was an eagles egg that was placed in a chicken's nest.
When it hatched, it grew up like other chickens, picking and
scratching for food. One day he raised his head and saw in
the sky an eagle, soaring high, and wished he could fly. But
he didn't try!
We have been looking at ways to transfer assets by means of
a will, today we backtrack, and explore some ways to develop
and grow assets so we get to leave a legacy.
The reason that 20 per cent of the people own the best assets,
and are financially independent, while the other 80 do not
seem to cut it, goes way beyond the Pareto rules.
Pareto postulated that 20 per cent of the people are responsible
for 80 per cent of the problems, but the converse is also
true, 20 per cent of the people do 80 per cent of the work,
and that is because only 20 per cent of us plan.
The first step in planning is the choice: do I want to be
in the top 20 percentile, or am I the laid-back type, in the
80 per cent group?
You can look at wealth creation as a project. In project management
there are three important aspects: planning, scheduling, and
controlling. Many of us lack follow-through, and fail in the
Control is about monitoring, comparing results, revising the
schedule, and the plan, taking corrective action, and deferred
The famous marshmallows experiment was a longitudinal study
(conducted over may years) of preschool children, who were
given a choice. The choice was either to have one marshmallow
now, or to wait until the end of the session and collect two
Those children who waited for the two marshmallows did better
at school, got better jobs, had more stable marriages, and
were more in control of their lives as adults.
So among the many and varied plans that we make, here's a
When it looks impossible for your own self, do a volte face
and make the dream come true for your child: turn your daughter
into an heiress.
A 30-year-old female can set up an annuity contributing $450
per month. At the best rates on the market, in 30 years, the
fund will have accumulated to more than one million dollars,
other things being equal.
A 35-year-old can contribute $550 per month and after 30 years
accumulate in excess of one million dollars.
Of course we have not factored inflation rates and currency
power, but the present value of $1 million, 30 years from
now, at an investment return of 10.5 per cent per annum, is
just about $50,020.
So if it is easier to deposit that lumpsum into a high yielding
individual annuity (you pay nothing else) you can create an
heiress in your daughter. If your daughter is 10 years old
now, she'll be a millionaire by her age 40.
Of course you will have to set up a trust fund for her to
ensure that cash disbursements are staggered, because you
don't want greedy young suitors at your doorstep.
There was once a chicken's egg that was placed by a hunter
in an eagle's nest. The egg hatched, and the little chicken
grew thinking he was an eagle.
One day, mama eagle took her young ones to the edge of the
crag, and one by one they flew off into the sky. The little
chicken, walked gingerly to the edge, flapped his wings, and
fell 1,500 feet! Hunters down below, thought it was road kill!
The lesson for us, don't fail to try, but don't be fooled
by others around you either!
Ahmed is a registered financial consultant