I have a friend.
During his quarter life crisis year, he set a goal.
He aims to accumulate RM 4 mil cash (USD 1 mil) by the age of 30.
Reason being he can then yield RM 10,000 passive income a month by just placing the cash into fixed deposit (conservatively 3% return per annum) and do nothing.
Having 5-figure passive income a month is sufficient to give him a stable and decent life in his country. Not too wealthy lifestyle, but surely surpass the benchmark of majority working individuals. And most importantly he does not need to continue the rat-race and can have the options to choose the life he wants to live.
He has a plan to achieve his goal.
He ventures into many money making opportunities on top of his employment.
Zero or low cost of capital opportunities: Including online-to-offline affiliate marketing, independent consultancy services, MLM opportunities, consignment product distributors, broking deals.
Capital intensive opportunities: Including flipping properties, flipping companies, investing in preference share of friendly companies, fund his friendly stock trading team and profit share, and the list continues.
He does many things as long as it is legal and proven to be profit generating.
He rethinks his strategy and started to consolidate.
After 3 years of relentless hustle, he realized that he is still far away from his goal. He starts to rethink of his strategy.
Problem 1: He starts to discover that pledging huge chunk of cash into FD is not the only way to generate stable passive income a month.
He can diversify his cash into multiple investment vehicles, which yield them a higher portfolio return. It would then lower his capital needed to achieve his target.
For example, he would only need RM 1 mil of cash to achieve his monthly income target if his portfolio return is average at 12% per annum.
Problem 2: He has only limited time but many things to accomplished.
He starts to fade out those ventures that are giving him the low return on time invested (ROTI).
He instead focus on ventures that are of emerging market, scalable and efforts put in must be compoundable.
He continues his hustle to achieve his goal.
Less than two years left before he reaches age of 30, regardless of whether he achieves his goal, one thing for sure, he is doing his best to achieve what he wants. No regrets.
He always tells me this quote which I find it meaningful.
“On the top-line, always try hard to achieve your target. On the bottom-line, feel grateful for the results, even though the results may not be as expected.”
Moral of the story - 3 key takeaways that I learnt from him
Have a long term goal (not necessary monetary goal). Break it down into small quantitative pieces.
Human often make wrong decisions. But as long as the decision is made by yourself with serious thoughts, don't feel discouraged if the outcome is a non-favourable one. We learn from it and improve as we grow.
Only spend time thinking about things that we are in control. Don’t waste time at things that are not within our control.