Archive for April, 2008

Procrastinate procrastination – 6 easy steps

Posted on April 29, 2008. Filed under: Interesting Articles |

Came across this article, bearing an interesting subject, with interesting facts. It s so true that if one can start putting their dreams into actions, perhaps the dreams are not unachievable afterall….

 

 

“I’m going to make those marketing calls. Yup, tomorrow I will.”

“Dang, there’s the alarm. I’ll hit the snooze button – just one more time.”

“I’m going to start an exercise program. I’ll look into it next week.”

“I’ll get that GST report done – one of these days.”

“I’d really like to tell her how I feel about what she said to me. But not now. Maybe there will be a good time later – maybe.”

“Let’s get together for a visit. I’ll call you one of these days.”

watchDo you allow yourself to get sucked-in to these thoughts and actions, or lack of action now and then? I do, or did, or won’t anymore.

The more I chose these putting-off thoughts and actions, the more immobilized I became. When I chose to do that, I felt inadequate, frustrated, unworthy, and then rushed or panicked. The next emotional “trip” was blame, guilt, or anger – maybe all three. My situation was because of somebody or something else – not my fault.

I don’t know about you, but those feelings don’t seem champion-like. Those are not feelings that I want to embrace.

If I could give you easy steps to procrastinate procrastination so you can feel energized, worthy, productive, happy, and successful, would it be of value to you? If so, read on.

Procrastination is proof that we can postpone our happiness, dreams, and success until another time. We hope and wish that something will magically happen, so our lives will finally be amazing and incredible. Procrastination is a pathetic excuse for not attempting, succeeding, learning, or growing. It’s a pathetic excuse for not using our potential NOW, for not living NOW. Yet many of us procrastinate on a regular basis.

achieveThe psychological payoffs for procrastination are immense. We:
– avoid doing things we perceive to be fearful or uncomfortable
– eliminate risk and avoid change
– can be critical of others and use their inadequacies as justification for our own inactivity
– blame others or the world for our circumstances and results
– win sympathy from others and feel sorry for ourselves
– waste our days, weeks, and years agonizing inside about things we didn’t do
– justify sloppiness or incompetent work because “I just didn’t have enough time”
– avoid success and the perceived responsibilities.

Procrastinating procrastination involves conscious awareness of our actions (or inactions) and making new conscious choices. There are only two choices.

1. Do something so it is “done.” Then you can fully experience the feelings of pride, joy, exhilaration, wonder, awe, and great learnings. These are in-the-moment NOW feelings. The outcome may not always be as you pictured it, however there is always a great lesson when we look for it.

2. Don’t do something, because it is not important now and is therefore “undone.” Accept this without any feelings of guilt, anxiety, or remorse.
Here are 6 easy steps to procrastinate procrastination. Do them, or procrastinate – your choice. Decide for yourself how good it feels.
** Note: this next part took me a few hours to write because I had things to do with each step.

 

1. Take 15 minutes ONLY and do one thing you really want to do; i.e. a walk, play with your child, bubble-bath, reflect on things for which you are grateful, read a really good book (like mine). Focus your attention only on your experience and the great feelings. You are an amazing human being!!
** Excuse me; I’m going outside for a run with my dog, Tip.

2. Do something that you have been putting off. Start now! You’ll find the task is not as bad as you perceived. Choose to enjoy the project and especially the feeling of accomplishment, or movement in a desired direction.
** By gosh, that feels good to complete that GST report.

3. Ask yourself, “What is the worst thing that could happen if I do this?” Usually, the perceived fears or challenges are insignificant compared to what you can gain.
** Although I was afraid to ask Carol about our conversation, I did. I learned I had misunderstood. She was not upset at me. She was frustrated because of her own procrastination. She’s doing something about it now, just as I’ve done.

4. If you find yourself being critical, blaming, or sympathetic of others, ask yourself, “Would I want others to do this to me?”
** I will not allow my critical thoughts about him to destroy our working relationship. I am going to see him, now, to talk about this head-to-head and heart-to-heart. He’s a great leader, a wonderful man, and thank goodness he’s not a copy of me. I will clearly set my boundaries in regard to what I am willing to do.

5. Evaluate your commitments. Are you stupendously prepared? Have you invested the time to do the job in an exceptional way, fully utilizing your abilities and talents?
** I get to practice that presentation one more time. Now I know I’m ready!

6. Gauge your self-talk. Ensure it is positive and supportive. “I should do this.” “I must do that.” These debilitating mental conversations are an attack on your self-fullness. Be proactive rather than reactive.
** I will visit my neighbour this afternoon. I’ll easily finish this article today. Today is a fantastically productive day for me.

Will any or all of these steps work for you?

If you want to be a champion, take ownership of your life and act now – not tomorrow, NOW! You’ll like how it feels.

When you act in ways that allow you to feel really good, you’ll find you can be, do, or have anything you want. It’s the Law of Attraction – and it works.

~ Dan Ohler

 

 

 

 

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Are bonds risk free?

Posted on April 27, 2008. Filed under: Investing |

 

Have you heard something like this – invest in bonds; bonds are very safe and is almost risk-free.

Well, it is true that bond is relatively safer as compared to equity investment, but it is surely not RISK-FREE. In fact, I have encountered many whom make the statement above not even know what is Bond in the first place.

It is essential that we understand the risk associates with bonds before we make our investment decision.

The risks associated with bonds are tied to several factors. There are interest-rate risk, credit risk, callability risk, and inflation risk. The safest bonds are short-term (less than 5 years) Treasury Bills followed by other short-term government bonds. The riskiest bonds are long-term bonds (12 years-­40 years), junk bonds, and high yield, or high return bonds.

a. Maturity period

The longer the maturity of bonds, the greater the interest rate risk while shorter term bonds have less risk but lower returns.

—Short-term bonds mature in 5 years or less.

—Intermediate bonds mature between 5 and 12 years.

—Long-term bonds have maturity dates of more than 12 years.

For eg, an investor choose to invest in a bond with 30 years maturity period. Within 30 years interest rates could change dramatically. If the bond pays 6% interest, and interest rates climb to 12%, chances are the investor could lose money to inflation and could be making more money elsewhere over 30 years.

This makes sense when you think about it. The longer a bond issuer is exposed to market or economic factors, the greater the odds are that something bad might happen.

b. Risk is also associated with the interest rate on the bond.

Bond with lower interest rates will experience more fluctuations in bond prices than bonds with higher interest rates. If you have two bonds maturing in 30 years and Bond A pays 5% interest and Bond B pays 15% in interest. Bond’s A’s price will change more dramatically than Bond B’s price. The principal value will have wider swings in its selling price if sold before the maturity date. For eg, if you own a bond paying 5% interest and you want to sell it one year later on the open market when the interest rate is 7%, you’re going to get a lower price than what you paid. After all, why would someonre buy your 5% bond if they could get a new 7% bond? The only way they will do it is by buying your bond at a discount.

Hence, it is right to say that bonds offer no hedge against inflation because inflation causes interest rate to rise which then causes bond prices to fall. Bond’s price can be quite volatile if market interest rates do vary after a bond is issued.

c. Ratings on bonds also reflect assumed risk.

Credit rating systems help consumers make more informed on the risk attached to each bond. Higher rated bonds carry less risk while lower rated bonds (e.g., junk bonds or high yield/high return bonds) have more risk.

Independent ratings services evaluate the credit risk of municipal and corporate bonds. These range from the best credit quality for issuers with the strongest financial status to the lowest ratings for issuers in default. Standard & Poor’s is one of the best-known ratings agencies. Bonds with S&P ratings of AAA, AA, A, and BBB are considered to be investment-grade quality. Bonds with ratings below BBB are considered to be junk bonds and are speculative.

Of course, the interest rate paid by these bonds go up as the risk rises. So, if a bond offers an interest rate that is way off the market, it is because there is a high degree of risk involved.

d. Bonds can be called.

Bonds may have call dates that protect the issuer from paying high interest rates if they can refinance and pay lower rates. If you hold a bond, it can be called back by the company issuing it. The company will pay you a predetermined amount to do this. Hence, you run the risk of having to reinvest your money at lower interest rates.

 

Hence, before making the decision to invest in bonds, understand clearly the associated risks. Make sure you read up on what their rating is. Try to stay away from the junk bonds even though they do offer a much attractive interest rate. And of course, try to stay invest for long term in order to minimize the risk. Bond prices may swing a lot if the bond is sold before maturity.  Investing in bonds are very much the same as any other form of investment in the sense that all require a certain level of knowledge to avoid disappointment…

 

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Investment tips

Posted on April 24, 2008. Filed under: Investing, Uncategorized |

 Just some general tips on investment:-

 

1. Put a certain percent of our income towards savings, particularly long-term savings such as a retirement plan/child education planning. This will help ensure that you stay well ahead of inflation. For eg, if I were to invest RM1,000 per month for the next 15 years, with average rate of return of 8% pa, the future value of the invested sum would be RM340,000. Whereas if the same amount is being saved at normal saving account with minimum interest, the total saving by end of 15 years would be RM 180,000.

2. How do you decide whether you should invest directly in shares? Simple. If you haven’t got the time to learn about stock markets, to follow the progress of companies or to track your portfolio, rather invest in unit trust funds. 

3. If you do invest directly in shares, your two most important considerations should be ensuring that you have a properly diversified selection of shares across the stock market sectors to reduce risk, and regularly rebalancing your portfolio. When a share rises in price, you should consider selling some, but not all, of these shares, so that you make a profit, but your overall portfolio remains proportionally the same as it was when you started. By doing this, you’ll be able to reap further profits if the share price continues to rise.  

4. Generally, “savers” and “investors” have different objectives for their money. “Savers” plan to use their money in the next 3-5 years, while “investors” won’t need their money for five years or longer. Many “savers” want liquidity or quick access to their money without penalty. Then perhaps Bonds should be the choice. Bond provides a desirable saving or investment vehicle for many reasons. Bonds tend to be safer than stocks because if you hold bonds until the maturity date, you don’t risk the principal. Plus, bonds can provide a regular, steady source of income (typically, interest payments are received every 6 months). However, bonds tend to have a lower return than stocks over the long term.

5. If an investment product is too complicated to understand, avoid it. It does not mean you are stupid. It simply means that the product provider and/or financial adviser are trying to confuse you. You should not invest until you fully understand the product and the associated risks.

6. If you are a true investor, you invest for the long term and you don’t panic when markets fall. If you want to invest for the short term, you should use a bank fixed deposit or a money market account rather than an investment in the equity markets.

7. It is time in the market and not timing the market that counts. Don’t try to time markets. Few people have got rich from doing this and most have lost money. The best way to get rich is to take time to select an investment product that has properly diversified underlying investments, and then to stick with it for the long term. Most people make the fundamental error of buying into an investment when it is at the peak of its performance and then selling out when its value has dropped. I have made a few of these expensive mistakes. Believe me, it was painful!

8. Investing on a regular basis is a good strategy in volatile markets. If markets rise, your investment improves in value. If markets fall, you get more for your money, and you’ll benefit when markets go up again. This is known as dollar-cost averaging.

9. Don’t become emotionally attached to shares. If a particular share bombs out for good reason, such as bad management or failure to adapt to new markets, get out. But if the share value is falling as part of a general sector downgrade, there is little reason to sell. No wonder when Warren Buffett was asked how he became so successful in investing, he answered: “we read hundreds and hundreds of annual reports every year.”

10. If you are trading shares for short-term gain, you are not an investor, you’re a gambler. Don’t be surprised when you make a loss. Well, again, I am sharing with you my personal experience….

 

11. Being a contrary investor can make all the difference. As investment Guru Warren Buffett once said: “Be fearful when others are greedy. Be greedy when others are fearful”

 

12. Never invest on an ad hoc basis. You should have an overall financial plan designed to meet all your financial needs, taking into account your investment goals and life assurance needs. Investing in something simply because someone (friends, relatives, colleagues..) recommends it, is unlikely to help you achieve your financial targets.

13. Be prepared to pay for good advice, as you would for any expertise. But make sure you deal with an adequately qualified adviser. You are lost because you are not equipped with investment knowledge, so why go to someone for financial advice if that person is not properly qualified as yourself?

14. Always have an emergency cash fund. Ideally, the fund should be equal to three months’ income. This way you will not have to cash in investments at an inopportune time or take out a high-interest loan if you are suddenly landed with a major expense.

15. For regular saving, try to arrange your direct debit to channel money into investment as soon as after the pay day so that you will not “accidentally” spent away the money. Believe me, this is a practical advise!

 

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16 TAX-SAVING MOVES

Posted on April 21, 2008. Filed under: Tax Planning |

While we are working so hard trying to accumulate our wealth, it becomes vital for us to minimise areas which will erode our cash reserves. Personal tax is one of the areas we have to look at.

I would like to share the following 16 tax-saving moves, which are legal and permitted by IRB:-

1) Save for your child’s education.

Any amount that is deposited into a savings account for your child under national Education Saving Scheme (Skim Simpanan Pendidikan Nasional) allows you to claim tax deduction. Tax deduction limited to RM3,000 per individual.

2) File separate tax returns

Separate assessment allow each spouse to claim personal tax relief of RM8,000 while a joint tax return allows one spouse to claim a wife or husband of RM3,000

3) Ask your employer to increase your EPF contributions

Contribution to the employees’ EPF by employers are tax-exempt to the employees. It is highly unlikely your employer will agree with that arrangement, so try to ask your employer to reduce your monthly salary but increase your EPF contribution by the same amount. For eg, if you reduce your salary by RM1,000 per month and have the same contributed into your EPF, you tax saving from your employment income would be the total reduction sum, ie. RM 12,000 X your tax rate.

4) Change your cash remuneration to cash reimbursement

Fixed allowances given by your employer each month for entertainment or housing are taxable at your tax bracket. Change this to a reimbursement based on receipt and your are not taxed on the amount received

5) Ask for a company car

A car given by your employer is regarded as a benefit in kind (BIK) and taxable. However, a company car is advantageous for tax payers because the present tax scale for cars is much lower than the actual cost of buying and maintaining a car

6) Make charitable contributions

Charitable contributions entitles you to a tax deduction for the amount given. Please take note that, from 2008 onward, this amount cannot exceed 7% of your aggregate income.

7) Take up postgraduate studies

A relief of RM5000 per year for any course of study at the master’s or doctorate level. The course does not have to be done full time, but must be in an institution or professional body in Malaysia recognised by the government.

8 ) Read more

You can claim up to RM1,000 for purchase of books, journals, magazines and other publications

9) Get sporty

You will get a deduction of RM300 for each year of assessment for the purchase of sports and exercise equipments

10) Buy life insurance

The maximum tax relief is RM6,000 a year for premiums paid to an insurance company for life or deferred annuity plans Please take note that this limit shared with your contributions to the EPF.

11) Take up a medical or education policy

You can claim deductions of up to RM3,000 a year for education and medical insurance

12) Pay your parents’ medical bills

You are able to claim up to RM5,000 for payments towards your parents’ medical bills

13) Medical

Claim a deduction up to RM500 per tax year for a full medical examination and RM5,000 for medical expenses for yourself, spouse or child for serious disease. A separate tax reduction of up to RM5,000 a year is given for necessary basic supporting equipment for disabilities suffered by yourself, spouse, children or parent

14) Pay Zakat

If you are a muslim, paying any amount in zakat, fitrah or other obligation Islamic dues will entitle you to a tax rebate for the amount that you pay.

15) Buy a computer

A deduction of up to RM3,000 can be claimed once every three years for the purchase of computers, printers and bundled software

16) Hire a Tax consultant

Consider hiring a tax consultant to explore ways your remuneration package can be structured to maximise your tax savings. I suppose this is justifiable only to those higher income earners.

If you diligently do your tax planning, you will be surprised how much you could save at the end of the day!

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How to choose your unit trust fund?

Posted on April 21, 2008. Filed under: Unit Trust Investment |

Since starting out, I have encountered many investors asking me what funds to choose from, and most of the time, they just go along with the choices recommend by me. Well, can’t really blame them, given the many choices offered in the market which could be confusing, and afterall it is indeed my job to recommend suitable funds based on their investment objectives.

So, I have been meaning to write about the factors one should consider when it comes to choosing your unit trust products/funds.

First, we need to understand the concept of Risk vs. Reward Spectrum.

When considering which unit trust fund suits your investment goals, you need to remember that the greater your need for higher returns, the more risk you’ll have to accept.

If your goal is capital preservation, you should choose a conservative fund, accepting the lower anticipated total returns. If you decide you’re willing to take a higher level of risk, you may be more interested in an aggressive fund, perhaps resulting in a better long-term return but also entailing greater risk of a loss.

Examine the fund’s prospectus for information about risk factors associated with its investment strategy. Also, consider how the addition of a specific new fund may affect your portfolio’s overall risk.

The information offered by the article below might help you to identify the types of funds best suited to your particular investment objectives:-

____________________________________________________________

 

Investor Education

 

(i) Asset Allocation

It’s easy to get caught up in the day-to-day headlines about what’s happening in the stock market. And where the “experts” say stocks are headed. 24/7 financial news offers investors benefits. But it’s a drawback when investors become confused or lose perspective. Investment success requires discipline and a willingness to focus on long-term objectives. It’s important to keep the big picture in mind.

Asset allocation is critical for building a successful investment strategy for most people. In simple terms, it involves spreading your assets among several different investment options. Asset allocation can help you minimize risk in your portfolio when market conditions are uncertain. And it may increase your long-term potential for returns.

What is asset allocation?

It is an investment strategy that seeks to balance risk and reward in your portfolio by spreading your investment dollars across several different types of investments for potential financial gain.

A well-balanced portfolio is the key to achieving your investment goals.

What investment strategy is right for you?

A personalized strategy may help you weather all kinds of market conditions and keep you on track to meet your financial goals. Compare risks and returns for each option. Then, consider questions like these when talking to your financial advisor:

  • What are your financial goals? Are they long-term or short-term?

  • Are you seeking growth or income?

  • When will you need the money?

  • How much risk can you accept?

  • What are the tax implications?

Things to Keep in Mind:

  • Asset allocation is the way in which you spread your investment portfolio among different asset classes, such as stocks, unit trust funds and bonds

  • When prices of different types of assets do not move in tandem, combining these investments in a portfolio can help reduce the variability of returns, commonly referred to as “market risk.” For eg, when equity market moving downward, often the bond market will be on upward trend.

  • Unit Trust funds are pools of securities, usually offering diversification within a single asset class. Some unit trust funds may include several asset classes.

  • The asset allocation that is right for you depends on your investment time frame, goals, and tolerance for risk.

  • As your investment time frame and goals change, so might your asset allocation. Many financial experts suggest re-evaluating your asset allocation periodically or whenever you experience a milestone

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Maximised return by market timing? See what Warren Buffett says..

Posted on April 20, 2008. Filed under: Investing |

When building an investment portfolio, we can use different strategies depending on our needs. Some strategies help us to increase our investment more quickly, while others may be more effective to reduce the impact of market fluctuations.

Generally, the earlier we start making regular contributions, the better off we may be. Not only will we have more time to accumulate wealth, we may benefit from compound returns on our earlier investment. This means we’ll not only earn interest on the money we contribute, but also on the cumulative interest earned on those funds; ie interest on interest.

Many investors think that the best way of investments is by timing the market, ie, buy low sell high. But, only few investors, if there are any, can accurately predict and time the market constantly. To me, timing the market is very much like gambling in Genting, sometime you win, sometime you lose!

Hence, time in the market is generally more important than market timing! Because the longer we stayed invested, we earn interest not only on the initial amount invested, but also on the cumulative interest that is earned over time. In short, the longer we compound, the more wealth grows. Compounding effect is very fruitful if we start early and make regular contributions.

There is a saying “that’s why the greatest investor is the most patience person in the world”

Leave you with the most respected investment GURU – Warren Buffett. We have a lot to learn from him.

 

 

 
 
 
 

 

 

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With love…everything is possible

Posted on April 16, 2008. Filed under: Something good to share |

There are times we face difficult experiences..there are times we think we have no way out..there are times we see solution being impossible.  I would like to share with you this youtube clip..where you will see impossible being done.

The most inspirational fathe and son team!

I SALUTE THE FATHER!  With love..nothing is impossible….

 

 

 

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Who earns what Worldwide

Posted on April 16, 2008. Filed under: Interesting Articles |

 

These are some interesting facts on world wealth allocation:-

 

The world’s 225 richest people now have a combined wealth of $1 trillion. That’s equal to the combined annual income of the world’s 2.5 billion poorest people. (225 vs 2.5 billion!!! my gosh)

The richest 1% of adults in the world own 40% of the planet’s wealth, according to the largest study yet of wealth distribution. The report also finds that those in financial services and the internet sectors predominate among the super rich.  (mmm…financial services. I am glad I have chosen the right trade to be in 🙂 )

Three billion people live on less than $2 per day while 1.3 billion get by on less than $1 per day. Seventy percent of those living on less than $1 per day are women. (huh? I thougt women are the big spenders)

Three decades ago, the people in well-to-do countries were 30 times better off than those in countries where the poorest 20 percent of the world’s people live. By 1998, this gap had widened to 82 times. (Now? I am sure the gap has been widen again. If rich get richer…someone out there would have gotten poorer!)

Microsoft CEO Bill Gates has more wealth than the bottom 45 percent of American households combined.

Europe, the US and some Asia Pacific nations account for most of the extremely wealthy. More than a third live in the US. Japan accounts for 27% of the total, the UK for 6% and France for 5%.

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Five Year Old Blind Genius Pianist (Amazing)

Posted on April 15, 2008. Filed under: Something good to share |

 

This is so touching. She is such an angel…

 

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Brilliant Compensation Video

Posted on April 15, 2008. Filed under: Interesting Articles |

 

A friend of mine sent this “Brilliant Compensation Video”.  The video is meant to explain the concept of Network Marketing. I enjoyed it because the presented business model is very much the same as what the unit trust industry is offering. But Network Marketing is shown here to be more than what I thought it was, so much so in the US, a university offers it as a subject in itself. I find the presentation is very interesting and very informative BUT only to those whom are keen to look at joining this industry.  (I have friends claiming the video almost bored them to death! 🙂 )

 

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