How to become a successful financial advisor?

In the previous post, I have mentioned that the Personal Money in June (Issue #118) has an article about how to become a good financial advisor and I wish to share it here. Recently, I am quite busy, so delay the sharing until now.

These are the five criteria to become a successful financial advisor:

1. Commit to lifelong learning

Financial planners need to be committed to continuous learning in a fast-changing business environment. Planners need to keep updated on the technical knowledge related to different aspects of financial planning, and then translate what you have learnt into practice. Only an educated financial planner can educate his client. After doing the research, he can then share it with their clients. A good financial planner will be able to help clients be discerning with the burgeoning choices of financial products in the market. Financial planners can stay competitive by staying relevant. Keep up to date with news and global events.

2. Define your service.

Planners need to understand what they are trying to accomplish from the financial planning practice. Thus, financial planners should decide whether they want to be generalists capable of providing a comprehensive financial planning plan or specialists who focus on one area of financial planning. Financial planners should avoid over-promising and under-delivering. Also, invest in supporting systems and tools, the planner needs a robust process to assess the risk the client is willing and able to take.

3. Be transparent.

It is critical for consumers to know what they are paying for and how they are paying for it. Be as transparent as possible when discussing compensation for the financial plan and/or advice. Financial planning is a process of setting objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve certain goals. To better educate his clients, it is advantageous for the planner to explain the entire financial-planning process. This helps them understand why they should pay you.

4. Build values and skills.

The skills required in establishing a relationship, identifying clients’ needs, presenting strategies and communicating them are necessary soft skills that a financial planner should have. To create trust, the financial planner has to have integrity and always out the clients’ interest first. To be respected, planners need to uphold the reputation of the profession at all times. To establish a good relationship with clients, update them frequently.

5. Aim to minimize diversions and errors.

Planners need to have a logical and defensible position for every assumption they take. Each assumption should be documented. Conduct “what-if” analyses and scenario testing to prepare for any eventuality. Planners should not paint a rosy picture by selecting a particular time frame. Instead, select different start and end points, and test them out. By preparing different scenarios, the planner will be able to demonstrate and clarify the trade-offs and propose options to close any gaps and create a buffer against unforeseen circumstances. Most importantly, it is to remind the clients that a financial plan is not static.

Even if you are not a financial advisor, you may look at your financial advisor/planner if he/she has the criteria above.

Enjoy your financial planning journey!

What are the trademarks of a good financial adviser?

In the Personal Money June 2011 (Issue #118), there is a letter in the Question of the Month written by me. The topic of the month is “What are the trademarks of a good financial adviser?”

Here is the letter that I submit and be published in the issue:

“A good financial adviser is not only providing financial advice to customers, but sharing the knowledge and awareness of financial planning with the customers. To be successful in providing financial advice, advisers need to ensure the customers having same thought and relevant knowledge to agree and be confident on what the advisers recommend. Only when both parties are aligned, the financial plan can be executed smoothly. Besides, a good financial adviser should understand and recommend based on the customers' needs and situation, but not keep promoting the same products to every customer, which gives better commission to the advisers. Review periodically on the customers' portfolio is needed to align the portfolio with the bearable risk level.”

The said issue of the Personal Money also has an article about good financial advisers. I will share the article with you in next post. Please stay tuned!

Should we withdraw EPF to invest in unit trust funds?

Referring to the previous article regarding EPF announcing 5.8% dividend, we continue to discuss about should we maximize the return of our EPF before we are age 55. Normally, we are not allowed to withdraw our EPF before 55, and EPF will give dividend to fight the inflation, in order to ensure we have more retirement fund in future.

However, the fact shows that our EPF is no longer sufficient for our retirement life and most of us still need to work after age 55. There is example that 70% of our EPF fund will be finished by us in 3 year after we retire. Thus, we should not solely depend on EPF dividend, but have to work out something to maximize our EPF fund.

Let me briefly explain about our EPF account structure and conditions of withdrawing EPF for investment. We have 2 accounts in our EPF, which account 1 contributes 70% and account 2 contributes 30%. It means that our EPF payable (together with employer) will be divided into two portions, 70% credited into account 1 and 30% credited into account 2. Normally, we can withdraw from account 2 for the purposes such as, house downpayment, housing loan payment, tertiary education fee and so forth. Account 1 is mainly for our retirement fund, which we only can withdraw after age 55. Anyhow, we are allowed to withdraw from this account 1 for unit trust investment with some conditions.

What are the conditions? The first condition is, you need to have a certain amount of money in your EPF account 1 to be able to withdraw for investment. This is varied based on your age. Normally, the amount you can withdraw each time will be less than 15% of your total amount of account 1. This condition avoids us from withdrawing too much for investment, as there is always risk in investment. Besides, we are only allowed to withdraw once every quarter for unit trust investment. For example, you withdraw an amount for investment today, your next withdrawal must be 3 months after today.


What is the benefit to withdraw EPF for unit trust fund investment?

1. Limitation on the investment amount
EPF limits the withdrawal amount according to our age and account 1 balance. This is to avoid investors from a big lump sum investment at the wrong market timing. A big lump sum investment can easily trap investors when the market is turning down.

2. Limitation on the withdrawal
EPF only allows us to withdraw once every quarter and make sure we are not investing too frequent. Invest once every 3 months in the long term can average our buying price. This is the Dollar Cost Averaging concept, where we can lower down our buying price during the market downturn. This method cannot maximize our return, but to average our buying price, where we can breakeven faster once market recovers from bad time.

3. Long investment horizon
Account 1 can be only withdrawn at age 55. For investors who are in the range of age 20-40, we have a very long time horizon to invest using our EPF. Investing periodically in long term definitely can lower the risk exposure of our investment, as market is going upward trend in long term. Time is a very important factor in investment, as investment can grow bigger and faster during long term. By having sufficient time, we can always wait for the good time to leave the market and get back cash.

4. Better feelings
Unit trust funds price is moving according to the volatility of the stock market. The volatility is always causing investors to be in greedy or scary mode. In my experience, EPF investors are steadier than cash investors when market is turning down. The main factor should be EPF investors will not feel the pain as the money is not coming out from their pocket, but from their EPF account, which they are aware that they cannot touch this money before age 55. Normally, they will continue the EPF investment every quarter regardless of the market movement. During low market, they always buy in more units with same withdrawal amount. Once the market is recovering, they start to earn positive return. In contrast, cash investors normally are very alert about the market movement. They will stop topping up when the market is turning down to wait for the best timing to top up. In fact, they always miss out the best timing, as best time will only be realized when it was past. Cash investors normally wait till the market recover to a certain level, only they will continue to invest. They always miss out to buy more units during low price. When market is recovering, they are hoping their investment to breakeven and they always invest again when their investment breakeven. Again, they buy the units at higher price. At the same time, the EPF investors are already earning positive return when cash investors waiting for breakeven.

5. Lower service charge
This is not a very significant benefit, but it is still lower than cash investment. EPF investment service charge is 3% and cash investment service charge normally is 5.5%.

After all these pros above, are there any cons that we should take into consideration? Yes, this is for sure. Unit trust fund investment is an investment scheme with risks. Although long term periodically investing can lower down the risk exposure, it still cannot eliminate the risk of investment. When looking at the return, there is difference between EPF investment and cash investment. For cash investment, we are earning if there is positive return, but this is not the case for EPF investment. EPF will give dividend every year to our EPF fund, thus our EPF investment return must be able to beat this dividend rate. If our return from the investment is less than the EPF dividend, we are considered losing. This is the opportunity cost.

At last, we are reminded that this EPF investment will be credited back into your account 1 after you repurchase your funds. Investors are not able to get this in cash, as this is our retirement fund in future.

Happy Investing!!!

Happy Chinese New Year & Gong Xi Fatt Chai!!!

HAPPY CHINESE NEW YEAR & GONG XI FATT CHAI to all the readers of my blog. It is quite some time that I never update my blog, and now is the time for me to update this more frequent again.

Earlier I have shared few posts about the personal financial planning, which you can see the links of the complete series at the right pane, and I will continue on this to complete the whole personal financial planning series. The next topic of this personal financial planning talk is Types of Investment Tools. Please stay tune for the sharing soon.

In every new year, we will feel that the goods and services in the market are rising in price, and we will have our bonus or salary increment. How we can overcome the price rising with our current bonus and salary increment? How we should plan for our future financially? Now is the time for us to think about this. Let’s us plan our finance wisely and work towards financial freedom.

Again, wish all of you a very Happy Chinese New Year and a very Happy Investing Year!

Amanah Saham 1 Malaysia (AS 1Malaysia) is Launched!

Our Prime Minister, Dato Seri Najib announces that there will be another funds being launched and managed by PNB (Permodalan Nasional Berhad) during his 100th day as Prime Minister. The fund is called Amanah Saham 1 Malaysia (AS 1Malaysia). Today, the fund has been launched. Total of 10 billion unit with RM1.00 each will be sold through all the agents bank on 5 August.

There is a quota of 50% allocated for Bumiputera, 30% for Chinese, 15% for Indians, and 5% for others during the first 30 days. There is no quota after the period. The agents bank that distribute the fund are CIMB Bank, Maybank, and RHB Bank. Besides, the fund is also distributed by Pos Office and all the ASNB offices.

There is still no any official information published in ASNB website yet, but it has been announced that, the fund is fixed at RM1.00, same as ASM or ASW2020. Thus, it is expected that the return of this fund should be similar with the ASM and ASW2020. More information will be added here when there is official information published.

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ASNB has announced the prospectus of AS 1Malaysia. The unit price of AS 1 Malaysia is fixed at RM1.00. According to the Guideline of Unit Trust, this fund is not a capital protected fund. However, as the price is fixed at RM1.00, in fact the fund is capital guaranteed.

The prospectus of AS 1Malaysia can be downloaded here, http://www.asnb.com.my/prospectusall.htm

ASM (Amanah Saham Malaysia) Available Again!

As promised earlier, ASM which are not sold is opened to all the races. There are 1.6 billion unit of ASM will be opened for all the bumi or non-bumi to invest. These units will be available for investment at 21 July 2009. Each individual investor is only eligible for 20,000 units.

Prime Minister, Dato Seri Najib announces earlier that there will be another fund called Amanah Saham 1 Malaysia launched and also managed by PNB, so people expect this new fund is similar to ASM, ASB or ASW2020.

However, we still do not have detailed information of the new AS1M, it is no hurt if people invest in ASM first while waiting for the more detailed information of AS1M.

More information on ASM, refer to earlier article:

ASM and ASW2020

The 10 Richest Malaysian 2009

According to the Forbes’special report on 27 May 2009, these are the top 10 richest Malaysians:

1． Robert Kuok
Net Worth: US$ 9 billion
Age: 85
Main Business: Wilmar International, PPB

2． Ananda Krishnan
Net Worth: US$ 7 billion
Age: 71
Main Business: Maxis, Astro and India Aircel

3． Lee Shin Cheng
Net Worth: US$ 3.2 billion
Age: 70
Main Business: IOI Group

4． Lee Kim Hua & Family
Net Worth: US$ 2.5 billion
Age: 80
Main Business: Genting Group, Resorts World

5． Teh Hong Piow
Net Worth: US$ 2.4 billion
Age: 79
Main Business: Public Bank

6． Quek Leng Chan
Net Worth: US$ 2.3 billion
Age: 68
Main Business: Hong Leong Group

7． Yeoh Tiong Lay & Family
Net Worth: US$ 1.8 billion
Age: 79
Main Business: YTL Corporation

8． Syed Mokhtar AlBukhary
Net Worth: US$ 1.1 billion
Age: 57
Main Business: MMC Corporate, Malakoff

9. Tiong Hiew King
Net Worth: US$ 1.0 billion
Age: 74
Main Business: Sin Chew

10. Vincent Tan
Net Worth: US$ 0.75 billion
Age: 57
Main Business: Berjaya Group


Besides from the top 10, the others richest Malaysians are:

11. Azman Hashim – US$ 470 million
Chairman of Amcorp and Malaysian Investment Banking Association

12. William H.J. Cheng – US$ 390 million
Lion Group

13. G. Gnanalingam – US$ 260 million

14. Lim Kok Thay - US$ 225 million
Genting Group

15. Anthony Fernandes - US$ 220 million
AirAsia

16. Mokhzani Mahathir - US$ 215 million
Kencana

17. Lee Oi Hian - US$ 210 million
Kuala Lumpur Kepong, Batu Kawan

18. Chan Fong Ann - US$ 209 million
IOI Group Board Member

19. Kamarudin Meranun - US$ 205 million
AirAsia

20. Chong Chook Yew - US$ 200 million

21. Chen Lip Keong - US$ 195 million
NagaCorp

22. Lee Swee Eng - US$ 190 million
KNM

23. Jeffrey Cheah - US$ 185 million
Sunway Group

24. Lim Wee Chai - US$ 180 million
Top Glove

25. Ahmayuddin bin Ahmad - US$ 175 million

26. Lee Hau Hian - US$ 174 million
Kuala Lumpur Kepong, Batu Kawan

27. Lau Cho Kun - US$ 165 million

28. Vinod Sekhar - US$ 150 million

29. Liew Kee Sin - US$ 140 million
SP Setia

30. Tiah Thee Kian - US$ 135 million
TA Group

31. Rozali Ismail - US$ 130 million
Puncak Niaga

32. Lin Yun Ling - US$ 115 million
Gamuda

33. Yaw Teck Seng - US$ 113 million
Samling Group

34. Goh Peng Ooi - US$ 112 million
Silverlake Axis

35. Eleena Azlan Shah - US$ 110 million
Gamuda

36. David Law Tien Seng - US$ 105 million

37. Syed Mohd Yusof Tun Syed Nasir - US$ 100 million
K&N Kenanga

38. Hamdan Mohamad - US$ 98 million
Ranhill

39. Tan Teong Hean - US$ 95 million
Southern Bank

40. Kua Sian Kooi - US$ 90 million
Kurnia Insurance

The 10 Richest Malaysians 2008

New Domain!!!

After writing the blog for one year, finally I have got my own domain name for the blog. Earlier, I plan to move my blog to my own hosting server from blogger, but there are some issues in between, especially the site uptime. By using blogger, I have no worry about the site uptime.

There are pros and cons of using blogger or using wordpress with own hosting server. Blogger is much simpler compared to wordpress and we no need to spend a penny to get our blogs hosted. Furthermore, site uptime is quite good so far...Good Job, Blogger!!!

By using wordpress, we need to spend some money to get hosting server, and we need to make sure the site uptime is satisfactory. Anyway, wordpress has much more gadgets to play with compared to blogger :) Moreover, by having own hosting server, we can integrate database into our blogs...I'm thinking of that, maybe some of you got any idea if I can do this in blogger???

So, finally, I have my own brand name for my blog... http://www.leekk8.com and my chinese version blog domain is http://chinese.leekk8.com.

Enjoy your reading and feedback to me if you have any comments...

Income Tax 2008 Submission

Every year when around end of April, all the people will be busy to look for all the receipts of previous year. Looking for receipts for what? To declare income tax. Income tax submission is on 30 April every year. When around this day, all the LHDN (Lembaga Hasil Dalam Negeri) offices will be crowded from day to night.

Despite of old days, now we can submit the tax online, by using e-filing. After filing the tax, we can make the payment online as well, using online banking. This is really a convenient way for us. No need to take leave to go to the LHDN office. No need looking for parking. If do not want to take leave, then need to go there after work. By using e-filing, we can settle everything at home or at office. I just file my tax online, just takes me half an hour.

What do we need to prepare before doing the tax filing? The most important document is the EA form. From the EA form, you can actually key in the total salary, allowance, and your EPF contribution. Just be aware that this year is a bit different in the allowance, where some of the allowances are tax-exempted allowance, such as internet allowance, petrol card, and so forth. After that, compile all your receipts. The items can be used for tax deduction are books and magazine (max RM1000), sport item (max RM300), life insurance (max RM6000 together with EPF), medical insurance (max RM3000), computer (max RM3000 once every 3 year), parents’ medical bills (max RM5000), medical check-up fee (max RM500), and other donation to charity (max 7% of total income). So, by having all these amount, you just key in the figure online, then it will calculate your taxable income automatically as well as the tax amount that you need to pay.

Beside, you also need to key in all the dividends that you get last year, as we can claim back the exceeded tax if we are not in the 26% tax bracket. Just compile all your dividend voucher and key in all the information according to the online form, the exceeded tax will be calculated automatically.

Doubtful that if you need to declare income tax? Just take your total income last year (salary + bonus) minus the EPF contribution, if exceed RM24,000, you will need to declare tax. It is always a good practice to declare tax even you are not entitled to pay tax yet.

Going to submit but do not know how to do e-filing? Refer to the website, the guide is quite clear, https://spsd.hasil.gov.my/PKI/e/mainpage.html.

30 April 2009….another 8 days to go!!!

ASM and ASW2020

Following the Sukuk Simpanan Rakyat, the government again announces for the additional units of Amanah Saham Malaysia (ASM) and Amanah Saham Wawasan 2020 (ASW2020). The additional 3.3 billion units of ASM can be subscripted on 21 April 2009 onwards, and the additional 2 billion units of ASW2020 will be available for subscription on 27 April 2009 onwards.

These two funds are different from the other normal unit trust funds, where their NAV is always RM1.00. The minimum initial investment will be 100 units and the maximum investment per pax is 20,000 units. Both funds are equity funds, but the risk is much lower than the other normal unit trust funds, as they are “guaranteed” by the government. ASM has delivered a per unit income distribution of 6.75 sen, 6.8 sen and 7.8 sen while ASW2020 gave a per unit income distribution of 6.8 sen, 8 sen and 7 sen for years 2006, 2007 and 2008 respectively. So, the average returns for these funds are ranged 6% to 8%.

ASM and ASW2020 can be bought at all the ASNB offices, Post Office, Maybank, CIMB Bank and RHB Bank.

For detailed information, can refer to http://www.asnb.com.my/.
For ASM: http://www.asnb.com.my/asm.htm
For ASW2020: http://www.asnb.com.my/asw.htm

Personally, I should say these funds are suitable for those who do not want to bear the high risk as normal unit trust funds. Their return is almost same as the normal moderate risk unit trust funds, and they are much more stable. The difference is very obvious when we compare the return of ASM/ASW2020 with the normal unit trust funds for year 2007 and year 2008. In 2007, most of the normal equity funds give return of 40%-60% in a year, while ASM and ASW2020 give return of 7%-8% in a year. In 2008, there is the economy crisis and most of the share markets drop. Normal equity funds suffer loss of 20%-30% in a year generally, but ASM and ASW2020 still give return of 6%-7%.

So, depends on yourself, see which funds are suitable for you. For those who are thinking to invest in low risk funds like bond funds, this is actually a much better choice. Although ASM and ASW2020 are equity funds, their risk is as low as bond funds (or I can say their risk is lower than bond funds), and their return is definitely higher than bond funds. The only drawback is, you need to queue in the post office or banks to buy the units. However, recently the market is so bad, there is not many people actually queuing for these funds. In old days, 1 billions unit of ASW2020 can be sold out within half an hour countrywide. If you’re interested to have it, just go to the said banks to grab it.

Sukuk Simpanan Rakyat 2009

Our Prime Minister, Dato’ Seri Najib has announced the mini budget of RM60billion earlier to stimulus the economy. One of the programme in this budget is the Sukuk Simpanan Rakyat 2009 (Islamic Bond). The objective of this bond is to give a chance to people to earn some income during this economy crisis period, where most of the people not dare to invest in equity.

This bond is opened for all Malaysian above 21 year old, and the minimum investment is RM1,000, while the maximum investment is RM50,000 per investor. The bond will be launched at 14 May 2009, but the offer period is from 14 April 2009 to 13 May 2009. The agent for this offer will be all the commercial banks, including Bank Islam, Bank Simpanan Nasional (BSN), and Bank Pertanian Malaysia. Commercial banks are banks like Maybank, Public Bank, CIMB Bank, EON Bank, Ambank, RHB Bank and so forth.

The maturity period of this bond is 3 years from the issue date. Interest will be paid out quarterly with 5% interest per annum. This means that if you invest RM1,000 into it, you will receive RM12.50 every quarter, until the bond is matured after 3 years. After 3 years, you will get back your initial investment, which is RM1,000. So, in total you will receive RM150 of interest during these 3 years.

For more detailed, you can refer to the Bank Negara website:
Feature: http://www.bnm.gov.my/index.php?ch=226&pg=731&ac=672
FAQ: http://www.bnm.gov.my/index.php?ch=226&pg=731&ac=674

Personally thinking, this bond is suitable for those who not able to take risk at all. At this time, bond with 5% is really not bad, as the Fixed Deposits interest rate now is only 2.5% per annum. However, during this economy crisis, stocks market has dropped quite a lot, and most of the stocks now are at fair value level, and some even are undervalued. For those who can bear the risk and looking for higher return, should consider to invest in equity instead of this bond.

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.

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.

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.

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!!!

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.