MONEY MASTER

As the year 2009 is coming to an end, we should start setting financial goals for year 2010. Financial goals are needed so that we can control our day-to-day financial affairs which will be executed by creating and following a budget. Good financial goals are usually realistic and achievable and will give satisfaction to one. It doesn't serve a purpose if a person earning 10,000 a year setting a goal which is to save 20,000 a year because it is impossible to achieve. Not only that, it will then demoralize him or her. There are few steps to set financial goals:- Identify and write down your goals. Break goals down into short-term goals and long-term goal - timeline could be differ; eg. some might take few months as short-term where as some will consider it as long-term Educate yourself and plan - Learn the debts and assets that we have, and to look into the expenses. Then plan a budget . Follow the budget with discipline and diligently . Evaluate your progress - it doesn...

As Christmas is just two weeks away I would like to blog a bit on Christmas shopping and spending. I believe by now, many of us are either busy preparing for Christmas, like me, decorating the Christmas tree at home just not long ago or busy planning the shopping details for this year's Christmas and with financial turmoil is just on the way for recovery, many might cut Christmas spending. It is always a virtue to spend wisely this Christmas, as we still have our financial goal to achieve, coupled with more festive celebrations over the next two months, namely the New Year and The Chinese New Year. Christmas is a celebration of giving as what our God has done by giving his Son, Jesus to redeem us. We can demonstrate the spirit of giving by giving gifts or celebrate this Christmas with others. Anyway, back to the point of spending wisely , there are indeed few points that one can consider in order to reduce the budget for this Christmas while at the same time enjoying this meaning...

BILL GATES VS STEVE JOBS It is an ironic when we mentioned these names. While both of name are famous for the "Information Revolution" , these are also the two names that hardly see eye to eye to one another. One of them are seen as the devil who is only interested in making money out of the manipulation of technology. Bill Gates is the villain to many of the techno geek and given the failed product of Vista, it is hard to deny that. However, let us not forget Bill Gates is also the man who give us Windows 3.11, Windows 95, Windows XP, and of course now Windows 7 . But for most people, Bill Gates is one man who only interested in money, money, money!! On the other hand, Steve Jobs gained the reputation more like a saint in this industry. Whenever people talk about Steve Jobs, people will talk about his passion for art, design and even perfection. While no one could deny the effort Jobs put on Apple's product, is it really true that Gates is the villain while Jobs is the s...

Whether you like him or not, the Apple CEO Steve Jobs has had a helluva decade. After all, it was under his helm that Apple defined the portable music player market with the iPod, has shaken up the mobile industry with the iPhone, rocked the retail music business with iTunes and re-invented the computing business with OS X in a way that the PC business - with less than 10 percent of market share - is no longer the bread-and-butter of the company. Of course, the marketing plan by Apple was brilliant and create a loyal and if I could use that word, a cult-like followers of the Apple brand. In fact, FORTUNE magazine describe it as the DECADE OF STEVE - How Apple's imperious, brilliant CEO transformed American business . It also mentioned about the dedication and commitment that Steve Jobs had towards every small details in the company. We cannot deny that the manner in which Apple conducts business has been highly effective at not only increasing sales and broadening the company’s po...

This post is continue from where I left last week on What does the 1Malaysia 2010 Budget has in store for you - Part 1. The last post on 2010 Malaysia Budget is regarding on how the government will implement the fuel subsidy which in my opinion, will not be able to reduce the burden of the poor, which was the actual purpose of the subsidy. This time, I will discuss the other "goodies" in 2010 Malaysia Budget like the following:- The maximum income tax rate for individuals to be reduced to 26% from assessment year 2010. Personal relief increased to RM9,000. Personal relief for EPF and life insurance schemes to be increased to RM7,000. Taxpayers will get tax relief on broadband subscription fee of up to RM500 from 2010 to 2012. To promote prudent spending, a service charge of RM50 a year to be imposed on each principal credit card and charge card ; and RM25 a year on each supplementary card, effective from Jan 1, 2010. The personal relief will be increased to RM9,000 where...

Have you heard of the rule of 120 minus age ? It is actually an investment allocation rule or a guideline for novice investors like most of us. The rule is pretty simple, just take 120 minus your age, and you will have the allocation in percentage for investment. Example, Ricky is currently 23 years old, which means that he should invest up to 97%. The idea behind this rule is the younger we are, we need to allocate more for investment, as we can afford to lose. Besides having nothing to lose, the income we are getting when we just started to work is not that high. Imagine the scenario below:- Ricky, currently 23 years old and start to work earning 20K annually. After deducting all his expenses other deductions like loan installment, he will still have about 4K (assuming 80% is the expenses in percentage). From this 4K, he should invest 3880 (120-23 = 97% of 4K). 17 years down the road..... Ricky now age 40, and earning 40K annually. Assuming 80% is his expenses, he will still have 8K ...

The Malaysia Prime Minister Datuk Seri Najib Tun Razak has tabled the 2010 Budget last Friday evening with the theme "1Malaysia, Together We Prosper" totalling about RM191.5B. The summary of the 2010 1Malaysia Budget is here . So, what does it really have in store for most us? From the summary of the 2010 Malaysia Budget , it looks like there are few points for us, me at least. To ensure that fuel subsidies only benefit targeted groups, Govt will implement a fuel subsidy management system in early 2010, which will utilise the MyKad. I'm not sure how the government going to implement this, but if government is to implement this, why not give the allocated budget for fuel subsidy to everyone fair and square. If they plan to allocate RM1B for the fuel subsidy, might as well, divide the RM1B to the number of citizens in Malaysia so that everyone is getting the same amount fair and square. By implementing the fuel subsidy using MyKad, the poor will be badly affected. With thi...

Below are the summary in the Budget 2010 which was tabled by the Malaysia Prime Minister, Datuk Seri Mohd Najib Tun Razak:- * Government to make it easier for skilled/qualified people to get permanent residence status. Visa to be granted for family within 14 days. * CSR Fund of RM100mil to be set to carry out social programmes. * Tax breaks for registration of patents and copyrights. * Big scale factory outlets to be set up to boost tourism besides having major events like KL Grand Prix Fest, National Water Festival, Malaysia International Golf Exhibition and Rain Forest Eco-Challenges * Taxpayers will get tax relief on broadband subscription fee of up to RM500 from 2010 to 2012. Civil servants can apply for computer loans up to a maximum of RM5,000 from the govt once in every 5 years. * RM6bil for agriculture sector for paddy fields irrigation, fish production, fruit farming, livestock farming infrastructure, training * RM2bil subsidy for farmers and fishermen including subsidies fo...

Is the financial world finally recuperating? Although there are statistics and incidents in shreds and patches that indicate that the financial world is settling down but a particular change has to last for a considerable time period before it establishes itself as a trend. What gave rise to the turmoil in the financial markets? The factors that are responsible for creating upheavals in the economy didn’t impact the economy in one day; it started seeping into the economy few years ago. Since the economy wasn’t strong enough to withstand the turmoil, it gave in. However, the economy was seemingly healthy. But this wasn’t the true picture. It started with subprime lending activities that assumed an uncontrollable proportion due to manipulation and irregularities. Mortgage brokers and lenders had scrupulously inflated income levels and manipulated appraisals. They approved mortgage loans of borrowers that were not eligible to get a mortgage. As more and more borrowers started defaulting ...

Recently when I discussed setting a financial goal with some friends, and one of them talking about reaching personal net worth more than six times from our current annual income in another four years. Well, at first I thought reaching that kind of personal net worth is quite impossible, but after doing some calculation I believe reaching personal net worth of six times our annual income is possible, at least reaching closer to that amount. First, we must realize that it is not possible to save 100% of your annual income. We have expenses, loan and many more which will takes up huge percentage of the annual income, unless of course, we have very low amount of expenses and loan. Even then, we cannot deny that we are not going to save 100% of our annual income, else how are we going to survive in this world where everything needs money? Back to the real issue, how I suddenly come to the conclusion that the financial goal is achievable, at least for me, but at one condition, which is I ...

I believe that nobody ever suspects what happened to Lehman Brothers about a year ago would actually took place. And if that is not enough, let us take a look at one of the struggles that the Wall Street wizard, J. Christopher Flowers had to endure lately. Of late, Flowers is struggling to salvage a series of ill-timed investments that he made just before the financial crisis got really ugly and dragged already distressed institutions down further than he thought possible. His billion-dollar stakes in Japan's Shinsei Bank and in Hypo Real Estate and HSN Nordbank, both in Germany have crumbled. Such is the impact of what many claimed to be the worst economic crisis ever since the Great Depression. Probably some of us want to know how the economic crisis all started? Not long ago, a US homeowner did something that he hadn't done for quite a while. He sold his house for less than the listed price. When enough other sellers did the same, the house prices that on average had more t...

In previous post of Managing Debt , I talk about some brief overview of good debt and bad debt. This post suddenly come across my mind when my brother feel so "unhappy" cannot use future money to buy his train ticket for the Hari Raya holiday. When the transactions failed to be done with the credit cards, my mom ask him to go to the station and buy direct with cash. Then he frowned and say, "Sigh, cannot use future money." Debt or some would say future money can hedge the inflation or make the money work for us provided we have the discipline in repaying the debt. One of the example, is the credit card - my brother buying train ticket scenario. He has the money in which he can either use for buying train ticket or just top up that amount of money to buy a stocks, which he is confident will be giving him about 7%-10% gain. Thus without using the credit card, he cannot buy that stocks (which can be good or bad, but then that is another story). But with the credit ca...

The recent so-call bull rally has last for almost six months, and while people are predicting that the market will be having a bad day in the month of September as September has always been a bad month for stocks, market continue their wild run after few days of fear. This mini bull rally reminds me of something call profit from patience. For most traders, selling after some percentage of profit and cutting loss is a norm. The illustration below is to show the comparison both investors A and B, where A will sell his stock once reach 10% while B is holding stocks for some time. Assuming both of them buying stock Z which is yielding 4% a year. 6 months continuous bull run resulting the price go from 1.00 to 3.00 For investor A, From 1.00 to 1.10 (10%), A realized gain is 10cents Then stock continue to move up 1.30, and A buy it back and because sentiment is extremely bullish, he will sell at 30% profit. So, once hit 1.70, he sell it again. A buy again when price drop to 1.60 and sell at...

For the past few weeks, I was not able to up blog more in this blog, mainly is the slow Internet connectivity that I'm facing in my house in Kulim, because I was using Celcom 3G, which sucks, although there are many complain about Maxis 3G. When I go back home town, I was too lazy to blog as I have always stressed on Work Life Effectiveness, which means that although I earn a living by working as Engineer, but I want to dedicate the time to myself and family as well during the weekends. When I come to think of it, most of us will be sweating throughout our lifetime earning barely enough to support whole family. I actually think, is it possible that we can be out of our working life as early as possible - especially for those from the average income family background? The answer is yes and no. No is because we lack of discipline and financial planning and management . Without discipline, most of us will just spend as it is. In fact, without discipline, most of us will hardly have a...

WASHINGTON – President Barack Obama said Saturday the $787 billion stimulus program must be given a chance to work before consideration is given to a second such jolt for the still-ailing economy. Obama acknowledged in his weekly radio and Internet address that people are getting nervous about continuing high joblessness — the unemployment rate hit 9.5 percent in June — but said reversing payroll losses takes time. He asked Americans to be as patient as possible. Republicans have labeled the $787 billion stimulus a failure. Both Obama and Vice President Joe Biden have argued that the bulk of the money from the stimulus program is still being disbursed and that it already has saved many jobs. Obama criticized Republicans for opposing the stimulus but offering few alternatives to the worst recession since the Great Depression . And he rejected talk of a second stimulus, an idea that has been discussed by Democrats and even famed inves...

The recent three months rally has resulted in 30% increase of most of the stocks and the bourses around the world. This three months rally has also prompted many people on whether we are still in recession mode or we are out of the woods. Based on the volume for the past few months, I can say that most of the retailers have started playing with stocks and the three months rally is like a very energetic bull that just keep on going up without pausing. But when we really read at all the news, we can see that jobless rate in the US and European countries continue to spike, whereas Malaysia are seeing double digit contraction in her export data. So, with all the bad news, why are we seeing the market going up for three months without pause? The recent rally was actually drive by the commodity . Look at the crude oil price chart? It has been going from USD40 to close to USD72 in just three months. Other commodity prices are also increasing bit by bit. This commodity rally is fueled by Chin...

At moment of crisis, you will wonder why some survives, some fall while some others triumphs. During this economy downfall, we see how AIG nearly fall into bankruptcy due to the lack of financial planning and too much of unnecessary bonuses given. However, it doesn't mean during economy crisis, all is lost and gone. If one manages the money they have effectively, be it the financial situation of their company or their personal finance , there will definitely be enough for rainy season. So often we see an individual or a company suffers during economy crisis due to the lack of financial planning. Most often these people spent more than they have even during the good times. Finance matters to all of us. And if you lack financial planning or any personal finance advisor, then I believe it is time you learn about it. Probably the first crucial step is for you to define your financial goals. When you have a certain goals or direction, it will help you to plan everything in accordance t...

A payday loan is known by different names, for instance, cash advance loan, deferred deposit loan, payroll advance loan, paycheck advance, payday advance and so on. A payday loans is a particular form of loan that is offered for a small time period to deal with your urgent spending requirements. These loans are typically due for repayment at the time when you receive your next paycheck. A payday loan can help you if you experience difficulties related to unforeseen expenditures or bills prior to receiving your next paycheck. In simple terms, a payday loan is secured by your future paycheck. These loans have garnered significant popularity over the past few years. Against lending you the money till your next payday, the lender would ask for a fee. The majority of storefront locations necessitate you to offer them with a physical check that would act as guarantee for the payday loan. If you qualify for such a loan, the loan amount would be electronically deposited into your savings or c...

CREDIT HISTORY When companies do a credit check on you, they are given not only a score number but also details of your credit history. If you have missed payments on your credit cards then it would show up on your credit report. If you have defaulted on a loan payment, your credit history will show this. If you have missed making payments, you are not considered responsible enough when it comes to handling money. In other words you are a higher risk than your neighbor with a great credit score. Having a higher credit score is considered by insurance underwriters a sign of stability and responsibility. Obviously the higher the risk your insurance company considers you to be, the higher the insurance premium. While some may be of the opinion that using credit scores to determine insurance premiums may discriminate against those who are in the lower economic group because they tend to usually get themselves in financial trouble and probably have a lower credit score. However, others may ...

Up to what extent you can drown into debt in a month, and come out of debt smoothly by repaying, is best shown by your debt to income ratio. This ratio of debt and income is the key method to determine the availability of cash from you monthly income for repayment of your loans….or, in other words, it expresses your true borrowing capability. That’s why creditors consider debt to income ratio a very effective tool to figure out your monthly payment, and your true financial situation. This ratio clearly calculates the total amount of loan an individual can take. There are 3 categories of debt to income ratio: Front End and Back End Ratio Your creditors tend to analyse your debt to income ratio with two numbers 33/38. 38 is the back end ratio. It is the long term debt ratio. And front end ratio is 33, which is the ratio of housing expenses. Housing Expense Ratio The payments of an individual’s housing normally means each and every payment you need to make in your day to day life. That i...

Upto what extent you can drown into debt in a month, and come out smoothly by repaying, is best shown by your debt to income ratio. This ratio of debt and income is the key method to determine the availability of cash from you monthly income for repayment of your loans….or, in other words, it expresses your true borrowing capability. That’s why creditors consider debt to income ratio a very effective tool to figure out your monthly payment, and your true financial situation. This ratio clearly calculates the total amount of loan an individual can take. There are 3 categories of debt to income ratio: Front End and Back End Ratio Your creditors tend to analyse your debt to income ratio with two numbers 33/38. 38 is the back end ratio. It is the long term debt ratio. And front end ratio is 33, which is the ratio of housing expenses. Housing Expense Ratio The payments of an individual’s housing normally means each and every payment you need to make in your day to day life. That includes a...

How do you deal with debt? How do you pay the monthly credit card charges, minimum amount or full amount? What is the best way to reduce debt? Before we go into reducing debt, we have to understand what are debts. Debt means we are using future money now, in one way, we are killing inflation, if properly utilize this tool, but without proper planning, the interest alone will be enough to kill us before we manage to hedge the inflation. Thus, to fully utilize debt as a tool for us to increase our net worth and in another way, making money for us, one must have very strong discipline in the debt repayment. There are some debt which actually favors us, while some will get us deeper in the world of debt. Good debts are like property loan whereby the property will have value in the long run and credit card although it can be damaging, if not used properly. Bad debts are like getting personal loan or charge credit cards just to buy electronic gadgets to show off. Guess, I'll stop at th...

I wonder how many of the bloggers who drop by here are fans of Stephen R. Covey. Anyway I guess it's important for us to set our perspective right, all the more if we want to wealthy. One must first develop the right habits. What habits one may ask? The effective habits, I believe as suggested by Stephen R. Covey. Probably if we look at the lives of those successful people such as Bill Gates, Warren Buffet, Michael Dell and many others, there are a few things we may find it to be similar, is that all of them have an effective habits and hardwork. I'll probably just simplify it as Stephen did in his book, 7th Habits of Highly Effective People, although I don't agree with him in coming with the 8th Habit book. After all, how is it possible to keep developing new habits without getting rid of some of the old ones. Therefore, I shall start by mentioning the need in PRIVATE VICTORIES, but I might not start with Proactive. Because I believe it's not about Proactive, but befor...

It was Mother's Day last week, and I am sure that many of us bought our beloved mum special gifts and maybe treat her a meal. Before I began writing on Budgeting Mother's Day Spending, I wish all the mothers in the world, a Happy Mother's Day, though it is kind of a little too late. Anyway, for those who has yet to celebrate Mother's Day with their beloved mum, I do hope that they will not be too stingy or cost savvy about the spending. I'm sure that the every mum would be very happy if her children even decided to cook for her or just do something special on this occasion - nothing fancy, but maybe spend some extra time with her or buy her favorites recipe book, etc. Mother's Day official date might be the 2nd Sunday of May, but if one cannot make it last week, then he or she can celebrate Mother's Day on some other day, but at least we do something to show our love for our mum and honor for her. My family (total seven of us including my brother's girl ...

Nowadays, most fresh graduates will be burden with debts, even the moment they stepped in the varsity world. I'm quite positive that those not coming from a well to do family will need to get student loan or education loan. Students from Malaysia can apply for this student loan or education loan from a government body, PTPTN. When I graduated three years ago, I directly have to start my payment for the education loan. The terms and conditions of the loan is to start the payment 6 months after I graduated. This applies to all the university students getting student loan from this PTPTN - which means that we have to get a job within 6 months after graduated. Well, for those getting jobs within the first six months after graduation, how many of them are actually paying back their student loan? I believe majority of them are not paying or just paid maybe once or twice the installment. Not that I want to criticize or condemn anyone, but I do believe we need to pay back this student loa...

It's kind of ironic in our life that when we are young, we will wish that we are grown up but when we are grown up, we will be wishing that we are still the young and innocent guys or gals that we used to be. A lot of this was actually caused by one thing.....money. Money is the root of all evil and problems. We must not forget, we are living in the materialistic world no matter how much we would like to deny. Money, can be a great servant if we use it properly while a the same time, it can be an evil master. So, what is money to us? Do we treat it as our master or our slave? How do we know whether we are the money master or the slave? If we are the master, surely it is the money who work for us while if we were the to be a slave to somebody, we would be sweating to please the master. There is no two way about it. For the money case, it is very obvious that if we are the money master, we would be investing the money, so that in one way, the money will earn more money for us, whil...

Money......what is the value of money for us? Some of us believe that money is everything while the others think otherwise. We use money to but stuff - food, clothes, transportation etc. Money seems to be a very important element in our life that everyone sweating day and night just to meet the daily needs. We are living in a world where money seems to be everything - which is quite obvious why I name this blog Realm of Wealth . I was thinking whether to name the blog Realm of Money or Realm of Wealth, but decided on the latter one. The main reason I choose wealth over money is because wealth is made up of an abundance of valuable material possessions or resources, while money is just money. I want to blog more on money related stuff, while at the same time not only money, so wealth is more suitable. This blog will have information based on my perception, which can be right or wrong, but to voice out is the process of learning, which will happen all the time.

Do you all believe that on Friday the 13th, something bad will happen? I mean, there are so many Friday the 13th, and something bad might eventually happens on one of those days, right? Well, on the last Friday the 13th, something bad really happened. If you all have notice, I have not been serving the Google Ads since Friday the 13th this month. Well, I received an email saying that my adsense account was disabled because I pose risk to the Adwords advertiser. I'm not sure what went wrong as I was still able to see the Google Ads few hours before that and after that when I woke up, I thought Google was down or whatever until I checked my email. I am now appealing and not sure how it will turns out, but hopefully I will be accepted back to the program. At the same time, I will also search for something like adsense. Not that I'm greedy or what, but I just want to earn something out of my writings. I do hope Google forgive me, if I really posed risk to Adwords advertisers - not ...

Over the weekends, I discussed with my brother on the money topic again. As always, I prefer healthy brainstorm session so that I can learn more. As we all know, learning is a continuous process. Anyway back to the money topic, we were discussing on what to do with some cash in hand. I am the kind of people with the philosophy - "Savers are always the losers". Now why did I hold on to this principle. A lot of reason. One of it being inflation will eat up our savings. I always encourage to continue invest, and not trade in times of uncertainty. When we invest, we are actually buying a business or at least pass on the inflation to the consumer. Imagine a scenario. If the cost of a product increase due to material cost, are you going to priced it lower than the manufactured price? Of course we will pass on the inflation to the consumer, no? Unless business is very very bad, else we definitely will pass on the inflation to the consumer. So in other words, buying business will at ...

Malaysia entering recession......it is one of the headline from Business Times. Below are the details of the news:- MALAYSIA is entering a recession, if it is not in one already, head of RHB Research Lim Chee Sing said. He predicts the economy to shrink 1.5 per cent this year, or possibly worse, depending on the state of development in the US and other bigger economies in the world. At this rate, the recession seems set to be sharper than that in 1985 when gross domestic product (GDP) shrank by 1.2 per cent, but milder than the 7.4 per cent contraction in 1998. "Depending on the definition you use, Malaysia is already in recession, or perhaps, is entering a recession," Lim told reporters during a discussion on the stock market in Kuala Lumpur yesterday. A recession is commonly defined as a decline in the GDP for two or more consecutive quarters. But this definition is unpopular with many economists since it does not take into consideration changes in other variables such as j...