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Tips on how to choose unit trust funds

2009-12-16T18:12:00.000-08:00

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

YOUR MONEY - 10 factors to financial freedom

2009-11-29T20:03:00.000-08:00

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

What is the real value and use of gold?

2009-11-22T20:42:00.000-08:00

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

How to invest in gold

2009-11-09T00:16:00.000-08:00

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.

Conclusion

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

Millionaires Around The World

2009-09-17T18:00:00.000-07:00

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..

7 Critical Factors To Consider In Health/Medical Insurance

2009-09-15T19:42:00.000-07:00

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!

Shopping for medical cards!

2009-09-10T19:49:00.000-07:00

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.

How to Spend Like a Frugal Millionaire

2009-09-09T02:39:00.000-07:00

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.

source

Why Athletes Go Broke

2009-09-07T02:34:00.000-07:00

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 here

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.

source: http://www.briancuban.com/why-athletes-go-broke/

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

2009-08-27T18:09:00.000-07:00

by Chloe Dowley

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

1.Accountant

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!

Top-Paying Jobs for Women

2009-07-01T03:14:00.000-07:00

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

6 Millionaire Traits That You Can Adopt

2009-06-29T18:14:00.000-07:00

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

Illegal Deposit-Taking

2009-06-20T21:28:00.000-07:00

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

By LOURDES CHARLES

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 : http://thestar.com.my/news/story.asp?file=/2009/6/18/nation/4142281&sec=nation

7 Ways to Save on Gas

2009-06-18T19:06:00.000-07:00

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.

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 GasBuddy.com and BillShrink.com 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 BillShrink.com.

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 GasBuddy.com. (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 GasBuddy.com.)

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 GasBuddy.com.

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.

Copyrighted, SmartMoney.com. All Rights Reserved.

source: http://finance.yahoo.com/family-home/article/107208/7-ways-save-gas.html?mod=family-travel

Contact

2009-06-10T21:42:00.000-07:00

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

Best Recession-Proof Jobs

2009-06-09T18:15:00.000-07:00

* 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

source: http://hotjobs.yahoo.com/career-articles-jobs_that_are_red_hot_right_now-894

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

2009-06-08T18:51:00.000-07:00

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

Highest Paying Jobs In The U.S.

2009-06-04T21:24:00.000-07:00

The top 24 according to the U.S. Department of Labor:

Surgeon: $181,850
Anesthesiologist: $174,610
OB/GYN: $174,610
Oral and maxillofacial surgeon: $169,600
Internist: $156,790
Prosthodontist: $156,710
Orthodontist: $153,240
Psychiatrist: $151,380
Chief Executive Officer: $140,880
Engineering Manager: $140,210
Pediatrician: $140,000
Family or general practitioner: $137,980
Physician/surgeon, all other: $137,100
Airline Pilot: $134,090
Dentist: $132,660
Podiatrist: $111,130
Lawyer: $110,590
Dentist, any other specialist: $106,040
Air Traffic Controller: $100,430
Computer and Information Systems Manager: $100,110
Marketing Manager: $100,020
Natural Sciences Manager: $97,560
Sales Manager: $96,950
Astronomer: $96,780

source: http://www.askmen.com/money/career_150/177d_career.html

Achieve Abundance of Wealth and Prosperity by Using Money Affirmation

2009-05-26T00:13:00.000-07:00

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

Making Money With High Returns

2009-05-22T01:43:00.000-07:00

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?

Pointers For Unit Trust Investments

2009-05-20T19:28:00.000-07:00

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.

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

2009-05-18T02:59:00.000-07:00

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!

Passive Income Earning Jobs

2009-05-12T19:18:00.000-07:00

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..

Good Investments in Times of Uncertainty

2009-05-07T19:03:00.000-07:00

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?

Survey: Most Malaysians ill prepared for retirement

2009-05-06T20:31:00.000-07:00

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.

By HARIATI AZIZAN

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

FD to My Rescue

2009-04-22T20:38:00.000-07:00

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.

Stretching your $$$ during bad times

2009-04-13T17:48:00.000-07:00

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.

Best Ways to Utilise Your Credit Card

2009-04-09T20:52:00.000-07:00

Though I don't usually promote the usage of credit cards, I would like to share some information on how we can benefit from it and not fall into its trap. Credit card debts can be killer, especially when the interest rates charged can be up to 18% or more!

When you pick a card, try to pick one that has no annual fee.Free for life.It is also common to see that these companies usually wave the fees if you are a good paymaster, but you have to ask! I found it out through my own experience with Citibank.

Just have one credit card at any one time - for any emergency purpose. Maybe one of your family members are admitted in the hospital and their insurance policy/medical card seems to give problems at that particular time. Or it just happened that you forgot to withdraw cash to make a payment for something that says "DEADLINE TODAY!!!".

Since credit cards nowadays come with promotions of free points and most of them are providing electronic service, sign up for the electronic billing system. The companies usually have promotions in terms of free gifts or free points to promote their internet billing facilities.

Talking about free points, what do you usually redeem them for? Some gadget that will be used for about five times maximum and then lie in the closet, collecting dust? Think about the items that you actually need, rather than what attracts you on the redemption catalogue. A simple guideline would be to choose an item that you would actually pay money to get it. Otherwise, just forget it.

You can also churn money using your credit card if you know what to do and have the right contacts. Credit cards usually offer cash advance with some interest charged. If you can spot an investment avenue that brings you a higher interest, why not use this cash for this purpose? When any friends need a short term loan from you, with some interest, of course, you can lend them the money. But be sure you have all this properly documented as you don't want to suffer from bad debts!

Make prompt payments.Do not delay even a single day. And pay in full, always. Don't make it a habit to make the minimum payment only. When you do that, all of a sudden you will find that you are surrounded by huge debts, thanks to the high interest rates charged.
Don't use your card to make purchases at merchants who charge an additional fee. Automatically the price of the goods become more expensive. Why pay extra when you can get it at some other place at a cheaper price? Or purchase with cash to avoid the additional charges?

When you need to make a big purchase such electronic goods, look out for promotions which allows you to make payment over a 12 month period, with 0% interest fee.This would actually free your cash flow a little, but always remember to pay on time.

Painless Way to Clear Your Debts

2009-04-07T00:40:00.000-07:00

Just a few days back a friend of mine was complaining that his economic situation was bad and that he was under huge amounts of debt. He had his credit card debt and his car loan that he has not paid for a few months now, not forgetting his wife's car that has expired road tax and insurance.

While we were chatting on further, he revealed to me that just last month, both, he and his wife got a pay rise. Well, it is a very good thing to happen, since most other people are either retrenched or afraid of that happening to them soon with the economy showing no sign of major improvement. And yet they still find that they are almost penniless by the end of the month.

How can this happen, I wonder. You are used to live by almost 20% lesser income. Now that you have more, definitely you should be able to save more or pay off your debts.The answer lies in our own attitude. How much self control do we have? Are we disciplined enough to control our finances? Do we make a budget every month? Purchasing expensive items and gifts just to impress others or to show-off shouldn't be in our priority list at all.

If you are serious in clearing off your debts, I would suggest that you continue to live with the salary amount that you have been getting before this. The increment amount that you have now (the balance) should be used to pay your debts. You would not feel the pinch much when you apply this technique because you are not used (yet) to live with more money. So the additional money is channelled straight to whatever financial purpose you may have - clear debts, make investments, have savings, etc.

I am practising this method, and I can say that its really worth it!

Economic crunch hits docs and patients

2009-03-31T02:21:00.001-07:00

As I was just discussing with my dad about one other effect that the economic crunch would likely have, this article published in the Star came in a timely manner for me to post it here. All this while I had thought that the medical profession was a 'retrenchment-proof' job and you were considered safe if you had the word 'Dr' in front of your name. The article below tells us otherwise.

Tuesday March 31, 2009

By FOONG PEK YEE

pekyee@thestar.com.my

KUALA LUMPUR: The economic slowdown is biting hard even in the medical profession, causing keen competition in government clinics, with private practitioners also scrambling to get a share of overtime payments.

Several government clinics are now operating much longer, up to 9.30pm daily, with doctors manning them paid RM80 an hour in overtime payments.

Health Minister Datuk Seri Liow Tiong Lai, who acknowledged the keen competition going on between government and private doctors for overtime payments, said:

“Many doctors, irrespective of whether they are in the government or private sector, are very keen to earn extra income these days.”

Liow said that to cater to the increasing number of patients seeking treatment at government clinics, the number of clinics providing outpatient treatment would be increased from 16 to 31 soon.

Besides these clinics, he said 59 hospitals were also providing similar treatment after office hours.

Patients pay RM1 each for outpatient treatment at government clinics, which record more than 50 million such visits annually.

With private practitioners charging at least RM15 per visit and with the economic slowdown causing people to tighten their belts, more and more patients are heading to government clinics.

“With more people seeking treatment at government clinics, opening up more such clinics between 5pm and 9.30pm will make it more accessible, especially for those who are working,’’ Liow said in an interview.

The minister said he had received feedback from private doctors on poor business in their clinics due to the economic slowdown.

On allegations that government doctors were being favoured over private practitioners to work overtime in the government clinics, he said:

“The faster approval for government doctors could be due to the fact that their credentials are readily available for checking.”

“As for the private doctors, it may take longer to verify them,’’ he said, adding that all doctors applied for the overtime online.

Severe Infections Lands Me in the Hospital

2009-03-29T23:53:00.000-07:00

Not enough with year 2008's lousy closing, 2009's opening was even more devastating for me. For those who may have been wondering of my absence of more than a month, this is the reason: I was admitted in the hospital for severe infections. To complicate things even further, blood samples sent to the lab were returned with mismatched results!

Getting admitted into the hospital is not a good idea at all, if you ask me. Prolonged stay there can cause you to get sicklier as well. Not forgetting the boredom that comes with staring at the four walls when you are awake and the pain that comes when doctors and nurses come to prick you for setting an IV drip and collecting blood samples from you.Ouch!!!

Friends who visited me joked that my name would definitely be the top on the list for retrenchment, looking at the serious economic situation we are in right now. This was also the time it made us realise the importance of having a proper/sufficiently covered medical card (insurance). At least you won't have an additional stress worrying about huge medical bills that will be handed to you on discharge from the hospital.

I'm just glad I'm back home. Home sweet home.

Boycotting American Products

2009-01-14T20:45:00.000-08:00

In almost all Muslim countries, the collective cry to stop the war against the innocents in Palestine is heard. Some countries, if not all of them, even went to the extent of boycotting Israeli/Jewish/ American products. Yes, products like McDonald's, Nokia, Coca Cola and Starbucks Coffee!

Don't get me wrong. I'm all against war and especially if it is affecting innocent women and children. But this? Leaders of countries calling for a boycott of products from those countries? I don't think so.. In fact, I feel that those 'leaders' are on their way to successfully create a worse situation of an economic downturn.

Stopping me from going to Starbucks or McDonald's would not redirect me to any other local stalls. Instead, I'm going to tighten my wallet. And if this actually happens, won't there be lesser money being circulated in the market? And therefore forcing the economic situation to take for the worse? Wrong timing/situation for personal finance education???

If things are headed the way it is, 2009 isn't going to be any better and if those leaders out there are not thinking about having a solution to this financial turmoil we are facing and instead taking actions based on their emotions. Leaders should not try to make use of this situation to gain cheap publicity and for their own political gains. I'm sure all of us want peace and there are other ways to end this problem. Don't you all agree?

Happy New Year 2009!

2009-01-01T19:21:00.000-08:00

The year 2008 was definitely a year of ups and downs. It started off with a good dose of ups but decided to close the curtains with an equally matching and challenging collection of downs. Many are still stuck with the downs of 2008. Don't let your hopes down. Don't forget that the 2009 is here now. Believe that it will lift you out of your troubles brought by 2008.

May God continuously bless us all with long life, good health and great provisions!

Major Landslide!

2008-12-11T18:15:00.000-08:00

For those who have been wondering why I haven't posted for about a week, this is the reason that I have- I was caught in a landslide! A reason good enough, I hope.

All power and telecommunication to my housing area was cut off. The main road was inaccessible due to the debris from the landslide and the houses that collapsed from the impact of it. Finally we had to come out through a jungle, which was cleared by the army personnels who arrived at the location for the search and rescue operation.

We could see young and old alike trying to vacate the disaster stricken area as soon as possible. In total, 14 beautiful bungalows was destroyed and 4 persons were killed and 1 body still not found in the tragedy. Luckily the number of death was low as it occurred during a long weekend break and most of the occupants were away.

Please bear with me until I get things sorted out.

Petrol vs Soda

2008-12-03T19:48:00.000-08:00

The current petrol price is at RM1.90 per litre.It is displayed clearly at the station.And I do see it each time I fueled my car. And all this while I've been complaining about it.

However, yesterday as I went to the ATM to withdraw some cash before going to the counter, I picked my favourite soda drink - actually any iced soda drink can be voted as my favourite. I just can't let this addiction go. I paid the amount and walked to the car. As I was walking I noticed the price of this drink - RM 2.10 for a 500ml bottle. It's more than double the price of the petrol!

Let's face it. Petrol for the car becomes a basic need now, I have to pay for it whether I like it or not. Its the means of transportation for me and also it enables me to go to work and make a living.And yet I've been complaining.

On the other hand, I've been spending willingly and unconsciously at the same time for the sodas.And I've been very happy about it.What good does it do? Increase my chances of suffering from diabetes later.Weaken my set of teeth and strengthen the wallet of my dentist. Hmmm... looks like there are no benefits at all on my side.

Something is seriously wrong here. The priorities programmed in my brains is not right at all! All this while I was prepared to fork out money for my wants more than I'm willing to pay for my needs. After this, I should put in some additional effort to control my tastebuds. At the same time save some extra money.

What other things that can fall into this category? Do you have any experience to share? Please share your experience in the comments section.

Some Financial Mistakes You should Avoid As A Parent

2008-12-01T17:34:00.000-08:00

It is easy to blame on other people's mistake. But this post is not about that. I love my parents and appreciate whatever sacrifices they have made to bring me up. And without any doubt, they love me too. Just that they loved me and my siblings too much that they unintentionally made some mistakes along the way.

For instance, they never allowed any one of us to work during the school holidays. Even until I was 17! The reason they had was if we earned our own income, we will be too comfortable with it that we would not concentrate on our studies anymore. The problem: we failed to understand the challenges of working life until very much later stages of our lives.

Another issue that I can clearly remember is that they never allowed us to spend our 'gift money' that we received during celebrations or birthdays from friends, relatives and even parents themselves as we like. We were told to put it into our savings. However, if we needed anything, we should ask our parents and if they were okay with it, they would get it for us. The problem: we failed to make our own choices and differentiate between the needs and wants.

They pampered us too much. They tried to provide us with all the comfort that they could. When my youngest brother got a job,my parents insisted that they should send and fetch him. Many times I've insisted that he should stand on his own feet and make use of public transport available, especially when he is 25!

Apart from that, my brother uses the car during the weekends just to go and meet friends and hang-out. I can see the problems arising:

he doesn't learn budgeting, because he still gets free rides

his time management skills are nil because he gets to tell parents when he is ready to leave and not the other way around

once he is very comfortable with driving (parents-sponsored), it is difficult to use public transport.

How is he going to get by when he can't afford all these comforts with his small salary later on?

Funerals & Weddings In The Financial World

2008-11-29T16:54:00.000-08:00

What a title! Some of you may even feel shocked that those two have anything in common at all. After all, they are like worlds apart. One is an occasion to be merry and remembered life long while the other is an occasion of gloominess and brings down tears even from the bravest of all..

Last week I had to attend a funeral and a wedding and I realised that as the world continue to grow economically, people are willing to spend lavishly. And in many customs, weddings and funerals are considered to be a very sensitive and placed in the highest order at the same time. It also represents their status in the community.

You know where I'm heading to, right? Yes. Weddings and funerals these days are becoming a very expensive affair. As to feed their ego, more and more people today spend more than they can afford for their weddings, and they defend their actions by saying, it is only once in a lifetime (and so are funerals!). Whether the parents or the couple to be married themselves are going to finance the wedding function, they seem to forget that life still goes on after the function and there would be more and more expenses coming along the way. Some even go to the extent of taking huge personal loans to cater for this 1-day event!

And if this is not shocking enough to you, nowadays you can even get a burial spot for yourself well in advance. Some people even invest in it and sell a few years later when they get good returns out of it. Funerals are held in pomp and splendour just to show off how what a big name the family has in the society. The longer they have the function and cater for a bigger crowd, it is assumed that their status is higher in the society.

All I want to say is this: whether it is going to be a wedding or a funeral, have it in the most moderate way you can think off.

How To Increase Your Traffic By 1000% ?

2008-11-27T19:23:00.000-08:00

What do you think is the common dream of most bloggers? To increase traffic to their sites, right? Imagine increasing traffic by 1000%. Well, imagine no more.That's what exactly I did to my blog, MoneyChurner.

3-4 days back I was reading SVB's article on agregators and she did mention about a new service, Tip'd. So, I did some little exploring on my own and joined Tip'd.

I'll show you what my stats on Google's Adsense Report looked like before I joined Tip'd. In the screen capture below it shows I had merely 30 page impressions.

Now, after joining Tip'd just after 1 day and submitting 3 articles(which are:My Maid/Servant Is Richer Than Me','How To Retire As A Millionnaire By Investing in Real Estate?' and '4 financial things you should know before getting married'), my traffic stats or rather page impressions in my Google's Adsense account show as below:

Indeed very surprising. It shows page impressions of 310! I myself never imagined that. Maybe there are other ways out there to increase the traffic even further. I have to check it out and definitely share my experience with you all later. Meanwhile, do you believe that you too can make the 1000% leap?

Vital To Start Planning For Your Retirement Early

2008-11-25T23:45:00.000-08:00

Since this blog talks much about retirement planning and saving for the future, I thought it would be good if I could also put in articles published in the papers. This article was published sometime last year. And I have to agree with the writer, Malaysians as a whole are not prepared for their retirement.
Can you imagine that the money saved for more than 30 years gone in 3 years?
Many young people feel that 'there is still long way to go', or 'let me enjoy my money first'. What they don't realise is that this attitude of theirs is going to cost them dearly in their future, especially when they don't have the earning capacity any more.

COMMENT BY V.K.CHIN

RETIREMENT is meant to be a rewarding experience when those who have toiled for decades to raise families and contribute towards nation-building can relax and take it easy.

Retirees are supposed to spend whatever time they have left to do the things they have always wanted to but did not have the time as they had to earn a living.

But the opposite is true in many cases as the majority of retirees are in fact facing a nightmare in just trying to support themselves with the basic things in life.

Their main torment is finance or lack of it. It is estimated that at least 70% of retirees and pensioners were just not prepared to stop work because they could not afford to.

Most of those in the private sector depend on their Employees Provident Fund (EPF) contributions for their retirement. This is almost the only money they have to look after themselves. Unfortunately, it has been proven by none other than the EPF that most of the money would be gone in three years after its withdrawal. This is indeed a very sad state of affairs and the workers have only themselves to blame for their plight.

Very few people have proper planning for retirement. They do not save enough for this purpose until too late. Though everyone starting work should be saving for this purpose as early as possible, they only realise the seriousness of their situation in their 40s or 50s.

Without their compulsory EPF contributions, many of them would have been even worse off with almost nothing to their name. Many have their own homes and if they are lucky, they would have settled their mortgage by then.

Life insurance is still frowned upon by some as not being urgent and in any case not many earn enough to put money into shares, bonds or other saving instruments.

Saving outside of the EPF is not a culture as people may have difficulty in coping with their monthly family and personal commitments financially. EPF contributions are also being drawn to meet the demand for funds for housing and health. This will further limit the money meant for retirement.

Too many are expecting their children to look after them when they retire.They are prepared to use whatever assets they have for their children’s education. Many of them would have been left penniless by the time their children complete their studies.They would then be completely at the mercy of their children. If the kids are filial, then the parents would have a comfortable retirement. If not, then the last few remaining years would be extremely difficult for the retiree.

Some children can be extremely selfish and may insist on going to study overseas though their parents may not be able to afford it. Parents may have to mortgage their house or borrow a sizeable loan for this purpose. They may end up bankrupt if their children refuse to repay the loan.

There are countless such sad stories and these are serious social issues where not much can be done to help. It is impossible to tell those nearing retirement that they should keep some money for themselves instead of using it all to educate their children.

Parents should be practical and realistic. If their children are not academically good enough for university, they should opt for vocational education where they would be able to obtain a skill to earn a decent living.

It is worth repeating this message so that hopefully the message will sink in and those approaching retirement would take measures to protect themselves financially.

source

Which option to take, 11% or 8%?

2008-11-23T21:26:00.000-08:00

The most heated argument taking place among working Malaysians today is 'shall we agree to the option given by the government to reduce our contribution to the EPF from 11% of our salary to 8% for two years starting Jan 1, 2009 or not'.

EPF (Employee Provident Fund) is a fund created by the government as a retirement fund once the employees retire. It is made compulsory as for some people, it may be the only source of retirement fund. It is currently fixed at a minimum 11% reduction from the employee's salary and a minimum 12% contribution from the employer.

Lowering the rate of employees’ contribution to the Employees Provident Fund (EPF) temporarily is part of the Government’s bag of tricks to stimulate the economy. The idea is to boost private consumption by putting more money in workers’ pockets.According to Government's estimates, RM4.8bil a year will be freed up for spending in the economy if all EPF contributors opt for the rate cut.

It is indeed a good strategy for the short term and good for the country's economy as a whole. More employees who fall under the lower income bracket welcome this move as they are struggling to make ends meet due to the current hike in essential goods after the petrol price shot up lately to its all time peak suddenly.A little more cash at their disposal would definitely ease their burden.

However, the rest of the group or the 'financially savvy' ones are crying foul over this move.Their reason is that it definitely means lesser retirement funds. Bad move in the long run.

For the past few years EPF has managed to give out dividends at around 5%. If you can really discipline yourself, even if you claim yourself to be in the financially savvy group, this move can be seen as an opportunity. How?

If you are earning RM4000, the reduction of 3% in EPF contribution will amount to RM120. That means an extra RM120 in your pocket. Don't spend it. Instead look for ways where you can save and invest this money so that it can give you a higher dividend than the one given by EPF. I believe an excellent investment instrument for this small amount in monthly basis would be the mutual funds/unit trust where you can do a Dollar Cost Averaging for 2 years with this extra cash. Or you can also pay off any outstanding credit card debts as the interest charged is usually very high.

So, now you have 3 options in front of you:
1. Reduce the deductions and spend the money.
2. Stick to the 11% deductions and leave the money to grow with EPF.
3. Opt for the 8% deductions and invest in places where higher dividends are being paid.

Make the right choice and have a comfortable retirement later!

What Can You Teach A One Year Old About Finance?

2008-11-21T17:55:00.000-08:00

For a one year old who can barely speak, how can I share with him the knowledge that I'm gaining slowly nowadays about the financial world? My first challenge would be to make him understand what I'm trying to tell him. Then, the next challenge would be to get a response from him. But still, I'm just so eager to transfer him all that I've learnt.

Ok, I have to start somewhere. Maybe not on the compounding interest mentioned by Frugal Dad in How to Teach Compounding Interest to Kids or even the difference in needs and wants as mentioned by JLP in his post : Using Mashed Potatoes To Teach Kids About Money. Those are great ideas, but I'll think I'll save it till my boy is a little older.

For a start, I've decided to teach him that he needs to save money. So, how do I do that? My little boy has a habit of digging into my shirt pocket every day when I return from work, usually throwing off my pen and petrol receipts in the process. So, this time, I had on purpose, some coins in my pocket. Everyday, without fail, we dig into my pocket and discover those coins. And what do we do with that? We head for the elephant-shaped 'piggy-bank' and drop the coins into it. Initially, I was putting in the money. As he grew to hold the coins properly in his fist, I have trained him to 'bank in his savings'.

What do you think he would have learnt in the process? I'm sure he doesn't know what is compounding interest or the difference between needs and wants. Heck, I doubt he even understands what money is at the moment. But I'm very pretty sure he knows that the shiny round thing from his dad's pocket must end up in his 'piggy-bank'. That's sufficient for now, I think, don't you agree?

We have been religiously doing this activity for about 3 weeks now. The only concern is I have to be very careful and pay full attention to him as kids tend to put anything they find into their mouth. Otherwise, I think I have put him on a head-start on financial education!

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The Liberta Financial Freedom Challenge

2008-11-19T18:14:00.000-08:00

Francois from Liberta has put up a challenge to everyone out there. It is called the Liberta Financial Freedom Challenge. He has also started the Liberta Financial Freedom Support Network, which focuses on Financial Freedom. The people in the network provide support and encouragement to each other so that each individual keeps going on and meets his/her goals of getting out of debt and achieving financial freedom.

Hopefully, I can settle my debts, achieve financial freedom and finally retire as a millionaire. As I've mentioned earlier, setting goals are very important and it becomes easier to achieve them when you have friends around you to give you support and encouragement. So, I'm taking up the challenge. What about you?

How Much Can I Save From The Current Reduction In Food Price?

2008-11-17T23:29:00.000-08:00

How much do you think you can actually save from your daily food? Would you be surprised if I said that whatever little money that you saved from breakfast and lunch today could actually provide you with a comfortable retirement? Enjoy going places and relaxing in your own home after retirement with sufficient money for your daily needs. Isn't that wonderful?Maybe you can make use of the current situation. Read on.

Restaurant owners have agreed to reduce the price of 'roti canai' and 'teh tarik' by 10 sen and a plate of 'nasi kandar' by 20 sen, or at least that was what reported in The Star Online. (By the way, 'roti canai' is a Malaysian favourite pancake eaten with some curry and 'teh tarik' is actually a special concoction of tea, milk and sugar and stirred in a special way) This generosity arises from the reduction of petrol prices by the government, which business owners had used as an excuse earlier to hike up the price of almost everything under the sun.

For an average person who has been practising eating out for breakfast and lunch, it means a reduction of 30 sen for breakfast (assuming they have only 2 pieces of roti canai and a glass of teh tarik) and 20 sen for lunch, if he has nasi kandar for lunch. In total, savings for a day amounts to 50 sen.

If working days is considered 5 days a week, then in a month he'll be working 20 days. Therefore, using simple maths, 50x 20 = RM100. Not bad. I didn't realise it can reduce our expense by that much.

Some people are still wondering what to do with their money now. RM 100 savings can easily be used in an investment vehicle such as unit trust or mutual funds. They should make use of the opportunities given, especially now, because the market is all low and is good time to invest. Save a minimum of RM1000 for the initial investment and use the RM100 as the automatic deduction to do dollar cost averaging on your investment.

As for me, how much extra can I save in this particular case? The answer is none, because I usually pack my lunch & breakfast from home itself and I've been saving more all the while. Cheaper and healthier at the same time!

My Maid/Servant Is Richer Than Me

2008-11-15T17:35:00.000-08:00

Yesterday as I was going through the reminder letter for my maid's visa renewal, my mind started doing it's own mathematical calculation. And finally decided to tell me: "Hey Boss, you know what? Your maid is actually going to be richer than you!" How is that possible? I pay her salary, I feed her and provide her accommodation, and how is this even possible, you may ask?

Simple. She is a live in maid from Indonesia and comes from a poor family (obviously). When I employed her from the agency, I had spent almost RM6,000 that includes her visa, insurance, health check-up, etc. Her monthly salary is tied at RM500. That means annually she is getting RM6,000 - net. She has told us once before that she plans to work with us for at least 3 years, if its possible. So, using these assumptions, she will be taking home RM 18,000 at the end of her work term(Without any interest).

This is definitely a huge sum.Especially when she is going to convert it into their Indonesian currency and spend it there. All her expenses while she is with us is born by us, so she does not have anything to spend on or worry about.Her CASH FLOW is so strong! Zero outgoing and 100% incoming. Is she smarter than her employers in financial terms or has she educated herself by reading Rich Dad, Poor Dad by Robert Kiyosaki? If she intends to, she can be a real estate investor and retire as a millionaire as I have disclosed here.

In my opinion, she has done a wise move. Moving on to a foreign country, which gives a higher exchange rate than her own, that too in her young age.The only doubt in my mind is that how is she going to manage her money. If only she invest some portion of it properly in instruments that provide with compounding interest, she can help improve her financial position of her family further.

What do you all think?

God And Money

2008-11-12T20:37:00.000-08:00

A man is trying to understand the nature of God and asked him: “God, how long is a million years to you?”

God answered: “A million years is like a minute.”

Then the man asked: “God, how much is a million dollars to you?” And God replied: “A million dollars is like a penny.”

Finally the man asked: “God, could you give me a penny?” And God says: “In a minute.”

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Savings I Made Last Weekend

2008-11-10T20:21:00.000-08:00

My house was running mostly on those dimly litted yellow bulbs after the fluorescent lamp's starter burnt off. For weeks, or probably months I was trying to put off fixing those things back. This week I thought, enough was enough. Had to fix them right away! Went to the hardware shop and got a few starters with the holder to fix to the round, fluorescent bulb. Got the ladder and climbed up. Then, when I was half way up, I suddenly realised that I had this phobia of heights and immediately cancelled my plans. Called my brother, who took his own sweet time to drop by.. Gave him some simple instruction on where to slot in those dangling wires, and in a few minutes we were done!

Water was leaking from the tap when we fixed the pipe to the washing machine. Precious water was simply being wasted.
Reason: The washer had worn out.
Changed the washer instead of the whole tap-head. The washer only cost a few cents, instead of the few dollars the tap-head would have cost me.

Called in my younger brother to help me out, instead of the handy-man who would have charged me for his services. My wife fixed us nice lunch & dinner.So it was an all in family affair.

In conclusion, the activities done were saving on electricity,water and workmanship.How much did I save? Got to check on next month's electricity & water bills.

How Warren Buffet Made His Billions

2008-11-09T17:55:00.000-08:00

Warren Buffett is a man who has made millions but he also started working at his father’s brokerage when he was 11 years old, that’s an age when most other kids were playing hide-n-seek and didn’t know how to spell ‘brokerage’..

This financial wizard is by recent estimates, worth $46 billion but how he got there is the fascinating story.

It all began in the family grocery store back in Omaha. Buffett’s great grandfather started the store in 1869 and it was in the Buffet family until 1969, till his uncle finally retired. But it’s at this store, where he began going around his neighbourhood selling gum. This was before his stint at his father’s firm.

Warren Buffett told CNBC’s Liz Claman, “My grandfather would sell me Wrigley’s chewing gum and I would go door to door around my neighbourhood selling it. He also sold me six Coca Cola for a quarter and I would sell it for a nickel each in the neighbourhood, so I made a small profit. I was always trying to do something like this.”.

From small beginnings come bigger things and so after selling gum, soft drinks and working with his father, by age 14, he had bought a 40 acres farm in Washington, Thurston County..

But he confesses that he never enjoyed the farm as much as he enjoyed investing in stocks. But the first stock he bought was “Citi Service preferred stock. I had three shares and made all of $5 on it. I had bought it at $38.25 and then I sold it around $40, it went down to $27 in between and after I sold it at $40, it went to $200!”.

From that poorly timed stock sale in 1944, he learnt a lesson that became his legendary investment strategy - which is essentially - patience pays, so buy them and hold them. He figured out two other critical things about himself in the 1940s - what he is good at and what he likes to do.

This pivotal moment in his journey came in 1956, when he was just 25 years old. This man who was rejected by Harvard and now armed with contributions from family and friends and $100 of his own money starts a limited partnership with seven people.

Over the next nine years, Buffett turned a $105,000 into $26 million - a stunning 24,000 per cent increase! He had invested mostly in textile companies, farm equipment manufacturers and even a company making windmills.

Thirteen years later, Buffett forms another partnership that becomes one of the greatest teams in the history of investing. He convinces longtime friend Charlie Munger to quit his investment partnership to join Buffett as his Vice President of Berkshire Hathaway.

And now with the 82-year-old Munger, Buffett sits on top of the greatest holding companies ever.

So, it’s understandable that this man is looked up to for investment and business advice all the time. But what’s the secret gift he’s got? How does he pick the right investments all the time? He explains, “I look for something that I can understand to start with, there are all kinds of businesses I don’t understand.”.

“I don’t understand what car companies are going to do 10 years from now, or what software or chemical companies are going to win/do ten years from now but I do understand that Snickers bars will be the number one candy company in the US - like its been for 40 years. So, I look for durable competitive advantage and that is hard to find. I look for an honest and able management and I look for the price I’m going to pay.”.

While Buffett’s big acquisitions have made headlines; wise investments in companies like Coco Cola, the Washington Post and Gillette have provided the capital to make those acquisitions possible. Since taking control of Berkshire in 1964, the company has acquired 68 subsidiaries. In March of 1964, Berkshire acquired its first insurance company National Indemnity.

In 1972, See’s Candies for $25 million, in September of 1983, Nebraska Furniture Mart and Borhseim’s in 1989. In 1998, Berkshire acquired Dairy Queen and Geico in January, Net Jets in August and General Re Corp in December. In April of 2002, Fruit of the Loom and most recently Buffett is looking abroad for new business.

Recently, he bought 80 per cent of the Israeli Metal Works Company and he did it without even seeing it. He was approached by the promoter via a letter and what was in that letter convinced him that ‘this was the kind of the person I wanted to do business with and it is the kind of business we wanted to own.’ How does this ‘daring bit of investment fit in with his usual careful way of investing?.

He explains, “I had to size up the business but that’s a background of being in stocks. If you put your whole net worth in stocks when you are 20-21 years old - you have not visited the businesses but you are really analyzing their financials, you are trying to assess whether they have durable competitive advantage, assess the quality of the management and the integrity of the management and then you try to figure out whether you are buying it at a reasonable price and that’s it, that is all we do.”

He’s never had anything lacking - his acute business brain has made him a lot of money. He also feels that the youth of today are living better than John D Rockefeller. His own style remains the same - he lives in the same house for 48 years, carries no cellphone, has no computer on his office desk, does not move around with an entourage.

As he puts it, “I have had everything I wanted all my life. At 20, I was having the time of my life doing what I did. Today, I’m eating the same things I always eat - burgers, fries and cherry coke. Only my clothes are more expensive now but they look cheap when I put them on!”.

At 76, he married his long-time companion, Astrid Menks at a low-key ceremony at his daughter Susan’s house. He is also amazingly healthy for someone on a burgers-coke diet. He’s also surprisingly down to earth. He moves around freely unencumbered by a security detail. He does have a few guards with him during the annual shareholders meeting but he says he doesn’t feel the need to put himself in a cocoon.

Which probably explains, why he wasn’t nervous about visiting a factory in Israel, which is close to the Lebanese border. He says of that visit, “Our plant there is about 8-10 miles from the Lebanese border and there were maybe a rocket or two that hit the parking lot or something like that but it can be dangerous being in this (US) country as well.”.

Buffett is comfortable in Omaha in part because people leave him alone with the exception of a random fan or two. This billionaire doesn’t even have a chauffeur - he drives himself around in a 2006 Cadillac DTS, recently purchased after he auctioned off his old Lincoln Town Car, which was famous for its Thrifty license plate. And no, he does not want a yacht or many mansions. He just wants to be left alone to enjoy a good football game in his sweatsuit on a big screen television - with popcorn.

It’s really no surprise that America’s most prominent investor chooses to live far from the nation’s wealthy-elite in New York, Los Angeles, Chicago and Miami. He says that when he was in New York, he had about a 100 ideas about where to invest but it was over-stimulation.

In Omaha, he needs one good idea in a year and he feels he can think better and with less distraction. He feels there is a sense of community in living there.

His investing theories have been talked about ad nauseum by almost every business/finance writer and is a cottage industry all by itself.

But one he finds closest to reflecting his views is a book written by Larry Cunningham - ‘The Essays of Warren Buffett - Lessons for Corporate America’ is required reading in a one of a kind course start at the University of Missouri School of Business.

The course is called Investment Strategies of Warren Buffett. It turns up Buffett is hot on campus too. The class now in its eighth year and is the brainchild of Buffett’s friend Harvey Eisen.

Harvey Eisen recalls, “This course is a breakthrough in terms of reality meeting academics. I said why don’t we have a course like this and the academics scratched their head and said ‘well we don’t’ and I said ‘why don’t we’ and then we got it done.”.

Dean of the University of Missouri School of Business Bruce Walker bought the idea. He says, “We want our students to be exposed to many different approaches to investing.”.

The Buffett playbook is taught, analysed and written about but it is best summed up like this.

Harvey Eisen explains it, “
Number one - Don’t lose the money and
Number two - don’t forget rule number 1!
Number three - look for unique companies that are hard to replicate - he calls
that a moat around the business.
Number four - he talks about the circle of competence, which means in simple
English, do what you know..

“Everybody in the stock market knows about the economy or about the Federal Reserve. Warren focuses on what he knows and he has made enormous successes at that.”

He does not want his managers to report in at any committee meeting of any kind and he lets them get on with the business of running their businesses. But there is one thing he requires of each CEO. Buffett says, “I asked them to send me a letter, that I would keep in a private place that will tell me what to do tomorrow morning, if they are not alive in terms of their successor.”

But what about his own successor? He says, “The succession plan is very simple. Our board met a few days ago and we talked about that every in single meeting and we have at least three people inside Berkshire, who in many respects will do my job better than I do. I can’t give you the names but the board knows which one of those three they would pick, if something happened to me.”.

Warren Buffett has also given away $31 billion of his fortune to the Bill & Melinda Gates Foundation and he ‘hopes it will accomplish just what they have set out to accomplish. I have observed their Foundation very carefully and Bill & Melinda decided initially they were spending about a billion a year. They have decided they were going to try and figure how they are going to save most lives, relieve the most human suffering.’

Ultimately, that’s what money is really meant for, isn’t it?

Source : http://www.rediff.com/money/2006/dec/26buffet.htm

How To Retire As A Millionnaire By Investing in Real Estate?

2008-11-04T00:24:00.000-08:00

Okay,now let's get down to business.Do you really want to retire as a millionaire and that too by investing in properties? You can, if you really want to. It's not really that difficult. You only need to be disciplined in your savings. The faster you start saving and the more you start saving, the better it is.

All you need to do is from the age of 30 to 60, try your very best to purchase 6 properties worth 100,000 each, with potential of market appreciation. Since our plan is to start at the age of 30, we should have accumulated, over the years of working, at least 25,000. This amount would then be used as the down payment for the property purchased.The remainder can be paid of by taking a 20 years loan.Every 5 years, you have to repeat the same action: Buy a property worth 100,000.The 1st, 2nd and 3rd property would have been paid off by the time you reach 60 years old.So, the rental income that you can get from the properties that has been paid off can be used to pay off the rest of the properties. In fact this enables you to pay off the later properties at a faster pace and not as the initially planned 20 years any more.

When all this is done, you will have a passive income and can retire comfortably. Not to mention that your properties also have potential of having appreciated over the years.

Assumptions made:
- retirement age: 60
- you've got at least 30 years to retirement
- you save around 500 dollars every month: 500x12x5 = 30,000 every 5 years
- rental income is minimum 500 dollars a month
- each property purchased is 100,000 dollars

Warning: You must also be prepared to cover the monthly instalments from your own pocket in case your tenant defaults his payment or when the property is without a tenant. Any cost incurred for repairs must also be born by you.

4 financial things you should know before getting married

2008-11-02T08:00:00.000-08:00

1.How are both of you going to manage your money and your expenses? Is it going to be pool your money together (merged finances- as called by Clever Dude) and pay off expenses or each person is going to have a separate account and take charge of selected expenses?

2. What are the 'sins' that each other are committed to? Is there any type of 'sin' that could suck a major portion of your income? A must have drinking session with close friends every Saturday night or being a broadway musical crazy fan that you can't miss even though you know that will cause you to go on hunger for the next 2 days. You may want to read Clever Dude's Have You Committed Financial Infidelity where he has actually shared his experience and how he actually avoided the fights after marriage because he did that before marriage! Another good article regarding this topic that I just saw : Money, fidelity go hand in hand by Sharon Jayson, USATODAY.COM

3. Are there financial dependent family members from either side who needs to be cared for?In case there is someone who needs financial assistance, it would be wise to declare them earlier to your would-be-spouse. Maybe it is a brother who is wheelchair-bound or a sister who needs dialysis every week, just tell.

4. What are the financial 'burdens' that your partner is carrying over? Maybe your future spouse has yet to pay off his/her education loan which is quite a substantial amount. Knowing how much he/she is committed every month would be good so that we don't make any false assumptions or have any expectations that cannot be fulfilled because of this existing 'burden'.

All the financial things listed above should be openly spoken to your spouse before you get married. This opinion is even shared by Bryce in Don’t Keep Secrets.It is better for both of you to have a clear picture of your financial status in order to have a proper financial planning for your life.

Wealth, Success and Love

2008-10-30T08:02:00.000-07:00

A woman came out of her house and saw three old men with long white beards sitting in her front yard. She did not recognize them.

Then she said, "I don't think I know you, but you must be hungry. Please come in and have something to eat."

"Is the man of the house home?", they asked.
"No," she said. "He's out."
"Then we cannot come in," they replied.

In the evening when her husband came home, she told him what had happened.
So, he said, "Go tell them I'm home, and invite them in!"

The woman went out and invited the men in.
"We do not go into a house together," they replied.
"Why is that?" she wanted to know.
One of the old men explained. "His name is Wealth," he said pointing to one of his friends, and pointing to another one he said, "This man is Success, and I am Love." Then he added, "Now, go and discuss with your husband which one of us you want in your home."

The woman went in and told her husband what was said.
Her husband was over-joyed. "How nice!" he said. "Since that's the case, let us invite in Wealth. Let him come in and fill our home with wealth!"

His wife disagreed. "Why don't we invite Success?"
But, their daughter was listening from the corner of the room. She jumped in with her own suggestion. "Wouldn't it be better to invite Love? Our home will then be filled with love!"

The wife agreed. "Then, let us heed our daughter's advice," said the husband to his wife. "Go out and invite Love in to be our guest."

The woman went out and asked the three old men, "Which one of you is Love? Please come in and be our guest." Love got up and started walking toward the house. Then the other two also got up and followed him.

Surprised, the lady asked Wealth and Success, "I only invited in Love, as you directed. Why are you all coming in?"

The old men replied together, "If you had invited only Wealth or Success, the other two of us would have stayed. However, since you invited Love... wherever He goes, we go with him... because wherever there is Love, there is also Wealth and Success!"

How to Measure Returns

2008-10-28T08:00:00.000-07:00

Azizi Ali, one of our famous local millionaires not only accumulates wealth for himself, but also help others achieve the same by training and imparting his knowledge. I found this topic quite interesting as I get questions or statements from friends and family members who say that market is down, so don't invest! or I'd want to monitor my fund performances on my own (mutual funds, to be exact) so that I know how much returns I'm making..

Special Report: How to Measure Returns
by Azizi Ali

"I made fifty thousand in the stock market in 99!" an acquaintance proudly declare. In fact, it was so loud, he was practically screaming in your ear. Which kind of make you feel inadequate because you only made ten grand. So you quickly change the conversation subject to the mating rituals of extinct Sagittarian Mongolian bisons.

But hold on a second. Though it's true that you made less money than him, it does not necessarily mean that he is one up on you. Because we are only talking of straight figures so far. And that is not how return on investment are calculated.

The correct way of measuring returns is in two ways: in percentage form and on an annual basis.

Return must be expressed on a percentage term

Return expressed in straight ringgit/dollar/yen has little meaning. This is because straight ringgit amount do not reveal the amount of money that had to be invested in order to earn that return.

For example, is RM10,000 a good return? The answer is that it depends on the amount invested. If RM50,000 was invested, then RM10,000 would be an excellent return as it is a 20% return. However, if the original investment was RM500,000, then the return is a measly 2%. If his layout was five million instead, then he would have cried as his return is...0.2%! Pass the tissue paper, please.

Return must be expressed on an annual basis

But the job doesn't end there. Even after expressing the return in percentages, it must also be expressed on an annual basis. This is the universally accepted way of stating a percentage return.

Following the earlier example; if the RM10,000 return from the RM50,000 was realized after just 6 months, then the annual return is 44% (The return is 44% instead of 40% due to the compound effect). And even if the investment was cashed out after that six months, we would still consider the return as 44%.
If on the other hand, the RM10,000 was realized at the end of two years, then the return is only 9.54%. (Again, the 9.54% return instead of 10% is due to the compounding factor).

So now you know that the return of x % in y number of years - often quoted by fund managers - is not the right way of indicating return on investment. A 50% return in five years may look good but that is only 8.44% annual return.

Then we can compare

Once we have the returns expressed in percentage form and on an annual basis, only then we can compare the various returns from different investments. Only then the comparison be fair and sensible. Orange to orange, durian to durian.

Coming back to the beginning example, if the guy made RM50,000 from investing RM500,000, his return on investment is 10%. Not bad. Something to crow about, I suppose.

But since you made the ten grand by investing only RM20,000, your return is a fabulous 50%! Whaddaya know - You are the winner!

Now you can go back talking about sex and dead Sagittarian Mongolian bisons.

Impact Of Goal Setting

2008-10-26T01:00:00.000-07:00

Another inspiring story that was delivered to my mailbox. Though the topic is on Impact of Goal Setting, the example given in on the world's greatest investor,Warren Buffet. I guess it would be useful to all investors out there, especially to those who look up to him as the Investment Guru.

In 1952, there was a research study done on the impact of goal setting on the graduating batch of students at Yale University. When asked how many of them had clearly specified and written down goals, only three percent responded. The remaining ninety-seven percent, despite being highly intelligent and hardworking, had no road map where they would be five to ten years after graduation. Twenty years later in 1972, a follow up study was done on the class of 1952. What they discovered was shocking; the combined income of the three percent who had clear goals was greater than the entire income of the ninety seven percent combined! Was it just a coincidence or does having clear goals really have an impact on a person’s personal and financial success?

One classic example is investor Warren Buffet. Does his ability to come about by chance? Absolutely not. From a very early age young Buffett was obsessed with making money and had a very clear dream of becoming the world’s greatest investor. Born during the depression when his father was close to bankruptcy, Warren learnt about the value of money and the importance of being financially secure at an early age.

Even before his teens, Warren knew that he wanted to be rich. As early as elementary school and later on in high school, he would tell his classmates that he wanted to become a millionaire before the age of 35 (when he turned 35, his net worth exceeded $6 million). It was because of his goal that he constantly thought of ways to make money, while most other kids his age would be spending their parents’ money.

He even memorized a book called ‘ A Thousand Ways to Make $1,000’. At the age of six, he started buying coke bottles at 25-cents per six-pack and selling them at 5-cents a bottle, giving him a 16% gross profit, as he would tell himself. At the age of 13, he got a job delivering newspapers and through innovative marketing and distribution strategies, he served five hundred customers a day. At the age of 11, he took all his savings and started investing in the stock market. His first investment was three shares in a company called ‘City Service’. While most kids his age were reading comic books, Warren spent his time reading company annual reports.

By the age of 14, he started a pinball business and was earning $175 a week, as much as the average 25-year old was earning in 1944. Would he have taken all those actions if he never set a goal to be rich in the first place? Of course not. It was clearly because of his focus of energy and actions that allowed him to become the best in what he does.

A Blog Posted by Singapore 's Youngest Millionaire

2008-10-24T00:36:00.000-07:00

I just came across this article in my mail. Went through a very fast googling process looking for its source. Ended up at http://www.adam-khoo.com. Looks like this guy is from Singapore and made his 1st million at the age of 26 and currently gives lots of speeches/seminars and has written quite a number of top-selling books. His frugal lifestyle is something that all of us should aim to learn and follow.

By Adam Khoo

Some of you may already know that I travel around the region pretty frequently, having to visit and conduct seminars at my offices in Malaysia, Indonesia, Thailand and Suzhou (China). I am in the airport almost every other week so I get to bump into many people who have attended my seminars or have read my books.

Recently, someone came up to me on a plane to KL and looked rather shocked. He asked, 'How come a millionaire like you is travelling economy?' My reply was, 'That's why I am a millionaire.' He still looked pretty confused. This again confirms that greatest lie ever told about wealth (which I wrote about in my latest book 'Secrets of Self Made Millionaires'). Many people have been brainwashed to think that millionaires have to wear Gucci, Hugo Boss, Rolex, and sit on first class in air travel. This is why so many people never become rich because the moment that earn more money, they think that it is only natural that they spend more, putting them back to square one.

The truth is that most self-made millionaires are frugal and only spend on what
is necessary and of value. That is why they are able to accumulate and multiply their wealth so much faster. Over the last 7 years, I have saved about 80% of my income while today I save only about 60% (because I have my wife, mother in law, 2 maids, 2 kids, etc. to support). Still, it is way above most people who save 10% of their income (if they are lucky). I refuse to buy a first class ticket or to buy a $300 shirt because I think that it is a complete waste of money. However, I happily pay $1,300 to send my 2-year old daughter to Julia Gabriel Speech and Drama without thinking twice.

When I joined the YEO (Young Entrepreneur's Organization) a few years back (YEO is an exclusive club open to those who are under 40 and make over $1m a year in their own business) I discovered that those who were self-made thought like me. Many of them with net worths well over $5m, travelled economy class and some even drove Toyota's and Nissans (not Audis, Mercs, BMWs).

I noticed that it was only those who never had to work hard to build their own wealth (there were also a few ministers' and tycoons' sons in the club) who spent like there was no tomorrow. Somehow, when you did not have to build everything from scratch, you do not really value money. This is precisely the reason why a family's wealth (no matter how much) rarely lasts past the third generation. Thank God my rich dad (oh no! I sound like Kiyosaki) foresaw this terrible possibility and refused to give me a cent to start my business.

Then some people ask me, 'What is the point in making so much money if you don't enjoy it?' The thing is that I don't really find happiness in buying branded clothes, jewellery or sitting first class. Even if buying something makes me happy it is only for a while, it does not last. Material happiness never lasts, it just give you a quick fix. After a while you feel lousy again and have to buy the next thing which you think will make you happy. I always think that if you need material things to make you happy, then you live a pretty sad and unfulfilled life.

Instead, what make ME happy is when I see my children laughing and playing and learning so fast. What makes me happy is when I see by companies and trainers reaching more and more people every year in so many more countries. What makes me really happy is when I read all the emails about how my books and seminars have touched and inspired someone's life. What makes me really happy is reading all your wonderful posts about how this BLOG is inspiring you. This happiness makes me feel really good for a long time, much much more than what a Rolex
would do for me.

I think the point I want to put across is that happiness must come from doing your life's work (be in teaching, building homes, designing, trading, winning tournaments etc.) and the money that comes is only a by-product. If you hate what you are doing and rely on the money you earn to make you happy by buying stuff, then I think that you are living a life of meaningless.

Story Of A Little Boy

2008-10-22T23:05:00.000-07:00

The other day I came across a very interesting story. It was a story of a little boy. A true story. This little boy picked up an interest in music. For several years, he had been learning to play the cornet. He persisted, putting in hours of practice at home each day, and there came a time, after many painful hours of practice peppered with criticism from his mother, that he was rewarded by being chosen to participate in his school's Armistice Day Ceremony.

Each year on November 11, the entire school went down to the gym for a ceremony honouring the nation's fallen soldiers. In what had become a school tradition, trumpet players stationed at doors on either side of the gym would alternate playing "Taps," one blowing the first dum da dum notes, and the other echoing dum da DUM, and so on.

That year, this boy's cornet skills had advanced enough for him to be given the part of the echo. He woke up the morning of the event, exhilarated at the prospect of performing in front of the entire school. When the big moment came, he was ready.

As the little boy stood in the doorway with his cornet, the first trumpet player sounded, Dum da DUM.

But on the second dum, he hit a wrong note.

"My whole life flashed before my eyes, because I didn't know what to do with the echo. They hadn't prepared me for this. Paralyzed - my big moment" recounted the little boy years later.

Should he copy the other trumpet player's mistake or embarrass him by contradicting what he's played? The little boy was undone. The scene scalded itself permanently into his memory. What he did next he can't remember - had become a blank.

But that little boy learned a valuable lesson that day: It might seem easier to go through life as the echo - but only until the other guy plays a wrong note.
It is a lesson that will serve all of us well. Often, either by choice, circumstances or sheer force of habit, we end up playing the 'echo'. And this was probably the lesson that made him stick to the principle 'Be Greedy When Everyone Panics, and Panic When Everyone Is Greedy'.

That little boy grew up to be the most successful investor of all time and the richest man in the world a few years running. That little boy's name is Warren Buffet.

Can You Continue To Invest In China?

2008-10-21T08:00:00.000-07:00

There was a BIG hype before the Beijing Olympics, major financial news indicating that the share prices of China and the Greater China were to soar higher. To a certain extent it was true. When the global economic slump began, China was one of the worst to be hit. In the below table, you can see the market returns of many countries/region.

Market Returns from 2 January 2008 to 30 September 2008.

Market	Index	Returns
India	SENSEX	-44.9%
China	Hang Seng Mainland Composite	-40.0%
Asia ex-Japan	MSCI Asia ex-Japan	-38.3%
Korea	KOSPI Index	-38.0%
Thailand	SET Index	-36.0%
Emerging Markets	MSCI Emerging Markets	-34.2%
Hong Kong	Hang Seng Index	-32.3%
Indonesia	Jakarta Composite Index	-31.3%
Taiwan	TWSE Index	-29.6%
Malaysia	Kuala Lumpur Composite Index	-29.5%
Europe	DJ Stoxx 600	-29.5%
Singapore	FTSE STI Index	-29.0%
Asian Tech	Bloomberg Asia Pacific Technology	-27.5%
World	MSCI World	-22.5%
Tech	Nasdaq 100	-20.4%
Japan	Nikkei 225	-19.0%
US	S&P 500	-17.3%

Returns are in RM terms

Source: Fundsupermart

Now, the question is : Can You Continue To Invest In China?

According to Fundsupermart's research, '..should be prepared for short-term volatility. China equity funds are single-market funds which may exhibit greater volatility than regional funds in the short term – we suggest investors place China or Greater China equity funds in the supplementary portion of their portfolio, which usually takes up no more than 20% of an overall portfolio.'

Rick Aristotle Munarriz in his article, 7 Reasons to Remember China at The Motley Fool, mentions that '...as long as all seven of these companies keep growing, they will be big market winners in four years.'

'...China has the largest population in the world, and it has had economic growth in the last nine or 10 years of at least 9%, 10% or 11%. If the bubble bursts, maybe the economy grows at 7% a year. That's still greater than other economies in the world...' this should be noted as another strong point why China should be a good place for investment during bad times, as written on Street.com's China: 'The Best Place to Invest in the Next Five to 10 Years'

It will happen eventually, the question is when? So, in order to be on the safer side, never put the money that you would be needing in less than 5 years for investment.

Which Industries Should You Invest In At Times Of Recession?

2008-10-19T20:27:00.000-07:00

Below are the list of some industries that remain healthy, if not doing too well in an unhealthy economic conditions:

Pharmaceuticals
Healthcare Companies
Tax Service Companies
Gravediggers
Waste Disposal Companies
Discount Retailers
Sin Industries

Read more about Industries That Thrive On Recession at Investopedia. They've also got tonnes of other articles on investing and finance. A very good place to start off for beginners.

5 Most Important Things To Watch Out When Taking Housing Loans

2008-10-15T22:51:00.000-07:00

Look out for the lock-in period.
This is the time frame set by the banks to tie you down with them. Usually they won't allow you to swith to other financial organisations within this period. They also would not like you to pay off the debts earlier than scheduled. If you do any of the above, it is possible for them to charge a fee which would be between 5%-10% of the loan amount.

Choose the right package
Though there would be various packages offered, they can be summarised into 3 broad categoried:-
-starting off with a very low interest rate and later have a BLR (base lending rate) + x%
-a fixed interest rate throughout the loan tenure
-initial high interest and gradually lowering the rates, or having a BLR -x% for the main portion of the tenure.

Now the question is, which is the best package? Well, it all depends on you. The type of organisation you are working for or running your own business, are you on a tight budget now and how you foresee your income growth in the future.

See whether the lawyer's fee/MRTA is absorbed by the bank or passed on to the customers.
In an economic situation like this, most banks try to absorb the legal cost involved and give free MRTA (Mortgage Reducing Term Assurance) coverage.

Choose a bank with the best service offer
When applying for loans, try to apply to as many banks at once. In fact, instead of going to different locations, looking for these banks, if there is any expos going on for new homes, you can get most of the banks having a counter there. Or simply give a call to them and get a sales representative to see you. You can then choose the fastest service provider or the one that really satisfies your condition of customer service. If you face problems in the beginning itself, most likely you would have problems too later on.

Get a longer tenure for the loan
Whichever institutions giving you the longest loan period, grab them!
Though it will boil down to having to pay more in terms of interest, our aim would be to pay more than the stipulated amount monthly. Most banks charge lesser interest rates when the duration is longer. And we can make use of this point to our advantage. When paying off 100 or 200 extra every month, the duration of the loan will be reduced automatically and in bad times, you can choose to pay lesser than what you are used to pay every month and you will feel a great relieve for that.

In Malaysia, there are many banks offering home loans that varies in its packaging. I list some of the more popular ones below:
1. Standard Chartered

2. Public Bank Berhad

3. HSBC Bank Malaysia Berhad

4. Hong Leong Bank Berhad

5. AmBank Berhad

6. MaybankBerhad

7. Citibank Berhad

No, I'm not being paid to list the above banks and neither am I biased towards any one of them. It's just through my own experience of getting a home loan. I finally ended up taking a home loan from Public Bank as it met with most of my requirements.

What Should You Do With Your Money Now?

2008-10-14T21:10:00.000-07:00

The most common questions running on everyone's head now would be:

where to stash my cash?
is it a good time to invest now?
should I sell off my investments (stocks, mutual funds, etc) and keep liquid cash?

So, wanting eagerly to dig out the information from my head for the benefit of mankind (ha ha ha), I started this post. However, as I continued with my research, I found that there were already some very good analysis done on this topic and posted on the net by some very experienced finance guys/gals or just let's call them financial gurus. Cancelling of my earlier idea, I decided to let you all to have a go on their opinion instead.

James B. Stewart has written piece recently on this matter in smartmoney under the title : Crashes, Like Bubbles, Call for a Level Head

I liked what he said: -

"I didn't need to waste much time thinking about what to buy. Everything was beaten down. There didn't seem to be any point in stock-picking. As I've said before, at a time like this what you buy is less important than that you buy something."

"...is the predominant emotion, which is fear in a panic, greed in a bubble. Psychologists tell us fear is a more powerful emotion than greed."

He's also written another excellent article, For Long-Term Investors, Now Is Time to Buy. This simple title by itself should tell us what we should do now in terms of investments.

We can also make use of one of his valuable tips in investment as I found below:

"....I follow a disciplined system of buying on 10% declines in the Nasdaq, and selling at intervals of 25% gains. These are based on historical averages for corrections (an average 20% decline) and bull markets (an average 50% gain.) The goal is simple: Buy lower and sell higher."

The Silicon Valley Blogger in her latest update has poured out her opinion, even though that is not the main topic of the day:

"...that it would be a total waste of a bear market if we ever miss the chance to dollar cost average even just a teensy bit into it. If we’ve got money to spare, it’s going into our core index funds."

For a more comprehensive read, she has also given ideas on Best Places To Put Your Money When The Stock Market Tanks.

Over a cup of tea with a friend, a question popped out. "If the average person is selling, then who’s buying?" As I was searching for an answer, I stumbled upon a very good article by J.D at getrichslowly. I was quite surprised to find the exact words that we used were actually in his article! Maybe then, it is possible that we were not the only ones discussing about this topic now.

At the end of the day, after listening to the experts, you decide yourself what do you want to do with your money. It is your money after all.

What is Dollar Cost Averaging?

2008-10-14T01:29:00.000-07:00

Dollar-cost averaging (DCA) is a wealth-building strategy that involves investing a fixed amount of money at regular intervals over a long period. Now, most of the time, we hear this term being associated with mutual fund investment. Is it only good for that?

Dollar-cost averaging is simply an investing method of a fixed dollar amount at pre-determined intervals.It can be used in stocks investments as well as mutual fund investments or just any other kind of investment. Yes, you can apply it on real estate investment too, if you want. However, the problem would be the amount of cash that you would need to apply this strategy. For example, let's just say you bought a property at 200,000. Can you invest the same amount on a regular or monthly basis? That would be ridiculous!

But it would be an excellent strategy to be used on mutual fund investment or in the share market. The amount of money invested at each interval remains the same over time, but the number of shares purchased varies based on the market value of the shares at the time of a purchase. When the markets are up, you buy fewer shares per dollar invested due to the higher cost per share. But frankly speaking if the market is on the uptrend, it would not be advisable to invest, right? However, usually investors in mutual funds are known as passive investors, therefore they just let their investment grow over the years and probably they don't have the time to monitor their investment as well. When the markets are down, the situation is reversed and you purchase a greater of number of shares per dollar invested. It's a strategic way to invest because you buy more shares when the cost is low, so you get an average cost per share over time, meaning you don't have to invest the time and effort to monitor market movements and strategically time your investments.

It enables even low-wage earners and folks with tight budgets to invest a minimum amount that they are comfortable with on a regular basis.It cultivates investors to get into the habit of saving, and these small amounts can really add up over the course of a lifetime thanks to the power of compounding.

Now, the next common question would be - 'Can't we do lump sum investment for mutual funds or in the stock market?'. To learn the pros and cons of each strategy, there's an excellent research done by the Silicon Valley Blogger on thedigiratilife.

Cancel your credit card before you die.......... (Hilarious!)

2008-10-12T20:49:00.001-07:00

Just received this joke via email. Hope you people out there enjoy this too... the lighter side of finance!

Now some people are really stupid!!!! Be sure and cancel your credit cards before you die. This is so priceless, and so, so easy to see happening, customer service being what it is today.

A lady died this past January, and Citibank billed her for February and March for their annual service charges on her credit card, and added late fees and interest on the monthly charge. The balance had been $0.00 when she died, but now somewhere around $60.00.

A family member placed a call to Citibank. Here is the exchange:

Family Member: 'I am calling to tell you she died back in January.'
Citibank: 'The account was never closed and the late fees and charges still apply.'
Family Member: 'Maybe, you should turn it over to collections.'
Citibank: 'Since it is two months past due, it already has been.'
Family Member: So, what will they do when they find out she is dead?'
Citibank: 'Either report her account to frauds division or report her to the credit bureau, maybe both!'

Family Member: 'Do you think God will be mad at her?'
Citibank: 'Excuse me?'
Family Member: 'Did you just get what I was telling you - the part about her being dead?'
Citibank: 'Sir, you'll have to speak to my supervisor.'

Supervisor gets on the phone:

Family Member: 'I'm calling to tell you, she died back in January with a $0 balance.'
Citibank: 'The account was never closed and late fees and charges still apply.'
Family Member: 'You mean you want to collect from her estate?'
Citibank: (Stammer) 'Are you her lawyer?'
Family Member: 'No, I'm her great nephew.' (Lawyer info was given)
Citibank: 'Could you fax us a certificate of death?'
Family Member: 'Sure.' (Fax number was given)

After they get the fax:

Citibank: 'Our system just isn't setup for death. I don't know what more I can do to help.'
Family Member: 'Well, if you figure it out, great! If not, you could just keep billing her. She won't care.'
Citibank: 'Well, the late fees and charges do still apply.' (What is wrong with these people?!?)
Family Member: 'Would you like her new billing address?'
Citibank: 'That might help...'
Family Member: ' Odessa Memorial Cemetery , Highway 129, Plot Number 69.'
Citibank: 'Sir, that's a cemetery!'
Family Member: 'And what do you do with dead people on your planet???

(Priceless!!)

10 Top Things To Check For When Buying An Apartment/Condominium

2008-10-09T19:09:00.000-07:00

As I just moved into my own apartment, I'd like to share some of my experience as well as the mistakes I made when I bought it. Hope it would be beneficial to others.

Security
One of the main reason people move in to apartments these days is security. So make sure that sufficient security officers are at duty. You can even try to enter the apartment and see how difficult/easy it is to gain access. From there, you can judge on your own the efficiency of the security in that apartment before you decide to purchase your unit.

Piping system
Living in an apartment is a lot more different from living in a house. In a house all repairs have to be taken care by the house owners themselves. However, in an apartment you are responsible for your neighbours too. For example, if your neighbour right below your apartment unit complains of leakage from his ceiling, you have to take action to rectify this problem. If not, he can even sue you! But be careful, as you won't be able to detect leakage in your own walls if the property is painted with a new coat of paint.(as I am facing now!)

Distance
Ensure that the property is close to whatever facilities you require such as shops, school, workplace, mother-in-law's house, etc. mmm...maybe you want it to be really far for this last point..:)

Parking
If you own a car, make sure you get an allocated parking space. If you need additional parking space,(maybe your spouse owns a car too) check for the charges and whether they are covered or not.If you expect frequent visitors, then you have to consider visitor's parking as well. Some apartments are really facing problems in this area and resort to double parking (as I've faced before especially in the heart of the city) and this makes the area really congested and not an ideal place to live in.

Public transport
Some people depend on public transport very much. For those in that category, make sure you can get your preferred transport easily. And if you have to travel a bit to the nearest train station, consider the amount you have to fork out for that near distance as well as time taken to get there. However, expect lots of noise and pollution in a place where there is good public transport system.

Occupancy rate
Please check with the management office about the occupancy rate. An ideal situation would be occupancy rate of between 80%-90%. Higher occupancy rate means that the value of the property has a fair chance of appreciating in the future. You will also find it easy to rent out your unit in case you decide to do so in the future. (I made a mistake here too.)

Neighbours
Know your neighbours and love them! Make sure your neighbours are the exact kinds that you would enjoy or comfortable living with.If you are in a multi-racial society, ensure it has a well accepted ratio of people from all communities. If you have kids, ensure that it will be a healthy environment for them to grow up.

Position
It is very important to consider the position of the apartment (whether it faces north, south, east, west) as well as the arrangement of the living room, toilet, kitchen and hall in it. As more have started believing and practicing the ancient geomantic sciences such as Feng Shui and Vaastu Shastra, you will find it easier to sell later on if you have adhered to these principals as well.

Lift/Escalator services
Ensure that there are sufficient number of lifts and they are serviced periodically.In case you are looking at an apartment without these services, try to get a unit on a 1st or 2nd floor. Ground floor would be too noisy and climbing up 5 floors daily wouldn't be a comfortable experience!

Age of building
By knowing the age of the property you are going to invest in, you can roughly estimate the repairs that you have to do such as wiring, plumbing, etc. Apart from that, if the property is a lease-hold, you know how long you can continue living in the same place and after some time, if you plan to mortgage the house to take loans, you have a rough idea from now itself the ease/difficulty that you will face.

If you have any experiences you would like to share, I would love to hear from you.

Fast money anyone?

2008-10-09T00:39:00.000-07:00

Almost everyone that I know of wants to be rich fast. No patience in waiting to grow their wealth. Well, probably that includes me too, when I was much younger.However, after dabbling with various websites,blogs, magazines, books,classes and seminars, I've managed to slowly crawl out of my shell.

The group that falls mostly in this category are the ones aged between 20-35. At least that's what I find when I talk to my friends of that age group. I figured that while less than 20 would not have worries or plans about their financial future (because most probably they are still depending on their parents for survival), those above 35 must have had their share of life's experiences for them to have a different opinion.

During that age(20-35), as I recall clearly, me and my friends used to sneak into casinos and illegal gambling spots that kept mushrooming in the city to fulfill the needs of high adrenaline rush in youngsters like us. And make money we did!

My personal favourite was the Russian Roulette and Horse Racing (computer animated). We used to do all crazy stuffs, especially when it was pertaining to bring us luck. After a while lady luck seemed to get bored and decided to leave us.

Then, slowly we began to 'graduate' and move on to more serious ventures known to many as 'Get-Rich-Quick-Schemes' or 'High-Yield-Investment-Products'. Those agents/con-men that we met were really convincing enough for us to part with our money. The main reason people are still throwing in their money in these kind of schemes despite reminders and warnings from the authorities is plain greed. People just can't let go of the idea of being rich overnight and are willing to take BIG risk for that.

There are plenty of those schemes out there, both local and foreign ones, but I'm not going to list them here. Some deals are done face-to-face while others make use of the technology where they come up with really professional looking websites and systems to attract their potential 'victims'.

Then as I grew more matured (or so I thought),I started going into the stock market, without the slightest knowledge about the vast financial world out there. The result? Burnt my fingers of course! But it was a worthy experience, since I learnt it at quite a young age, now I can restrain myself from going into the stock market just by relying on 'tips' from friends.

So, now whenever I advise people to invest in a more reliable and trusted source (such as mutual funds,etc.) and they don't seem to agree or understand, I just remain silent. After all, I've been in their shoes before!

How Much is Enough?

2008-10-08T20:34:00.000-07:00

When I was just working as a part-time clerk in the bank, my basic salary plus allowance and overtime roughly brought in RM1500. I did not know the value of it then, but figured that it must have been quite low since it was only a clerk's salary.

All the money earned was either spent (not all of it) or saved in a normal savings account. It actually brought a smile on my face each time I checked the balance because it kept growing from month to month. In short, I had more than enough.

My expenses were kept to a bare minimum because I still lived with my parents, commuted using public transport and meals were at the local stalls that served reasonably good food at a low price. Oh, and before I forget, I was still not married then!

Now, after almost a decade later, earning more than double the 1st salary, I'm still trying to figure out where my money goes at the end of every month. Currently married (dear wifey is also working), living in my own house, own 2 cars and have applied my knowledge of diversification to some extent in my investments. A big portion of the salary is used to pay off our fixed overhead expenses.

However, our day-to-day living is a real example of frugal living. Definitely no extras to spend like those days! At such, can you say that earning more would be enough? What is your take on this matter?

I’m tagging the Digerati Life, and thetaoofmakingmoney. If I didn’t tag you and you want to answer, tell me in the comments or post it on your own blog and post the link in the comments.

Clocking in the extra hours in your current job or putting in the hours separately to build an alternative income stream?

2008-10-07T19:07:00.000-07:00

Lazy Man's article prompted me to write this article.

We all want to have a comfortable life, provide good things for the family, etc. To achieve this, we see people spending more than half of their lifetime at work. They clock-in more hours as to accompish more task set by their bosses and impress them. Their full concentration and
undivided attention is given to their bosses (and job).Is this a smart move?

On the other side of the coin, we also get to hear people working more than 1 job at a time. Yes, multi-tasking is not limited to computers only. Beware computers, human beings are catching up! This is not something that was probably heard at all during our grandparents' time.
Some people prefer to have an alternative source of income with a 2nd or 3rd job.

What do you stand to gain by the first method - working longer & harder in your current job?

potential for promotion and enjoy the perks and benefits that comes with it
strong excuse when demanding for a pay rise
more responsibility
more security as some people see it

Advantages of the 2nd method - alternative source of income:

you set the targets of how much you want to make
work is based on your own flexibility
no one is blowing down your neck
you decide what you want to do to bring in the income (can also be a hobby that started to pay off)
if you are persistent enough, your alternative source of income can balloon into a main source and become your new career or business

Personally, I would choose the 2nd method (this blog is a proof of that! ha.. ha.. ha. :) ). Anyone has anything to share or have other opinions, please do.

How To Make Some Extra Bucks - By Doing Nothing

2008-10-07T00:51:00.000-07:00

I love the title - do nothing and make some money at the same time. Almost nothing, that is…

1. Put aside the change

Put aside all the coins that you receive everyday into a piggy bank - yeah, mummy is always right. Just continue to do what you were trained to do from young. After some time, you will be surprised that you have some substantial amount of money in your savings.

2. Terminate your gym membership

No, don’t get me wrong. If you are actively utilizing your gym membership, by all means go ahead and exercise. After all health comes before wealth. But, if you are not using them and paying hundreds of dollars every month hoping that you will be using them soon (and this has been going on for a year or so), it is about time you looked into terminating the membership immediately and try to exercise at home instead using simple equipments such as the skipping rope and dumb bells.

3. Change to regular petrol

Unless you own a very new car and too sensitive to the performance of your car, you can always change to the regular petrol from your premium petrol. This will save you a few cents for every litre and for the few hundred litres your car is going to gulp down over a few weeks or months, you should be having a thicker wallet.

4. Use credit card instead of cash

Let me warn you first - you have to be extremely disciplined to follow this step, or else you will end up cursing me for giving you this idea. Credit card companies usually give out points to their customers for every swipe of the card that you make. Just make sure you record every transaction that you make with your card and before the end of every month, make a full settlement on your card. This way, you are not charged for your card, but you get something free instead for this service. At times, after a certain period of accumulation, you can even go for a free vacation! That’s a brilliant idea, wouldn’t you agree?

5. Disconnect your cable TV

For a person who is concerned about his finance, cable TV would sound too luxurious. Instead of being a couch potato, the time can be utilised to earn additional income or exercising or doing some better things. Or at the least, try to minimize the channels or switch to a lower plan, if available.

After following the steps mentioned above, you would have made some amount of money. Well, a dollar saved is a dollar made!

What Can You Do To Supplement Your Income?

2008-10-07T00:35:00.000-07:00

There are many things out there you can do to supplement your income. However, since most of the time people don’t get to do what they love to do in their primary jobs ( they are most like to be working for the paychecks) first of all you have to ask yourself a few simple questions. This is an important step as you want to enjoy yourself as well as earning some income at the same time.

What is your hobby?
What is it that you can continue to enjoy to do even though there’s no money involved in it?
Can you get support from your family members in what you intend to do? (not necessary but you will soon find that it will be much easier if you had their support or understanding)
Do you need any special facilities or equipments and how much cost would be incurred?

Having thought about all these questions mentioned, you have various choice of jobs that you can start-off as a part-timer or as a hobby. Besides generating some income for you, it can continue to be your favourite past-time. You can relax yourselves and free yourselves from the daily stress.

Among the popular choices that you have:

Teach part time - This can include at colleges/institutes or giving private tuition.
Baby sit - If you find that you love kids, you can always offer baby sitting service, starting from your relatives.
Designing websites - You can help to design and maintain websites for the small business owners and gradually as your skills improve, you may even offer your services to the corporate group as well.
Service computers - Usually customers find it difficult to troubleshoot or maintain a pc (from viruses, de fragmenting, installation of software,etc.) after their warranty period is over. Why not offer your service in this area?
Tailoring service - If your service is good and you are good with your hands, you are sure to have your hands full especially during festive seasons.
Bridal & make-up service - This seasonal service is also good for a part-timer who is artistic and creative. Together with this, you can have decoration service also included.

The examples given above are merely to jumpstart in case you are having difficulties looking for ideas. But hey, the sky is the limit. You don’t have to limit yourself to these jobs alone as you can come up with your own method to supplement your income as you should know best what you are good at!

Successful Bloggers

2008-10-06T01:01:00.000-07:00

Over the weekend, I had the chance of meeting 2 of my old friends. 1 of them is an engineer while the other was in the IT industry. Though the meeting was on separate occasion with each individual, surprisingly, I had 1 common topic for discussion. You guessed it right! It was on how to make more money.

Both of them were very keen and enthusiastic about generating a higher income for themselves and their family but didn't know how.
Both of them wanted to start off some business, but didn't know what business they should venture into.
Both agreed that they lacked in marketing skills which is of utmost important to have in running a business.
Both had limited funds for investment in the business.

BUT,

Both had Internet connection + computer facility at home.
Both had spare time that they could devote to everyday.
Both had some experience/expertise that they could share with others for their benefit.

So, I suggested that while they were thinking about a more appropriate business plan, why not do some blogging. To my surprise, they were quite unfamiliar with that term. One of them even kept pronouncing 'BLOG' as 'BLOP'!!! And continued to explain how you go about doing it and how bloggers make money and what were the potentials for the bloggers. So, in that process of finding more resources for them, I stumbled upon a list of really successful bloggers.

This brought back the confidence in me to continue blogging. Reason No. 1 was for the amount of these successful bloggers made and Reason No. 2 was the notion 'everyone is blogging these days, so you can't make it' wasn't true. At least not in the case of my friends. So there still must be a BIG opportunity out there in blogging. Ok, enough of the talk, let's look at the list of bloggers who has started bringing in the $.

List of Successful Bloggers (Source: BusinessWeek)

boingboing.net
Launched: January, 2000
Revenue: Over $1 million a year

icanhascheezburger.com
Launched: January, 2007
Revenue: Estimated $5,600 a month based on ad rates and self-reported traffic data

shoemoney.com
Launched: October, 2005
Revenue: $12,000 a month

overheardinnewyork.com
Launched: July, 2003
Revenue: Estimated $8,100 a month based on ad rates and self-reported traffic data

kottke.org
Launched: March, 1998
Revenue: Estimated $5,300 a month based on ad rate

talkingpointsmemo.com
Launched: November, 2000
Revenue: Estimated $45,000 a month based on ad rates and self-reported traffic data

perezhilton.com
Launched: September, 2004
Revenue: Estimated $111,000 a month based on ad rates and self-reported traffic data

gothamist.com (and 13 other sites in the "-ist" network)
Launched: January, 2003
Revenue: Monthly average of $50,000 to $60,000 over the past 12 months

techcrunch.com
Launched: June, 2005
Revenue: $200,000 a month

gofugyourself.typepad.com
Launched: July, 2004
Revenue: Estimated $6,240 a month based on ad rates and self-reported traffic data

mashable.com
Launched: July, 2005
Revenue: Estimated $166,000 a month based on ad rates and self-reported traffic data

problogger.net (multiple sites)
Launched: November, 2004
Revenue: Over $100,000 a year

michellemalkin.com
hotair.com
MichelleMalkin.com launched: June, 2004
Hot Air launched: April, 2006
Revenue: NA

What is some of the best financial advice you’ve received?

2008-10-05T18:30:00.000-07:00

For the first time ever, I got tagged and I'm responding to it! Silicon Valley Blogger from The Digerati Life tagged me to answer the question:

What is some of the best financial advice you’ve received?

Since I was brought up in an environment where 'Money is not everything' and 'Money is the root cause of all evil', you can't expect much of financial advises. Instead, focus was given on education of oneself to secure a promising job and hence, a bright future. (Reminds of of the famous book, Rich Dad, Poor Dad).

However, if you ask me what is some of the best financial lessons I've learnt, then, I can point out one or two.

Compounding interest will definitely be an eye opener for me to the financial world. When I was about to purchase my house, I started to look into all places where I may possibly have stashed away some cash.
My search revealed a mix of good news and bad news.
The good news - I had some amount of cash stashed away.
The bad news - I had it for a few years and it was all kept in a normal savings account!

Savings account only gave a miserable 0.2% interest per annum. At least if I had the initiative to transfer them to Fixed Deposit account, I would have made a 3.5% - 4.0% per annum. Hmmm.. looks like my money was resting in a corner without doing any work for me. My mistake!

The top 20 jobs most likely to survive a recession

2008-10-02T17:21:00.000-07:00

Though the top 20 jobs are listed down, it is important to note here that only highly skilled people are in demand always, whether it is a technical or non-technical job.
So, in order to be still saleable, it is recommended that you should upgrade yourself with additional paper qualification, whether it is a degree or a simple plain certificate. Other than that you can also opt to check out certifications, such as the brainbench certification, some of which are provided for free on the Internet.

Jobs that most probably will survive a recession:

1. Sales representative/business development

2. Software design/development

3. Nursing

4. Accounting and finance executive

5. Accounting staff

6. Networking/systems administration

7. Administrative assistant

8. Business analysis (software implementation)

9. Business analysis (research)

10. Finance staff

11. Project management

12. Testing/quality assurance

13. Product management

14. Database administration

15. Account/customer support

16. Technology executive

17. Electrical engineering

18. Sales executive

19. Mechanical Engineering

20. Government contracts administration

Source:
Copyright 2008 Wellington Newspapers Limited
All Rights Reserved
The Dominion Post (Wellington, New Zealand)
September 6, 2008 Saturday

Easiest way to add third party widgets to your blog

2008-09-30T01:16:00.000-07:00

Blogger provides really nice interface and its quite user friendly to bloggers, regardless of what some people say that the platform is controlled by them, blah blah blah... For beginners, it is easy to make money as well using the Adsense gadget.

Apart from that, you can also add 3rd party Ads from other Ad Networks. If the other Ad Networks provide their javascript, u can use directly the HTML/Javascript Gadget that is provided in the list of gadgets (instead of cutting-and-pasting the codes into the 'Edit HTML-Layout' section of the Blogs.)

Just paste your codes into the content section and if you don't want any ugly titles appearing above your ads, don't write/type anything in the title section. Leave it blank, or press the space key (so that the title is given a blank space).

Investing in Gold

2008-09-24T19:30:00.000-07:00

This morning a friend was asking my opinion about investment in gold. For long, gold has been a very attractive type of investment. Even when we look up history, traders and invaders have travelled far and wide in search of this shiny metal.

My 2-cents opinion on this matter is listed below.

Why invest in Gold?

Gold is the most liquid asset.
Gold can play a vital role in diversifying your portfolio.

Why investors may shy away from investing in Gold:

One must remember that gold, like any commodity, can move down just as aggressively as it moves up. In mid-March this year, gold was seen traded at more than US$1,000 an ounce and earlier this month, it came down to less than US$750. So, it is possible to lose value in gold as well as other investment.
Another point worth noting is that gold was not an interest-bearing asset.

People preferred to keep gold coins rather than gold bars but the buying of physical gold was quite rare due to “security issues”.

Ways to purchase/invest in Gold:

Gold Bullion Coins - Kijang Emas (you can get it from selected Maybank branches)
Gold Savings Passbook Account

About Money Churner

2008-09-23T22:07:00.000-07:00

Money Churner is a blog targeted for young and the middle aged group of professionals, executives, students,entrepreneurs and even housewives, offering hints, tips and ideas to help enhance your knowledge about your finances- to make money as well as preserve and make it grow.

If there is any hot businesses worth exploring, I'll probably be discussing about it as well.And from time to time, if I get bored, I may just talk some unrelated things, which, I hope you guys wouldn't mind!

Use the search box at the top right hand corner if you're looking for specific information, or simply browse through my posts instead.

Please leave your comments or contact me directly. Your comments and opinions are always appreciated!

Customized Blog

2008-09-22T22:40:00.000-07:00

Just trying my hand at customizing the blog today, so decided to create a new blog just for this purpose..

Actually, coming to think of it, its almost a year now, since I got myself a website. But nothing much was done and the blogging software that I used was not really user-friendly. Until I checked out blogger.com.