Tuesday, October 27, 2009
Although $60 a year is a small money but are you sure you want to pass on any FREE money ?
Assuming EPF declare a dividend of 4%, you will get more than MYR 10,670 5 years down the road out of the MYR 6,000 you have been saving. MYR 100 x 12 months x 5 years.
If you save the same MYR 100 monthly else where, it will need 22.01% interest rate to obtain the same return 5 years down the road.
22% passive return is not something available readily anywhere in the market. The only con side of this offer is its limit of MYR 300 contribution from the govertment in the next 5 years. Which is pathetically little. Then again, it also means it doesn't hurt at all to save the extra MYR 100.
Comes to think of it, is Someone intentionally trying NOT to pay out this FREE money by NOT promoting it as it deserves ? So they may declare a good policy change but keep things quiet and then at the end they can say, "it's you who didn't take our offer!"
Proceed with care and patient, EPF department does NOT know how to handle this yet ... their typical responses are, "Come back next year ..."
Monday, October 26, 2009
Friday, October 23, 2009
Tuesday, October 20, 2009
- One day earning doesn't really mean much. As shown in this article, another day of 67% lost would not only not break even but actually making you some loses. The average return for the whole year is more important so that it is comparable with other rates like BLR and fix deposit interest rate etc. Persistency over the years would also become more important as time goes. Be reminded that Warren Buffet average annual return is 15.6% ( details in Greatest Investors of all time ).
- It is also not too hard to catch the 2nd pitfall. Actual amount matters. Earning 67% from $1,000 is very different than earning 67% from an investment of $100,000. I can easily turn $1 to $2 earning 100% return but I would be happy if I can get 10% return from my $1 million investment. This is the part that says size does matter and a big percentage number is only exciting when it works together with another big number.
- Another pitfall is one that some may overlook. Investment return should be calculated based on total capital, not the transaction amount itself. For example, I have allocated $1 million for a particular investment. In one particular transaction, I invested $100,000 and earned 67% return while the rest of the $900,000 sits somewhere doing nothing. My overall return is actually 6.7% only. Meaning I have earned $67,000 with $1 million. This is particularly important when judging fund managers performance.
Monday, October 19, 2009
Purchase Price : $4 millionsBank Loan : 100%Loan Rate : 6%Monthly Rental : $30,000
- Many people want to buy it but not all of them have 4 millions
- Many people do not qualify for a 4 millions loan
- Some people CAN buy this but this may NOT be their only choice
- Some people WANT to take this kind of opportunity but NEVER found this particular one!
- Both seller and buyer may have personal preferences ... etc.
Monday, October 12, 2009
10 years old policy has an effective commission cost of 20% = 2 / 1020 years : 10% = 2/2040 years : 5%
Sunday, October 11, 2009
- Choose an account that gives highest interest you can find for your ASS account
- Decide how much emergency fund you need in your ASS ( usually in number of months or years of your monthly expenses )
- Once achieve the emergency fund amount, the overflow should goes into investment
- Your investment potential return should be significantly higher than your ASS return
- move the emergency fund to FD, Bond Fund or Money Market Fund if interest is higher than your ASS account.
- Continue looking, learning, categorizing and revising until your investment return is Passive and higher than your active income.
Your account is Yours,My account is Mine,Our account is Ours.
Saturday, October 10, 2009
Friday, October 9, 2009
Ahmad fights inflation by growing his own needsAh Dung is the RICH guy who didn't really get hurt by inflation
Thursday, October 8, 2009
A student loan is considered to be a good investment since it is taken out to establish the career of an individual that helps him earn his livelihood. However, sometimes it becomes impossible to prevent debt arising from student loans. Debt consolidation plays an important role over here. Student loan debt and mortgage loan debt are considered as “good debts” because of their positive aspects. On the other hand, credit card debt and car loans are regarded as “bad debts’” since they signify lavishness. You don’t acquire student loan debt by extravagance. These loans can be obtained more easily from federal sources than private lenders. You can get useful returns from utilizing a student loan. The more you become educated, the more is your earning capacity. However, you must not forget that you have got to pay it off.
The anxiety of paying back multiple student loans can be annoying on certain occasions. In addition to this, procrastination is a normal feature of the college life of a student. This does not spoil your results but not paying your loans when they become due for payment would certainly have a bad impact on your financial future. The most effective option for a student to drive away his financial concerns and get pleasure from his college life is a student debt consolidation loan. This type of a loan combines all your student loans into one loan that is simple to handle. You basically take out a bigger loan to manage your various smaller student loans. As a result of the affordable and competitive interest rates, you can save some money. By stretching out the repayment terms, your monthly payments are reduced considerably. You also have the opportunity of locking in an affordable rate.
At present, the last thing that you want to happen to your finances is piling up a huge amount of student loan debt. A student debt consolidation loan can be the right solution to conquer your debt problems. You have to keep in mind that private student loans cannot be consolidated with federal student loans. If you’re suffering from student loan debt, you have to consolidate your federal student loans and private student loans separately.
notet from Doroth, Financial Helpdesk.
Tuesday, October 6, 2009
Thursday, October 1, 2009
Income is a pre-requisite to Personal Finance but NOT a part of it, so amount of income is irrelevant to the strength of a personal finance plan.Passive Income is achieved when you use 1/100 effort for an income.Personal Finance is NOT the same as finance, Personal Finance is simple, straight forward and usually there is an obvious single best method.
- Buy a property with Other People Money ( OPM )
- Rent the property out higher than repayment amount
A property worth $ 130,000 renting at $600 per month.A 5% interest on $130,000 for 30 years may result a monthly repayment of $700 - which fail rule #2. Every month you are paying out $100 from your own pocket for someone else to use your property.If you borrow less loan ie. $100,000 your monthly repayment is less than $550 which has positive monthly cash flow but this fails rule #1. In short, you have to fork out $30,000 now in order to get back $50 a month.