu, out for a walk every weekday evening for $20 a week. She went to bed happy that night, with pledges of $50 a week—twice as much as she had been getting in pocket money. “I may just survive after all,” she smiled to herself as she dropped off to sleep.

from The Secrets of the CPAs (page 23)

THE CASH TEST by CPA Denis

If you have any money of your own, take some of it and hold it in your hands.

1. Now close your eyes and imagine yourself adding more to the pile. Imagine it doubling and tripling. Open your eyes and decide exactly how good or bad this makes you feel on the following scale:

Bad: Zero points

Not good or bad: One point

Quite nice: Two points

Definitely good: Three points

Really, really good: Four points

Totally awesome: Five points

2. Now close your eyes again and imagine yourself going out and spending all the money you have—real and imaginary. Picture yourself buying everything you ever dreamed of. Open your eyes and decide exactly how good or bad this makes you feel on the following scale:

Bad: Zero points

Not good or bad: One point

Quite nice: Two points

Definitely good: Three points

Really, really good: Four points

Totally awesome: Five points

Which question did you have higher marks for? If you had higher marks for number two, you are a Spender. If you had higher marks for number one, you are a Saver. If you have equal marks for both, you could go either way.

In Hong Kong, it’s easy to get the impression that most people are Spenders. But in fact, if you ask bankers about how much people save, we find that a significant number of Hong Kong people are Savers.

Hot tip: It’s much easier to get the money­making mindset if you are a Saver, or can make yourself into one.

Chapter Four

The following week, May learned a new piece of wisdom from the advisors in the talking book—but it baffled her. Not because it was too complicated, but because it sounded too simple.

“One of the key laws of money is The Magic of Writing Things Down,” an elderly male character called CPA Peter, on page 54 said.

“But what does that mean?” asked May, scribbling it on a new page of her exercise book.

“It means you write everything down,” CPA Peter said. “Of course. What else could it mean?”

“Is that all?”

“Yes, that’s all. Get into the habit of writing down everything you spend your money on.”

“Will doing that make me rich?”

“Yes. Doing that will significantly help make you rich.”

May was not satisfied with that answer. She wrinkled her brow, “It seems too sort of—easy,” she said. “There must be more to it.”

CPA Peter scratched his chin and looked into the

distance. “This is a hard one to explain,” he said. “This law seems very simple. But there seems to be some actual magic in it.”

“Actual magic?” repeated May. That sounded enticing.

CPA Peter nodded. “No one really knows how this secret works, but it does. It is amazingly powerful. Doctors have long known that when people start writing down what they eat, they start getting slimmer—even without any special diet.”

“Is that really true?”

“Yes, it is. Many people of your age have parents who want to lose some weight.”

“My Mom does.”

‘Advise her to write down what she eats, and she will immediately switch to a better diet.”

“It works for money, too?”

“Yes. The science of accountancy started in Italy in the 1500s. That was when some businesses started writing down what they bought and sold. Other people noticed that those were the businesses that became successful. Now all businesses around the world use bookkeepers and accountants.”

“But I don’t need an accountant. My Mom’s one.”

“You don’t need an accountant right now. But the magic of writing things down works for people, too. When you start recording what you spend your money on, your money habits instantly become much better.”

May liked the sound of this, and made photocopies of the sheets on page 54 and 55 to fill in at regular intervals.

from The Secrets of the CPAs (page 54)

AN ACTUAL PIECE OF MAGIC by CPA Peter

Remember: When you keep written records of anything that passes through your hands, whether it’s money or food or anything else, your mindset about that item changes. You pay more attention to it. And that small change alone is enough to make a difference.

Fill in the chart below to get started.

“You’re right,” May said to CPA Peter. “Now that I have written it down, I do feel better about it. I feel more serious about it. But I need to learn more stuff

faster—I’ve got a million weeks of pocket money to make up for.”

“Turn to page 63,” CPA Peter said. “You’ll find something important there.”

from The Secrets of the CPAs (page 63)

THE THREE MOST IMPORTANT S­WORDS IN THE WORLD

by CPA Joseph

When you’ve got money coming in regularly, what should you do with it? The three S­Words that young people need to know give you the answer. They are: Saving, Spending and Sharing.

If you think about it, there are obviously three main things you can do with your money. You can spend it, you can save it, or you can share it. You may wish to consider doing all three.

Say you get $15 a week pocket money.

Saving: You could put $5 of it aside every week. You could put it in a piggy bank or cash box of some sort at home. You could put it in a bank account. Or you could give it to Mom or Dad and get them to act like a Bank of Parents.

Spending: You could spend $5 of it. Of course, it’s better to save money than spend it if you can, and your parents will certainly be impressed if you save as much as possible. But saving systems don’t work if they are not realistic. It is probably not very likely that you can get through a whole week without spending any money. So it’s much better to decide how much you will spend and stick to it.

Sharing: You could take $5 and do something good with it. You could give this much money every week to needy people. It’s easy to do this through a charity or a church or other religious organisation, or you could support a cause you really believe in, such as Friends of the Earth (HK) for example.

May wasn’t sure she liked the idea of this. “I don’t get any pocket money, and I have to work hard for every dollar I get. Why should I give any of it away?”

“That’s an understandable attitude,” CPA Joseph said. “But for an answer to that one, look at page 52.”

She flipped the pages of the book and read hungrily.

from The Secrets of the CPAs (page 52)

ANOTHER ACTUAL PIECE OF MAGIC by CPA Robert

Why do many people regularly give away a portion of what they earn?

There’s no rule which says you have to. But lots of people do it. Nearly all religious people do it, and lots of people who are not religious do it, too. They send money to charities, they sponsor needy individuals, or they give it away in other ways.

Psychiatrists are doctors who are experts in how people feel. They know that people who regularly give away some of their money get lots of benefits in the way they feel. Generous people are happier, they are less stressed out, and they are more popular, they have better relationships

with other people, and so on. Happier people live longer.

But there’s more. People who share their money usually say that it comes back to them multiplied. It may be as cash, or it may be in another form—but it always makes a good return. This is another one of those magical money mysteries that no one can really explain.

It is probably something to do with attitude. If you hold on to something too tightly, it fights to get away from you. But if you let it circulate freely, it goes away and finds its way back to you by choice.

Chapter Five

Three days later, at breakfast, May’s mother paid her the $15 she owed her for doing the washing up all week. But then she announced that she wanted to borrow it back, because she was late for work, and needed to take a taxi.

May handed the money back. Later, she told Mr. Page what had happened.

“You’re a good girl,” he said. “Lending money to people is one of the best ways of making money. When you put money into a savings account in a bank, you are really lending money to the bank. And you’ve heard the word ‘investing?’ Well, all that means is ‘lending money’ to a business.”

Mr. Page told May to sit down and get her pencil out. “Today, we are going to learn one of the most important things about money. I want you to turn to page 46.”

from The Secrets of the CPAs (page 46)

THE MONEY SECRET THAT BLEW EINSTEIN’S MIND

by CPA David

“Compound Interest” is a boring pair of words, but it has a cool meaning.

In fact, a man who many people think might be one of the cleverest people in history, a man named Albert Einstein, was astonished by it. He said, “Compound interest is man’s greatest invention.”

The word “compound” means “combined together.”

The word “interest” in this sense doesn’t mean that something is “interesting.” It means “thank­you money” and is the money you get as a gift from people you lend money to.

So you get “compound interest” if a borrower adds the thank­you money they owe you to the other sum of money they have borrowed from you.

Once you learn about compound interest, you can see why people think it is so neat. It can almost build fairy­tale endings to the story of saving money.

This is how it works.

Say you lend me $100 and I promise to pay you back all your money next week and add an extra 10 percent as a thank­you. That extra ten percent (which adds up to $10) is known as the “interest.” So by the end of the week I owe you $110.

Now picture this (in the sums that follow, we’ll skip the cents and just talk in whole dollars, to make things simpler): Instead of taking your money and the extra $10 back at the end of the week, you let me keep it for a week longer.

Once again, I promise to pay your money back, plus

10 percent as a thank­you. But this time, I am paying 10 percent of $110 (because your money and your interest are combined or compounded), so I add $11 to the total, which becomes $121.

If I keep the money for a third week, I again have to promise to pay your money back plus 10 percent—but your money is now $121. 10 percent of that is $12, so put it together and I now owe you $133.

The fourth week, I am paying 10 percent of the new total, $133, which is $13, so now I owe you $146.

Compound interest makes money grow really fast. In six months, I would owe you $1,192. After one year, I would owe you $14,204! All for lending me just $100.

Of course, banks are unlikely to offer to pay you an interest rate of 10 percent a week. You’ll get a less generous rate. But on the other hand, if you set aside money for a long time and you let it rest for years and years—then the same fairy­tale magic happens.

“Wow,” said May. “That is amazing. I like the sound of that! Can I use that compound interest to make the money I get for chores grow?”

“Yes, you can,” said CPA David. “Have you got a bank account?”

“Not yet, but my mother is always talking about starting one for me.”

“Good. Well, keep reminding her to do it. You see, the bank will only let her start a bank account for you if she puts some money into it. And that will give you a good start.”

“You don’t need to. All savings accounts pay interest.”

“That’s cool.”

“You have no idea how cool it is. Turn to page 76 to find out.” * * *

from The Secrets of the CPAs (page 76)

THE MAGIC OF INTEREST­PAYING ACCOUNTS

by CPA Anthony

Say you are 11 years old and your Mom or Dad puts $1,000 in the bank for you. Let’s say the interest rate is five percent a year. You go and have a look at your $1,000 when you are 21. You will find that it has grown to $1,629!

If the interest rate is a bit higher, say 11 percent a year, your $1,000 would have grown to $2,839.

If your Dad had put $10,000 in there to start with, it would be $28,394.

And if you could have persuaded him to put $100,000 in there for you at the age of 11, you would have found $283,942 waiting for you at 21!

No wonder Einstein was amazed.

“I’ll tell her to put it into an account that pays interest.”

Chapter Six

May had to go to the dentist the next morning, so she stayed off school. The dentist was very happy with her. Because she had been drinking water instead of fizzy drinks, her teeth were fine.

Afterwards, she met her mother and persuaded her to go to the bank and open a savings account for her.

She put $2,000 in the account. The interest rate was eight percent. The bank manager calculated that by the time she was 21, the account would hold $3,998.

May was thrilled. CPA David was right. Compound interest really did work just like magic.

On her way home, May decided to treat herself to a toy or something for the first time since the big fire.

She bought a tie-dye kit from a craft store. It cost $59, which she borrowed from her mother. There was enough dye in the box to colour three or four tee-shirts, according to the package.

When she showed the kit to her friends, they were

intrigued: They all wanted rainbow-coloured tee-shirts. So she organised a tie-dye party for after school the following day.

Each of her friends brought an old plain white teeshirt with them. May—who was the only one who had the instructions in the box—helped each of them tiedye their tee-shirt for a fee (to cover expertise and raw materials) of $30.

She managed to stretch out the materials in the box to make six shirts.

Her total income was $180. She paid back $59 to her mum, and found she had $121 profit.

She put half of it in the bank, and used the rest to buy another tie-dye set. She did the same thing with another set of friends, and earned another $180. This time, she had no debts to pay, and put the whole lot in the bank.

That night, she told Mr. Page about it. He was delighted with her.

“You have got the money-handling mindset now,” he said. “Congratulations.”

She blushed with pride.

“But actually, what you’ve done is featured in this book. it’s a well-known money-making technique. You’ll find it on page 112. “

She flipped to that page. * * *

from The Secrets of the CPAs (page 112)

GETTING MONEY BY SPENDING IT by CPA Marvin

It sounds like a contradiction in terms, but you can get money by spending it.

This is what we call the “adding value” way of making money. You take things which are low cost—old tee shirts and a cheap dyeing set for example—and set up a system in which you produce something which is relatively valuable: one­of­a­kind, rainbow garments.

You have “added value” to them, and can sell them for a profit.

Other projects you can do with the “added value” principle:

1. Buy a powdered drink (such as Pocari Sweat) in economy size, and add water to make sports drinks.

2. Buy a stack of paper and make a school newspaper.

3. Buy paints and create portraits.

4. Buy laundry marker pens and make hand­inked tee shirts.

5. Write a play and organise a show for which you can sell tickets. * * *

May Moon spent many early morning hours sitting on the bench outside the school studying her talking book. There was so much to learn—but the more she found out, the more she felt that she was only beginning to learn about the subject.

Yet she was happy—even though she still had 999,998 weeks of no pocket money ahead of her.

The money she was earning regularly from chores was enough to cover the small things she needed, and

she even put some away, and gave some to a charity: an orphanage that her favourite aunt had set up in a poor country.

May’s favourite chapter of The Secrets of the CPAs was the one that began on page 110. It was full of good ideas that she wanted to put into practice.

* * *

from The Secrets of the CPAs (page 110)

HOW TO FEED AND WATER YOUR POCKET MONEY

by CPA Selwyn

This chapter contains Ten Top Tips to help young people make their income grow.

1. LIST YOUR LAI SEE PACKETS

At Lunar New Year, make a record of all the lai see packets you get, who gave them to you, and how much they gave you.

Doing this will help you in two ways. First, it’s very good practice to do some “bookkeeping” in this way. And second, if you have a list, you can do a much better job of properly thanking all your friends and relations— and that will almost definitely mean you’ll get another batch of lai sees (and possibly more generous ones) next year!

2. HAVE A PIGGY BANK FOR SMALL CHANGE

Somewhere between the age of eight and 18, most young people make the jump from having cash in a piggy bank to having cash in a bank account.

Persuade your parents you need both.

Having cash in a piggy bank is good, because it is close at hand, and you can always put small amounts of money into it.

Hot tip: Many adults hate fiddly small coins, such as 10­cent and 20­cent coins. If your mother or father are among them, ask them whether they would like it if you took all their tiny change to put in your piggy bank. They may well be pleased to agree to this, as it will make their pockets and purses lighter.

Yet a handful of 20­cent coins can easily add up to $10 or more!

3. USE THE INTERNET

If you like computers, ask your mother or father to open a bank account for you with a bank which lets you check your money through the Internet.

Then get into the habit of checking it regularly. This is one of the best ways you can use to develop a mindset in which you keep a careful watch on your money.

You might try HSBC or Hang Seng Bank, which have special programmes for young savers.

4. BELIEVE IN THE TOOTH FAIRY

Young people have more sources of money than they realise. Don’t tell your parents you have stopped believing in the tooth fairy—she’s a good source of income.

Hot tip: Find out which child in your class gets the most money from the tooth fairy and use this as a bargaining point.

Example: “Chi­keung gets $20 for every tooth. Can you tell our tooth fairy to match that amount, please, Mother?”

5. SHUN LICENSED CHARACTERS

It’s nice to have a Hello Kitty lunchbox or a Harry Potter calendar. But kids your age are not stupid.

You know that products with pictures of licensed characters on them don’t work any better than products without them—yet they cost three or four times as much.

Hot tip: If your mother or father are paying for an item, tell them you’d prefer the Winnie­The­Pooh one, if that’s what you really want. But if you are buying something with your own money, don’t throw away your money on what business people call “a licensed character” product.

6. GET OTHERS TO DOUBLE YOUR MONEY

Hot tip: If you are saving to buy something really big and expensive: a set of Star Wars DVDs, or an iPod, or a mountain bicycle, ask one of your parents to match what you save. “Dad, if I try really hard and save $350 all by myself in two months, will you match the amount?”

There’s a chance he’ll say “Yes.” If so, this would be equivalent to doubling your money!

7. ASK FOR OWN CREDIT CARD

“Are you crazy? You’re way too young.” That’s what your parents will almost definitely reply. But ask anyway. There are two good reasons for this.

The first is that they have got to get used to the idea, because one day they’ll probably have to say “yes”.

And the second is that when they refuse, you say:

“Okay, well, if you won’t get me a credit card, at least you should get me an Octopus card, so I can get used to buying things using a little rectangle of plastic.”

Octopus cards are really tiny mobile bank accounts, and getting to know how to use them and how to top them up are excellent devices for learning a full range of money skills. Ask your folks to get you one.

Further, when your parents are topping up their Octopus cards, they may well add cash to yours at the same time if they are feeling generous.

8. CONSOLATION GIFTS

Parents are soft­hearted creatures and they almost definitely adore you. They are programmed that way. This does not mean you are licensed to be obnoxious. But there’s nothing wrong with making them aware of things you would like to have that you may not be able to save up enough money for. You may get such an item as a consolation gift or a prize for outstanding behaviour.

For example, lots of young people have to wear toothbraces or retainers, or have complex dental operations. It may not be unreasonable to say: “Dad, this retainer is really uncomfortable, and it makes me miserable. If I wear it for a whole year, can I have an Xbox?”

It’s worth trying.

9. DO NOT ASK FOR A MOBILE PHONE

Don’t ask for your own phone unless you are desperate. These are tiny, high­value items which are highly likely to get lost or stolen. Also, you very quickly run up large bills without meaning to.

Paying for replacement phones or coughing up for outrageous phone bills is one of the fastest ways of getting your parents to cancel your privileges or confiscate your pocket money. Steer clear of this danger.

Instead, wait until your parents offer you one for their convenience. “Here, you take this so that I can co­ordinate when to pick you up after your martial arts class.”

If your having a mobile phone becomes a convenience or safety issue for your parents, then their attitude to you having one will be completely different. It is much less likely to become a danger to your personal savings account.

10. STUDY INVESTMENT TRENDS ON HOLIDAY

Believe it or not, your family may well have considerable experience in investing without realising it.

Anyone who has been out of Hong Kong on holiday has almost definitely made or lost money as a forex (foreign exchange) trader.

This is how it works. Say you go to London on holiday. Your mother changes $10,000 at the airport on the first day, as spending money for a four­week holiday. She gets 714 pounds. That’s because the exchange rate is one pound to 14 Hong Kong dollars at the time.

But it turns out that the uncle and aunt you are staying with insist on paying for everything.

So on the way back to Hong Kong, your mother still has the money. She changes the 714 pounds back into Hong Kong dollars. But in those three weeks, the exchange rate (which is always moving) has changed to 15 Hong Kong dollars to one pound. This means she gets $10,710 back.

You will see that she has gained more than $700 for doing absolutely nothing! This sort of thing happens all the time.

Of course, it’s difficult to know which way the exchange rate will go. So you can’t use this method to make your own savings grow.

But every time you go on holiday, keep an eye on what happens with exchange rates anyway. It is brilliant practice for developing investment skills. When you are older, you may become good at predicting price changes of currencies or other things you can invest in, like stocks and bonds.

Chapter Seven

May had a question for Mr. Page—a question that had nothing to do with money.

“Ask away,” he said. “If I can answer it, I will.”

“How did you appear in my bag, Mr. Page? Who put you there? Was it a fairy godmother or something?”

The illustration in the book shook its head. “No. You bought me.”

May’s eyebrows rose. “I bought you? I don’t remember doing that.”

“You threw a coin into a magic glade, remember? And you made a wish at the same time.”

She nodded. “I think I remember. Twenty cents! I guess that was the best investment I ever made.”

The book shook its head. “No it wasn’t. But you’ll find out for yourself, soon enough, what was.” * * *

‘Twenty-four days had now passed, and May Moon had worked hard—both at school work and doing chores at home and for the neighbours.

She had more than $430!

But better still, she had confidence. She didn’t mind the fact that she would not have any pocket money for another 999,996 and a half weeks. She knew she could work hard and earn the money she needed.

“We’ve not got much left to teach you,” Mr. Page said. “Turn to page 199.” * * *

from The Secrets of the CPAs (page 199)

THE SECRET OF HAPPINESS by CPA Felix

There are people who don’t have much money, who are very happy.

And some people have lots of money, but have other problems. Mad Mak, the supermarket king, is very eccentric—some people think he’s crazy. Mr. Loo the property developer is lonely. Many wealthy people are sad and don’t know why.

The secret of happiness is a big, complicated thing, and no one knows all of it.

But there’s one thing that many people have discovered about happiness, and it’s important to know. It’s this: Getting a lot of money is NOT the secret of happiness. But knowing that getting a lot of money is not the secret of happiness IS one of the big steps on the road to real happiness.

And that’s one of the most important things you can learn about money. * * *

By the end of the 24th day, she’d finished the whole volume. May realised that the talking book would disappear soon.

The illustration nodded sadly. “You’ve learned everything we can teach you. From now on, you’ll be on your own. So now it’s time for me to say goodbye.”

“Goodbye, Mr. Page.”

“Goodbye, May Moon.”

The book shimmered and then seemed to go out of focus. A moment later, it had vanished completely.

And that’s the end of this story—well, nearly. * * *

As May Moon walked back home from school the following afternoon, her school bag depressingly light, she wondered what Mr. Page had meant when he said that she would soon find out about the best investment she had ever made.

On the way home, she met an old man with long hair and ragged clothes.

“Ah, hello, little girl. I’ve been looking for you. You lent me some money. I want to pay you back.”

It was the strange man who had accosted her and taken a dollar from her just over three weeks earlier. She was in such a sunny mood that she couldn’t bring herself to be cross with him.

“I only gave you one dollar. You can keep it.”

“But I want to pay you back.”

“It doesn’t matter. Forget it.”

“I insist.”

“You probably need it more than me.”

“I insist.”

May sighed. This old man was really irritating. Why on earth he had to lurk in her street, she had no idea.

“Okay, then, you can pay it back.” She held out her hand.

To her surprise, instead of taking out a one-dollar coin, he took out a calculator.

“Let me see exactly how much I owe you. Hmm. It was 25 days ago.”

He started punching the buttons. “Now let me think. You gave me $1 a month ago. I promised you $2 the following day, which is an interest rate of 100 percent a day.”

May’s eyebrows shot up. “You pay interest?”

“Of course. I said I would, didn’t I? How would I run my business if I didn’t do things properly?”

“You run a business?”

“I certainly do. Mad Mak’s Supermarkets. Don’t you know who I am? The name’s Mak.”

May could hardly breathe. So this was Mad Mak the multimillionaire? The book had said he was eccentric, but she had not imagined just how odd he would be.

He continued to punch numbers into his calculator. “Right. So at the end of the first day of the loan, I owed you $2.

“The second day it would be $4.

“The third day it would be $8.

“The fourth day it would be $16.

“The fifth day it would be $32.”

May sat down on the bench by the tree, while Mad Mak went through the numbers one by one.

“The sixth day it would be $64.

“The seventh day it would be $128.

“The eighth day it would be $256.

“The ninth day it would be $512.

“The 10th day it would be $1,024.

“The 11th day it would be $2,048.

“The 12th day it would be $4,096.

“The 13th day it would be $8,192.

“The 14th day it would be $16,384.

“The 15th day it would be $32,768.

“The 16th day it would be $65,536.

“The 17th day it would be $131,072.

“The 18th day it would be $262,144.

“The 19th day it would be $524,288.

“The 20th day it would be $1,048,576.

“The 21st day it would be $2,097,152.

“The 22nd day it would be $4,194,304.

“The 23rd day it would be $8,388,608.

“The 24th day it would be $16,777,216.

“The 25th day it would be $33,554,432.” * * *

May sat and twiddled her toes. He was mad, wasn’t he? He couldn’t mean all this, could he?

“Phew,” said Mad Mak, sitting down next to her. “That was a tough bit of math. Math involving money is always a challenge, right?”

“Not really. Not if you have the right mindset,” May said.

“Now how would you like your 33 million? In cash or by cheque? I have both.”

“Is this some sort of joke?”

“No. I always pay my debts. I owe you $33 million.”

Well, you can probably guess the rest of the story.

May Moon used the $33 million to buy a new school for her village.

Her mother offered to restart her pocket money, but May said that she preferred working for her money. “it puts me in a better mindset,” she told her.

Many people were amazed that she didn’t keep the money but gave it all away.

“Earning money is important. But getting a lot of it is NOT the secret of happiness,” May said. “And knowing that is the first step on the road to finding real happiness.”

Epilogue

Have you enjoyed this book? If you’ve read all the way up to here, you probably know as much about money as May Moon does. E-mail her at maymoon@hkicpa.org.hk and tell her about your plans.