DON'T ASK "WHAT" TO INVEST IN, ASK "WHY"

When it comes to “what to invest in”, everyone has an opinion. Whether it’s the best stock to buy, or the best property to invest in, or even the best currency to hold. And that is perfectly fine, because everyone is entitled to an opinion.
What is frustrating however is that professional advisors are often quick to provide a long list of recommendations, even before considering an individual’s circumstances. When was the last time you were asked, “why are you investing?”
People need to focus less on “what” (i.e. what to invest in) and more on “why” (i.e. why invest?). Are you investing because you want a stable income stream or are you looking to achieve significant wealth accumulation? Are you investing because you want to buy a house in five years time, or to go on that 6 month vacation next year, or just simply because you want some money put aside for rainy days?


The answer to your “why” can often provide a guide to the type of investments you should aim to hold.
Here are three things you should consider before asking “what” to invest in:

1 – Your investment time horizon

How long can you put your money away for? Generally, the longer you can put aside your money, the better your ability to take on risky investments.

2 – Your risk appetite

How stressed out do you get when you start losing money? Always err on the side of conservatism as most people overestimate their ability to handle losses. Obviously, the less comfortable you are in losing money, the less you should invest in risky asset.

3 – Your job security, and how it correlates to your investments

Many people (even professionals) fail to consider this. If you hold a stable job, you are better able to handle temporary fluctuations in your investments. On the contrary, if you work full-time as a real estate agent and derive much of your income from successfully selling properties, it’s probably not a good idea to also invest a signification portion of your wealth in property.

How Do You Cope With Inflation.?

Inflation is here. You just can’t stop it.
Here are some strategies that you can put into immediate action.

Watch your personal inflation rate

A general inflation rate is published every year by the government but that is based on some daily use items and control materials. The fact is that every one of us has a different set of inflation rate. Just take a look at how much you are spending every year and you will most likely find that your expenses keep increasing at a much higher rate, regardless of the official rate.
When your income increases, you elevate expenses almost immediately. You may get a brand new car, get married, got kids and all these total yearly expenses always exceed the official inflation rate.
The more to worry about is your personal actual inflation rate. If you can keep this low, there is not much to worry about the national inflation rate.

Invest in inflation-proof assets

As money being pump into our banking system, which is called the fiat money since the currency value no longer backed by reserves, government is used to printing more money. The most obvious is the major bailout of banks by the US government in the sub-prime crisis. Inflation just happens.
When certain raw material price increases, all related item will appreciate as well. For example, when oil price take a hike, petrol price increases. Transportation fees elevate and all building materials follow suit. Therefore, the price of buildings and houses also go up.
So if your money is still parked at places that remain as fiat money, it unavoidably depreciates. Therefore, it is wise to park your money at places where value appreciates due to inflations. Some inflation-proof assets are real estates, energy-related businesses and commodities such as gold and silver.
When you are investing for inflation, your intention is to protect your wealth from being depleted due to inflation.

Invest for cash flow, not capital gains

When someone says, “The stock I bought is rising!” or “The house I bought two years ago has appreciated more than 30%,” they are aiming to get capital gains from their investments. But when you say, “I got a steady dividend check from the listed company every quarter” or “I receive monthly rental from the tenant”, you are investing for cash flow.
Due to inflation, price of commodities rises, including rental. Some companies can pass the cost hike to their consumers by raising the price of their products – such as milk powder and alcohol. As a result, those companies can still pay you the expected dividends in the midst of inflation. When you are investing for cash flow, your cash flow will actually increase, thanks to “inflation”.

What’s your actual personal inflation rate?

Inflation is one of those investment variables that you can’t control. So rather than whine about the misfortune of higher inflation, focus on things you can control. You can control where you park your money. You can control your own personal inflation rate. While inflation isn’t something to be desired, it’s something you can learn to live with.
Now, tell me what’s your actual inflation rate? Use this formula to calculate:

Actual inflation rate = (E2011 – E2010)/ E2010 x 100%
E2010 = total expenses in 2010
E2011 = total expenses in 2011

What should you do when interest rates rise?

High interest rate, friend or foe? It depends on which side you’re on. If you are a lender, high interest is good and of course if you are the borrower, it is bad news indeed. Last year, Bank Negara Malaysia gradually raised the interest rate a few times from 2.00 percent in January up to 2.75 percent in August, in order to stabilize prices and maintain a good level of growth in the country. Any increase will profit financial institutions that will then increase their lending rates which is passed on to their customers.

Pay off debts

When interest rate is going up, the first thing that comes to mind is to get rid of debts as quickly as possible. It is time to be aggressive on your debt repayment schedule and reduce money going towards interest payment rather than the principal amount.

Get a fixed rate

If you anticipate or foresee a rising rate and you intend to apply for a bank loan, it is advisable to get a fixed rate. For example, if the fixed interest rate is 6 percent per annum, then it will remain so for the entire loan period. If your loan is the variable type, then expect to fork out more in tandem with the rising rates.

Investment

The stock market generally does not react well to a rising interest rate due to the lost of value. Investors may take advantage of this situation to go bargain hunting for discounted stocks. On the other hand, others may decide to reduce their investment or pull back their exposure to stocks. Of course, other factors like the current economic situation will determine the actual performance in the stock market.
If you have equities dumped into the utility and energy sectors, you may not be too worried compared to someone who has equities in the financial services which is sensitive to interest rates. Businesses that sell a product that requires their customers to take up financing, for example real estate developers and automakers are usually negatively affected when interest rate goes up.
The cost of borrowing becomes higher but it seems that the underlying interest rate is still perceived by Malaysians to be low compared to a few years back when it was 3.5% (2008). Hence, there seems to be very little effect on property prices as it remains high to date and it has not deterred people from acquiring more debts.
A study done by Standard & Poor in the US that analyzed data of Federal Reserve hikes between 1946 and 2009, combined with data from Standard & Poor’s 500, reported on sectors (in the US only) that perform well after interest rate hikes are “information technology, healthcare, telecommunication services, energy, consumer staples, industrials, consumer discretionary, utilities, financial and materials.”
For those who are not risk takers and prefer the comfort of consistent returns can place their money in fixed deposits or in fixed-income instruments. That way, they know the exact returns from their investments no matter what is happening to the interest rate. The good news is fixed deposit rates will also go up giving the investor higher returns. However, bondholders will be negatively affected but will benefit those who buy in after the rate hike. The general advice is to keep yourself updated on local and world economic situation and adjust your investment portfolio when necessary to protect your money.
Read other articles by Jacquelyn at WParent.com on parenting matters and Tips4Everyone.com on solving marriage problems.

Are you building passive income or busy to earn the active one?

Are you spending most of the time on your day job? Most people are stuck with 9-5. In Malaysia, it is very common for a hardworking employee to work like 7-11 (start on 7am, finish on 11pm). During this economy downturn, people work even harder just to avoid being the first to be retrenched.
We all have limited time 24 hours a day. Break it down:
Sleep: 8 hours
Work: 8 hours + 2 hours (commute, meal etc)
You are only left with 6 hours a day.
What about the weekend? If you want a quality life, you will probably spend the weekend with family and friends.
If you are really stuck with a day job right now, the only difference you can make depends on how you utilize the remaining six hours a day.
As you know, active income requires your full time participation to make money. You are being paid for the effort you put in during the time you commit to your employers. At the moment you stop working, your active income will stop too.

So many ways to build passive income streams, what do you do?

So, have you started building your passive income stream? There are so many ways to make one. All you need is the effort and commitment.
Can you write a book?
Can you start a business?
Would you make money online?
Do you invest your money wisely?
Do you shop for a property that gives good rental yield?

How many hours you spend everyday to build passive income?

Successful entrepreneurs spend more than 8 hours a day building passive income streams. And they do it for fun most of the time.
If you find yourself too busy and even overwhelmed with your active day job, you will be trapped in the rat race for quite a long time.
Tell us how many hours you spend everyday to build passive income source. What you do to achieve it?
Lets Joint Us As A Financial Advisor At Maa Takaful. Get Good Income But Spend Less Time.

WHAT IS THE BEST INVESTMENT..?

The best investment comes in many forms. I was frequently asked this same question over and over again. Let's see how some successful people answer the same question:

Ask a Successful businessman

On page 45 of Personal Money Issue #93 May 2009, Lim Chung Chun, the co-founder of iFast Corp Pte. Ltd. said,

My best investment has been in iFAST. This has been my single-biggest investment and the most profitable so far.

iFast is a multi-national investment services provider that has presence in Singapore, Malaysia, Hong Kong and India.
A successful businessman invest a lot in his own business. Ask Ray Kroc about his best investment, I bet he will say “McDonald”!

Ask a Successful Architect

On page 47 of Personal Money Issue #88 December 2008, Zaini Zainul said,

I concentrate on real estate. I guess that, being an architect, it is what I know best. I dont play in the stock market, as there are short-term success and risk involved.

Zaini is a very successful architect who designed the Perbadanan Putrajaya Complex and Putrajaya Shangri-La Hotel at Putrajaya.

Ask a CEO

On page 43 of Personal Money Issue #92 April 2009, Mohamed Akwal Sultan, CEO of the Credit Counselling and Debt Management Agency (AKPK) said,

I have a couple of good investments. One of the best happened when I first started working. I took a small loan to buy Amanah Saham Nasional unit trust way back in 1982. I've not touched that amount, and the compounding effect and accumulation of dividends have ballooned into quite a comfortable sum now.

You are a successful person in the Employee Quadrant when you become a CEO of a company. When you are focusing on your job and career and being a passive investor, unit trust may be the best investment for you.

What is my best investment?

My best investment so far is my life insurance agency business. I invested some money and a lot of time in these business. These businesses give me regular streams of income. Although the income generated are not totally passive, but they allow me not to work for months without worrying about income loss.

What is the best investment for you?

From the examples above, it is apparent that there is no such thing as the best investment that suits everyone.
The best investment for you is something you

• are passionate about
• can leverage on
• have total control

SELAMAT TAHUN BARU 2011

2010 Telah Berlalu Banyak Suka Duka Kehidupan Yang Kita Lalui Sepanjang Tahun Lepas. Adakah Kehidupan Kita Telah Berubah Dari 2009 Ke 2010 Dan Kini 2011..? Apa Pun Yang Kita Miliki Sepanjang Tahun-Tahun Yang Lepas Semua Itu Bukanlah Nasib Tetapi Usaha Yang Kita Lakukan.
Semoga 2011 Lebih Menjanjikan Kehidupan Dan Ekonomi Yang Lebih Baik Untuk Anda Semua. Tingkatkan Usaha Untuk Hasil Yang Lebih Baik Untuk Tahun Ini........WELCOME 2011

SEE INSURANCE THROUGH DIFFERENT EYES

TUGAS ANDA SEBAGAI PERUNDING KEWANGAN INSURAN/TAKAFUL MEMERLUKAN KESUNGGUHAN UNTUK MEMBANTU MASYARAKAT. PASTIKAN MASYARAKAT MEMANDANG ANDA PADA SUDUT YG POSITIF. ILMU YG BAIK SERTA PENDEKATAN YG KREATIF AKAN DAPAT MEMASTIKAN MASYARAKAT TIDAK JEMU MENDEKATI KAMU. SAKSIKAN VIDEO LUCU TENTANG SEORANG EJEN INSURAN DI ATAS, ADA MESEJ YG PERLU ANDA FAHAMI..........INGAT..! ANDA ADALAH INSAN YG TERPILIH DI BERI TUGAS MENYELAMATKAN MASYARAKAT DI KALA MEREKA DI DLM KESUSAHAN. ILMU YG ADA PADA ANDA BOLEH MENYELAMATKAN RAMAI ORG DARI JATUH MISKIN,ANAK-ANAK YATIM,IBU TUNGGAL SERTA BAKAL-BAKAL SISWA DAN SISWI YG MEMERLUKAN DANA PENDIDIKAN......HANAFI

SEMUA YANG BERLAKU PUNYA SEBAB YANG PERLU DI FIKIRKAN BERSAMA

Salam.......dahulu subsidi menjadi tongkat pada kaum bumiputera tapi kini menjelang hampirnya Malaysia mengejar negara maju tiada lagi subsidi dan biasiswa yg boleh bumiputera banggakan kerana semua ini terhapus seiring dengan kemajuan pesat negara.
 
Mari kita berkongsi tentang kos pendidikan masa hadapan, adakah ia satu jaminan ibubapa tidak perlu risau tentang kos tersebut..? 20 tahun yg lepas jawapannya mungkin YA..tetapi kini ibubapa tiada pilihan kerana kos semakin tinggi tambahan pula biasiswa sangat terhad untuk yg paling cemerlang. IPTA juga tidak dapat menampung jumlah pelajar sehingga ramai yg tidak dapat melanjutkan pelajaran semata-mata tempat yg terhad. Kerajaan menasihati hampir 100,000 pelajar yg gagal untuk masuk ke IPTA  pada tahun 2005 agar menyambung pelajaran mereka ke IPTS.

Persoalannya kos di IPTS sgt tinggi dan adakah sebagai ibubapa anda mampu untuk menanggung kos tersebut..? Hanya 20% sahaja ibubapa bumiputera yg tiada masalah kewangan tersebut. Bagaimana dengan nasib anak-anak yg ibubapanya berpendapatan sederhana dan rendah..?

Semua ini memerlukan perancangan yg teliti agar kos tersebut boleh di guna pakai sesuai mengikut keadaan semasa dan ini memerlukan khidmat nasihat kewangan dari konsultan yg berilmu, agar dlm apa jua keadaan samada ibubapa panjang umur atau meninggal awal kos tersebut tetap menjadi milik anaknya tanpa membebankan sesiapa. Baru-baru ini keluaran akhbar disember 2010 kita di paparkan dengan masalah siswi di IPTA yg melacurkan diri semata-mata untuk menapung kos pelajaran kerana faktor kewangan. Adakah keadaan begini yg kita mahu kan pada anak-anak kita kelak..? Jawapannya sudah pasti tidak, tetapi apakah persediaan kita untuk mengatasi masalah ini..? Jika anda belum melakukan apa-apa kami di Vibration Consultancy sedia memberi khidmat nasihat secara percuma. Anda hanya perlu menghubungi kami di talian 0193163021 / 0162207467.

MODUS OPERANDI BARU PENIPUAN MELALUI " ONLINE FOREX "

Salam.....dunia semakin canggih dari tahun bertukar tahun dengan teknologi yg semakin inovatif sehingga yg di fikir mustahil 20 tahun lepas hari ini menjadi realiti. Sehingga dunia hari ini di sebut sebagai "dunia di hujung jari " maupun dari segi komunikasi,kehidupan seharian dan gaya bekerja yg byk membabitkan teknologi.

Tidak ketinggalan juga suatu ketika dahulu jika ingin merompak individu terpaksa melakukan secara fizikal yakni pergi ke tempat yg ingin di rompak. Tetapi dgn kemajuan teknologi penjenayah tidak  perlu memiliki senjata api memadai pandai dengan dunia perisian IT maka mereka boleh merompak wang anda secara ONLINE. Oleh itu anda semua hendaklah berhati-hati dengan internet investment yg telah menelan berbilion ringgit duit org ramai di serata dunia. Terkini di Malaysia modus operandi penipuan melalui ONLINE FOREX. BANK NEGARA telah mengeluarkan kenyataan online forex adalah salah di sisi perundangan. Oleh itu jgn mudah terpadaya dgn pulangan lumayan yg akhirnya merugikan simpanan anda. Sejak 2008-2010 hampir 7 juta ringgit telah berjaya di perdaya dari masyarakat di Malaysia.

Please drive safe (Warning VERY Graphic Video) This is not funny...