Here is the full transcript of author Sissi Goh’s talk titled “How Not To Lose The Billion Dollars You Didn’t Know You Had” at TEDxTanglin Road 2023 conference.
Listen to the audio version here:
TRANSCRIPT:
They say money doesn’t buy happiness. We’ve all heard that saying, right? So why don’t we believe it? Why don’t we live by that statement?
The Pursuit of Material Possessions
Every many of us truly believe the opposite, that money does buy happiness. I mean, how else can we justify the amount we spend on clothes every quarter, gadgets every month, or entertainment every week? What if we flip this well-known statement on its head? What if we say that happiness comes from money?
But I’m not talking about cash in the bank. I’m not talking about gold bars. Let me explain by telling you a story. Here are the pictures of my grandparents when they were young.
My Grandparents’ Story
They looked pretty good, right? Nice clothes, great hair. My grandparents were lookers. My great-grandfather owned a pharmaceutical company. He lived in a mansion in the central area of a metropolitan city. He didn’t just have a house. He had a nearby bungalow, too, where the people he hired to help the family stayed. My grandpa received very good education since a young age.
He became a Fulbright Scholar studying in the United States. Then he met my grandma, whose father also studied economics in a renowned university and working as a C3 executive in a bank. Everything was going well until my great-grandpa died in an accident. He fell down a staircase.
The Consequences of Poor Financial Planning
It was traumatic for my family, not just emotionally, but also financially. For a man as smart as he was, as well-off as he was, he had absolutely no financial planning at all, not even with Will.
You could imagine what happened next. Everything went haywire.
Business was sold at a discount. Family members start suing one another for a piece of his estate. Court cases went on for years. When there’s disharmony in a family, you make other people, like lawyers, rich. The family was basically left with nothing.
You see, having a good education does not necessarily mean one knows how to manage money. My family sold assets without realizing its potential value. It hurts my stomach to think of the time when my grandparents came back and told me that they purposely sold a property to a non-family member at a spiteful price of $200,000 just to make their siblings angry.
The joke is clearly on them because today that property is worth well north of $200. Now everybody should be angry. That’s probably where the saying, “cutting off one’s nose to spite one’s face,” comes from. What I took from my great-grandfather’s story and what I want you to take from it is that many people, or rather most people, they know how to accumulate money, how to make money, but they have no idea of how to preserve and distribute their money, and that’s a huge problem. Never let the wealth you have painstakingly built over the years become the source of contention and disagreements for your next generation.
My Mentor’s Story
On the other hand, my mentor, on the day when he was born, he was retired. You might be thinking, how is that possible? Here’s how. His parents had the foresight of investing a annuity plan for him, which meant that he would have a steady stream of income for the rest of his life.
So thanks to this early planning, my mentor didn’t have to worry about financial insecurity. Instead, he spent all his time pursuing his passions as a full-time student. He has three masters, one PhD, and one doctorate. He’s well-known for his career achievements, and he’s a great philanthropist as well. On top of that, he still has time to hang out with cool people like me. It’s not just me. He’s also helped many others to achieve the same level of financial security that he has.
I love the saying of his, “Imagine you have a tree. The tree is strong because the roots are strong. The roots of the family is the income that the family has. The tree of the family is the assets that the family has.” So if you cut the tree from the top, while the roots are still strong, the tree will grow back.
The Importance of Income Protection
But if you cut the roots, the strongest tree will also fall down. Pretty powerful stuff. You see, most people, they focus on asset protection, asset accumulation, and asset distribution, when what we should focus on is income protection, income accumulation, and income distribution. Because it’s impossible for everyone in a family to know how to manage money.
In fact, most people don’t know how to manage money. So if you pass down the asset as a lump sum, someone in the family will squander it away. But if you pass down the income, even if they have no idea of how to manage money, they will still be able to survive. Some people say that they will never leave anything to their children other than a good education and good values, because with that, they should be able to make it on their own.
But remember what I said in the beginning of the talk, what if happiness comes from money? Think about how many people do not dare to take the needed risk to pursue their passions, because they’re afraid that they can’t live without a paycheck, they can’t afford to. And that’s why they choose not to jump into a new job, or start a new business, or even start a family. What if you have the streams of income that can allow you to pursue your passions?
Would you make a different choice in life? Now you see what I’m talking about when I say that happiness can come from this kind of money, passive income. The income stream is power, and your education and your values will tell you where to use that power. So combine all these elements, a good education and good values, plus income, the power, the impact you can create in society is strong.
Creating Your Own Stream of Income
And now you might say, “But my parents didn’t create that stream of income when I was young. I wasn’t born retired.” Then you should start creating it now. Recently, I watched this movie called “Air.”
How many of you have seen it? Okay, for those that haven’t, I don’t want to give away too much. Let’s just say Michael Jordan is very good at playing basketball and becomes very rich. Yes, I was very impressed by the Nike executives, but I was even more impressed by Michael Jordan’s mother, who believed in her son’s value and created a $400 million passive income for him, because Michael gets a cut every time when there’s a sale of Air Jordan shoes anywhere in the world.
She set a precedent for profit-sharing scheme. Most people would have chosen things like a car. Let’s be real. Michael also asked for and got that red sports car. But those wheels pale in comparison to the multimillion-dollar passive income. And now you might say, “But I’m not Michael Jordan, right? Nike wouldn’t create that Air Jordan shoes for me.” Then I would say, that’s one thing you can do.
Get really good at what you do and make sure that everybody knows you are good, because you can attract a lot of income if you are known to be the expert in your field. And you convert that active income into passive income as early as possible, so that you can achieve financial freedom. Spend the time and energy and money to promote your own brand rather than marketing somewhere else’s dream. Speaking of marketing somewhere else’s dream, we know that a lot of people, they’ve worked very hard to purchase luxury goods.
The Value of Time and Compound Interest
When you are shouting out thousands to get the Louis Vuitton back, you are helping to market somewhere else’s dream. You are a walking billboard of Louis Vuitton. But instead, if you had invested those money, compound interest would ensure that you will have even more money several years later. Most people would never achieve financial freedom, because they have no idea of the value of that time.
That time is controlled by capitalism, not themselves. People who have bought Louis Vuitton bags might not have achieved financial freedom, but definitely have contributed to the financial freedom of Bernard Arnault, the CEO of LVMH, ranked number one in France. Thanks for the contribution.
In summary, if you start protecting and accumulating income streams at a young age, you too will achieve financial freedom and gain back the control of your time and the confidence to pursue what you’re passionate about.
Your children will also have the opportunity not to worry about how to make ends meet, but instead, they can decide what makes them happy. Compound interest is the eighth wonder of the world. So with good planning and the magic of compound interest, your income streams will continue to grow, and you will be securing potentially billions of dollars for your children’s children. Building wealth day after day, that offers not just a wonderful lifestyle, but peace of mind that’s priceless.