Before that, I had picked some interesting comments that are worth to be shared with you here. If you want to read the full comments, go to the inflation post and scroll down to the comment section.

Kenny Lau from Sungai Petani

We are taking dinner at home… my mom is cooking for us… Thus, I felt I am a lucky guy actually at this moment… This has proven a chinese phrase “An old folk is equal to treasure”.

Change your vehicle spark plug to a better one like platinum and use a good grade engine oil.. Crude oil price shooted sky high is a fact now… My friend is asking me to change of my spectra, cuz they said this car is a oil sucker. But, when I am calculated my monthly usage and told them ” I could not save 50k ringgit in ten years if I trade in my car and get a CVVT or VVTI vehicle like Vios and Civic.

I grew up in Sungai Petani too. The food there is in fact very cheap compared to Penang and K.L. My parents still live there and they still cook every single meal at home. You are a lucky guy, Kenny!

The next interesting comment is from Angeline:

I think the best thing i have done so far is changing my job to a higher paying one, and where the employer pays for my petrol (as it is quite a distance). The boss must have regretted it now as the fuel hike announcement was made after that LOL

I have heard some companies giving petrol allowance as high as RM0.70/km. Angeline has made a good move.

Lousai shares his view about managing cash flow:

First of all even before Fuel hike etc, as an ordinary person depending on single source of wage, i ‘ve started with expenses/income sheet tracking since year 2005. I found it not only tell how much your earn( most ppl do) and how much you spend your hard earn $$ to.

As a result, i can do projection on how much i need to save p.m for a particular event like holiday, getting a new gadget etc.

Vincent Lee from Sabah had written a great comment sharing tips to practically cut down fuel expenses and electricity bill. Read his tips:

• 18 Tips on Saving your Petrol
• How to Cut your Electricity Bill?
• What Bill to Pay First and Way to Save

Also from Sungai Petani, Muhammad Ooi who is a Prudential agent gives us some practical tips too:

What you have done to minimize the fuel hike impact?

- for me, just do more sales. eat healthy, replace our daily teh tarik, milo ais with air kosong sendiri..

- plan my journey properly, plan to combine several appointment in same day.

- i produce my own product, sell it for RM 10 each. Just use the profits to cover my fuel and working hours meals cost. No need deduct the travel cost from my main income.

Next is an insightful comment from SG. I guess he is from Penang who lend me the book Cash Proof. I almost finish reading it. It is a great book indeed. This is what SG said:

Contrary to what people tend believe, only central banks create inflation.

The classical economics definition of inflation is ‘ increase in the total stock of money’. Since we’re using paper money and not gold and silver (like a century ago), there will always be inflation if there is more paper money being created. Actually, economic growth causes prices to FALL.

JC is concerned about the rising crime rate caused by bad economy:

All the inflation and price hike is causing crime rates to increase too. Two weeks back a Honda CRV (less than a year old) was stolen from my house. The car was parked inside a locked gate. I hope to highlight this to other owners of such car to be careful.

NK thinks that increasing knowledge is a better solution:

Instead of focus on the cost cutting, I am looking at other other area like improve my productivy, increase personal market value and knowledge. I believe all this self upgrade will become very useful when opportunities arrived.

How to achieve that?
Well.. The simple way is reading more books, documents.. NO neccessary you have to buy the book, you can borrow from friends or library. How about the Internet? full of resources. The beauty is it is FOC.

Last but not least, blogger Voyager8 shares some tricks to cut cost without sacrifice. Visit his blog for more information.

Sometimes, you can save cost without scarifying anything. Here is now I did it.

I applied to a petrol rebate credit card, to get the 2% rebate for petrol consumption, and 0.5% rebate on other consumptions with the card. The platinum credit card is free for life, so I don’t need to pay anything for annual fee too.

I really appreciate all your participation. I do hope that I have something for each one of you, but I only have one book to give away. For those who has a blog, I hope the links here will give you some valuable traffic.

The winner is Kenny Lau. I wish this book will get you to the higher management position in your career soon. Please contact me with your mailing address.

I hope to make this free book giveaway a monthly event. Keep in touch!

Post from: Personal Finance Money Tips

You just need an extra step to calculate the return of your investment portfolio.

Let’s say you invest in several asset classes. Your gold investment gives over 100% return last year. Your stock investment turned sour after the 8th of March Malaysian general election. The apartment you rented out gives you a consistent return month after month because of your loyal tenants. Many type of investment, all with different return. So how do you know your overall investment portfolio is doing? Is it on track?

This is a simple tutorial on how to compute your portfolio return.

Return of portfolio = (W1 x R1) + (W2 x R2) + (W3 x R3) + …..(Wn x Rn)

Where W1, W2, W3 and Wn stand for the weightings in % of assets, for asset 1 to n, in the portfolio. Whereas, R1, R2, R3 and Rn are returns for the respective assets, 1 to n, in the portfolio.

Example 1:

More than half is invested in real estates.

Weight of stocks = 50k/293k = 17.06%
Weighted return of stocks = 25% x 17.06% = 4.27%
Overall portfolio return = 4.27 + 0.44 + 1.01 + 4.10 = 9.82%

Example 2:
This is a very conservative asset allocation. about 73% invested in fixed deposit.

Example 3:

This is an “balance” portfolio, invested in four asset class with equal share.

Download the excel spreadsheet: investment-portfolio-return

By tracking your portfolio return, you will be able to construct a proper asset allocation to get the desired return.

Post from: Personal Finance Money Tips

• Full house on first day of business. The new Old Town White Coffee open today at Bayan Baru. - photo at http://twitxr.com/quange/updates … #

Post from: Personal Finance Money Tips

• Yellow and blue nasi kandar Pelita, probably the most profitable restaurant in Penang - photo at http://twitxr.com/quange/updates/72229 #
• I believe this is the old price - photo at http://twitxr.com/quange/updates/72348 #

Post from: Personal Finance Money Tips

Despite the rise of unavoidable expenses, I am giving away a free book. It is a book based on a 10-year study of 200,000 managers and employees. It shows you how the best managers use recognition to engage their people, retain talent and accelerate performance. You will get this great book written by Adrian Gostick and Chester Elton - THE CARROT PRINCIPLE.

The book is still brand new. I bought it from Borders Queensbay Mall, Penang few months ago with RM59.90. I read it once and there are a lot of gems discovered. I love the book and I think you will love it too.

In order to get this book, all you need to do is to write a comment on this post about how the recent fuel hike and inflation affects your life. You can write about:

• Tips to remedy inflation
• What you have done to minimize the fuel hike impact?
• Anything about inflation that affects your everyday life.

Let us hear your story.

The book will be given to one of the participants I choose randomly. Result will be announced on July 20th.

Post from: Personal Finance Money Tips

As most people understand, the mortgage of their home is the liability. You owe the bank money. In return, you need to charge your house title to the bank as collateral. So you think you actually have an asset to pay for your liability. You think your actual home is the “asset”, that when you can’t afford the installment, it can pay off your mortgage by being auctioned to third parties. You are right, but it won’t get you rich.

For the rich people with higher financial IQ, they know that the house they are staying in is actually a liability. It is a luxury item. It takes money out of your pocket! In fact, it takes more money than you think. Beside the mortgage installment, you are paying for the renovation, electrical appliances, household bill etc.

Now, let’s come back to the golden question: DO YOU HAVE THE ASSETS TO PAY FOR YOUR LIABILITIES?
A local entrepreneur in pre-school education wants to have a new S-class Mercedes Benz. That’s a liability. He recruited a new talented business partner and opened up another kindergarten. In 3 months time, the child care and education centre is giving him RM5000 net profit every month. His partner is taking care of the centre, while he is shopping for his new luxury car. That’s an asset.

photo credit: mujitra

I have some down line agents who are very independent and making sales week after week. I trained them in the first few months in business, and they can practically do business on their own after that. I got overriding commission from every sale they make. They are my assets. They help to pay for my car loan, my liability.

So, do you have the assets to pay for your liability?

Post from: Personal Finance Money Tips

By writing a WILL, we have stored aside a golden key for our heirs to unlocked our assets in the future. The best benefit of all is the convenience and preservation we hope that a WILL can do for our family, when it needs to.

If you have engaged a professional will-writer to help you to plan your WILL, it is likely that you will receive a yearly reminder and asset inventory booklet. I had shared about the necessity to rewrite a will before. From that article, I got a response from Ina who asked for a template of my personal assets inventory spreadsheet.

photo credit: Marcin Wichary

What is the function of a Personal Assets Inventory?

To provide even more convenience to your family.

Unless you think they will enjoy the game of treasures hunting, especially after your death, why don’t we provide them a list or a map that shows exactly where our treasures are located.

What should be included in a Personal Assest Inventory?

EVERYTHING, if possible.

The list should include but not limited to:

PERSONAL INFORMATION

Full name:
IC No:
Passport No.:
Signature used in the WILL:
EPF No:
EPF Nominee(s):
Income Tax No.:
Location of important documents:
Location of the WILL:
My professional will-writer:
Executors:

PERSONAL ASSET INVENTORY

Safe Deposit Box:
Bank Accounts:
Real Estate Properties:
Insurance policies:
Shares:
Unit Trusts:
Businesses:
Cars:
Other Assets:
Liabilities:

ONLINE ASSET:
Email accounts:
Other important info:

Download my template: personal-asset-inventory

If you find this template useful, you can share it with your friends. If you make any changes or modification that makes the template a better one, please send me a copy and I will post it here.

Post from: Personal Finance Money Tips

Did I invest in it? No, I didn’t. But don’t go away yet. Read on to find out more.

What is CHGS?

According to the brochure:

Country Heights Grower Scheme is an innovative concept combining farm/estate ownership and investment. The returns are pegged to the CPO price and plantation output. This provides an opportunity for investors to own a piece of oil palm plantation and generate profit annually, as outlined in the graph below.

Click the image for larger view.

What is the income potential?

Again, according to the brochure, you will get

• 8% guaranteed return p.a. on year 1 to year 3 (2007-2009)
• 23 years continuous return on investment (12% to 17% nett return based on average 2007 CPO price and annual production yield of min 20 Metric tonne / Hectare of Fresh Fruit Bunch from year 4 to year 23 (2010-2030)
• Ownership of a plantation plot from 1/4 acre onwards
• Share of Nett Proceeds from the sale of plantation land upon maturity period.

We all know that palm oil industry is growing like a hot cake recently, due to the positive demand for bio-diesel and edible oil. However, I think bio-diesel is not a long term replacement of petroleum-based diesel. Bio-diesel still requires us to burn something to get energy.

What’s the Exclusive Offer?

The offer is either
12-month Instalment Payment Plan with 0% interest using my Alliance Bank credit card.

or

Purchase minimum 2 plots to enjoy 2D/1N stay worth RM780 at Palace of the Golden Horses

That’s nice. By the way, I am not tempted.

More information

For the most updated information, you can visit the website of CHGS. The best place to start is the FAQ (Frequently Asked Questions)

Did I mentioned the price is RM7000/plot at the beginning. At the point of writing, the CHGS website showed that the price is now RM8000/plot.

Before you invest, take a look at the Master Prospectus and the Agreement.

Now I know many would ask why didn’t I invest in it? The answer is simple: I invest in what I understand and have confidence in. Still remember the top rules of investment? I also prefer investment that gives me more control.

More consideration:

• Investors will not receive the land title upon investment because they are actually investing on the interest of the land. In layman terms, you invest in agriculture land, but without getting the title. You pay for a piece of land, but no title.
• It is not so liquid. However, growers (investors) are allowed to make transfers to a third party and the transfer fee is RM 100 per transaction. For those who bought earlier (probably paid only RM6000-7000), can you sell it now for RM8000? Who will help you to find a buyer?
• The long tenure of 23 years.

Did you buy a plot? Please share with us your experience.

Post from: Personal Finance Money Tips

Wait a minute, it is only for road tax renewed between 1st of April until 31st of May, 2008. Those who renewed their LKM (Lesen Kenderaan Malaysia) in June will have to wait until July.

Where to claim?: Any Post Office (Pejabat Pos)

Who can claim?: Only the car owner. You must show up!

Cheque or cash?: CASH! I hope they will stock enough cash there.

What is the document needed?: Original Identity Card (IC) and your thumb.

How is the process?: You fill up an application form. The info will be verified with data recorded at JPJ. Once verification is completed, you will get the cash rebate.

How much can I get?: RM625 for car <2000cc, and jeep/truck <2500cc. RM150 for motorcycle <250cc. It looks like it is a one-off subsidy. You might not get the rebate next year.

How many times can I claim?: Only for 5 vehicles under your name. Can be any combination of motorcycles, cars and trucks.

Further inquiry?: Please contact Post Office Customer Service Hotline: 1300 300 300

Click the pictures to enlarge.

Post from: Personal Finance Money Tips

One of the famous rules of investing is — never lose money. There is one kind of investment vehicle that are attractive to investors looking for downside protection, at the same time who would also like to see gains from upside movements in the markets.

Simply put it this way - you want to earn money when the market ist good. But you don’t want to lose money if the market goes down.

photo credit: MShades

In a volatile market like the current situation, a structured fund is being regarded as a safe heaven by most conservative investors.

What is a Structured Fund

From Investopedia:

A fund that combines both equity and fixed-income products to provide investors with a degree of both capital protection and capital appreciation. These funds use fixed-income securities to give the fund capital protection through principal repayment along with the added gain of interest payments. The fund uses options, futures and other derivatives, which are often based on market indexes, to provide exposure to capital appreciation.

A structured investment product is generally a pre-packaged investment strategy which is based on derivatives (ie. options etc) but which features protection of principal if held to maturity.

For example, an investor invests 10,000 ringgits, the issuer simply invests in a risk free bond which has sufficient interest to grow to RM10,000 after the 5 year period. For example, this bond might cost RM8,000 today and after 5 years it will grow to RM10,000. With the leftover funds the issuer invest in special derivatives needed to perform whatever the investment strategy is.

The two common elements in a Structured Product are:

1. A bond product or another element of capital safeguard.

2. An alpha generator - which is any financial instrument (i.e. a stock, currency, etc.)

Recently Launched Structured Funds

PNB Structured Investment Fund
Tenure: 5 years
Exposure: structured products issued by Deutsche Bank Malaysia, which may include bonds, stocks, equity-linked and hybrid products
Minimum: RM10,000
Service fee: 1.5% of NAV
Management fee: 1% p.a.
Trustee fee: 0.08%
Repurchase fee: 2.5% within 1st year, 2.0% within 2nd year, 1.5% within 3rd year, 1.0% within 4th year, and 0.5% within 5th year.

Takaful’s myAl-Afdhal Capital Protected Investment Plan
Tenure: 5 years
Exposure: syariah-compliant global equity and commidities
Minimum: RM7,000
Closing Date: June 15, 2008
Service Fee: 3.5% of NAV
Management FEe: 1% p.a. of NAV

Great Eastern Centennial Max Plan
Tenure: 5 years
Exposure: Euro and US equity index
Minimum: RM20,000
Service Fee: 5% of NAV
Management Fees: Nil
Repurchase fee: Nil

Prudential Jade Structured Fund
Tenure: years
Exposure: China
Minimum: RM1,000
Closing date: May 29, 2008
Service fee: 2.5% of NAV

RHB Commodities Capital Protected Fund
Tenure: years
Exposure: Over-the-counter option linked to the performance of futures contracts of four commodities
Minimum: RM5,000
Closing date: May 29, 2008
Service fee: 3.5% of NAV

AmAsia Star
Tenure: 3 years
Exposure: call options on a multi-asset index
Minimum: RM5,000
Closing date: June 25, 2008
Service Fee: up to 2% of the single premium upfront

Comparing Structured Funds

Because a structured fund is capital protected when held to the maturity of 3-5 years, some consideration to be made are:

Tenure: Will you need the money within 3-5 years? Some funds charge a repurchase fee or withdrawal fee before maturity.

Cost: The lower the service fee, the better it is. Some funds has management fees and also withdrawal fees. I would opt for the lower initial service fee if all other condition are similar.

Insurance protection: Some funds are managed by insurance companies and there is normally an additional 25% sum assured given to the fund holders. Fund managed by insurance companies can be nominated according to Insurance Act. If it is done right, your money will skip the probate, meaning faster for your family to get your money.

Exposure of derivatives: Do you want more exposure in commodities, global index, or currencies? It depends on your asset allocation.

For illustration purposes, I’ve done a simple comparison between Centennial Max Fund and PNB Structured Investment Fund.

The Centennial Max plan requires 5% service fee upfront, and no other hidden charges thereafter such management fees, trustee fees, policy fees, insurance charges etc. At the meantime, PNB SIF requires 1.5% service fee, 1.0% management fees p.a., 0.08% trustee fee p.a.
By assuming the average return of both funds is the same 6% p.a every year until maturity, we can calculate the “assumed” return when the funds mature. Please note that the table below is generated for assessing the cost of investment. It doesn’t represent the real investment return of the said funds.

The Centennial Max Plan might incur a lower investment cost in this case, thus giving a higher maturity benefit. Moreover, insurance benefit is provided at no additional cost.

Please bear in mind that cost of investment is just part of the big picture. You still need to consider the investment exposure of the fund.

Disclaimer:
Materials provided in this article are for information purposes only, and should not be considered an offer, or solicitation, to deal. How you choose to act on these information is entirely on your own.

Post from: Personal Finance Money Tips