Historical Performance of Malaysia Equity Funds (30 Nov 2008)

(Bracket indicates negative value)

1 Year:

1. MAA Capital Guaranteed 2 – (3.04%)
2. MAA Capital Guaranteed 3 – (3.41%)
3. Mayban Life Property Plus CG – (3.87%)
4. MAA Capital Guaranteed 1 – (3.92%)
5. PRUlink Guaranteed Account – (4.67%)
6. HLG European Dividend-Growth – (5.88%)
7. MAA Capital Gtd Asia Pacific – (6.59%)
8. MAA Platinum – (7.15%)
9. Saham Amanah Sabah – (7.80%)
10. AMB Dividend Trust – (19.67%)
11. HLG Consumer Products Sector – (20.05%)
12. MAA Technology – (20.79%)
13. AMB Value Trust – (21.27%)
14. AMB Ethical Trust – (21.90%)
15. Areca Equity Trust – (23.62%)
16. MAAKL Al-Fauzan – (24.60%)
17. AUTB Progress – (24.64%)
18. HLG Trading/Services Sector – (24.82%)
19. Allianz Life Equity Income – (24.91%)
20. MAAKL Dividend – (25.79%)


3 Year: (Annualized Return)

1. AMB Value Trust – 20.36%
2. OSK-UOB Smart Treasure – 19.99%
3. AMB Ethical Trust – 18.90%
4. Uni Aggressive – 16.68%
5. Saham Amanah Sabah – 16.49%
6. OSK-UOB Emerg Oppty – 16.43%
7. CMS Islamic – 15.98%
8. Public SmallCap – 14.64%
9. OSK-UOB Small Cap Opportunity – 13.79%
10. HLG Industrial and Tech Sector – 12.73%
11. Uni Strategic – 12.73%
12. Manulife Equity – 11.80%
13. Allianz Life Dynamic Growth – 11.76%
14. CIMB Principal Equity – 11.38%
15. MAAKL Growth – 11.37%
16. MAAKL Value – 11.35%
17. TA High Growth – 11.24%
18. PB Growth – 11.02%
19. OSK-UOB Equity – 10.89%
20. MAAKL Al-Fauzan – 10.87%


5 Year: (Annualized Return)

1. AMB Value Trust – 12.99%
2. PB Growth – 12.42%
3. Public SmallCap – 11.03%
4. AMB Ethical Trust – 10.97%
5. Manulife Equity – 10.59%
6. OSKUOB Equity – 9.73%
7. MAAKL Al-Faid – 9.62%
8. Pacific Dividend – 8.58%
9. Saham Amanah Sabah – 8.58%
10. Public Savings – 8.27%
11. OSK-UOB KLCI Tracker – 7.66%
12. Public Islamic Equity – 7.59%
13. Lion Progressive – 7.32%
14. MAA Capital Guaranteed 1 – 7.23%
15. Public Aggressive Growth – 7.15%
16. Public Industry – 7.01%
17. Kenanga Syariah Growth – 6.97%
18. Kenanga Growth – 6.94%
19. Public Ittikal – 6.85%
20. AIA Aggressive – 6.75%



Source: Lipperweb

Click here for the previous month ranking.

EPF Reduced from 11% to 8%

Recently, our Finance Minister announces that the EPF (Employee Pension Fund) is reduced from 11% to 8%, so that the people have more money every month, and increase the purchasing power. I believe the aim of this new policy is to increase the purchasing power and boost the economy. The question is, can this move really improve the purchasing power, and boost the economy?

Reduction from 11% to 8% means that we have extra 3% of our salary every month. 3% is not a huge amount, but also help a bit to ease our burden in this high inflation era. This is the direct benefit that we can see, but did we think in depth, what is the implication of this move? Is this really benefit to people like us?

EPF is our pension fund, and this will be the main income when we are retired. In fact, EPF is already not sufficient for our retirement fund. When we pay less 3% every month now, this means that our retirement fund in future will be lesser. Do not think that this 3% is just little. When we consider the compounding effect of the EPF dividend, this may make you lose quite a lot in future. Even RM100, after 30 years with dividend 5% per year (conservative assumption), this RM100 will become RM432, which is 4.32 times. This is the first thing we should consider.

Another more important aspect is the tax. Maybe most of us did not aware about the tax when we heard about this reduction in EPF. EPF is tax-deductible. We can minus out the EPF amount that we paid when we calculate for our taxable income. Now, we pay less to EPF, so that the deductible amount is also less. If your monthly income is in the range of RM2400 to RM6300, this reduction of EPF may increase your tax payable. People with income less than RM2400 a month, normally is not taxed. People with higher income than RM6300, their tax-deductible amount is already maximum. (EPF tax-deductible amount is RM6000 maximum)

Maybe you will think that 3% is not much, even you are taxed more, but the amount is still a small amount. In fact, you may get wrong. So, please check about your income if your salary range is between RM2400 and RM6300. In tax, there is a tax rebate RM400 for those who have taxable income less than RM35,000. If your taxable is just exceeded this RM35,000, because of the reduction of EPF, then you will need to pay RM400 more to Income Tax. Check back your last year BE Form, if your taxable income is around RM30,000, then you must be careful. With the increment of salary this year and next year, your taxable income may be closed to the RM35,000. If you choose to pay less to EPF, your taxable income may exceed RM35,000 and you will be taxed RM400 more. The reduction is automatic, so you should consider properly and apply to remain the same 11% deduction if you think you need to.

BKAWAN announce Q4 Financial Report of FY2008

Batu Kawan Berhad, BKAWAN (Stock Quote 1899) has announced the 4th quarter financial report for financial year 2008. These are the few key points of the report:

• The Group’s pre-tax profit for the current quarter was RM135.8 million, marginally higher compared to the RM132.1 million reported in the corresponding quarter last year.

• The Group’s pre-tax profit for the year ended 30 September 2008 was RM522.8 million, substantially higher than the RM359.9 million recorded last financial year, mainly due to higher profit contribution from KLK.

• The Net Profit for the current quarter was RM132.8 million compared to the RM131.6 million in the corresponding quarter last year.

• The Net Profit for the year ended 30 September 2008 was RM514.0 million, substantially higher than the RM355.4 million recorded last financial year.

• The Earning Per Share (EPS) for the current quarter is 30.13sen and 117.25sen for the year ended 30 September 2008.

• The Net Assets per Share is RM6.66.

The price of BKAWAN today is RM7.00, so the PE is RM7.00/RM1.1725 = 5.97x
This is really a very low PE, and the net asset per share is almost same as the share price. BKAWAN announce that there is 9 sen (less 25% tax) and 40 sen (single tier tax exempted) dividend. By using the share price now, RM7.00, the DY is 7%.

Opportunity is here, did you grab it?

Recently all the people talk about financial crisis, market is going down. When people meet up, no longer ask each other how much you have earned from investment, but asking each other how much you have lost in investment. Anyway, there is always opportunity during the crisis, but did you grab it?

Just share with you a story that I heard last time. There is a guy who is very holy and always prays to the god. One day, it is flood around his house. He thought this is the time for him to see the fruits of his continuous praying to the god. He believes the god will sure rescue him from the flood. He is waiting for the rescue on the roof top of his house.

There is a log flooding on the water coming near to him, other people ask him faster grab the log and move to safer place, but he refuses to. He says the god will sure come and rescue him. After sometime, there is a rescue boat come to get him. The guy says the boat is too crowded, he wants to wait for the god to rescue him. Now the water level is getting higher and higher, the guy is so dangerous. At this time, there is a helicopter coming near the guy and ask the guy to climb up the ladder into the helicopter. The guy does not want to climb the ladder, so he says the god will sure come to rescue him. Soon, the water level is higher than him and he really goes to see the god, he is died.

When he sees the god, he asks the god why the god is bad as did not rescue him although he always prays. The god answers that he already tried to save him for three times but the guy did not grab the opportunity. The god sent him a log, but the guy did not grab it. The god also sent him a boat, but the guy did not go into the boat. The god also sent him a helicopter, but the guy still did not go into the helicopter.

So, although the god has given the guy three opportunities, the guy did not appreciate the opportunities and also did not grab the opportunities. In real life, we should appreciate and grab all the opportunities around us. Do not always just wait for the opportunities. If you did not really think about the opportunity, you will not notice even the real opportunity is just beside you. During this financial crisis, we should analyze and think about it, grab the opportunity that in front of us.

Historical Performance of Malaysia Equity Funds (31 Oct 2008)

(Bracket indicates negative value)

1 Year:

1. MAA Capital Guaranteed 2 – (2.43%)
2. MAA Capital Guaranteed 3 – (2.65%)
3. MAA Capital Guaranteed 1 – (2.66%)
4. PRUlink Guaranteed Account – (4.02%)
5. MAA Capital Gtd Asia Pacific – (5.52%)
6. MAA Platinum – (6.08%)
7. Property Plus CG – (7.29%)
8. Saham Amanah Sabah – (11.11%)
9. AMB Dividend Trust – (18.77%)
10. MAA Technology – (21.37%)
11. HLG Consumer Products Sector – (22.28%)
12. AMB Value Trust – (22.92%)
13. AMB Ethical Trust – (23.57%)
14. HLG Trading/Services Sector – (23.63%)
15. Allianz Life Equity Income – (24.26%)
16. Areca Equity Trust – (25.13%)
17. ASM Dana Al-Aiman – (25.85%)
18. MAAKL Dividend – (25.93%)
19. MAAKL Al-Fauzan – (25.95%)
20. AUTB Progress – (26.73%)


3 Year: (Annualized Return)

1. AMB Value Trust – 20.16%
2. OSK-UOB Smart Treasure – 20.11%
3. AMB Ethical Trust – 18.42%
4. Uni Aggressive – 16.79%
5. OSK-UOB Emerg Oppty – 16.30%
6. Saham Amanah Sabah – 15.88%
7. Uni Strategic – 14.38%
8. CMS Islamic – 14.27%
9. OSK-UOB Small Cap Opportunity – 13.99%
10. Public SmallCap – 13.84%
11. Manulife Equity – 12.52%
12. PB Growth – 12.13%
13. TA High Growth – 11.77%
14. HLG Industrial and Tech Sector – 11.75%
15. CIMB Principal Equity – 11.38%
16. OSK-UOB Equity – 11.22%
17. MAAKL Progress – 10.80%
18. MAAKL Growth – 10.78%
19. MAAKL Value – 10.55%
20. Alliance Dana Adib – 10.23%


5 Year: (Annualized Return)

1. PB Growth – 12.83%
2. AMB Value Trust – 12.02%
3. Manulife Equity – 10.35%
4. Public SmallCap – 10.25%
5. AMB Ethical Trust – 9.94%
6. MAAKL Al-Faid – 9.09%
7. OSKUOB Equity – 8.72%
8. Saham Amanah Sabah – 7.98%
9. Public Savings – 7.68%
10. Public Islamic Equity – 7.62%
11. MAA Capital Guaranteed 1 – 7.47%
12. Lion Progressive – 7.09%
13. OSK-UOB KLCI Tracker – 7.03%
14. Public Industry – 6.81%
15. Kenanga Syariah Growth – 6.78%
16. Public Ittikal – 6.51%
17. Kenanga Growth – 6.26%
18. AIA Dana Dinamik – 6.20%
19. AIA Aggressive – 6.16%
20. CIMB-Principal Equity – 6.15%


Source: Lipperweb

Crisis??? Or Opportunity???

If you are reading newspaper or listening to radio recently, you should know the global share market has been dropping for quite a lot. The bankruptcy of Lehman Brothers and huge debt faced by AIG make the situation worse. Global share markets drops almost 50% from the peak at the early of the year. Crude Oil price and Crude Palm Oil price also has been dropping for quite a lot.

Look at the chart above to see the dropping since the peak of each indice. KLCI has dropped from the peak 1516 points before the general election until the latest 859 points last week. Today, HSI and HSCEI have dropped for 12.70% and 14.00% respectively in a single trading day. KLCI is unchanged due to the public holiday in Malaysia, and the KLSE has no trading. Obviously, KLCI will drop a lot tomorrow when the trading starts.

At this moment, all the papers report about the global financial crisis, unemployment rate, inflation, all the negative issues in economy. Most of the people now are so sad when talking about investment and economy. Investors have suffered a lot of paper loss now. Businessmen tell that business is not good. The whole world is so sad about the economy and investment.

So, what do you feel after you hear this? Sad? Worried? Scared? I believe most of the people will feel these, especially for those who suffer a lot from paper loss. When most of the people think like that, why not you think in another way round? Is this a crisis? Or actually it is an opportunity? Make your mind fresh and think about it properly. Really take some time to think about it…we think about it together and I will share my views and feelings here later.

“When all people is pessimistic, you should be optimistic. When all people is greedy, you should be worried” I believe most of you heard this before, but how many of us can do it?

Public Bank announce 3Q Report of FY2008

Public Bank, PBBANK (Stock Quote 1295) has announced the 3rd quarter financial report for financial year 2008. These are the few key points of the report:

· The Group’s pre-tax profit for the nine months ended 30 Sep 2008 of RM2,566.2 million was RM383.3 million or 17.6% higher than the previous corresponding period of RM2,182.4 million.

· Net profit attributable to equity holders improved by 24.8% to RM1,927.3 million.

· Non-Performing loan (NPL) improved to 0.9% from 1.3% over the same period.

· Public Bank recorded a pre-tax profit of RM2,129.4 million for the nine months ended 30 Sep 2008 and was 14.1% higher than the previous corresponding period.

· Pre-tax profit contribution from the Group’s overseas operations increased by RM13.3 million or 4.8% from the previous corresponding period.

· For the 3rd quarter ended 30 Sep 2008, the Group registered a pre-tax profit of RM804.0 million, an improvement of RM29.6 million or 3.8% as compared to the previous corresponding quarter.

· Earnings attributable to equity holders grew by 13.4% or RM72.7 million over the same period.

· The EPS has increased to 18.4 cent in the 3rd quarter compared to 16.2 cent in the previous corresponding period. The EPS for nine month ended 30 Sep 2008 is 57.4 cent.

· Total assets is RM190,729 million and total liabilities is RM180,841 million.

Historical Performance of Malaysia Equity Funds (30 Sep 2008)

(Bracket indicates negative value)

1 Year:

1. MAA Capital Guaranteed 1 – 2.92%
2. MAA Capital Guaranteed 2 – 2.31%
3. MAA Capital Guaranteed 3 – 1.66%
4. PRUlink Guaranteed Account – 1.47%
5. Saham Amanah Sabah – 1.45%
6. Property Plus CG – (0.38%)
7. MAA Platinum – (1.02%)
8. AMB Dividend Trust – (6.74%)
9. HLG Consumer Products Sector – (7.01%)
10. AMB Value Trust – (7.48%)
11. AMB Ethical Trust – (8.31%)
12. MAA Technology – (9.08%)
13. Areca Equity Trust – (10.06%)
14. Allianz Life Equity Income – (10.71%)
15. Public SmallCap – (10.76%)
16. AUTB Progress – (11.74%)
17. MAAKL Dividend – (11.82%)
18. HwangDBS Glo Emerging Markets – (11.98%)
19. HLG Trading/Services Sector – (12.10%)
20. Allianz Life Equity – (12.33%)


3 Year: (Annualized Return)

1. OSK-UOB Smart Treasure – 25.27%
2. AMB Value Trust – 23.24%
3. AMB Ethical Trust – 21.31%
4. CMS Islamic – 21.20%
5. HLG Industrial and Tech Sector – 21.19%
6. Uni Aggressive – 20.69%
7. OSK-UOB Emerg Oppty – 20.63%
8. Public SmallCap – 20.62%
9. PB Growth – 18.31%
10. Uni Strategic – 18.04%
11. OSK-UOB Small Cap Opportunity – 18.00%
12. Manulife Equity – 17.90%
13. MAAKL Progress – 17.81%
14. Saham Amanah Sabah – 17.69%
15. Public Islamic Opportunities – 17.11%
16. MAAKL Value – 16.62%
17. TA High Growth – 16.37%
18. CIMB Principal Equity – 16.31%
19. MAAKL Growth – 15.80%
20. Public Aggressive Growth – 15.22%


5 Year: (Annualized Return)

1. PB Growth – 18.35%
2. Public SmallCap – 16.53%
3. AMB Value Trust – 16.32%
4. Manulife Equity – 16.09%
5. AMB Ethical Trust – 14.13%
6. Public Aggressive Growth – 13.79%
7. MAAKL Al-Faid – 13.60%
8. OSK-UOB KLCI Tracker – 13.59%
9. OSKUOB Equity – 13.37%
10. Public Savings – 13.09%
11. Public Industry – 14.79%
12. Lion Progressive – 12.60%
13. Public Regular Savings – 12.47%
14. ING Dana Suria Ekuiti – 12.37%
15. Public Equity – 12.28%
16. Public Islamic Equity – 12.25%
17. Public Growth – 12.03%
18. Public Ittikal – 11.99%
19. MAAKL Progress – 11.87%
20. CMS Islamic – 11.78%

Source: Lipperweb

Have you paid your credit card bill fully?

Many people have a habit that every month only pay the minimum payment of their credit card bill. This causes the credit card bills accumulate to be more and more, and at last, they are not afford to pay the bills.

Most of us know that the credit card interest is 1.5% per month, and there is 20 day interest free period. It means that the interest is only calculated if you do not pay the bills within 20 days from the bill issuance date.

Anyway, from July onwards, there is no more 20 day interest free period for those who do not pay the credit card fully. If you just pay the minimum payment, once you swipe your card, the interest will be calculated immediately. And, the late charge is also increased to RM10 instead of RM5 previously.

So, please pay all your credit card bill on time to avoid the high interest being charged to your retails. Do not let the bill to grow, the compounding of interest can make the debt increase very fast. So, PAY OFF all your CREDIT CARD DEBT NOW!!!

The TEN Principles of John Templeton’s Investment

I have read a good article about the ten investment principles adopted by John Templeton in a chinese newspaper, The Oriental Daily. So, I have summarized it and translated to english and post here. You all can read and think if these principles are benefit to yourself.

1) Leave the market when everyone is looking good at the market
From experience, in a risky investment market, it is always minority earning money, and majority is just enjoying the process or losing money. Thus, when people look good, we leave the market; when people look bad on the market, we enter the market.

2) Do not put all eggs in one basket
Even professional analysts may judge wrongly. So, if you invest all your money into a single stock, you may lose all your money if anything bad happens on that particular stock. By diversification, we invest our money into several stocks, if one of the stocks performs badly, we still have most of our money left.

3) Choose emerging market if you want super high return
Like human, the fastest growth happens during baby and teenage stage, but not adult stage. So, investing in emerging markets, we may obtain super high return from the fast growth of economy in emerging countries.

4) Main factor in stock selection – Understand the management team
Everybody has different characteristics and attitude. To make a corporate to be successful, management team is playing the most important role. We should understand how they manage the corporate and select those corporate with a good management team.

5) Select stock with FELT
When selecting stock, we should justify if the stock price is FAIR, the market is EFFICIENT, the stock is LIQUID, and the corporate annual report is TRANSPARENT.

6) Investment opportunity is always available during crisis
In the final stage of crisis, normally markets have been dropped quite a lot, and there are stocks undervalued. By having many cheap stocks and undervalued stocks, there are a lot of opportunities for us to invest.

7) Investment decision guidance – Net Assets
Net asset is the difference between total assets and total liabilities of a corporate, then divided by the number of share. If net asset is higher than the current share price, this share is undervalued. If the net asset is lower than the current share price, this share is overvalued.

8) Understand the game rules and regulations before entering a market
There are different policies, rules and regulations in different markets and countries. Before we invest in a market, we should understand the rules and regulations in the markets, especially those emerging markets which has less complete law and rules to protect the investors.

9) Gold is always hidden under the sands
Do not just look at the surface when we invest. We should study the market, find out the potential corporate and invest in these potential corporations.

10) Technical analysis is not the most important method
Technical analysis is just a part of all the analysis methods. Technical analysis is a supplement after we analyze on the politics, capital and fundamental aspects. Investment is on a particular stock, so we should analyze the fundamental of the corporate before we invest.

Historical Performance of Malaysia Equity Funds (31 August 2008)

(Bracket indicates negative value)

1 Year Return Ranking:

1. MAA Capital Guaranteed 1 – 7.16%
2. MAA Capital Guaranteed 2 – 5.89%
3. PRUlink Guaranteed Account – 5.80%
4. MAA Capital Guaranteed 3 – 5.18%
5. OSK-UOB Resources – 4.83%
6. HLG Industrial and Tech Sector – 4.54%
7. AMB Value Trust – 3.67%
8. Property Plus CG – 3.29%
9. MAA Platinum – 3.18%
10. HLG Consumer Products Sector – 2.98%
11. MAA Technology – 2.24%
12. AMB Ethical Trust – 1.64%
13. Areca Equity Trust – 1.47%
14. AMB Dividend Trust – 1.14%
15. Public SmallCap – 0.98%
16. PRUGlobal Basics – 0.90%
17. PB ASEAN Dividend – 0.41%
18. HwangDBS Glo Emerging Markets – 0.35%
19. OSKUOB Emerg Oppty – 0.24%
20. AmGlobal Agribusiness – (0.34)%


3 Year Return Ranking: (Annualized Return)

1. OSK-UOB Smart Treasure – 29.05%
2. HLG Industrial and Tech Sector – 26.23%
3. CMS Islamic – 25.95%
4. AMB Value Trust – 25.85%
5. OSK-UOB Emerg Oppty – 24.88%
6. AMB Ethical Trust – 23.57%
7. Public SmallCap – 23.55%
8. Uni Aggressive – 22.78%
9. Manulife Equity – 22.12%
10. PB Growth – 21.92%
11. OSK-UOB Small Cap Opportunity – 20.60%
12. MAAKL Progress – 20.53%
13. Public Islamic Opportunities – 20.39%
14. CIMB Principal Equity – 20.18%
15. Uni Strategic – 20.40%
16. Public Aggressive Growth – 20.00%
17. MAAKL Value – 19.71%
18. TA High Growth – 19.34%
19. MAAKL Growth – 18.76%
20. CIMB Principal Small Cap – 18.75%


5 Year Return Ranking: (Annualized Return)

1. PB Growth – 19.89%
2. Manulife Equity – 18.22%
3. Public SmallCap – 17.41%
4. AMB Value Trust – 17.01%
5. Public Aggressive Growth – 16.00%
6. MAAKL Al-Faid – 15.51%
7. OSK-UOB KLCI Tracker – 15.26%
8. Public Industry – 14.79%
9. AMB Ethical Trust – 14.79%
10. Public Savings – 14.69%
11. Public Equity – 14.55%
12. ING Dana Suria Ekuiti – 14.32%
13. Public Growth – 14.32%
14. OSKUOB Equity – 14.13%
15. Lion Progressive – 14.04%
16. Public Ittikal – 14.01%
17. Public Regular Savings – 13.96%
18. Public Islamic Equity – 13.84%
19. Public Index – 13.51%
20. HLG Industrial and Tech Sector – 13.47%


Source: LipperWeb

DIGI Offers FREE PA Insurance for Subscribers

From 11 Sep 2008 onwards, DIGI is offering a 1-Year FREE Personal Accident Insurance to all the subscribers.

The benefits are as following:
- RM10,000 for Accidental Death
- RM10,000 for Permanent Disablement
- RM500 for Funeral Expenses (due to Accidental Death)

For detailed information, you can look at https://www.digi.com.my/whatshot/promotions/insurance/index.do

To sign up the free insurance, just go to https://www.digi.com.my/insurance/index.do, fill in all the relevant information and sign up. You must be DIGI Prepaid/Postpaid registrant for more than 3 months.

Since this is a free insurance offered by DIGI, all the DIGI subscribers should apply for the plan fast. Although RM10,000 coverage is not much, at least this give you or your family more compensation when you have accident. DO activate the plan now!!!

Financial Planning Talk (7): Is Insurance Important?

Earlier, I have mentioned that before we start to invest, we need to have sufficient emergency fund. Actually, beside this emergency fund, we still need to protect our wealth before we start to invest. Saving money and invest is to accumulate our wealth and gain more wealth. In order to make sure we are able to accumulate and gain more wealth, we need to protect our wealth in the first place.

Why do we need to protect our wealth? During our wealth accumulation, if there is any accident or we are so unfortunate and get illnesses, we may spend all our wealth for our living expenses or medical fees after the accident or illnesses. If we have no any wealth protection, all the money which are accumulated over few tens year may be spent finish in a short while.

How to protect our wealth? When we talk about wealth protection, it is insurances. Insurances can pay for us when we need to be admitted into hospital. Insurances can provide some money when we get serious sicknesses. Insurances can leave some money for our family when we are not around anymore. So, insurance is the tool for us to protect our wealth.

When we are considering buying insurance, we need to understand our ability. There are a lot of insurance plans. We need to understand the coverage, premiums, terms and conditions when we decide to buy a particular plan. We need to consider our ability, do not buy a high premium policy which makes us stress when saving money to pay the premium.

Besides, buying insurance does not need to buy much. Just buy whatever you need, just buy whatever you can, then it is good enough. Personally, I prefer to buy traditional policy instead of investment-linked policy or some saving plans. Life insurance, medical card, 36 critical illnesses, and personal accident policies should be sufficient for normal individuals. Insurance is to protect our wealth, it is not to earn money. It is advisable that we invest in other investment tools to gain return instead of signing up investment-linked policy.

Maybe you can look for a good agent to explain to you in details about all these policies and try to figure out the best combination of policies you should buy. I feel that most of the policies out there are almost same, so I would choose a good agent and buy from him or her. A good insurance agent is very important, as he or she can always review the policy together with you according to your dependants and income. When you need some advice about insurance, he or she can be always available to help you. Try to emphasize more on the quality of the agent, but not only the premium and policy.

Financial Planning Talk (6): Is Emergency Fund Important?

After we assess our financial situation and set our financial goals, we will come out with a financial plan or investment plan. Earlier, I have stated that paying off all the debts should be the first step in our financial plan. So, if we have paid off all the high interest debts, then we should save money and invest to gain more money with money.

Many people neglect the first step before they invest, they do not have any cash for emergency case, so when they need some cash urgently, they need to cash out their investment even their investment is facing paper loss. This is not the right way, as investment need to be long term.

An emergency fund is very important for us before we start to invest. The objective of investment is to earn money comfortably and make our future life better. So, when we invest, we should make sure we are comfortable with the investment and we will not worry about the investment everyday until cannot sleep or cannot eat. By having a sufficient emergency fund, we should not be worry about our investment and let the investment grow over the time.

Then, how much is sufficient for an emergency fund? This depends on our expenses. Normally, financial advisors will advice us to prepare an emergency equivalent to our 6-month expenses. This can make sure we still can survive for 6 months if we lose our job suddenly. For those who are still single and not the main source of income for the family, you can consider preparing an emergency fund equivalent to 3-month expenses. It is not easy for career newbie to accumulate 6-month expenses as emergency fund.

How we can prepare the emergency funds? We should save a portion of our salary, maybe 10% or 20% every month to accumulate this emergency fund. The best way to put this emergency fund is Fixed Deposits (FD) which we can cash out money immediately (if it is business day) if we need the money urgently. If your job is extremely safe and your income is not the only income for the family, you can consider putting 70% of it into FD, and 30% of it into some low risk funds, such as bond funds.

The last thing to remember, while our expenses increase along the way, our emergency fund should increase as well. Review our expenses regularly and add more into the emergency fund to maintain our emergency funds to be always equivalent to our 3-month / 6-month expenses.

Batu Kawan announces 3Q FY2008 Report

Batu Kawan (BKAWAN) has announced the financial report of 3Q FY2008. These are the few key points of the report.

- The group achieved a substantially higher pre-tax profit of RM124.8 million against RM77.9 million reported in the corresponding quarter last year, mainly due to higher profit contribution from KLK.

- The group’s pre-tax profit for the current 9 months under review of RM387.0 million was 69.9% higher than the RM227.8 million achieved in the corresponding period last year.

- The EPS of current quarter is 28.01 sen against 17.15 sen in the corresponding quarter last year. The EPS for the current 9 months is 86.99 sen while the EPS for the corresponding period last year is 50.29 sen.

- Total assets of the group is 2,879.58 million while the total liabilities of the group is 88.63 million.

- The net assets per share is RM 6.34

Historical Performance of Malaysia Equity Funds (31 July 2008)

(Bracket indicates negative value)

1 Year Return Ranking:

1. MAA Capital Guaranteed 1 – 9.52%
2. PRUlink Guaranteed Account – 8.05%
3. MAA Capital Guaranteed 2 – 7.49%
4. MAA Capital Guaranteed 3 – 6.92%
5. MAA Platinum – 6.10%
6. HLG Industrial and Tech Sector – 2.78%
7. HLG Consumer Products Sector – 2.27%
8. MAA Technology – 1.85%
9. OSK-UOB Resources – 1.51%
10. AmGlobal Agribusiness – 1.47%
11. PRUGlobal Basics – 1.26%
12. HwangDBS Glo Emerging Markets – 0.90%
13. AMB Value Trust – 0.13%
14. Property Plus CG – (0.06%)
15. AmNew Frontier – (0.16%)
16. MAAKL Dividend – (0.42%)
17. ASM Dana Al-Aiman – (0.45%)
18. AmDividend Income – (0.49%)
19. ASM Dana Bestari – (0.88%)
20. AMB Ethical Trust – (0.91%)

3 Year Return Ranking: (Annualized Return)

1. OSK-UOB Smart Treasure – 31.28%
2. HLG Industrial and Tech Sector – 29.08%
3. AMB Value Trust – 27.08%
4. OSK-UOB Emerg Oppty – 27.02%
5. Uni Aggressive – 25.50%
6. Public SmallCap – 25.29%
7. Manulife Equity – 25.08%
8. AMB Ethical Trust – 25.01%
9. PB Growth – 24.76%
10. Public Aggressive Growth – 23.51%
11. MAAKL Progress – 22.88%
12. CIMB Principal Equity – 22.70%
13. Public Islamic Opportunities – 22.61%
14. OSK-UOB Small Cap Opportunity – 22.34%
15. Uni Strategic – 22.13%
16. CIMB Islamic DALI Equity – 21.29%
17. MAAKL Value – 21.25%
18. TA High Growth – 20.68%
19. ING OA Inv- ING Ekuiti Islam – 20.42%
20. MAAKL Growth – 20.05%

5 Year Return Ranking: (Annualized Return)

1. PB Growth – 22.98%
2. Manulife Equity – 21.33%
3. AMB Value Trust – 20.74%
4. Public SmallCap – 20.11%
5. Public Aggressive Growth – 19.40%
6. CMS Islamic – 18.88%
7. AMB Ethical Trust – 18.58%
8. ING Dana Suria Ekuiti – 18.31%
9. OSK-UOB KLCI Tracker – 18.13%
10. Public Ittikal – 17.91%
11. Public Equity – 17.58%
12. Public Industry – 17.55%
13. MAAKL Al-Faid – 17.55%
14. CMS Premier – 17.34%
15. Public Islamic Equity – 17.22%
16. Public Savings – 16.96%
17. Public Growth – 16.96%
18. ING Equity – 16.79%
19. Public Regular Savings – 16.79%
20. Lion Progressive – 16.62%


Source: Lipper

6 Tips to Get Out from Debts

Recently I read an article at Money Compass magazine, feel that these 6 tips should be beneficial to those who have credit cards debts currently. So, I just translate it to english and post here.

Tips 1: Face the debt honestly
There are many people not clear how much debt actually they have. Normally, they just pay the minimum payment after they receive the bill. If you have any debt, take out all the bills immediately and calculate how much debt you have now. Face your debt honestly.

Tips 2: Plan for a budget, compare the interest rate, and repay the debts as soon as possible
Everybody should plan for own budget and spend wisely. When expenditure is higher than income, we will take loans and get credit card debts. Try to avoid instalment when doing purchase, thus can save some interest. We should manage to calculate the interest for each type of loans or debts, and find the best way to save the interest. If we know that we have not enough money to spend, we must spend wisely, spend on needs, but not spend on wants. Beside, we also need to increase our income by getting part time jobs.

Tips 3: DO NOT use credit cards if you are not self-discipline
To enjoy in a short while may cause you into financial trouble for a long time. Do not think to enjoy first and pay later. When you want to swipe your credit card, you must justify if you are able to pay the bill. Make sure to clear all the credit cards bills before the due date. Reminder: credit card is a payment tool which provides us convenience. If we are not self-discipline enough, DO NOT use credit cards.

Tips 4: Restructure the debts and manage the debts
While settling the debts, we should settle the high interest debts first. Meanwhile, we can discuss with banks to restructure the debts, trying to get the plan with best interest rate, and manage the debts properly. Beside, we also can look for assistance from AKPK consultants, get out from debts by managing the debts effectively.

Tips 5: Record all the expenditure
We should record down all the expenditure according to different types of expenditure, such as meal, purchase daily necessary, phone bills, etc. With this record, we understand where we spend our money to. By adjusting our expenditure, we can allocate a portion of the money as emergency fund or for investment.

Tips 6: Forced Saving
If we have no saving at all, it is useless we mention about investment or financial management. It is very important we have savings. According to our expected standard of livings, set appropriate financial goals, force ourselves to save money regularly. It does not matter on the amount, even it is just small amount, it helps to achieve our financial goals. When there is economic crisis, this is very important, we should prepare 3 to 6 month expenditure as emergency fund. If you plan your financial early, there is no worry even during economic crisis.

Financial Planning Talk (5): Start the Financial Plan – Pay Off the Debt

After setting the goals, we can start to come out with the financial plan. The financial plan should be aligned with the goals. For each short term goal, we need to plan accordingly to achieve the particular goal.

Typically, the first thing in our financial plan should be paying off all the debts, if got any. It is glad that you are free of debts. If you have any, paying off the debts should be the first goal that you must achieve.

The rule of paying off debt is, pay off the debts with highest interest rate first, and pay off the debts with lowest interest rate last. Normally, credit card debts have the highest interest rate, which is 18% p.a. If you have credit card debts, you must pay off all your credit cards debt as soon as possible. Stop to swipe your card, purchase using cash. Do balance transfer and negotiate with banks to pay off the debts in a certain period with lower interest rate.

Besides credit card debts, personal loans are the second high interest rate loan, then followed by car loans and housing loans. Normally, we will pay off the car loans and housing loans in long period, such as 5-7 years and 20-25 years respectively.

There is something we must bear in mind. Never invest your money while you have debts, unless the return of the investment is higher than the debts interest rate. For example, credit card debts annual interest is 18%, while FD interest rate is only 3.7%, unit trust investment gives annual return 8-10%, and stock investment gives annual return 12-15%. So, we should always pay off all the credit card debts before we do investment or saving.

Financial Planning Talk (4): Setting Financial Goals

Before we set our financial goals, we should understand well about our current financial situation. After we set our financial goals, then we can plan for implementation plan according to our financial goals. For financial goals, we should set long term goals and short term goals. Having short term goals, it is easier for us to plan for the implementation plan to achieve the goals. And these short term goals are the progress to achieve the long term goals.

Why we need short term goals? If we set our financial goals as to retire early with 1 million ringgit after 15 years, it is very difficult for us to have a proper investment plan which can help us to achieve the goals. However, if we consider our current financial situation and set some short term goals which can help us to achieve the financial goals eventually, it is easier for us to have a good investment plan.

Typically, we should first examine our assets and debts. Debts must be paid off before we start our investment plan, unless the interest of the debts is less than the return of the investment. So, for this example, we can set some short terms goals, such as pay off all bad debts within 1 year, then save for a certain amount for investment within 3 years, meanwhile invest the money into different investment tools with different rate of return, targeting to get 200 thousands within first 5 years, then 500 thousands after 10 years, and eventually achieve 1 million after 15 years.

By having a clear target within a shorter period, we can set a proper investment plan easily and more important, we can review our financial planning periodically and justify if we are going the right way. If we cannot achieve the short term goals, we should review our long term goals and investment plan, and revise the plan in order to achieve our financial goals eventually.

This is just an example, we can set any short term goals that we need to, such as for some purchases or traveling and so forth. Anyway, we should always set goals which fulfill the 5 features that I mentioned in earlier post, which are SMART (Specific, Measurable, Attainable, Realistic, Timely).

Example:

Public Bank announce 2Q FY2008 Report

Public Bank has just announced its Financial Year 2008 Second Quarter financial report.

These are the few key points about its performance:
- Group’s pre-tax profit for the financial half year ended 30 Jun 08 of RM1,762.2 million is 25.2% higher than the previous corresponding half year.
- Net profit attributable to equity holders improved by 31.0%
- Group’s domestic bank, Public Bank, recorded a pre-tax profit of RM1525.5 million for the financial half year ended 30 Jun 08 and was 20.3% higher than previous corresponding half year.
- Pre-tax profit contribution from overseas operations increased by 16.8% to RM202.7 million.
- For the single 2nd quarter, the group registered a pre-tax profit of RM791.6 million, 8.0% higher than previous corresponding quarter.
- Its gross non-performing loan (NPL) decreasing by 21.9% to RM1.22 billion and Group’s net NPL ratio improved to 0.9% from 1.5% over the same period.
- EPS for 2nd quarter and financial half year is 17.69 cent and 39.08 cent respectively.
- Net assets per share is RM2.7921.

Public Bank has announced an interim dividend of 30% less 26% tax, which is 30 cent per share.

The 10 Richest Malaysians

1．Robert Kuok
Net Worth: US$ 10 billion
Age: 84
Main Business: Wilmar International, PPB

2．Ananda Krishnan
Net Worth: US$ 7.2 billion
Age: 70
Main Business: Maxis, Astro and India Aircel

3．Lee Shin Cheng
Net Worth: US$ 5.5 billion
Age: 69
Main Business: IOI Group

4．Teh Hong Piow
Net Worth: US$ 3.5 billion
Age: 78
Main Business: Public Bank

5．Lee Kim Hua & Family
Net Worth: US$ 3.4 billion
Age: 79
Main Business: Genting Group

6．Quek Leng Chan
Net Worth: US$ 2.4 billion
Age: 67
Main Business: Hong Leong Group

7．Yeoh Tiong Lay & Family
Net Worth: US$ 2.1 billion
Age: 78
Main Business: YTL Corporation

8．Syed Mokhtar AlBukhary
Net Worth: US$ 1.8 billion
Age: 56
Main Business: MMC Corporate, Malakoff

9．Vincent Tan
Net Worth: US$ 1.3 billion
Age: 56
Main Business: Berjaya Group

10. Tiong Hiew King
Net Worth: US$ 1.1 billion
Age: 78
Main Business: Sin Chew

Pump Petrol Using Credit Card

The petrol price has been increased by 40%, we as consumers really suffer from the high petrol price and high inflation rate. To fight with the high inflation, we always try to save more petrol when driving and get as much as rebate when pumping petrol.

Recently there are few banks offering credit cards that getting rebate when pump petrol, I found that Direct Access Mastercard is quite good, getting 2% rebate in any petrol station. Maximum rebate per month is RM50. Moreover, we still can use loyalty card to get loyalty points, example BonusLink in Shell, Smiles in Esso and Mobil, Mesra card in Petronas and so forth. I personally use Direct Access Mastercard together with Smiles card in Esso or Mobil, so that I can get 2% rebate from credit card and get 1 point for RM1 from Smiles card. 1000 Smiles points can redeem RM15 petrol, so in total, I can save 3.5%.

Looking at other credit cards, Citibank Shell Card only can get 1.5% rebate if you have no outstanding balance. Maybank and CIMB Petronas Card can get more treats points and 2% rebate respectively, but no loyalty points can be collected using these two cards.

Anyway, DO pump petrol using credit card ONLY if you are discipline enough to pay the bills on time every month to avoid from interest charges. Also, always consider to apply Free For Life credit cards.

Historical Performance of Malaysia Equity Funds (30 June 2008)

1 Year Return Ranking:

1. OSK-UOB Resources – 18.56%
2. HLG Industrial and Tech Sector – 14.62%
3. PB Asean Dividend – 12.39%
4. PRUGlobal Basics – 10.64%
5. MAA Capital Guaranteed 2 – 9.63%
6. OSK-UOB Emerg Oppty – 9.63%
7. MAA Capital Guaranteed 3 – 9.35%
8. AMB Value Trust – 9.22%
9. MAA Capital Guaranteed 1 – 9.08%
10. PB Growth – 7.66%
11. AmNew Frontier – 7.54%
12. CIMB Islamic DALI Equity Growth – 7.28%
13. Public SmallCap – 6.97%
14. PRUlink Guaranteed Account – 6.85%
15. CIMB Islamic Small Cap – 6.75%
16. AmGlobal Agribusiness – 6.26%
17. Public Far-East Select – 6.10%
18. CIMB Islamic Equity – 6.01%
19. CIMB-Principal Small Cap – 6.00%
20. CIMB-Principal Equity Growth & Income – 5.88%

3 Year Return Ranking: (Annualized Return)

1. OSK-UOB Smart Treasure – 34.23%
2. CMS Islamic – 31.89%
3. HLG Industrial and Tech Sector – 31.03%
4. AMB Value Trust – 29.10%
5. OSK-UOB Emerg Oppty – 28.68%%
6. PB Growth – 28.41%
7. Public SmallCap – 27.72%
8. AMB Ethical Trust – 27.25%
9. Public Aggressive Growth – 27.02%
10. Uni Aggressive – 26.70%
11. Manulife Equity – 26.47%
12. MAAKL Progress – 26.42%
13. CIMB Islamic DALI Equity – 25.18%
14. CIMB Principal Equity – 24.90%
15. Public Islamic Opportunities – 24.52%
16. OSK-UOB Small Cap Opportunity – 24.52%
17. MAAKL Value – 24.41%
18. ING OA Inv- ING Ekuiti Islam – 23.65%
19. ING Dana Suria Ekuiti – 23.53%
20. CIMB Principal Equity Growth & Income – 23.44%

5 Year Return Ranking: (Annualized Return)

1. PB Growth – 24.77%
2. Manulife Equity – 22.75%
3. AMB Value Trust – 22.11%
4. Public SmallCap – 21.85%
5. Public Aggressive Growth – 21.04%
6. CMS Islamic – 20.80%
7. ING Dana Suria Ekuiti – 20.80%
8. AMB Ethical Trust – 20.06%
9. Public Ittikal – 19.77%
10. Public Industry – 19.56%
11. OSK-UOB KLCI Tracker – 19.40%
12. CMS Premier – 19.33%
13. ING Equity – 19.02%
14. Public Equity – 18.90%
15. MAAKL Progress – 18.73%
16. MAAKL Al-Faid – 18.60%
17. Public Islamic Equity – 18.55%
18. Public Growth – 18.29%
19. Lion Progressive – 18.16%
20. Public Savings – 18.16%

Sources: Lipper

Financial Planning Talk (3): How to set financial goals effectively?

After assessing our financial status, we should set our financial goals. Without goals, we have no target in our financial planning and we can achieve nothing. Without goals, it is very difficult to draft up a proper financial plan for ourselves. Goals are actually what we wish to achieve. However, most of us have no idea how to set the financial goals effectively.

Typically, one of the methods to set goals effectively is getting S.M.A.R.T.

Specific. When we set our financial goals, the goals must be specific. Keeping the goals specific, we can set our plan easier, as we can plan for specific action to achieve specific goals.
Example: To get enough education funds for the son to study at Australia by using both education plan policy and bluechips investment.

Measurable. As we need to revise our financial plan regularly, we need to make sure our goals are measurable. If we cannot measure it, we cannot imagine it. Measurable goals make us clearer what is our goals and easier for us to judge if we have achieved, partial achieved or not achieved. Having a measurable goal, we can see the change occurs.
Example: To get RM300,000 of the education funds for the son to study oversea from both education plan policy and bluechips investment.

Attainable/Achievable. When we set our financial goals, we will think of the way we want to achieve the goals. The financial goals must be achievable and not too far from our ability. The feeling of success helps you to remain motivated.
Example: To get 15% average annual return from the bluechips investment and 7% average annual return from the education plan policy.

Realistic. Realistic means something do-able. When we set our financial goals, we must be realistic. Looking at the resources that we have and the status that we are in, set a realistic goal.
Example: By using RM10,000 as capital and yearly top up of RM5,000 to invest in bluechips. Pay RM300 per month for the education plan policy.

Timely. All the goals that we set must be put a time frame. Without time frame, we will never start to move towards the goals. No time frame, no commitment.
Example: To get RM300,000 of the education funds for the son after 15 years.

Story Telling: Patience and Determination

I would like to share with you a story that I heard recently. There is a very high tower, and a group of frogs are going to jump to the top of the tower to see the view there. At halfway, one of the frogs said that it is so tired and hot, it does not want to continue and give up. Some of the frogs also give up when this frog stops, while the rest continue to jump. After a while, another frog said that there should be nothing special at the top of the tower, and we need not to suffer from the tiredness to jump up to the top of the tower. So those who listened to the frog, also agreed to stop and give up. At the end, there is only one frog jumping up to the top of the tower. All the frogs are so surprise and ask the frog, why are you so determined and preserved to jump up to the top of the tower? Then, they realize, the frog is actually deaf. Due to it cannot hear what the other frogs say, so it can jump up to the top of the tower patiently.

This is only a very short story, but let me to have a very good lesson. Some of you might not understand the morale of this story, it is ok, I would like to share what message I get from this story.

Some of us know about the importance of financial planning, also spend time to assess our financial status and set our own financial goals, as well as prepare our own investment plan. After we implement our investment plan for a period of time, probably someone around us would say that our investment plan will not be successful, and investment is very risky. There might be also some people would say that we do not know what will happen tomorrow, of course we should enjoy life now and do not need to save money for investment. This is same as what happened in the story. If we cannot pretend to be deaf at this moment, we might listen to them and give up our investment plan. Finally, we cannot achieve financial freedom. Only if we can pretend to be deaf, we are able to implement the investment plan with full of determination and patience, and eventually achieve the financial freedom.

For those who are investing in stock market, most of us will learn from Warren Buffett, to choose some good stocks, invest and keep for long term. However, after some time, when people around us said that their stocks are rising fast, but our stocks are not moving much, we should change stocks and invest in same stocks that they have. There might be some people will tell us that there is rumour that there are some stocks will rise since there will be speculation. So, at this moment, if we cannot pretend to be deaf, we might listen to these rumours and change to invest in those rumour stocks which we know nothing about them. In stock market, we as normal investors are not able to win over the professional speculators. So, if we can pretend to be deaf, and do not listen to what other people say, we will keep going with our investment plan. Investing in good stocks for long term, having dividend and compounding effect, we can earn a pretty return.

While implementing our financial plan or during our investment, sometime we should not listen too much what other people are saying. Prepare a good plan for ourselves, keep following the plan patiently and with full of determination, eventually we can achieve financial freedom.

Financial Planning Talk (2): Some tools to help assessing our financial status

Earlier, I have mentioned that the first step in personal financial planning is assessing our current financial status. This step is very essential as we need to know how much our net income is, how much assets we have and how much debt we have. We should take all these into consideration before we choose the most suitable investment strategy for our financial plan.

Each of us may have our own way to assess our current financial status, but for those who still have no idea how to know about our financial status, this is the guide for us to assess our financial status in general. For those who are very good in accounting, they can build their own balance sheet and income statement. These two tables can give them a clear picture how much assets, debt and cash they have. Normally balance sheet will include assets (such as property, equity, bank deposits, bond, etc), and debt (such as housing loan, education loan, personal loan, credit card debt, etc). Income statement should include your income and expenditure, and this can show you how much net income you have every month.

However, most of us have no idea about proper accounting, so we can do it in another way. We can list down the monthly income (such as salary, allowance, side income, etc), and monthly expenditure (such as house installment/rent, car installment, daily life expenditure, etc). Then, we also list down the yearly income (such as year end bonus, equity dividend, bond/deposit interest, etc) and yearly expenditure (such as insurance premium, roadtax, income tax, etc). From these two listings, we can calculate our monthly net income and yearly net income.

Beside, we also need to list down our current assets and debts. List down assets (such as properties (own use/rental), unit trust funds, bank deposits (saving, current, and fixed deposits), stocks, gold, etc), and debts (such as housing loan, car loan, credit card debt, personal loan, etc). At last, we also list down the insurance that we have and the sum-insured.

Here is the example of the lists:

Historical Performance of Malaysia Equity Funds (30 May 2008)

1 Year Return Ranking:

1. OSK-UOB Resources – 28.10%
2. OSK-UOB Emerg Oppty – 26.30%
3. Public SmallCap – 25.32%
4. Public Far-East Select – 22.58%
5. CIMB Islamic SmallCap – 21.28%
6. PB ASEAN Dividend – 20.22%
7. HLG Industrial and Tech Sector – 19.57%
8. PB Growth – 18.33%
9. PRUglobal basics – 17.93%
10. HwangDBS Glo Emerging Markets – 17.84%
11. AmGlobal Agribusiness – 17.84%
12. Public Regional Sector – 16.84%
13. CIMB Principal Small Cap – 16.60%
14. AMB Value Trust – 16.46%
15. OSK-UOB Smart Treasure – 16.16%
16. CIMB Islamic Equity – 16.11%
17. CIMB Principal Equity Growth & Income – 16.10%
18. Public Islamic Opportunities – 15.94%
19. PB Asia Equity – 15.25%
20. CIMB Islamic DALI Equity – 15.23%

3 Year Return Ranking: (Annualized Return Stated)

1. OSK-UOB Smart Treasure – 38.62%
2. CMS Islamic – 34.98%
3. HLG Industrial and Tech Sector – 34.88%
4. OSK-UOB Emerg Oppty – 33.09%
5. PB Growth – 32.65%
6. AMB Value Trust – 32.16%
7. Public Aggressive Growth – 32.07%
8. Public SmallCap – 31.13%
9. Manulife Equity – 30.96%
10. AMB Ethical Trust – 30.46%
11. MAAKL Progress – 30.14%
12. CIMB Islamic DALI Equity – 29.78%
13. CIMB Principal Equity – 29.60%
14. Uni Aggressive 29.34%
15. CIMB Principal Equity Growth & Income – 28.62%
16. CIMB Principal Equity Aggressive 1 – 28.48%
17. MAAKL Value – 28.15%
18. CIMB Islamic Equity – 28.06%
19. OSK-UOB Small Cap Opportunity – 27.88%
20. CIMB Principal Equity Aggressive 2 – 27.78%

Source: Lipper

Financial Planning Talk (1): What is Financial Planning?

Personal financial planning is the process of achieving financial freedom or our financial goals through the proper management of our finances. The aim of the personal financial planning is to evaluate our current finance status and decide which investment mode is suitable for us to achieve financial freedom. In simple word, personal financial planning helps us to achieve our financial goals from where we are today. Personal financial planning consists of six major components: cash flow management, insurance, investments, income tax management, retirement planning, and estate management.

The general guideline for personal financial planning consists of six steps. First, we need to assess our current financial status to understand better our current ability. The most common way of assessment is through our personal balance sheet and income statement. Thus, we have a clearer picture what kind of assets or liabilities that we have, and how much is our income, expenditure and net income. After that, we should set target or goals. In other word, the goal is the situation where we achieve financial freedom.

By knowing our current financial status and financial goals, we need to develop a proper financial plan. This financial plan should consist of cash flow management (budgeting), insurances, investments, estate management, income tax management, and retirement planning. After having a plan, there is the most important stage in a successful financial planning, which is implementation. Discipline is much needed to implement the plan effectively.

The world is changing while time past. Things change very fast, so that our plan also needs to be changed accordingly. Periodically monitoring the progress and revising the plan and goals can make sure we achieve financial freedom eventually.

So, do you have any financial plan? If no, you can think about it and come out one financial plan that suits you.

Invest Early or Invest Late?

These 2 tables show that the difference between starting investment early and starting investment late. Assuming that the annual return of the investment is 8%:

Mr. A invests RM1200 every year for 10 years, but Mr. B wants to enjoy life first, so he plans to invest RM1200 every year for 20 years on 11th year onwards. In the 30th year, Mr. A has around 40% more than Mr. B, although Mr. A just invests for 10 years while Mr. B invests for 20 years.

What happen if Mr. B still wants to enjoy life first, and he said that he will have higher income after 10 years and he is able to invest double of Mr. A’s investment?

We can see from the table, Mr. B invest RM2400 every year for 10 years on 11th year onwards. In 30th year, Mr. A still has slightly more than what Mr. B gains.

Time is very valuable and it cannot be bought using money. From the calculation above, we can conclude that time is a very important aspect for the investment to grow. The compounding effect is significant. Investing earlier definitely generate more money for you compared to investing later.

Is Retirement Too Far from us?

Many people especially youngster have a perception that retirement is too far from us and retirement planning only needs to be done when we enter 50s. This is not correct! Once we start work and earn money, we should plan for our retirement. Traditionally, EPF (Employee Provident Fund) is one of the major sources for our retirement fund. However, in this high inflation era, EPF is no longer enough for our retirement life. We need to get alternative to prepare for our retirement fund.

Since EPF is not enough for our retirement life, we should look for alternative. Saving is another method to fund our retirement life, but if you just put your saving into bank FD (Fixed Deposits), how much interest you can earn? Most of the banks now offer 3.7% interest per annum for FD. 3.7% is obviously lower than the inflation rate. After the recent fuel price hike, inflation this year is estimated to increase to 4-5%. Your money in bank FD is actually losing value in terms of purchasing power.

So, we should save money every month since we start work, and invest the money into investment tools that are suitable for us. Regardless what kind of investment tools, time is a very important aspect. If you invest in properties, the properties need time to appreciate. If you invest in stock market, your stocks need time to grow as companies need time to grow and generate profits. Any kind of investment need time to grow, and the magic of compounding effect will make your investment grow faster and faster in a long run.

Obviously, if we want to prepare a sufficient fund for our retirement, we need to start planning fast. Earlier you start to plan, higher the chance you can be successful, and more fund you can get for your retirement. Very soon, I will show you the difference between start invest early and start invest late.

DO NOT hope that your children will take care of you financially in future. Nowadays, we get married late and when we retire, normally our children just come out to work or not even work yet. They do not even afford to support themselves financially. PLAN FOR YOUR RETIREMENT FUND ASAP!!!

Why Financial Planning is Important?

What is the role of money in your life? Do you realize that life is closely related to money and it will be a difficult life without money? When I am in secondary school, I never think of the importance of money and financial planning. At that moment, I just think that getting a job which I like and enjoy without considering the salary. However, I face the reality of this cruel society when graduate from university. We need to spend so much and we just have income once a month. Then, I realize the importance of money.

It is really a bit weird that, we learn so many things during our school day or even our university life, but no single teacher teaching us about managing the money and financial planning. Our parents and teachers always ask us to study hard so that we can get a high paid job in the future. They ask us to earn more income, but did not teach us how to manage the money. In fact, there are so many high income persons nowadays are in credit card debt. So, to achieve financial freedom, the most important aspect is not how much you earn, but how much you save from your income.

Maybe you will ask, do you mean that I can achieve financial freedom if I save money every month? I will answer you, NO. However, if you do not save every month but spend all your income every month, definitely you cannot get rich or financial freedom. Having a good financial plan is the only way to achieve financial freedom.

How to define financial freedom? I believe everybody has their own definition of financial freedom. Some may say they want to have 10millions, some may say they want to have sufficient passive income every month, and some even may say they want to start a business and get the business public listed. So, we should set our target or goal for our financial plan, which means we achieve financial freedom. For me, my definition is free of debt, maintaining the quality of life after retired by having passive income equivalent to my income before retirement, and having 1million worth cash or equities investment.

Financial planning is not a subject in school, and in eastern countries, normally parents also will not talk much about money to us. That is the reason why so many people are in credit card debt and according to EPF (Employee Provident Fund), 70% of the retirees spend all of their EPF withdrawal within three years after they retired. People do not know how to manage their money and spend more than what they earn. Even high income person, most of them do not actually save money, and just think that having a car and house is enough in their life, but they do not think far ahead that how they going to survive after they retired and have no income at all.

In fact, financial planning is so important for us in order to achieve financial freedom and have a great retirement life. And, this is the purpose I write this blog to share with you all especially youngsters about personal financial planning. Let us go towards financial freedom together!