Singapore's Online Community - Singapore Forums - View Single Post - What qualification do i need to have to b a success businessman?

**ramcem** · 28-11-2006, 04:33 PM

Your mum, dad and the government also says, "To be successful,

You need to be a President Scholar with straight "A"s results from either Cambridge, Stamford, Harvard or Oxford.."

If that's the case, professors in these universities must be making billions of dollars every year and they will top the list of Forbes richest men. However, these professors will also be unlikely to be in the Forbes 500 for the next few decades to come.

On the other hand, if using salary as a benchmark, Bill Gates (a famous Harvard dropout by the way..) is not the highest paid in the world. Our Prime Minister probably earn much more than him. Steve Jobs from Apple Computer and former boss of Cisco (forgot the name), paid themselves US$1 in salary every year.

Robert Kiyosaki defines simply the 3 types of income:

i) Earned (Salary);
ii) Portfolio (Paper Assets);
iii) Passive (Business Owners and landlords)

Our schools and society in Singapore emphasis heavily on earned income since day one. That's why our ministers paid themselves million dollar salaries. But please be aware that this is also the highest taxed income of all.

I never truly appreciate the lessons until I have 3 businesses of my own.

Take for example I pay my staff a $1000 salary. I have to top up 13% of his pay to CPF which works out to be $130. This is money I can't pay him direct. He still need to fork out about 20% to contribute to his employee CPF. That's another $200 gone. He is now left with $800. Wait a minute, almost everything he pays for attract GST of 5%.. so that's another $40 gone. He is now left with only $760. Think that's all? How about income tax? Although in Singapore you probably won't have to pay any income tax if your salary is below $1500, let's for simplicity sake, work out the calculations. Assuming that after all the deductions of personal reliefs and GST rebates, he fell into the 10% bracket. He is now left with $684 of true disposable income.

Let's work out the mathematics. I have prepared $1000 + $130 = $1130 to pay his full salary. He has only left with $684 to spent. 39.82% goes either into some form of witholding schemes such as CPF or tax (direct and indirect).

And mind you, Singapore has one of the lowest tax in the world. Some countries charge as much as 45% or more from income tax alone!

Contrast this with I make a $1000 profit from my business. Using legal accounting, I spend it on business travel, dine in high class restaurants, buy comfortable chairs for my office and many creative ways I can think of. I am down to $100 net profit before tax. The corporate tax is now about 24% (coming down soon..). I just pay $24 in tax.

Now you understand why Bill Gates is not the highest paid in the world and why Steve Jobs and ex-Cisco boss pay themselves US$1 a year?

Still want a high salary?

My ultimate aim is to eventually draw S$1 per year in salary. When I have done that, I would be damn rich and successful!

~Ramcem