Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly, on October 24 - 30, 2016.

 

Dotcom millionaire Fabian Lim is used to defying conventions, especially when it comes to money. For one, he believes that money should not be viewed as a scarce commodity.

“Once you start looking at things from a scarcity viewpoint, it closes your mind [to money-making opportunities] and damages your chances of becoming wealthy. This mindset will make you lose your drive,” he says.

Lim addresses this scarcity mindset is his book, The Science of Getting Rich Decoded — a simplified version of Wallace D Wattles’ The Science of Getting Rich (published in 1910). “The book mentions that getting rich is not the result of saving or thrift — many thrifty people are poor while those who spend freely are rich — which I believe is true. You don’t see a rich guy saving because he has so much that he does not need to,” he says. 

Lim, a former Deloitte consultant and an avid recreational pilot, says he felt compelled to write a simplified version of Wattles’ book because he found that many of his friends and acquaintances had difficulty understanding it. “First of all, I found the book very interesting. But even with my ‘not-too-bad’ command of the English language, I had considerable problem trying to understand what was written. 

“In fact, I asked some people who had read the book and most of them said they were not sure or did not really understand everything. So, I thought it would be a good opportunity to draw people back to the book, but this time, have it decoded in plain language. 

“Also, after the publication of my first book, I asked myself, ‘What’s next?’ I wanted to stick to the wealth creation arena and I wanted to do something more evergreen, so decoding the book was perfect. I felt that it was a great manuscript to elaborate on and perhaps use in the future to inspire others.”

Although there are many books on wealth creation, Lim chose this book as it had the steps down to a science — it had clear principles on how to acquire wealth. “Wealth principles have not evolved much over the last 100 years, although the methods and mechanisms have. [For instance], starting a business, trading and finance can be done online today,” he says.

“My goal is to share with the common man that there is a science to getting rich as opposed to the art of getting rich. As a science, it allows us to duplicate and replicate the steps precisely and get the same results.”

He quotes Wattles in his book: “If getting rich is the result of doing things in a certain way, and if like causes always produce like effects, then any man or woman who can do things in that way can become rich, and the whole method is brought within the domain of exact science”. 

Lim says, “He argues that getting rich is not a matter of environment, nor the result of saving or thrift, nor is getting rich doing the things that others have failed to do, nor is it the result of doing the things others have failed to do. Getting rich is the result of doing things in a certain way. This is something I totally subscribe to, which gives you the first clue to how wealth is created. 

“In fact, Wattles came to this conclusion after studying people who became rich. He found that they were an average lot in all respects, having no greater talent or abilities than others. It is evident that they did not get rich because of their talent and abilities, but because they happened to do things in a certain way. There is a correlation between the way things are done.”

For example, 90% of the rich spend their time building capital, negotiating and closing deals, which the poor do not do. “What they are really good at is using other people’s money to [make money]. If you look at the blueprint of a rich person versus that of an employee, the job scope and activities are totally different and this reflects on the financial outcome,” says Lim.

“I myself can relate to this because I do certain things in a certain way. I have very rich friends who also do things in a certain way. All it takes is to decode them and find out which of those things are replicable.” 

 

Higher and faster returns

One of the things Lim prefers to do is investing in assets that can give him higher returns in a shorter period of time. “My investment instrument of choice right now is foreign exchange (forex), which ironically is the most dangerous. But my business partner Datuk Jimmy Wong has a superior system and does a good job. So, for the first time I am able to have an average return on investment of 20%,” he says. 

“My take is that if you really want to chase wealth, if 99% say it is dangerous, go and find the 1% who are actually making money. Because that is the kind of skewed proportion you are going to find when it comes to wealth creation. I mean if wealth creation is common sense, then everybody will be rich. 

“I do not invest in unit trusts or funds because I have better use of my money, either in a high-growth forex account or via business growth. I find unit trusts too slow and unnecessary.”

Although there is persistent belief that business is risky as it could be affected by market conditions or socio-political events, Lim says it all depends on your risk appetite and risk management. “There are only two things that you need to know: how to accurately assess a hungry group of buyers or customers — if you know where they are, you will know how to assess them — and who your competitors are, so you can outsmart and outmanoeuvre them. If you can figure these out, everything will be easy for your business. 

“It is all about understanding risk management. But risk appetite is the other side of it. If your risk appetite is far too small, your risk-return is going to be small as well. The key, of course, is not going into risk blindly, but to ensure that you have adequate knowledge. 

“Take air travel. People who are afraid of flying say that it is inherently risky. There is a certain amount of risk in aviation, but the risk is mitigated by what we call redundant systems. So, in a plane, there is a backup for everything. There is a backup computer, engine and even probes in case one, or all of them, fails. That makes air travel arguably safer than driving a car. 

“It is not that I do not believe in passive investing, but I have so many active business ideas that make better use of my funds. For example, I recently started a flight school called Flightschool.sg. So, I invested in a full-motion flight simulator. My goal is to help children and teenagers to realise their dream of flying.

“I will also be starting a new business venture in medical evacuation called Medivacs. Few people understand the dangers of being medically unfit overseas. Then, because of that, when you are back in Malaysia, you are billed a crazy amount, such as US$500,000, because you are a foreigner. And your insurance company refuses to pay and links it to a pre-existing condition that you have. I am hoping to address this soon.”

Lim owns an online stock trading platform called SharesXPert, but he is not actively using it anymore. “SharesXPert is still available and it is a good tool for spreading risk. But it has now been superseded by forex. My returns from using SharesXPert used to average 25% to 30% a year. But since partnering Datuk Jimmy Wong, I have been able to get the same returns in a month,” he says. 

“Forex strategies are very different from stock strategies. I still subscribe to trend trading [a strategy that attempts to capture gains through the analysis of an asset’s momentum in a particular direction]. But when it comes to forex, we both trend trade and counter trend trade. Trading counter trend means doing so for a short time when the trend goes against you, so that you can re-enter at a more profitable price point.

“In this new forex platform, you can use fundamentals and technical analysis, and in that regard, it is not that different. But this particular platform is different because it does not use any technical indicators and it does not follow fundamental news. It is a unique system that allows you to spot a set-up with your naked eye.”

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