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Wednesday, December 3, 2008

EPF vs KLCI - Part 1

Quoted directly from today's The Star Business..... links over here

IN general, most people have the impression that the money placed in the Employees Provident Fund (EPF) always generates lower returns compared with the returns from their own investments.

In this article, we will look into the returns from EPF versus returns from the KL Composite Index (KLCI). We assume that investors are able to generate their own returns equivalent to the returns from the KLCI.

Based on our 23 years of data compilation, it is generally true that the average returns generated from EPF are lower than KLCI returns. From 1986 to 2008, the average return of EPF was 6.7%, 2.3 percentage points lower than the average return of 9% from the KLCI (see table).

However, most people do not understand the risks they need to undertake when they invest by themselves. The standard deviation of EPF is only 1.5%, 22.2 percentage points lower than the standard deviation of 23.7% from the KLCI.

We use standard deviation to measure risks. Most investors only look at how to generate the extra 2.3 percentage point returns, forgetting that they need to undertake a much higher risk to generate the extra returns. The extra return is unable to compensate for the extra risks that investors need to take.

Let’s assume one investor invested RM10,000 in the EPF and the KLCI respectively at the beginning of 1986. Logically with the average KLCI return higher than the average EPF return, the fund in KLCI should be higher than the fund in EPF in most periods.

However, as the table shows, by the end of 2008 (we assume that EPF will only be able to generate a return of 4.25%), the fund placed in KLCI would have reached RM40,000 versus RM43,946 generated by EPF, a shortfall of RM3,946.

The main reason behind this shortfall is that the EPF never gives negative returns whereas the KLCI generated negative returns eight times over the past 23 years.

There is a market saying that out of 10 people who invest in the stock market, only one can make money, the others will lose money. Warren Buffett says if you want to win, you don’t lose. Hence, we disagree with some people who advise others not to place money in EPF because it generates lower returns.

In most periods, the money in EPF gets lower return than the money placed in KLCI. However, the main reason for the lower fund value in KLCI by the end of 2008 was the market crash during 1998.

The money in KLCI dropped by 47.1% to RM18,105 in 1998 from RM34,246 in 1997 whereas the money placed in EPF increased further to RM26,594 in 1998 from RM24,924 in 1997. After 1998, it took nine years for KLCI to catch up with the fund value in EPF.

Last year the fund value in KLCI (RM46,000) finally surpassed the fund value in EPF (RM42,154). However, as a result of the recent market crashes, we are anticipating the fund value in EPF to overtake KLCI again this year.

It will take a few years from now for the KLCI to catch up with the EPF again. Unless investors are constantly monitoring their own investments and are able to avoid most of the negative returns, we think it is safer to put money in the EPF rather than withdraw it for their own investments.

And then another news that kinda contradicting with the earlier news out........

EPF Q3 investment income down 60.4% to RM2.06b

Links over here

See how contradicting? Not totally contradicting, since EPF not really losing any money but the fact remains that EPF's earning will suffer as well during the financial turmoil or recession. We can argue forever and say that the Government promises us at least 2.5% return (Wikipedia is the man) without risk. But how sure are we that the EPF will give a return of > 3.5% (comparing to the FD rates). If during recession (worst case) EPF only give return of 2.5%, then it is lower than the current FD rates in Malaysia. Worse still, it is way below the current inflation rate of 7.x% (provided by Bank Negara, but we all know it is a lot more). What about equities, in our case KLCI? Will it always return lower or negative return? I will continue to discuss on Part 2 when I have time. In the meantime....think about it yourself. "Is EPF really better than KLCI?"

Friday, November 28, 2008

The internet is the market of tomorrow

I was blogging about Adsense and all in this blog...
Idle Page

It was at this point that I realize the internet is the market of tomorrow. At the moment, most people look at internet business in the form of freelance writing and other etc. But in the near future, I believe with almost everyone having the access to internet themselves, the market will be big enough to attract people into channelling their business strategies into the cyber world.
At the moment, only big company like Amazon and E-bay that is gaining popularity. However even in Malaysia we have Mudah and some other lelong online market. Although we must take into consideration the fact that some of these companies are not reliable but with strengthening markets in the internet, big companies will start to consider the internet as their main play ground.
Some of the rough ideas that I could give you is this:

  • The tuition place has been crowded with students and hence more and more parents are concern about the reliability of the tuition centres. There are a few tuition centres operating through the internet even at this point although I believe that it is not quite reliable at the moment. However, further improvement will make these companies a big force in the years to come. In recent days, more parents will opt for private tuition, but with the high demand of livelihood, private tutor that could be very costly might not be the best option and hence, internet could be the solution.
  • Talking about mobile phones, laptops, and other accessories, you will soon find that the internet are flooded with such items on sale. And in fact, at times you could be getting it at a cheaper rate. Let us not forget that the internet alone generate more than billions of traffics. Assuming only 1% of those as your customers, you will be soon be on the way to join the millionaire society.
  • Boutique? Can it be done? I understand that most teenage girls are already turning into the net as their shopping mall. One of a friend of mine has open a boutique in Kuala Lumpur is quick to realize that through the internet, the business in fact has a better turn out of profit. Especially with the fact that rental are now super expensive and really, business needs to be extremely good to rake in profit and hence, the internet plays a major role in such business options.
  • Comic books, manga, movies?/ what about starting a Cinema online? Almost impossible?
    Think again....of course, the concept of cinema has the advantage as it has big screen and wonderful sound system. But take a bigger picture. Look at the changes that globalisation has brought to this world. Now, some couples will have to live miles apart just because of their work responsibilities. For examples, business run in China need to be look after by someone who has a wife in Malaysia. Here is when all these come in. People need that concept to keep them connected to one another in a wonderful way. Something like Sykpe but better than that because you get to be watching a movie together in a Cinema...but the difference is that it's in the internet.
  • Think bigger and you will soon find out that virtual life has been one of the HITS lately and trust me, it is only a matter of time that more business opportunities will occur even in this game itself.
If you can't even imagine how much impact the internet will bring to the next generation, then you have better start to observe and learn more about the cyber world.
This is the FUTURE.

If you can see this, then you're half ahead of the rest and that's when Money easily follow after you.

Tuesday, November 18, 2008

Petrol Tax for Net Oil Exporter

When I was reading the news on theStar online (, I got a bit shocked. The Malaysian government not only not giving petrol subsidy for Malaysian, but now starting to earn revenue from the current petrol price at RM2.00 (source). While shocked, I was not surprised. Well, it does not take a rocket scientist to figure out that we are actually paying the government when the crude oil price was below USD60 per barrel. As mention by my previous post that we did actually pay the petrol tax .....source, it seems that now it's OFFICIAL that we, Malaysian, born in a nation producing oil will have to pay petrol tax. Well, previously they do not want to admit it, but at least this time they admit they are actually getting return by reducing the petrol price 15 cents to RM2.00 and they can still earn some money out of it. I will need to search for more details to confirm that we will be the 1st net oil producer to impose tax on petrol. Until now, I can see that majority net oil producer cum exporter will give subsidy to the petrol. Not sure we have again becoming the 1st - you know la....our government wants us to become no 1 in a lot of thing, be it good or bad.

The reason I'm blogging about this here is because I want to stress out how short sighted the Malaysian government is. Again in one of my previous post regarding the petrol price hike, I already stressed out the hike in the world crude oil and wanted to see the face of those who increase the petrol price over Malaysia when the world crude oil price down. And as predicted, the government is blushing and is not keeping the promise to let the price float with additional RM0.30 subsidy. I would assume that if the next GE when BN falls, it is not because PR is better choice. It is because BN flip-flop policies and short-sightedness when drafting the Budget. Actually with the removal of subsidy, the current government only caused the people from my era suffers. And we must not forget, GE happens every 4-5 years and the upcoming GE will have a lot of voters from my era onwards and not everyone support a party. We will vote those we think that can help us, and not vote blindly like people from the previous generation. Not that I want to say that I'm good in predicting things, but at least at the moment 2 out of 2 things that I posted happened. Well, we will see in 4-5 years time.

Monday, November 17, 2008 Japan into recession as well

It seems that more and more countries are slipping into recession. Euro zone, Singapore and now Japan. Here's what I have from theStar online:-

Japan's economy slid into a recession for the first time since 2001, the government said Monday, as companies sharply cut back on spending in the third quarter amid the unfolding global financial crisis.

The world's second-largest economy contracted at an annual pace of 0.4 percent in the July-September period after a declining an annualized 3.7 percent in the second quarter.

That means Japan, along with the 15-nation euro-zone, is now technically in a recession, defined as two straight quarters of contraction.

The result was worse than expected. Economists surveyed by Kyodo News agency had predicted an annualized 0.1 percent rise in the third quarter.

Japan's Economy Minister Kaoru Yosano said following the data's release that "the economy is in a recessionary phase,'' according to Kyodo.

But the worst may be yet to come in the wake of the global financial crisis, especially with dramatic declines in demand from consumers overseas for Japan's autos and electronics gadgets.

Hurt also by a strengthening yen, a growing number of exporters big and small are slashing their profit, sales and spending projections for the full fiscal year through March.

Toyota Motor Corp., for example, has cut net profit full-year profit forecast to 550 billion yen ($5.5 billion) - about a third of last year's earnings.

Compared to the previous quarter, gross domestic product shrank 0.1 percent, the Cabinet Office said. Business investment - a main driver of Japan's six-year economic recovery since 2002 - dropped 1.7 percent from the previous quarter.

"As the global economy is expected to slow down for the time being, downward movements (in Japan) are expected to continue,'' Yosano said, according to Kyodo.

Since taking office in late September, Japanese Prime Minister Taro Aso has unveiled two economic stimulus packages in an effort to cushion the blow.

His latest 27 trillion-yen ($275.7 billion) proposal includes expanded credits for small businesses and a total 2 trillion yen ($20.4 billion) in cash disbursements to households.

At its last meeting, the Bank of Japan cut its key interest rate for the first time in more than seven years, lowering it to 0.3 percent, joining central banks around the world in trimming borrowing costs.

In its semiannual outlook report, the central bank slashed its projection for economic growth to just 0.1 percent for the year through March, compared with a 1.2 percent gain it projected in July.

It said both exports and domestic private demand have weakened.

The deteriorating conditions also recently led Masamichi Adachi, senior economist at JPMorgan Securities in Tokyo, to downgrade his outlook on the Japanese economy.

"We are now looking for a severe recession, similar to that during Japan's own financial market crisis in 1997 to 1998, and to the current US recession, in terms of depth of real GDP contraction,'' he said in a report.

Monday's data showed that net exports sapped 0.2 percentage point from growth, as the high cost of importing fuel eclipsed a slight increase in outbound shipments.

Imports rose 1.9 percent, while exports grew 0.7 percent.

Private consumption, which accounts for more than half of inflation-adjusted GDP, increased 0.3 percent from the previous quarter.

However, the rebound in consumer demand is unlikely to last, economists say. - AP

Monday, November 10, 2008

Buy Stocks or Hold Cash!!

I just read an article regarding the strategy to buy stocks or hold cash and I thought it might be suitable to post it over here.

OVER the past few weeks, as a result of the sharp plummet on the stock market, some investors regret not selling their stocks early as almost all of their stocks have been incurring huge losses.

However, the market recovery over the past few days caused some investors to again regret — not buying stocks when the stock market hit the bottom.

The decision to hold more cash or stocks is one of the most difficult decisions to make.

According to a study by Gary P. Brinson, L. Randolph Hood and Gilbert L. Beebower in 1986, 95% of the variance of fund returns was the result of the asset allocation decision.

Hence, the right asset allocation between cash and stocks plays a very important role in determining the returns of a portfolio.

In this article, we will look into two key strategies in asset allocation, namely the constant mix (CM) and the constant proportion portfolio insurance (CPPI) strategy.

The key principle behind the CM strategy is to buy stocks when the market drops and sell them when the market recovers.

As for the CPPI strategy, it is the reverse, which is to sell when the market plunges and buy when it recovers.

We should continue selling stocks until the portfolio drops near our pre-set floor level. Once the market touches our floor level, we will hold all cash and no stocks.

Under normal market conditions, the CM strategy is an excellent tool for rebalancing our portfolio.

This strategy requires us to rebalance our portfolio based on a constant mix, where we set a constant ratio of stocks to total assets.

Assuming we have only two asset classes, namely stocks and cash, we will maintain the desired invested portion in our portfolio regardless of market conditions.

If we have a portfolio value of RM100,000 and intend to maintain a stocks to total asset ratio of 60%, we invest RM60,000 in stocks and hold RM40,000 cash.

If the overall market drops by 10%, our stocks will drop by RM6,000 (10% of RM60,000) to RM54,000. Now, our portfolio will be RM94,000 (RM54,000 + RM40,000 cash)

Our invested portion will drop to 57.5% (RM54,000 of stocks divided by our new portfolio value of RM94,000).

In order to maintain a 60% investment, we need to have an invested portion of RM56,400 (0.6 x RM94,000).

So we will use RM2,400 in cash to buy stocks (RM56,400 - RM54,000).

After this portfolio rebalancing, our new invested portions will be RM56,400 in stocks and RM37, cash.

This will bring the invested portion back to 60% with the total portfolio value of RM94,000.

The CM strategy will cause us to buy more stocks when the market drops. We will be able to acquire a lot of quality stocks at cheap prices.

However, we will continue buying more stocks while the overall market continues to plunge.

During a bear market, we will see our portfolio shrink in value as our earlier purchase price may get cheaper.

Unfortunately, not many investors can tolerate a drop in their portfolio value.

The CPPI strategy is appropriate for use in either a super bull or a super bear market.

It is not suitable for use on normal market periods as we need to sell stocks when the market drops and buy when the market is on the way up.

We may end up buying at high prices and selling them at low.

Under the CPPI strategy, the portion of money in stocks is based on the formula that:

Money in stock = M x (TA - Floor) Where M = stock investment multiplier (proportion), TA = total assets held in the portfolio, Floor = the minimum allowable portfolio value (zero risk level) and TA - Floor = cushion or funds that can be put at risk.

Assuming we have a portfolio value of RM100,000, if we set our minimum allowable value (Floor) = RM70,000 and stock multiplier (M) = 2, we will invest RM60,000 in stocks [2 x (RM100,000 – RM70,000)].

If the overall market drops by 10%, our stocks will drop by RM6,000 (10% of RM60,000) to RM54,000. Our portfolio will be RM94,000 (RM54,000 + RM40,000 cash).

Our invested portion needs to be reduced to RM48,000 as 2 x (RM94,000 – RM70,000).

We need to dispose of RM6,000 worth of stocks (RM54,000 – RM48,000) and bring the cash level to RM46,000.

Following this portfolio rebalancing, the portion invested in stock is RM48,000 with cash of RM46,000.

The total portfolio value is RM94,000.

We will continue to sell stocks and hold more cash as the market drops.

We will stop investing in stocks when our total portfolio hits the floor level (TA – Floor= 0).

The strength of the CPPI strategy is that our lowest portfolio value at any point in time will be RM70,000 whereas the CM strategy may cause our portfolio value to drop much lower if the market crashes further.

In conclusion, the choice of strategy will depend on the overall economic outlook.

Unless we know our economy will not drop into recession, otherwise — based on our current situation, the CPPI strategy has the advantage of protecting our minimum portfolio value at the floor level.

Ooi Kok Hwa is an investment adviser licensed by Securities Commission and managing partner of MRR Consulting.

Friday, October 31, 2008

Thus, the amount of money that you want to make, and do make during your lifetime of working, is dependent upon your beliefs, attitudes, values, and career choices. If you value helping people in need, you can anticipate a particular salary over the course of your career. As long as your values are more important than what you are paid, your choice is fine. But, you cannot set a goal of making a million dollars a year, make a career choice that pays $40,000 per year, and expect to be happy with your career decisions and the money you make over time.

Almost everyone thinks that they should make more money than they do. But the amount of money you are paid by your employer is dependant upon a number of factors discussed in: The Scoop on Salary Increases: What Pay Raise Can You Expect From Your Employer?.

About’s Joshua Kennon tells you: How to Become Wealthy: Nine Truths That Can Set You on the Path to Financial Freedom. I’m writing these tips to help you have the money you need to follow his strategies. He and I agree on the first step you need to take to make more money.

Change How You Think About Money to Increase Income Potential

Money is what you are paid to do a job and accomplish goals for an employer. Or, money is the salary you pay yourself as a self-employed business person. Money is neither the root of all evil nor is it a panacea for all of your pains and the world’s ills. It is simply a tool that allows you to attain the standard of living you choose to pursue.

Money enables you to provide for your family’s basic needs and to raise and educate your children. Money allows you to support philanthropic causes about which you are passionate. Money allows you to travel, purchase items you want in your life, and pursue hobbies and interests that engage you. Money allows you to retire some day if you choose.

Consequently, getting more money is not just okay; it’s fundamental to the plans you have for your life. Asking for a higher salary when you change jobs is expected. Requesting an increase in pay from your current employer is your right. Choosing a career that will pay a higher salary and thus, a higher lifetime income, is all right.

Change How You Think About Yourself to Increase Income Potential

While you don't want to define your character by the amount of money you make, you do need to have the mind set that whatever you can earn, you are worth. If you think of yourself as a $30,000 a year employee, $100,000 is quite a mind leap. Be prepared to make the choices throughout your career that will enhance your ability to earn more money. As an example, asking your manager for a raise can daunt the courage of even the most confident person. Yet, if you never ask for a raise, you are "settling" for what your organization offers you.

Thursday, October 30, 2008

How Low Can The Bourse Go

The global economy turmoil has cause most of the stocks breaking few year low. And the low keep going lower. Then a lot of people started asking me, "Do you think it is time to buy stocks now?" Well, I do not know. In fact, no one will know how low can these stocks get. During the pessimistic environment, those financial advisor or economist will reduce or downgrade certain companies. It always happen this way. When it is good, they will say that there is possibility of reaching higher and higher, until it burst. Then during economy turmoil or bearish environment, they will say, the low will get lower. The only thing we can do to avoid losses is to accumulate the stocks of prospective companies and to average down when it gets lower. Only we ourselves know how risky we want our investment to be and judge the situation with full of wisdom. Remember...... "Price is what you pay. Value is what you get." by Warren Buffett? This quote is to remind us that we are to judge how much we are willing to pay for the share of a company and how we see the value in it. Remember, opportunity always come and knock on our doors. If we think we cannot lose, then it is best to stay away from the stocks until we are comfortable. Else, we can start to accumulate, and when it rallies.......we sell on strength. Even if it does not rally, we can hold and keep for long term, provided the investment is not based on speculation. Or we can set a cut-loss point if it is speculation type of investment. Always remember.......we will not know how low it can go before it moves up.

Monday, October 13, 2008

Going Green Can Save Money As Well

Over the weeks, I've been thinking what else we can do to earn more money besides working, investment etc. To earn more money, the easiest way is to invest. But as a salary drawing guy, the capital that I have is actually quite limited. Most of my salary will go to monthly commitment like car loan, education loan and also daily expenses like food. The leftover of the money is either for investment or savings purposes. This could mean only one thing, reducing expenses will automatically increase the amount for investments. How to reduce expenses when most of my expenses already fixed? Can it be further reduced? Then I realized that actually going green can also reduce my expenses a little though not very significant. How am I going to implement going green project?

First of course is to reduce the usage of my car. By reducing the usage of my car, we can reduce the CO2 and CO emission. Next thing that come in my mind is reducing electricity. I'm trying to save energy as much as possible, which is why I will take a look at the need of some of the electronic devices that I have. Do I need to use my laptop? Yes, of course, it's for my work. Do I need to use my desktop? Well, I do go online some time using my desktop, but I can actually try to reduce the usage of the desktop. I also need to take a look at the necessity of my bluetooth headset, which i use it most of the time when I drive back to Ipoh from Kulim. Do bluetooth headset a necessity? I believe that the normal headset is sufficient. Although nowadays, people are pushing towards wireless, I believe normal headset is as good as the bluetooth headset.

Going green not only push towards energy conservation. I also plan to eat more green food, vegetables and less meat. My cholesterol level was a bit high during my last medical checkup, which prompt me to eat healthier. Well, seems now I can get my plan going by reducing meat and have more vegetables. Besides eating healthier, I get to save some money also. I remember that vegetables cost a lot cheaper than meat. In my cafe alone, most vegetables are priced at RM1.00 or RM1.20 compares to the chicken which cost about RM1.60 to RM 2.00. 60 cents different could lead to about RM36 of savings monthly if I stick to my current appetite of ordering about 3 different dishes per day.

Wednesday, October 1, 2008

Tackling the transport costs

Phew.....will be getting a long break. 2 public holidays for Hari Raya, an annual leave and 2 weekends break. When I came back yesterday, I read Personal Money on tackling the transportation costs in the midst of petrol price hike. There are a few ways to tackle, one which is going natural, which means using the natural gas vehicles (NGVs). While NGVs seem to be a real money savers, do take note that in Malaysia, only SELECTED Petronas stations have the pump. So, you will need to join the queue of taxis. Besides that, there's the cost of installing the tank and the system to the car, which can cost a bomb, and will void the warranty given by the car manufacturers. If the car no longer have the warranty given by the car manufacturer, one can opt to install, but the real question is, will this really save a lot of money in the long run, after the Petronas given the comment that the price of NGV might go up accordingly with the petrol price. Secondly, we can opt for Hybrid cars - green cars. But as we all know, the price of a hybrid is beyond the reach of an average salary man. Finally, we can also opt to buy better fuel consumption cars like Vios and City, and currently Perodua is promoting Viva and Myvi as fuel friendly cars. One must realize that Vios and City are not cheap, and Viva and Myvi is without the boot, which can be a real issue when it comes to long holiday where we need to pack the boot with our luggages. So, there's a lot of ways to tackle the transport costs, but the issue is, when we try to reduce the transportation costs, are we at the same time increasing other expenses? One very clear example is getting a City and Vios. Both car cost about RM80k and the service is slightly higher than the local cars like Perodua and Proton. Local cars only cost about 40-60k. There is actually no specific answer to this. It's all depending on the individuals. Some are saying taking public transportation. But do public transportation in Malaysia really convenient? Maybe one can try to be in my shoes, and see whether public transport exist.

Thursday, September 18, 2008

Credit Card - Friend or Foe (Part 2)

This post continue from Credit Card - Friend of Foe (Part 1)

Majority generation born after 1980 are using credit cards. In fact, the credit card usage has been so severe since the late 90s and this in fact has cause issues like subprime credit pop up in the US recently. Credit cards, can in fact become our friends if we manage it well. As was posted previously, with credit card, we do not need to bring a lot of cash with us - which is very important as the rate of theft is increasing from day to day. Besides that, loyalty reward points or cash rebates that can help us to save some of our money.

Another good thing about credit card is the easy payment scheme. By using easy payment scheme, expensive stuff like furniture, gadgets etc can easily become more affordable. For example, a PC cost about RM3k can be pay as few as RM300 installment over the next 12 months. But this can easily become the bad thing about credit cards if not managed properly. One can easily get deeper into debt because of this.

Next is that, by using credit card can also educate us on financial planning and discipline. To use credit card without paying interest, one have to really plan and jolt down every details on his or her spending. Doing so requires discipline and good financial management. From this, we know that using credit card requires some skill :).

Phew.....I think I better stop blogging as of now. I still need to figure out how to solve some of the stuff tomorrow morning.

Monday, September 8, 2008

Credit Card - Friend or Foe (Part 1)

While I was reading through a forum regarding credit card, a question popped up in my mind. Is it better to pay using credit card or cash? A lot of people went into debt because of this plastic, which I found it to be user-friendly and it gives me more pros than copns. Sure, some might argue that because of the user-friendliness, it causes a lot of young executives, housewives etc to fall into debt. In fact, one of the reason subprime crisis popped up out of nowhere in the United States is due to credit cards' debt.

Actually credit cards can be our friends as well as foes, just like fire or water, when under controlled, it will become our friend, but if we lose control, then it will become our foe. The good thing about credit card is we do not need to carry a lot of cash with us whenever we go our doing weekly groceries, shopping, dining, etc. Imagine we want to purchase furniture, how much we are bringing along with us and with the increase in crime rate, the possibility of getting rob also increases. Thus, this has prompted a lot of us as consumer to pay by credit cards. Why? Because most of us worried that we'll be robbed, worry about snatch thieves (especially ladies with handbag). In fact, to me, I'll never let my wallet to have more than RM100 whenever I go out shopping, dining, etc. I always charge my expenses to credit card, be it just a few dollars or few hundreds. To me, I'll never feel safe if I am loaded with cash. So if one day, the credit card terminal is down, I'll be doom. LOLz.

Another thing about credit card is the loyalty reward points or cash back or rebates. With the rising competition day by day, each banks will try to outdo each other by offering reward points, where we can redeem goodies with it, or cash back or even offering rebates. I still remember not long ago, there's no credit cards offering points or rebates for petrol. But due to competition, now we have Citibank Shell Card, CIMB Petronas Card, CIMB DA, which offers 2% rebates for all type of petrol consumption, Maybank Petronas Credit Card etc. With the petrol price soaring high, the rebates or points or cash back from the petrol usage can be significant. I have a friend who told me that after few months, in fact, he had one of his weekly grocery for free.

I will continue to share more over the next few days/weeks depending on my workload on the credit cards. Feel free to comment on this and maybe we can brainstorm more on the credit cards issue.

Continue to Credit Card - Friend or Foe (Part 2)

Sunday, August 31, 2008

What the expert say on BUDGET 2009

Several experts share their views with Malaysiakini regarding the Budget 2009 unveiled by Prime Minister Abdullah Ahmad Badawi.

David Cohen, director of Action Economics, Singapore:

It is a populist budget to deflect the growing popularity of Anwar (Ibrahim). (Prime Minister) Abdullah (Ahmad Badawi) is obviously under pressure as witnessed by the rollback in fuel prices last week.

Lee Heng Guie, chief economist at CIMB Bank:

I think most people already expected a budget plan that won’t have many negative points. So this is one factor that helped the market to rise and also because overseas markets were good last night. But the overall mood is still cautious because there is still uncertainty.

Given the tough macro situation, they may have little choice but to spend more now. Whether it’s the right choice depends on how they fine-tune the deficit going forward.

Khoo Kay Peng, political and economics analyst:

Anwar can, if he wishes, make any amendments he thinks are necessary. We don’t know what alterations he will make, but for example he has mentioned before the RM10 billion extra allocation for the growth corridor projects - which Abdullah asked for in the mid-term review.And Anwar has said that we do not need any new mega-projects at this point in time.

Whatever it is, there is uncertainty and this will keep the markets quiet. Even when Anwar comes into power as he says, investors will want to see how he performs, what sort of plan he’ll raise then.

For Abdullah, he needs to have a yardstick, a performance yardstick instead of just voicing hot air bubbles. He needs to stimulate local consumer demand, find concrete measures to increase wage-earners’ pockets, and look at transportation as he has promised. There must be more buses and other forms of public transportation put on the roads.

Also, on whether the government has enough money, nobody really knows because there is a lack of transparency. Abdullah must find concrete ways to cut down public administration, reduce bureaucracy, for example shift us more to e-government. We have one of the biggest bureaucracy in the region, we are too labour-centric and this is why we have the image of being not efficient. Yes, in the past the public administration is used as a political tool, a vote bank. But we must take politics out of the equation. Anyway, it hasn’t help them (Abdullah and his Umno party) in the elections anymore.

Dr Ramon Navaratnam, prominent economist and president of Transparency International :

On thee one percent reduction of income tax for the highest bracket, the rich can take care of themselves very well - therefore the tax cut was unnecessary.

The middle and lower income groups are the mainstay of Malaysia and the groups which will agitate for change. It would have been better to address their needs. The poor should always be the priority.

There seems to be a shift in budget strategy whereby it attempts to address basic needs and not on unnecessary mega projects.

However attempts to share wealth when inflation is not controlled, will still see the erosion of income for the low and middle income groups.

Tricia Yeoh, director Centre of Public Policy Research:

Such a record expansionary budget with huge funds is theoretically a good thing, given the urgent need to generate growth in the face of economic slowdown.

However, it can only be considered a thoroughly good thing if we can be assured that the money will be channelled in the right direction, without any unnecessary leakages.

Unfortunately, the past track record of government has been poor in this respect. With a rampant culture of corruption and weak institutional structures, this may lead to continued wastage and abuse. I would therefore emphasise strengthening the institutions of governance, so that the funds are actually optimised and maximised.

Thursday, August 14, 2008

Value and Price

It's been a while since I last update the blog. A lot of time is due to I have difficulty in logging in to blogspot or even gmail especially after 9pm. Few of my colleagues also facing the same problem, having trouble logging in to blogspot, msn etc. But when we use our company VPN, quite surprisingly we manage to go through. So we suspect the Streamyx is having clogged network at the international gateway. This could mean that we are not getting the value of the product that we paid every month. One of Warren Buffett famous quote, "Price is what you pay, value is what you get" remind me of this. Too bad, we cannot do anything regarding streamyx since the company has the "best" broadband service in the country.

A lot of us got confused that value = price, and vice versa. But, in fact it is not - however, the relation between the two is very close. Price is in economics and business is the assigned numerical monetary value of a good, service or asset (source: Wikipedia). Value implies the worth of specific thing or a specific group of things - source. Often we found ourselves having difficulty in differentiating the two, especially in the stock market world and during the bear market season.

Example, after doing a lengthy research on company A, one might perceived company A as 1.00 per share when the share price was about 0.60, so he or she bought few units. But suddenly, when the market plunges, of course it will affect the company A stock as well. The company share drop 0.20 to 0.40. He or she who at first perceived the company A as 1.00 now in dilemma, whether to drop the investment, or continue to trust the company due to the financial standings of the company and the business nature of the company. From here, value and price will show significant difference. If he thinks that the company worth is 1.00, he will continue to invest in the company. This is value. If he thinks he already lose 0.20 per share since his buy price is 0.60, and drop the investment and go on with life, this is price.

The example given above might not be that appropriate, but at least that is what I can think of. I'm not advising whether we should hold or throw our investment away - but I just want to clarify one thing, "Value != price and vice versa." I actually see a lot of people, who at first told me which shares to invest in, telling me that now still below its worth, but the next minute they see red, they throw the investment away. The company might be a good one, provided they do some research on the background and management, but due to global economic situation, it might affect the company's share. But if the company is good, sooner or later it will climb back to their value, when others started to notice the company. By then, we only reinvest back in the company again - with higher price, we would have missed out on the gain, not only that, we could end up losing money again.

Wednesday, July 23, 2008

Are you prepared for the worse to come?

As we stare at the global economy slowdown, we should keep asking ourselves, "Are we prepared for it?" Are we confident enough to declare that we have prepare for the worse? Some might be quite relief that the crude oil price has been going down for few days but we don't know how long this will last. Even if the crude oil price remain downtrend, we cannot let our guard off. To prepare for it, one must always ensure there's sufficient fund in hand, if and only if the global economy slowdown. Even if you can keep your job, the money will come in handy especially if the stock market collapse. Can really get good deal during the market collapse. In fact, the money can be used to buy property at very low price. Usually when comodities reach historical high, cash is king. But I'm the kind of guy who believe that the market will rebound one day, which is why I will continue to accumulate the high dividend yield counter, so that I can have passive income. And again, we are talking about sufficient emergency fund. Judging by the current situation, I think my current standing is ok, with some cash that can last me for few months without salary, my portfolio push to almost 75% dividend yield + blue chip counters. I plan to re-adjust the whole portfolio and cash in hand by the end of 3rd quarter. So moving forward to Q4, I will only save + save + save.

Tuesday, July 15, 2008

Jumble Station

It's been a while since I last updated the blog. Either I was too busy with my work or sometimes when I'm free, I cannot login to the blogspot. Not sure it is the S*reamyx problem or the Google problem. I can login to my gmail though. Besides that, not really have any idea on what to blog about. But anyhow, I feel like updating the blog today. My fren ask me to take a look at one of this blog. The purpose of the blog is to promote the Jumble Station - a community outreach initiative designed to raise funds to assist Single Parents in need some of whom are part of the Shelter Home Single Mothers Network. Jumble Station aims to economically empower Single Parents and the poor to be financially independent in the long run by owning or running their own small businesses eventually. The purpose I brought up the blog is not to help fund raising nor do anything to promote it. Just that I see that Jumble Station has one great vision - which is to economically empower Single Parents and the poor to be financially independent. The vision is about to same as one of my dream; to be financially independent by the age of 40 - currently still have debt over 100K. But I believe it can be done. If people who are poor or facing financial difficulties can do it, I'm sure it not be that tough for me. But besides earning for myself, I will donate to those needy. I will continue to work towards fulfilling my dream that I dared to dream - in fact, this is what was preached by my church's pastor. What a coincidence, LOLz!

Wednesday, June 25, 2008

Another calculation

I've got a forwarded email which talk about the current fuel situation. This guy really go all the way to calculate the exact price for petrol. It is another version of the calculation, at least different from my calculation. The email content is as below:-

We know the international rates are above the USD 130/barrel. We understand the fact that the fuel prices are increasing worldwide and we also know that major scientist are still contradicting on why this phenomenon is happening. Some blame Bush and his plunders around the world and some blame climate change and there are others which say petroleum 'wells' are getting scarce.

Again we go back to numbers to be more straight fwd

1 barrel = 159 liters x RM2.70/liter = RM 429 or USD 134

On 1 hand, we are paying the full cost of 1 barrel of crude oil with RM2.70 per liter but on the other hand the crude oil only produces 46% of fuel.

Msia sells crude oil per barrel at USD130 buys back Fuel per barrel at USD134. And not forgetting, every barrel of fuel is produced with 2 barrels of crude oil.

1 barrel crude oil = produce 46% fuel (or half of crude oil), therefore
2 barrel crude oil = approximately 1 barrel fuel
In other words, each time we sell 2 barrels of crude oil, equivalently we will buy back 1 barrel of fuel.

Malaysia sell 2 barrel crude oil @ USD 130/barrel = USD 260 = RM 858
then, Malaysia will buy back fuel @ USD 134/barrel = RM 442/barrel
Thus, Malaysia earn net extra USD 126 = RM 416 for each 2 barrel of crude sold/exported vs imported 1 barrel of fuel !!! (USD 260-134 = USD 126 = RM416)

So where this extra USD 126/barrel income is channeled to by Malaysian Govt???????? ?

Another analysis:

1 barrel crude oil = 159 liters.
46-47% of a barrel of crude oil = fuel that we use in our vehicles.
46% of 159 = 73.14 liters.
@ RM 2.70/liter x 73.14 liter = RM197.48 of fuel per barrel of crude oil. This is only 46% of the barrel, mind you. Using RM 3.30 = USD 1, we get that a barrel of crude oil produces USD 59.84 worth of petrol fuel (46% of 1barrel).
USD 59.84 of USD 130/barrel turns out to be 46% of a barrel as well.

Another 54% = bitumen, kerosene, and natural gases and so many more.
And this makes a balance of USD 70.16 that has not been accounted for.

So this is where I got curious. Where is the subsidy if we are paying 46% of the price of a barrel of crude oil when the production of petrol/barrel of crude oil is still only 46%?

PS: My previous post only points out that we (Malaysia) sell at lower price according to crude oil price only to buy at high price according to world market price.

Thursday, June 19, 2008

Did the Govt really subsidize our petrol?

While I was doing some rough calculation, I was wondering whether our Govt really did subsidize us RM0.30 per litre? When the crude oil price was about USD138 per litre, world market price was about USD178. And according to 2nd Finance Minister Tan Sri Nor Mohamed Yakcop (sources, Malaysia should adjust the price to RM3.15 with 30cents subsidy, which means the market price is RM3.45.

Do some simple calculation
3.45/178 = 0.01938

0.01938 * 154.50 = RM3.oo per litre
(USD 154.50 = world market price at the time fuel price increase in Malaysia - 5th June 2008)
Crude oil price on the 5th June 2008 is USD135

USD154.50 - USD 135 = USD 19.40
USD 19.40 = RM 61.89 (if USD exchange rate with RM is 3.19)

RM61.89 / 158.987 = 0.39
(1 barrel = 158.987 Litre

RM3 - RM0.39 = Rm2.61
Rm2.70 - RM2.61 - RM0.09

RM3 is the extra that we pay if we go according to world market price, so with Rm2.70, it seems that the government is subsidizing us. But if we look at the crude oil price index, the price is actually RM2.61. I would assume world market price is price with tax, etc. The situation might sounds a little bit confusing, but from here we can see that we at least paying RM0.09 per litre as tax.

My opinion is the government does not subsidize us, but reduce our petrol tax by RM0.30 per litre.

Monday, June 9, 2008

Changing Lifestyle

The recent hike in petrol price put me in a difficult situation. First, I need to top up additional RM30-60 monthly for petrol. Then to be on the safe side, I should increase my food expenses to about RM20-30 also. That comes to about RM100 in total. Then it comes to my mind that if I were to change my lifestyle, will my previous financial goal or target achievable? Well, yes and no. Yes in the sense that if I totally change my lifestyle to no entertainment, no yum char session, no this and no that, then I have 90% confident that my current budget still ok. No, if and only if my forecast is not so good, meaning everything will increase exponentially. Nevertheless, the decision is for me to change my lifestyle so that every thing that I planned out early this year will remain status quo. At the same time, will try to see whether I can get additional income from other source.

A lot of us have complaining since petrol price hike. But, my suggestion still is to change our lifestyle before further increase. By changing our lifestyle gradually, we can in fact adapt to situation. Do not let the situation deter us from achieving our target. Below is the list of things that I can think of to cope with the current situation:-
  • Buy in bulk - if you do not need to use so much, share with others. By buying in bulk, you can get at lower price and at the same time not everyone need to go groceries with you.
  • Reduce the entertainment or yum char spending- I mention here reduce, not totally no. Why? Because "all works and no play makes Jack a dull boy". And some entertainment need not use money like jogging around the housing area, company teambuilding etc. Who knows, socializing might earn you extra income, especially if you are in the sales/marketing field. LOL!
  • Drive at a constant speed - this I believe was mention here and there, so I think no need to further elaborate.
  • Eat in pantry or cafe - drive less, eventually will save more.
Well, that's all I could think of at the moment. If I can think of anymore, I will post it. So, stay tune. :)

Thursday, June 5, 2008

Still on the petrol price hike again??

Just now, I read about MALAYsian dilemma that my brother wrote. In fact, I find that what he wrote was actually true. The Malaysian dilemma is definitely POVERTY. Realistic speaking, currently there is only one way that Malaysia, as a whole nation will go, which is NOWHERE. I keep asking myself, "Am I being a bit pessimist about the outlook on the economy in Malaysia?" I do not think so. Just yesterday after the announcement of petrol hike, we can really see how desperate Malaysian to go fill their tanks with petrol. Jam everywhere near petrol station, even at area where I am staying. This morning, there were even protest in Ipoh and KL. If I remember correctly, this has never happened in Malaysia before. The recent raise is the steepest, I believe. And more is to come. News circulated that the Govt want to let the price to float according to world price. But, after having a deep thought, I realized it might be a good thing to let the fuel price float according to the market price, yet we as Malaysian will get at least 30 cents subsidy. In fact I would like to see the face of those who brought this up when the global crude oil price decrease. The only thing that I worry now is that the Govt might change their mind and then fix the oil price again when the global crude oil price decrease. If our Govt keep their word and let the petrol price float, then it might be a good news for most of us after all as I always believe this......"What goes up must come down and vice versa."
Looking at the chart, we can believe that the fuel price will come down. It is just the matter of time. We will see how. In the meantime, we will just endure and be as prudent as possible. :)

Regular gasoline price from '72 to 2008

Crude Oil Price from '47-May 2008

Wednesday, June 4, 2008

Inflation!! What can we do about it??

When I was busy at the production, the Malaysian Prime Minister suddenly announced an increase of petrol price to about 50%. The increase come as a surprise to me and most of my colleagues. Most of the people anticipating increase about 100%, but not so soon. As soon as I got the news from a colleague, I quickly settle everything in the line and quickly leave office and go for a short pit-stop at one of the station. It's definitely a bad day for me as I only know about the news after office hour which could mean one thing, jam at all the petrol station. I guess it correctly but I do not care anymore. I just cut queue and manage to get everything done by a while. The bad thing about the pit stop is that I manage to that I did not manage to refuel full tank using my credit card. Another thing is that I bring very few cash, thus I can refuel RM24, which will translate into about RM10 savings. It is still ok for me. I'm posting not because of what I have gone through. I believe what I have gone through will be the same for most of the Malaysian. INFLATION. With the HIKE of petrol price, I believe will be a start of new chapter, could most likely mean nightmare for most Malaysian. It is a known fact that the public transportation in Malaysia is the "best" that most Malaysian needed to purchase a private vehicle just to go work and go from a place to another. Without own vehicle, the only transportation that most Malaysian can rely is by walking or cycling. Ok. Enough of the rant. What we will be seeing soon is inflation hike will take place. The inflation will be so severe that most of us will have to endure until we can think of a better way to overcome it. Think, increase at about 50% petrol price, logistic will 100% increase (we do not know how much it will increase, of course), thus the chain of reaction will go all the way and pass all the burden to consumer. In the end, it will be the consumer to suffer. The inflation statistic that will soon be released by the authority will definitely be a far cry from what the consumers are experiencing. Imagine, without the hike of petrol price, consumers in Malaysia are in fact facing about 2 figure inflation, but the official released was about 3%, which IMO, is bull shit. Let's take some example to prove the point. Almost every year, we can see about RM0.50 increase in food like economy rice etc. Let say the previous priced at about RM2, RM0.50 will translate into 25% of increase. Then we talk about Gardenia bread. Last time was about RM1.90 but if I'm not wrong, already increased about 25%. What else we want to get the example from? I still remember I used to eat at those old kopitiam having to spend less than RM5. But if you ask me now, I will definitely say additional RM5. I cannot blame the business operator, they are not doing for charity, but with everything going up and RM is becoming smaller and insignificant, they have no choice but to increase the price accordingly. Inflation is getting from bad to worse daily. Our purchasing power becoming from low to lower and end up we hardly survive. No wonder my dad told me that a lot of employees rather spend all the money than to save the money in the bank. Why? Because our inflation rate is so high that the authority do not want to admit and our bank fixed deposit is so low that whenever you save money, meaning you are losing the value of the money daily. So what's the point? A lot of people will think about that. The BIG question is again "What we can do about inflation??". Well, I do not know. I might post up something regarding this in the future. Well, till then, I will try to contain the situation so that it does not seems so bad.

Wednesday, May 28, 2008

Goals and plans

I have been reading my brother's blog lately and allowing him to do most of the editing and updating. This is because I believe that he is more knowledgeable in this expect. and truthfully he has been doing a great job in maintaining the quality of this blog.
Today I am going to talk about the goals and plans that one must have in order to achieve success in this life. I've just watched the movie "Pursuit of HappyNess" that star Will Smith. A movie inspired by true story...about this man, Chris Gardner. He was struggling in his battle to work for a prestigious stock brokerage firm as intern. Although he has to go through six months without salaries, his perseverance and determination reap a great results. Today he is one of the millionaires and open his own brokerage firm, Gardner Rich & Co.
As I watched the struggles he had to go through, one thing I realized was that he never gave up hope and keep doing his best with whatever that he could to achieve his aim.
It made me plan my own goals by the end of this year. I always wanted to buy a FERRARI by the age of 28 and I will never give up on this dream, at least not yet.
But I believe that I need to set a certain goals by end of this year, which I intend to post it here:

1) My savings from income reaching RM10, 000.
2) Blog generate US 10 dollars a month.
3) Tuition classes will consistently with RM2k a month by end of the year.
4) Credit card approval at least 1 per month.

It seems to be so tough as I look at it now, but I believe from where Chris Gardner was from millionaire is even more difficult and yet this man made it through.
Of course it won't be a goal without any short term aim and plan. I intend to share more on how to effectively making your blog a main attraction.
That will be my next posting as I explore into this field.

Saturday, May 17, 2008

Money Master

I've renamed this blog to MoneyMaster, if you all hadn't notice. This blog used to be "a friend to money", well even if you do a Google search with "a friend to money", you will eventually find this blog in the search results. Not sure after I renamed it to MoneyMaster, we can still search it in Google. Anyway, some might be wondering why I've changed it to MoneyMaster. Well, it did occurs to me that if we wanted to earn more money, we have to let the money works for us. When we reach to a certain point where our money is generating enough income for us to survive without having financial worries, then we have become the MoneyMaster :), like what I've always tell others, it is better for us to become our own BOSS, so that we do not have to tolerate our superior. I noticed that most young adults aged 22-30 are quite immature in a way or another. Most of the young adults nowadays are really aiming high, but there is a problem. Most of us don't really like to tolerate our superiors or colleagues. In fact, when there's argument or increase in workload, we will start blaming others or our superiors. I am one of those young adults which I mentioned. In fact, it was just recent weeks that I have argument with one of my colleague. He was actually a rather senior staff in the company, which could be why he always demand respect from my team members, as my team has some of the most junior staff in the company. Never occur to me that he will blame me for what some of the production staff did wrongly. He blamed me for not releasing test according to the procedure, which as a matter of fact, I did, but one of the production guy screwed up with the master copy. Nevertheless, we had argument, until he complain about my attitude problem to my manager, which I believe my manager would explain on my behalf that I do not mean to be rude to him. Ok, to cut the long story short, the problem settled, but scar remained in our hearts. When I was writing about becoming the master to money, I realized that in order to become a master, we need to serve others. And I realized networking is indeed one of the element to become the money master, like my Dad always adviced me, it is better to have one more friend than enemy. Anyway, the damage has been done. What I can do now is to try to respect him in the future. Although I was right to have my own stand and principles, but I do realize that I need to fix our relationship, so that in the future, my products will run smooth. What I am going to do in the future is to take his or the seniors' opinion into account, and to humble myself. Well, after this incident, it also teaches me one important thing, which is respect others and to be humble. It could be that I'm so arrogant that I ignore others feeling, which I plan to change. Well, back to the Money Master topic, becoming the master to money is not easy, but slaving for money is the other way round. I'm confident with the daily lesson I learned from my job, my relationship with others etc, I can become the Money Master soon enough that I can enjoy living a frugal live after that. After all, we need to enjoy our live. All works and no play make Jack a dull boy.

Saturday, May 10, 2008


Phew......finally getting the permission to post using my own profile. Was doing the 'restructuring' work on the blogs with my brother for weeks and finally we figure out it will be better for us to post the blog using our own profile. Before this I was posting using my younger brother's profile as he was the one to encourage me to blog. I am glad because I can share my 2 cents opinion on money matters with others across the Net. But while doing so, I realized that restructuring is actually part of our life and as well as a process to increase our net worth. Usually a company will restructure if there's change in leadership. Some company will restructure if the circumstances force the company to do so. Nevertheless restructuring usually means new idea, innovation, creativity, motivation etc. While 'restructuring' our blog, both my brother and me come out with more and more idea in which we would like to share with others, but we realized that we need to streamline it so that our 2 cents idea or our opinion can be practice by our peers. Thus, we come out with this idea to use our own profile, instead of sharing the same profile, which can sometimes be quite confusing to our peers. Whoops...... seems like I'm off-topic a bit. Ok.... Back to the money matters and how restructuring can be apply to it. Well, most of us draw fixed amount of salary monthly and the way we spend it could be the same from one month to another. It's because we have house loan, car loan, education loan, credit cards loan etc. The amount of our debt seems to be fixed. But how many of us restructure our budget once in a while? Or we only restructure the budget yearly when we have increment? In my opinion, it is better to restructuring our monthly budget once in a while and while our income is still fixed. By restructuring once in a while, we can come out with the idea of earning more money, renewed motivation to achieve financial goals. Besides that, we can be so detailed on the spending until we can reduce unnecessary expenses. By doing so, coupled with discipline, hopefully we will achieve our yearly financial goals, or in fact do more than that. Cheers......

Tuesday, April 29, 2008

Methods to save more money

I guess it is valid to say that everyone know that it is important to save money but the question is how many actually do it? And what are the practical steps necessary??
Here are some of the practical steps that I would recommend and I wish that you will read it carefully and review it with your life.

1) Eat outside one less each time a month.
Assuming that you love to eat outside with your friends and that you went for supper about twice a week. Meaning you went for 8 times a month and that each time you probably spend about RM8. So if you were to eat out less each time a month, by the end of one year, you will be saving about RM464 . Well, that is quite a big amount and in the long run, you might just realized that it actually add up to all the reasons why you are not having enough. Of course it would be even better if you could just be going out once a month, (cause by that, in one month alone, you're saving close to RM60). But let us be reasonable and start with just eating less once a time in a month.
2) Bring your lunch to school/work.
It is difficult to determine how much amount of money is actually spent on food if you spend at home and also outside almost everyday. Imagine this: I have to buy RM300 for food at home and then I spend another like 7bucks a day for lunch. That will make it RM140 lunch money a month plus the will be RM440. Imagine if you cut the cost for eating outside and replace it with lunch box...your expenses could be easily reduced by RM60-80 depending on how luxurious is the food. And it is even more healthier than going for food outside.
3) Create a shopping list and stick to it when you get groceries, and use coupons (estimate saving could be about RM40 a month)
When you want to go shopping, go with a list. And there are always coupon in big shopping complex like Jusco or Tesco. And also the usage of credit cards with bonus points. All these little amount could add up into big amount without you realizing it. It is also a discipline that you won't be inside a shopping complex and be deceived by the word "SALES".
4) Use generic brands
Nobody will realized if you bought the cheap TESCO milk or the fancy brand. And it really doesn't matter if I am using a LV wallet or just the "ciplak" brand from Pasar Malam. After all, you are not using the wallet for anything else but to keep the money inside it. No one can do these for you. Only you can decide on what is your priority. Like Nike said...JUST DO IT. Going for generic brands in the long run could add up your savings in a big amount. Estimation should be about RM100 a month depending on how much you are into trend.
5) Lower the utility bills.
Ask your local utility company how you can lower your energy bills. Example the phone usage at home now has a lot of package. Some only requires you to pay RM38 per month. Energy usage could also be lowered by only using the HEATER when it is very cold. And the aircondition should only be turn on when necessary. This step could easily save you about RM20 per month.

Alright...5steps seem too much for one lesson I guess.
Anyway after the 5 steps, estimated extra saving should be around this: RM20+RM100+RM40+RM60+RM40) = RM 260
By just simply being more careful with your spending you have RM260 extra a month. Consider keeping the momentum for 4 have about RM1000 extra in just the 1st third of the year. Try it out and give us your feedback.

Monday, April 28, 2008


Money usually comes with two elements; income and expenses. Income and expenses are different but at the same time similar. Some might wonder why the element can be different but at the same time similar. Previous posts stressed on the way to increase the income. But what is the purpose of increasing the income when we cannot control our expenses? It comes to nothing, right? If we made 2k, and we used up 1.8k, we still have 200 left. The 200 left can be used to increase the income if use to invest properly and accordingly. But if we made 100k, but we used up 100k, we have nothing left. And if we made 3k, but we used up more than 3k, we not only have nothing left and we owe others money. So it does not matter whether a person is earning 1k, 2k, 10k, 100k, etc. The person must have wisdom in spending his or her money. Else even if he or she is earning 100k per month, the money will end up fast. Where as if he or she has the wisdom on spending money, even with lower income, he or she will end up getting more in the future as the money that was invested previously will continue to generate income. The moral of the story is to use within our means and spend wisely. So, it does not matter whether we are getting high income or low income. Our expenses can be used as an alternative to income. The less we spend on unnecessary, the more we will have to invest, which resulting to more income.

Tuesday, April 22, 2008

Consider Internet Business

I was reading on some of the ways to earn more money. Realistic ways for teenagers such as doing research paper, assignment for people as well as photocopy business. It was then that I saw some of the Anime stuff being sold at a very expensive price and I wonder what sort of people will be interested. Probably I was wrong because I realize that people who love Anime love especially limited edition collection. It is not really the price that matters to them but the interest in their favourite characters.
Then I read on the just a click away website....about internet business and that the capital requires are low and then it is a good medium to explore the opportunity for a higher income every month.
There are more than 800 millions users of the Internet and that those people are your customers and though out of the 800 millions, there might only be 0.1% who visited your website but that still makes it about 800 thousand customers. Well, not all will be buying from you either but then again the chances of making a deal is higher than the rate of those people who set up a shop in Jaya Jusco or Parade (well, I'm Ipoh using this places as example)
But then again, I know that there is so much more to learn about e-business...things that involve shipping, law and other relevant information. I believe it is a process of learning at the moment before the giant leap is to be taken

Tuesday, April 8, 2008

Writing yourself rich

Article-writing online could be a great way to earn extra income if you're an avid reader. A bonanza to all writers in fact. Even for beginners, it is possible to earn more money by writing articles although I'm not talking about earning 6 figures salary.
I'm always looking for fun and interesting way to help me generate my income.
One of my passion is through writing articles and it really works.
One of the ways is to write some of the few best articles that you are best at (it will be best to write topics that you are good could be traveling, sports, movie reviews, religious content or anything that you know best) and send it to the magazines through the net.
Some of the big companies that could be attracted to you might pay you a great deal of money to write. (I personally have not try this but heard that it works.)
On a more realistic note, try Readers' Digest that wants people to submit good jokes or even stories to them. And if you're the kind of person that read a lot about everyday heroes, it is also available in Readers' Digest. While I'm not saying that you will definitely earning from all the writings, it increase your chances of becoming a freelance writer.
Not all the sites offer you money are genuine. Some are fraud. So do take note of the amount of money that required to join the group.
Plus, if you're a good writer, you can also start an e-book through some of the online companies. Although I will recommend you to start it as a free read for people. Once you earn the credit as one of an outstanding e-book author, you might consider charging a small amount for people to buy the e-book. It is interesting how some people could be earning millions through writing while some of us are struggling with it.
Everyone have a dream and passion for the things that they love but only a few dare to walk through the struggles to achieve what they dream of.
Being a freelance writer will not take up too much of your time if you love to read and write, plus in the long run, you are creating an alternative career route for yourself.
Of course it will be even better to start having blogs of your own. I have seen people earning money by selling their high profile blogs and also gaining trust and credit as a professional writer because of the popularity in their blogs.
Some Malaysian politician also use blogs to gain popularity. Indeed the internet has made the gold pot nearer to each of us, if we only dare to take the step to risk.

the right mentality

The right mentality needed for the "BIG BUCKS" to arrive is necessary.
I was talking to a salesperson about his career and really, now is the time of his life where he is earning 5 figure salaries....much more than me (giving tuition is kinda limited with me still having to go through my studies) but surprisingly he is saving far less than me.
I knew probably it was the lifestyle of his that made his savings limited....Clubbing, yum cha, and all sort of activities took up his hard earned income. In the long run, he will be running out of "steam"earlier than many people who earn only 2k a month. Simply because he was not thinking far ahead enough.
I watched a barber nearby my house cut hair for my brother. It was not a profession that will make big buck all the more in my housing area. But this man has so much determination to do what he knows best....cutting hairs. And it is almost everyday that he open his shop from morning til night. (one of the most hardworking barber I have seen.) While he might not be as intelligent as an engineer or a teacher, he has the right mentality to make enough for him and his family, which is probably why his shop lasted far longer than those others that existed before his.
Getting to your gold pot before you're too old to use any of it....sounds familiar to you? Everyone understand the theory but the difficult part is starting to work towards it.
Sometimes people wonder why billionaires can make it to where they are....and it was really not just counting on lucks alone.
These people spent endless time thinking about improving what they have and really, it was hardwork and strong determination that put these people into the place where they are.
My brother posted a blog about becoming a millionaire by 28. While 3 years seem like a short distance to achieve that, I have strong beliefs that it is possible. (if there is a strong determination and beliefs in doing so, he will make it more than he is aiming at.)
While many people would want to talk about being realistic, I definitely understand it....we need to see beyond that short 3 years as well. The idea of being patience enough to wait for the right timing and opportunity are also vital into making it BIG before the $$ become useless for us.
Even at 20, I'm seeing many opening opportunities for me to enroll and pursue my career. Every fields are capable of producing "millionaires"...the question is how much determination and hardwork are there?
I had a teacher in my school who is earning 5 figures salary and really, it all seem so unbelievable for a teacher to do that...and yet he is capable of that and he has so much more extra time left. (That is the advantage of teachers)
And not to forget to mention of the Moven Peak's boss who started his career of as a waiter....and now he's earning more than some of his graduates friends.
The whole idea of becoming rich is captivating to some, while others view it as a "sinful thoughts" but I felt that there really need to be a right mentality to strike a proper be earning more daily while at the same time not obsessive with the money.
The right mentality is necessary. The young billionaire, Zuckerberg, creater of FACEBOOK has not just wait for people to use the networking system....the idea of FACeBOOK very much the same as FRIENDSTER but why is it so that some make billions and the other not.
The difference is simple....a thoughtful perspectives towards the demands of others...learning to understand others and not be a servant to MONEY.
Too many people work for money alone, not knowing that money is suppose to be the servant of theirs and not the other way round. While I understand that some people need to work hard 24/7 to be achieving to where they are, it is so much of a waste that we denied the most important element in life, relationship with one another.
It's all about having the balance between making money, investing and relationship....none of it can be separated from the other. A friend of mine has never work, even now after his STPM exam....he had a lot at home but the question is that he lose out something valuable that I have learned...experience.
So it is all about having the right perspective...the right frame to look at the world.

Friday, March 28, 2008

1M by 28, possible?

1M by 28, is it possible? After doing some thinking for days, I come to this 1M figure. Some might be asking "Why not 100K?" , or "Why not 1B?", or "Why not other figure?". Well 100K will be quite easy to achieve, while 1B will be too difficult and I was too lazy to come out with other figures. To be honest, 1M is not easy nor difficult. This is because as a salary drawing person, our net worth will not grow exponentially. In order to have our net worth growing exponentially, we will have to invest. My plan of course is to invest a big chunk of my money to stocks, so that I can earn from dividend, and also from the price appreciation. Money working for us definitely easier than we work for money. I'm 25 this year and so it means I have 3 years to achieve this and 3 years equivalent to 36 months or 156 weeks or 26280 hours. It also means that for each hour I need to earn at least RM39 to achieve this goal. Too bad I do not have much capital in hand, therefore earning RM39 per hour is close to impossible if I plan to invest. Besides this, I have other commitment, which makes the task more challenging. I like challenges, which is why I will try my best to achieve, and even I cannot reach 1M mark, I'm sure that it will be very close. So, 1M by 28, possible? Only time can tell, I'll say. :)

Wednesday, February 27, 2008


Recently I just got my salary. Usually before I withdraw the money, I will do a budget and this time is not an exception. Although my net income for the month is suppose to be higher than what I usually got, I was surprised that after paying for almost what I spent, and owed, I was left almost nothing much for investment. Then, in my heart, I start to think, "Why we're always lacking of money? Is it because of really lack of money, or just that I want to have more?" Sometimes I started to blame GOD on why I do not have enough. Well, then I started to think, "How much is enough? When will I stop this childish thinking that I don't have enough?" I must not forget, although my salary is not high, but it is a lot higher compares to those earning less than RM1000 per month. In fact, there's a lot of people earning few hundreds but they still move on. I do not know whether they complain like I did, but I'm sure it will be really tough to survive in Malaysia with few hundreds, considering our living expenses is quite high. I really salute those who manage to educate their children well, having to worry about their daily expenses at the same time. If they did that successfully, I know that one factor contribute to the success. Discipline. How many of us are willing to stick to our budget? Without discipline, one will have overspend the money he or she has. Without discipline, even an ultimate budget plan will not goes well. By posting this blog, I reminded myself again and again, I have to have the discipline to control my spending from today onwards. I hope I will always remember this, and I hope you will be the same.

Saturday, February 23, 2008

My Point Of View On This Week's Stock Market

KLSE has been going down since the day Malaysia Prime Minister Datuk Seri Abdullah Ahmad Badawi announced to dissolve the Parliament and to have a General Election on the 8th of March. If we look at our bourse compare to others in the region, KLSE never go to green zone, even when the DJIA closed in green. A lot of factors contribute to this heavy selldown of KLSE. One of it is the profit taking activities by the speculators. Another would be the selling of Gamuda, which is the country's 2nd largest construction player. Datuk Lin Yun Ling cut his stake to 1.7% from 5.2%. Discussion has been going on this counter whether this could turn out to be another Transmile as Datuk Lin is not just an ordinary shareholder, but he is the MD as well. A lot of investors fear the worse has yet to come decided to even cut loss and Gamuda continue to drop. And at one point yesterday, Gamuda reach 3.78, which is very tempting. Too bad I was not around to monitor as I went for my group's teambuilding. Finally, foreign-led selling of blue chip counters also contribute to the heavy selldown of KLSE. Most of the counters in KLSE are currently at discounted price. But most investors still fear. Have we reach the bottom yet? In my opinion, if KLSE reach 1350 and cannot sustain at that point, meaning we still have yet to see the bottom. I believe we can still go down more if there is still uncertainty in our politics, so we better pray for this GE to be over as soon as possible. Until then better not catch the dagger while it is falling. The best bet currently is not to panic and cause more heavy selldown, but to hold some of most reliable counters that we won't regret holding. Warren Buffett quoted this before "Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years."

Monday, February 18, 2008

Can blogging make me rich?

A lot of people tend to believe that blogging can make you rich but the fact is that blogging will not and in fact, if you don't love to blog, don't even think of making money this way. Blogging is never a way to get RICH will only provide you the extra income as a bonus especially if you love to blog. ADSENSE, ADBRITE and many other Advertisement company offer you lil money while putting advertisement into your blog.
But let us get back to Earth, all these companies have their own terms and regulations to protect themselves from giving money to people who simply set up a blog and click on the ads.
To make more money, blogging can give you your bonus but not like what some may said that they only blog and wait for those ADVERTISEMENT COMPANY to pay them.

Nevertheless blogging is one the ways to open up your network and also to earn credit for having able to share your perspective and ideas to the world through the internet. In a way, if you are interested in journalism, it could help you to land a job in a magazine company.
So blogging a waste of time or what? I think it is a place for people to learn and to share....and to add to it, there will be some bonus for the writings you put into the net.
So why not?

Friday, February 15, 2008

A good marketing strategy....

Ever wonder why some football club would be earning big bucks and generate income each year while some go into debt and nearly even go good example is Fiorentina.
If we talk about NIKE, everyone would know that this brand represent sports and is special in its' own way....question is how is it possible for a similar symbol to a "tick" become so popular. How come Manchester United could be earning so much every year even though after paying their millionaires footballers?
If you are not a football fan, you probably would still hear of the name DAVID BECKHAM before....and the Red Devils through the Busby Babes tragedy earn even more than their usual income.
I think something that those big names have learn to capture is the heart of the "people". The book "Art of War" by Sun Tzu mentioned that in a country, the priority is the citizens of the country and not so much of the King. If a leader learn this, he would be on his way to victory in every battle.
Big names like Manchester United have been able to entertain their fans through their attractive football game. And the Red Devils board never failed to capture the passion and heart of the fans towards the Busby Babes....and yes, until now....the Red Devils team has been attracted fans all over the world.
And so what about all these marketing strategy has to do with us making money? The key factor here is for us to realize the most simple yet almost all the time being ignored...."the customers."
It does not matter if it is in sales or anything else.
Lately CJ7 make a big hit in the entertainment industry. Yes, the story line is rather simple and predictable in a way, but it is something new for Chinese movie to produce something that can only be found in "disney land"....FINDING NEMO, CARS and many others....CJ7 has not failed in this area....the little alien that look very much like a dog would definitely be gaining much popularity. Therefore for a good marketing strategy, there need to be a sincere search towards what the customers want.

Monday, February 11, 2008

Earning despite of the economy slowdown....

It's been some time since this blog was updated and suddenly this thing pop up from my mind. The 97 dotcom crash happened more than 10 years ago, and it is believed that the economy will slowdown every 10 years. How do we actually can earn more especially during the economy slowdown? I think the easiest way to earn passive income is and will always be the stock market. However it also depends on the stock selection of investors. Long-term investors will opt for counters with strong fundamentals, dividend and bonus payout. Bonus and dividend can act as side income during the economy slowdown. But how do we know which company has strong fundamentals? Well, the best time will be during the economy slowdown - only during the economy slowdown, you can see which counters can hold up quite well........."Only when the tide goes out do you discover who's been swimming naked", quoted Warren Buffett - one of the world richest man who is known for his unconventional style and frugality despite his immense wealth.
But then again, how many Warren Buffett do we see in reality?
Anyway, it is always wise to make sure that you are not in heavy debt by going into stock market. Because if that's the case, there will be no turning back for you if somehow everything turn against you at that time.
It is wise to be careful during the economy slowdown but also important to take notice of the opportunities that are arising.
There are group of people who make big buck during the economy slowdown while another group heading towards disaster. To be heading the right path means you need to be alert enough to notice any changes in the market, just as in the olden ways during the wars, the Chinese warriors need to master their senses in identifying the weather as it plays an important part in determining the winner.
Read the book on "The Art of War" by Sun Tzu and you will be able to learn that even better.

Saturday, February 9, 2008

CHINESE NEW YEAR is here...and most people will greet you GONG XI FA CAI!!! meaning wishing you a great prosperity...something like that. (I don't really understand Mandarin).
Well, while new year should be a time of celebration, a lot of Chinese would be involve in gambling. Some would play for fun while some would want to take advantage of this and hopefully "choi" (luck or prosperity...not sure which one) will be on their side. It is indeed a time of celebration and if kids were to play cards for fun or even a few cents, it should not really be a concern yet but if one play cards to win, that is when the problems start.

If gambling has been part of your life, you are only associating yourself with the enemy of money and thus becoming one yourself. Nobody wins in gambling....only the casino owner would or the banker...that is the fact. While some happy go lucky guy might have been able to earn some money once in a while, many more head to the "bankruptcy" list.

So let's face with this fact....if you want to take the risk in gambling, it would have been better to look into stock market or unit trust. It is good to take risk but when it comes to gambling, there is more than 50% of losing.

Well, some Chinese people don't like the word "shu" or lose but I think there really is a need to look beyond those unlucky words but start thinking it in the right perspectives. No money comes based on luck alone....your choice between the two heading down for destruction for sure while the other heading the opposite way.

Friday, February 8, 2008

"It is okay to be poor, as long as we do not lie, steal or take things that do not belong to us." These were the words of famous comedian Stephen Chow in the latest movie, CJ7.

Well, it might be a lil difficult to digest this post as it speaks of being poor in a blog which speaks of friend to money. Okay...let's look at it this way...while making money is important in life, I think the movie CJ7 tells us that it is even more important to become someone useful for the community. The movie did not promote poverty but the fact that poverty exist, we need to face with it. Imagine a father who earn hardly enough for the family has to reject the request of his little boy for a new toy. That is the kind of message from CJ7.

But let's get it right...this blog is talking about making I'll get my information accurate with the title of this blog...if you want to read on other more important stuff...check on my other blog:

I remember reading a book on making money and one of the most important key to gain market is trust. Everyone is selling products and some are of the same as why would the people around you choose you and not is the key.
The movie CJ7 teach us on that...listen to the advice of Stephen Chow...don't cheat, steal, take things that do not belongs to us....but work hard and earn what we call...DIGNITY.
If that characteristics are in you, success is just a step away. Nothing comes good in the long run if lies and corruption are part of it. Do what is right even if it means to lose a little while at the moment. Remember the first posting....GOD WILL NOT BE SO UNFAIR TO THOSE WHO WORK HARD....

I think it was one thing most people who are trapped in the cycle of poverty would always fall into...."perception of never being able to move beyond this cycle". While I am not saying that it is easy to move beyond this, there requires a strong will and beliefs to move beyond this cycle. I must admit that watching CJ7 gives me much enthusiasm to work it and you will one part in the movie, Stephen was disagreeing with his boss on his decision to send his son to a private school...he believes he can manage it and yes, that is the spirit one should have even if others go against you. If we look deep down into our everyday lives, "unsuccessful people normally are people who wouldn't try harder."

Not all though....well, failure is bound to happen if one choose to go beyond the comfort zone....but remember it is better to die trying than to die waiting. Money is not everything but if you want to give a better life for your family or even think about creating a better world, the first thing to do is to step into this corrupt business world and try to do something to change it.

"MONEY MONEY MONEY....must be funny, in the rich man's world." Let's not just sit waiting for a better have to work for it. And if you can't even take care of your own family, don't talk about the world. If BIG BUCK can only be earned by corrupted people, then we are only allowing the "SYSTEM OF CORRUPTION TO RULE IN THIS WORLD." Making more money is not a is on the methods of earning more that define the characters of a person. I must admit that I am also earning money through blog but hey...I'm not doing anything is also an advertising opportunities for companies....I am doing my best to write something beneficial to more people so that this blog would be a channel of blessing and not a door of "receiving money by clicking".

Money is not everything....but let's face it...for people who are poor, money could have been a blessing. Let's take it in a positive light....CJ7 is a movie of good introduction to poverty and hardship though a little bit of exaggeration yet a good example of how tough lives would be without money.

Well, money is important and I would work hard to earn more but like what is in CJ7, let us not lie, or cheat or steal or take things that do not belong to us but work hard and try to become someone useful for the community. I believe that itself would generate income....think outside the box....think outside a bias perspective....but at the end of the day, the choice is this new movie, think beyond the norm.
Work hard for it....good job Stephen!! I believe the same results would occur if anyone would work hard and try harder each time.