Financial Planning And Financial Product

Testimonial Global Domains Internationals

2009-10-27T22:21:00.000-07:00

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Don: Debt is bad, time to cut spending

2008-11-27T03:12:00.000-08:00

By FINTAN NG

PETALING JAYA: Consumers should tighten their belts in this period of economic uncertainty and not spend unnecessarily despite the lower base lending rates offered by several leading banks. Universiti Malaya Professor Dr Mohd Nazari Ismail, who teaches international business and recently gave a talk on financial crises and whether they were preventable, said easy credit would only lead to more unrestrained consumption and perhaps build the foundation for a future credit crunch.

Prof Mohd Nazari Ismail

“Consumers at this point should cut down on their spending; there’s no need to take up a loan for that extra car,” he said.

Nazari said it was easy credit and unrestrained borrowing by companies wanting to expand as fast as possible that led to the financial crisis. “If we don’t want a debt-laden future and have our children pick up the tab, I suggest we bite the bullet because spending our way out of a recession right now is just postponing the problem,” he told StarBiz.

Nazari said measures taken by governments to lower interest rates, fiscal stimulus packages and bailouts would just increase debt for the future.

“Debt is bad although it’s what fuels business expansion. Frugality is a virtue but it’s more challenging to practise it now since we’re all encouraged to spend,” he said, adding that fiscal stimulus packages such as infrastructure development or measures taken to stimulate consumption might not always work.
Nazari said Japan was an example of how infrastructure development had not helped. “The bubble burst in the early 1990s but despite all the spending on infrastructure, Japan’s growth has not been exceptional although to be fair, it’s a large economy,” he said.

Japan’s public debt stood at 195.95% of gross domestic product.
He did not see a cut in spending happening anytime soon in major economies. “Barack Obama was voted in because US voters believed that he would be able to solve their problem.” He said it would be a challenge for the US or other countries to not spend their way out of a recession but they would have to be wary of taking on too much debt.

It is inevitable that the public debt in the US would be much larger in the years to come. “The Obama administration will have no choice but to spend; not to spend will be political suicide.”

Time to buy?

2008-11-27T02:43:00.000-08:00

By John Authers

Published: November 10 2008 02:00 | Last updated: November 10 2008 02:00

As world stock markets plunged last month, investors were able to take heart from the latest words of Warren Buffett: he announced he was buying stocks. "A simple rule dictates my buying: be fearful when others are greedy, and be greedy when others are fearful," proclaimed the man known as the Sage of Omaha. "And most certainly, fear is now widespread, gripping even seasoned investors."
Nobody could disagree. But the extreme fear that was in evidence did not guarantee that stocks had hit a bottom. Mr Buffett acknowledged as much in his column for The New York Times and advised investors not even to try to time the market. His point was that stocks were cheap, so people should not take the risk of waiting.

"I haven't the faintest idea as to whether stocks will be higher or lower a month - or a year - from now," he wrote. "What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over."
But is there a way of telling when equities might have hit bottom? Certainly, when fear overcomes greed to this extent, attempts to assess a stock's value according to fundamental measures go out of the window. Instead, all people have to go on is history. Yet precedents as extreme as last month's "Black October" are few. Only four periods in the past 100 years (two of them during the 1930s) match the 46 per cent slide since the Standard & Poor's 500, the world's most widely tracked index, reached an all-time high in October last year.
In the weeks since its latest extreme sell-off, the S&P regained as much as 20 per cent at one point but continues to trade in a volatile range. Almost all other markets worldwide have displayed similar patterns, shedding even more than the US and rebounding more before lapsing into a range.

Nobody thinks that anything like normality has been restored; the weeks since then have included the biggest crash in hist-ory for the foreign ex-change market and further acute difficulties for the credit market. Historical pointers look ominous too: after the crash of 1929, anybody buying when the market started to stabilise would have lost more than three-quarters of their money over the next two years.

But some are beginning to set aside such fears. "For an unparalleled 20 years, global equities, especially US equities, have been overpriced," Jeremy Grantham, founder of the Grantham Mayo Otterloo fund management group in Boston and for years a voice that counselled caution, wrote late last month. "Now, finally, they are cheap and likely to get cheaper. Likely, I believe, to set up a once-in-a-lifetime investing opportunity (or maybe twice in a long career)."

He is only starting to buy, however, and has not deployed all the cash he has available. Buying now makes sense for those truly in it for the long term; the bottom may still be ahead.

W hen markets experience dislocations as extreme as Black October, as Mr Buffett implies, what is important is the mass psychology reflected in the market's moves.

Indeed, there are ways to assess investor psychology. The Chicago Board Options Exchange's Vix index, for instance, measures "anxiety" from how much investors in options are prepared to pay to protect against future falls in the S&P 500. This measure was not around during previous great bear markets but the spike in volatility in recent years took it to all-time highs. When sentiment becomes this extreme, it is fair to hope that stocks have become too cheap, creating bargains once confidence returns.

Looking instead at realised volatility, or the extent to which stocks vary on a monthly basis, the S&P last month was as volatile as it had been at any time since 1929, except October 1987. All previous spikes in volatility returned swiftly to calm.

Yet another measure comes from US Treasury bills, short-term loans to the US government that are arguably the safest investments in existence. When T-bill yields fall, investors are prepared to pay more for that safety. At the worst of the recent panic, T-bill yields reached 0.02 per cent, their lowest since 1940. They have barely recovered. Again, such an extreme desire for security might imply that the market cannot fall much further and is ready to swing in the other direction.

A further measure, comparing the yields available on the highest-rated - triple-A - bonds with bonds of only slightly lower quality once again shows the desire for safety leaping to extremes not seen since the 1930s.
A popular model - although academics suggest that it is flawed - compares the yields on stocks to the yields on bonds. The model does have a kernel of common sense. When bond yields are very low, as they are now, that could signal that it makes sense to pay more for stocks, in search of a higher return.
There is therefore a respectable case to be made that in the past few weeks fear has conquered greed to an extent that goes beyond the rational. The return of stability in due course creates the opportunity for a big rally. But this may merely be a "bear market rally". In the past two weeks, the S&P both staged its 20 per cent revival and then gave up half of it. That is not surprising - the bear market after 1929 was punctuated by several rallies of 20 per cent or more.

A market bottom cannot hold if stocks remain too expensive, so long-term measures of valuation have proved to be great indicators of bear market tops and bottoms. One suggested in the 1930s by Benjamin Graham, an investment theorist, looks at cyclical price/earnings ratios, where the price of a stock is compared with the average of the earnings per share it has produced over the previous 10 years. This controls for the effect of the profit cycle, which otherwise would mean that year-by-year multiples tended to be higher when profits were at the low point of the cycle and lower when profits were high.

This measure has been revived by Yale University's Robert Shiller, who gained fame for publishing Irrational Exuberance, in which he warned that stocks were badly overvalued, shortly before the internet bubble burst in 2000. Enhancing that fame in recent years have been his indices showing that another bubble, in US housing, was about to burst. Shiller p/e multiples reached their greatest extremes in 1929 and 2000, two market tops that were followed by bear markets. In October 1987 they peaked at a much lower level, giving an important clue that the market break of that year would prove to be less significant. Further, the lows have coincided with long-term market bottoms. There is also a tendency to revert to the mean over long periods.
Significantly, the cyclical p/e now suggests that stocks are slightly cheaper than their long-term average, for the first time since 1991. That in turn implies that those who can afford to wait a number of years for a pay-off should start to feed money into the stock market.

A variation on this theme is to look at very long-running trends. There are various ways of doing this, but Mr Grantham's simple model holds that over time, stocks rise by inflation plus 2 per cent. This produces an upward trend line, to which stocks will eventually revert. On this basis, stocks have recently snapped back to fair value, having been wildly overpriced. As with the cyclical p/e model, this suggests that the stock market had been overvalued since 1991.

Again this is encouraging, but the news has to come with the caveat that markets are prone to overshoot and become too cheap after prolonged periods when they have been too expensive. Hence, both these measures are consistent with stocks falling much lower before they find a bottom, even though they are currently fairly priced.

A further measure that has signalled market tops and bottoms over the years is known as q. This refers to the ratio of the value of a company to its net worth - the value of the equity on its balance sheet. Again, over time, the market value of a company will tend to converge on this measure. Again, after being overvalued for more than a decade, stocks now appear to be at about fair value according to q.

T he final, critical element in the equation concerns the future. How bad will this recession be? Usually, market bottoms are related to recessions, with markets generally beginning to recover when the economy is on the floor and some months before a broader upturn.
For those who believe this recession will end in the early months of next year, therefore, there appears to be an argument to buy stocks now, as they already implicitly discount a long and severe recession. Tim Bond, of Barclays Capital, suggests that equities might present the "buying opportunity of a generation". According to Barclays' model of implied economic forecasts from credit spreads, the market is discounting as much as a 15 per cent dec-line in real gross domestic product for the US next year. By way of comparison, the average annualised GDP contraction during the Depression was 14.1 per cent and the worst single year, 1932, saw a contraction of 23 per cent.

If the final scenario is any better than this - with the political response to this recession very different as lessons of the 1930s have been learnt - stocks could be ready to rise. But Albert Edwards, a strongly bearish equity analyst at Société Générale in London, suggests that this is a mistake. "Previously, equity rallies in the depth of recessions were driven not by predictive power but by expanding multiples as interest rates and bond yields collapsed. Bad economic news was good news for valuations."
This time, he suggests, the world is dealing with a historic overhang of debt. Interest rates have already been slashed without turning round either the market or the economy. Rather than correlating with bonds, therefore, equities are more likely to become correlated with economic growth. That in turn means stocks might not rally ahead of an economic recovery.

A confident attempt to call a bottom to the market requires, in any event, a belief that the economy will be rebounding soon. Yet there is a flip side to that. "It is typical for great bubbles to overrun badly. But usually we don't invest our money on estimated likely overruns, but instead filter our money in slowly and hope to get lucky," says Mr Grantham.

"After all, if stocks are attractive and you don't buy and they run away, you don't just look like an idiot, you are an idiot."

Down time
The mother of all bear markets started in 1929, lasted at least until 1932 and coincided with the onset of the Great Depression. The Standard & Poor's 500 index fell 86 per cent.
Although many market scholars would count it as a separate incident, a further drop in equities began in 1937. The S&P endured a new fall of 54.5 per cent in the space of a year, though ending above its high from 1932. It took 25 years to get back to the 1929 peak.
The precedent is alarming: at this point in the 1929-32 bear market, stocks had another 75 per cent to fall before hitting bottom.

Worst of days
If another example is needed, there is always the Black Monday crash of 1987. But this could be a red herring. It was the worst single day in stock market history, but the plunge came when the market had grown very frothy, at a time when the economy was reasonably strong, and there was a swift rebound.
The economic backdrop this time is far more menacing and the market has now fallen far more from top to bottom. Comparisons with 1987 are therefore wishful thinking.

Oily slide
The other era that most closely compares is the bear market that began in 1973, coinciding with the oil price spike and the beginning of the great "stagflationary" cycle of the 1970s. The S&P fell 47.8 per cent.
At its worst so far, the 2007-08 sell-off displayed a virtually identical loss of 46.9 per cent - after reaching these depths much more swiftly.
A few months ago, with fears of inflation resurfacing as oil prices surged to unprecedented levels (just as they did, for different reasons, in 1973), this was a very popular parallel. But now, with central banks cutting rates to fight fears of deflation, the comparison looks stretched.

False bottom?
After the "internet bust" of 2000, the S&P fell 49.1 per cent. This is fresh in the mind but its lessons are questionable. It started with stocks more overvalued than ever before - and the sell-off stopped before a return to normal valuations.
But was the bottom during the WorldCom scandal of 2002 a false one? On one theory, the rebound came only because of excessive cuts in interest rates that stoked the credit bubble. That implies that this latest sell-off can end only once it has tested whether 2002 was a false bottom - meaning stocks need to fall significantly from last month's low. If they breach that, parallels with the 1930s look all the more disquieting.

OPR Cut Expected To Help Spur Economic Growth Amid A Gloomy Global Outlook

2008-11-24T19:42:00.001-08:00

By Massita Ahmad

KUALA LUMPUR, Nov 24 (Bernama) -- After months of anticipation and expectations from the market, the central bank finally reduced interest rate Monday amid a gloomy outlook for the global economy.

The decision by Bank Negara Malaysia to cut the Overnight Policy Rate to 3.25 percent from 3.50 percent was already expected by the market months ago, and while some persisted that there would be a cut today, others had given up on seeing a reduction.

The reduction in the interest rate shows that it is quite obvious that the government is anticipating a slowdown in economy for the coming years, said Datuk Muhammad Salleh Majid.

By reducing interest rate, it would help spur economic activities as cost of doing business will get lower, the former president of the then Kuala Lumpur Stock Exchange, now Bursa Malaysia, told Bernama in a telephone interview Monday.

Salleh is a Principal Fellow with the Faculty of Economics and Management, Universiti Kebangsaan Malaysia.

He said if the reduction brings no response in the economy, the central bank may likely consider reducing it further, but it would not be so soon.

He pointed out that the central bank took a long time before deciding on today's reduction.

Maybe there would be further reduction if there is a need to generate economic activity as the US interest rate is at one percent but still not helping to curb the increasing rate of unemployment, he said.

He said there is talks that US may reduce interest rate up to zero percent.

However, he pointed out that unemployment was not an issue in Malaysia.

The country's expected four percent jobless rate this year and next year is still considered manageable, he added.

The cut in the OPR was widely expected after the inflation rate in October eased to 7.6 percent, down from 8.2 percent in September.

Meanwhile, a forex dealer said the cut in interest rate will put the ringgit under pressure against the US dollar.

The ringgit is already weak, and with the cut it is expected to weaken further to the 3.70 - 3.80 range against the dollar by year-end, he said.

The ringgit closed at 3.6275/6305 against the dollar today.

Among those who were strongly anticipating a cut in the OPR today was ECM Libra Investment Research.

In a comment early this morning, ECM Libra Investment Research said there was little reason for Bank Negara not to slash the OPR to moderate the impending slowdown in the Malaysian economy.

Based on the Consumer Price Index for October, it could be safely said that the inflationary pressure in the domestic economy is no longer a concern for Bank Negara, it said in its research report released before BNM's meeting.

The fact that the Government significantly cut its forecast of the Malaysian economic growth for 2009 from 5.4 percent to 3.5 percent implies that there is now a strong reason for Bank Negara to slash the OPR, it said.

Among those who differed, Kenanga Research, in its Economic Viewpoint this morning said it expected the rate to remain unchanged for the year as a move to stabilise the ringgit's downward trend. It said the ringgit's slide could be one of the main reasons that may curtail the central bank from cutting the OPR.

OSK Research also shared the view, saying that a cut in the OPR amid the present volatile time may trigger additional unfavourable issues such as driving up demand-pull inflation, further depreciation of the ringgit against the US dollar and loan defaults amid a slower economic expansion.

However, it did point out that the easing in inflation did provide more room for the central bank to loosen its monetary policy.

-- BERNAMA

Oil falls below US$54 as economic gloom deepens

2008-11-19T19:55:00.000-08:00

By Ikuko Kao
Email us your feedback at fd@bizedge.com
LONDON: Oil's decline deepened to below US$54 (RM194.40) a barrel on Nov 19, pressured by economic weakness that will further erode the world's demand for fuel.

US crude fell to US$53.30 a barrel, its lowest since January 2007, and by 1311 GMT was trading 61 cents lower at US$53.78. Oil has dropped by nearly two-thirds from a record above US$147 a barrel in July.

London's Brent crude was off 54 cents at US$51.30.
"With no end in sight for the global economic turmoil, traders continue to focus on the lack of demand heading into 2009," said Jonathan Kornafel, Asia director of US-based options trader Hudson Capital Energy.

"It is becoming quite evident that demand may actually drop from 2008 to 2009."
The oil market was also closely watching US weekly oil data due out at 1535 GMT on Nov 19 as well as any moves from the Organisation of the Petroleum Exporting Countries (Opec) at their meeting next week.

Analysts in a Reuters poll expected the US oil data would show an increase of 800,000 barrels of crude stocks, and a 400,000 barrel rise in gasoline inventories. Distillate stocks, which include heating oil and diesel, were forecast to have risen 600,000 barrels.

The American Automobile Association (AAA) motor group said on Tuesday that US travel for the upcoming Thanksgiving holiday next week would decline for the first time since 2002.
Opec is very concerned about the worsening world economic slowdown, the group's president Chakib Khelil said in remarks published in El Khabar newspaper on Wednesday.
Nigerian Oil Minister Odein Ajumogobia said his country was not pushing for further cuts in oil output. -- Reuters

2008-11-18T04:04:00.001-08:00

Nota :
Di sebabkan program yang bertindih, temuramah En. Nor Azmi CFP bersama Tuan Sayed Munawar terpaksa ditunda ke satu tarikh yang akan di maklumkan kemudian. Harap maklum. TK

Untuk makluman semua, En. Nor Azmi Omar, Certified Financial Planner(CFP) dari Smart Planner Biz Services akan ke udara di Bernama Radio @ Radio 24 @ 93.9FM @ 20 November 2008 @ Khamis @ 9.30 malam di dalam program:-

"APA MASALAHNYA?, Setiap Khamis, 9.15 malam - Program Bicarawara Radio24 dengan hos Sayed Munawar".

Jangan lepaskan peluang ini.

Selamat Mendengar!

Observation

2008-10-20T17:40:00.000-07:00

It is always favorable to the investors to purchase securities after the market crash (i.e. at low prices);

Lower purchase price will allow the investors to achieve higher rate of return in future when the market stages a sustainable recovery;

Therefore, there is no better time than now to apply the concept of Dollar Cost Average (DCA) as an investment strategy, since nobody can accurately predict when the market will bottom out.

Dollar Costs Averaging (DCA) is a prudent investment strategy that allows investors to accumulate more units as the market falls with a predetermined regular investment amount over a fixed interval.

Not The Time To Panic But Time For Wise Investments In Bursa

2008-10-15T16:55:00.000-07:00

The current sluggish momentum in the local bourse is not because of any fundamental weakness but more due to jittery investors sentiments, said CIMB-Principal Asset Management Bhds chief investment officer, Raymond Tang.

The local market has already factored in the impact of the financial meltdown in the United States and Europe, he said, adding that it is also adjusting and taking into account the recession that is expected to take place in the United States.

"I think our market is less volatile, (but whether) it has bottomed, I think it is still too early to say (no one knows) how much further the engine (financial market in the West) has been damaged," he said during a briefing on how to invest in a difficult market.

At 4pm the Kuala Lumpur Composite Index shed 18.89 points to 947.17. CIMB-Principal year-end target for the Index is 1,000 points.

Hence, it is not the time to "panic" but the time to make wise investment decisions as it has been proven that when the market goes down it will rebound and there will be gains to be made.

Tang said even during the massive downturn, the local bourse did not take a nosedive like the other regional markets.

"Malaysia's market fell far less then the neighbouring countries. If you see in the last two weeks, the local bourse fell between six and seven per cent versus the neighbouring countries, which fell 20-30 per cent. But, of course when the markets rally, we go up less."

For Malaysia, it is more of a "pot hole" and not a "bump."

"Hold on for a while because the whole market is in chaos. So, explore the situation and be less panicky. Those with a clearer mind will profit compared with those who panic," he said.

Investors should also focus on a 3-5 years time horizon, said CIMB-Principals chief executive, Datuk Noripah Kamso.

It is just time to slowdown a bit, take a look around and when things are fine, move ahead, Tang said, adding that even CIMB-Principal has deferred plans to launch about two funds, of which one is a real estate fund.

"The funds were planned for last year, we deferred it for six months, then another six months as there is no point selling funds at the current market situation," he said.

As for funds exposed to the global market, he said CIMB-Principal has positioned itself in companies that will survive recession.

On the other hand, Noripah said CIMB-Principal has reached out to the investing public via its new Flagship Fund initiative to enable the investing public to invest defensively during the current market volatility. The flagship fund consist of eight core funds with consistent long-term risk adjusted returns. She said the funds are widely diversified across different sectors and assets.

10 saving tips

2008-09-04T09:21:00.000-07:00

10 tips on how to cut your spending and convert it to become your saving.

1. STOP smoking.
Smoking are bad for your health and it is real money waster.

2. Don't buy any newspaper
Just read it on the internet. Reading news on the internet is free and imagine how much can you save a month if you buy the newspaper everyday. If one newspaper cost you RM 1.20. You can save RM 1.20 X 30 days = RM 36 per month and RM 432 per year.

3. Use energy saver bulb
Some company who sell the energy saver bulb claim that you can save 40%-50% of your monthly electric bill if you change all you bulb and use energy saver bulb.

4. Bring food from home
Encourage yourself and your kids to bring food from home.

5. Don't use aircond especially during rainy season
Rain will make the surrounding temperature go down and result in colder surrounding. Aircond use a lot of electricity especially higher horsepower aircond.

6. Wash your own car
Sending your car to car wash will cost you around RM10-20 nowadays. Instead of sending car to carwash. Wash your car. It can be your weekend activity. And it burn your fat too.

7. Don't hire a maid
Instead, do it yourself and of course with help of the family members. If you have kids, you can ask them to do the dish after eat and do the laundry.

8. Plant for food
You can plant some vegetables like chili, curry tree and lots of small tree yourself.

9. Buy bulk
By buying some item that you used every monthin a large quantity, you can save some money. Buy at MAIDIN Subang Jaya where they offer some item in bulk and the more you buy, the less the price.

10. Iron all your clothes at once
Iron use a lot of electricity and you can save your electricity bill by ironing all your clothes at once.

Write what you spend

2007-07-13T07:10:00.000-07:00

When a person write their expenses and their income for personal financial review, most of them will notice that their expenses is more than the income or the expenses is too high than they expected. The person will not know where the money gone and sometimes 10 sen a day can make you lose RM 365 a year.

So how to trace where your money gone and how to cut your expenses?
One good exercise is by write all your expenses from thousand ringgit to 10 cents.

Why bother to write even the smallest amount of money?
Because when the amount of 'sen' (eg. sweet you buy from a convenient store) added up on one week can become 7 ringgit and if the seven ringgit one week for the whole year is about RM 365.

What is the effect on you if you write all your expenses?
You will become cost conscious and you can save thousand of ringgit a year.

This method require a self decipline to works and eventually you can make a saving per month and have some emergency fund, retiree saving, investment fund and become happy, healthy and wealthy.

Study loan defaulters to be blacklisted

2007-07-01T00:56:00.000-07:00

The student who dont pay their PTPTN will be named in CTOS system. By looking at this article, even PTPTN seek help from CTOS to make the borrower pay their loans.

Recent news that the Malaysian government did not authorized CTOS will make some of people who have named in CTOS systems happy. But the most important lesson from these two story that if you want to make a loan or even borrow from someone, make sure that you pay back what you borrow. If not, the banks will not give you a loan or you will have created a bad image of yourself to the lender.

If you think you cannot pay back what you borrow, then don't borrow or make loans at all.

Who needs financial planning

2007-06-18T00:13:00.000-07:00

Most of people said that they did not need to consult a financial planner because they think they know how to manage their own financial plan and strategy. But they did not realize that to manage it, they did not only plan but they must know the financial planning tricks and knowledge.

Most people did not have adequate financial planning knowledge and did not know how to manage their financial using the right way and have low financial IQ. They fail to manage their financial plan or like to delay managing their plan. For those who have made a draft of their plan, they fail to make an effective and suitable plan for themselves. It is because lack of financial knowledge and they did not know the suitable financial tools for them to use to make the plan works.

They need a Financial Planner that can create a plan for them that suit their needs and the financial climate and the planner can suggest suitable financial tools. Below are the type of people who need a Financial Planner:-

Fresh graduates who just started working.
Those who are getting married.
Someone who one to reduce their mounting debts
Maximizing their saving
Wealth creation
Just retired and want to plan their EPF money.

Good debts and bad debts

2007-06-17T11:18:00.000-07:00

I have just read a good piece of writing by Pakdi. You can read it here.

Of course, there always been a good debts, and a bad debts. To simplify this:-

Good Debts
Good debt is a debt that can give you higher return that the amount of the debts that you make. This include the amount of money that you borrow plus the interest that you must pay in order to borrow the money from the banks. For example, a property or a house that you buy will increase in value in certain period of years and the value in 10 years time is higher than amount of money that you borrow from the bank. But this will depends on the market and the location of the property.

Bad Debts
Bad debt is an opposite of the good debt. It is a debt that will give you a lower return and the thing that you purchase will decrease in value. A very good example is mass production cars. After you buy the car, the car price will drop and it will be keep dropping year by year. Other example is like electrical appliances that you buy by using the plastic card, furniture and much-much more.

Thats why people are getting into deep debts because the did not manage the debts well enough and they did not know the types of debts. Mainly because of ignorance and lack of financial knowledge make them poor and getting poorer. And they blame the plastic card for all the sort of financial situation that they are in. So increase you financial knowledge and don't be like them.

Peter Lynch

2007-06-10T20:47:00.000-07:00

Ever read Peter Lynch book?

I have read his book title Learn To Earn, A Beginners Guide to The Basics of Investing and Business. It is a perfect book for a beginner to learn the basics of investing in the stocks, and how to make your business a successful one.

This book started with an interesting introduction that will tell us the history of corporation around us and how many that really successful. It makes us open our mind that we can be an owner or own the share of the corporation and of course the public company shares.

First chapter of this book is very interesting and fascinating for me as it will tell you the short history of capitalism. Chapter 2 is all about the basic of investing that is the type of investment that you can make money from. Chapter 3 is about the lives of company on how it grows and become successful.

There a lots that you can gain by reading this book. The book are recommended for someone who wants to know what is stock market ad how to buy a share and the strategy to become a great stock picker. So buy it and this book will be a great investment for you.

Getting A Clean Credit Report

2007-05-29T19:11:00.000-07:00

Source: Bernama

Ever wondered how banks evaluate whether a person is credit-worthy or not without the person revealing any credit information about him or her?
Or have you ever wondered how much information the bank has on a person's credit pattern?

The answer lies with the Credit Bureau and its database known as the Central Credit Reference Information System (CCRIS), which serves as a reference point for the banks. The Association of Chartered Certified Accountants (ACCA) explains at great length the workings of the Credit Bureau and CCRIS. Managed by Bank Negara Malaysia, the Credit Bureau was formed under the Central Bank of Malaysia Act 1958 and has been in operation since 1982.

Since then it has accumulated credit information of over five million borrowers in Malaysia. The information is obtained from more than 50 financial institutions, including commercial banks, Islamic banks, finance companies, merchant banks and other financial institutions and stored in the CCRIS. Apart from being the reference point for financial institutions to make faster and informed decisions on each potential borrower, the Credit Bureau is actually part of BNM's strategy to promote best practices in credit risk management among financial institutions.

UNDERSTANDING CCRIS

Whenever a person borrows money from a financial institution or holds a credit card, the information will be relayed to the CCRIS. The details, among others, include personal particulars such as name, identity card number and address, and details of credit account such as the type of credit facility, credit limit, outstanding balance, conduct of account and status of legal action, if any.To verify against the personal particulars, a cross reference is made with the National Registration Department and the Companies Commission of Malaysia.The information stored in CCRIS will then be made available to financial institutions upon request.Since many borrow money from financial institutions in one way or another, this may make a person wonder whether the personal details are secure and will only be used for the purpose of evaluating the person's credit application or reviewing credit status.

THE SECURITY ISSUES

The credit information provided by the Credit Bureau to any financial institution is classified as secret.The financial institutions are required to observe the provision of banking secrecy under the Banking and Financial Institutions Act, 1989 (BAFIA) and the Islamic Banking Act, 1983 (IBA). The information is strictly for credit evaluation purposes only and the financial institutions are not allowed to divulge them to any other parties except in the course of court proceedings between the person and the financial institution or when it is authorized under any Federal law to be revealed to the police. Thus, it can be rest assured that the information will not be used for unsolicited marketing or product promotion. In addition to laws, the CCRIS records all requests for the credit report in detail.For instance, the CCRIS records the details of the bank requesting for the information, the officer making the request and the time of access. By doing this, the Credit Bureau and the internal auditors of the respective financial institutions can track down who has sought information on any particular borrower.

ACCESSING THE CREDIT INFORMATION

The information in CCRIS is not the privilege of financial institutions only. The borrowers too have the right to obtain the information as well. And this has been made possible since 2002 following a change in the law initiated by BNM. To obtain a credit report, one has to fill up a Credit Report Request form available at the Credit Bureau office or can be downloaded from its website at http://creditbureau.bnm.gov.my. The completed form need to be submitted together with a copy of identity card and two other supporting documents such as driving licence or utility bills for verification. It normally takes a month for the Credit Bureau to process any such request. Upon obtaining the credit report, any discrepancies in the information can be rectified by filling up a Request for Data Review form. Each discrepancy has to be listed clearly and the request for change must be supported with facts. The Credit Bureau will then investigate and notify the financial institution concerned.

If the financial institution finds that the disputed information has been inaccurately relayed to the Credit Bureau, it must make amendment and send it back to the Credit Bureau. The Credit Bureau only provides factual information on a person's credit history without passing judgment on the person's credit worthiness. It's totally up to the respective financial institution to decide whether to approve the loan application or not. Thus, if one bank rejects the loan application, it does not mean that the other banks will follow suit because each bank has its own credit evaluation system.

The banks, nonetheless, will make decisions based on the credit report that sometimes can adversely affect a person's application especially if it's tainted with poor payment records like late payment or worst, non-payment of loans. If a person's credit report falls in this undesired category, the person should contact the financial institution and discuss the possibility of rescheduling the payments. Once the account is regularized, it will reflect an improved position and improve the chances of securing the much-needed loan. Meanwhile, there is another source of credit information available in the market commonly used by financial institutions. It is widely known as CTOS.

Unlike CCRIS, CTOS collects data from publications or advertisements or based upon searches normally deemed reliable. Thus, the data accumulated by CTOS may not be up to date or exhaustive like the one collected by CCRIS but the financial institutions still refer to them in evaluating credit worthiness of any potential borrower.

Financial Books

2007-05-28T04:18:00.000-07:00

Last Saturday weeks, I have been book shopping with lots of Financial ad Self Help books in the shopping list. I have been looking around in the net such as BicaraJutawan.com and Personal Money magazine to find a good books to read.

The book that make us buy all this genre of books is Rich Dad Poor Dad by Robert T. Kiyosaki.

I think all people in the world of investing, tax planning, real estate and business know who is this guy. The book is really interesting and is easy to read as he tells the reader on he he learn to make money from his rich dad. He receive advice from both of his dad. The rich dad is his best friend's father and the poor dad is his own father. This books tell you the mindset to become a rich person by comparing the advice given by both dad.

The other books that we purchased in this Rich Dad series are Cashflow Quadrant ad Retire Rich Retire Young.

I really recommend you all to read these book as it will educate you to think like a rich person and finally you will become one.

Financial Planning in General

2007-05-17T04:09:00.000-07:00

Financial Planning is all about planning your finance. It is all about money from the money you earn and the money you spent. Generally, financial planning involves taking a broad view on personal financial status covering many areas of wealth management, and then going a step-by-step process to solve financial problems and achieve financial goals.

Below is the element of financial planning:

Cashflow management:

Know your current net worth. Generally your asset minus your liabilities.
Eliminating bad debts.
Frequently save some of the money you own.
Budgeting

Investment Planning

Consider where to put your saving. Better place your saving where the money retur or the dividend is high, for bumiputera, ASB is oe of the bes choice around

Insurance Planning

Ensure all your asset and family are well protected with suitable insurance.

Tax Planning

This involves strategies to make the most of your income, stocks, real estate, property under the local tax regime.

Retirement Planning

Surely you want to retire rich and not retire poor. You also don't want to work if your age is 6o++. This is important aspect of financial planning and somehow many people did not think for the future.

Estate Planning

An estate planning or a will can provide financial security for your family, ensure your property is preserved and passed to beneficiary and avoid disrepute. For muslim, you can hire a will planner so the Will is in accordance syara'.

Reminder to Shah Alam Community

2007-05-09T02:57:00.000-07:00

Assalamualaikum wbr and Good Day!

Do you know that if you fail to pay the summons from Majlis Bandaraya Shah Alam, your name will be listed in the Credit Tip Off Service (CTOS)??? So folks, if you have received this summons from this council, please act accordingly, pay before the due date or else you'll be facing problem for your loan application in future.

Do you know what is CTOS? Where to check? Who to refer to? You can get more information from their website www.ctos.com.my

Adios.....
Zul B M
zul_hami@yahoo.com

Al Rajhi Charge Card-i

2007-05-08T21:41:00.000-07:00

Assalamualaikum wbr and Good Day!

Almost all banks in the country have Master Card or Visa credit cards. Some offer life membership and some offer 3 years free membership and discounted rates for the following years. Even some bank is offering a gift to give away upon approval. Yes, there are many ways how these banks promote their product and sometime we could not resist declining the offer. And it is not surprising that some Malaysian have more than three credit cards! We sometimes fail to identify which credit card give better facilities and whether they have hidden agenda which sometime the marketing people would not tell us.

What I’m trying to tell here is about a new product available in the market which a bit different from the credit card but has the same function. This is a charge card from Al Rajhi Bank. Some people fail to differentiate between credit card and a charge card. The main different is the credit card can be paid 5% from the total usage whereas the charge card, you have to pay in full the total amount due as stated in the monthly statement.

An Al Rajhi Charge Card-I offers you all the convenience of a card with none of the pitfalls of credit. And it provides peace-of-mind in knowing that all Al Rajhi Bank’s product protects you under the principles enshrined in the Syariah.

The Al Rajhi Charge Card-I is a way to pay for things online, over the phone and at millions of Visa accepted locations worldwide. And because there is no interest charge, you avoid the compounding effect on your outstanding balance.

Al Rajhi Charge Card-I offers:

Up to 55 days of cost free funds.

24 hour ATM access at Al Rajhi Bank ATMs and ATMs displaying Visa PLUS signs.

Acceptance at millions of Visa outlets worldwide

A visa Wave feature for faster, secure and contact less transactions

Monthly statement to track your spending

Internationally Syariah compliant.

You can withdraw 50% from your credit limit for cash advance. The RM10 for every withdrawal for domestic (Al Rajhi Bank ATMs outlet) or the amount charged by the correspondence banks.

There will be no late payment penalty as you have to pay the total amount dues.

You will be 55 days interest free. How does it work? Let say, you have made a RM 3,000 transaction from 1^st April to 30^th April for the cash advance and retail transaction using your charge card. The statement date will reach you by early May and the RM 3,000 is due on the 26 May 2007, which gave you 26 days from the statement date (in this case the statement date is 1^st May) to pay the full amount. Failing which, the usage of the charge card will be interrupted and you have another 29 days to pay in full the RM 3000. The 1^st 26 days plus 29 days period is the total 55 days interest free which you won’t be charged for any late payment.

Beyond the 55 days, the bank will take legal action against you for failing to pay the total amount due and whatever amount incurred for getting back their monies. So, to avoid interruption in your card usage, please make a payment in full before the due date.

Requirement:-

Open to Malaysians aged 21 and above

Minimum monthly income of RM1,500

A copy of NRIC or Military ID or Police ID, and the latest 2 months pay slip, and Bank Statement and EA Form.

You can download the application form from their website at www.alrajhibank.com.my

It is good for a Muslim as this card is prohibited for any unlawful activities or those contravening to the Shariah principles including but not limited to illegal online banking, betting or gambling!!

I hope this write up will help you to understand some of the important information on terms and condition of the Al Rajhi Charge Card-i.

Thanks,

Zul B M

zul_hami@yahoo.com

Intro

2007-05-08T05:59:00.000-07:00

Assalamualaikum wbr and Good Day,

Well, when we talk about financial product available in the market, we tend to find the best product offered by the commercial banks. We found out there are a lot of offers from housing to personal loans and not to forget the credit cards. In my honest opinion, these are the loans everybody is looking for to cope up with our financial situation in supporting our needs to have a better life.

Without the knowledge about the terms and conditions of each loans, we are confuse which is the best product to choose and we are easy to be influenced by the wrong explanation and advice from the marketing agents/sales executive from the commercial banks. Every and each agents will say that their product is the best in the market. Their lowest rate, their longest tenure and other facilities which sometimes could influence us to choose the wrong products beyond our needs.

So what should we do? Who should we refer to? The best person to refer to is the independent financial planner which he/she does not refer to only one product from only a bank or he/she does not represent from any of the commercial banks or insurance company. AND the most important thing is he or she is the Certified Financial Planner (CFP) from Suruhanjaya Sekuriti or Security Commissioner of Malaysia AND a member of Financial Planning Association Malaysia (FPAM). You can find a lot of useful hints and infos available once you browse to www.sc.com.my

I'm a not a Certified Financial Planner but I have my personal financial planner to advice me to manage my financial planning. To know more about the financial planning, feel free to get some useful infos from my website www.asasteguh.com

Thank you

Zul B M