I’ve been slacking off for a few days in writing. It’s been a busy week for me. A friend I haven’t seen in over 2 years visiting in mid-week, some friends from Sacramento visiting over the weekend, and a surprise birthday party on Sunday. Now that the week is almost over, I have written only one meaningful article. So let me end the week with two.

Here we go. I talked a lot about personal finance lately. And no, I am not abandoning network marketing. Part of Owning Your Life is to be financially free. You could achieve that by generating passive income and residual income. And of course, network marketing is one vehicle you could use to generate those income.

And how is that related to Personal Finance? Everything. You can create all the passive income and residual income you can get your hands on, but if you don’t know how to manage those income; you are pretty much taking two steps forward and one step back (or worse 2 steps or more) in your quest to be financially free.

I have a friend who just get started in investing, or so he thought. He came from a well-to-do family. He is in his early 20’s and have a bright future ahead of him. I came to him about a month ago presenting the idea of investing in real-estate. He was very interested in it but unfortunately he just invested his money somewhere else. He told me he really hated the idea of having his money sitting in money market account earning interest.

I was happy that he finally thought about investing. He asked me to review some of the documents he received from this investment. He asked a few questions that I found really odd. “I won’t lose money right?” “I will get an 8% return right?” “The worst thing is I just wont have any return right?”

I asked him “Did you ask all these questions before you invested your money?” He said “No” and I asked “Why not? It’s your money. Do you not think you have the right to ask all those questions no matter how stupid you think those questions are?” And his response was “I don’t know.”

He told me he doesn’t want his money sitting in a money market account earning 4-5% interest and he doesn’t mind investing in this investment as long as he doesn’t lose the money he invested. The objective of the investment is to have an annual return of 8% over the next 4 years. So let me get this straight. He doesn’t want a 4-5% return but he is fine with a 0% return because there is a chance of an 8% return? And the worst part is, he is NOT allowed to withdraw his money for 4 years without incurring penalties for doing so.

At the end of the day, I would rather sound dumb and have all my money in my bank than trying to look smart and be penny-less.

I came to a conclusion that he invested his money because of the thrill-factor. I’ve done that in the past and the results were never good. You put your money in a stock, hoping it’ll go in a direction you want without doing your due diligence on why you invested in that stock in the first place. I am sure most of us have done it. It is a SURE-WAY of losing your money in no time. I did.

I gave my friend a lecture about it but I don’t think he got what I was trying to say. Then I realize, he probably need to experience it first hand what I experienced to understand what I was telling him. Yeah, real estate sounds boring compared to stock market or forex. But it’s the boring one that is there for me in the end. I learned it the hard way.

Now, if you invest your money the way my friend just did … Is it investing or is it gambling?

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