Achieve your financial goals faster with less. A review of KC Lau‘s Money Smart, Achieve Your Financial Goals Faster With Less.

Reading the Money Smart, Achieve Your Financial Goals Faster With Less (Money Smart) book by the renowned KC Lau was not just a delight, but a great relief to know that there is a simple and easy-to-understand book on personal finance and money management out there that does not come off as the run off the mill “Get rich quick” kind of book that is so prevalent in the market now.

For one thing, this book comes with a 10-year money-back guarantee if you feel it wasn’t worth you buying it, reading it, and applying the advice it offers. This is a strong gesture on KC Lau’s part in fulfilling the reader’s expectation that his advice will truly make a difference in your personal finance journey.

Let me assure you that Money Smart does a great job of letting the readers know that it isn’t about the fast life of getting rich but rather the well-paced, deliberate journey of ensuring you are financially comfortable enough to have TIME and how it relates to your HAPPINESS.

Throughout this review, I will be talking about what are the great aspects of the book that you really should include in your own personal finance journey. There are also a few aspects that I feel KC Lau could expand more on (maybe in the next book?).

Ease of Reading

I must say one key thing I appreciate about the content is the great flow and structure. Not once did I think that there were some misplaced portions or parts in the Money Smart book that felt out of place.

Money Smart does an impeccable job of maintaining the reader’s attention by chopping up the content into small easily-digestible portions that do not exceed 5 pages. This is particularly great for those new to the world of personal finances or even those who don’t have time to sit down and read many pages in one go.

The overall structure is divided into 3 broad sections of first being smart with your money, second on how to make more money, and finally how to save more money.

Every chapter and section flows nicely into the next one, without skipping a beat. Even for a casual reader, you can easily move on to the next one without much difficulty. Concepts and explanations are simple yet valuable.

I especially appreciate the strategy of going on offense and defense by being proactive in finding efficient and smart ways of making money and also on how to save more money.

Get Ready for a Simple Yet Rewarding Paradigm Shift

Often, we think that the ultimate personal financial goal is to be rich enough that all our problems go away. In Money Smart, there is a more valuable realization – The mark of a person is not how wealthy they are but rather how much time they have and what they do with it.

Money Smart does not recite the traditional mantra of “boost your passive income with so and so method…” but rather emphasizes the careful planning, considerations, and tradeoff that comes with financial freedom.

In Money Smart, financial freedom does not equate to being filthy rich but rather having enough for your own basic living expenses that frees you to do what you are passionate about and interested in. Time is money, while money gets you there but does not necessarily make you happy.

Financial freedom is different from financial wealth. You should be free; not slogging the 12 to 15 hour workdays to earn more money that you don’t have time to enjoy.

Making the Right Investing Choices

I really like Money Smart’s approach and exploration as to how your investment is split into investing in financial assets and investing in yourself.

While it’s crucial to have a solid investment portfolio making steady returns, often many people don’t give much thought to investing in themselves. Money Smart’s exploration into this is deep and thoughtful.

While we diversify our investments, we should also diversify our income streams. In order to do this, Money Smart stresses the importance of investing in ourselves to learn up knowledge and skills to best equip ourselves in diverse areas to take on different types of work. Cue a lightbulb moment.

Money Smart explores diworsification too in that you need to do a proper cost-benefit analysis to determine whether the multiple sources of income are worth it compared to the time you spend on them. After all, time is the real wealth here, not more money.

 

Staying Eager Yet Realistic

This is perhaps the most profound point that Money Smart explores deeply. While most personal finance book champions the easy high life, Money Smart does not.

By being realistic about finances and striving for a stable financial life and financial freedom, this book sets a good tone for anyone looking for sound and realistic advice on finances.

The third part on how to save your money really sets the stage for self-discipline and also being realistic on how austere you can lead your life. Balance is key, and Money Smart really delivers on helping readers understand the balance between saving and the kind of lifestyle you want for yourself.

One point Money Smart brought up that elaborates this is when we focus on needs versus wants. While we ideally should want to only furnish our needs, realistically it would be too extreme and not the right way to live. It’s a wise and timely reminder for readers who get too caught up in the moment while they are on fire to pause and think about what really matters.

More Exploration into Property Investment?

Money Smart does a good job explaining to readers how to buy and finance a property, This is great for many people who like the idea of owning physical property, whether to live in, resell, or rent.

The allure of physical property cannot be denied especially to those of us brought up on the idea that it’s a must-have for every established adult.

For myself, I would have liked to see Money Smart delve into how one can get into the property market without buying the actual house itself, which is through REITs (Real Estate Investment Trust) which enable investors to buy stocks in companies that own and manage properties.

Money Smart could then elaborate on the pros and cons of physical property investment versus REITs, such as affordability.

In other words, good focus and depth for physical property investment yet maybe Money Smart could have delved deeper with other property investment options to increase the width of the scope of this subject.

Using Debt to Generate Returns Isn’t as Straightforward as It Seems

A part of the book deals with the use of debt by rich people to generate higher returns. Yes, you read that right, and yes, it is possible!

While Money Smart explores the potential utilisation of debt to further enhance returns, it isn’t a one-size fits all solution as this is based on the following assumptions:

  • You will get a higher return than the cost of your debt.
  • You can get the loan/debt in the first place.

The example used in one part of the book deals with housing as a store of value of it being good or bad debt. It is good debt when financing cost is low, compared to the return you get from your investment.

Now hear me out, for though the majority of people who do this instead end up having interest expense higher than the returns on their housing. That is because:

  • Rental yields in Malaysia have historically been low at about 3.7%.
  • House price growth has been lackluster recently (2018 – 2021 Quarterly Average: 1.9%, 2015 – 2017 Quarterly Average: 7.0%)
  • Fixed deposit rates normally are around 2.5% to 4.5% which makes it potentially higher than rental yields.

One should also be aware of how much one can afford to borrow (and repay) in the first place. It is a strategy that may not be applicable to middle- to lower-income groups.

In other words, I believe Money Smart could spend a little more on elaborating some of the caveats of this method and explain more on what to look out for in order to ensure the successful execution of this strategy.

Conclusion

Money Smart, Achieve Your Financial Goals Faster With Less is a book by KC Lau, of which I am expressing admiration for because how well-written it is for a regular person on the street to gain a better perspective of how they should be viewing their personal finances. While I would have liked to see more elaboration on the two topics I mentioned, this book is still a solid starting point for any reader.

 

Get your copy of Money Smart, Achieve Your Financial Goals Faster With Less by KC Lau today. 

 

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