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6 Ways To Manage Overthinking

One survey from the University of Michigan indicated that 73% of adults between the ages of 22 and 35 overthink, and 52% of 45 to 55-year-olds do too. While it is important to engage in thinking in our work, overthinking on the other hand affects our effectiveness in getting things done.

What is overthinking and what are some of the ways to manage overthinking? Overthinking is a process where people engage in excessive thinking to the extent that it impedes their actions and productive results. It becomes a justification for procrastination and inaction.

On the surface, it would seem legit for one to gather more information for analysis prior to making a decision and taking action. However prolonged thinking and rethinking can be a wasteful habit and can stop people in their tracks.

The way forward is to strike a healthy balance between thinking and action. To do that we need to come up with effective strategies to avoid overthinking and engage in the right thinking and take the right actions to achieve the desired results.

Over the last 25 years in leading various projects in my consulting work for organizations, I have developed a framework to ensure that our team avoids overthinking but engages in productive thinking to enable practical execution to achieve the desired results.

Let’s check out some of the ways to manage overthinking.

6 Ways To Manage Overthinking

1. Set A Time Frame

To ensure that we do not get into paralysis by analysis mode, we need to set a clear time framework for various tasks such as gathering information, analysis and diagnosis, decision-making, recommendations, and a clear action plan with specific measurable goals and deadlines.

Having a clear time frame is important and requires one to be more practical and balanced without getting carried away with a long engagement in one task that one loves to do more than others. It is not uncommon that some leaders love to debate over the smallest of stuff which is often more intellectual than practical.

There are many root-causes of why some leaders engage in overthinking. Some are perfectionists who are never contented until they explore everything to the fullest. Others lack courage in making decisions, so they avoid them by prolonging thinking and analyzing.

By setting a deadline for each task in each of the phases of work, one becomes compelled to move forward without being stuck in the thinking phase. This is certainly one of the ways to manage overthinking that you can try.

2. Ascertain The Necessary Information

There is no end to getting more information. It will be useful to choose the criteria needed to make a good decision and then go about collecting information about them.

The more data and information we collect, the more analysis and thinking will be involved. We do not live in a perfect world where we can have all the information needed to draw a perfect conclusion.

One of the ways to manage overthinking is by making sure we need adequate information that enable us to make a reasonable decision to move forward. Often more information creates overload and crowds one’s thinking. What is needed is relevant information to help make a sound conclusion that is directive enough to spell out the correct actions to be taken.

3. Analyze To Come To A Decision

One needs to be aware that we need not reinvent the wheel. We only need analyze the information to achieve better understanding in the areas that lack clarity. In those areas in which we are already clear, there is no need for more analysis.

The purpose of our thinking and analysis is to help make a decision. It should not be analysis for analysis’ sake. A better way is to set specific areas where clear decisions need to be made. Then go ahead with the thinking and analysis to arrive at those decisions.

4. Moving From Negativity To Positivity

A lot of overthinking may arise from negative mindsets with constant worrying about the past as well as concerns about the future. Often worrying about what could go wrong will get one to stall under the pretext of waiting for more information or analysis.

Too much negativity will certainly dampen one’s courage to take action. Many would justify that in view of the risks of what could go wrong, they need more thinking and rethinking on various issues. While a little caution with an exploration of contingencies is a good measure, taking an over-cautious stance with great doses of pessimism will wreak havoc on good decision-making.

Worrying forward leads to overthinking which is just creating problems that do not even exist. One of the ways to manage overthinking is by moving from what could go wrong to what could go right with the right strategies is a good way to move out of overthinking.

5. Execute To Achieve Productive Results

Thinking and more thinking would not create results. The missing link in most organizations is concrete actions. There are many leaders who love to have meetings after meetings to discuss over many things. The ills of overthinking are that they create a comfortable habit of inaction.

Inaction provides temporary refuge and comfort but over time it dents the credibility of leaders as they are eventually judged by the results they achieve. Without execution, there will be no results and without results, a leader is deemed to have failed.

In one of the ways to manage overthinking, is to execute what was planned.

6. Recognise And Reward Results

To discourage people from engaging in overthinking, organizations should realign their recognition and rewards towards result based. Assessing one’s work based on concrete and measurable results directly or indirectly is a good way to get people to move from overthinking to taking the right actions to get the desired results.

So there you have it, some of the ways to manage overthinking.

You need to stop overthinking, be a realist and not a perfectionist. Focus on getting things you want to be done right instead of things that could be done wrong.

About the Author

Dr. Victor SL Tan is the CEO of KL Strategic Change Consulting Group. He undertakes change management consulting and training. He is also the author of 14 management books. His bestseller books include Leading Positive & Productive Change and The Secret of Change. For more information email him at victorsltan@klscc.com or contact him at 012-3903168.

07/10/2022
Planning Is Important, Things Can Turn Ugly In An Instant

The following story is based on an actual series of events with some names and circumstances fictionalised and any similarity to the name, character or history of any person is entirely coincidental and unintentional. Hope that we all don’t make the same mistake and full understand that planning is important.

“It was like robbery!” a distraught Mama Yan said in a high tone as she opened the door for Mandy.

“They were in uniform and they just barged in,” she continued. “One of them held up a letter and others just came in and started to take the TV and other items.

“And Sharon, she, she…” her mouth quivered as she looked towards the lone figure lying on the bed in the living room. “Sharon, she tried to get up as if to stop the men and she fell…”

Mama Yan related that at that moment, everything stopped. A more elderly among the men just shouted “Jangan!”, reached forward and with a few others, helped carried Sharon back to the bed.

“I just froze and what happened next was a blur. All I can recall now was the elderly officer coming to me, saying something like “…datang pejabat untuk selesai. Kita tidak akan ambil apa apa.”

Mandy went towards Sharon and in a soft tone said: “Are you alright? Don’t worry, I’ll sort things out…”

She then turned to Mama Yan and pacified her, assuring her that she would take care of things. Mandy seemed to have figured out what the ‘raid’ was all about and asked for the notice the men left behind.

Let’s take a closer look at why planning is important.

Planning Is Important, Things Can Turn Ugly In An Instant

This incident stemming from failure to settle outstanding payments of property assessment fees is the latest of episodes of non-payment of bills, the last being the disconnection of electricity supply that left the family in darkness just two weeks back.

Mandy pitied Mama Yan, who was a sharp contrast from what she used to be – a happy contented mother, always beaming with pride that her Sharon, who in her late 30s, was at the prime of her career, having climbed the corporate ladder to be Marketing Director in an MNC.

Sharon was Mama Yan’s pride and joy as a daughter. Despite being busy, often home late and out to office early, she had never failed to make sure that her mama and wheel chair-bound Pa were well cared for. They never had to worry about finances. Sharon was that ever responsible, dependable, and caring daughter!

That was until one late afternoon six months ago. A call came in from Sharon’s colleague that she had blacked out and she was being rushed to the hospital.

A Stroke Of Bad News

Later, the doctor broke the news to Mama Yan that Sharon had a stroke and the left side of her body was paralysed. Mama Yan’s heart shattered in pieces when she finally got to see Sharon. Tears streamed from Sharon’s eyes. Tried as Sharon could, no words came out from her mouth. Her frustration could only be seen from her eyes.

Tears welled up too in Mama Yan. Sharon, who always had things in control, was lying there helpless. The pain of seeing the suffering that Sharon was undergoing was after a while replaced by thoughts racing through her mind about Sharon’s future and what would be in store for the family.

Sharon had taken care of the family well, providing for their financial needs. The live-in maid was a great help in attending to Sharon’s Pa, who even though recovering for the stroke, needed help in movement.

Can you see now why planning is important?

Good Times Won’t Last Forever

Six months have passed. There are no indications how long more Sharon would be bed-ridden. Weighed down by worries of mounting expenses and depleting savings, how to cope with two stroke patients, and a load of unexpected problems, Mandy was the only family friend that Yan could turn to.

Mandy, however, could only provide help in sorting out certain problems like dealing with municipalities and local Government departments.
What was of greater concern was that their one-time solid financial pillar had crumbled. Yan has never felt so hapless.

Mama, amidst tears, said to Mandy: “I have no choice but to see Yong and beg him for financial help now. He is the brother-in-law that I don’t really like but I have no choice.”

Considering that Sharon had built a successful career and if she has got down to writing a Will to take care of her dependent family, her parents would not be in dire straits if their financial pillar passed on.

However, in this instance, her plans under the Will could not be effected as she is still alive, but incapacitated.

Will VS Trust

Planning is important. Had she set up a Trust, Sharon would have planned well for such an eventuality if not for this cruel twist of fate. She could have placed certain assets she had accumulated in the trust of her appointed licensed trust company.

In the trust deed or instructions spelled out by the settlor (person setting up the Trust), she could have instructed the amount, frequency of payment for the living expenses of the family, as well as medical expenses, which in the case of Sharon’s family could be substantial as it would be for both her father and her.

Sharon could have even directed the trustee on how the monies in the trust fund should be invested until her death, after which she could set conditions as to what and how to invest. Such planning will ensure that income is generated while she is incapacitated to meet living and medical expenses.

The family’s financial pillar would still have been intact in this case as Sharon’s ability to financially provide for her dependent parents has been transferred to a reliable trustee. While the trustee can be an individual, a trust company is recommended as the latter will exist in perpetuity and has experienced and skilled staff with the time and resources on hand to administer the Trust.

Hope we now understand on why planning is important.

About Rockwills International Group

Rockwills International Group, now in its 27th year, pioneered professional will writing in 1995 and has since evolved into the leading estate planning specialist in the country. It is today the largest provider of solutions and support services in the areas of trusts, succession, management and distribution of wealth. It has shareholders’ funds exceeding RM50 million. It has done over 280,000 wills and 15,000 trusts and hold more than RM25 billion in assets under trust.

05/10/2022
Two Ways To Make Money In Malaysia Share Investment
The stock market is hugely popular, not only in Malaysia but the entire world. During the Movement Control Order (MCO) back in 2020, retail investors made a huge splash in Bursa Malaysia, and most investors made quite a handsome profit.

Let’s look at the two ways which you can earn in Malaysia share investment.

1. Capital Gain

Capital gain is the increase in a capital asset’s value and is realized when the asset is sold. It is the profit that you get when the selling price of the stock exceeds its purchase price. It is the difference between the selling price (higher) and purchase price (lower) of the stock.

For example:

Stock ABC price = RM1 per unit
Buy 10 lot (100 unit) = RM1 x 100 units
Purchase price = RM1,000

One month later

Stock ABC price = RM1.10 per unit
Selling price = RM1,100
Profit/Capital gain = RM100 or 10%

The above shows an example of how a capital gain of 10% is being made. ABC price went up by RM0.10, and was then sold at RM1.10.

*Note, the profit does not take into consideration costs such as brokerage charges, stamp duty and clearing fees. The net profit should be less after deducting these fees

Read: What Causes Bursa Malaysia Prices To Go Up And Down?

2. Dividend

The second way to earn in Malaysia share investment is through dividend. A dividend is the distribution of a company’s earnings to its shareholders and is determined by the company’s board of directors.

When a company generates a profit and accumulates retained earnings, those earnings can be either reinvested in the business or paid out to shareholders as a dividend. Dividends are often distributed quarterly and may be paid out as cash or in the form of reinvestment in additional stock.

If the company is not making good profit, or even making a loss, then we shouldn’t expect any dividends from the company. In fact, we don’t invest in these companies that do not have good fundamentals.

Malaysia Share Investment: Capital Gain VS Dividend?

The stock market is suitable for all kinds of investors. There are those who are in for the short term, perhaps capital gain is more suitable. But do keep in mind that if a stock price can go up so fast, it can go down even faster.

Whereas dividend stocks are more suitable for those who are in it for the long term. By investing in good and strong fundamental companies, you should be able to get a steady stream of dividends.

But that shouldn’t stop you from looking for stocks that can give you both capital gain and dividend right?

Make sure you also read:
- 4 Mistakes People Make In Stock Investing
- 5 Investing Lessons from Warren Buffett’s Letters
05/10/2022
Where Market Is Heading And Why I Should Not Care

In a world overflowing with mindless narratives and political polarisation, separating the signal from the noise in the markets can be challenging for anyone. The markets so far this year reminded us all that stock markets are risky. Even SPAC activity has not been this bad for the past five years.

Surely no one can correctly guess where market is heading, where uncertainties are the one thing that is certain.

Never mind that rising inflation is eating away our purchasing power as poor consumers. Oh, for all the coffee lovers out there, coffee, already noticeably imbued with the bitter taste of inflation, is likely to get even costlier, as farmers in world-leading coffee exporters face the fallout of
extreme weather.

Here’s why you shouldn’t be placing too much importance on where market is heading.

Sure, it is easy to get emotional especially if you are stuck in losses, given the significant negative returns across most asset classes in the first
half of the year and can no longer think rationally. On top of recession and inflation concerns, investors also had to deal with a deteriorating geopolitical environment.

Will there be another war somewhere? Who cares!

Where Market Is Heading?

As most of my long-term suffering readers know, I am a big advocate of alternative investments or absolute return strategies. Alternative investments have long been used as a tool in portfolio construction by large institutions, pensions, and endowments.

In recent years, many qualified individual investors have increased exposure to alternative investments to boost returns, generate income, and achieve long-term financial goals. Tech-enabled business models make it possible to serve customers on the lower end of the wealth spectrum.

One of the most attractive aspects of alternative investments is that they typically have a low correlation with equity and bond markets. When used as a complement to traditional investments, alternative investments are a valuable piece of a long-term investment portfolio.

Financial players of all sizes are aggressively pursuing product innovations to survive the competition. My strategic partnerships with trusted managers allow me to move fast with innovation.

Alternative Investments Are Important

From another perspective, alternative investment managers make the capital markets work better and more efficient which gives a meaning as to where the market is heading is not really important. They make them more liquid.

The local financial services industry was a simpler place more than 20 years ago and most investors were happily invested in plain vanilla equity and bond funds back then.

Indeed, one of the primary attractions of alternative investments for me when I began dealing with them in 1995 was that I knew the benefits of traditional diversification are overstated. Let me stress clearly that I am not against local investments. I am an enthusiastic local stock market
investor.

Shifting to another gear, many people assume that if somebody is really wealthy, he or she does not really have to worry about anything. In harsh reality, when you have more money, you have more problems or concerns. One of the concerns is the ability to preserve capital in the long-term.

Most people do not become wealthy by being irresponsible with their hard-earned money. Most of them worry about the downside risk which could affect their portfolio value especially during extreme market conditions. A proven alternative investments help investors to preserve their wealth while achieving growth over the long-term.

Many people mistakenly believe that alternative investments are all about making leveraged bets and getting big returns. In my line of work, some investors are looking to increase the amount of income in their asset allocation. The level of passive income varies greatly based on their wealth. A high income driven strategy is also a solid defence against rising inflation.

But Beware Of Scams

Where market is heading won’t mean a thing if you can’t differentiate financial scams.

Nobody likes to work and everybody loves high and guaranteed returns. If anyone knows how to produce extremely high returns all the time, he or she would already run a properly regulated investment vehicle and the money will find them. Please tell me something that I do not know because I am an “idiot”.

When you have more money, you will likely be the target of some unscrupulous people trying to sell something to you without having your best interests in mind. They can be anyone like your neighbors, relatives, colleagues and even your financial advisors. For these “greedy” sales people, while money cannot buy real happiness, there never seems to be quite enough.

I work with successful alternative investment managers or traders who are rational, analytical, able to control emotions, and performance oriented. They must have an edge and employ good money management by having rigid risk control rules.

I am always cautious about the specific investment ideas in my public articles due to internal compliance, but I will share with you in broad strokes about some of them in this limited space. It is a sample of different opportunities in the world of alternative investments especially for sophisticated investors and family offices, while some of you are still looking for a crash.

I talked about them in detail in a zoom meeting with investors not long ago. Grab that filtered water (cheaper than coffee) and be ready.

Stable Income Is Better Than Losing Money

Regular income despite not giving a damn about where market is heading? An alternative fixed income bond which is also available in the Islamic shariah version offers a solid infrastructure to mitigate the risk and pays a fixed coupon per month, paid quarterly in arrears to the investors. The generous income stream from the profits allow investors to support the lifestyle they desire.

Available in major currencies, the profits are generated from contract arbitrage trading. Contract arbitrage is the simultaneous purchase and sale of an asset to profit from the price differential between a seller and a buyer. The difference in price generates the profit.

Moving to another idea is an alternative global multi strategy fund which invests in global digital assets. The fund has performed very well at a much lesser volatility so far this year, given the sharp sell-offs in cryptocurrencies that hurt some of the high profile players with poor risk management and overleveraged.

Those crypto geniuses who blew up their trades knew what they were doing right?

Consider Digital Assets Too

The emerging digital assets industry has experienced a rollercoaster ride in recent years, with a lack of transparency and significant volatility discouraging some genuine investors from investing. Where the market is heading is not important, as the fund provides a simple, efficient solution for sophisticated investors to gain exposure to the digital assets space with low volatility and minimal exposure to systemic market risk.

On this note, while on a capital raising roadshow in Europe, the fund was well received by some of the largest wealth managers and investment banks. All wealth managers and institutions have plans for adding digital assets or funds to their offering. It is inevitable that sophisticated investors realise that evolution in Blockchain-based applications provides strong growth potential for the foreseeable future.

No Loss, So No Worries On Where Market Is Heading

Taking the world by storm, here is another gem. A global macro strategy fund with no losing years since its inception has continued to provide consistent positive returns amid the volatile market conditions in 2022 so far. The fund aims for consistent absolute returns over a medium-to-long
term period, by leveraging on the fund’s proprietary technology and the manager’s alpha skills in both good and bad times.

The fund invests in equities, fixed income, commodity, forex and interest rates.

To wrap up this article, as an investor, you can prepare your portfolio for uncertainty. Much like preparing for a road trip where you cannot control the traffic on the road, and having to deal with rude drivers and potholes.

Instead of trying to control or fix the problem, you can control how you prepare and react to it. Where market is heading? I don’t care!

About the Author

YH Wong has over two decades of experience in the financial services industry. His clients include high net worth investors and boutique institutions such as family offices and investment partnerships in the region. He is currently a senior partner with Satori Consultancy Ltd, a financial services company regulated by the Mauritian Financial Services Commission. He can be reached at yhwong@satoriconsultancy.com.

30/09/2022
RM5.2 Billion Lost To Scams In Malaysia Over Two Years
We read about individuals losing money to scams in Malaysia almost on a daily basis. The losses are staggering, and even though the warning signs are all around us, the number of victims keep piling up. According to the Inspector-General of Police, Tan Sri Acryl Sani Abdullah Sani, there were 71,833 fraud cases recorded since 2020 until May 2022, with a loss amounting to RM5.2 billion.

The most prevalent financial scams in Malaysia as revealed by the Royal Malaysia Police (RMP) are:
- Bank / Government Impersonation
- Illegal Loans
- Money Mules / Account / ATM
- Card Rental
- Investment Scams
- E-Commerce Scams
- Romance Scams
Since we want to become a smart investor, we will be taking a closer look at investment scams, with the hope that we are able to identify them and take the necessary actions to avoid becoming a victim.

Common Types Of Investment Scams In Malaysia

1. Get Rich Quick on Social Media Platforms

Usually, the scammer will ask for a small investment with a promise of very hight returns. For example, 100% return in three hours or RM1,000 in 30 minutes. Since the initial ‘investment’ is small, investors would have no problem giving away the money to start.

Once we see the gains in our account, we will be tempted to put in more money. And when the time to cash out the gains or to take out the capital, normally the scammer will ask us to pay certain fees. By the time we realise that we have been scammed, the damage had already been done.

2. Clone Firm Scams

Another famous scam that is going around is done where scammers use legitimate investment firms, but misuse their name and logo to dupe victims. It looks so real that you can’t easily tell them apart.

For example, the real business is Smart Investor, but the clone uses the name Smart Investment. It even uses the same logo, so you will genuinely
mistake it for the real deal.

The Modus Operandi Of Scams In Malaysia

Operators of illegal internet investment schemes lure unsuspecting victims to make online investments or receive investment advice online, by offering investment opportunities with unusually high returns with zero or very low risk.

When questioned about their legitimacy, most scammers operators will claim to be foreign operators that do not require licensing from Malaysian regulators to operate their business.

In truth, these operators have no legitimacy whatsoever; they are not licensed to receive deposits by Bank Negara Malaysia or licensed to offer investment advice from the Securities Commission (SC) related to fund management, securities and futures.

Unsuspecting victims would then be enticed as scammers will pay them the high returns during the initial stage, and this is used as a tactic to lure and recruit new investors. The survival of this scheme actually depends on new depositors.

The funds obtained from new depositors will be used to pay dividends to the existing depositors. Therefore, the scheme will fail when there is no contribution of funds from new depositors.

However, the scam operator will eventually abscond deposits collected when they feel that the scheme is about to fail, thus leaving the depositors at the losing end.

With So Many Legitimate Investment Schemes, Why Do People Still Fall For Scams In Malaysia?

“Scammers employ various means to manipulate their victims including promising high-returns, illusion of safety and inducing fear-of-missing-out (FOMO),” said Bryan Zeng, CEO of FA Advisory, a financial planning service provider.

Bryan Zeng, CEO of FA Advisory

On the other hand, legitimate investment schemes are highly regulated with clear guidelines on what is permissible or not. These guidelines are designed to protect the investors but may make the legitimate investment appear as less attractive.

But then again, the promise of getting rich quick in these situations is hard to resist. Scammers will promise crazily high returns in a very short time, which makes no sense once you think about it. But at the spur of the moment, we feel that it is too good to pass on such an opportunity – and we tend to make decisions based on our emotions.

As emotional beings, we are often easily manipulated when we are at our most vulnerable, which makes us easy prey for scammers. When we are not able to think clearly, that is when we make ill-informed decisions that will come back to haunt us.

Always remember the old adage: “If something is too good to be true, it is most likely a lie.”

Hence, a healthy dose of scepticism, emotional restrain, and critical thinking can go a long way. You can also check with the relevant authorities before investing or depositing money into someone else’s bank account.

Some useful links:
- Bank Negara Malaysia’s Financial Consumer Alert List: https://www. bnm.gov.my/financial-consumer-alert-list
- Securities Commission Malaysia’s Investor Alert List: https://www.sc.com.my/regulation/enforcement/investor-alerts/scinvestor-alerts/investor-alert-list
- Royal Malaysian Police Semak Mule: https://semakmule.rmp.gov.my/
Those are just some of the facts that you should know about the scams in Malaysia, hope we are well-educated enough to detect and avoid it.

Make sure you also read:
With knowledge, we can actually avoid from becoming a victim of scams in Malaysia.
28/09/2022
4 Ways To Save Money When Making International Purchases And Transactions

Have you been surprised by your credit card statement at the end of the month after purchasing something from an international online store? Does it seem that the total charged to your credit card was not the same as the amount you saw during checkout?

Online shopping has become more popular in recent years because it enables us to purchase various items with just a few clicks from our electronic devices. However, many Malaysians remain susceptible to hidden fees and unfair charges when making international purchases, travelling, and transferring funds.

This is where having a multi-currency account can help streamline how you send, spend or receive money. Whether you are using it personally or for business purposes, a global currency account provides added freedom and removes borders.

Here are a few ways on how a multi-currency account and card can help make your life easier.

1. Spend in local currency while shopping internationally

We all know that Malaysians love to shop. When the pandemic hit, many Malaysians transitioned from shopping in malls to online stores, both locally and internationally.

The transition to online shopping was spurred out of necessity but it helped many Malaysians to purchase their favourite items even from the comfort and safety of their homes. However, it can be frustrating when dealing with uncertain conversion rates and hidden fees.

Hence, a great way to navigate this is by choosing to pay in the currency of the country you are buying from – here’s where your multi-currency account comes in. Pay like a local to save on extra fees and get a better exchange rate!

2. Be in control of your finances when travelling abroad

With countries opening their borders after the pandemic, many Malaysians have been hit with the travel bug and are planning their vacations meticulously. As such, if you are looking to travel overseas, owning a multi-currency card will help you to spend in multiple currencies whichever country you are in, with better exchange rates that are often lower than your traditional bank.

You don’t have to worry about fraud as you are always in control when using a multi-currency account, with instant transaction notifications and the ability to freeze your card instantly. You can also spend like a local as you can use your card to withdraw money from your multi-currency account at ATMs worldwide.

3. Get paid like a local even from overseas clients

Top view of woman using laptop computer

Freelancing is a great way to support a lifestyle outside of the traditional office job. For many, it is also an opportunity to work with exciting companies in different countries. It also means having the liberty to go about your day, but at the end of the day, you are responsible for maintaining a continuous flow of work.

Expanding your horizon to regional or global clientele could yield better results and maybe even better pay. But it brings up the question of how do you actually get paid? Most companies seek to pay their freelancers in their local currency.

So that’s where a multi-currency account comes in, allowing you to receive your salary and invoice payments in their local currency, which can then be converted to your local currency for use. No more hefty bank fees or unfair exchange rates on both sides!

4. Manage your overseas property remotely

Once you purchase properties abroad, you may find yourself thinking about the most convenient way to pay utilities, taxes, and other mandatory fees. It is often stressful trying to decipher the uncertain and hidden charges that come from doing a bank money transfer.

After all, no one wants to pay more than necessary, as it would only result in loss of money. This is especially true if you bought the property as an investment and turned it into an Airbnb or event rental space.

A great option to manage these properties is with a multi-currency account, where you can pay in local currency and receive money locally as well, and then convert it into your desired currency when the rates are right. Make it simple and take the hassle out of property management — and save money in the process.

It is important to select a multi-currency account which allows you to hold, receive or convert various different currencies at the lowest rates possible. With Wise, you will be able to enjoy the mid-market exchange rate for transfers, conversions and more without hidden fees. Another

feature to look out for is 3-D secure authentication, which ensures every transaction is safe. So, if you want to make international transactions from the comfort of your home or travel the world to see for yourself, it would be wise to own a multi-currency account.

27/09/2022
A “Not-So-Great” Resignation: 39% Of Professionals In Malaysia Who Have Thought Of Resigning In The Past Year Didn’t Leave Their Jobs
The much-publicised ‘Great Resignation’ appears to be more muted in Southeast Asia, based on the latest survey from global recruitment firm Robert Walters.

Professionals in the region are valuing job security during uncertain times, with more than half (59%) indicating that they are uncomfortable to quit without a new job offer, and 81% of those who have thought of resigning are willing to change their minds, if conditions are right.

In addition to job security, professionals in Malaysia highly value salary package, good leadership and healthy workplace culture. These are contributing factors that will retain talent.

Hiring new talent remains challenging in Southeast Asia, especially in Malaysia which saw 83% of companies finding it more difficult to do so in the past year. High expectation on salary and benefits was cited as one of the biggest challenges for sourcing talent, at 66%.

These are among the key findings of the Robert Walters Great Resignation Reality Check that canvassed the insights of over 2,600 professionals and more than 1,100 companies, to better understand the attitudes held towards resignations, staff turnover situations, and unlock retention motivators. It was conducted in June 2022 and spanned six Southeast Asian countries (Singapore, Malaysia, the Philippines, Thailand, Indonesia and Vietnam).

Job-switching instead of resignations While 79% of professionals surveyed across Southeast Asia had the intention to resign in 2021, close to half (42%) have yet to do so.

Malaysia saw the most professionals (82%) who have thought of quitting their job in the past year, followed by Singapore (80%) and Thailand (80%). However, 62% of professionals in Malaysia will not quit without a better opportunity lined up, just slightly behind Singapore (64%).

“Rather than a ‘Great Resignation’, businesses can expect an accelerated hiring market across Southeast Asia in the coming year. Professionals are not quitting on a whim, but rather, they are looking to move between jobs. In the face of a possible recession, we expect more cautious professionals, who would only move when they have another job offer on hand,” said Gerrit Bouckaert, Managing Director, SEA, Robert Walters.

Malaysia: Positive work culture including good leadership, and flexible work arrangements are highly favoured by employees

Of the 82% professionals in Malaysia who considered resigning in the past year, 39% eventually stayed on because they have not found a new job yet (58%), are uncertain over new workplace’s culture and suitability (26%), and are concerned about job security at a new company (25%).

About 4 in 5 professionals (81%) would reconsider their intention of resigning if conditions are right. While salary increment continues to be the main determinant, changed job responsibilities (26%) and a change of leadership (24%) are the other crucial factors that will make them change their minds.

In view of this, employers have stepped up efforts in taking necessary measures to retain staff, such as matching or increasing salaries (58%), offering training and upskilling opportunities (56%) and providing a clear pathway for career development (44%). However, almost half of the professionals (45%) mentioned that they were not aware of changes made by their employers, indicating a gap in the retention initiatives by employers.

A staggering 86% professionals also revealed that they have re-evaluated their other life aspects when it comes to career, now prioritising their mental and physical wellbeing (76%). Other notable areas include time spent with their loved ones (70%), and the meaning/fulfillment of their jobs (68%).

This corresponds to this year’s findings by Malaysian Employers Federation, noting that many employers are now adopting Flexible Work Arrangements (FWAs) to cater to employees’ evolving needs such as having work-life balance, physical and emotional health.

Apart from work flexibility, colleagues and culture that inspire employees to do their best are what professionals value most in an employer (43%). This ranked slightly above compensation and perks (41%).

Other findings include:
- In addition to high salary and benefit expectations (66%), high competition for candidates (55%) and lacking industry experience (44%) are the biggest challenges employers face when hiring talent.
- 87% of companies think employee turnover/resignations in their organisations have increased in the past year.
Ai Rene Tan, Country Manager of Robert Walters Malaysia

Ai Rene Tan, Country Manager of Robert Walters Malaysia comments:

“Positive employee experiences have never been more important in today’s work environment. Recognising and rewarding strong talent, job security and meeting employees’ desire for better well-being are important to attract and retain talent. Good leadership and positive workplace culture will also make a critical difference in the hiring of new talent.”

To find out more about Robert Walters in Malaysia, please visit www.robertwalters.com.my.

About Robert Walters

Robert Walters is one of the world’s leading specialist professional recruitment consultancies and focuses on placing high-calibre professionals into permanent, contract and temporary positions at all levels of seniority. The Malaysia office specialises in placing candidates on a permanent basis in the following disciplines and industries: accountancy & finance, banking & financial services, executive search & senior management, engineering & manufacturing, human resources, tech & transformation, legal & corporate secretarial, sales & marketing, healthcare & life sciences and supply chain, procurement & logistics. Established in 1985, the Group has built a global presence spanning 31 countries and regions.
26/09/2022
Correlation VS Causation

The confusion between the correlation and causation is inevitable especially for those who are new in investment and trading. But one must understand the difference between correlation vs causation before opening any investment accounts. The financial analytics bible defines the correlation is a relationship between markets.

For instance, FBMKLCI and DJIA have a positive relationship. But without further statistical test, we cannot say which market is the leader and which market is the laggard. Both markets may share and react on the similar information which is the mediator. So there comes the need of another course of test called causality test. The causation, for example, explains the case when FBMKLCI causes DJIA to move.

The mathematics of assets correlation is simple and straightforward. The correlation test finds the degree of association between the price change of Asset A and Asset B. It is then measured by a statistical tool such as Pearson Correlation coefficient. The causality test on the other hand adopts the similar mathematical formulation but with a little adjustment on the equation parameterization.

Correlation VS Causation

The causality test focuses on finding the correlation of Asset A and Asset B with each other’s history. The most popular causality test used in the Bloomberg terminal is Granger causality test.

The knowledge on assets correlation and causation is crucial for investors as it helps the investors to differentiate and identify market movers. Some of the assets maybe well correlated but not necessarily a price determinant to each other. For instance, the most popular assumption in the agricultural commodity trading is the soybean oil futures traded in US Chicago Board of Trade (CBOT) is the leader for the Malaysian crude palm oil futures (FCPO) in Bursa Malaysia Derivatives (BMD).

A study by Li and Nguyen (2015) provide a crucial piece of evidence where they reveal that the CBOT soybean oil and BMD crude palm oil have a stable long run relationship, but the study discovered that there is bi-directional causality between both futures markets. It shows that the Malaysian crude palm oil price may influence the soybean oil price in the US and vice versa.

Futures Market

Another example, the causality test determines the functionality and reliability of futures market as a hedging avenue for the market players. The futures market is established to be a future price reference for its underlying cash market. The efficient futures market guarantees effective hedging strategy. Therefore, an efficient futures market must have two conditions to be fulfilled.

First, the correlation between the spot and futures must be at perfect positive at all times. Secondly, the futures price must be proven leading the spot price in the causality test. Lacking on any of these prerequisites may render the price risk transfer process from the hedger to speculator to be less efficient. To add further, the causality test helps the global investors in devising their international portfolios.

A good knowledge in cross markets causality will tell whether the bearish mode in the S&P500 tonight maybe spill over to Nikkei 500 in the next morning or not. This is why it is important to have the knowledge about correlation vs causation.

So, the next time you heard an impactful news on a geo-economic event, you can tell that if your portfolio will be impacting or impacted by the global sentiment. Hope you now have a better understanding of correlation vs causation.

About the Author

Dr. Ahmad Danial is a Certified Financial Technician (CFTe) and Senior Lecturer in Finance at Department of Economics and Financial Studies, UiTM Puncak Alam. He has over 10 years’ experience in the financial markets before hopping into the academia. His areas of expertise include financial contagion, trading in stocks and derivatives markets, price discovery, hedging strategy, Econophysics and technical analysis. He can be reached at danialzainudin@uitm.edu.my.

26/09/2022
Investing In P2P Financing: Is It Worth It?

Malaysia became the first country in the ASEAN region to regulate P2P financing with the registration of six P2P operators with the Securities Commission Malaysia (SC) in 2016 – B2B FinPAL, Ethis Kapital, FundedByMe Malaysia, ManagePay Services, Modalku Ventures and Peoplender (Fundaztic)–which were fully operational by 2017. Since then, a few more operators launched their platforms including Cofundr in July 2020 and microLEAP in October 2019.

The question in our minds, it it worth investing in P2P financing?

What Is P2P Financing?

The Peer-to-peer (P2P) financing aims to address funding needs of SMEs to raise working capital or capital for growth. It is also recognised as one of the alternative investments that one can consider which come with different risks and rewards. Nevertheless, an investment still serves the same
purpose; to gain profit and to hedge against inflation.

Number of campaigns and amount raised by year. Source: SC

Based on the data from 2017 until 31 March 2022 by the SC, the total amount raised from P2P financing was RM2.62 billion, with 35,499 campaigns
and 32,925 investors. Thus, P2P financing has been a major contributor in helping SMEs to fund their current operation and expand their businesses.

Of the investors, mostly (86.7%) are retail investors, with 7.9% angel investors while high-net-worth (HNW) individuals and HNW entities made up
the balance.

Type of P2P Financing investors. Source: SC

Smart Investor talks to several industry experts to find out more about P2P financing and investing in P2P financing.

Alternative Financing Through Crowdfunding

Paul Kuan, chief executive officer of Cofundr says that P2P financing is a platform to finance SMEs by raising funds via the internet. The investors
will invest in a portion of the financing known as investment notes for a risk-rated return.

Paul Kuan, chief executive officer of Cofundr

He informs that in every P2P financing, there are three parties involved; the issuer (SMEs), investors and facilitator (the P2P platform such as Cofundr) to facilitate the entire P2P ecosystem.

“In layman terms, P2P financing is a form of alternative financing through crowdfunding which enables businesses to obtain loans directly from individuals, facilitated through a P2P financing platform, cutting out financial institution as the middleman,” adds Jeff Tan, acting chief executive officer of Peoplelender Sdn Bhd that manages the P2P financing platform known as Fundaztic.

Jeff Tan, acting chief executive officer, Fundaztic

“P2P operator facilitates businesses to raise funds from both retail and sophisticated investors through an online platform. Through the SC’s registered platform, an investor may invest in an investment note issued by businesses for a specified tenure with the expectation of a predetermined financial return,” Er Chiang Chuan, head of business development and operations for B2B Finpal, explains.

Er Chiang Chuan, head of business development and operations for B2B Finpal

He adds that with a sophisticated risk algorithm and extensive SME experience, B2B Finpal ecosystem helps to connect those underserved SMEs with investors for quick and easy financing access.

Percentage of issuers who have successfully and unsuccessfully raised funds. Source: SC

From 2017 until Q1 2022, 99.4% of issuers have successfully fundraised. It shows that the chance of getting successful financing through P2P financing is very high.

How can someone raise funds for their businesses through the P2P platforms? Will it be difficult with stacks of documents needed to be
provided?

Tan briefly shares that for businesses, the general procedure is to ensure that they meet the required criteria in place by the P2P platform. When an issuer applies for funding, the P2P operator will evaluate the issuer’s eligibility, among others, by assessing its capacity to repay through credit
history checks and analysis of any alternative data.

“As a fintech P2P platform, all onboarding procedures are being done via our website or mobile app. This applies to both issuers looking for
financing as well as investors looking for investment opportunities,” Kuan responds.

“microLEAP also provides value-added services, such as Free Personal-Accident (PA) Insurance on the business Key-Person, online video
tutorial on basic debt management and accounting in both Malay and English, as well as absorbing all Shariah-related fees,” adds Marzuki Musa, chief marketing officer of microLEAP.

Marzuki Musa, chief marketing officer of microLEAP

Each P2P financing platform may have different registration and application process. Er provides us the general overview of how they work:

1. Sign up on the P2P platform
The issuers are required to provide business information and documents such as the nature of their business, contact details, financial information, directors and shareholders information, etc.

2. Verification and approval by the P2P financing platform
The P2P operator will evaluate the issuer’s suitability, among others by assessing its capacity to repay through credit history checks and
analysis of any alternative data.

3. Execute the issuer agreement
Once the issuers have accepted the offer and executed the issuer agreement, their funding request will be published on the P2P financing platform and investors can choose whether or not to fund their business.

4. Receive funds
The funds will be credited to the issuer’s bank account once it has reached the target amount set earlier during the application.

Investing In P2P Financing, Knowing Your Risk Appetite

Generally, for those interested in investing in P2P financing platform’s investment notes, they will first have to open an account with the respective platform and provide information such as their name, address and contact information for the operator to carry out identity verification and undergoes the Know Your Customer (KYC) process.

According to Er, the process is important to protect the investors and P2P operators from misuse of data and it is also required by the law. But what are the criteria or guidelines that an individual need to consider before investing in P2P?

Marzuki shares that there is always an element of default risk when it comes to investing in P2P financing market.

“Hence, microLEAP encourages all investors to diversify their risk by investing in as many investment notes as possible for a given amount of
funds,” he says.

microLEAP is a Shariah-compliant and conventional P2P financing platform that provides alternative financing for MSMEs, that is funded by both investors who are looking for a Shariah-compliant yield as well as impact investment.

“P2P financing indeed provides higher returns than traditional investments, but investors take on higher risks as well,” Er concurs.

He adds that investors need to be aware that the returns from investing in P2P financing are not guaranteed. “The issuers may default on their P2P financing and might not be able to repay their monthly dues to investors. In the event of a default, some platforms may take legal action against defaulted issuers or work with them to propose alternative repayment solutions.”

Furthermore, risk appetite is different for every investor. It is tempting to go for higher-risk businesses that provide higher returns, but Er emphasizes the need to ask yourself on what you can stand to lose if they default on their payments.

“To further help investors, Cofundr uses Factsheet that contains the company background, years established, business sector, litigation status of the company and if the company has been blacklisted before.

However, at Cofundr, we practice a “noname” basis where we do not reveal the issuer’s name. This is to protect the Issuer’s confidentiality,” Kuan shares.

Compared to conventional investments such as equities, unit trust or fixed deposit, is there a safety net for investors that are investing in P2P Financing? Or is there a potential to suffer a total loss from capital? As such, how would an investor mitigate the risks?

“Diversifying your portfolio is by far the best strategy to minimise any risks or losses you may encounter in the long run. To diversify means to spread your investment across as many notes as possible in terms of number as well as type of issuers,” Tan says.

The biggest risk in investing in P2P financing is repayment or default risk where the issuer might not be able to repay the fund in full.

“To mitigate the risk for our investors, our credit assessment team is very selective with the issuers we onboard and we often make an arrangement such as guarantor arrangement, assignment of proceeds, post-dated cheques and others to rotect our investors. Investors can suffer losses when investing in P2P financing. Hence, we always advise investors to diversify their investment into several investment notes rather than focusing on just one,” Kuan further adds.

Going Forward

On what are the future plans for the P2P financing industry players, here are what they share.

“We aim to elevate the financial well-being of the communities through P2P financing. We also plan to offer more dynamic products for both the
issuer and the investor. Recently, we launched our Shariah-compliant products, Takaful Contribution Financing and Islamic Invoice Financing to serve the Islamic market in the P2P ecosystem,” Kuan shares on the plans for Cofundr.

“We will also continue to educate the public about P2P investment and how it can become an alternative investment asset class for them to consider when building their wealth,” he adds.

“After establishing ourselves in several states in Malaysia, we will look to expand regionally. microLEAP’s plans to branch beyond Klang Valley
and increase our presence in other states such as Negeri Sembilan, Johor, Sarawak and Sabah,” Marzuki informs.

B2B Finpal expects to see a V-shaped recovery as consumers start to spend again after the recent COVID-19 pandemic that has hit businesses very hard. “B2B Finpal will be ready to support the recovery of Malaysian SMEs,” Er says.

As for Fundaztic, Tan informs that they will expand their sales force to other states to make Fundaztic accessible to all MSMEs across Malaysia. Fundaztic has also expanded to Singapore since last year and they are now exploring further expansion to other countries as well.

Now that you know more about the P2P financing and have heard from the industry players, do you think that investing in P2P financing should be considered as one of your alternative investments?

23/09/2022
Raising Awareness Of Financial Literacy And Financial Planning In Malaysia

The month of October is that time of the year where the financial planning profession come together to raise awareness of financial literacy and financial planning in Malaysia among the public.

Vincent Kwo, President of the Malaysian Financial Planning Council (MFPC), weighs in on the state of financial literacy and financial planning in Malaysia, why one should engage a financial planner and what MFPC is doing to uphold the best standards of practices in the industry.

Vincent Kwo, President of the Malaysian Financial Planning Council (MFPC)

Smart Investor: Are there any recent initiatives, campaigns or events by MFPC to promote financial literacy and financial planning in Malaysia this year?

Vincent Kwo: The Malaysian Financial Planning Council’s objectives include promoting the development and enhancement of the financial planning profession in the country, as well as elevating financial literacy and financial planning in Malaysia.

To meet the first objective, we conduct professional financial planning programmes that lead to qualifications recognized by the Securities Commission (SC) and Bank Negara Malaysia (BNM). This ensures Malaysians access to the highest quality of financial planning services provided by qualified and knowledgeable financial planners.

As for meeting our second objective, we continually embark on various initiatives, conduct programmes and events for the Malaysian public at absolutely no cost to promote financial education. The aim of these initiatives – all of which are devoid of any commercialization – is to stay in the forefront to raise the financial literacy and financial planning in Malaysia for the rakyat, which is at a worryingly low level.

We are immensely proud that our initiatives have reached out to and benefitted thousands of Malaysians, empowering them with financial knowledge for their and their families’ financial well-being.

The first half of 2022 saw us hold four of our award-winning My Money & Me workshops virtually for youths in KL, the east coast zone, the northern zone and the southern zone. These programmes are a regular feature in our itinerary, which are evidence of our efforts in contributing to the rakyat’s financial well-being and ultimately advancing the development of the nation.

The workshops are cross-collaborative programmes with Bank Negara Malaysia, SC, OFS and SIDREC, EPF, AKPK, LIAM, MTA, FIMM, LHDN and MFPC.

The topics at our basic financial literacy My Money & Me workshops include asset protection, asset accumulation, asset management and asset distribution, vesting Malaysian youths with financial knowledge. The workshops will also empower youths to practise positive financial behaviour and gain strong financial capability well into adulthood and their retirement years, ensuring their financial and emotional wellbeing.

During the My Money & Me workshop in March, we launched an e-learning portal https://mymoney.mfpc.org.my/ with free access for the public. The self-paced learning available will ensure resources are available to build the financial knowledge of the public. The portal comprises of subjects related to conventional and Shariah financial planning.

In addition, we conducted numerous series of Pocket Talks covering financial planning topics, free for the public. These aim to raise public awareness of the importance of financial education and planning.

Raising Awareness Of Financial Literacy And Financial Planning In Malaysia

We have conducted 20 talks to date in conjunction with our MFPC Industry Talk with local universities. The talks are conducted in collaboration with financial planning firms, financial institutions and trade associations to promote the importance of financial planning, and to instil interest in financial planning as a profession in young adults.

In the pipeline are three more My Money &Me workshops for the year, for Sabah, Sarawak and Selangor.

Other programmes in the pipeline include an e-Tournament 2022 in October 2022 entitled Game for Money. 20 universities will participate in the event. The aim of the tournament in to provide financial education as well as to instil interest in financial planning among undergraduates.

We will also participate in Bersama InvestSmart^® in Sarawak, in September. This is an event initiated by SC that seeks to create more informed investors who are self-reliant and able to make investment decisions that are right for themselves.

MFPC is confident that our numerous financial education programmes have made and will make a difference in the lives of Malaysians, enhancing their upward mobility and creating lasting and positive changes.

SI: What is your take on the state of financial literacy and financial planning in Malaysia, especially given the past couple of pandemic-fuelled years?

VK: The recent pandemic drove home the fact that financial planning and literacy are essentials, not options. Many people lost their income unexpectedly and matters were made worse for those who did not have a comprehensive financial plan.

Unfortunately, financial literacy and financial planning is very low among Malaysians, which worsened the financial problems brought on by the pandemic. MFPC’s various free financial education programmes to raise public awareness and literacy aim to aid the public to improve their situation.

We plan to continue working to this end, so many more Malaysians understand the importance of financial planning and education, and will be better equipped to withstand any similar circumstances that may arise. We look forward to working with our partners in the effort to improve the financial well-being and lives of the rakyat.

SI: Why does one need a licensed financial planner in their life?

VK: Various studies, including the Capital Market Development Fund (CMDF) report on Financial Literacy and Utilisation of Financial Advisory Services in Malaysia, reveal that Malaysians generally have a worrying low financial capability, do not know how to manage their money, and do not plan ahead. This does not bode well for their financial sustainability and makes them prone to falling into the bankruptcy trap, and become prey to loan sharks and get-rich-quick scams.

We recommend that one should have a complete financial plan for oneself, and if you don’t have a plan, to seek assistance from a licensed financial planner to develop a plan.

A licensed financial planner can help one to establish a personal financial plan, give measurable goals to work toward, track progress, reduce doubt about decision and make better financial decisions. This will help one to manage cash flow and manage debt efficiently.

Planning can be tailored to suit every personality type and meet different needs at different times of one’s life stages. A licensed financial planner can provide the necessary advice on changes and adjustments to support one’s lifestyle, resulting in peace of mind and general well-being.

SI: What should a person look for in a financial planner?

VK: It is most important that we seek the services of a licensed financial planner. A financial planner with the Registered Financial Planner (RFP) or Shariah RFP designation is licensed with Bank Negara Malaysia and the SC, and holds the Financial Adviser’s Representative (FAR) and Capital Markets Services Licence (CMSL) respectively. We can also check against the list of licence holders provided by Bank Negara and SC.

As for the other qualities, the following should be considered: trustworthiness, ability to provide evidence of a good track record of success, ability to provide independent advice, compatibility with the client, the ability to provide up-to-date information and the ability to refer to other specialists if required.

In short, one should look for professionalism in a financial planner. MFPC provides an evolving set of Best Practice Standards and Code of Ethics for adherence by our RFP and Shariah RFP designees. This is to ensure professionalism in financial planning services providers, prevent exploitation of clients, and to preserve the integrity of the profession.

This is also to ensure Malaysians will benefit from the highest quality of financial planning services. It demonstrates clearly the importance we place on ethical behaviour in the profession. At the same time, this will help in raising awareness of financial literacy in Malaysia.

22/09/2022