The Surprising SIMPLE MAGIC FORMULA to be Wealthy!

Today I came across an incredibly informative and enriching article on that talks about how EASY it its to become rich.

There are the 3 Magic Formula:

1) Spend Less
2) Earn More
3) Build Wealth Wisely

No, you do not need to be blessed with a rich family background, nor become very lucky when it comes to attaining wealth. ALL IT TAKES IS A PASSION IN LIFE. This passion will imbue you with the discipline to follow through these steps!

The article highlighted on many habits of the wealthy. I’m glad that I relate to most of the habits, while there are still many areas for me to work on. As the Writer of RATpacksg, I am humbled to be walking my talk. I will share on how PRACTISING THESE HABITS CAN BE SIMPLE and HOW YOU CAN DO IT TOO.

1) Spend Less:

The wise ones

  • Spend within their means. If they earn $2,500, they won’t spend $3,500
  • What they spend on reflects their values. You will not see them buy the best blenders, television and go for big holidays if their highest value are their kids. You are likely to see them working within what they can spend on and devoting an above average amount compared to other parents on their children.

Case study on myself:

I prioritise spending on education, attending workshops and seminars. Why? Education IS THE BEST INVESTMENT! For example, I have spent over a thousand dollars to learn how to invest. Recently, I spent a few hundred dollars to get a motor boat driving license. My skills and knowledge are ASSETS because I will monetise them to put money into my pocket! My passion is simply CONSISTENTLY LEARNING AND DOING.

  • Are conscious about spending and have a systematic spending plan? Some use budgeting to be in control where they funnel their income and seldom encounter an emergency spending that catches them off guard

Case study on myself:

Budgeting is not troublesome at all! With the use of an app called Wally, I am able to track my monthly expenses, and whether my outflow exceeds my inflow. Its simple, you can set a recurring expense which auto deducts itself every month. This is suitable if you have monthly insurance premiums or lodging rentals to pay. For one-time expenses, with just a swipe of the screen and entering the amount, you can record a one-time expense. Initially, I found this habit hard to maintain. Now, recording my expenses has become natural for me and I am thankful it allows me to take charge of my financial standing.

  • Sell old stuff before buying new. There is a conscious effort to “liquidate” whatever they can,think thoroughly before
    buying something
     and ensuring they get a good value for their purchases (value is not cheap, its quality at an acceptable price)

Case study on myself:

I like this one. Don’t think about throwing your stuff away. Earlier this year, I developed this resourceful habit. With the Carousell App, I could easily sell my stuff online when I no longer need them. I have been selling board games, trading cards, books and magazines, you name it. My new sexy gaming mouse Aquila-X5 was paid for by selling off my old one which I have used for about a year.

  • Will not borrow to pay for things that do not build wealth. Using credit cards or loans to boost spending will mean not knowing what  you need to cut in the future to fund purchases that don’t add value

My thoughts on this:

NEVER borrow to fulfill your wants, unless it’s real estate. However, I would still get at least one credit card to build my credit worthiness. Credit worthiness is important because when I need to take a mortgage in future to buy real estate, the bank would look at it to determine whether I qualify for it. In other cases, it affects the interest rate on my loan. Simply put, its an assessment of how worthy am I of qualify for a loan at a good interest rate. Credit Card would never cause any problem to me as long as I monitor my expenses with it.

2) Earn More:

The wise ones

  • Make use of company education and training to enhance their core competency.  They also developed an interest in their work to develop a valuable skill set. This makes them employable and able to seek opportunities with higher remuneration
  • Does not burn bridges and network extensively
    • Change jobs when they have learn what they can, when they do not feel challenged or seek up greater challenges or when they are not adequately compensated
    • Work overtime to gain extra money (but this is probably at the expense of health)
    • Build hobbies and interest areas into a monetary income stream. When you are interested in certain areas, you might be able to build a following and be able to sell goods and services using your expertise to supplement your main job income. E.g. A bike enthusiast who gains contacts on cheaper or not available bike parts and able to bring them in to sell to other local enthusiast

Case study on Myself:

I have a couple of hobbies – Writing, Singing, Social Media and Investing. Currently, I am working on monetising my hobbies to develop them into income streams. Besides writing for RATpacksg, I began writing for ( A leading food and travel blog in Sg) which could put money into my pockets via paid advertising. In addition, facebook has become my search engine of opportunities, I use it not only to stay updated, but also to connect with like-minded individuals and look for more ways which I can continue to turn my passions into wealth. You don’t need a novel idea to make money. Look no further than your passions and your network as your assets!

    • For some people with unique competency, the internet has liquidfy the environment such that you can take up free lance jobs. This includes, designers, artists through ODESK, or you could have competent skills that can consult other contacts on the side

My thoughts:

So you want to earn some money during your school holidays? Check out pages such as ‘Singapore full-time/part-time job’ or ‘part-time/full-time jobs in Singapore’. With over 20k members on the page, it is hard not to find a temp job which you like. Freelancing for jobs which falls within my passion has allowed me to develop many different skills and gain lots of perspectives. In this ever-changing dynamic society, it enables me to be more adaptable. I am beginning to find out how I can make money doing what I like. Ever heard of ‘Do what you love and the money will follow’?

    • This may overlay previous, but a person can also start a side business with like minded folks or good friends to seed a business that may eventually provide a sizeable income stream

Case Study on Myself:

I started a liquor wholesale business after my national service with a entrepreneurial friend of mine. We made some mistakes and it failed after a couple of months. I lost my initial 4 digit investment on it and learnt about entrepreneurship the hard way on my hard earned army savings. Yet, it was an experience worth the money.

Currently, I am blessed to be able to partner with a world’s leading travel vacation club, where I had many opportunities to network with adept individuals from all walks of life. I was also given the opportunity to share my story in front of an audience of about 100s and being featured in a travel blog ( ) . Its certainly well worth the endeavour for brushing up my public speaking skills! Once again, Im monetising my passion – Travelling.

3. Build Wealth Wisely

Once you achieve 1) Spend Less and 2) Earn more, you can do 3) Build Wealth Wisely.

There are a few ways to build wealth to generate higher returns. Which way you choose depends on:

  1. Risk appetite. How much short term losses can a person take that prevents him to sleep at night?
  • My opinion: I don’t lose money investing in value businesses in stocks and I’m risk averse. However, there’s scenarios which I take risks of real losses. My risk appetite only grows big when opportunities arise and the benefits far outweighs the risk. In addition, the probability of the risk has to be significantly small. Even after checking all odds are in my favour, I ensure that my short term losses are not greater than 8% of my total portfolio holdings.

2. Acquiring and maintaining a skill to wisely build wealth through     that method. This can come from your job, going for courses or scouring the internet for different wealth building methods. E.g. learning the in and outs of purchasing a property and renting it out, understanding the returns, pitfalls, and effort require to be profitable for 30 years

  • Case Study on Myself: This is the reason my investing journey is an ongoing learning process! While having the discipline to follow a method to grow wealth through Value Investing, I open my mind to new information and knowledge. Currently,  I have a list of to-dos – how to invest in properties, understanding the commodities market, how to value different companies using different models.

 3. Active or PassiveHow much time do you want to spend on building wealth? Do you want to spend more time with family? Different ways of building wealth comes with different time needed to become competent and also  different levels of recurring managing wealth time. (Read building wealth is not as passive as you think)

  • My Opinion: This is a very detailed article on the many different ways which you can use investment to build wealth, and warns you not to be overly optimistic about the ease of monitoring your own investment. While it is easy to do once you get the hang of it, you certainly cannot shortchange yourself of the time and effort required to achieve good ROI.  No investments go on ‘auto-pilot’ mode without effort. The world is your oyster, so ask questions and explore which model suits you based on your priorities in life!

4. Your Edge. Whether you have the ability to confidently build up your wealth consistently over time using your wealth building methods. Some people judge their results on a short 5 year basis as having the edge when they could just be lucky and not competence.

  • Case study on myself: No matter how ‘proven-to-work’ wealth building methods may seem, no method is without its flaws and vulnerabilities. I am really just a small boy starting out in this journey picking up pieces of knowledge as I walk along the path. In the world of investment, the most informed person wins. Hence, I am confident that I can consistently build wealth over time because I simply made constant learning my passion.


To be wealthy is simple. The reality is that you have to

  1. Stop giving yourself excuses and find ways to optimize your spending
  2. Never let go of improving yourself to stay employable, get promoted at work
  3. If you believe in financial freedom, pick up one of the wealth building methods to grow your wealth further
  4. Sacrifice things that hold low value to you to funnel more to build wealth
  5. If you are constraint to not able to fund with a high amount now, check out how to commit to use your increment to fund wealth building.

Be serious, pick out one area that you need to improve and work on it. Then, choose one wealth building method you prefer and share with me what are the potential problems building wealth this way.

Please share this with your friends and those who can benefit from this article.

Thomas Wu

Credits also go to for providing the useful information and bullet points.


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