| Have you heard of Ang Pau? Ang Pau is a Chinese | | | | First, you use it to encourage your kids to start |
| tradition during the Chinese new year. People who | | | | saving $200 per year. In order to save $200 per |
| are married will use a ready made "small red | | | | year, you will get your children to form a good habit |
| envelope" to put in some dollars and give it to | | | | to budget his expenses and not buying things with |
| relatives / friends who are not married. | | | | emotional influence. This solves most of the problems |
| Base on the past, most people will receive $200 | | | | which young people face which is "spending more |
| every year. This is something that only Chinese will | | | | than what they earn" and "getting into huge debt |
| have so some people might not have heard about it. | | | | problem". |
| Although it's a small amount of money every year, | | | | Another way you can use the magic of compounding |
| there's a magic in these "Ang Pau". | | | | interest is that you start saving your own money |
| If you invest all your Ang Pau money into equity unit | | | | and be a millionaire in the next 20 years. According to |
| trust (let's use 12% as estimation), how much will | | | | my calculations, you can be a millionaire in 20 years |
| you get when you are 25 years old? | | | | when you start investing $1000 every month in unit |
| It's a total of $29,866.79! | | | | trust that gives you a 12% Annual return. Saving |
| This means when a Chinese graduate from university, | | | | $1000 per month might not be easy for someone. If |
| he is capable to pay for a cheap house's deposit and | | | | you have problem saving $1000 per month, start a |
| buy his first house. He might rent out some of the | | | | small and easy business such as internet marketing |
| rooms and stay in it. Before he starts his first job, he | | | | that will give you a stable $1000 per month. |
| already owns a house with a small amount of passive | | | | Don't get addicted to make lots of money and start |
| income. This is a | | | | spending a lot and not saving. Financial success can |
| Is that cool for a Chinese? No. It's not. The coolest | | | | not be achieved solely by making more money. |
| thing in the whole part is the magic of compound | | | | Financial freedom and success can be achieved only |
| interest. | | | | with the combination of making more money, |
| This is not a privilege for Chinese only. There are 2 | | | | spending less money, expanding current asset and |
| ways you can use the magic of compounding | | | | good money management. |
| interest: | | | | |