When it comes to money or finance, information or knowledge is powerful. We make decisions about our personal finance based on what knowledge or information we possess. Information does not come freely to us and most of the time, we have to do our own research and studies either to enhance what we already know or to learn something totally new.

Luckily for us in this Information Age, there are many people willing to make the effort and share their knowledge, experience and opinion about money or finance through blogging. There are many blogs to choose from and depending on one’s preference, several will become personal favorites. I checked a Malaysian web directory, blogmalaysia.com to see how many blogs there are dealing with finance and found 67 blogs listed (as of writing) under the heading “Economy & Finance.” Another directory you can check is allmalaysia.info, search “finance” or “personal finance.” There are quite a number of blogs listed either in English or Bahasa Melayu. However, I did find some blogs that are no longer active.

Out of the many blogs easily accessible, I have picked out several as listed below (in no particular order) which I find interesting and informative for my own reading (in addition to KCLau). It all depends on what information you wish to learn and then choose the blogs you want to focus on.

• www.meshio.com (A Malaysia personal finance blog)
• www.nil2million.com (Make money tips and personal finance for everyone)
• Malaysiapersonalfinance.blogspot.com (Malaysia personal finance)
• Knowthymoney.blogspot.com (Money & opportunities are abound. Are you ready to grab it?)
• Financialrich.com (Financial freedom. Wealth building, retire early, personal money, financial planning, saving)
• Financialindependent.blogspot.com (Journey to become financially independent)
• www.mypennysense.com (Penny sense. It’s all about smart money management)
• www.wangtool.com (In WangTool.com, we learn and share on how to improve our personal finance management skill)
• www.financialplanningmalaysia.com (A weblog about sensible approach to personal financial planning, principle-centered investing and wealth building)
• belanjawan.com (Your financial health discussion portal. Provides a platform for discussion on healthy budgeting and how to overcome debts)
• www.alantanblog.com (Discover the road to financial freedom. Insider ideas to manage your personal finances so you will be more wealthier and happier)
• www.cashcolor.com (A personal finance blog)
• Moneymagnet2.blogspot.com (Financial planning, investment, saving, budgeting, retirement, estate planning)
• 1-million-dollar-blog.com (Personal finance and investment blog)
• www.klmarket.com (Top bursa Malaysia & finance blog)
• www.ivaluenews.com (Personal finance, personal financial planning, debt management)

All these blogs provide endless reading material for me and there are many more great blogs out there providing useful information about money or finance. All you need to do is find the time to research, then learn and benefit from them. The people behind the blogs deserve to be acknowledged for working hard to provide the rest of us with useful contents that would certainly boost a person’s financial knowledge.

Which blogs do you find useful and meet your preference? What information do you wish to learn about the most?

Read other articles by Jacquelyn at WParent.com on parenting matters and Tips4Everyone.com on solving marriage problems.

This article is posted at: KCLau's Money Tips

Finance Blogs in Malaysia

First, let me tell you three stories. At the end of this article, I will show you their similarity.

Evil credit card

She pays everything on credit. She loves the dress so she swiped her VISA card to pay for it without realising that she can hardly afford it. She paid for the latest hand phone on 24-month easy instalment plan. After a few months since the day she first got her credit card, the credit limit is totally used up. As a result, it took her five years to fully settle the outstanding balance. She blamed that credit card is evil.

He neglected his wife because of iPad

He just bought the latest product from Apple, the iPad. The gadget never leaves his hands. After a few weeks, his wife started complaining and whining. She was not happy because the husband is more interested in iPad. One day, she smashed his iPad on the floor during a fight. Obviously, she blamed his husband for the lack of love because he is too obsessed with the iPad.

A student asked for refund

He bought the Perfect Pitch course. Perfect pitch is a rare ability only a few musicians possess. Without referring to any reference note or instruments, if you instantly recognise the pitch (F#, Bb or D) of a note, you have the perfect pitch ability. The course he bought is a series of CDs teaching this ability. After going through only a few lessons, he still can’t develop the skill. So he blamed that the course is just crap. It doesn’t work. Do you think the course doesn’t work at all, or only to this particular student?

These stories are the example of tools and the users. Credit card, iPad, and the CDs are just tools. Credit card doesn’t create debt. IPad is not evil. CDs just deliver the information. It is the users who do not use the tools properly that cause all the disasters.

So remember this, money is also a tool. We are the users.
Money is not evil. The users who misuse it are the root of evil.

This article is posted at: KCLau's Money Tips

Tools and the users: Who is evil?

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This article is posted at: KCLau's Money Tips

Mathematics of Life: A Small Truth that makes life 100%

Which fund to invest when there are 550 unit trust funds from 39 fund houses?

Just come to this free seminar to learn the methodology.

Free Seminar for Investors in Penang – Fundsupermart Recommended Funds Workshop 2010

DATE: 24th July 2010 (Saturday)

TIME: 2.00 PM to 3.00 PM (Registration starts at 1.30)

VENUE:
SUNTECH Learning Center,
SUNTECH Penang Cybercity,
Lintang Mayang Pasir 3,
11950 Bayan Baru, Penang.

ORGANIZER: Fundsupermart

SPEAKER:
David Koay, an analyst from Fundsupermart.com and is currently covering the Malaysian capital market and economy. He commenced his career in the investment industry working as an equity analyst in Inter-Pacific Research, covering various sectors and listed companies such as semiconductor, building materials, construction, plantation and conglomerates.

What you will learn in the workshop

• The selection process and why Fundsupermart recommended these 19 funds out of 550.
• The benefit of DIY investing via Fundsupermart platform

REGISTER NOW
Note:
Recommended Funds are now at 1% sales charge only!

More about investing unit trust online:

1. Open an account online

2. Regular saving plan application

This article is posted at: KCLau's Money Tips

Recommended Unit Trust Funds Workshop 2010

Fundsupermart just published their latest list of recommended unit trust funds. They are currently running a promotion with just 1% sales charge. That’s 50% discount on the transaction fees.

With over 550 funds from 39 fund houses, choosing the right fund can be daunting. That’s why I always receive emails from readers asking which fund is worth investing. I simply can’t answer you because how am I going to recommend any fund without researching all 550 funds? We should leave this job to the expert, who are paid to do the research full time.

Evaluating Funds’ Performance, Expense Ratio and Risks

Fundsupermart.com (FSM) has released their Recommended Funds 2010 list by evaluating the funds in areas such as Performance, Expense Ratio and Risks.

They give Performance a 40 – 60% weighting since the profit-making abilities of the fund manager is the most important factor. The returns are evaluated against benchmarks and peer group averages within similar sectors and regions

FSM also evaluates the returns over various time periods, including both good and bad times, to check for performance consistency. Funds have to be at least 3 years old before FSM considers them.

FSM places a weighting of 20-30% each in Expense Ratio and Risks in order to evaluate whether the higher fees and additional risks are commensurate with returns.

Every recommendation is supported by reasons

You can head over to this list of recommended funds. FSM elaborate the reasons they recommend a particular unit trust fund.

For example, they recommended AmDynamic Bond because:

• AmDynamic Bond emerged as the top performing fund among its peers with a five-year annualised return of 9.9% (from end March 2005 to end March 2010) as compared to an average annualised return of 4.2% within the same period.
• The fund made the highest cumulative returns over the one-, two-,
• three-, four- and five-year periods in its category, as at 31 March 2010.
• The fund also outperformed its benchmark, RAM Quantshop All MGS Index over the past three years. Its cumulative returns over the one-, two- and three-year periods were 10.5%, 19.0% and 23.6% respectively, significantly higher than its benchmark’s return of 2.5%, 7.7% and 10.4% respectively.
• In addition, its expense ratio is reasonable at 1.19% (as at 31 January 2010), which is lower compared to the average expense ratio of 1.32% against its peers.

How to invest unit trust with Fundsupermart?

1. Open an account online

2. Regular saving plan application

Disclaimer:
This article is not to be construed as an invitation or solicitation for the subscription, purchase or sale of any fund. Investments involve risks. Investors should read the fund’s prospectus and if necessary, consult with financial or other professional advisers.

This article is posted at: KCLau's Money Tips

50% discount promotion (on sales charge) for Fundsupermart recommended funds

2008,you bought an apartment directly from a well-known developer. 2010, you sold the apartment and make RM100,000. It was a handsome profit!

2007, you subscribe for a new company IPO (initial public offering). You successfully purchase a few thousand units. 2009, you liquidate all your holding of the shares and make RM50,000 net gain. It was a successful trade!

1st of May, 2009, the domain name Ad.com was sold for the hefty sum of $1.4 million, ranking it among some of the year’s top-selling premium names. Its cost is just a few dollars to the first owner who registered it.

Undoubtedly, you can make a lot of money by flipping – buying something at a lower price and then sell it for a higher price, provided that you can find the willing buyer. This is called “investing for capital gain”.

This breed of investors makes lots of money. But there is another style of investing, besides investing for capital gain.

Different style of investing (not for capital gain)

Case #1
Mr. Tan bought an existing three-storey shop in 2004. The commercial building is rented to a restaurant at the ground floor, an insurance agency on the second floor, and a tuition centre on the third floor. He has a positive cash flow of RM2000 per month and keeps increasing year after year due to rental inflation.

Case #2
John bought a blue chip share during the economy crisis back in 1997. The public company is a manufacturer of daily products and pay handsome dividend annually. John never thought of selling the shares. He is very satisfied with the dividend payment cheque he receives every year.

Case #3
Fannie bought an existing blog in 2008. She changed a couple of things on the website and poured her hard work into marketing it. She is now making a few thousand dollars from the blog every month, even though she had retired from the active role of managing the website by the way of outsourcing.

Now, you can see that these cases are different from the flipping strategy we discussed earlier. Mr. Tan, John and Fannie make money by “investing for cash flow”. Although they do not consider selling their investment possessions, I believe that the value of their investment had increased. The capital gain is just a bonus if they choose to liquidate the investment.

Which investing style do you prefer?

Which style do you prefer? Which style of investing is safer, in your opinion? and WHY?
Tell us in the comment section below. And also please make your vote.

This article is posted at: KCLau's Money Tips

Investing for Cash Flow vs. Capital Gain

When you see your neighbour’s latest TV set (higher resolution, wider screen, brighter colour, thinner and trendier), you want one for yourself. So you decide to buy even a bigger one, just to show off that you can do the same, or even better than your neighbour.

That’s called “keeping up with the Joneses”.

“Keeping up with the Joneses” is a catchphrase in many parts of the English-speaking world referring to the comparison to one’s neighbour as a benchmark for social caste or the accumulation of material goods. To fail to “keep up with the Joneses” is perceived as demonstrating socio-economic or cultural inferiority.

Since this is always not a smart reaction for someone who is financial savvy, why keeping up with the Joneses? In fact my question is not “why you want to keep up with your neighbours”. It is why “Joneses”? Why not “Tans”? Why not “Ramli” or “Muthus”? But “Joneses”!

The answer is available on the Internet.

This term is 20th century American. It originated with Arthur (Pop) Momand’s Keep Up With The Joneses comic strip in the New York Globe. The strip was first published in 1913 and became popular quite quickly. By September 1915, a cartoon film of the same name was touring US cinemas.

Keepin up with the Joneses Comic

The ‘Joneses’ in the cartoon weren’t based on anyone in particular, and they weren’t portrayed in the cartoon itself. Jones was a very common name and ‘the Joneses’ was merely a generic name for ‘the neighbours’.

Have you done anything just to impress your neighbour? Tell us what you’ve done to keep up with the Joneses.

This article is posted at: KCLau's Money Tips

Why keeping up with the Joneses?

This is a guest post by Jessica.

Small things without any doubt can make a big difference. And, when it gets applied in money, the joy is unparallel. There are definitely times when we mock at small decisions and are skeptical how much these decisions can accumulate money for us. Follow the below given pointers and you will get an insight into how you save money by the smallest unnoticed decisions of yours.

Take good care of your health

Make it a point to take good care of your health.

We often tend to act careless when it comes to our health. It is not to be so. We all know that if we were to take good care of our health, we would be upbeat leading to which we can drive away all the illnesses that may take us down.

You can also save a lot of medical expenses in the process.

For example: you are experiencing problems in your kidney and you decide to postpone your doctor’s appointment. It aggravates and leads to much bigger problems. You wonder why you didn’t pay a visit to the doctor’s earlier on.

Switch Off Appliances not in use

Always switch off electrical appliances when not in use.

For example: switch off the lights or the ceiling fan when you are not in that specific room.

When you buy electrical products, make it a point to purchase products that have undergone electric consumption tests. Compare with various products in the market and buy wisely.

Fuel Savings

Saving fuel is very important. Fuel can be saved to a large extent while driving a car.

For example: when you know you are going to be stranded at traffic signal for quite sometime, it is considered a wise move to switch the ignition off. This act of yours’ will save a lot of fuel and eventually a lot of money too.

Beware of your mortgage

These days, more and more people turn towards credit companies to get their goals fulfilled. Similarly, when you want to buy a house or start a new business, you are naturally but, tempted to go in for a mortgage.

It is definitely easy to obtain but, eventually comes with some conditions. You must pledge something or show something as collateral. Persons possessing credit less than their affordability have to look deep into bad credit mortgage. Doing so will only result in you going back with a home ownership or spend the rest of your term paying monthly rental bills.

Watch out your Credit Card

Consider making constant checks on your Credit Card statements. By doing the credit report scam, you will only be helping yourself in identifying if there’s any sham movement going on in your account.

If there happens to be any improper expenses being made in your account, try to slash the origin itself before letting it replicate. You can do this the new way employed by many instantaneous alerts these days.

This article is posted at: KCLau's Money Tips

Small things do make big differences

In my previous posting “Are You an Active Saver“, I wrote about a survey result concerning Malaysians’ financial situation. The conclusion is that we Malaysians are not saving enough for the future. You may belong to this group that is not saving enough if you agree with any of the statements below.

• I do not know where my money goes each month
• I do something everyday that wastes money
• I do not know my own weaknesses
• Spending on big items like a car, a house and even groceries are dragging me down
• I am wasting money carrying debt

In reality, these are the issues that need to be addressed and tackled everyday. These are the obstacles that may have been blocking your ability to preserve some money and save for the future. You may be earning a reasonable amount of money but still find it hard to save money.

How do you improve your financial situation?

The answer is by improving your financial literacy or financial IQ. Robert T. Kiyosaki, the author of the book “Increase Your Financial IQ”, advocates learning to solve financial problems to learn, grow and become more knowledgeable in order to become rich.

According to Kiyosaki, rich people view financial problems as opportunities to enhance their financial IQ or increasing their financial knowledge. Hence, having better knowledge means being able to solve more complicated problems and make more money.

On the other hand, the poor regards money problems as problems. They feel victimized which is compounded by their failure to solve their problems. Consequently, the problem stays and worsens and the poor becomes poorer.

A rich person may not be able to solve all his money problems but instead of ignoring them or walking away, he refers to others who are experts in the field to solve them and learn from the experience.

Lastly, everyone has financial or money problems even the rich people. Those who choose to face and solve the problems will fare better compared to those who choose to ignore or pretend they don’t exist.

Read other articles by Jacquelyn at WParent.com on parenting matters and Tips4Everyone.com on solving marriage problems.

This article is posted at: KCLau's Money Tips

Malaysians Not Saving Enough Money

D’Leh was waiting quietly behind a big rock. His heart was beating fast and strong. Finally, the preys turn up. He knew that within the next few minutes, he was going to face the moment of death or survival. If he could take the animal down, the flesh would be enough to feed his entire tribe for months. If he failed, they may all die in hunger. In these few minutes of battle, he might fall for any minor mistake when dealing with such a huge beast!

D’Leh is the main character of the movie 10,000 BC.

The risk of death

Our ancient ancestors face the struggle to find food every single day of their life. Like what we’ve watched in the movie, if you can’t get the food on time, you won’t be able to get through the long winter. Fight for food now or die!

But those are ancient time. What about now?

The risk of being uncomfortable

You no longer have to worry about finding food. Life is so enjoyable that it is not only about the struggle to put food on the table.

If you want to succeed financially, why not taking risk of being uncomfortable? That’s the only risk you may need to face. That may be the only consequence if you fail – being less comfortable.

If you start a part time business, what you may lose are leisure weekends.
If you start a freelance business, what you may lose are movie nights.
If you invest in that stock, what you may lose is a portion of the capital.
If you quit your job now, you may end up in a smaller house, an older car, and less money to spend. I doubt that you will end up in hunger.
What are you going to lose anyway?

Just do it!

It is no longer risky.

This article is posted at: KCLau's Money Tips

It is no longer risky

All of us are consumers but not all of us are active savers. An active saver can be defined as follows:

• You have the habit of saving money since very young
• You were taught the value of money by your parents
• You diligently save some money each and every month
• You read about financial news, for example from the web

A survey released in 2009 by HSBC Direct indicates that 22 percent of online Americans are active savers. The rest are categorized as everyone else. According to Kevin Martin, the executive vice president of personal financial services at HSBC, anyone can learn to be an active saver. It is easy if you learn early but with proper discipline, you can begin anytime.

In another survey conducted by the National Foundation for Credit Counseling reported the following about Americans:

• 1 in 3 adults have no savings
• For those aged between 18 and 34 years old, about 50 percent have no savings at all
• 1 in 3 American adults do not save part of their income for retirement
• 57 percent do not keep a budget

Survey on Malaysians

It would be interesting to know how we Malaysians would fair in a similar survey like the one above. Well, in a 2008 survey done by Citi’s Financial Quotient (Fin-Q) comprising of 500 online interviews on 40 set questions, the results were less than favorable.

• Only 2 in 5 Malaysians put aside money as savings
• Only about 28% Malaysians have a monthly budget
• 1 in 5 has savings that would last only 4 weeks in the event of a job loss
• The average savings Malaysians have in reserve is about 11 weeks

It all boils down to how financially literate you are. Most Americans rate themselves low where 2 in 5 choose to rate themselves a C, D or F when it comes to personal finance. How would you rate yourself?

Personally, I would give myself a “B” in financial literacy as I don’t claim to know everything there is to know about personal finance but enough to achieve financial security at this point. I also choose to be an active saver which is something that is absolutely necessary if I want to achieve all my financial goals. Do you choose to be categorized as an active saver or not?

Read other articles by Jacquelyn at WParent.com on parenting matters and Tips4Everyone.com on solving marriage problems.

This article is posted at: KCLau's Money Tips

Are You an Active Saver?

Thanks for taking part in the last survey. I’ve received encouraging responses from you. The initial result shows that one in every two income-earning adults tracks their spending. Most of these people have a budget plan.

One of the emails I received today caught my attention and inspired this post. She told me that a budget planner doesn’t work for her. She can plan the budget at the beginning of the month but when approaching the end, she will be totally out of the budget.

And when I studied her budget plan compared to the actual spending, I spotted something strange.

“Other” is normally something not budgeted

She has spent quite a big chunk on “other” category in her budget. In May, she sponsored RM2,357 on her mother’s trip to China. In April, she replaced her broken laptop. Back in February, she spent RM1120 to replace all her tyres that the tread is almost worn off.

And all these expenses are categorized as “other”!

This is the solution: No more “other” spending (or keep it at minimum at least)

The simple solution that I suggested is – you should have a budget planned for all these expenses. Your mother’s trip should be included in your parent’s allowance. If you pay RM500 a month to her, set extra RM200 aside for her annual vacation. You should have a big purchase saving category budgeted to cater for your spending on gadgets or other big purchase. Car tyres replacement should be included in car maintenance (RM1120/24 months, assuming that you change tyres every two years).

If you have a budget planner, what goes into “other” category?

Tell us more about it in the comment section below.

Note: I will be discussing more details about budgeting in my new book. Just in case you are not informed about it, I am going to launch the book as a collaborative project. You will be able to read the book before the manuscript goes to my publisher. Your name may even appear in the book. Stay tuned!

This article is posted at: KCLau's Money Tips

What goes into “Other” category in your budget?

In a survey done in 2008, only about 28% of Malaysians have a monthly budget. Either you are extremely rich that you cannot be bothered to keep track of your money or you do not have any money or income to keep track of in the first place, you have no desire whatsoever to do it. However most of us fall somewhere in the middle rung, meaning we are not so rich as to completely disregard where our money is going.

People normally make excuses when it comes to doing a budget planner. The work is tedious, it is a useless exercise, my income is too small, etc. They start to complain even before they attempt to do it. The bad thing is you also hear them lament “I don’t know where my money went!” or something similar. You hear this complain often enough even from people who earn a decent income.

Well, to this people, they better listen up. This is where a budget planner becomes handy and useful. A budget planner helps you plan your day to day expenses. The fact is everyone spends money daily such as when you buy food, when you make a call, when you switch on the fan, etc.

Having a budget planner helps in the following ways:

• It shows your spending pattern. Maybe you have been spending 20 percent of your income on the lottery and you did not realize it yet.
• Assist you in doing proper allocation of your money. For example, 10 percent on food, 15 percent on savings, 10 percent on debt repayment, etc.
• It stops you from spending money you do not have. Who knows, maybe you have been trying to live a RM100,000 lifestyle on a RM50,000 annual income.
• Assist you in your debt-repayment plan.
• Assist you in achieving your financial goals faster.

A budget planner is really an important part of your financial planning. You cannot simply say you want to save 20 percent of your income when you do not have the amount to save in the first place. If you want to know whether you have or not, start to plan now. Go to the internet and type in “budget planner” or “free budget software” and you will get free samples of it.

Basically, you will be tracking your monthly income, your day to day spending, your big expenses (e.g. loans, utility bills, insurance, tax, etc.) and knowing your balance at the end of the month, positive or negative cashflow. Once you do this and keep doing it as part of your financial planning, you stop asking the question “Where did all my money go?”

Read other articles by Jacquelyn at WParent.com on parenting matters and Tips4Everyone.com on solving marriage problems.

This article is posted at: KCLau's Money Tips

The Importance of a Budget Planner

Let’s face it, each of us have dreams of becoming rich or wealthy one day. Achieving a few millions seem daunting enough and out of reach but try to imagine what it would be like to be a billionaire. Not everyone can aspire to be one as it takes a unique person to become one.

Do you have what it takes to be a billionaire?

Below is a set of questions developed by top psychologists Debra Condren, David Ballard and Joan Kane to assess your ability to reach that high.

1. “Can you tolerate and manage ambiguity?”
An aspiring billionaire can see through a maze of information or data and does not get confuse easily. He is able to see a successful venture when others run away from the idea.

2. “Can you deal with isolation?”
It can be a lonely place at the top. Of course there are lots of people who want to be your friend. An aspiring billionaire knows how to differentiate a true friend from the fake ones.

3. “Why go big at all?”
An aspiring billionaire has goals especially long term ones and has charted out a road map to reach them.

4. “Can you see around the corners?”
An aspiring billionaire can transform an existing industry and create a brand new one. For example, Bill Gates and Sam Walton who go beyond ordinary and achieve unbelievable heights in their respective lives.

5. “Do you prize independence?”
If you answer yes, that would have been your motivation to start your own business, striking out fearlessly. You are your own boss. Later on however, when your business empire has grown, you have to deal with a group of people like the board members and investors.

6. “Do you have the guts to double-down?”
Not everyone has a strong character and is tough enough to weather all the problems and tackle the hurdles of going out to build a great business. Even with massive risks, an aspiring billionaire has what it takes to tackle any obstacles and come out a winner at the end.

7. “Are you willing to make tough decisions for the growth of the company?”
Being the leader or the boss means making difficult decisions that protect your business or company. For example, replacing or firing staff or workers that do not contribute to your goal, even if the staff concern is your best friend or relative.

8. “Do you like speaking in public?”
Any business will gain from massive public exposure. This may come from having meetings with various groups of people like your staff, shareholders and customers, attending a public function or giving a television interview.

9. “Are you a consensus builder?”
An aspiring billionaire must have the talent to garner the consensus of the people around him to support him. It is not suppose to be a one-man-show only. Also, it is not suppose to be the kiss of death for the person who goes against or disagree with your idea.

10. “Can you delegate?”
An aspiring billionaire is smart enough to delegate parts of the work to others, while overseeing the whole business successfully.

11. “Are you inspired by creativity or more process-oriented?”
There is nothing wrong with being creative. However, an aspiring billionaire must know how to implement the ideas and work systematically to make them successful.

12. “If you say you need it on your desk by 9 am, will it get done?”
An aspiring billionaire has to be somewhat strict which is to be expected from a leader of a big company. He must have some level of respect from his employees even if it means sacrificing a bit of friendship or goodwill in the process.

13. “Can you work on Christmas?”
An aspiring billionaire is willing to make sacrifices to reach his goal even if it means missing out on important family occasions.

The person who fulfills all of the above is not contented in achieving a 7-9 figure net worth only. This person is shooting for the stars aiming for a 10 figure net worth and the billionaire status.

Reference source: www.forbes.com

Read other articles by Jacquelyn at WParent.com on parenting matters and Tips4Everyone.com on solving marriage problems.

This article is posted at: KCLau's Money Tips

Dream Big, Be a Billionaire

I am doing some surveys for my new book.
Today survey is about keeping track of your cash flow. I would like to know if there are many people who actually keep track of every ringgit they earn and spend. If you record your spending whether on a notebook, computer or your hand-held device, please select “yes”.
If you hardly do any tracking at all, choose “no”.
If sometimes you do, or you used to do it but stopped due to whatever reason, choose “sometimes”.

Please comment on this topic and tell us what you think about tracking your money below.

Thanks for your participation.

This article is posted at: KCLau's Money Tips

Tracking Personal Cash Flow [Survey]

WordCamp Malaysia 2010 marks the first WordCamp to ever be held in Malaysia, it’s also the beginning of many more to come.

WordCamp is a seminar for bloggers who use WordPress to power their blog. Thanks to this open-source blogging software, I run this blog entirely on Wordpress without worrying about paying any license fees for software.

WordCamp focuses on everything WordPress. WordCamps are usually informal, community-centric and a whole load of fun to be at. WordCamp is for everyone with an interest in the Wordpress platform.
Here are the details for WordCamp Malaysia.

Date: 22th May 2010
Time: 8am – 5pm
Venue: Bintang Grand Ballroom, Cititel Mid Valley, Kuala Lumpur.

The agenda of WordCamp is available at:

http://www.wordcamp.my/agenda
Among the highlights, Miss Naoko McCracken from Automattic will be attending for WordCamp keynote and “SURPRISE” for everyone before keynote.

The only way to find out more is to ATTEND the first WordCamp in Malaysia.

The price for WordCamp is as below:
RM 150 – They are maintaining our rates at RM150, thanks to our sponsors.
RM 200 – For the remaining registrations
RM 250 – At the door (but this is based on availability as we unfortunately have to cap the event at a maximum of 250 attendees, so please register online to secure a seat for the conference)
For registration, please proceed to: http://gi.conf.my/wordcampmy

Being WordCamp Malaysia attendees, you will entitle:
- Some WordPress Schwag all the way from San Francisco!
- Over 7 Hours of awesome content
- Great networking opportunities with like-minded individuals
- Buffet Lunch at the Hotel
- 2 Coffee Breaks
- And some “mystery” gifts by sponsors
For participants who are based outside Kuala Lumpur and overseas, there is an accommodation page in for reference. Check out:
http://www.wordcamp.my/accommodation

WordCamp Malaysia 2010 is jointly organized by Interunix, Grok, WP Design Studio & Kreative Themes.

This article is posted at: KCLau's Money Tips

Wordpress Blogger: The first ever WordCamp in Malaysia

A reader asks me through email about the differences between some similar financial jargons.

KCLau,

When reading financial books, I will come across terms below and I have problem to differentiate them. Can you tell me the differences?

1. equity, share and stock
2. bond and money market

Teo

First, let me show a trick to quickly look up for definitions of a word or phrase. Last time before the existence of the World Wide Web, we have to look for the meaning of a word with the help of a dictionary. I’ve forgotten the last time I checked up something in the dictionary ever since I got to know this trick.

Open up your web browser and go to www.google.com
Type “define: XXXX” in the search box and press enter.
For example, if you want to look for the definition of equity, type “define: equity”.
You will get this search result.

Equity, Share, and Stock

Equity = the ownership interest of shareholders in a corporation

Share = any of the equal portions into which the capital stock of a corporation is divided and ownership of which is evidenced by a stock certificate; “he bought 100 shares of IBM at the market price”

Stock = the capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity); “he owns a controlling share of the company’s stock”

In very simple terms:
Let’s say Mr. Tan started a business with his wife registered as Tans Sdn. Bhd.
He and his wife Susan own the company’s shares.

When the company is listed as a public company to raise more capital, the capital raised is called “stock”. The stock certificates are issued to other investors who pay to own shares of the stock.

As Tan family and other investors own the shares of the company’s stock, they own the equity. Equity is the ownership of the share of a business; shares are units of the equity or stock. You can say that equity is more general than stock.

When the business remains Tans Sdn. Bhd., Mr. Tan and his wife own the shares of equity of the company, but not the stock (because the company hasn’t gone public listed).

When Tans Sdn. Bhd becomes TANS BHD. (already listed at Bursa Malaysia), they all own the shares of the stock of the public corporation. Stock is also the equity.

In fact, you don’t really need to be annoyed by these jargons. All you need to know is

invest in stock = invest in share = invest in equity

Bond and Money Market

Bond = a certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.

Money Market = the market for short-term debt securities, such as commercial paper, certificates of deposit and Treasury bills, with a maturity of one year or less. Typically, these are safe, highly liquid investments.

Well, the main difference is that for bond, the term is longer (e.g. 3, 5, 10, 20 years etc)
For money market, the term is very short (less than a year).

Money market has the lowest investment risk. The return is also relatively low, even lower than Fixed Deposit.

Can you explain this in even simpler sentences?

This article is posted at: KCLau's Money Tips

What is the difference of equity, shares, stocks, bond and money market?

I came across an article talking about financial compatibility, advising couples in a relationship to find out whether they are financially compatible or not. Experts say it is important to do this even before tying the knot. This is a practical advice as money disagreements have been cited to be the number two reason why a lot of couples get divorced.

What the experts say

According to financial expert Philip DeMuth, part author of the book “The Little Book of Investing Do’s and Don’ts”, take notice of how your partner deals with money right from the beginning of the relationship. Pay attention to how money is handled during the first few dates. It is not a good sign if your potential partner throws money around just to impress you. Having lots of money is not an excuse to spend crazily taking Warren Buffet as an example.

If your partner likes to use cash to settle payments, it may indicate that he is careful about credit card debt. On the other hand, it could also mean that he has had his cards cancelled. If you want to find out the real situation – ask! At the same time, look out for signs indicating financial stability in your potential partner. Two signs of financial stability are being a homeowner and staying at a workplace or sticking to a job for a long period.

After marriage, couples should continue to keep track of each other’s finances. Jacquette Timmons, the author of “Financial Intimacy: How to Create a Healthy Relationship with Your Money and Your Mate”, suggests that couples discuss about money regularly to avoid problems especially concerning big purchases like buying a house.

Timmons also suggests talking about the various issues of money, i.e. “earning, saving, investing and spending.” During the discussions, take note which area you and your partner agree and disagree.

According to Manisha Thakor, author of “Get Financially Naked: How to Talk Money with Your Honey”, couples may find it tough to be open about money even knowing the importance of it.

To overcome communication barriers, Ryan Himmel, a certified public accountant offers the following tips:

• Open up about your past personal financial mistakes

• Choose an appropriate time to talk about money, not after one partner just had a difficult day at work

• Appoint a financial advisor to get a neutral third party opinion

• Use the word “we” rather than “you” or “me” to promote team effort

Lastly, if your potential partner refuses to talk or open up, DeMuth’s advice is to run away or break off from the relationship.

Reference source: www.forbes.com

Read other articles by Jacquelyn at WParent.com on parenting matters and Tips4Everyone.com on solving marriage problems.

This article is posted at: KCLau's Money Tips

Financial Compatibility: Talk before tying the knot!

It is a common strategy to rebalance your investment portfolio in order to reduce investment risk and lock in the profit. This is especially true when investing in unit trust, which is the easiest way to get you started investing in various classes of investment vehicles without much up-front capital.

Now, the question is: How often should you rebalance?

Annually? Monthly? or even weekly?

For the sake of convenience, most investors prefer to rebalance their portfolio in a yearly basis. Moreover, if switching and repurchasing of funds are involved, you will need to pay extra administration fees, which eventually eats into your portfolio returns.

The research team at Fundsupermart had conducted a research to observe if more frequent rebalancing will improve returns.

The results:

• The best return is obtained on annual rebalancing.
• The shocking result is that the more frequent you rebalance, the return drops, although not significantly.

It shows that you can do more with less – get higher return with less rebalancing.

If you are interested to read the four page report, download the pdf file here.

This article is posted at: KCLau's Money Tips

Frequent Rebalancing Doesn’t Improve Portfolio Return

This is a guest post by Louis Teo, a bright young man who managed to take control of his finances after being in debt.

Coming from a mid-income family, getting the opportunity to work with a multi-national company while tertiary studies fee 90% being sponsored by employer means a lot to me, a young 19 years old fresh STPM school leaver at the time. By taking the offer, I can achieve my dreams to earn big bulks of money, drive big car and live in a luxurious house, because this company promises greater career prospect.

Bank account is like a transit

All my dreams started to fade away when I realize that the income earned always not enough to cover my lifestyle. The reason why not enough is because I like to buy branded stuff and live in luxurious lifestyle. No matter how hard I work, my net worth will become “~RM0” at the end of the month. For me, bank account is like a transit place for the money. Once the money goes in, in less than a month time, it will go out. Sometimes even worst, it will go out more then what it supposes to. (I am spending my future money with credit card due to uncontrollable spending habits) Worst! Right?!

I have been living with this lifestyle for 2 years. I started to realise I need to save money when I find out that I don’t have initial capital to buy a house. By merely listening to friends advise, I took up my first ever investment, which is buying an investment-linked insurance. But I don’t feel comfortable after that. I have many sleepless nights because I am afraid of losing money.

Find a mentor

One day, I took up the challenge to search for “What is Investment-linked Insurance?” And I found KCLau Personal Financial Blog that explains about it. I clicked on it to read the article. I found the article very impressive and this prompted me to start browsing his blog to look for other articles. Wow!! I found lots of interesting articles which I have been looking for. I signed up for his newsletter, read his book preview. Folks, you know what? My journey to financial freedom begins.

I bought “Top Money Tips for Malaysians” book as Christmas present for myself end of 2009 and started to read it. Amazingly, I complete reading the whole book and even read repeatedly for 2 times in less than 2 weeks time. I am so impressed with practical tips provided by KCLau, he wakes me up I can be my financial genius, not financial idiot. Ask yourself, you want to be financial idiot or financial genius? I bet you will answer: “I want to get control of my money, I want to be financial genius”. If so, you must read his book.

Get financial education

Besides, I also spend a few hundreds of ringgit to buy Aziz Ali’s series of financial book. Yes, it cost me quite a lot to buy the books, but the money spend is well worth to increase my financial knowledge. For me, money spent to make myself becoming more “asset” and not more “liability”, is worth, it is worth!

I practice the tips learnt from the books and now I am on the correct path towards my financial freedom dream. I am happier and I always thankful with what I have now.

My Money Tips for You

Below are some of my tips to KCLau blog readers:

1. PAY YOUSELF FIRST. You are the most important asset to yourself, so you must pay yourself before paying other bills.

2. Make sure you have at least 3 months of equivalent emergency fund, preferably 6 months. Some may ask why 6 months? Ask yourself, the chance to get the 2nd job if you got sacked from your 1st job is higher in 3 months or 6 months? The answer is always 6 months.

3. Start your investment as soon as possible. You will lose if you don’t start early. Read the story of twin brothers, James and Jeremy (Pg 3) in KCLau’s “Top Money Tips for Malaysian”

4. Make sure you know what you are investing. Don’t invest in something that you don’t know or too complex to manage.

5. Divide your saving into separate accounts for separate objectives. Don’t mix them up. In this way, you are much clearer with the amount that you are lacking for each objective. It looks tedious, but if you don’t separate it, you will be tempted to spend your money.

6. If you are a working employee, make sure you read “The Millionaire in Me” by Azizi Ali. You will be amazed how an ordinary employee can be millionaire at your retirement age. The book teaches us how to remain an employee and still become a millionaire. (*Note: this book is one of Azizi Ali’s best-seller)

7. Tips No.7? Subscribe to KCLau’s newsletter and stay tuned with more practical personal financial tips. It’s free, by the way! So why not signing up?

This article is posted at: KCLau's Money Tips

Money Tips from a Young Employee