Monday, January 26, 2009

Happy Lunar New Year - Welcoming The Year Of Ox!


Today is Lunar New Year. All Chinese around the world is welcoming the year of Ox. For me and my family, it's a big family gathering moment. We will be visiting our family members especially those senior relatives, for example my Grandma. During this time, I will get to see those relatives who works abroad because they're home with their family.

I am taking this opportunity to wish everyone a wonderful and prosperous Lunar New Year. May the year of Ox brings good health and good fortune to all of us. Happy Ox Year :)

Friday, January 23, 2009

2008 Year End Bonus vs Global Financial Crisis

If you received your 2008 year end bonus from your employer, you are considered lucky. If you get your salary increment and are still currently employed, you are lucky too. Many large corporate firms worldwide are laying off redundant staffs. Some are reducing the working hours and some are closing down certain outlets/offices/branches. Blame the global financial crisis.

Earlier this week, local new papers reported that there will be about 45,000 job loss after Chinese New Year (CNY) 2009. These 45,000 are mainly workers from factories and manufacturing companies which had to close down due to low product demand from western countries, especially United States. Yesterday, NST Online reported that there will be another 50,000 to loss job after CNY 2009. These 50,000 are civil service contract staff. The reason is 'it called on the government to be more sensitive to their plight'.

It's sad to know there will be about 95,000 job loss after CNY. Especially for those who are not prepared for such situation. That's why every working adult must have a sufficient emergency fund. At least the emergency fund can bring foods on the table until the next employment. It's never too late to prepare one.

Let's hope everyone will be able to face the global financial crisis with positive thinking and positive attitudes.

Tuesday, January 20, 2009

Chinese New Year 2009 - Are You Spending Less?

Chinese New Year 2009 is just around the corner. Everyone is hoping the new year of Ox is bringing along a bullish year ahead.

Personally, I feel Chinese New Year (CNY) for this year is quite quiet compare to the years before. Not many crowds at the shopping complex. Not much CNY goods and delicacies at the supermarket. Didn't hear much firecrackers and fireworks in the air. Even up to today, our office only received 3 CNY cards. We used to received between 15-30 CNY cards for the past few years. The CNY business also slower this year. Based on today's The Star Online, 2 possible reasons are the China product safely issue and the global economy uncertainty.

Me and my family also spending less this year. We are learning to spend on those items which are necessary and healthy. We try to prevent wasting on foods and CNY goods. Based on past few years experience, we bought quite a lot of CNY goods and at the end, 10%-20% of the item ended in the dustbin. We also limit the purchase on imported delicacies especially those from China as we concern on the safety of those products. The safety issue has a deep impact on me as every time I pick up some goods, I would automatically check the origin of the products. Though the Health Ministry has been very stringent about foods imported from China, I still feel skeptical.

As for the world economy, earlier this week, the local papers published that they're possibility of 45,000 job loss after CNY. This is a scary news isn't? Indirectly these news are telling my conscious mind not so simply spend.

So, are you spending less for CNY 2009?

P/S: Let's hope for a meaningful, healthy and prosperous new year ahead.

Thursday, January 15, 2009

Understanding Consumer Attitude To Saving Survey - by Aviva

From Personal Money (Jan 2009 issue), I came to Aviva.com, world's fifth-largest insurance group and the biggest in the UK. Aviva is one of the leading providers of life and pensions products in Europe and have substantial businesses elsewhere around the world, including Malaysia.

I am very interested in their Consumer Attitude Survey - Understanding Consumer Attitude To Saving Survey which they conducted throughout 2004-2008. The survey covered more than 100,000 individuals from 25 countries including Malaysia. For the 2008 survey, it was based on interviews with 28,525 individuals in 25 different countries across Europe, Asia Pacific and North America.

Some of the interesting findings from the survey (Malaysian respondents):
  • 34% believe that 'Save or invest money regularly each month' is the most practical way to accumulate enough wealth to live comfortably in retirement compared to 29% believe 'Save or invest whatever money I can when I can' is the most practical way
  • 64% said that 'I am worried that I won’t have enough money when I retire to provide an adequate standard of living' and 55% regularly set money for use whey they retire
  • only 24% agree that they have enough savings/investments to cope with the unexpected
  • 40% wish that they had done something earlier to provide enough for their retirement
  • 47% feel that they have all the information they need to make well informed decisions about their personal finances
  • 67% rely mostly on partner, family, friends, colleagues/co-workers for advice on financial services
  • 37% think that the government will provide them with an adequate level of pension/retirement savings for their retirement
  • 65% think that it is the responsibility of the government to provide for the elderly
  • 43% would like to work either full time or part time after the usual retirement age

The survey is important to understand ourselves and our fellow Malaysian better. At the same time, it's time to think and plan ahead for a meaningful and wonderful retirement journey. You don't want to be old and broke, right?

You may read the complete survey here.

Monday, January 12, 2009

EPF @ KWSP Contributions Reduced To 8% - Part 5 - 22% Opted To Maintain Contribution Rate At 11%

Berita Harian on 6th Jan 2009 reported that only about 22% or 1.23 millions out of 5.64 millions active EPF members opted to maintain their contribution rate at 11%. The rest 4.41 millions members opted to reduce their contribution to 8%.

Most of the applications to maintain their contribution rate at 11% come from 3 states, namely Selangor, Kuala Lumpur and Johor. Out of 1.23 millions members who opted to maintain at 11%, about 56% come from Selangor, 28% from Kuala Lumpur and 14% from Johor.

Throughout the whole year, EPF believe there will be more applications coming in to chose to maintain their contribution rate at 11%. For those who wish to maintain their contribution rate at 11%, they will need to fill in Form KWSP 17A(AHL)-KHAS.

Personally, it's great to know that at least 22 out of 100 Malaysians care for their retirement fund. Let's keep building our retirement fund!

P/S: You may read the complete news here.

Sunday, January 11, 2009

Financial Fitness Test

Is yearly health screening test in your 2009 appointment list? If yes, perhaps you need to set another appointment for your financial screening test with your financial advisers. Or, you can check your financial screening test at Financial Fitness Test, a selftest from Agency Kaunseling dan Pengurusan Kredit (AKPK) or Credit Counseling and Debt Management Agency. By answering 11 simple questions, you will know how fit is your financial health. Remember to provide an honest answer for each question in order to get a more accurate result.

I hope you will have good results. If no, don't worry. It's never too late to improve your financial fitness. Do try it out!

Thursday, January 8, 2009

For Unit Trust Consultants - How To Convince Me (the investor) To Invest With YOU

Money is a very sensitive issue. Typical salesman is another scary object. When these 2 (Money & Salesman) combine, they become an even bigger scary object. I admit I don't like to be bothered by an unwelcome salesman. I just can't stand their unprofessional sales nagging habits and the way they 'talk more than what they deliver'.

It's the same with unit trust consultants. Some of them are typical salesman. If you're a unit trust consultant and you're interested to know how to convince me (the investor) to invest in your funds, you need to read the followings:

1) Honesty
Will you trust someone who is dishonest to care for you $$$? No, right? Be honest with yourself, with your company, and with the products (unit trust funds) that you're selling. I highly value honesty before I can trust you with my $$$.

2) Professional
Show to me that you're a professional unit trust consultants. Nowadays, your leaflets and hardcopy of fund information is not impressive anymore. I need more proof before I can invest with you. Perhaps bring along some investment related magazines or a laptop to show me online fund performance.

3) Experiences & self history
Share with me how long you've been with your investment company and why you're in your investment company. I prefer to deal with people who know where they're heading. I don't want they run away with my hard earned $$$.

4) Show to me how you can help me with my $$$
Tell me how you can help me to make my $$$ work harder for me. After all, this is all investment is about right? To make more money from existing money? Perhaps can show me how your unit trust fund will be able to help me to reach my financial goal faster compare with my current investment method. How about some graph or statistics to show me the difference between my current investment with your funds? A picture say a thousand words, right?

5) Consider for long term relationship
Don't be missing in action after I invested RM10K with you. I appreciate if you can update me from time to time on the market trend. Or perhaps can share with me some news on newly launched funds. Or even can ask me - "Anyone else that you know which might need my help to help them to reach their financial goals earlier?" I don't mind to share the good stuff with friends and family.

Below are are some 'sensitive words and phrases' which you must try to prevent when introducing your unit trust funds to me:
1) "I SURE you will make money"
say instead: "I can assist you to achieve your financial goals"
I remember a unit trust consultant told me "I SURE you will make money. If you didn't make money, I will compensate you for your loss". She sound very confident, but too confident can be dangerous. I am not looking for a compensation, I just want to grow my money. Furthermore, no one can guarantee the investment. In the end, I didn't invest with her at all, though every now and then, she still ask me about it.

2) "I didn't earn from selling to you"
instead: Be honest and say 'I am helping you to make more money. It's fair for me to earn a small percentage for my assistance/professional help". I don't believe you didn't earn from selling to me. The question is whether it's worth or not for me to pay you to take care of my investment. So, make sure you help me to monitor my funds.

3) "Your existing Fund X from Unit Trust X (X = competitor) is not good, don't invest in fund X. Invest in my funds"
You are not from Unit Trust X company. You don't know much about fund X. How can you say Fund X is not good? instead tell me the differences between fund x and your funds. By saying so, you're humiliating me by saying that I made a wrong decision by investing in unit trust X. Encourage me to find more information on fund X and proof to me that it's not worth to invest in fund X.

Personally, to be successful in unit trust industry, the unit trust consultants or advisers must always remember that their main role is to help their client to make more $$$ and to achieve their client's investment goals. Must place your clients goals ahead your own goals (sales commission and other sales incentives). If you're able to do so, you won't be surprised when your potential customer call you, instead of you approaching them.

P/S: Perhaps the inspiring story form Millionaires Sisters will give you more guidelines how to convince me to invest in your funds. Good Luck!

Tuesday, January 6, 2009

The Money Tree Formula by Robert G. Allen

I love readings and I love financial books or articles, especially those with practical advice. Today, while I was reading some articles on Yahoo website, another article, The Money Tree Formula - by Robert G. Allen got my attention. With a click, I was glued to the website until I reached the end of the article. When I read the first part of the article, I knew I had read it somewhere not long ago. But, I just can't recall where I read it before. Anyway, I still enjoy every part of my second reading from http://www.money3.com.my/, a local financial portal. You can reach The Money Tree Formula article here. It's a long article but it's worth every second of your reading. I agree when he said we must have multiple sources of income to secure our financial future. Here is what he means by M.o.n.e.y T.r.e.e. :

M - Multiple Streams of Income
O - Outstanding
N - Nothing Down
E - "Employee-resistant."
Y - "Yield"

T - Trend and Timing
R - Residual
E - Essential to Everybody Everyday
E - Enthusiasm

Do read the articles yourself for his complete M.o.n.e.y T.r.e.e. formula.

Robert G. Allen is a successful financial writer and one of the most influential investment advisors of all time. You can find more information about him here and here. Among his best selling books are Nothing Down, Multiple Streams of Income, How Ordinary People Make Extraordinary Money Online, Creating Wealth: Retire in Ten Years Using Allen's Seven Principles of Wealth, and The Road to Wealth.
Hope you'll find his article inspiring too. Happy reading!

Sunday, January 4, 2009

Unit Trust Investment - 11 Concerns The Novice Should Know

If you read my previous post on 7 Factors you should consider before investing in unit trust, you might roughly have the idea whether unit trust investment is right for you. Or perhaps, you are taking the factors into deep consideration before making your decision on unit trust investment. Apart from the 7 factors, there are other things a novice unit trust investor should know. I wish to share the 11 most important concerns:

1) Familiarize yourself with investment terms
Every field has its own language. It is the same with investment. I learned most of the terms from my readings materials and also from MAAKLMutual website. By learning the investment terms, it will enhance your investment knowledge and enable you to make wise investment decision.

2) There is no guarantee returns
Unit trust is unlike fixed deposit placement. For fixed deposit, you will get a guarantee return according to the term you have agreed when you deposit your cash. For fixed deposit, if you placed a principle of RM10k for a year at interest rate of 3.5% , after maturity you will have RM10350 (RM10k + (3.0% x RM10k)). For unit trust, the return depends on the performance of the fund and current share market prices.

3) Fund switching
If you are not satisfied with your current fund performance, you may switch to a different fund. Do check for the fees involved in fund switching.If there is a fee involved, do calculate and see if it is still worth for your to perform the switching.

4) Cooling-off period
When I was investing unit trust for the first time, I was not aware that there is cooling off period for first time investors. If you are personal investor and investing for the first time with a specific unit trust company and you decided to withdraw your investment, you may do so within certain business days from your investment date. For MAAKLMutual and Public Mutual is 6 business days.

5) Past performance of a fund does not reflect the future performance of the same fund
Some unit trust consultants might use the past performance of existing funds to convince investors to invest in particular funds.Though it can sometimes produce the same excellent performance but, always bear in mind that past performance does not reflect the future performance of a particular fund. There are so many factors involved to determine the performance of a particular funds. And the factors is changing from time to time.

6) No one can time the market
The market consist of complicated investors, fund managers, giant corporate leaders, political stability, consumers and many other factors. Since there is so many factors involved, so no one can time the market. Be alert to the current economy situation and invest wisely to get the most from unit trust investment.

7) Investment through EPF @ KWSP
Other than investing through your hard earned cash, EPF @ KWSP allows its member to invest certain amount from account I in selected funds.You may check how much you can investment from Public Mutual website. Just enter your current age and your current EPF savings, you'll know how much available amount you can invest in selected funds.

8) Earnings from unit trust fund
Unit trust brings profits in 2 ways. The first is from dividend or distribution. Depending on the funds, investors will received certain dividend per unit.The second is from the increase of Net Asset Value (NAV). Different funds might have different priority. Read the prospectus for more details.

9) Read the prospectus
It is wise to read the prospectus to understand your fund before you invest in one. The prospectus will tell you more about your fund managers and how your money will be invested to make more money. It is like a contract between you and the fund you purchased.

10) Be patience
If you want quick money, unit trust is not the right investment plan for you. Allow a minimum between 3-5 years before you can see the returns from unit trust investment. Unit trust is more of a long term investment strategy.

11) Do your own homework
Don't depend 100% on your unit trust consultant. Improve your financial literacy. Learn more on investment. Read the prospectus (Again?) before you make your investment decision. No one know you better than your own self. Thus no one can help you unless you help your own self.

I learned the above concerns the hard way. Most of them, I learned after I placed my first unit trust investment. I hope to be able to share the concerns with you so that you are aware of your rights. Let's make the most from our investment. I am still learning. Feel free to add more concerns to the list above. Happy Investing!

Thursday, January 1, 2009

2009 Wishes For The World

Today, I read from NST online that there are glimmer of hope for 2009. Yes, we need more of this kind of news to start a new year. Although most of us agree that it will be a challenging year ahead, deep in our heart we are hoping for a better year compared to 2008 right? I have the following global wishes for 2009:
  • The global economy will recover very soon. For the past few months, we can see it everywhere - news on gloomy world economy (the newspapers, the Internet, the radio, the television, the magazines). From US to UK, China, Japan, Hong Kong, Singapore... and we in Malaysia started feel the effect too.

  • Less retrenchment and companies closing down. This is the effect of global economy crisis. What were previously known as international strong corporate companies, now is shaking and trying to reduce operational cost by laying off employees. Some giant companies even opt to stop operation and closing down due to poor world demand. Let's hope there will be enough food for everyone on the table.

  • Peace agreement for those countries involved in war so that there will be less life taken away from loved ones. For some unfortunate countries, it's a never ending war for them. Whether it's because of religions or controlling the world economy, it's war everyday. There must be an end to this suffering.

  • Greener world so that we all can live in a cleaner and healthier environment. After all, we are here to take care and at the same time enjoy our temporarily stay here right? We also hold the responsibilities to ensure that we hand over a better Earth if not the original Earth to our children.

  • A little bit more LOVE in every one's heart. Yes, LOVE. Love yourself, your partner, your children, your parents, your families, your friends,your colleagues, your boss, your career, your neighbours, your countries, and finally love our only living planet, the Earth.

Let us pray for a better year ahead for everyone. Happy New Year 2009!