Unit Trust Investment

Learn From William D. Gann

2011-12-06T07:19:00.000-08:00

William D. Gann was one famous investment guru. Born in 1878 and died in 1955, he had witnessed the great depression, the World War 1 and World War 2, the ups and the downs in the stock market for 50 years! He invented the famous Gann Theory – a time cycle based technical analysis.

He could make prediction of the stock or commodity with the exact price on the exact date! For example, in 1909 Gann made the prediction that the price of wheat would go to $1.20 by 12 noon on September 30th. He also successfully predicted the massive stock crash in 1929.

Gan believed knowledge is power!

He said:

"The difference between success and failure in trading in commodities is the difference between one man knowing and following fixed rules and the other man guessing. The man who guesses usually losses. Therefore, if you want to make a success and make profits, your objective must be to know more; study all the time; never think that you know it all."

We must stay objective, acquire the right knowledge, stay humble and always have the quest to learn more.

With these positive attitude, success is on the way!

Pay More Be Happy

2011-12-06T06:53:00.000-08:00

Overpay your loan if you can.

Based on taking out a 25-year home loan of RM100,000, overpayments of RM300 a month would pay it off 12 years early. You would pay back RM123,084 rather than RM146,988 – a saving of RM23,903.

Investing Advice From Jim Rogers

2011-11-25T23:28:00.000-08:00

This is the best advice for trading from Jim Rogers which I think should be shared.

Jim Rogers: I would say one lesson we all need to learn is that after you’ve had a great success, you really should be very worried. Let’s say you sell and say you’ve made 10 times on your money. You should be extremely worried. You should close the curtains, not read, look at the TV, or anything because that’s when you’re full of hubris, arrogance, confidence. You think, “God, this is something easy,” and you’re desperate to jump around to something new. You should do your very best to avoid making another play until you’ve calmed down a lot. Just wait. It’s a very dangerous time for any investor.

Likewise, if you take a huge loss and there’s a big panic and things are dumped on your head because you’re overextended or wrong for whatever reason, calm down, don’t say, “I’m never gonna invest in stocks again or commodities or whatever.” That’s the time you really should be willing to invest again if you can gather together some capital money. The investments can be terribly emotional. You have to figure out a way to control your emotions and deal with your emotions if you’re going to survive in these markets.

My advice is that, most of the time, most investors should do nothing. They should look out the window or go to the beach. You should wait until you see money lying in the corner and all you have to do is go over and pick it up. That’s how most investors should invest. The problem is we all think we need to jump around all the time and be jumping in and out and that’s not good.

We think we have to have investments. No, we don’t. If I said you could only have 25 investments in your whole lifetime or if there was some way to limit you to 25, you would be extremely careful. You wouldn’t be jumping around doing all sorts of strange things. Patience is what most investors need to learn. You don’t have to be doing things all the time. Most of the time the best thing is to do nothing. You just sit with what you have as an investment and let it ride or sit and wait until you see someone sitting in the corner.

Most of the time – unless you’re a short-term trader and great at it. I’ve known some spectacular short-term traders. But for most investors, unless you’re one of those guys, then you should just do nothing. Do nothing. If you’re an investor, do nothing except re-examine what you have, and if you’re not investing, just continue to look until you find something.

Intrinsic Value

2011-07-07T00:35:00.000-07:00

Any great company is a bad invesment if the price is high enough. We have to distinguish between a company and a stock.

A company may be great because it has excellent management and unique service, but it may be a bad investment if the stock fully reflects this information.

Alternatively the stock of a troubled company could be a great buy if the price more than discount all the problems.

Great buying opportunities sometimes arise when investors overreact to bad news. They more than discount all the pessimism about a company and the stock price falls below its intrinsic value.

Cheap enough, any company is a buy. Costly enough, any company is a sell. The trick is finding what a company is worth. Whether a company is good or bad, the stock is good only if it’s selling or less than it’s worth.

The trick is to find what the stock is worth that is the intrinsic value. Discounted cash flow is one of the method.

Be Happy

2011-07-05T00:58:00.000-07:00

God won't ask what kind of car you drove, but He'll ask how many
people you helped get where they needed to go.

God won't ask the square footage of your house, but He'll ask how many
people you welcomed into your home.

God won't ask about the clothes you had in your closet, but He'll ask
how many you helped to clothe.

God won't ask how many friends you had,
but He'll ask how many people to whom you were a friend.

God won't ask in what neighborhood you lived, but He'll ask how you treated your
neighbors.

God won't ask about the color of your skin, but He'll ask
about the content of your character.

God won't ask why it took you so
long to seek Salvation, but He'll lovingly take you to your mansion in
Heaven, and not to the gates of hell.

Motivate Yourself To Be Resilient

2011-03-12T19:25:00.000-08:00

Plato once said, “The first and the best victory is to conquer self.”

Resilience is a remarkable characteristic of a successful people. Resilience is the ability to bounce back from failure; use mistakes and failures as learning opportunities.

“The man who can drive himself further once the effort gets painful is the man who will win.” Roger Bannister.

People with resilience demonstrate a winning character. They never admit defeat. They are highly motivated to carry on with life despite facing setbacks.

“The spirit, the will to win and the will to excel are the things that endure. These qualities are so much more important than the events that occur.” Vince Lombardi.

People with resilience are positive minded and proactive, self-starters and able to visualize themselves to control and decide their destiny.

“It was courage, faith, endurance and a dogged determination to surmount all obstacles that built this bridge.” John J. Watson.

Criticism

2011-01-28T06:54:00.000-08:00

How To Overcome Criticism

Brian Tracy said, “Almost all unhappiness in life comes from the tendency to blame someone else.”

To the wise man, criticism is good, whether it is constructive or destructive. In other words, criticism has an intrinsic quality.

“Most of us would be upset if we were accused of being silly, but silly comes from the old English word ‘seilig’ and it’s literal definition is ‘to be blessed, happy, healthy and prosperous.” Zig Ziglar.

Never react to criticism, instead response to it. How to response to criticism?

O Ascertain its validity and response accordingly and positively.
O Evaluate the criticism and explain if it is true.
O Don’t get defensive, after all we are not perfect. We care just human.
O Don’t take criticism personally. Focus on what had been said and not on who said it.

“Never letting the competition defines you. Instead, you have to define yourself based on a point of view you care deeply about.” Tom Chappel.

“If people like you they’ll listen to you, but if they trust you they’ll do business with you.” Zig Ziglar.

Amanah Saham Bumiputra Performance

2010-11-16T17:23:00.000-08:00

ASB is an income equity fund with a fixed price per unit at RM1.00. The maximum investment for each adult eligible individual is limited to RM200,000. Since launched in 1990, ASB is one of the best performing fund under PNB management. The table below is the historical dividend rate since the fund was launched in 1990.

Year Dividend Bonus Total
1990 8.00 6.00 14.00
1991 8.50 4.00 12.50
1992 7.50 5.00 12.50
1993 9.00 4.50 13.50
1994 9.00 4.50 13.50
1995 10.00 3.00 13.00
1996 10.25 3.00 13.25
1997 10.25 1.25 11.50
1998 8.00 2.50 10.50
1999 10.50 1.50 12.00
2000 9.75 2.00 11.75
2001 7.00 3.00 10.00
2002 7.00 2.00 9.00
2003 7.25 2.00 9.25
2004 7.25 2.00 9.25
2005 7.25 1.75 9.00
2006 7.30 1.25 8.55
2007 8.00 1.00 9.00
2008 7.00 1.75 8.75
2009 7.30 1.25 8.55

Excellence And Determination

2010-11-16T17:13:00.000-08:00

Aristotle once said, "We are what we repeatedly do. Excellence, then, is not an act, but a habit."

But excellence can only be possible with dedication and determination.

"The difference between the impossible and the possible lies in a person's determination." Tommy Lasorda, a former Major League baseball manager

Amah Syndrome

2010-11-04T06:08:00.000-07:00

Star dated 4.11.2010

According to Andrew Sheng in his book titled From Asian To Global Financial Crisis, there were two main indicators to irrational exuberance during the super bull run in 1993. The first was the amah (domestic maid) syndrome. We need to be careful when amahs got excited about the stock market. This was because they did not know what they were buying and would always be the last to sell. The second indicator was when businessmen began to speculate stocks in the stock market. This was because they might neglect their businesses and use some of their cash for speculation.

Comparing our current market situation with the 1993 bull run, there are certain similarities that we see, such as strong economic growth, ringgit appreciation, inflow of foreign capital and ease of credit. However, our local retailer participation is yet to get boiling, which may be the last push factor towards the bull run. Hence, once the participation of the local investors starts to get heated up, together with more inflow of foreign fund, that may be the signs of the market heading for a ‘mini’ super bull run.

● Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting.

Housing Loan

2010-11-03T16:57:00.000-07:00

News On 4th November 2010

Bank Negara is imposing with immediate effect the maximum loan-to-value (LTV) ratio of 70% for the third house financing facility taken by a borrower as it seeks to curb "excessive investment and speculative activity in the residential property market".

The central bank said on Wednesday, the move was expected to moderate the excessive investment and speculative activity in the residential property market which has resulted in higher than average price increases in such locations.

Quit Smoking

2010-10-16T03:01:00.000-07:00

You know smoking is not healthy, yet you smoke. It is easy to tell yourself to quit yet you never stop. Mark Twain even said, “To cease smoking is the easiest thing I ever did. I ought to know because I’ve done it a thousand times.”

Smoking is killing yourself slowly and willingly. “When you smoke cigarettes you’re likely to burn yourself to death; with chewing tobacco the worst thing you can do is drown a midget.” Fred Allen.

You save money when you quit smoking. “I have seen many a man turn his gold into smoke, but you are the first who has turned smoke into gold.” Elizabeth I, to Sir Walter Raleigh.

Why you smoke? E.R. Bulwer Lytton said, “A good cigar is as great a comfort to a man as a good cry to a woman.”

“A cigarette is the perfect type of a perfect pleasure. It is exquisite, and it leaves one unsatisfied.” Oscar Wilder.

“I kissed my first woman and smoked my first cigarette on the same day. I have never had time for tobacco since.” Rudyard Kipling.

Cut Costs With Laughter

2010-10-07T01:48:00.000-07:00

Motivate Yourself To Laugh

“People who laugh actually live longer than those who don’t laugh. Few persons realize that health actually varies according to the amount of laughter.” James J. Walsh.

Laughing makes you feel good. Laughing is the best medicine to your heart and it is free. Laughing increases the blood flow in your arteries.

Professor Micheal Miller said, “Given the result of our study, it is conceivable that laughing may be important to maintain a healthy endothelium and reduce the risk of cardiovascular disease.”

“Up to 80 muscles are used during a hearty laugh, the blood pressure rises, the heart beats faster and blood oxygen levels increase.” Norwegian University Of Science.

“Be helpful. When you see a person without a smile, give him yours.” Zig Ziglar.

Laughter not only keeps the heart healthy but also boosts one’s immune functions and helps reduce stress.

“The kindest thing you can do for the people you care about is to become a happy, joyous person.” Brian Tracy.

Watch your diet, do exercise and add a good dose of laughter to live longer and happier.

“You grow up the day you have your first real laugh – at yourself.” Ethel Barrymore.

DXN Berhad - With Great Potential

2010-09-25T20:35:00.000-07:00

For a number of years, the multilevel marketing company used its operating cash flow to diversify into unrelated businesses, from property development and a travel agency to the timber trade and biodiesel production.

In 2008, they made the decision to focus on the MLM business. The transformation has reinvigorated the group’s bottom line. It made a record net profit of RM28.4 million for FY2010 ended Jan 2010, which improved further into a record quarterly net profit of RM10 million in its 1Q2011 ended May 31, 2010.

That was helped by the use of operating cash flow to reduce borrowings. It reduces its net borrowings to RM17.3 million in 1Q from RM31.3 million in the preceding quarter. The group could turn net cash by year end.

All its unrelated businesses have been wound down and losses provided for – except for ongoing property development project in Alor Star. It does not plan to scale up this division. Operating cash flow from the MLM will be ploughed back into the MLM or distributed as dividends.

In 1Q2011, besides savings in interest costs, earnings also grew through the group’s two pronged strategy of opening new markets and broadening its product range

Financial position as at 31 May 2010.

NTA RM0.89
Cash RM43.46 million
Borrowings RM60.88 million

Share Capital RM60.191 mil
Share Premium RM1.78 mil
Treasury Share (RM7.911 mil)
Retained Earning RM154.37 mil
Shareholders Fund RM202.97 mil

Non Current Asset RM119 mil
Current Asset RM188 mil
Current Liabilities RM94 mil
Long Term Liabilities RM6.8 mil

1Q EPS RM0.0445 ( Corresponding 1Q EPS RM0.0216 )
1Q Net Profit RM10.076 million
Projected Annualised EPS RM0.1772
Projected Annualised profit RM40 mil

Number of shares 240.764 million
Share price on 24.9.2010 RM1.13

Look out for the announcement for the 2nd quarter by October 2010. If the EPS is the same or more, then this counter is good to invest in. Recently the company had fix its dividend policy to pay at least 50% of its profit as dividend on a quarterly basis.

If the above profit is maintained, at least RM20 million will be paid as dividend, giving a yield of about 8%.

Fair price RM1.70 ( 10 x projected EPS )

Motivate Ourself To Better Health

2010-09-25T20:15:00.000-07:00

“In health there is freedom. Health is the first of all liberties.” Henri Frederic Amiel.

Yes, health is more important than wealth. If you are wealthy, but not healthy, you will not be able to enjoy your wealth. If you are healthy but not wealthy, you can work hard to look for wealth.

Francois Rabelais once said, “Without health life is not life; it is not living life. Without health life is only a state of languor and an image of death.”

“Health is worth more than learning.” Thomas Jefferson, 3rd president of USA.

Health is wealth. Health is beauty. Take care of your health and make it as top priority in life. William Shenstone said, “Health is beauty, and the most perfect health is the most perfect beauty.”

“Strive to preserve your health; and in this you will the better succeed in proportion as you keep clear of the physicians, for their drugs are a kind of alchemy concerning which there are no fewer books than there are medicines.” Leonardo da Vinci.

Look after your health. Value your health to value your life. “Health is not valued till sickness comes.” Anonymous.

Money Mistakes

2010-09-25T20:00:00.000-07:00

Money Mistakes. How To Avoid Them

“Money is a huge deal in every one’s life. It has to be managed well, otherwise one would run the risk of having financial difficulties in the future” KH Tan, a financial planner.

What are the mistakes?

Not Budgeting
The root of financial problem begin with our failure to plan ahead and set financial goal. Budgeting is the first step of financial success. Budgeting enables one to manage his or her finances and be in control of his or her financial affairs.

Impulsive Spending
Wealth is commonly destroyed because of uncontrolled spending. One cent spend is one cent loss. Unrestrained spending can turn into habit of wastage and create mountain of debts.

Debt Bondage
Credit card is a useful tool but it can be a tool to accumulate debt too. In Malaysia, 1,656 were declared bankrupt in 2006 cause by credit card alone. Nationwide there are 3.2 million being declared bankrupt. According to Bank Negara in July 2010, 50% of credit card holders who had been declared bankrupt were below 30 years old.

No Saving
Locally renowed millionaire, Azizi Ali said “The one essential step to achieving financial independence is learning how to save.” One of the habits of a millionaire is to consistently saving a portion of your income.

No Sound Investment
Conventional saving alone cannot grow one’s wealth because interest rate do not compensate well due to inflation. Therefore, it is necessary to put one’s money in other investment instrument like stocks, bonds and unit trust.

Vitrox Berhad

2010-09-24T04:36:00.000-07:00

Vitrox-At An Inflection Point (CIMB )

This vision inspection equipment maker is on the cusp of explosive growth, having successfully executed its business re-engineering. It is well-placed to tap into the vast revenue opportunity of US$1.0bn-1.2bn p.a. presented by its new area of manufacture as it rides on its association with Agilent. Vitrox (VITRO MK, Not Rated) will benefit from Agilent’s technology, channel partners, supply chain and outsourcing, and shorter product development cycle.

The key drivers are i) its takeover of Agilent’s market share for AOI and AXI machines, ii) the drive towards more automated vision inspection, iii) a wider product offering, and iv) margin expansion possibilities.

Vitrox is trading at 5.5 x FY11 P/E, a 25% discount to its peers due to its smaller market cap, lower ROE and dividend yield. If we were to apply a 20-30% P/E discount to its peers on FY12 EPS to factor in execution risks, potential shortfall in market share targets and Vitrox’s smaller size, we would arrive at a valuation of RM1.83-2.09, which offers upside of 61-83% from current levels. Vitrox is at an inflection point, buoyed by its new AOI and AXI machines which have been gaining rapid acceptance

Posted by Smartbiz

Financial position as at 30 June 2010

NTA RM0.41
Cash RM28.9 mil
Borrowings RM0.00

1Q EPS RM0.0288 ( Profit RM4.895 mil; Turnover RM12.98 mil )
2Q EPS RM0.0648 ( Profit RM9.874 mil; Turnover RM26.12 mil )
Projected Annualised EPS RM0.2232
Projected Annualised net profit RM34 mil

Share Capital RM15.5 mil
Share Premium RM1.22 mil
Treasury Share (RM1.022 mil)
Retained Earning RM47.61 mil
Shareholders Fund RM63.3 mil

Non Current Asset RM16.09 mil
Current Asset RM62.258 mil
Current Liabilities RM14.457 mil
Long Term Liabilities RM0.581 mil

Number of share buy back 2,714,700
Number of shares 155.5 million

Watch out for the announcement on its 3rd quarter profit. Good counter to invest since its earning is on an uptrend.

Fair price is RM2.20 ( 10 x its EPS if its performance is maintained )

Stock Market Is Full Of Opportunities

2010-07-19T08:35:00.000-07:00

“Hidden in troubles, lies the key to our magnificent opportunity.” Albert Einstein.

Be aware of opportunities. It comes in our life at the critical moment that we have to make major decision and this decision has far reaching consequences on our future direction of our life.

“We are told that talent creates its own opportunities, but it sometimes seems that intense desire creates not only its own opportunities, but its own talents.” Eric Hoffer.

Dr. Booker T Washington said, “I have found that success is measures not so much by the position attained in life as by the obstacles which have been overcome in attaining that position.”

Learn to differentiate between genuine opportunities that may disguise as something good. Give yourself time to ponder and allow your instincts to reason and make decision. Take advice from friends you trust and beware of friends with vested interest.

“America is only another name for opportunity.” Ralph Waldo Emerson.

Mr Warren Buffett Taught Peter To Fish

2010-07-09T07:20:00.000-07:00

The son of billionaire investor Warren Buffett has an old-world spiritual message for today's money-rich parents: teach your children values and do not give them everything they want.

Musician and now author Peter Buffett said “Economic prosperity may come and go; that's just how it is," he writes in the book. "But values are the steady currency that earn us the all-important rewards."

Look At Your Self - Uriah Heep

2010-07-09T07:03:00.000-07:00

A young couple moves into a new neighborhood. The next morning, while they are eating breakfast, the young woman sees her neighbor hang the wash outside.

That laundry is not very clean, she said, she doesn't know how to wash correctly. Perhaps she needs better laundry soap.

Her husband looked on, but remained silent. Every time her neighbor would hang her wash to dry, the young woman would make the same comments.

About one month later, the woman was surprised to see a nice clean wash on the line and said to her husband: "Look! She has learned how to wash correctly. I wonder who taught her this."

The husband said: "I got up early this morning and cleaned our windows!"

And so it is with life: "What we see when watching others depends on the purity of the window through which we look. Before we give any criticism, it might be a good idea to check our state of mind and ask ourselves if we are ready to see the good rather than to be looking for something in the person we are about to judge. "

Advice From Mr Warren Buffett

2010-07-09T06:57:00.000-07:00

"The power of unconditional love. I mean, there is no power on earth like unconditional love. And I think that if you offered that to your child, I mean, you’re 90 percent of the way home. There may be days when you don’t feel like it — it’s not uncritical love; that’s a different animal — but to know you can always come back, that is huge in life. That takes you a long, long way. And I would say that every parent out there that can extend that to their child at an early age, it’s going to make for a better human being."

Competence....Who Are You? The Who !!!!!

2010-07-04T08:02:00.000-07:00

“The day you stop learning is the day that you start decreasing your rewards and start suffering from frustration and lower levels satisfaction.” Brian Tracy.

Competence as defined in Collins Cobuild dictionary as, “is the ability to do something well or effectively.” Someone who is competent has the ability, knowledge and skill to do something in an efficient and effective way.

“Formal education will make you a living; self-education will make you a fortune.” Jim Rohn.

A PhD in engineering does not automatically make you a competent engineer. You must have the knowledge and the practical skills to be called competent.

Practice makes you competent. Vash Young said, “Any experience can be transformed into something of value.”

Don’t take shortcuts. Master your jobs and you will be the master of your destiny in the corporate world.

“Feed your mind with mental protein, not mental candy. Read, listen to and watch positive uplifting material.” Brian Tracy.

A Reminder - Walking For Exercise

2010-07-04T07:12:00.000-07:00

Exercise must be something that you enjoy doing, NOT something that you must do. One of the most practical and enjoyable exercises is WALKING.

Charles Dicken once said, "Walk and be happy, walk and be healthy. The best of all ways to lenghten our days is to walk, steadily and with a purpose."

The benefit of walking were revealed in a Health Insurance Study of 110,000 people in New York City. At the end of the time, 41% of the nonwalkers were dead, while only 23% of the walkers were.

Walking is as essential to the human body as breathing. It is a muscular symphony, where all the muscles and parts of our body moves as we walk.

Have positive attitude. A lively fresh outlook is essential for enjoyable living at any age.

Mark Twain said, "Whatever a man's age he can reduce it several years by putting a bright-coloured flower in his buttonhole."

High Determination Brings Success

2010-07-04T02:39:00.000-07:00

Thomas Edition once said “The three great essentials to achieve anything worthwhile are first, hard work, second, stick-to-itiveness, third, common sense.”

Determination is the quality of being firmly committed to doing something.

“There is nothing in the world like the devotion of a married woman. It’s a thing no married man knows anything about.” Oscar Wilde.

Determination gives strength of purpose to everything you do. You decide your own destiny. “Take control of your destiny. Believe in yourself. Ignore those who try to discourage you. Avoid negative sources, people, places, things and habits. Don’t give up and don’t give in.” Wanda Carter.

“Failure will never overtake me if my determination to succeed is strong enough.” Og Mandino.

“The only limits to the possibilities in your life tomorrow are the ‘buts’ you use today.” Les Brown.

My Simple Investment Rule Is Working

2010-06-20T21:48:00.000-07:00

My investment rule is simple, "Just Buy Index Fund" However the timing of buying and accumulating must be at the time when the index is at its lower point. Sell when the index is at a reasonably high point to realise your profit.

Do you have the patience to pay yourself a return of 100%?

Two of Mr Warren Buffett's secret on investment:

“By periodically investing in an index fund, the know nothing investor can actually outperform most investment professionals.”

“A low cost index fund is the most sensible equity investments for the great majority of investors. My mentor Ben Graham took this position many years ago and everything I have seen since convinces me of its truth.”

EKUINAS

2010-06-20T05:25:00.000-07:00

EKUINAS ( Equity National Berhad ) was set up by Malaysian government with special emphasis to invest in high potential medium sized companies to be supported to become champion and leaders in their respective sectors. PM said on 10.6.2010.

The first company EKUINAS invested recently was Tanjong Offshore Berhad.

BE A WINNER.

“Winning isn’t everything but wanting to win is.” Vince Lombardi.

Have you ever asked yourself, “Am I the high achiever type?” Do you crave to be the best and satisfied with what you have achieved so far?

Remember, it is you who can set the limits and parameters on the level and type of achievement you want. Only you set your own boundaries of achievement and success. “I am a great believer in luck, and the harder I work, the more I have of it.” Stephen Leacock.

Being achievement oriented is the most laudable characteristic. Being a high achiever type is one who is highly motivated, who are goal focused and who knows that he can achieve his dream.

“No man had ever a defect that was not somewhere made useful to him.” Emersion.

“Kites rise against, not with the wind. No man ever worked his passage anywhere in a dead calm.” John Neal.

May Be This Is The Time

2010-05-25T05:39:00.000-07:00

The stock market is on the down trend. But hei don't be disheartened. In every diversity there is always an opportunity. I am looking forward for the market to go down further. This may be the chance for us to make a killing.

Public Index Fund is trading at RM0.6358 as at 25th May 2010. Looking forward for the price to go down to RM0.45.

Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.” John Quincy Adams

Persevere is to continue to do something in spite of difficulty. The best way to handle tough responsibilities is to persevere. All new assignments at the beginning are difficult but perseverance can make it a success.

“O’ the mass of arms, the brilliant leadership, the courage and the magnitude of the ancient armies of Greece, combined to conquer the city of Troy; all that, and ten years of perseverance.” Hipponax, The satirist.

Top job demand high responsibility. Unless we persevere, we cannot maintain the top job all the time.

“The ocean of possibilities is enormously inviting, yet terribly threatening. For most of us the problem is not a lack of potential, it’s a lack of perseverance; not a problem of “having the goods” but of “hearing the bad”. Jay Strack.

Louis Pasteur once said, “Let me tell you the secret that has led me to my goal. Mt strength lies solely in my tenacity.”

Understanding Human Needs

2010-05-22T02:24:00.000-07:00

“Treat people as if they were what they ought to be and you help them to become what they are capable of being.” Johann W. Von Goethe.

Understanding human’s needs is the key to motivation. We have to combine common sense, understanding of human psychology and sensitivity to human’s feeling when dealing with motivating a person.

“If you make the obvious effort to be accommodating, sympathetic, and kind, business will transpire, and deals will be made; profits and goals will be realized.” Letitia Baldridge.

Money is a powerful motivating factor but job satisfaction, job enrichment, security, social esteem, trust and responsibility and opportunities for achieving excellence are equally important.

“There’s only one thing money won’t buy, and that’s poverty.” Joe E. Lewis.

Balance both these factors to achieve maximum motivation.

Opportunity In Adversity

2010-05-20T00:14:00.000-07:00

Public Index Fund is trading at RM0.6537 as at 21st May 2010. For those of you who have a medium to long term investment horizon, it is about the right time to draw your EPF and buy unit trust.

I hope the price will goes down further so I can start buying again. Please read on my write up on the advantage of Ringgit Cost Averaging.

"A habit cannot be tossed out the window, it must be coaxed down the stairs a step at a time." Mark Twain.

Amount You Need To Maintain Your Present Lifestyle

2010-05-19T21:42:00.000-07:00

Let say you are now having a take home pay of RM5,000 a month and with this amount you are financially confortable and happy. Not taking into consideration inflation and future value of money, all you need to have in your investment can be calculated as follows:

Let assume that you can invest in ASB or unit trust earning an average return of 10%. The amount of money you need a year is RM60,000 (RM5,000 x 12 months ). Therefore the amount of investment you need to invest is RM600,000 ( RM60,000 / 10% ). It is only after the first year you are allowed to draw RM5,000 a month. The caveat here is you have to wait for 1 year before you can pay yourself RM5,000 ( maximum ) a month. The principalhave to left intact all the time.

If you need RM10,000 a month, the amount invested is RM1,200,000. It is not impossible for a retired husbang and wife to come out with combined EPF of RM1.2 million.

Compound Interest Concept

2010-05-15T01:02:00.000-07:00

Compound interest concept can be explained by looking at how much you can get from RM10,000 initial investment after 20 years.

Using the compound interest formula, the value of a compound interest investment after ‘n’ interest periods is calculated as:

FV = PV( 1 + i )n

where:
‘FV’ = Future value after ‘n’ interest periods.
‘PV’ = Present value of Principal,
‘i’ = the interest rate applying to each period.
‘n’ = the number of interest periods (number of years for per annum computation)

Thus the future value (FV) of RM10,000 in 20 years:

When Interest rate is 10%

FV= RM67,275

When Interest rate is 15%

FV = RM163,665

When Interest rate is 25%

FV = RM867,362

In fact, an equity fund can give you 100% return in a year or it makes a loss of 99% in extreme bear market. If your portfolio can produce 15% return per annum consistently, that’s already fantastic.

Advantage of Ringgit Cost Averaging

2010-05-13T01:36:00.000-07:00

Say investor A

Invest in Fund A with the amount of RM 10,000, NAV RM0.2800, service charge is 5.5% (cash investment) or 3% (epf investment).
Amount goes into investment; 100/105.5 X RM 10,000. = RM 9478.67

Unit acquire; RM 9478.67 / 0.2800 = 33852.4 units.
Cost per unit; RM 10,000 / 33852.4 units = RM 0.2954

In the event of the market downturn; say NAV of Fund A is RM 0.1800.

Option 1,
(Without Averaging Down the Cost.)

Investor A has to wait for the NAV of Fund A to go up from RM 0.1800 back to RM 0.2954 to reach the break event point.

Option 2,
(Applying the Averaging Down Cost Approach)
Say investor B (invest same time as investor A)

Decided another cash investment of RM 10,000, at NAV RM 0.1800,
Amount goes into investment; 100/105.5 X RM 10,000 = RM 9478.67

Unit acquire; RM 9478.67 / 0.1800 = 52659.3 units.
Cost per unit; RM 10.000 / 52659.3units = RM 0.1899

Therefore, total amount invested; RM 20,000
Total units acquire; 33852.4 + 52659.3 = 86511.7 units.
Average cost per unit; RM 20,000 / 86511.7 units = RM 0.2312.

In the event the NAV of Fund A going up from RM 0.1800 to RM 0.2954,

1) Value of the investment of Investor A

33,852.4 units X RM 0.2954 = RM 10,000.00
Investor A only manage to get back his /her investment amount (provided if there is no dividend @ unit increase on the investment)

2) Value of the investment of Investor B

86,511.7 X RM 0.2954 = RM 25,555.56
Profit; RM 25,555.56 – RM 20,000 = RM 5,555.56
Therefore : % Net Profit = RM 5,555.56 / RM 20,000 = 27.78%. (the calculations exclude any dividend payment, if any)

Conclusion

By applying the Dollar Cost Averaging concept, the investor will acquire more units from the investment made during the market downturn, thus lower his cost per unit & enable him to earn more profits when the NAV of the fund going up.

Do You Know?

2010-05-12T01:33:00.000-07:00

Do you know that there are 3,548 people declared bankrupt because of credit card debts in Malaysia?

1,774 or 50% of them were below 30 years old. As at 30th March 2009, Malaysia's credit card debt amounting to RM23.3 billion.

Young urban Malaysian are actually managing debt rather than their finances. Cash flow to our financial well being is like our blood flow to our body. Any disruption to our cash flow will affect our success in life just like when if our blood is infected, we get sick.

Just like exercise is so important to our health, financial planning exercise is crucial to achieving our financial goals.

Be Humble In Investing

2010-05-09T02:22:00.000-07:00

By staying humble, we will at least have a chance to recognise and acknowledge a mistake, if and when we do make a mistake.

And when we do, it's utmost imperial that we correct our mistake(s) immediately and not hope and pray for the market to correct our mistake(s) for life is never always that kind to all of us.

Now if one is arrogant, would one ever admit that perhaps one is wrong in their stock selection?

"Only fools refuse to be taught. Wisdom calls out in a loud voice waiting to be heard." Proverbs

The Importance Of Timing In Investing

2010-05-04T06:24:00.000-07:00

If you believe me, it is true that “timing is everything” in investing strategy. It is even more true for politicians, actors, comedians, singers, and athletes. They all rely on timing as a key skill in their success. Putting yourself in the right place at the right time is a crucial part of the skill for some kind of success.

Successful investors create their own luck, take calculated risks, and put themselves in situations where they can take advantage of investment timing opportunities. Investment timing can make or break the investment opportunity. Many people have haphazardly entered the stock market at the wrong time and made very hugh losses or little profit.

The best investment advice is to continually develop your investment timing skills and be able to recognize opportunities as soon as they arise. Think laterally, broaden your perspective, and learn how to predict how local and world events will shape things financially. Then take calculated risks based on those factors. If you can get comfortable with this new kind of thinking, then you will benefit from investment opportunities that others miss.

A good case study is when I bought index linked unit trust fund when the market at its lowest and sold it when the market was high. I made a profit of 44% within 9 months. Now I am heavily invested in the same fund and hope to make another killing.

"What is being said is that the market makes all the decisions. Our only decision is to listen to the market and obey its signals. Always and without exception. Remember the market never lies. It is only we lie to ourselves." The Zen Of Trading

Investing In Public Index Fund

2010-05-01T22:22:00.000-07:00

I write to share with you the benefits of investing in unit trust that are manage by Public Mutual Berhad, a subsidiary of Public Bank Berhad as compared to investing in other type of investment instruments such as fixed deposit, Tabung Haji, Employee Providend Fund and Amanah Saham Bumiputra .

Why Public Index Fund
It is simply because Public Index Fund can potentially give an average return of 20% per annum as compared to Fixed Deposit ( 4% ), Tabung Haji ( 5.5% ), Employee Providend Fund ( 5.65% ) ans Amanah Saham Bumiputra ( 9% ).

My Investment Is The Proof
Friend, you may think I am making up stories but let me show you how much I get from investing RM113,200 in Public Index Fund. As at 30th April 2010 closing price, my investment value is RM139,870, giving a profit of RM26,670 which in turn giving a margin of 23.56%.

My average price is RM0.60. In year 2009 and 2010, Public Index Fund declared dividend of 7 cents and 5 cents respectively.
Just for your information, for every one (1) cent increase in the market price, my investment is making additional profit of RM2,027.40. Therefore the more units you have, the higher the quantum of profit you make. I advise you to withdraw as much as possible from your EPF account to take advantage of this investment opportunities.

Average Returns From Other Public Mutual Funds

10 Years 5 Years 3 Years
Public Index Fund 23% 26% 24%
Public Saving Fund 24% 29% 25%
Public Itikal Fund 21% 26% 25%

My Investment Strategy
My investment strategy is simple , “buy when low and sell when high” and that is why Public Index Fund is my choice. If you buy now at RM0.68, you may be able to make a gain or profit of RM0.32 for every units you purchase because the highest market price of PIX was at RM1.02 in November 2007 when the KLCI was at its peak of 1,500. Now the KLCI is 1,330.

KLCI index is supported by our government and fund managers . Public Index Fund invested in nearly all the 30 companies that are in the basket of KLCI index.
You don’t have to worry as I will monitor your investment and advise you when to buy and sell. If you are still not convinced, you may try investing RM1,000 first and see how it grows.

How To Invest
Investing in unit trust is easy. Minimum initial investment is RM1,000. You may either invest in cash or through withdrawing your EPF in account 1. All you need to do is to sign and have your thumb print on the form.

I conclude with what Confucius once said, “A journey of a thousand miles begins with the first step.” Take action now because procrastination is very costly. This is illustrated by the story of Tim and Tom.

Cost Of Procrastination

2010-05-01T06:23:00.000-07:00

The Cost Of Procrastination.

Collins Cobuild dictionary says if we procrastinate, we are slow to do something because we keep leaving it until later.

The root core of the term is from Latin - two Latin words "pro" meaning "forward, in favor of," and "crastinus" meaning "of tomorrow". Consequently, it clearly means putting forth or in favor of tomorrow.

Procrastination can be beneficial in some cases. Procrastination sometimes can prevent us from making some serious mistakes like we may not have enough information that we need to start up a project or it may not be the best time for us to get into business. If procrastination becomes advantageous in this way, then it accomplishes a good goal otherwise and in 95% cases – they are detrimental – they are real destiny killers.

The disadvantage of procrastination becomes more glaring in the investment world when we do not take immediate action to invest in the right product at the right time when the opportunity arises. Lost opportunities will definitely cost us money.

A case to show that procrastination cost us money is illustrated by the action of Tim and Tom. Tim started investing RM1,000 every year for ten years since he is 18 years old. He stop investing at the age of 27 and let his investment grow. Assuming at 10% compounded growth, at the age of 65, Tim received RM655,617.00.

Tom on the other hand waited 10 years after he was 18, then he invest RM1,000 a year for the next 38 years. He received RM441,536.00 when he reach 65.

Tim invested only RM10,000 and it multiplied 65-fold, while Tom invested RM39,000 and multiplied only 10-fold. Tom’s opportunity loss is RM214,081.00.

Five Ways To Become A Millionaire

2009-06-21T01:56:00.000-07:00

By: Brian Tracy

The way you think about money will determine how much of it you accumulate more than any other factor. Your attitude toward money affects your emotions and your motivations.The Five Ways to Become a MillionaireIf you are really serious about becoming wealthy, you will want to know the five main ways that fortunes are made in this country.

Own A Business

Number one, top of the list, top of the hit parade throughout the history of America, is self-owned businesses. It is entrepreneurship of all kinds, including in real EST ate. 74% of self-made millionaires in America, not only in this generation and in this century, but in the last century as well, come from self-owned businesses.

How Wealthy People Start OutThe great majority of wealthy people started businesses and built them from the ground up. In the 19th century, fortunes were built by people like Andrew Carnegie, Jacob van Astor, Thomas Edison, Commodore Vanderbilt, J. P. Morgan and others. In the 20th century, especially in the last few years, businesses and fortunes alike have been built by people like Bill Gates, Steve Case, Larry Ellison, Ross Perot and Sam Walton. Each of these people started with nothing and succeeded in building a business from scratch.

Work To The Top

Become a Millionaire Where You AreThe second major source of self-made millionaires in America is senior executives. Ten percent of the self-made millionaires in America are men and women who have joined large corporations and worked with those corporations for many years.

They rose to positions of seniority, were paid extremely well, given stock options, profit sharing and bon uses, and as a result of holding onto the money, they became millionaires.Success Pays Big RewardsMichael Eisner of Disney Corporation received a $126 million dollar bon us in a single year. Lee Iacoca of Chrysler Corporation was paid $26.7 million dollars as a bon us in a single year. It's not hard to become a self-made millionaire when you are making that kind of money.

Be A Professional

The Professional Road to WealthThe third source of self-made millionaires in America is doctors, lawyers and other professionals. Men and women who become very, very good at what they do and rise to the top of their professions are eventually paid, very, very well. The top five percent in every field earn 10 and 20 times as much as the average person in that field.

Be An Excellent Saleperson

Sell Your Way to the TopThe fourth major source of self-made millionaires in America are salespeople and sales consultants. Fully five percent of self-made millionaires are men and women who are the top salespeople in their fields. They never started their own businesses. They never went to college or university to get professional degrees. They just became very good salespeople for their products or services and were paid very good money.

The secret was that they then invested the money conservatively and held on to it. 99% of self-made millionaires come from these four categories: self-owned businesses - 74%; senior executive positions - 10%: doctors, lawyers and other professionals - 10%; and salespeople and sales consultants - 5%.

Other Ways

Other Ways to Get RichThe final one percent of self-made millionaires is made up of all the people in all other areas. This one percent consists of people who have made their money by inventions, in show business, in sports, through authorship of books and songs, lottery winners and inheritances. But these people make up only one percent of the total. The bottom line is that there are so many ways for you to become a self-made millionaire that it is almost impossible for you not to achieve this goal if you are really serious about it.

Take Action

Action ExercisesHere are two things you can do to put this information into action as soon as possible:First, decide what it is that you really enjoy doing and then throw your whole heart into doing it extremely well. There is a direct relationship between excellent performance and the kind of high income that leads to financial independence.

Second, be perfectly honest with yourself on an ongoing basis. Is what you are doing right now going to lead you to financial independence, or do you have to begin making some serious changes in your work and in your life? Whatever your answer, take action on it immediately.

Stock Market Motivational Quotes

2009-05-11T05:43:00.000-07:00

Thousands become millionaires, but millions become bankrupts in stock investment. Are you in the millions? Knowledge and experience is the perquisites in stocks trading. Learn from the gurus and give a thought to the following quotes:

Understand the risks in stock market. “Risk comes from not knowing what you are doing.” Warren Buffett.

Remember, never beat and outsmart the market. “The simple truth is that there are no ‘sure things’ in the market.” Bernard Baruch.

“If it goes up I buy it, if it goes down I sell it.” Mark Twain.

Study the market and work hard. “The odds are in your favour when you do your homework and work very hard.” Marty Schwartz. “The harder you work, the luckier you get.” Gary Player.

Trade and follow the trend. Never trade against the trend of the market. “The trend is the stairway to heaven.” Robert Krause.

Always preserve your capital. Warren Buffett said, “It is better to miss an opportunity than lose money.” George Soros said, “Survive first and make money afterwards.”

Define your trading plan and trade according to your plan. “It is the actual consistent execution of a well defined trading plan which has a positive expectance which makes profits.” Troy Stayman.

In stock trading, timing is very important. “The perfect speculator must know when to get in; more important he must know when to stay out and most important he must know when to get out and when he’s in.” Jay Gould.

The Determinant Of Success

2009-05-08T20:39:00.000-07:00

By Brian Tracy

Believe In Yourself

Perhaps the most powerful single factor in your financial success is your beliefs about yourself and money. We call this the Law of Belief. It says simply this: Whatever you believe, with feeling, becomes your reality.What Successful People BelieveWhatever you intensely believe becomes your reality. That we have a tendency to block out any information coming in to us that is inconsistent with our reality.

What we've discovered is that successful people absolutely believe that they have the ability to succeed. And they will not entertain, think about, or talk about the possibilities that they'll fail. They do not even consider the possibility of failure.

Positive thinking And Knowing

Positive Thinking Versus Positive KnowingYou always act in a matter consistent with your beliefs. The most important belief system you can build is a prosperity consciousness where you absolutely believe that you are going achieve your financial goals. We call this positive knowing versus positive thinking.

Positive thinking can sometimes be wishing or hoping. But positive knowing is when you absolutely know that no matter what, you will be successful.

Willpower

The foundation of willpower is another principle related to your beliefs is willpower. We know that willpower is essential to any success. Willpower is based on confidence. It's based on conviction. It's based on faith.

It's based on your belief in your ability to triumph over all obstacles. And you can develop willpower by persistence, by working on your goals, by reading the biographies of successful people, by listening to audio programs, by reading books about people who've achieved success.

The more information you take into your mind consistent with success, the more likely it is that you will develop the willpower to push you through the obstacles and difficulties you will experience.

Beat The Odds

Beat the Odds on SuccessRemember that success is rare. Only one person in one hundred becomes wealthy in the course of a lifetime. Only five percent achieve financial independence. That means that the odds against you are 19-to-1. The only way that you're going to achieve your financial goals is if you get really serious. To succeed, you must get serious. You must get busy. You must get active. You must get going. Remember, everything counts.

Resolve To Achieve

Resolve to Achieve GreatlySelf-mastery, self-control, self-discipline are essential for anyone who wants to achieve greatly. And control over your thoughts is the hardest exercise in self-mastery that you will ever engage in. See if you can talk and think about only what you desire and not talk or think about anything that you don't want for 24 hours. Then you'll see what you're really made of.

Action

It's a hard thing to do but with practice, you can reach the point where you are thinking about your goals and desires most of the time. Then, your whole life will change for the better.Action ExercisesHere are two things you can do to build a belief system consistent with the financial success you desire:

First, continually repeat to yourself the words, pictures and thoughts consistent with your dreams and goals. Whatever you repeat often enough, over and over, becomes a new belief.Second, set a goal for yourself to think and talk only about the things that you want for the next 24 hours.

This will be one of the hardest things you ever do. But if you can keep your mind on what you want and off of what you don't want for 24 hours, you can begin to change your entire future.

How To Stay Debt Free - By Lim Siew May

2009-05-01T20:48:00.000-07:00

It's important to avoid being highly indebted as it can leave you financially vulnerable in tough times. Here's how to keep your credit card account in the black.

1) Mind your debt

When it comes to problems in managing debt, your mind may be the first area you need to conquer. Mohamed Akwal Sultan, CEO of the Credit Counselling and Debt Management Agency (AKPK), notes that debt is a psychological problem, whereby some people would resort to spending when they are depressed.

Dr Goh Chee Leong, vice-president of Help University College, says the basic principle that explains why people spend without thinking on their credit card is attributable to the desire for instant gratification. “We tend to want short-term pleasure even though it means long-term pain,” he says. “We think, if ‘I pay less now, I’ll have more money and it doesn’t hurt me now’. It’s the same principle as to why people procrastinate — have fun now and suffer later,” explains Goh, who lectures in psychology at Help.

Another factor that contributes to mindless spending, notes Goh, is the lack of control over desire. “Some lack the will-power to say no to what they feel they want. So, this is a matter of heart versus head.

Is there an antidote for this? “Focus on your limit,” he advises. “Don’t get distracted and compare yourself with other people. If you want to spend the same amount of money that others are spending, you either have to increase your income or decrease your expenditure. Although it is a cliché, it is important to live within your limit.”

The good news is that like many things in life, delaying one’s gratification can be attained through practice. “Discipline is a mental muscle. It’s willpower that makes us do something we don’t feel like doing, such as jogging and saving money,” Goh explains.

2) Know your limits

You can’t control debt if you don’t know what you are spending your money on. In Mohamed Akwal’s opinion, budget is one of the most important tools in financial planning. Tabitha Tan Boon Nie, 25, makes it a point to come up with a budget each month. “I only have one fixed income.

If I do not budget, then I might be spending more than my income. This is very dangerous!” Each month, she deducts her monthly fixed debts and expenses such as her housing and car loan instalments as well as her parents’ pocket money from her income. “If you’ve just started working, then, in two to three months’ time, you should have a rough idea of how much you need for meals, petrol and toll. If your expenses are more than the balance, then you’ll have to look at how you can reduce them,” she says.

Ruban Thomas, 30, a senior business development executive, took almost three years to clear his credit-card debt. But the experience has taught him how to manage his personal finances better. He now drafts a monthly personal budget planner, putting together a very basic list of monthly income and expenses. “You can just give it your best guess.

Stick to the list of things that you can easily identify, such as rent, car payment, insurance and utilities. As time goes by, you can add more details.” Ruban makes it a point to pay himself a minimum of 20% every month when he gets his pay cheque. Next, he sets aside money for “unavoidable payments” such as car and housing loans, PTPTN (National Higher Education Fund Corp) loan and utility bills.

Nelson Ng, a banker, does something similar. “The housing and car loans are my main priorities. I spend what’s left of my income after deducting 20% to 30% for savings,” he says.

3) Keep a tight rein on the ‘extras’

Budgeting helps to identify your regular expenditures, but it doesn’t help if you blow the budget regularly on big items. Ng points out: “You must always remember to not overspend and indulge in impulse purchases, especially during sales.”

Credit card issuers tend to give a credit limit that is two to three times higher than one’s earning capacity. This can give you the illusion that you are able to afford a lifestyle that is two or three times beyond your means.

Hence, make sure you have the money to pay for each purchase. You could have a little ‘savings accounts’ set aside for treats like travel or large purchases like a handphone. After purchasing the items, use the money to pay the charges in full.

4) Limit temptation

When Ng managed to settle his outstanding debts after around two years, he decided to cancel four of his credit cards to avoid the temptation of overspending. Currently, he only owns two credit cards — one for petrol transactions and the other for daily use.

“There is always the temptation to overspend when we have too many cards in our wallet,” he opines. “With a minimal payment of 5%, the monthly payments seem to be small, but the bigger debt is always waiting for us at the bottom of the statement.

Clear your credit card debts as fast as possible because every month, there will always be additional bills being credited and your debts will accumulate very fast, with the high interest of 18% per annum.”

Similarly, Tan owns two credit cards and does not intend to apply for more. “The interest rate is way higher than the interest rate your saving account is giving,” she points out. “Furthermore, my credit limits are already over my monthly income. I really wouldn’t want to get into such
debt that will take me years to clear.”

Secrets Of Millionaire - By Kimberly Palmer

2009-04-24T20:44:00.000-07:00

10 Secrets of Millionaires' Money Management
Kimberly Palmer
Tuesday April 14, 2009, 11:15 am EDT

It turns out millionaires are just like us--but they have a lot more money. When asked about their secrets to success, they don't cite anything magical or rare, but rather the steady application of wise investing strategies, hard work, and, believe it or not, a degree of frugality.

Here are 10 secrets of millionaires' money management:

Start early to avoid financial pitfalls.
Adrian Cartwood, 49, author of the blog How to Make 7 Million in 7 Years, made his fortune by living frugally while he built his technology-related business. People often get into trouble, he says, by racking up personal debt early on, which acts as a big drag on their earnings. "Learn how to live within your means and how to delay gratification; these are the habits that you need to maintain on the way up, so you can keep your millions when you get there," he says.

Believe that you can do it.
Before investing in real estate and becoming a millionaire, Alan Corey, author of A Million Bucks by 30, read as many biographies and autobiographies of millionaires as he could find. He says he was searching for a common characteristic that could help him in his own quest. "What I found was they all had an incredible self-belief that they would be financially successful," he says. Corey says that embracing that level of self-confidence helped him get to the top.

Articulate your vision for success.
Jen Smith, author of the Millionaire Mommy Next Door blog, says that the saying, "I want to be rich," is too vague. Instead, she recommends imagining what your ideal life as a millionaire will look like. Smith offers this example: "I want to have $2,000,000 invested so that I can live off of the interest. Then I will quit my job so that I can volunteer, travel, learn to play tennis and watercolor, and enjoy picnics at the beach with my family."
Smith's vision involved becoming financially-free before becoming a parent. She cut out images from magazines of beautiful places she wanted to visit and people doing fun things and put them near her desk to help her keep that vision in mind.

Insure against life's risks.
Bankruptcy is often caused by divorce, a death in the family, or a disability that renders someone unable to work. Conversely, protecting against those risks through insurance protects wealth. In The Quiet Millionaire, financial planner Brett Wilder writes that many people either fail to get adequate insurance or pay too much for it because they don't understand it.

Work hard--and you'll get lucky.
In his new book, Think Like a Champion, Donald Trump attributes his success to his hard work, which to outsiders often appears to be luck. But Trump says luck only comes from working hard. "If your work pays off, which it most likely will, people might say you're just lucky. Maybe so, because you're lucky enough to have the brains to work hard!" he says. That same concept, of course, was advocated by Benjamin Franklin in the 18th century. He said, "The harder I work, the luckier I get."

Practice smart budgeting.
Smith recommends tracking how much you spend each month, something she does religiously. Every month, she downloads her transactions into a spreadsheet to keep her spending on track. Smith also says that, as prosaic as it sounds, maintaining a good credit score is essential to becoming and staying a millionaire. "A good credit score can save you thousands of dollars over the course of your lifetime," she says.

Do what you love.
Sure, a career in finance might come with a hefty annual salary, but you probably won't excel at something you don't enjoy. That's why Corey recommends going into the field that you find yourself reading about in your spare time. He asks, "Do you read fashion magazines? Get a job in fashion. Do you read gossip blogs? Get a job in celebrity-based enterprises. Do you read Car & Driver? ESPN.com? Yahoo Pets Forum?" Even if the field doesn't seem lucrative, there are ways to make it to the top--something that's more likely to happen if you love it.
[For more, read: "Juggling Your Money in the Recession."]

Decide how much money you really want.
For many people, $1 million won't be enough. "For most Gen-X and Gen-Yers, retiring with a couple million when they are 65 won't be anywhere near enough to maintain even an average lifestyle, because that little pup called inflation is constantly nipping at your heels as you try to run towards building your own retirement nest-egg," says Cartwood. A more reasonable goal might be $3 million-- an amount that Cartwood considers the minimum to be a "bare bones millionaire" these days. Consider your ideal lifestyle and what you would like to be able to fund. A mortgage of a certain size? Exotic vacations? College tuition for your children? Having a concrete goal in mind makes it easier to get there, says Cartwood.

Invest against the grain.
Corey recommends making investment decisions based on the exact opposite of what everyone else is doing. Right now, for example, stocks are relatively cheap because so many people have sold off shares, which means anyone buying can get them at a discount to their values from a year ago. Corey's rule of thumb doesn't just apply to stocks. "Buy a foreclosed house, fill it up with roommates, and you can get a pretty good passive income," he suggests.

Live below your means.
Even Eminem, a celebrity and millionaire, scales back his purchases out of concern for frugality. In February, London's Independent newspaper reported that as Eminem considered buying a $15,000 watch he liked, he started worrying that he should save his money instead. Eminem reportedly said, "I don't want to run out of money; I want my daughter to be able to go to college." And so far, at least, Eminem hasn't fallen victim to the financial challenges so many other stars, from Aretha Franklin to Annie Leibovitz, have faced.
[For more, read: "How to Go Broke Like a Rock Star."]

On the same note, Smith says that even though she's a millionaire, no one would know it--and that's the point. She recommends saving at least 10 to 25 percent of your income. She also suggests avoiding buying "status" items, such as fancy sports cars or mansions. After all, bling doesn't make a millionaire--and in fact, too much of it can prevent you from ever becoming one.

Motivate Yourself To Invest

2009-02-28T20:10:00.000-08:00

Business Quotes To Motivate Us

“Entrepreneurs are people who dare to do things which others think are impossible to accomplish,” Kenny Yap

“For more people to become entrepreneurs, we have to change our attitude towards those who fail.” Lee Kuan Yew

“Businessmen fish in troubled waters. When the sea looks very calm, you are unlikely to catch fish. But when you see trouble on the water, then you should fish there because the big fish are driving the small fish up to the surface….In every crisis, big fortunes are made.” Robert Kuok Hock Nien

“It is during hard and suffering times that we learned a lot. I learned to be a bill collector, a supermarket guard…I learned to be everything. When times are good, we don’t really feel the need to do extraordinary, therefore we learn less.” Datuk Maznah Hamid

“I have never been poor, only broke. Being poor is a frame of mind. Being broke is only a temporary situation.” Mike Todd

“What people see of my success is only one percent but what they don’t see is the 99 percent which are my failures.” Soichiro Honda

“Opportunities of all sorts abound in troubled times….good times are good but bad times are still better.” Konosuke Matsushita

“Prefer a loss to a dishonest gain; the one brings pain at the moment, the other for all time.” Chilton

You Can Make Your Child A Millionaire

2009-02-28T06:34:00.000-08:00

The Power Of Compound Interest

Do you know that you can make yourself or your child a millionaire by following a simple rule of saving? Of course you can if you follow a strict saving scheme, after all Albert Einstein once said, “Compound interest is the eighth wonder of the world”.

The power of compound interest is so powerful that even it is considered as the eighth wonder of the world.

If you invest just RM1,200 a year for 40 years, at an interest rate of 10% per annum, your money will bring in an accumulated interest of RM589,678. Total value at the end of 40 years is RM636,678.

You may ask what investment vehicle gives a consistent 10% interest per annum. The answer to this is to invest in unit trust. Public Index Fund, Public Saving Fund and Public Industry Fund of Public Mutual Berhad gives an average annual return of more than 20% for the past 10 years.

As a parent we should start saving for our children. If you invest RM1,200 per year for your child starting when he is 2 years old, he will receive RM636,678 by the time he reaches 42. If he leaves his investment until his retirement age, he should be getting more than RM1 million. Of course your child can continue saving after finishing university when he starts working. This will relieve you a lot. In this case you only save for him for 22 years and the balance 18 years is by your child.

If you invest in unit trust that gives an average return of more than 20%, the value of investing the same amount for 40 years will be doubled to RM1.27 million.

Invest now for tomorrow’s good life. Warren Buffett said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Learn Investment The Benjamin Graham Way

2009-02-27T07:00:00.000-08:00

The Intelligent Investor- Benjamin Graham

Born as Benjamin Grossbaum on 9th May 1894 in London. His father was dealer in China dishes and figurines. They have maid, cook and a French governess. His father died in 1903 and family went into poverty. Graham won a scholarship at Columbia. Graduated in 1914, second in class. He was 20 years old. Join Wall Street as a clerk, instead of academia.

Henry David Thoreau, Walden, “If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them”.

“All of human unhappiness comes from one single thing: not knowing how to remain at rest in a room.” Blaise Pascal.

Graham’s definition of investment as “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return”.

3 elements of investing:

you must throughtly analyse a company, the soundness of its underlying businesses
you must protect yourself against serious losses
you must aspire to “adequate”, not extraordinary, performance.

An investor calculates what a stock is worth, based on the value of its business. A speculator gambles that a stock will go up in the price because somebody else will pay even more for it.

Henny Youngman talked about inflation, “Americans are getting stronger. Twenty years ago, it took two people to carry ten dollars worth of groceries. Today, a five year-old can do it.”

REITs are companies that own and collect rent from commercial and residential properties. Good inflation fighters.

An intelligent investor must never forecast the future exclusively by extrapolating the past.

The value of any investment is, and always must be, a function of the price you pay for it. He price the investor should be willing to pay for stocks must not be finite. The higher they go, the harder they fall. There must be a limit to optimism.

On 24th March 2000, US stock market peaked at USD14.75 trillion. By 9th October 2002, it is worth USD7.34 trillion, a loss of 50.2%.

General notion is that the rate of return depends on the degree of risk you are willing to take. However, intelligent investor rate of return depends rather on the amount of intelligent effort the investor is willing and able to bring to bear on his risk. The maximum return would be realized by the alert and enterprising investor who exercises maximum intelligent and skill.

No intelligent investor no matter how starved for yield would ever buy a stock for dividend income alone; the company and its business must be solid, and its stock price must be reasonable.

“Human felicity is produced not so much by great pieces of good fortune that seldom happen, as by little advantages that occur every day.” Benjamin Franklin.

Graham insistence that how defensive you should be depends less on your tolerance for risk that on your willingness to put time and energy into your portfolio.

Lynch’s rule – “You can outperform the experts of you use your edge by investing in companies or industries you already understand”

“It requires a great deal of boldness and a great deal of caution to make a great fortune; and when you have got it, it requires ten times as much wit to keep it.: Nathan Mayer Rothschild.

A great company is not a great investment if you pay too much for the stock. Growth stock are worth buying when the prices are reasonable, but when their price earning ratios go much above 25 or 30 the odds get ugly.

“The happiness of those who want to be popular depends on others; the happiness of those who seek pleasure fluctuates with moods outside their control; but the happiness of the wise grows out of their own free acts.” Marcus Aurelius.

Graham’s image of Mr Market……when stock is going up, he happily pays more than their objective value; and when they are going down, he is desperate to dump them for less than their true value.

Our brains are hardwired to get us into investing trouble; humans are pattern-seeking animals. Neuroscience shows that our brains are designed to perceive trends even where they might not exist. After an event occurs just two or three times in a row, regions of the human brain called the anterior cingulated and nucleus accumbens automatically anticipate that it will happen again. If it does repeat, a natural chemical called dopamine is released, flooding your brain with a soft euphoria.

But when stocks drop, the financial loss fires up your amygdale- the part of the brain that processes fear and anxiety and generates the famous “fight or flight” response that is common to all cornered animals. You can’t help feeling fearfull when stock prices are plunging.

http://tinyurl.com/mathtoolbox

How To Be Rich ( Article By Thomas & William )

2009-02-21T03:06:00.000-08:00

As explained in the book The Millionaire Next Door by Thomas J. Stanley and William D. Danko, personal finance has as much to do with people's traits as it does with money. Many millionaires, in fact, have frugal ways.

Understanding how personal traits can influence your finances is an essential ingredient for building wealth.

Here are 10 key traits:

1. Patience

Patience is one of the most important traits when it comes to saving money.
This means waiting until the first wave of product hype has passed, keeping a car for an extra few years before getting another one and waiting until something you want fits into your budget instead of putting it on credit.
Patience is often the difference between creating savings and being in debt. Having the patience to wait until you find a good deal is a cornerstone of good finances.

2. Satisfaction

When you're satisfied, there is no reason to spend money on nonessentials. The sole purpose of commercials is to make you believe that buying a product or service will make you happier, wealthier, better looking or improve whatever isn't bringing you satisfaction.
People spend because they want to capture the excitement shown in advertisements. When you are satisfied with what you have and your life (not trying to live like those on TV), your finances will be in a lot better shape.

3. Organization

Being organized can make you more productive and ensure that all the many issues pertaining to personal finances are addressed.
It means not paying late fees, not buying two of everything, knowing deadlines that can affect your finances and getting more done in less time. All these can greatly benefit your finances.

4. Discipline

You need the discipline to continue to save money for specific, long-term goals every month.
Personal finance isn't a way to get rich quick, but is a disciplined execution of your lifetime plans.

5. Reflectiveness

It's important to be able to look at your financial decisions and reflect on their results.
You're going to make financial mistakes. Everyone does.
The key is to learn from those mistakes so you don't make them again, or recognize if you keep repeating them.

6. Creativity

The economy and our earnings don't always match our expectations.
Unexpected developments wreak havoc to elaborate financial plans. When this happens, changes are needed to deal with the new circumstances. Creativity is essential to accomplish this.
Creativity allows you to make something last longer rather than purchasing it when you don't have the money. It means juggling money to stay out of debt rather than simply paying with a credit card. It means finding a cheaper alternative when money is tight.
In these ways, creativity plays a large role in keeping finances in order.

7. Curiosity

Having curiosity helps you learn, study and improve yourself.
The curiosity of wanting to know more, to take the time to study and then take what is learned and put into practice is an important process that is driven by curiosity.

8. Risk-Taking

To build wealth, one needs to be willing to take risks. This doesn't mean uncalculated risks. It means weighing all the options and taking calculated risks when appropriate.
The stock market has risks involved, but over the long term, history shows that it provides good returns on money that is invested wisely. Those who fear risk altogether end up saving money in accounts that likely lose money to inflation in the long run.

9. Goal-Oriented

The importance of setting and working toward goals is obvious. If you don't know where you are going, it's difficult to get there. It helps your personal finances immensely if you have money goals and are motivated to reach the goals that you have set for yourself.
Those who lack goals don't have a road map to take them to the financial destination they want.

10. Hard- and Smart-Working:

Creating wealth and staying out of debt rarely comes about without a lot of hard work.
Many people might hope that the lottery will solve all their financial problems. The true path to financial freedom, however, is to work hard to earn money while educating yourself to continue to have more value and increase your salary.
You may not possess all of the above traits. But knowing them can help you make changes so that you nourish the ones that you have and obtain the ones you're missing.
Ultimately they will help you with your personal finances and create a plan to accumulate the wealth you desire.

Financial Quotes

2008-10-26T07:31:00.000-07:00

“Everyone who has achieved financial independence will tell you that – at least in the early days you have to work smarter and harder. The price of success must be paid in full, and it must be paid in advance. There are no shortcuts.” John Cummuta.

Saving is traditionally and simply defined as not spending. Investing take place when saving actually start to earn something.

“Wealth is not a matter of intelligence it’s a matter of inspiration.” Jim Rohn.

Saving generate more stable return like fixed deposit and bonds, whilst investment gives a fluctuating return; stocks, unit trusts and long term bond are some of the examples.

Simple interest is the amount of interest paid at the end of a specific period of time. Compounded interest is the amount of interest paid on the original principal plus interest already earned.

“To be wealthy, you must develop a burning desire for wealth and financial independence.” Brian Tracy.

Rule of 72 is used to determine the number of years it will take for the principal amount to be doubled. Simply divide 72 by the expected annual rate of return on your investment.

“Before you can really start setting financial goals, you need to determine where you stand financially.” David Bach.

Investment Quotes

2008-10-22T04:51:00.000-07:00

Compare Returns Before Investing

2008-10-20T05:15:00.000-07:00

When shopping for an investment, you should compare the return of the various unit trusts. Do not be misled by an attractive potential returns that are being promised. Look and compare past performance of the various unit trusts. To be on the safe side, look for unit trusts that have been in the market for more than 10 years. Let us understand some of the returns.

Total Return
Total return measures the amount of capital appreciation or depreciation plus any income yield over a period of time, inclusive of unit splits if any.

Average Annual Return
Average annual return is total return for a period of more than a year divided by the number of years involved. For example if your investment has increased by 60% over five years, that represents an annual average return of 12% per annum.

Compound Annual Return
Compound annual return is the growth in value each year as percentage of the value at the beginning of the year plus any accumulated earnings.

Real Return
Real return refers to your net return after adjusting for inflation. Real return shows investors whether their wealth has increased in terms of purchasing power. For example, if the return on your investment is 6% and the current inflation rate is 4%, your real return is 2%.

Inflation is the evil in the economic of the purchasing power. Choose therefore unit trust that has return far much higher than the inflation rate.

Advantages Of Investing In Unit Trust

2008-10-14T06:32:00.000-07:00

Good Potential Returns
In the long run, unit trusts have the potential to generate better returns when compared to more popular investments like fixed deposits and traditional insurance policies. In 2006, I bought Public Regular Sector Fund when the CI was 900 points. In 2007, when the CI was at 1450, I sold and made 41% return. My other 3 funds I bought in 2003 gave me an average return of 20%.

Less Risky Due To Diversification
Unit trusts are designed to spread your money cross a large number of different securities. This reduces the impact of having a single investment go wrong or underperformed.

Professional Management
When you invest in unit trust, you are indirectly hiring a full time, experienced professional to look after you investment. The cost of these professional are shared by all unit holders.

Ease Of Access To Money
Unit trusts provide easy access to the money you have invested. Unlike fixed deposit and insurance, you will be penalized if you redeem before its redemption period.

Before you invest in unit trust, you must get the right agent who can give sound financial advices.

Investing Strategy During Challenging Times

2008-10-14T05:57:00.000-07:00

The recent increased in fuel price which led to higher prices of goods and services may make us think of how to find an investment that gives return higher than the inflation rate. Current inflation rate exceed 5%.

Some of the investment assets that provide a good hedge against inflation are equities ( commodity and energy sectors ) good grade bonds and unit trusts.

Unit trust investment during bad times has its advantages. Firstly, the fund is managed by professional fund managers. Secondly, buying unit trust during bad times when the price is low will give a higher return in capital appreciation when you can sell during good times. Take advantage of the concept of dollar cost averaging during this bear market condition. Do not follow the herds but go against the herd. Buy when people fear and sell when people are greedy.

EPF contributors should take advantage to invest now when the price is low. Rather than leaving the money you have in EPF earning only 5.5%, you might as well draw your EPF account 1 and start investing in unit trust that can possibly earn more than 5.5%. After all, EPF also invest bulks of its fund in equities or stock market.

Quote

2008-07-07T08:14:00.000-07:00

"Compound interest is the eighth wonder of the world." Albert Einstein.

Why wait? Invest in unit trust while the stock market is still low.

If you don't understand the value of money, read what was once said by Benjamin Franklin, "If you would know the value of money, go and try and borrow some; for, as he that goes a borrowing goes a sorrowing."

Invest Early To Achieve Financial Success

2008-06-29T05:44:00.000-07:00

Brian Tracy once said, “At least eighty percent of millionaires are self-made. That is, they started with nothing but ambition and energy, the same way most of us start.”

If you are young and wish to see your cash grow over time at a rate exceeding 5%, putting your EPF saving in well managed unit trust is a wise option. If you put RM30,000 of your EPF saving in a Public Mutual Berhad index unit trust fund and achieved a long-term average return of 23% each year for 10 years and 20 years, your investment will have grown to RM292,467 and RM2,318,081 respectively.

It pays to invest early. Take advantage of Dollar Cost Averaging especially in the current stock market scenario as it provide an opportunity to accumulate more units.

“The philosophy of the rich versus the poor is this: The rich invest their money and spend what is left; the poor spend their money and invest what is left.” Jim Rohn.

Invest Your EPF In Unit Trust

2008-06-28T00:11:00.000-07:00

We believe that EPF is an investment fund that will take care of our retirement financial needs. In 2006, EPF declared 5.15% and in 2007, it is about 5.5%. With the current scenario, do you think that the return of about 5% is adequate to take care of all our financial goals on our retirement?.

My answer to this is definitely no. Why? The answer is INFLATION. Before the hike in petrol price, the retail price of a 10kg dragon rice was RM30.00, now RM39.00, an increased of 30%; dressed chicken was RM6 per kg, now RM8 per kg. Petrol was RM1.92 but now RM2.70, increased of 40%.

My question; is the return from EPF of 5% adequate to cover the inflation rate of say between 10% - 30%?

It is wise therefore to put EPF savings in well-managed unit trust. Public Mutual Berhad has numerous funds to invest in. However be selective on the fund you want to invest in and get good advice before you withdraw your EPF. Based on the recent prospectus, some of the funds gave an average return of 20%.

You can withdraw 20% from your EPF Account 1 of the excess above certain ceiling depending on your age. Subsequent withdrawal can be done every after 3 months interval.

Rule 72

2008-06-27T01:40:00.000-07:00

Rule 72 is a simple way to calculate the number of years it takes to double the amount of capital invested.

Example:

If you invest RM10,000 at an interest rate of return of 10%, it takes roughly 7.2 years for the capital invested to double to RM20,000.00. Calculated as : 72/ interest rate (10%). Try using you calculator and multiply RM10,000 by 1.10 for 7 times. The answer is RM19,487.17.

Happy investing.

Benefits Of Investing In Unit Trust

2008-06-22T06:24:00.000-07:00

Unit trust is an investment vehicle that pools the financial resources of many individual investors who aim to achieve similar investment objectives.

There are many benefits investing in unit trust. Firstly, the risk is minimized since the funds are invested in diversified portfolios. We all learned that diversification reduced risk.

Secondly the funds are managed by professional who has the expertise and experience. As individual, we do not have the time, experience and the expertise to study the stock markets and we may make wrong investment decision.

With as little as RM1,000.00 you can start investing. The investment can be turned into cash at any time if your need arise.

Unit trust provides a very competitive return in the form of dividend distribution and capital gain. Dividend distribution may be given every year while capital gain is realized when you sell at a price higher than your purchase price.

My Experience In Unit Trust Investment

2008-06-16T17:27:00.000-07:00

Investing In Unit Trust

I am writing to share with you about investing in unit trust specifically in Public Mutual Berhad which can give higher return or yield than EPF, Fixed deposit and even ASB.

In early 2006, I invested through EPF in a fund called Public Regional Sector Fund. I sold it in mid 2007 when the KLSE was 1,500 points and I made a return of 41%. My other funds ( three of them ) which I bought earlier also give me a return of average 20% per annum.

After realized how much I benefited from investing in the right unit trust, I signed up as a consultant. I want to be serious in this business because firstly I can help myself and secondly investment in stocks and shares is my passion.

For those who have never heard of unit trust, it is fair for me to give a little information about it. Unit trust is an investment vehicle that pools the financial resources of many individual investors who aim to achieve similar investment objectives.

There are plenty of advantages investing in unit trust such as:
It is affordable; low initial investment of RM1,000.
Managed by experienced professionals
Risk is minimized through diversification.
It can turn into cash easily.
High return through dividend distribution and capital appreciation.

Recently in the Star, EPF deputy chief executive officer, Encik Johari Abdul Muid said that it is during economic downturn that investing in unit trust is encouraged to benefit in the upswing later. Yes, actually this is the best time to invest.

I have done a comparison on the performance of the various funds under Public Mutual Berhad and I can confidently conclude that the returns from some of them are much higher than the return from ASB. Investing in the right fund and with the right timing can give a return of between 20 – 50%. Investing in unit trust can either be by direct cash purchase or through withdrawal from EPF Account 1 ( subject to certain limit depending on your age ). Choosing your agent is very important because he should be able to monitor your fund performance and advise you accordingly.

Rather than leaving your money in EPF or ASB earning only about 5% and 9% respectively, it is better to invest in unit trust with Public Mutual Berhad. Peter Lynch once said, “The mutual fund is a wonderful invention for people who have neither the time nor the inclination to test their wits against the stock market, as well as for people with small amount of money to invest who seek diversification.”

In case you are interested to invest, please call me at 013-3595414 for discussion.

Wellcome to my unit trust blog

2008-06-16T01:48:00.000-07:00

Hello There

Wellcome to my unit trust blog where you will get my best advice on investing in unit trust in Malaysia.

Hear more from me later.