Friday, May 22, 2009

You want to buy a car, NOW ?

Thanks to the new PM effect and various new policies in place including the RM 5,000 rebate, almost ALL of my Average income friends are Really interested to buy new cars.  Although soon they find out a lot of inconviniences because there are too many rules about the RM 5,000 rebate which make stuff not that practical but now friends still want to buy new cars no matter if he can gets the rebate.

If you also have a property 
that you can refinance
you should seriously think about
 refinancing your property 
to buy that car
 instead of getting a car loan.

Car Loan rate is 3.5% now.  Following the rule of thumb that car loan rate is 1.9x house loan rate, the 3.5% car loan is almost more than a 6% house loan.  With today's BLR-2.X offer, your house loan is most probably serving at 3.X% only.

6.X %  to 3.X % is a HUGE difference for crying out loud !

There are even some level term loan offered by insurance companies at 4.75% now, which is still so much BETTER than the 3.5% car loan ( which is 6% ) no matter which angle you look at it.

Despite the fact that car is the biggest personal finance killer in Malaysia, and if anyone buy a car NOW by taking a CAR LOAN while having the choice of refinancing his property .... Please ... at least share with me here why you do it, why do you want to spoil your own personal finance plan while I am already feeding you nice food near your mouth ?  Why do you still split it out ?

I will start with the most common excuse, "I scare income tax will find me if I pay my car in full as if buying it with cash!"

True concern but only valid for those illegal drug dealers etc.  If you Really have a property that can get Approval from banks to refinance, there is Absolutely no concern at all on tax filling.  Upon enquiry by tax department, simply submit your house loan documents and declare no other income whatsoever un-declared in the past.

Assuming all people start to do exactly what I share here, there is only one person they will go after - me!  They will blame me for causing them and the banks to lose so much more income.  Bank may start reducing the amount they lend to a property, they will ask if you are using the extra money to buy a car and then they may deny your loan application in future!

But I doubt that will happen at all, truth for the past thousands of years show that human just like to stay in their own shell even if it has been hurting them for so long, they get used to it and they will just refuse to walk out even one step to the more comfy zone.

What ?  You want to buy a car nOW !?

Benny Lee's theory : why Experts are Always Wrong

After banging on how bad he is twisting words (preceived value => value) to sweet talk naive public on a course he promotes, this article is about the good side of Benny Lee.

In the beginning of his FREE seminar, he listed out a series of expert's predictions on what stocks to buy and sell.  Then he shows how badly ALL those predictions fail miserably.

Although one of the reasons he uses is that Fundamental Analysis is useless which malpf disagrees and claims that he got it ALL WRONG where the REAL Fundamental does not change over a short period of time.  It takes a paradigm shift to affect a business's fundamental.  So News like these are NOT part of True Fundamental Analysis.

However, Benny also said it clearly that why an expert made a wrong prediction - because the expert adds his own Opinion when performing the analysis.

Company A is granted with Project X is a fact.  Company A is 'going to' earn Y amount of revenue could also become fact.  But how these news will affect Company A's stock price from RM 2.12 to RM 2.54 is an Opinion!  This is because in his calculation, he will have to make a lot of assumptions on the posible future finance data and those numbers are very opinionated ( different from one analyst to another ).

People who worship Technical Analysis may have heard of Mr. Market's story - that you must follow Mr. Market and not trying to out beat him - by using Technical Analysis ofcourse.  And this concept of Opinion from Benny Lee stick very well to Mr. Market's story.  Also one of the very good reasons why more people earn money using Technical than using their own Opinion = speculation.

Malpf also share that there is a Science part in investment but there is also an Art part.  The Art part malpf talks about is the same as the Opinion Benny talks about.

Some older readers also know the very specific step by step how to evaluate the True value of a business and therefore find out your very personal target buying price.  There are only 2 critically important numbers in that method : EPS and PE.  PE is the number that actually represent Opinion.

However, there is one distinct difference.  Benny claims that Opinion is bad, not reliable and therefore in order to earn money from stock market, you should rely on Technical and Technical never lies (Mr. Market story again)!  

Malpf preaches that Opinion can be dangerous.  But the more you know the better opinion you form.  The more you practise making opinion, analyse the result of your previous opinion and form better ones next time is the whole important process.  At the very end, be it Fundamental or Technical Analysis or any other methods, it all goes back to Opinion - the Art part in investment.  Which is also the part that distinctly draw a difference among all of us.  The tools we use may be the same but we will ALWAYS reach a slightly different opinion eventually.

This bring the end of this article to Soros story again.  Although Soros has a strong team behind him to earn money consistently using technical analysis.  But when he forms an Opinion about certain situation, his opinion will Overwrite ALL other opposing signals and it is this type of charismatic move brings him to what he is today.

So who can resist not forming his own opinion hoping to become the top of the world one day ?

An example where Morning Star goes wrong

As far as the Morning Star prediction goes, it DID NOT HAPPEN or the technical reading is WRONG !

In that article, it says that

1) candle stick is one of the 'best' chart format to use
2) Morning Star is one of the most reliable signal in Candle Stick analysis
3) It said KNM will shoot up big time on 20 May onward

But after 2 days of movement, KNM's price has gone down instead.

So if 1) and 2) are right, then technically 3) should be correct too.  While the fact proven it wrong, what has gone wrong ?

These are the possibilities:

1) The technical reading is wrong.
This is one of the simplest indicator you can find.  Any user in technical analysis can comment at first sight if the artcile is right or wrong.  The only part they may disagree is the part that Morning Star is reliable, which is an academic claim.  Practiciant may have their own different personal experience.
At the same time when KNM is expected to go up due to that Morning Star signal, KLCI is expected to go down technically as well.  But it turns out KNM goes down while KLCI goes up the next day.  
However, in the same article, it did mention some other technical readings that say 'don't buy yet'.  So you may hear some technical gurus always tell you wait until ALL 3 indicators tell you to buy or sell then only you make a move.
Reasoning 2 is usually a better explaination to this 'wrong prediction' example.  However, malpf doesn't think using more indicators will give you more reliable signal.  It is just adding more reasons to one gambling move.  If you use the right reasons, you get what you want.  But when you use the wrong reasons ( wrong indicators, wrong parameters etc ) then you will still get the wrong result.  ( details on danger of TA )

Thursday, May 21, 2009

Mahathir also dislike Forex ?

Read from chedet (english version) on mata wang, is he refering to Forex ?

But from the way he is 'accusing' today's world finance model including hedge funds shows that Tun M. is STILL in a denial mode.  Despite how bad hedge fund and forex CAN BECOME, but the finance tool itself is not at fault.

I hope Tun M will read my 3 parts money turns evil stories one day.

Its already a FACT hedge fund is overtaking mutual fund, its also a fact the forex is the largest and most liquid market in the world.  Its just like long ago, we didn't need money when we did the barter exchange thing.  But eventually 'Money' became a fact of life although till today theoritically its NOT really needed if we Human are perfect.

Its also like a fact that value of money is NO longer tight to Gold.  Gold is limited, currency is not.  Despite how bad it is, its already a fact for many years.  Despite it almost melted down the whole western finance world, its going to come back as it was.

So its a fact that Human are not homogenius, keeping the good for Everyone is NOT our priority but keeping the good for Ourselves is.  Many still think Everyone = Ourselves and there is where the paradox lays.

HATING hedge fund and forex blindly is NOT any better than LOVING them blindly.  Both are idiots and will only continue contribute wealth to the rich.  Its only a matter of doing it directly or indirectly.

Wednesday, May 20, 2009

Forex - the RIGHT way - Must use EA

I just realize this is one of the draft articles that has been sitting in my to-publish-list for more than 3 months but didn't get out in time to help people earlier. In short, I do NOT promote Forex investment because you really need to learn enough to do it but the fact is that you WILL NOT learn enough on it and you WILL invest in it before you learn enough. But such plain statement did not stop anyone to get into Forex and troubles. So I thought I may as well share the right way to do it, although carrying the risk of pushing more people to the dangerous world of leveraging - which already proven failed in this current financial break down in western world. Anyway, this post is stressing on EA - if you don't know what this is, don't forex !

1. download FREE forex trading software from MetaTrader4

MetaTrader4 is the foundation software for all the other forex brokers. If you don't want to download from MetaTrader you may try get a demo account from Interbank or, they all use MetaTrader4 software anyway. is known to have the smallest price gap which is very important especially when you have limited capital.

2. Get the demo account for FREE and then learn to buy, sell, long, short using the trading platform. Make as many buy sell transactions as you can and observe why the result is different than you would expect.

3. Understand price gap which is Different in each currency pair. You should eventually find out that there are only 3-6 currency pairs that you should trade in because they have the smallest price gap. This price gap is dynamic and it is possible that the gap changes right at the moment you execute a transaction, although not often.

4. Understand Expert Advisor feature in the software, you should learn (a) how to use it and how to (b)implement your own trading strategy.

5. Use real money ONLY after you have found an investment strategy that is proven can bring you return more than 60% of the time.

6. Apply money management, risk reward ratio, win lost ratio etc.

More on EA (step 4)
EA or short for Expert Advisor is one of single top most powerful feature why dump general public can earn money from Forex scientifically and systematically.

EA is a script that you can write yourself to get any data out from your trading platform, do anything you want with the data and then make decision on what transaction to take.

In short, if you have any investment ideas, you can TEST the idea and SEE if it works right in front of your own eyes! From the test result itself, you may further fine tune your investment ideas until you think you have gotten the right methodology, then you can invest with your real money in confident.

The most attractive elements in Forex is its liquidity and its HIGH leverage. It is the same liquidity and leverage that kill multi billionaires. So these 2 factors apply the same to everyone who trade Forex, sometimes it helps you, some other times it kills you. Its all up to your luck which way it turns.

However, EA is the ONLY quantifiable element in Forex (for FREE) that differentiates one investor than another. Because every investor has his own idea. And the ability to test, verify and 'PROVE' this idea for FREE is upmost powerful.

It is also the one last compulsory step but NOT many people have enough persistency to walk through the whole process. Which explains why 90% of the poor ALWAYS contribute to the 10% rich even in Forex.


Tuesday, May 19, 2009

Technical Analysis Example : Morning Star

One of the most popular technical graphs used is candle stick.  One of the problems with technical analysis is that there are too many indicators and it is hard to decide which to use.  However, historically some indicators are obviously stronger than others.  Morning Star is one of the strong ones.

See chart below on the red circle, that is a good example of Morning Star.  So for the next 3 days, KNM should be going UP if this Morning Star is proven correct.

Personally I am NOT buying KNM at this point of time.  Technically I can find an excuse that (1) Stochastic blue line has NOT cross up yet ( it means don't buy yet ).  I also believe I may have better (2) chance to get in later (an emotional opinion).  Most importantly, I am (3) NOT able to follow this stock closely for the next 3 days.  So this speculatable profit is not my rice bowl :D

Monday, May 18, 2009

KLCI 090518 end update

Where was I ?  .... Oh ya, see ?  KLCI did rebounce at 1,000 and didn't even break any support at all as predicted this morning

Tomorrow analysts would be sharing bullish news.  As of this particular moment, I see the dip of gold price which do indicate bullish in stock so I guess this time I have to agree with potential bullish move tomorrow.

But you will need to check USA ending market condition to further justify above claims.

Just want to remind you that I get all this 'opinion' all from alone.

KLCI update 09 05 18 0950

Its too early for me to say, "see? told you so ..." ...  but its interesting to see suddenly all the analysts became so bearish straight away predicting 1000 support line and even mentioned the 975 for today's movement.  If they anticipated this all along, why didn't they mentioned about this cautiousness the past 2 weeks like I did ?  Da ....

Anyway, as most of you should have known that we have 2 cases of A H1N1 in Malaysia now.  I have to admit that our new PM has done a good job controlling how the news spread this time ( by luck or by plan ).  First of all, I hope not too many of you are naive enough to believe all these below are coincidences:

1.  Health minister has been saying ok all along, suddenly both he and the deputy are out of the countries when the problem occured ?
2.  A1 disease confirmed on Friday (after diagnosed result) and the whole situation is 'stable' by Sunday ?
3.  The ministry want to 'punish' those plane boarders didn't come forward on Saturday but on Sunday they have proactively and successfully trace down most of them ?

Its ok for anyone to think great and bad on how the ministry has performed but as far as I can see.  Our new PM has been very sensitive to the market and make sure news come out in a way that will shake the market least within the situation given.  And past 3-5 days are perfect example to support my thoughts :D 

Anyway, simple fact as that the outbreak hasn't occured ( news wise ).  As factual as my own understanding in this situation, outbreak has already occured, its only a matter of to what degree.  So market may show correction but the crash I anticipated will not come just yet, not until the ministry is left with no choice but to release the outbreak numbers.

If you don't plan to keep your current stocks for more than 3 years, sell them off (after checking your technical charts).
If you are prepared to buy more stocks like I am, wait further with patient.

Friday, May 15, 2009

Pick the Right Value Stock by NextView, Benny Lee

I attended a preview in NextView on a course titled "How To Pick The Right Value Stock", speaker was Benny Lee who constantly writes for Smart Investor.

What initially attracted me was that he claimed that he can find the 'value' of a stock technically.  

As some of you may have learned that my 'valuation' imply the scientific calculation of a company's past years finance data growth rate.  It is beyond my imagination how to calculate what a stock's worth is base solely on prices alone.

At the end, it is just another marketing talk - probably a smart one thao.  When they talk about 'value', they mean the marker perceived worth, not the REAL value of a business.  So the Moving Average alone can tell us how much a stock is worth in the eye of the investors.

It may sounds logical and it is hard for me to convince otherwise.  But the real meaning of Moving Average is simply the average of a stock price base of the previous how-many-days prices.  And this Moving Average line forms the floor (support) and ceiling (resistance) price for that stock.

And in practical life, this Moving Average = Value is NOT really that exercisable.  For example;

If I think stock A is worth price X, I will buy when A's price is below X.

But in Technical Analysis, when stock A move below Moving Average (price X), its a SELL signal.  And you buy when stock A's price goes above X ( ceiling break ).  Which is OPPOSITE of valuation methods.

I immediately left the preview at this stage because I normally cannot tolerate this kind marketing twist.  However, I do have room to believe that they may have solution to my challenge but I am quite sure if the argument did get started, the best solution they can come up with is to use multiple indicators to get more reliable prediction.

Benny also claims that Most of the Analysts reports are Wrong!  And Therefore fundamental analysis is useless! He is referring to new project engagement, news of expansion, take over etc as fundamentals.  As Malpf has been preaching, anything that can change overnight is NOT fundamental!  So all these NEWs are  NOT fundamentals at all!  They are at best strong supporting news.  Which are purely subject to the Analyst's opinion on what that news may result.

For example, 100,000 viewers have promised to read Malpf blog is a good news but NOT a fundamental.  More than 500 viewers have been reading Malpf for the past 9 months - is a Fundamental.

People who promised can change, to higher or lower numbers.  But past 9 months of data already occurred and they do not get changed easily.  Fundamental is something that does NOT get changed easily.

But this is not Benny's fault at all.  Almost 100% of market analysts have no choice but to follow the trend treating news as fundamentals now.  Because everybody is talking about how good technical analysis is.  So if a market analyst is singing different tone, it is very hard for him to keep his job as his boss and others do not agree nor believe in him.

Other than above, I think they can still run a good training for beginners.  They plan to include teaching on Stochastic, MACD, Bollinger Bands and Candlesticks.  The course is only RM 150 per person and comes with 6 months support ( I think, you will have to ask NextView if you are interested ).  So its quite a good deal if you are not one of those who can learn these stuff by yourself.  

It wouldn't hurt you too much even if you got the wrong understanding on these technical stuff as long as you are able to USE them correctly.

Best Companies in Malaysia

I read from Dali's blog on some numbers of voted best managed, corp governance, investor relation, dividen companies in Malaysia.  Basically they asked the expert analysts to vote for the company they think best in each category.  The company who receive most number of votes is considered the winner in that category.  For example, 36 analysts voted Public Bank as the Best Managed Company

To sum the whole report up, I further come up with a few derived numbers;

1. How many times a company is voted in that particular group.  The more the better.
2. Total number of votes received.  The more the stronger the choice is.
3. Sum of the ranking in all 4 categories, the less the better.

Sort these derive numbers and I ended up with this unify choice of best companies in Malaysia.

There you go, this is another example of stock pick method.  From here onward, you just need to calculate the worth of each company stock.  If the current price is lower than your target price, you are in the buy zone.  Use technical analysis for further fine tune the entry timing.  However, don't follow too close and get greedy because Technical Analysis wouldn't be able to predict the lowest and top point correctly.

Tuesday, May 12, 2009

KLCI 20090512 update

KLCI performs as expected as last Friday's update, so I may need to adjust my dead cat bounce theory if it really bounce back this Wednesday(1002) or Thursday(1007).

However, it doesn't mean waiting is the only game you can play.

Normally you wouldn't be buying KLCI directly, you would just buy ONE particular stock - ONE very specific business.  So technically there is always an opportunity to buy/sell any stock.  Its just a matter of if you can find it.

For example, KNM is going to converge to 0.83 on Thursday 14 May (see below blue lines).  How it move ( above or below ) would be very interesting for those who follow technically ( at least it should).   But from experience, my bet is on side track below the support line.

until Meningitis (Melaka) or Swine flu officially lauched wars on Malaysia.

So by now, my previous sales made on KNM is another example of sell-too-early example.  But I wouldn't change any of my investment strategy due to this event alone.

Friday, May 8, 2009

KLCI 20090508 - what can you do now ?

First, it was bearish and most experts were saying the worst is yet to come;  (me too)

Then bull came and expert analysis polarize into 2; one group said that this is dead car bounce (me too)  and another group said the worst is over ! ( not me)

Now majority of the analysts are forced into agreeing on the bull trend. (not me)

Despite what they (I) said, what can you do at times like this?

First of all, no matter if you believe this is a fake or real bull.  The fact of up trend has been formed is a reality.  Following this method;

You can see clearly that KlCI hit the ceiling at 1,032 on 7 May and therefore came down that day.   You probably should have sold some of your old holding stocks by now.  If you have just bought some, sorry for late posting lor :)

(I sold mine on 5 may, slightly earlier than the perfect point)

Anyway as you may see from above 2 blue lines and learning what to do during an uptrend from this article ...

You may wait till the following support line to buy again;

993 on 11 May
998 on 12 May
1002 on 13 May
1007 on 14 May
1011 on 15 May

Expected entry dates would be 12-13 May.

This is one of the examples to earn easy money from stock market during an up trend.  This particular analysis is confirmed on 30 Apr, so it would be best if you engaged on that point using this analysis result.

As of now, there is only 1 hesistation on this.  Observe the orange circle and rectangle,  stochastic shows that it is in oversold status.  So if it hits the support line on 13-14 May (late week) then it may indicate rebounce (buy before support line), if it hits support on 11-12 May (early week) then it may indicate a crash ( buy after rebound ).

An added strength to this analysis is that the whole Malaysia is crazy about technical analysis now.  Most investors think that technical will 'guarantee' profit due to their ignorance.  As described in these articles:

Technical chart alone are NOT the solution for stock investment !

Anyway, what really matter is, since the general public are dump and now they believe in technical charts, all of them will buy and sell based on the charts.  Knowing this, it will give you the advantage to get in and out earlier than them to earn better profit than them.

---- ok so far, above are considered as proper consultation despite what you believe how the market will move (scientific?), below this would be my own personal judgement (artistic?)---

Since I am one of those who believe in dead cat bounce, I wouldn't be able to enter market during the next rebounce.  I will have to wait till it really rebound then I will need to decide again if I still believe this is a fake bull or is the worst really over.

I am sure this article will be more confusing than helping to most.  But in general, what this kind of analysis has done is adding a dynamic variable to technical analysis - the Time factor.  It doesn't change the fundamental flaw in Technical Analysis but it does help to stay ahead of others who also use technical charts.

Thursday, May 7, 2009

stock market making me dizzy ...

Was just having a little fun making world stock market spin like it rises now ... just to remind you that you may have 1 bird eye view on the whole world stock market performance in real time in ( no spinning )

Try move your mouse around the spinning markets to control the spins ... :)

Wednesday, May 6, 2009

Stock Pick 2009 05 05

Lucky or not, recent stock market's dead-cat-bounce is higher than expected, so high that the technical reading triggers the signal of end-of-bear-market, eventually made me changes my previous investment strategy, i.e. sell now instead of selling 3-5 years later.  In general this is an example of emotion overtake logic.

The emotion part is my belief that this is a dead-cat-bounce; the logic part is the clear technical signal of bear-end.  So sum all up, now even if the market goes crash, it would most probably be supported at 950.  Instead of the much lower level I expected earlier.

Although 70% profit within a month seems pretty good but almost any speculator for the past few weeks would most probably easily get that return rate and more.  Should I really keep for 3-5 years, 4x return isn't really that impossible.  To really feel the difference, try imagining earning $70,000 from $100,000 vs. the potential income of $400,000.  What can you do with an extra of $330,000?

Taking profit now actually allows me to rest for the year of 2009 (this year target achieved).  However, selling off everything I have now is a bad positioning move, so I will need to start working on 'what to buy now'.

So follow the same method to screen out stocks to be analyzed on, this time I am using these rules:

1) Volume higher than 15,000
2) Price between 0.30 and 0.50

This is the list I got;


Screen through their finance data (ROE and EPS), these are the 3 stocks I am watching now.  More in depth study will be needed before taking any action but I have time for that (before end of 2009).

GPHAROS : EPS chart and trend line

INSAS : EPS chart and trend line

MULPHA : EPS chart and trend line

One exception during above exercise is NTPM.  It doesn't really fall under my worth buying now rules but it is the only pick that all its EPS stays positive during the whole period.  So I am keeping this on my watch list too.  I may not be able to earn 15% from this stock, but it will be a good safe and steady keeper which I will need should I be wrong in my dead-cat-bounce perception.

NTPM : EPS chart and trend line

Tuesday, May 5, 2009

KLSE update 090505 1009

How long have I been gone ?  Wow ... are we supposed to be sad for the swine flu or should we be excited about the market bullish movement ?

real time world market performance at

The key difference of this recent surge than before is that it breaks 200 days Moving Average.  A common indicator used by the western world that a down turn is over.  And today's investment is the world for technical analysis.  So everyone would most probably be following blindly on this signal alone - recession is over !  Yeah !

200 days MA is suitable for mature markets like USA and Europe, with some internal justification, I use 220 for KLSE, Malaysia market.  And this is the chart for it.

It tells the same thing, you all should rush into it NOW !  ( I didn't say that, the chart did )

As far as the 1view world chart and technical chart show, correction will not kick in today.  Even if it did, it wouldn't be a huge correction.  In other words, you may still have some fun yet.

but NOT me ...

Well I have 30% of my investment fund in KLSE which I initially planned to profit take 5-10 years later.  Due to this recent hike, I am selling them now.  I set my selling price slightly higher than market price because I am not that desperate yet.  If the sale proceed today or tomorrow, I would have gain about 70% from this transaction alone and may satisfy my annual target of 15%.  But then I will have to work something out for next year.

We will see ...

Personal Finance in 1Picture

I started this Blog with very fundamental talks on personal finance on lay man write up. I have to apologize if recent posts have become quite cryptic and speculative. So let’s get back to some of the unfinished fundamentals on personal finance.

First you must have an income. Income can be any form of received money including pocket money for kids, household money received from bread earner, begged etc.
No matter how you get your income, you must setup an automated system to save part of your incom; BEFORE you do anything else ! Remember you need your ASS - Automated Saving System.

In today standard, this automated saving system should give you some interest, preferably matching fix deposit rate.

No matter if your income makes you a Rich, Average or Poor person, if you don't have an ASS you may find yourself in trouble one day. Some even cost them their lives.

Once you have enough money in your ASS, ie. can substain your lifestyle for 3, 6 or 9 months. You will need to start thinking about Money Earns Money - MeM. 'Passive' is the keyword. Something that you do once now and enjoy a life long extra income in future.

There are standard methods or PF tools to achieve MeM. Each level up the pyramid requires more learning. Entering into any of this with the wrong preception or knowledge may bring negative MeM.

At this stage, many will tell you high risk high return, low risk low return. While they are not wrong, but that concept is not entirely helpful to your personal finance. In order to focus on what can helps, you may need 21st century understanding on Risk.

Further in future, you may see that MalPF will preach that
1) Personal Risk is what you know, the more you know the better it is, irrelevant to what PF tool it is
2) PF Tool Risk is fixed no matter who invest in it, irrelevan to who you are

Bundle together that 2 concepts result one simple action to position yourself well in MeM - keep learning ( the easy part ) and learn the right stuff ( the harder part - due to Rich Conspiracy ).

There are 2 BIG parts in MeM. The part mentioned above is Earn 2 with 1 or Doubling your money - MeMx2 The crucial part left out here on purpose is Time - which is also the variable for individuals.

We use Rule of 72 to quickly calculate this variable. For example, it takes 6 years to double my money if I get 12% return from my investment.

So far MalPF model works well without the need of setting goals. However MeMx2 is the part where you may see a distinctive difference between a person do it with goals and another without.

Should one still find it hard to find own goals, simply follow the magic number - 7. Setup 7 MeMx2 accounts for the following:

1. Car
2. House
3. Family
4. Education
5. Retirement
6. Charity
7. Holiday and Travels

The good thing about none goal specific MeMx2 is that they are flexible and interchangable. You should start all 7 accounts at once even if you think you don't need it. Even putting in 1 cent a month into each account is better than putting 10 cent into one investment account only. ( No, this is NOT diversification, this is just broaden your availability when you don't have a target, like spreading a fish net when you don't have a hook/bait )

The second part of MeM is to Buy 100 with 1 or Secure Future Money - MeM100. Also commonly treated as insurance. While MeMx2 urges us to learn more, gain more knowledge but there are always something we haven't learned yet or will never able to 'finish' learning. Hence for all the stuff we don't know, we apply MeM100 to it.

This is especially useful when you have goals in MeMx2. For example, I want to save $100 a month for 20 years with 12% return so that I can get my $100,000 for my retirement. So I can buy a $100,000 insurance just incase if I lost my ability to save that $100, I will still get my $100,000 regardless.

There are 5 big areas in MeM100:

1. Die Early
2. Living Dead
3. Fail to Die
4. Accident

5. Income Replacement

If you still don't have clear goals in life up to this stage. Then you will not be able to have an optimized Personal finance plan ie. Buy Term Invest The Rest. You would probably go for something traditional called Whole Life Plan. Its not bad at all for someone who cann't even figure out a single goal after 20+ years of life. Try This ...

and this is what this picture is all about ... ( may be not All but the nutshell yes )