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Wednesday, December 16, 2009

Tips on how to choose unit trust funds

Personal Investments - By Ooi Kok Hwa

UNIT trust funds offer an attractive alternative to retail investors, especially those looking for the benefit of diversification with a small pool of capital while enjoying the possibility of earning higher returns compared with conventional savings.

However, a lot of people have the misconception that the diversification nature of these funds means that the risk of investing in unit trust is low and they can just close their eyes and simply pick any of the funds that come along.

This misconception has led to many paying high prices in learning that as in any type of investments, investing in unit trust funds requires some basic understanding and research before we commit our hard earned money to it.

In general, we can classify the unit trust funds in the market into two major categories: income funds and growth funds.

·Income funds usually are characterised as providing consistent income to the investors. These funds invest in income-producing stocks or bonds or a combination of both. Bond funds, equity income funds and money market funds are included in this category.

·Growth funds generally are more aggressive than income funds but have the possibility of earning higher returns by focusing on the objective of long-term capital appreciation rather than income producing or short-term gain. Examples of growth funds are small-cap funds, commodity funds, index funds and gold funds.

Before we start evaluating the funds to invest in, there are two main considerations which are our investment objectives and risk tolerance level.

Every investor invests for his own purpose. If you are investing for your retirement and are already close to retirement age, you should look for income funds that are more predictable.

However, if you are still young and want to save for your children’s higher education, which will be 10 or 15 more years, you may want to look for growth funds that generate higher return but with higher level of risk.

Once we are clear on what we are looking for in the investment, we can narrow down our selection to either income or growth category and move to the next step of identifying the most suitable funds within the selected category.

Here are a few key factors to look into when evaluating unit trust funds:

·Investment strategy, policy and holdings: Every fund has its own investment profile. Investors should have a clear understanding of the investment strategy taken in each fund that they are considering to ensure it is consistent with their personal investment objective and risk tolerance level.

Even the funds within the same category may have significant differences in risk exposure due to the difference in the investment holdings.

For example, the risk exposure in large-cap growth companies is definitely much lower than for penny stock funds.

·Past performance: Investors may look into the past performance trend of the fund to gauge its future performance.

However, do bear in mind that good past performance may not be repeated in the future and we should not be overly excited to see one year of good results if the fund is only newly established.

A good fund should be the one that has been consistently out-performing its peers, be it during good or bad times.

·Cost: Investors must be aware that when they buy or sell the funds, there are fees and expenses embedded in every transaction.

For example, the expense ratio of a small fund tends to be higher than a large fund while a regional or global fund usually will carry higher costs compared with a domestic fund.

·Fund management: The fund management is very important to ensure continuity and consistent performance.

If a fund changes management too frequently, it will be very difficult for us to gauge the performance of the fund as different managers will have different styles which may affect the performance of the fund.

For example, if the manager tends to have higher portfolio turnover, then the expense ratio of the fund may increase even though the nature of the fund holdings remains the same.

By having good understanding of the above factors, we may be able to make meaningful comparisons among funds that we are interested in to identify the ones that suit us most.

Source: the Star online

Sunday, November 29, 2009

YOUR MONEY - 10 factors to financial freedom

MOST people think that the Return on Investment (ROI) is the most important, if not only, factor for them to manage in order to achieve their financial freedom.

To them, they have a higher chance of achieving financial freedom if they can get good ROI for their investment. A good and high ROI will help to increase their investment fast to achieve whatever financial goals they have.

If they do not get a good ROI, then they think that they will have little chance of achieving their financial freedom.

As a result people focus too much on ROI in their financial freedom plan and neglect other equally important factors.

In my opinion, the importance of ROI in achieving one's financial freedom has been over-rated. ROI is not the only important factor. There are another nine factors that you can manage to achieve financial freedom.

The nine factors

The other unknown or under-rated factors in achieving financial freedom are:

- The time you start taking action

The earlier in life you start to take action to achieve your financial freedom, the better position you will be in achieving your financial freedom.

Someone who starts planning and acting on his financial freedom plan at age 30, put himself in better position than someone who starts at age 50. The earlier you start investing, the lower ROI you will need to achieve the same wealth accumulation goal.

However, many people just ignore this and do not use it to their best advantage in achieving financial freedom.

- The amount you save

The more you save from your income, the more money you will have to fund your financial goals. As a result, you can achieve your financial freedom easier.

In addition, the more you save, the less ROI is needed to generate to achieve the same accumulation goal.

- Your family income

The more income you have, the more money you can save. As a result, you will have more money to fund your financial goals. When we talk about your family income, it includes your spouse's income. Having extra sources of income is definitely better than having only one source of income.

- Children's education expenses

The more you spend on your children's education, the less money you will have for your other financial goals. So, someone who spends less on children's education or has fewer children is in a better position than someone who spends more on children's education or has many children.

- Your dream home

If you want to have an expensive dream home, you will have less money for your other financial goals. Someone who wants to have a RM2 million bungalow will definitely put himself in a more challenging position to achieve financial freedom than someone whose dream home only cost RM500,000.

- Your vacation expenses

The more you spend on your vacation, the less money you will have for your other financial goals. Someone who spends RM20,000 a year on vacation is in a better position to achieve financial freedom than someone who spends RM50,000 a year on vacation.

- Your retirement age

When you retire, you stop having active income. So, the later you retire, the more income you generate to fund your financial freedom. Someone who chooses to retire at age 65 will need a lower ROI to maintain his retirement life style than if he were to retire at age 55.

- Your living expenses during retirement

The more you intend to spend on your retirement living expenses, the more money you will need to fund your retirement. Therefore, you will need to achieve a higher ROI. On the other hand, if you intend to spend less on your retirement living expenses, you will need a lower ROI for your investment.

- Your medical fund provision

The more you need to provide for your medical fund, the less money you have to fund other financial goals. You can reduce your medical fund provision by transferring your risk to insurance company. You can also choose to use public healthcare service rather than private healthcare.

After going through the nine factors, you may think that they are nothing new. However, in the journey to achieve your financial freedom, what you know is not important. What matters more is what you do with what you know.

When you are able to manage your financial freedom plan using all the 10 factors, you will be able to place the importance of ROI in the right context and let other factors play their roles.

As a result, you will be able to exploit the compounding and synergistic power of the 10 factors to attain financial freedom.

Without considering nine factors, your financial freedom car is only powered by one horsepower engine rather than 10 horsepower engines. And that's a great waste.

In fact, there's another angle to consider when using the other nine factors: your ability to control a particular factor. The more control you have on one factor, the easier it is to manage that factor to achieve financial freedom.

Out of the 10 factors, ROI is the one that you have the least control.

You will never be able to guarantee your ROI no matter how much effort and knowledge you put into it. The truth is that no one in this world has an absolute control on ROI. Not even a great investor like Warren Buffett. Therefore, it is an illusion if you believe you can control ROI by putting in great effort.

However, you will find that you can have better control on the other nine factors. You can control when you want to start taking action, the amount you want to save, what your dream home should be, how much to spend on your vacation, when you want to retire, how much to spend on your children's tertiary education and how much money to set aside for your medical expenses.

You can also control on how much to spend on living expenses during your retirement and your much income to generate if you really want to.

I must agree that you can't completely control all these factors. However, you definitely have better control on these factors than the ROI factor.

Therefore, the wiser way to achieve financial freedom is to understand that ROI is only one of the 10 factors to achieve your financial freedom and the least controllable one.

If you are serious about achieving your financial freedom, start exploring the other nine financial freedom factors and put them to good and full use.

To do that effectively and efficiently, a tool that comes in handy is the Roadmap to Financial Freedom.

In fact, the roadmap has been designed in such a way that you can manage all the 10 financial freedom factors easily.

source: NST online

Sunday, November 22, 2009

What is the real value and use of gold?

WHAT is the real value of gold? Gold has industrial uses, especially in the electronics industry where it is used for electrical wiring due to its high conductivity. However, close to two-thirds of its demand is for jewellery, particularly in India and China.

Increasingly, it is being used again as a store of wealth as investors lose confidence in paper money, hedge against inflation or worry about economic and political turmoils. Other than buying physical gold, investors can invest in gold exchange traded funds (ETFs). SPDR Gold Trust, the largest gold ETF with a market capitalisation of over US$41bil, holds over 1,100 tonnes of gold.

Money could as well be in the form of sea shells and indeed Pacific islanders used sea shells as money. Before paper money, what constituted money came in many forms – sea shells, salt, leather, copper, silver and gold. Money was used as a store of wealth which could be used to purchase goods and services without resorting to barter trade. It was in the world’s oldest civilisation, Mesopotamia (in modern Iraq), where metal coins were introduced around 2500 BC. Gold is valuable only because it is perceived so in the collective psyche of the human race, hence its value is subjective and relative to other alternatives. To be valuable, something has to be rare and desired.

In all of history, only 161,000 tonnes of gold have been mined, barely enough to fill two Olympic-size swimming pools, according to a January 2009 National Geographic article. To be valuable and used as money, it has to be something durable. That would exclude fair maidens as their perceived value in the eyes of lustful men may diminish with age. Still, without the demand of gold from the fairer sex, its value would be much lower.

In Einstein’s theory of special relativity, time is relative to speed but if we apply the theory of relativity to the perception of value, the relative value of goods and services is determined by comparing the desirability of one versus another just as we compare the relative attractiveness of bonds, real estate, gold and stocks.

Even within the same asset class like stocks, we apply the relative yardstick – should we buy DiGi or Maxis? The relative attractiveness is determined by supply and demand, interest rates, growth and dividends for stocks, personal preferences and many other factors. The fact that the prices of stocks, bonds and commodities quoted on exchanges are so volatile is a reflection of not only genuine supply and demand but also human psychological factors which cause irrational exuberance or pessimism.

The Chinese introduced paper money during the Tang Dynasty (618-907) and with that they also invented hyperinflation when a large amount of paper money was introduced.

How does printing money cause inflation? In a simple hypothetical world where US$100,000 of paper money can only buy you a bar of gold or a house, doubling the paper money to US$200,000 does not create new wealth but merely causes the value of the bar of gold and the house to rise from US$100,000 to US$200,000, an inflation of 100%.

Wealth transfer

Printing of money merely results in a wealth transfer from the saver (who can buy less with paper money) to the government (as it can use the freshly created money) and borrowers (decline in the real value pf debt). Gold is perceived as an inflation hedge and a store of value. (See chart) Its price spiked in the late 1970s when the US and world inflation surged. The price is surging again due to diminishing confidence in paper money.

World governments are all undertaking fiscal stimulus to counter the economic slowdown. These large budget deficits eventually have to be financed by higher taxes but with unemployment in the United States at over 10%, politicians with an eye on getting re-elected may be tempted to print money to finance the budget deficits and bailouts.

Hence it is not surprising that with the United States, British and Japanese governments printing money, investors are flocking to buy gold or commodities which are a better store of value as their supply does not grow as fast as printed paper money.

The printing of money by the US government also puts other currencies at risk as over 60% of foreign reserves are held in US dollars. As the gold standard has been abolished, paper money cannot be converted to gold. No wonder the Indian government has decided to sell some of their US dollar reserves for gold. Perhaps the currencies of larger countries like Australia are relatively safer as they are sitting on large yet-to-be-mined gold reserves even as their US dollar reserves lose value.

So, should the fair price of gold be relative to paper money? Though the value of gold may be subjective in the minds of investors, the reality is that the amount of gold in the world is finite, but there is no limit to the quantity of paper currency which can be issued.

Therefore it is not surprising that the value of gold is at a record high as more money is being printed. All this is premised on the assumption that we will continue to treasure gold, which is likely to be the case as we have done so for millennia.

Choong Khuat Hock is head of research at Kumpulan Sentiasa Cemerlang Sdn Bhd

NEW YORK: Gold prices finished higher for a sixth straight day Friday, rising even as the dollar strengthened.

The December contract added $4.90 to settle at US$1,146.80 an ounce on the New York Mercantile Exchange.

For the week, prices gained 2.7 percent.

Gold has been on a record-setting climb since early September as investors looked for an alternative investment to a falling dollar.

Gold is considered a good hedge against a weak greenback because of its stable store of value.

The dollar, however, has shown some strength in recent days.

On Friday, the ICE Futures US dollar index, a widely used measure of the dollar against other currencies, rose for a second day in a row, gaining 0.4 percent in afternoon trading.

As investors grow more cautious over the sustainability of the economy's recovery, they have begun to shift money out of risker assets like stocks and commodities and back into safe-haven investments like the dollar and Treasurys.

Gold is also considered a safe-haven asset, so prices have held up amid the dollar's strength.

"When the dollar rebounds, I don't think it's a safe assumption that everyone will run from gold," said Jason Toussaint, managing director of investment at the World Gold Council.

There are investors who are holding gold "for preservation purposes," he said.

Some analysts have expressed concern that gold could see a sharp correction after such a rapid ascent.

But the consensus seems to be that gold prices have more room to run.

"We still expect to see attempts at higher levels," said Jon Nadler, senior analyst at Kitco Metals Inc. in a research note Friday.

Other metals were little changed.

source: the star online

Monday, November 9, 2009

How to invest in gold

HISTORICALLY, gold is perceived to be a safe haven during uncertainties and economic crises as it is considered more stable than other asset classes. It is generally an effective hedge against inflation and fluctuations in the US dollars.

Gold is an investment tool for preservation of wealth and a store of value in times of market volatility. It is an asset diversifier that could lower the overall risk in an investment portfolio.

In the previous article, we discussed the benefits of investing in precious metals and particularly gold. This article will focus on different ways to invest in gold.

Gold and gold-related funds

Gold and gold-related funds are unit trust funds that allow individuals, corporations and institutions with common investment objectives to pool their money for investment in gold and other precious metals. Professional fund managers then use the pooled money to acquire assets which will help meet those objectives.

Generally, a gold fund invests in gold mining equities and/or gold bullion accounts, while a gold-related fund invests in gold and other precious metals including platinum, silver, rhodium and palladium.

"By investing in such funds, investors benefit from diversification in their investments as fund managers buy stocks in more than one gold mining company or more than one type of precious metal," said Datin Maznah Mahbob, chief executive officer, Funds Management Division of AmInvestment Bank Group.

The funds also provide investment opportunities that allow investors to benefit from the investment expertise of fund managers who manage the funds.

In Malaysia, the only gold fund is opened to high-net-worth individuals with the minimum investment set at US$150,000 (RM513,000). For gold-related funds, investors can invest as little as RM1,000 to enjoy diversification in their investments and take advantage of professional fund management.

Gold exchange traded fund

An ETF is a unit trust, listed and traded on a stock exchange. It is an open-ended fund that tracks or follows the performance of a benchmark index.

An index is made up by a basket of securities and usually reflects the movement of an entire market. This gives ETF investors the opportunity to invest in a pre-packaged basket of securities of an index rather than just an individual security.

"Gold ETFs allow investors to buy and sell gold ETF units just like how they trade stocks on a stock exchange. Generally, gold ETFs track gold indexes or the price of gold. The ETFs invest in gold mining stocks to track the gold index," she added.

Gold ETFs, which track the price performance of the gold bullion, enable investors to participate in the gold market without taking physical delivery of gold. This is because it is 100 per cent backed by physical gold held mainly in allocated form. Allocated gold refers to the gold kept in a vault under a safekeeping or custody arrangement and the investor has total ownership to it.

The first gold exchange-traded fund Gold Bullion Securities listed on the Australian Stock Exchange since March 2003 is fully backed by gold, which is deposited and insured.

For SPDR Gold Shares listed on the Singapore Stock Exchange, the underlying gold is stored in the form of 400 ounces London Good Delivery bars in a bank vault.

"Gold ETFs are considered a passive investment. This means that upward movement of gold prices or gold indexes will be followed by the appreciation of ETF unit prices," said Maznah.

There is no gold ETF offered in Malaysia yet, but local investors can invest in Singapore-listed SPDR Gold Shares which are available closer to home. They need to have a foreign trading account offered by a local securities firm to trade the ETF. On top of that, their investment is subject to currency risk since the gold price is quoted in US dollars while the ETF is in Singapore dollars.

Physical gold investment

Some investors prefer to invest in physical gold including jewellery, gold bars and coins to have physical possession of the assets. Gold is an asset appreciated for its intrinsic qualities and beauty.

Investors have the option to buy gold bars in a variety of weights and sizes, ranging from one troy ounce to 400 troy ounces from some banks and jewellery shops. For instance, a local gold trading company offers gold bars and coins of 20 grams at RM2,415, 50 grams at RM6,010, 100 grams at RM11,964 and 1 kilogram at RM119,644 as at September 15 2009.

Investors can also invest in bullion coins offered in different weights of 1/20, 1/10, 1/4, 1/2, and one ounce. The actual value of bullion coins is based on the daily gold price and the gold content. They can buy bullion coins including the American Eagle, Australian Kangaroo Nugget and the Canadian Maple Leaf.

"To make direct investment in physical gold, investors need to set aside a bigger sum of investment compared to buying units in gold funds and gold ETFs. It is not as convenient as they have to think about safe storage and insurance for the precious assets," added Maznah.

Mining stocks

Mining stocks or equities are shares of ownership of a precious metals mining company. The stocks entitle the investor to receive profits from the operations of the company, usually by payment of a dividend, and to any voting rights attached to the stocks. Factors affecting the appreciation potential of a gold mining stock include market expectations of the future gold price, the future earnings and growth potential of the company, mining costs, and the likelihood of additional gold discoveries.

In general, prices of gold mining equities are more volatile than gold prices, thus some gold mining company equities decline when gold prices increase. The short-term volatility of the equity prices could be due to some gold mining companies hedging their future output using gold futures contracts. In the long-term, generally prices of gold mining equities could match the longer-term price trends of gold bullion.

"Investors do not enjoy diversification in their investments when they buy stocks of one gold mining company. They need to allocate more money to buy stocks of different companies to diversify their holdings," explained Maznah.

Gold passbook account

Another option is investors can buy gold in 999.9 fineness using a gold passbook account. Whenever they buy and sell gold, the transactions will be recorded in a passbook provided to the account holders. With the account, they can buy and sell gold at daily quoted gold prices for 1 gram in Malaysian ringgit. The account is normally backed by physical gold.

There are banks in Malaysia that require investors to deposit and trade a minimum of 5 gram of gold. The bank allows investors to make withdrawal in either physical gold or cash credited to their deposit accounts. They will incur a conversion charge inclusive of the shipping and insurance for the physical withdrawal.

One of the disadvantages for this type of investment is account holders do not get any interest or dividend for their investment. They generate profits only if they sell the gold at a higher price compared to their initial investment. The banks normally impose a charge of up to 5 per cent based on the gap between the selling and buying prices to cover administrative and storage expenses.


Now that you have understood the different ways of investing in gold, you need to compare them in terms of diversification, affordability and the advantage of professional management. On top of that, you should consider and select the investment options based on your risk tolerance as well as investment goals and objectives.

source: Business Times

Thursday, September 17, 2009

Millionaires Around The World

My, my... would you believe that in The United States alone, you will find 3.9 million millionaires, the highest population on the globe.

And 8.5% of Singapore's population are millionaires...and here we are trying to figure out on how to get our first million... (Now, do you think it is difficult to be a millionaire?)

By the way, to get the full story, you can go here..

Tuesday, September 15, 2009

7 Critical Factors To Consider In Health/Medical Insurance

Since I was seriously looking for health insurance, I found a few critical factors that we all should know before committing ourselves to it.

  • Not all insurance will be paying in full. Some have co-insurance, meaning that out of the total sum charged by the hospital, we have to fork out a certain percentage from our own pockets. Often it may be in the 80-20 ratio.
  • Do they cover pre-existing illnesses? You'll be surprised that there are some companies that do. Shop around and you'll find one that does.
  • Make sure the insurance company is a reliable/reputable one. You don't want to get into further complications when you fall sick, like your card is denied by the hospital, etc.
  • Make sure you know the coverage limit. Sometimes just having a namesake coverage doesn't help you at all. And get yourself/your loved ones adequately covered. This includes even if you are insured by your workplace.
  • Are pandemic illness covered? Even though recently the government has urged for insurance companies to include coverage on the H1N1 flu, the test and lab procedures before confirming the illness are not included.
  • If possible, get a secondary health insurance at a cheaper rate. Usually you can get this through a group insurance policies. Co-operatives normally provide this packages if you are a member.
  • For convenience sake, some people may prefer the cashless system. Not all health insurance provide this facility. Certain packages are used for reimbursement only. So, don't forget to check on this matter!

Thursday, September 10, 2009

Shopping for medical cards!

Health insurance a.k.a medical card is an extreme necessity that most of us don't realise until we experience the pain ourselves. My brother was admitted to one of the private medical centre here. And since it was an emergency admission, we just used credit card to swipe in for the deposit. After all, how much could it cost, we thought. The next day, the specialist came to inform that we needed to top up our deposit as it had crossed 7K. Just 2 days and it had crossed 7K!!!

And even though my brother had a medical card covered by his work place, the limit was up to 12K only. So, we are most likely to foot the total bill that would probably hit the 20-25K mark.And that's a LOT of money!

So, my first priority now would be to ensure that my entire family is adequately insured. I have to hold back on my investment plans for the time being.What else can be more important than the welfare and well-being of your family? And that reminds me..I've to get a card for my wife as well. Earlier, when I got a medical card for my son, I did not take for her because her work place provided her with one.

So for all you guys out there, do not delay in insuring yourselves and your family. Yes, more expenses incurred, but it gives you a peace of mind.

Wednesday, September 9, 2009

How to Spend Like a Frugal Millionaire

Maybe we have all read about these tips before (you may even find the likes of some of them here, here and here) , but I still found that this article an interesting read...

Saving thousands while still spending.

Millionaires make up just 2 percent of the population. They get a bad rap during recessions for being wasteful with their money and are frequently used as examples of excess. It’s the millionaires that you don’t see that you can learn from in times like these. I call them the frugal millionaires and interviewed 70 of them to uncover ways we can all be smarter with money.

Nearly 70 percent of the economy is based on consumer spending. To keep the economy going we need to keep spending but not waste money in the process. This is where the frugal millionaires come in. They’ve been smart with their money all along and haven’t lost it all and had to remake it. These are the kind of people you want to learn from when it comes to spending your money.

Spending philosophy.

Frugal millionaires are unique thinkers when it comes to spending money: 1) they can easily delay their need for gratification when purchasing; 2) they are resourceful in getting what they want by carefully timing their consumer purchases; 3) they make living below their means painless; 4) they don’t like wasting anything (especially money); 5) their sense of “self-entitlement” is highly minimized: and 6) spending is OK with them…depending on what they are buying (think: appreciating vs. depreciating assets).

[For more, see, "10 Secrets of Millionaires' Money Management."]

Buying tips.

These millionaires keep more money than they spend, that’s why they are rich. Their tactics work for them so they’ll work even better for you. Key Point: They don’t view shopping as a sport. They shop efficiently and spend their time doing more important things with their lives. Here are their tips that will help you save while spending:

Cars: Buy used (or off lease) fuel-efficient cars, often with “certified pre-owned” warranties. This warranty can be better than a new car, plus the initial depreciation hit is avoided. Drive the car for a long time and never lease it.

Eating Out: Bring half of a meal home to eat later (this also saves the waistline). Eat at happy hours. Bring wine from home and skip dessert. Value food quality over expensive ambience.

Eating In: Eat better and less expensively by cooking at home. Make it a friends and family event. Get your kids involved. Bonus: You can have that extra drink without worrying about getting busted for driving under the influence. Also: buy day-old bread at the best bakery in town and freeze it. Eat oatmeal, because it’s the most cost-effective breakfast food. Get a supermarket “club card” and buy food on special. Play the game of trying to see how much of a discount can be saved off the total food bill.

Clothes: When you buy something new donate something used to charity. Buy traditional clothes, but wait for the off-season to acquire them. Go for high quality – not high price. Buy vintage clothing and avoid logo clothing and keep people guessing who the designer might be. Hint: There shouldn’t be one!

[For more, read: "Juggling Your Money in the Recession."]

Consumer Electronics: Buy low-end gear that has the basic functionality of the more expensive stuff. Don’t be the first to buy new technology. Wait at least one lifecycle so the bugs are worked out. Buy refurbished electronics whenever possible.

Computers: Buy more mainstream computers with proven technology. Select higher capacity hard drives, a decent amount of RAM (the memory that the program runs in) and a cost effective processor. Super fast doesn’t always equal super good…unless you are building airplanes or bridges. Laptops are a good compromise between desktops and netbooks. Don’t go through the pain of upgrading operating systems on existing computers, it’s not time efficient and you will probably go insane trying.

Going green: Being green and frugal go hand-in-hand. Yet frugal millionaires don’t readily fall for the trendy green hype machine. They typically buy green if it helps the environment and lowers their costs. They look at the timeframe when a product can pay for itself. They do use compact fluorescent lighting, turn off lights and equipment that isn’t being used, monitor AC and heat usage (with programmable thermostats), drive efficiently, live in “right-sized” homes and turn off the water when they aren’t brushing their teeth or washing dishes. Because they have trained themselves to not waste money they won’t waste anything else either. They get into good habits and keep them going. You can, too.


Monday, September 7, 2009

Why Athletes Go Broke

The “Real Deal” is broke.

Former Heavyweight champion Evander Holyfield is playing the real life game of Deal Or No Deal. It has been reported that his $10 million estate in suburban Atlanta is under foreclosure, the mother of one of his children is suing for unpaid child support, and a Utah consulting company has gone to court claiming the boxer failed to pay back more than a half million dollars for landscaping. Just one more high profile athlete having to scale back his lifestyle to the level to which you have I have been accustomed. Why is it that athletes who seem to have everything are often completely unable to control anything related to finances?

We all played our violins to death when we heard of Latrell Sprewell’s financial troubles. On Halloween 2004, Sprewell, who was in the final season of a $62-million five-year contract with the New York Knicks, said he was insulted by the Minnesota Timberwolve’s offer of a contract extension that was reportedly worth between $27 million and $30 million for three seasons. Sprewell stated, “I’ve got my family to feed.” That quote become a national moniker for the public perception of athletes as greedy, out of touch individuals. Apparently, Sprewell still can’t feed his family. His yacht was recently repossessed and his multi-million dollar mansion is about to be foreclosed on.

While there is certainly the stereotype of the financially irresponsible NBA athlete, no professional sport is immune.

Let’s take a look at some high profile athlete financial sob stories over the years:

1. No one my age can forget Jack”The Ripper” Clark , star player for the Boston Red Sox who filed for bankruptcy in 1992 in the middle of his second year of a three-year, $8.7 million contract with Boston; he listed $6.7 million in debts. Jack was a master of financial planning and prudent asset acquisition. His bankruptcy petition listed assets such as 18 automobiles, including a 1990 Ferrari that cost $717,000 and three 1992 Mercedes Benz cars costing between $103,000 and $143,000. He owed money on 17 of the automobiles and was liable for about $400,000 in Federal and state taxes. He had also lost about $1 million in a drag-racing venture. Sounds like Jack would have been more at home in the NBA. You can read about it hereMike Tyson\'s Bentley

2. Johnny Unitas, Hall of Fame quarterback for the Baltimore Colts, filed for bankruptcy in 1991 citing numerous failed business ventures in his petition These failed bits included bowling alleys, land deals and restaurants. He filed for Chapter 11 bankruptcy in 1991.

3. Mike Tyson The name speaks for itself. Mike’s bankruptcy was highly publicized. Despite earning hundreds of millions during his boxing career, Mike kept it simple. His bankruptcy petition simply stated: ” I am unable to pay my bills”. According to federal court records, his liabilities totaled about $27 million. You can read that story here.

4. Dorothy Hamill, the women’s figure-skating gold medalist in the 1976 Winter Games, filed for bankruptcy after a series of financial setbacks. Hamill said she has experienced financial setbacks as a result of poor financial investment advice and management.

read more


Thursday, August 27, 2009

Need a Less Stressful Career? Here are Eight Secrets to Work Zen

by Chloe Dowley
8 Careers to Help Lower Your Stress Meter

It's 11 p.m. on a Sunday night, and you're glued to the computer screen, biting your nails, pulse racing. No, it's not an exciting moment in your weekend-long Halo 3 tournament, or even a big sell on eBay. You're trying to meet yet another work deadline. Sound familiar? If long hours and an unwieldy workload are stressing you out, maybe it's time to consider a career change.

Understanding the Enemy

Job stress is one of the most common complaints among Americans, and research indicates that it has become a more widespread problem in recent years. In 1992, the United Nations named job stress "The 20th Century Disease," and the World Health Organization has called it a "World Wide Epidemic." Also, studies have shown that too much negative stress can contribute to health problems ranging from migraine headaches and depression to life-threatening illnesses such as heart attacks. Is that pension plan really worth it if you won't be alive to cash it in?

Turn Off the Career Pressure-Cooker

What's an overworked guy or gal to do? Though it may seem out of the question after a 60+ hour workweek, redirecting some of your energy toward identifying and training for a new career may be the best investment you can make. The careers listed below are not anxiety-free (every job by nature has some elements of positive and negative stress), but they do offer a combination of freedom, creativity, and personal satisfaction that can help keep your pulse rate normal


If you're well-organized and have a knack for calculations, a balanced profit and loss sheet can offer a restful escape from the stress of complex office politics. You don't even have to leave your computer to earn an online accounting degree, which can be found at hundreds of accounting schools nationwide.

2.Preschool Teacher

Working with young children can definitely be a challenge. Yet introducing preschoolers to the world of education through art projects, group play, and music can be extremely therapeutic as well. Earn your degree in early childhood education and you could get paid to help three- and four-year-old kids on a daily basis. Even if you have to stay up late to get a teaching degree online, you can make up for that lost sleep when your students enjoy their post-lunchtime naps.

3.Nursing Assistant

Caring for patients as a nursing assistant delivers the feel-good perks of a medical career without the stress of med school or week ends on-call. A nursing degree could set you up to enter a career field projected to see 264,000 new job openings over the next 8 years.

4.Financial Planner

Though spending your own money can produce high levels of anxiety, helping others manage their funds can be just the opposite. A degree in finance can help you learn the basics of tax law, insurance, and investing principles to assist others as they prepare for retirement or plan their estate. To minimize the stress of funding your own education, keep costs down by researching your financial aid options for an online finance degree or an MBA.

5.Massage Therapist / Physical Therapy Assistant

Whether giving and receiving backrubs at a massage therapy school, or practicing flexibility techniques in a physical therapy assisting program, you can learn how to help people maximize relaxation. And if you incorporate some of these exercises into your own daily routine, you could have a recipe for a tension-free workday.

6.Pastry Chef

It's hard to get stressed when your office smells of butter, sugar, and cinnamon. Although some pastry chefs work odd hours, the love and creativity they put into their work can be extremely liberating. Most pastry chefs get their start in culinary school, where they can refine and hone their artistic skills.

7.Graphic Design

Being creative under pressure isn't easy, but earning a graphic design degree could help you join the ranks of the designers who are self-employed. Working for yourself can give you a tremendous amount of flexibility, and allow you to balance your personal and professional lives as you see fit.

8.Desktop Support

Desktop or computer support specialists use their expertise to help the rest of us deal with the stress of malfunctioning technology. With a bachelor's degree in computer science (or simply experience and technical training for some positions), you could enjoy low-stress super-hero status by saving hard drives from evil viruses.

Derail Your Stress Train

Though many factors can contribute to on-the-job stress, remember that you always have some control over how you react to it. As you begin your journey toward a lower-stress career, make sure you cultivate some personal stress-reducing habits as well. A little career training can go a long way in helping you launch your new low-stress career.

source: Yahoo!

Wednesday, July 1, 2009

Top-Paying Jobs for Women

Though a pay gap persists--women's earnings remain stalled at around 80% of men's--women are finding the jobs that pay them the most, and some may surprise you. Based on a U.S. Department of Labor Women's Bureau 2008 analysis, we ranked women's median weekly earnings as full-time wage and salary workers to uncover the highest paying jobs for women.

No. 1: Pharmacists

Women's median weekly earnings: $1,647
Women's median yearly earnings: $85,644
Percentage of men's earnings: 84.9%
Education required: PCAT; Pharm.D. degree; six to seven years of collegiate study
What they do: Distribute pharmaceutical drugs

No. 2: Chief Executives
Women's median weekly earnings: $1,603
Women's median yearly earnings: $83,356
Percentage of men's earnings: 80.1%
Education required: Varies; many hold a bachelor's or graduate degree in business administration or more specialized discipline
What they do: Hold overall responsibility for the operation of an organization, including corporate and small businesses

No. 3: Lawyers
Women's median weekly earnings: $1,509
Women's median yearly earnings: $78,468
Percentage of men's earnings: 77.5%
Education required: LSAT; J.D. degree; about seven years of collegiate study
What they do: Advocate in criminal and civil courts and provide legal counsel to clients on business and personal matters

No. 4: Computer Software Engineers
Women's median weekly earnings: $1,351
Women's median yearly earnings: $70,252
Percentage of men's earnings: 87.3%
Education required: Bachelor of computer science or software engineering
What they do: Design, develop, test and evaluate computer systems and software

No. 5: Computer and Information Systems Managers
Women's median weekly earnings: $1,260
Women's median yearly earnings: $65,520
Percentage of men's earnings: 85.4%
Education required: Bachelor's degree; often a technology-specific MBA
What they do: Implement technology into an organization, often overseeing network security and IT operations

source: Forbes

Monday, June 29, 2009

6 Millionaire Traits That You Can Adopt

1. Independent Thinking
Millionaires think differently. Not just about money, about everything. The time and energy everybody else spends attempting to conform, millionaires spend creating their own path. Since thoughts impact actions, people who want to be wealthy should think in a way that will get them to that goal.

Just look at David Geffen. A self-made millionaire with $4.5 billion to his name in 2009, this American record executive and film producer was college dropout, but made millions founding record agencies and signed some of the most prominent musicians of the 1970s and '80s. Although he didn't take what many assume to be the usual path to success, his tireless work ethic and sense of personal conviction about artists' potential allowed him to rack up a sizable fortune.

2. Vision
Millionaires are creative visionaries with a positive attitude. In other words, wealthy people not only have big dreams, they also believe they will come true. As such, wealth seekers should set lofty goals and not be afraid of uncharted territories.

Bill Gates, the world's richest person in 2009, did just that. The American chairman of Microsoft is one of the founding entrepreneurs who brought personal computers to the masses. Gates jumped into the personal computers business in 1975 and held on tight, creating Microsoft Windows in 1985. When consumers began to bring computers into their homes, Gates was ready to profit from this new age.

3. Skills
Writer Dennis Kimbro interviewed successful people to determine the traits they had in common for his book, "Think and Grow Rich" (1992). He found that they concentrated on their area of excellence. Millionaires also tend to partner with others to supplement their weaker skills. If you don't know what you are good at, poll friends and family. Use training and mentors to refine your strong skills.

4. Passion
Billionaire investing guru Warren Buffett says "Money is a by-product of something I like to do very much." Enjoying your work allows you to have the discipline to work hard at it every day. People who interact with money for a living, bankers for example, often love creating new deals and persuading others to complete a transaction. But finding your dream job may take time. The average millionaire doesn't find it until age 45, and tends to be 54 (on average) before becoming a millionaire.

5. Investment
Millionaires are willing to sacrifice time and money to achieve their goals. They are willing to take a risk now for the opportunity of achieving something greater in the future. Investing may include securities or starting a business - either way, it is a step toward achieving great financial rewards. Start investing now.

6. Salesmanship

Millionaires are constantly presenting their ideas and persuading others to buy into them. Good salesmen are oblivious to critics and naysayers. In other words, they don't take "no" for an answer. Millionaires also have good social skills. In fact, when writer T. Harv Eker analyzed the results of a survey of 753 millionaires for his book, "Secrets of the Millionaire Mind" (2005), he found social skills were more important than IQ. Just look at Donald Trump. His fortune has fluctuated over the years, but his ability to sell himself - whether as a TV personality or as the force behind a line of neckties - has always brought him back among the ranks of celebrity millionaires.

source: Investopedia

Saturday, June 20, 2009

Illegal Deposit-Taking

Looks like another form of scam in this hard times. One of my friend even was so convinced that this was a legal business that she joined in as a marketer for them and had made sales close to a million. She was trying to complete the 1 million dollar target as that would have earned her 1 thousand dollar every month in passive income alone.

Bank Negara team swings into action against Bestino Group


KUALA LUMPUR: Bank Negara has frozen the assets of Bestino Group Berhad, pending investigations into its alleged illegal deposit-taking and issuance of redeemable preference shares.

It is learnt that a task force had begun a full investigation into the company and its related activities following reports that Bestino had issued preference shares worth more than RM300mil to investors.

Sources said the authorities were investigating if the company had other branches besides those in Ipoh and Petaling Jaya.

It is learnt that investors were initially given gold bars with the face value equivalent to the amount invested.

However, they claimed that after several months of investing with Bestino, they were told by the company that Bank Negara did not allow the company to collect more than RM500mil in cash.

An investor, who declined to be identified, said that when he invested with the company in 2006, he was given gold bars with the face value equivalent to the amount invested.

However, he said those who wanted to invest in April last year were issued redeemable preference shares with a promised return of 3% per month.

source :

Thursday, June 18, 2009

7 Ways to Save on Gas

by AnnaMaria Andriotis
Friday, June 19, 2009

That budget road trip you planned for the family this summer is starting to look a lot more expensive now that gas prices are on the rise.

Some of the spike is seasonal. Increased demand -- from all of those other families hitting the road -- tends to lift gas prices each summer, says Paul Hess, information analyst at the Energy Information Administration (EIA). Oil prices have also been creeping higher in recent weeks as optimism grows on Wall Street that demand for crude will rise worldwide once the global economy stabilizes, says Tom Kloza, chief information analyst at Oil Price Information Service, which monitors oil prices in North America. And further boosting prices at the pump is an Environmental Protection Agency requirement to add a fuel blend to gasoline in certain regions during the summer months that reduces ozone damage. This additive alone can add another five to 10 cents to the price per gallon, says Kloza.

More from

10 Things Gas Stations Won't Tell You

Cash for Clunkers: What You Need to Know

Car Shoppers: Should You Buy or Lease?

As a result, regular unleaded gas costs $2.67 a gallon, up 16% from $2.30 a month ago, according to AAA’s Fuel Gauge Report. According to the EIA, gas prices won’t begin declining significantly until fall.

In the meantime, drivers can lessen the pain at the pump by taking some inexpensive and easy steps.

Here are seven ways to save on gas this summer.

Shop Around

Sure, it’s convenient to visit the gas station closest to home, but it may not be the best place to fill up.

To find the cheapest gas prices, compare prices at stations near your home or along your commute. Price-comparison web sites like and let you plug in your daily destinations to find the most affordable gas stations on those roads. The price difference per gallon can be up to 50 cents, says Samir Kothari, co-founder of

Pay Cash

More from Yahoo! Finance:

Popular Restaurant Chains on the Ropes

High Gas Prices Could Slow Recovery

What Your Dollar-Value Meal Really Costs the Restaurant

Visit the Family & Home Center

Last summer, gas stations rolled out higher prices for consumers who paid with credit or debit cards (the idea was to pass along the merchant fees associated with such transactions). Many gas stations are still at it, which means those who pay in cash can often save. ARCO (a subsidiary of BP) stations, located in California, Washington, Oregon, Arizona and Nevada, for example, only accept cash and charge between five and 10 cents per gallon less than competing stations. (ARCO recently introduced a debit MasterCard which consumers can use to purchase gas at no extra charge. Other debit cards are accepted at these stations, but there’s a 45-cent fee.)

Cash discounts are popular in California, Connecticut, Florida, Michigan, New Jersey and New York, according to (Discounts for cash-paying customers are legal in every state, as long as the gas station makes it clear that prices are different when you pay in cash vs. credit or debit, says Jason Toews, cofounder of

Fill Up at the Warehouse Club

In addition to frozen food, toiletries and appliances, Costco, BJ’s and Sam’s Club sell discounted gas at some of their locations.

“It depends on local market conditions but usually they sell it cheaply enough so that they’re beating out the competition,” says Toews. For example, at a BJ’s location in York, Pa., regular unleaded gas is selling for $2.59 a gallon. Local competitors there sell gas for $2.61 to $2.65 a gallon, according to

Keep Your Car in Good Shape

Routine maintenance on your car’s tires and engine can increase its fuel efficiency (and even exptend its life). Plus, most of the things you need to do to maintain your car's health don’t even require pricey visits to the mechanic.

Just keeping your tires properly inflated can help save you cash. Underinflated tires require more energy to roll and decrease a car’s fuel efficiency, says Kothari. Driving with properly-inflated tires can improve fuel economy by 3% over a year, saving 20 gallons of gasoline and up to $45 annually, according to the Alliance to Save Energy. Check your car owner's manual to find out what the proper air pressure.

Also, be sure to regularly change your air filter. Clogged air filters can damage your engine and decrease fuel efficiency. A new air filter will improve gas mileage by 10%, according to the Department of Energy (DOE). Even better: Air filters are fairly cheap, ranging in price from $20 to $60.

Also, stick to the motor oil that’s recommended by your car's manufacturer, and buy one that states “energy-conserving” on the label, says Kateri Callahan, president of the Alliance to Save Energy. This can increase fuel efficiency by up to 2%, according to the Alliance to Save Energy.

Avoid Road Rage

Aggressive driving isn’t just dangerous. It also wastes a lot of fuel.

Consumers pay an extra 24 cents per gallon for every five miles per hour (mph) over 60 mph they drive, according to the Alliance to Save Energy. Rapid acceleration, hard braking and speeding can lower a car’s gas mileage by 33% on the highway and 5% in the city, according to the Department of Energy (DOE).

Clean Out the Clutter

Golf clubs, bowling balls or that bag of salt from last winter -- any unnecessary equipment or baggage in a car can decrease its fuel efficiency. According to the DOE, gas mileage decreases by up to 2% for every 100 pounds.

Another helpful tip: On your next road trip, try to pack everything inside the car rather than piling it on the roof. Stashing stuff on top of the car increases drag and decreases fuel economy by 5% or more, according to the DOE.

Limit A/C Use

Whenever possible try to keep the air conditioner at the lowest level. Having it maxed out can reduce your fuel efficiency by up to 25% compared to having the A/C turned off, according to the Alliance to Save Energy.

Wednesday, June 10, 2009


Got ideas, questions, or feedback? Please contact me at the following email address:
mthilak [at] gmail [dot] com.

Tuesday, June 9, 2009

Best Recession-Proof Jobs

* Physician assistant
Two-year training program, and at least two years of college; license exam
Salary: $62,000

* Nurse practitioner
Master's degree in nursing
Salary: $74,000

* Cardiac sonographer
Two-year associate's degree, or 1-year certificate in diagnostic sonography
Salary: $56,000

* Laboratory technician
Bachelor's degree with coursework in chemistry, biology, and statistics; state certification and license
Salary: $51,000

* Computer control programmer and CNC programmer
Two-year degree or vocational degree and apprenticeship
Salary: $33,000 (computer control operator) $44,000 (CNC programmer)

* Actuary
Bachelor's degree in mathematics, statistics, or finance; professional certification
Salary: $86,000

* Financial analyst 1
Bachelor's degree in finance preferred
Salary: $48,000

* Financial planner
Bachelor's degree in finance preferred; examination for Certified Financial Planners
Salary: $61,000


Monday, June 8, 2009

How Long Will It Take To Double The Value Of My Investment?

Many of my friends started asking how long will it take to make their money from their investment, or to be exact - how long will it take to double the value of their investments? It is important to have rough idea of what we are going to gain (or lose) at the end of an investment period. This will help us to make better decisions on where to invest our hard-earned money.

First, we must understand that there are 3 most important factors that will affect our investment returns.

  • Impact of Inflation
  • Result of Compounding Interest
  • Impact of Taxation

Having this in mind,theoretically, there is a very simple rule that can be used to answer our question. It is known as 'The Rule of 72'. Basically, 'The Rule of 72' can help us to estimate:
  • how long will it take to double the value of their investments at a given rate of return
  • the loss in real value of a given amount of funds with a particular inflation rate
Since it can be used to calculate the no. of years whether to double your investment or the loss in real value of your investment, the formula is given as:

72/given rate of inflation or return = No. of years

Example 1:
Mr. A has RM 150,000 and wants to know how long will take to halve its real value with an inflation rate of 3.5% per annum.

72/3.5 = 20.6 years

This simply means that the RM 150,000 will not have the purchasing power it has currently. Even though you have the same amount of money, in 20.6 years, it can only make purchases worth today's RM 75,000.

Example 2:
Mr. B has RM 100,000 and would like to know how long will it take to double his money, given the rate of return as 7.5% per annum.

72/7.5 = 9.6 years

This is quite straightforward, in 9.6 years, your RM 100,000 will become RM 200,000.

Being equipped with this basic info on investment, I hope you guys can look out for investment tools that can cater for your needs. Just one more point to add - usually this calculation is used for in mutual funds. However, you must always remember that the rate of returns are assumptions that is based on past performance that may not hold true for the future.

The safe way to double your money is to fold it over once and put it in your pocket. ~Frank Hubbard

Thursday, June 4, 2009

Highest Paying Jobs In The U.S.

The top 24 according to the U.S. Department of Labor:
  1. Surgeon: $181,850
  2. Anesthesiologist: $174,610
  3. OB/GYN: $174,610
  4. Oral and maxillofacial surgeon: $169,600
  5. Internist: $156,790
  6. Prosthodontist: $156,710
  7. Orthodontist: $153,240
  8. Psychiatrist: $151,380
  9. Chief Executive Officer: $140,880
  10. Engineering Manager: $140,210
  11. Pediatrician: $140,000
  12. Family or general practitioner: $137,980
  13. Physician/surgeon, all other: $137,100
  14. Airline Pilot: $134,090
  15. Dentist: $132,660
  16. Podiatrist: $111,130
  17. Lawyer: $110,590
  18. Dentist, any other specialist: $106,040
  19. Air Traffic Controller: $100,430
  20. Computer and Information Systems Manager: $100,110
  21. Marketing Manager: $100,020
  22. Natural Sciences Manager: $97,560
  23. Sales Manager: $96,950
  24. Astronomer: $96,780


Tuesday, May 26, 2009

Achieve Abundance of Wealth and Prosperity by Using Money Affirmation

Today, I would like to share with you all something different, something that I've come across quite lately and been practising it myself and surprisingly it works! Don't ask me how, I only understand half of it (hopefully) and still struggling to understand the rest of it. So, if you want a further understanding, you should contact Mr. Hari or his team of volunteers from IRAH- HOME OF HEALING who are there just to serve mankind with unconditional love.

Ok, coming back to the topic of today - Money Affirmation.

The self- heal Money Affirmation is meant for all who are seeking for abundance of wealth and prosperity in their lives.This affirmation is also for those who are suffering from financial woes such as debts and constant worries about the lack of money. Frequent repetition will lead to believe and thereby the manifestation of wealth.

I am thankful, for abundance of wealth is flowing into my life.
I am thankful for the comfort, freedom and joy in spending and enjoying money.

I am thankful for money is flowing freely in my life, trusting in whatever ways it comes to me.
Thank you for the abundance of wealth and the freedom and joy to spend and enjoy money easily.

Thank you for Blessing My Life with Love, Joy and Abundance.

Hope you readers benefit from this as well as I did. If I remember it correctly, Mr. Hari mentioned to me that if you think of wanting something, your state of mind will be conditioned to that state permanently and that's what you will be - wanting something.

Instead, try to imagine and affirm that you've already got what you wanted and thank for what you've received. Slowly your mind will begin to believe that you've already got it and that's what you'll have.

Again, if you have the how's and why's jumping up and down your head, better head over to irah-healing and talk to the right people. They would be more than happy to serve you.

When it is a question of money, everybody is of the same religion. ~Voltaire

Friday, May 22, 2009

Making Money With High Returns

Just received an sms from a long lost school time friend. It reads like this:

"Hi mate, I know you are busy making money to sustain monthly operations, enjoy life to the fullest and save for the good OLD days yet to come. So, 18 to 30% per year returns. Solid, secure & safe. Oh yes, legal, ethical and simple. Money makes money. 1.5 to 2.5% monthly return. Minimum RM2500. Think about that. Try moving from a 2.5% per year FD saver to a 2.5% per month investor. You are still young, you can't afford not to."

What do you guys think about this? As for me, it is another one of those get rich quick schemes. Somehow, these guys have very good marketeers and convince others easily. Pay attention to the words "...Solid, secure & safe. ... legal, ethical and simple". All the words needed for you to part with your money. But at the end when you realise that you have been conned, these words won't mean anything to you, will they?

Wednesday, May 20, 2009

Pointers For Unit Trust Investments

Please understand that Unit Trust (U.T.)/Mutual Funds is for long term investment only. It not for getting rich quick, neither it is for getting huge returns. However, it can be used as a very good tool against inflation.

Below are few pointers that you should keep in mind before making your decision:
  • never allow your emotions to control you when making investment, whether the market is doing very well or very badly.
  • you should be prepared to wait for AT LEAST 5 years to see your returns from your investments.
  • as the market now is quite volatile and many people are losing their jobs, make sure that you have at least 6 months of salary in savings,to prepare for rainy days (just in case..)
  • always add in whatever amount you can afford on a regular basis into your investment to get a better average pricing of your units-also known as Dollar Cost Averaging (DCA).
Whether you are opting for the high risk or low risk fund depends on the duration you have for investment, objective of your investment, etc. Generally speaking, people who are nearing retirement should go for the lower risk fund as compared to younger investors. But still, this can change as each individual's risk appetite varies.

Monday, May 18, 2009

Want To Get-Rich-Quick? Think Again..

When talking about about good investment tools, I should not forget to mention the growing number of ponzi or get-rich-quick schemes that is coming in all sorts of forms. These masterminds that create them use different kinds of techniques and strategies to get people involved in it. Somehow, in between the legal investment machineries, these schemes manage to squeeze in and play with the emotions of its victims- GREED and FEAR.

For the last months, I've been hearing about some Gold Investment Scheme, supposedly backed up by some established goldsmith in town. They are giving 3% a month, which totals to 36% annually. You also get to keep the gold you purchased. But the catch seems to be they only give you the gold after 2-3 months.Why that long? Figure out yourself...

Then comes another scheme - with envelopes. You buy 5 postal money orders and send out to the company, and within a few weeks, you will get back more postal money orders that you can cash in.

Another version that I heard was even better. This guy used the idea of selling each pixel on his monitor (the idea that made the original person to be an instant millionaire from the use of Internet), but incorporated some get-rich-quick philosophies into it. So, you get to have a pixel on the company's website and then when you get downlines of your own, you are paid certain amount for your effort to bring in those victims!

And I'm sure more and more schemes such as these will be mushrooming soon as the economy is still in a daze and people are looking out for ways to make money. As I mentioned earlier, we succumb to our greed and fears, especially when we are in a desperate situation. Again, we have to discipline ourselves not to fall for any of these tricks. If you do, you are sure to lose your investments!

Tuesday, May 12, 2009

Passive Income Earning Jobs

Last weekend, unofficially, the topic of discussion at home with my wife and a couple of friends were "The Career Path of Their Children". Even though that seemed a long long way to go for me, the entire group had actually created a strong mental picture of what they wanted their children to become in the future.

No doubt that nowadays parents are more liberal in letting their kids to choose the career of their choice and it seemed that these young parents are eager to give their opinions and ideas or simply said- 'brainwashing sessions' - before they allowed their children to have the final say. But what was most surprising to me was the fact that the list of jobs that came up. And guess what? At the top most was the most prestigious career (still) according to them - DOCTORS.
And what am I (and most pf bloggers) doing here talking about passive income and early retirement? We (includes this particular group of friends) talk and preach till our mouths go dry about having income without working and yet when coming to their children's career planning ( or financial planning) they do the total opposite. Who does not know the long working hours of a doctor and the stress that they have to undergo. A consultant gynaecologist that I know of has really made it BIG that he even has built his own hospital. But the sad part is that he still has to come work because patients come to him because of HIM and not because of his hospital. In fact he is almost reaching his seventies now and he is highly appreciated for his skills and expertise in his field.

It certainly is nice to be appreciated, but the sad part is you've got to work till you drop dead!On the other hand, people who have built their careers on jobs like financial planners or insurance agents or even Multi-Level-Marketing (MLM) agents get to enjoy their lives as well as earn a good income to sustain it. What is the point of having tonnes of money when you can't enjoy it? I would definitely not choose studying medicine for my kid if given a choice.

Am I right in my decision? Or am I making a mistake here? I would love to get a feedback from you guys..

Thursday, May 7, 2009

Good Investments in Times of Uncertainty

Everywhere I turned to the whole of last month there was talk of the Malaysian Government's additional units of Amanah Saham Wawasan and Amanah Saham Malaysia being launched (unit trust).

In these times of uncertain economic conditions, good investments have been a little hard to come by. The Government, in an attempt to raise funds for various projects came up with a variety of financial instruments and in return to its people, a reasonable rate of returns. Anyway, the current FD rate still stands at a measly 2%.Another benefit of this special unit trust schemes are that they are capital protected. So, if you invest 10K now, you will definitely have a minimum of 10K when you decide to withdraw your investments. And in the past few years, the trend shows that they are giving out 7%-8% of interest.

Most of the allocated units were snapped up during the first day of its launch. Luckily or not, since the government has set a quota based on race (yeah, it stinks to read this, I agree!!!) only the allocation for the Chinese were completely sold out. For the Malays and Indians, it took a bit longer to convince them to invest. Maybe the Chinese community has been better exposed to financial education all along, so they quickly grab the opportunities that come their way.

Considering all these factors, who wouldn't want to invest in an attractive investment vehicles such as this?

Wednesday, May 6, 2009

Survey: Most Malaysians ill prepared for retirement

Another timely (maybe a little late for some!) article I found published in the papers regarding retirement preparation or rather the lack of it, among Malaysians.


KUALA LUMPUR: The majority of Malaysians are not only ill prepared for retirement, but are also unconcerned about financial security in their twilight years, according to an independent survey commissioned by Prudential Assurance Malaysia Bhd.

The Prudential Retire-Meter 2007 survey revealed that as much as over 80% of its 1,038 respondents were indifferent about having an ample coffer to lead a reasonably comfortable life after retirement.

Only 34% were saving regularly for retirement,” said Prudential chief executive officer Tan Kar Hor.

“The survey shows that Malaysians clearly know what they want to do when they retire, but the majority are not actively planning for their retirement.

“When Malaysians stop working, they want to travel, spend time with the family and be more involved with the community. Financial security is crucial to fulfil these dreams.

“However, it is startling to learn from our survey that only 34% of Malaysians are putting money aside regularly for their retirement funds,” Tan told reporters after launching the survey’s findings on Wednesday.

He added that an alarming 60% of the people interviewed were found to be ignorant of how much they would need to save for their retirement.

“They believe that they just save as much as they can now and hope that they would have enough to cover their retirement needs,” he said.

Tan noted that only 42% of the retirees surveyed said they were confident that they had enough to cover all their retirement needs, while 37% planned to return to the workforce.

source: The Star,Wednesday August 8, 2007

Wednesday, April 22, 2009

FD to My Rescue

Fixed Deposits (FD) has been an dull venue to make your money grow, as far as I am concerned. It is only to be used if you have some spare cash that you don't need to use in the near future. And it is also a tool that helps people in the near-retirement category, where they are not willing to take much risk in equities or other similar kind of investment vehicles.

So, what about me or others in my category, who prefer to take more risk with their money? Can't FD help us at all? Or so I thought, until recently. I found that the FD account can be renewed on a monthly basis. And in case the need arises for me to use the cash for emergency purposes, I still have the flexibility to do so.

You see, the arrangement for my maid's salary is like this: I only have to pay her full 2 year's salary when she completes her contract. Until then, I'm allowed to put her monthly salary in a separate account (not necessarily under her name) in case the authorities request to show proof of me paying her salary.

Until I make the full payment to my maid who is going to be richer than me, I decided to bank in her monthly salary to a special FD account created for this purpose. I'll make some extra cash (even though its a very small amount), which I won't see if I just let the money lying in a savings account.

Monday, April 13, 2009

Stretching your $$$ during bad times

Last month, the government seemed to have reduced the interest rates. This was done in an effort to promote spending and therefore to revive the economy.

I noticed that Fixed Deposit (FD) rates that was at almost 4% is now at 2% per annum only.Since FD is the most simplest & safest method of making your money grow, most people would stash away unused cash in a FD account. But looking at the current situation, it is not as attractive to lock your cash in a FD account somewhere and let it lie there almost doing nothing. So what are the options that you have now? Either take some cash and spend it (main intention of the government) or start investing or pay off some your debts that carries higher interest rates. I opted for the 3rd choice after doing some homework.

The home loan I was servicing had interest rate of 5.99% per annum. After the Base Lending Rate (BLR) was reduced by the central bank, most banks cut theirs. The bank now has offered me an interest rate of 4.6% per annum. With this new rate, if I religiously continue to pay the monthly amount I'm currently paying, the loan would be settled within 12 years, instead of 24 years. What a difference it makes!

But no bank will call you an make their offers. They certainly would not want to reduce their profits that they make from you, would they? You will have to make the call and ask for a reduction. Most often, you will find that they are more than willing to accommodate your request. If you are no more within the lock-in period, then you have a better bargaining power on your side, as you can always do a refinancing with other banks.

Opportunities like this doesn't come very often. So, make good use of this bad economic times to your advantage. I believe I've made mine.