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Sunday, August 29, 2010

How To Withdraw Money From Paypal Account

Just past few weeks, a friend of mine just started to use his Paypal account. The purpose he opened a Paypal account is to sell stuff at some auction websites, which I'm not sure, though I strongly believe it could be Ebay. Anyway, he told me that he got a problem getting the money and it will serve no purpose if the money can only stay in the Paypal account and use for online business as he might want to cash out anytime soon. Anyway, I told him that there is actually a way to withdraw money to his bank account and then tell him step by step how to do it while we were on the phone.

Anyway, due to the phone conversation, I know some of us are not aware that we can actually withdraw the money to the banks in Malaysia.

Below are the step by step on how to do it beginning from registering a bank account to the Paypal account.

1. Login to your Paypal account. You should be getting something like the following screenshot.

2. Next, click on the Withdraw tab and you will see that you can withdraw money either direct to the bank account and to debit card or credit card. Click on the Withdraw to your bank account link to withdraw direct to the bank account without any charges, provided the amount is more than RM400.

3. After you click on the Withdraw to your bank account link, you will be directed to the following page.

If one withdraw money from Paypal account for the first time, he or she will need to setup a bank account to the Paypal account. To do so, click on the Add bank account link on the page. You will be directed to the page as shown below after you click on the Add bank account link.

4. Fill in the details required in the setup bank correctly. The MEPS bank routing code is actually the Malaysia bank Swift code. Double check the details so that you will be getting the money instead of the money going here and there. Click continue once filling in all the details. Confirm the details and then repeat step 2 (this is my shortcut way of getting to the right page). This time you can enter the amount in USD and if you have only one bank setup to the account, it will appear in the To column. If you have more than one bank account setup, just choose the correct bank account. Click continue when done.

5. Review your withdrawal information and click Submit to confirm the withdrawal information.

6. Finally, you will be directed to the following page stating that "Your funds will be in your bank account in 2-3 business days" as shown below. An email will be sent to your Paypal email account as well for your reference.

If I remember correctly, I always withdraw on Monday and get my money before Friday on the same week. Hope this helps.

Wednesday, August 25, 2010

The "Middle Income Trap"

I come across this article and thought it would be nice to share it out here to see what are other people's opinion on the Middle Income Trap that are facing by some of the developing nation like Malaysia currently.

China, Malaysia, Korea And the Middle Income Trap

I just learned a new term today that I know I will be using frequently in the future. The term is "middle income trap" and it crystallizes some of my previously discombobulated thoughts I have had regarding economic development. Let me explain.

This new term (for me) comes from a post by Michael Schuman on Time Magazine's Curious Capitalist blog, entitled, "Escaping the middle-income trap." The post focuses on how Malaysia's economic growth has been so consistently strong since World War II, yet has been slowing over the last few years and of how Malaysia just cannot seem to break into the league of developed nations. Schuman defines this "trap," as follows:

I returned a few days ago from Kuala Lumpur, the capital of Malaysia, where the talk of the town – well, at least among economists -- is the “middle-income trap.” What's that, you ask? A developing nation gets “trapped” when it reaches a certain, relatively comfortable level of income but can't seem to take that next big jump into the true big leagues of the world economy, with per capita wealth to match. Every go-go economy in Asia has confronted this “trap,” or is dealing with it now. Breaking out of it, however, is extremely difficult. The reason is that escaping the “trap” requires an entire overhaul of the economic growth model most often used by emerging economies.

The concept behind the “middle-income trap” is quite simple: It's easier to rise from a low-income to a middle-income economy than it is to jump from a middle-income to a high-income economy. That's because when you're really poor, you can use your poverty to your advantage. Cheap wages makes a low-income economy competitive in labor-intensive manufacturing (apparel, shoes and toys, for example). Factories sprout up, creating jobs and increasing incomes. Every rapid-growth economy in Asia jumpstarted its famed gains in human welfare in this way, including Malaysia.

However, that growth model eventually runs out of steam. As incomes increase, so do costs, undermining the competitiveness of the old, low-tech manufacturing industries. Countries (like Malaysia) then move “up the value chain,” into exports of more technologically advanced products, like electronics. But even that's not enough to avoid the “trap.” To get to that next level – that high-income level – an economy needs to do more than just make stuff by throwing people and money into factories. The economy has to innovate and use labor and capital more productively. That requires an entirely different way of doing business. Instead of just assembling products designed by others, with imported technology, companies must invest more heavily in R&D on their own and employ highly educated and skilled workers to turn those investments into new products and profits. It is a very, very hard shift to achieve. Thus the “trap.”

Schuman sees South Korea as "probably the best current example of a developing economy making the leap into the realm of the most advanced." Schuman sees Malaysia as a long way from making that same leap:

Malaysia, though, is quite far from where it wants to be. That's a bit surprising based on its remarkable recent history. Malaysia has been among the best performing economies in the world since World War II, one of only 13 to record an average growth rate of 7% over at least a 25-year period. The country has an amazing record of improving human welfare. In 1970, some 50% of Malaysians lived in absolute poverty; now less than 4% do. Yet Malaysians also feel that they've become somewhat stuck where they are. GDP growth has slowed up, from an annual average of 9.1% between 1990 and 1997 to 5.5% from 2000 and 2008. Meanwhile, other Asian economies have zipped by Malaysia. According to the World Bank, the per capita gross national income (GNI) of South Korea in 1970 was below that of Malaysia ($260 versus $380), but by 2009, South Korea's was almost three times larger than Malaysia's ($21,530 versus $6,760). Malaysia is getting “trapped” as a relatively prosperous but still middle-income nation.

Schuman does not see Malaysia making the leap. Its companies are not innovating. Its private investment is declining and it spends almost nothing on R&D. "If Malaysia is going to break the “trap,” it has to reverse all of these trends."

So what has made Korea so different from Malaysia?

Why has Korea jumped so far ahead? I think the reason is embedded in the different methods the two countries used to spur rapid growth.

Both countries relied exports to create rapid gains in income, but they did so differently. South Korea, from its earliest days of export-led development in the mid-1960s, had been determined to create homegrown, internationally competitive industries. Though Korean firms supplied big multinationals with components or even entire products, that was never enough – Korea wanted to manufacture its own products under its own brands. The effort was often a painful one – remember Hyundai's first disastrous foray into the U.S. car market in the late 1980s and early 1990s – but Korea is where it is today because its private companies have been working on getting there for a very long time, backed in full by the financial sector and the government.

Malaysia, on the other hand, relied much, much more on foreign investment to drive industrialization. That's not a bad thing – multinational companies provide an instant shot of capital, jobs, expertise and technology into a poor country. MNCs, however, aren't going to develop Malaysian products; that has to take place in the labs and offices of Malaysia's private businesses. But those businessmen have been content to squeeze profits from serving MNCs and maintaining their original, assembly-based business models.

I have for years viewed Korea as THE success story of Asia. In fact, whenever people tout China and act as though democracy is wholly incompatible with growth, I respond with Korea. You can see me making this point in this Commonwealth Club of San Francisco video of a "Doing Business in China" panel. Korea was at one time the second poorest country in the world, second only to Niger. Now, Seoul is more dynamic than Tokyo and Korea just continues to grow both economically and in terms of its political freedoms. Why is that? And why are countries like Malaysia and Thailand stuck in the middle ground? And what about China and Vietnam, will they be able to make "the leap?

Japan and Korea are important because they have spending power. Vietnam and Cambodia are important because they have very low wages. China is the most interesting because just three or four years ago, companies were going to China because of its low wages, but now, companies are going there to make money (mostly on the Coast) and going there to make things (more and more inland).

Where do Malaysia or Thailand fit into all this?

Malaysia and Thailand remind me a bit of the mid-size law firm. I can understand hiring the big firm for the big deal or the big case requiring a massive number of associates or legions of highly specialized partners. And I can understand hiring a highly efficient and focused small firm. But I rarely understand hiring the mid-sized firm, which usually tries to price itself along the same lines as the big firms, but without the corresponding depth or expertise. Why bother? And nothing against either Malaysia or Thailand, but I think many businesses have asked themselves this very question.

Source: China, Malaysia, Korea And the Middle Income Trap

What do you think?

Sunday, August 22, 2010

Buying Handheld TV

With everything going mobile, one might be tempted to get a handheld TV as well especially among the movie lovers. While others might be curious that why he or she should be getting a handheld TV instead of more advanced portable media players like Ipod, well, you pay what you get. Handheld TV is made for TV lovers who plan to install the TV in their cars, or bring their TV set around to watch their favourite TV series and portable media players like Ipod requires one to download the media files from website instead.

Wednesday, August 11, 2010

How Rich Is Rich?

I come across one very interesting article from Personal Finance News from Yahoo! Finance - How Rich is Rich and think it might be suitable for me to share it out here and let us really ponder about the article and think how much does it need for you to feel rich?

How much money do you need to feel rich?

Wealth is a subjective concept, but one thing is universal in most definitions: being able to live a comfortable life without having to work.

"I'd like to have enough money so my family and I wouldn't have to work anymore or worry about the necessities, and maybe travel a bit," said Deborah Veale, a Southern California resident visiting New York City.

Veale said she'd need about $10 million to consider herself set.

One woman from Seattle put it at a "couple thousand dollars a month." Another from New York City wanted a billion (although she'd still fly coach.)

Experts peg the figure to be somewhere around $2 million to $12 million in savings.

On the high end of that range, a single person living in an expensive part of the country (say, New York City), wanting to retire at 35 would need at least $300,000 a year to feel rich, according to Steven Kaye, president of Watchung, N.J.-based wealth management firm American Economic Planning Group. He based that number on real-life figures his clients tell him they need.

A yearly income of $300,000 would allow for taxes, a $3,800-a-month apartment (the average price in Manhattan), and a monthly spending allowance of around twelve grand, he said. Not too bad, especially since you could do this all without a pesky job.

To generate $300,000 a year beginning at age 35, you'd need a nest egg of just under $12 million. That assumes a conservative investment portfolio generating a return of 5% a year, an inflation rate of 2.5% a year and Social Security benefits of $25,000 a year starting at age 62.

Over time, the shape of your nest egg would resemble a bell curve, growing in the early years, and then declining as inflation required you to withdraw more money to maintain a lifestyle equivalent to $300,000 in 2010. The $12 million would finally dwindle to $934 when you turned 100.

If you live in a low cost part of the country, $100,000 a year should be enough, said Kaye. In that case, you would need savings of about $4 million to retire at 35.

But if you're willing to stay in the workforce until age 65, a mere $2 million would be enough.

Jon Duncan, a financial planner at Tacoma, Wash.-based Seneschal Advisors, gave numbers similar to Kaye's, and agreed that for most people, the figure would be somewhere in the multi-millions.

"I'm from an era when we'd talk about millionaires and say 'Whoa, he's got it made for life,'" said Duncan. "But that's not the case anymore."

Indeed, few experts think a million is enough to quit your day job.

"Don't retire at 35," he advised this reporter, "you'll need a ton of money."

Keeping Up With the Joneses

Of course, there are other ways of determining wealth besides just what you'll need to live well in retirement.

Although decidedly not recommended by financial planners, one is relativity. Basically, you're rich if you're making more than your brother-in-law.

That appears to be how the government measures affluence. The Obama administration wants to extend tax cuts for all but the wealthiest Americans, which it defines to be those families making more than $250,000.

But that only includes about 2% of the population, according to the Census Bureau.

Kaye cautions not to confuse wealth with income. Some people can make a million a year, but be spending a million and a half. They are not rich, said Kaye.

"Income relates to lifestyle," he said. "Wealth relates to balance sheets."

Thursday, August 5, 2010

Are You a Wealth Accumulator?

There is this book called The Millionaire Next Door by Thomas J. Stanley and William D. Danko regarding the process of every one to accumulate great wealth. Don't get me wrong, this book is not giving the tips on how to get rich in 5 minutes, but rather the slow and steady process of successfully accumulating wealth.

According to the book, there is a formula to calculate or benchmark whether a person has successfully accumulate wealth according to their age and income and it summarizes into the following:-

Multiply your age by your gross annual income from all sources except inheritances. Divide this by ten. This, less any inherited wealth is what your net worth (excluding home equity) should be.

There are few classification of wealth accumulator and is as follow:-
  • A prodigious accumulator of wealth (called a PAW throughout the book) has a net worth twice as high as this formula.
  • An under accumulator of wealth (UAW) has a net worth under half of this.
  • An average accumulator of wealth (AAW) who has the net worth between half the formula and twice the formula.

The formula actually quite make sense because a doctor might be making a whole lot more money than a janitor, yet because the doctor spend excessively, he or she is actually a UAW while the janitor might be AAW or UAW because of his or her habit of accumulating wealth. Age also comes into play in determining whether a person is a wealth accumulator or not because the older you get, you will eventually have higher net worth.

Let's look at the following scenario:-
A and B is earning 50K and 100K respectively and both of them are of same age at 30 years old.

According to the formula,
A = 50, 000 x 30 / 10 = 150, 000
B = 100, 000 x 30 / 10 = 300, 000

Both A and B are AAW if both of them have 150K and 300K in net worth respectively. But should A has net worth the same as an AAW B which is 300K, then A is a PAW. On the other hand, should B manage to accumulate net worth as an AAW A which is 150K, then he or she is UAW.