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Monday, June 23, 2014

How to mess up your Retirement Plan?

Have you ever wonder if you could ever retire? 

Most people find it difficult to go through the month with their current earnings....so what do you expect to happen when you retire?

Is retirement possible?


While Malaysia set a minimum savings at age 55 to be RM196,800, meaning that you will have about RM820 a month for 20 years. Quite a small amount but if you have already got your healthcare taken care of, mortgage settled and children's education done, you should be quite safe. 

Now, if you think RM196,800 is a small sum and insufficient, then it's better that you be prepared. If you want a comfortable income to sustain you and your family after you retire, you have to start planning now. Not tomorrow, not in the future. 

Here are some ways that you can mess up your retirement plan and ended retiring poor.

1) NOT ENOUGH SAVINGS

If your monthly income is good enough to cover your expenses only, maybe it should be an indicator that you are not having enough savings. Since you spend too much, you don’t get to save enough money. And when there are instances of emergencies, you’re left with no choice but to tap into your savings because, as mentioned, you don’t save enough.
Not everyone has easy access to revolving funds or financial loans whenever they need it. Loans also aren’t always immediate, so you can’t count on them if you need money to spend on urgent matters. If you’re not being a smart saver, then you’ll have a lot of difficulty during retirement.

(when I said smart saver, I mean diversifying your savings into equity investment and also for emergency fund).

2) KEEP UP WITH THE JONESES

Now, more often than not, this feels good at the moment. You got the latest gadgets that are on the market, buying expensive brand goods like your coat, watches, glasses etc. People looked at you with envy at times when you showed off your latest Gucci or your new Tissot. Then you get to dine in the finest restaurant...how does that feel? Great? Tasting luxurious wine on a bar at the top of the building with the perfect KLCC view....well, I'm not against all of these...in fact, it felt great to enjoy life even now but if there's no limit to it, then you’re not putting in enough in your savings account or your retirement fund. What you spend should be able to keep up with what you earn. Spending more than you can manage will affect not just your retirement fund, but your current finances as well.

3) LIVING WITHOUT BUDGET

A lot of people don't know where their money goes to....or maybe they don't wanna know. They don't keep track. I used to be like this and it's bad, because it's very easy to spend more than one is earning, especially in Malaysia...unless for some reason, you happen to be a friend of some Datuk. (well, that's for another story though...)

There are a lot of things you spend on each month: utility bills, groceries, or debts. You might even be paying for our children’s education. It’s a must that you have a concrete budget plan. Budget your monthy income, and make sure to leave some for savings, as well as spending money. Remember to always put your needs first before your wants. It's easy to keep track with an Excel spreadsheet or some apps available on your smartphone.

4) UNWILLINGNESS TO TAKE RISK

Like I said earlier in point 1, being a smart saver...put your money into investment, or else it'll be eaten up by inflation despite of all your hardwork into savings. 

Of course, you got to know your risk tolerance based on your current situation and commitment. You can definitely consult with an advisor about it or learn about investment lessons from people who are good in investment. But again, it's still necessary to practice caution at the same time.

5) POOR DEBT MANAGEMENT

Now, a lot of people (myself included) fall for this. The credit cards make it so easy to spend beyond our means. 

So, make sure that you pay your credit card bills and loans. If you aren’t on top of repaying your bills and other debt, the money you will owe banks and financial institutions will only accumulate, the  longer it takes for you to repay. Chances are, you might have to keep paying them well into your retirement. This is why choosing the right credit card or personal loan is also important. 



Well, I'm sure there are many more ways to mess up your Retirement plans...if you are already doing any of this 5, maybe it's time to make a change.

Tuesday, June 17, 2014

Microsoft's new strategy: Machine Learning

If you think Microsoft's new CEO is making another bold statement without action, think again. Microsoft's new CEO, Satya Nadella is serious about cloud computing and he has a strategy.

A supposedly comprehensive predictive analysis service — and all you have to do is store your data in Azure, the Microsoft cloud.

The service will be known as Microsoft Azure Machine Learning (ML) was announced on Monday but will only be available in June. This is the first time where Microsoft combines their very own software with publicly available open source software, so that it's much more easier for usage than most of the available arcane strategies that are available now.

Machine Learning - fixing today's problem yesterday


The VP for ML at Microsoft proudly said, "This is drag-and-drop software."

This is a big step forward in popularizing what is currently a difficult process in increasingly high demand. It would also further the ambitions of Satya Nadella, Microsoft’s chief executive, of making Azure the center of Microsoft’s future. 


Machine learning computers examine historical data through different algorithms and programming languages to make predictions. The process is commonly used in Internet search, fraud detection, product recommendations and digital personal assistants, among other things.

As more data is automatically stored online, there are opportunities to use machine learning for performing maintenance, scheduling hospital services, and anticipating disease outbreaks and crime, among other things. The methods have to become easier and cheaper to be popular, however.

That is the goal of Azure Machine Learning.

Here is a video posted by Microsoft on Youtube:




Weekly Investment Term #5

I'm not a believer of technical analysis but I heard a lot of people in the investment industry look at the technical analysis and try to understand the trend and behaviour of the stock moving forward by looking at the chart. 

Well, I'm no expert to it but if you are interested, here is one term that you should understand: Trade Volume Index (TVI)



A technical indicator that measures the amount of money flowing in and out of an asset. Unlike many technical indicators, the TVI is generally created using intraday price data. The underlying assumption of this indicator is that there is buying pressure when the price trades near the asking price and selling pressure when it trades near the bid. The TVI is actually very similar to the on balance volume indicator but it takes the volume attributable to every trade instead of just the closing volume. 

Generally, TVI helps investors to identify which security is being accumulated (buy) and which are being distributed (sold). 

Thursday, June 5, 2014

Microsoft Corp making the right friends now

Just over a year ago, Salesforce actually labelled Microsoft Corp as the "evil empire". 

Now, they are friends.

Why the sudden change? Most probably it's because of one man. The new CEO Satya Nadella.

New man in charge of Microsoft Corp


It's hard to imagine former Microsoft CEO Steve Ballmer sitting down with salesforce.com Head, Marc Benioff for any reason, let alone to announce a strategic partnership between the two once-bitter rivals. But in yet another win for Nadella, the two were weren't just in the same room, they were gushing about each other's services late last week as they announced the joining of forces.

The deal doesn't include Salesforce incorporating Microsoft's Azure Infrastructure-as-a-Service (IaaS) yet, but that shouldn't prevent both from recognizing gains from the alliance. For Salesforce, its leading CRM solutions will now be incorporated into Windows phone and desktop devices -- yes, there are still a few out there. And Azure isn't completely out of picture, Benioff said. Salesforce will use the IaaS internally at first, and look for ways to integrate the service into other areas of the company.

For Microsoft, gaining a commitment from the leading CRM provider to further incorporate SQL server solutions and, perhaps even more exciting for Microsoft, expand Salesforce's use of Office 365, are major wins. Microsoft's Office 365 Home already has 4.4 million subscribers -- adding almost a million in the last three months alone -- and the partnership with Salesforce should give it an even bigger boost.

Well, Nadella made it clear that his goal and focus for the company is this...
mobile and cloud-first focus and he made it shown.

As impressive as the new strategy taken is, what speaks more about Microsoft new approach is definitely Nadella. It hasn't taken long for Nadella to spark change at Microsoft, and if his new friends are any indication, we haven't seen anything yet.

Tuesday, June 3, 2014

IPOs are almost always a bad investment

Well, if you're following the news, you'll probably disagree with this statement: IPOs are almost always a bad investment.

After all, if you bought 7-11, you're probably looking your stock at 1.61 now, from the 1.38 ringgit that was priced each in its IPO. 7-Eleven Malaysia Holdings Bhd (SEM), controlled by Malaysian tycoon, Vincent Tan is looking like a great investment, just like how Karex turn out last year. Again, if you bought IPO, you have earned some big money. So, why did I said IPOs are almost always a bad investment? Well, I didn't say it. That was a statement made by the man who earn a fortune from investment, Warren Buffet.

Buffett told Berkshire Hathaway shareholders that initial public offerings are almost always bad investments. He says there is so much hype involved that IPOs won't be the most-attractive value.



He said investors should be looking for good businesses to buy and trying to determine how those companies will fare in 10 years.

Well, a lot of people can have differing views on this. No doubt bout it, Warren Buffet missed out some big stocks like Microsoft in their boom time, Apple and then Facebook, but he was a man that made himself as one of the richest in the world from investing. 

I'm not gonna say much but the key thing to take from his view is simply this:

"I think the worst mistake you can make in stocks is to buy or sell based on current headlines," Buffett said.

The man has already said his view...what about you? Still looking to buy more of 7-eleven?