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  • Secrets To A Long Life

    Secrets To A Long Life

    The search for “the fountain of youth” has had a long history, from tracking down sacred, life-giving water sources in the days of antiquity, to the invention of “miracle pills” and stem cell research in the modern age.

    You are born with approximately 20,000 blood stem cells, which your body uses to replenish your blood. Over time, and depending on the “abuse” you put your body through, these cells become damaged and die. As your blood stem cells dwindle, your body becomes less efficient at repairing and regenerating itself.

    In essence, your blood stem cells may be the proverbial “clock” that eventually runs out, no matter how well you take care of yourself. In the meantime, however, you have a great deal of control over how quickly those cells perish.

    Is your personality geared for longevity?

    Personality for Long Life

    life, the longevity project

    According to results from The Longevity Project, a Stanford study spanning 80 years, your level of conscientiousness may have a great deal to do with how long you end up living. Having a personality that strives to do things well; being thorough and vigilant − this is a trait that most of the people who live the longest share.

    Sense of Purpose

    The Longevity Project also dismisses the idea that hard work will kill you early. On the contrary, those who stayed productive and worked hard all their lives tended to be happier, healthier, and more social compared to those who didn’t work as hard. That’s not to dismiss work stress as a factor that needs to be addressed and kept in check.

    Social Connection

    life socially happy

    But being productive can also lend a sense of purpose, which is very important for longevity. And working—especially in your later years—tends to keep you socially connected, which has repeatedly been shown to be an important factor for longevity.

    You Are What You Eat

    No discussion about longevity would be complete without addressing diet. A processed, high-sugar diet is undoubtedly the quickest route to an early death, barring a lethal accident. This is because consuming sugar and grains increases your insulin and leptin levels, which is the equivalent of slamming your foot on your ageing accelerator. Besides that, research by Professor Cynthia Kenyon shows that carbohydrates have a direct and detrimental effect on two key genes that govern longevity and youthfulness.

    Ideally, you’ll want to replace all forms of processed and refined sugars and grains with healthy fats such as butter, olive oil, coconut oil, avocado, grass-fed meats, and raw nuts. Many would benefit from getting as much as 50-85 percent of their daily calories from fats.

    Mindfulness and Perpetual Motion

    active life

    There’s compelling evidence suggesting that having a calm mind and active body are two important ingredients for longevity. The meditative technique known as “mindfulness” has even been shown to have a beneficial effect on genetic expression. Meditation has also been found to affect the enzyme telomerase, which some researchers believe is actively involved with the process of ageing. As for keeping your body active, avoiding sitting is perhaps of even greater importance than having a regular workout regimen.

    The science is very clear on this point: sitting too much is a surefire way to take years off your life! And that applies even if you exercise vigorously a few times a week. Basically, what the research is telling us is that getting too hung up on a once-a-day exercise routine is to put the cart before the horse. First, you need to make sure you’re engaging in more or less perpetual non-exercise movement, as this is an independent risk factor for chronic diseases like diabetes and heart disease.

    Life Long Learning

    Education is also strongly correlated with a longer life. If you think you know it all just because you went to high school or college, you might as well pack it up. It’s all downhill from there. My perspective is to be a lifelong student. If I lived for several hundred years, I don’t think there is enough time to learn all the topics I would like to. That said, merely getting an education can have a great impact, and perhaps it’s because it teaches you to be a student.

    Lifestyle Choices Today Impact Tomorrows

    good lifestyle choices impact your tomorrow.

    The takeaway message here is that you have a great deal of control over your life expectancy, based on the personal choices you make − from how you think to how you move, and what you choose to eat − and when.

    In the end, there is no quick fix when it comes to longevity. There is no magic pill and no fountain of youth. Although some people seem to be blessed with longevity in spite of their lifestyle choices, this is the exception and not the rule. For most of us, becoming healthy Centenarians will require effort and attention to the factors discussed above.

    This article was brought to you by Dr Mercola, a New York Times bestselling author. For more helpful articles, please visit Mercola.com

  • What Will Happen if You Don’t Pay Your Maintenance Bills?

    What Will Happen if You Don’t Pay Your Maintenance Bills?

    With prices of landed properties being way beyond what an average home buyer can afford in city areas like Kuala Lumpur and Penang, living in apartments or strata homes will be the norm for the future generation of urban homeowners.

    ‘Pay thy maintenance bills’. This is mentioned in one of the ‘sacred text’ better known as “Strata Management Act”, where it decrees that all strata home owners have to pay their maintenance fee.

    So, what’s a maintenance fee, you ask? It is the fee that would be collected from the owners within the strata development to be used for repair, maintenances, security and upkeep work of the common property.

    Consider this scenario: You have not paid your maintenance fees for the past six months and the management has been calling you day and night but they have not taken any action against you. You would think that you are invincible since all they can do is to annoy you with phone calls or email reminders. 

    You thought that the Joint Management Body (JMB) or Management Corporation (MC) (collectively known as the Management) is toothless and unable to do anything to you or your property.

    Think again! Let me shed some lights on what can happen to you if you continue to ignore the payment of your maintenance bills.

    1. Block Your Access to Shared Facilities

    The Management is legally able to restrict your rights to using the shared facilities such as gyms, swimming pools and clubhouses. Not only that, they are also allowed to evict you from said facilities if you’re ever caught using them.

    But for some, this may not be a problem as you don’t use these facilities anyway. So what else can they do to you?

    2. Send You Legal Letter of Demand

    maintenance bills

    There is no minimum amount of outstanding fees needed to send a lawyer’s letter of demand. As long as the legal notice remains unpaid after 14 days, the Management can proceed to bring the matter to court which may cost you even more money or may even land you in jail.

    3. Disable Your Access Pass Card

    While they may not be able to chase you out of your dwelling in the interim of any court order, they do however have the right to disable your access pass. This may compel you to enter the compound as a visitor and the inconvenience of registering as a visitor each time you come home.

    4. Blacklist Your Name on the CCRIS and CTOS

    maintenance blacklist

    Although you can bear some of the inconveniences, it may hurt you financially when your name appeared as a defaulter in your CCRIS and CTOS credit reports.

    Both CCRIS and CTOS show your credit payment ability and all of your financial commitments, which are used by financial institutions to determine your credit worthiness. This would affect your opportunity of getting better financial deals in terms of the quantum and interest rates when applying for a loan or a credit card.

    5. Having Guards Following You to Your Doorstep

    Still not convinced? If you still have not paid for your maintenance fee, the Management has the right to have a security guard follow you around, that is, to your doorstep when you arrive and to your designated car park when you leave the place. This is to prevent you from using any of the shared facilities when you are in the compound.

    6. Auction Your Personal Belongings

    maintenance furniture

    I bet you weren’t expecting this. You haven’t paid your maintenance fee in the past 10 months, and they cannot force you out of your house, and despite making matters difficult for you, you were able to live with the hassle.

    Now what if I tell you that by law, they are able to get a warrant to go into your house to take your personal belongings such as your laptop, computer, furniture and even clothes to be auctioned off to pay off your maintenance debt!

    In a bid to get defaulters to pay their maintenance fees, the Management can get a warrant to raid and seize the moveable items from their properties with the help from the Commissioner of Building (COB) and the government.

    The message is clear – pay your maintenance bills. While some JMB/MC may be quite forgiving and take a more passive approach on delinquent tenants, there are the more aggressive ones who would not hesitate to take such actions.

    Living in a community requires each one to play their role to ensure that the whole community benefits. Remember, maintenance fee will always be part of the deal when buying into a stratified development to take care of the development’s common property and services.

    Delays in paying your maintenance bills in timely manner will cost you more with interest charges and late payment fee. Therefore, as part of your financial plan, take into consideration this monthly obligation once you have committed to purchasing a strata title home.

    About the Author

    Chan Ai Cheng is the General Manager of S.K Brothers Realty (M) Sdn. Bhd.

     

     

     

     

     

     

  • 3 Important Steps For Your Mortgage Application

    3 Important Steps For Your Mortgage Application

    Food for thought: If one day your friend wants to borrow RM1mil to replace mortgage from you to purchase a house and promises to pay you back via monthly instalments for the next 35 years, how would you react? Personally, my top priority would be to take stringent steps to ensure that I would be able to get my money back.

    This applies to the banks too when one applies for a loan especially your mortgage. Here’s a quick summary of the process in three simple, sure-fire steps:

    Step 1: Your Profile Matters

    mortgage

    Ever wonder why the application forms have so many fields to fill, none of which are related to the property you want financing for? This is because each and every field in the forms give a score towards your eligibility. This scoring is called an “application score”.

    The place you live, your marriage status, your occupation and so on will give you points. The higher the points, the better your score and the higher your chance of getting your loan approved. So, remember: do not ask someone to fill your forms for you or leave them blank because this will affect your score.

    Step 2: Get your Income Recognized for Credit Rating

    mortgage bank

    How much you earn matters to the bank. You need to make sure all your income can be recognised by the bank with proper documentation. On top of that, how much you earn and your income sources are important too.

    Some banks will only recognise a certain percentage of your income especially when that income source is not fixed like commissions and incentives. For example, some banks will recognise only 80% of a commission and some banks will recognise only 50%. You will need to ask the banker how much will be recognised because each and every bank will have a different method of recognising income.

    This income will be used to compute your debt service ratio (DSR). This is to check whether or not you can afford the loan. DSR is your existing commitment plus new commitment over your net income after deductions from EPF, PCB, SOSCO and EIS. Most banks will reject your loan if your DSR percentage is more than 70% of your net income and every bank will have a different cut-off for DSR. Do ask the banks what their cut-off rates are to ensure they approve your loan.

    Read : Housing Loan In Malaysia: What Is Debt Service Ratio (DSR) And How To Calculate DSR?

    We need to be disciplined in keeping good records with the banks. When you borrow, you need to pay your loans on time. Bad records will be recorded in CCRIS and CTOS which banks will review.  Once it has been deemed that you have a bad record, your application will be rejected.

    Step 3: The Right One Will Get the Job Done

    Bankers, lawyers, agents and sales representative are all key players in your property purchase journey. It is advisable that you engage the person who is committed and can guide you. A simple rule is that if they can explain to you all the terms and conditions about your property purchase agreements, then he is experienced and can help you make better decisions.

    That being said, it is very important for you to equip yourself with the right knowledge by asking all the crucial questions about the loan.

    About the Author

    Gary Chua is the Chief Executive Officer of Smart Financing Co.

  • No Such Thing As A Standard Contract

    No Such Thing As A Standard Contract

    As a lawyer who has had the opportunity to represent and defend different types of clientele; from medium to large scale businesses, corporations and high net worth individuals, I am occasionally confronted with the odd client who would retort, “This is a pretty standard contract, right? So why do we need to review it? Just sign!” or “Why do we need to take so long to look into this joint venture agreement? Isn’t this pretty much a standard contract?” or worst still “Can you give me a discount since it’s a standard contract!”

    In my 15 years of legal experience, I have never come across two contracts that are exactly the same. I have never given any of my clients “standard” contracts because no such thing exists in my books.

    Contracts should be crafted according to the particular and specific requirements, needs and requests of the parties involved.

    It is always good to remember that contracts once entered into and signed are binding on the signatories. You can’t plead ignorance nor can you say that you did not understand the terms of the contract or that you did not foresee the consequences of breach or non-compliance.

    Unless of course you were coerced, forced or unduly influenced into signing the said contract. However, do take note that the threshold of proof for coercion and undue influence is one that is high and onerous.

    contract

    Oftentimes clients, in a bid to save on legal cost, use “standard” contract templates that they obtain from the Internet. You are forewarned here that doing so and not reviewing the specific terms can lead to devastating legal repercussions.

    Let me give you some examples of matters that are not covered in these template contracts that you find on the Internet.

    “Jurisdiction” Clauses

    The laws applicable in any other country will not be applicable here in Malaysia. This clause is extremely important if you are contracting with a foreign party.

    For example, if you are entering into a contract with a party from Singapore but the subject matter of the contract, for example the sale of a factory in Malaysia and the governing laws are Singapore, you will be faced with difficulty in the event litigation arises.

    If you have an incompatible or inconsistent clause in your agreement, it will make the litigation process rather cumbersome and costly for you. The issue of jurisdiction will have to be dealt with before the substantive issues of fact and law can be addressed.

    This is an unduly protracted and costly affair.

    The Appropriate “Governing Laws”

    contract law

    Oftentimes when you use a standard contract, no one looks at the ‘Governing Laws’ clause.

    There is a huge difference between the arbitration process and laws as compared to the Court process. Arbitration is an excellent alternative to litigation but if the value of your contract is small and the subject matter of the dispute is straightforward, then the cost of the arbitration process may exceed the value of your claim in itself. 

    Do not attempt to deal with governing laws and jurisdiction in the same wording. The two concepts are different and the contract should address them separately.

    Conflicting Clauses

    contract

    Let’s assume two people enter into a contract which contains Clause (1) and Clause (2). Further let’s suppose that the two clauses do not contradict one another yet come into conflict with each other. For example:

    This contract shall only be terminated upon mutual agreement by both parties

    Clause (1)

    This contract may be terminated at any time upon written notice to the other party

    Clause (2)

    Clearly both these clauses can be in conflict with one another. Conflicting clauses are one of the most commonly litigated contractual disputes in Malaysia. 

    Once there are conflicting clauses, the Courts will then have to resolve the conflict by interpreting and “making sense” of the contract by reading all of the contractual documents in context and also consider parties’ commercial intentions by way of oral evidence in Court.

    It is worthy to remember that not all standard contracts are advantageous. A standard contract may not capture the specific needs and circumstances of your business, and therefore not protect you from risks. On the contrary a badly drafted standard contract that you glean off the internet can cause more damage than benefit to you.

    Always remember that there is no such thing as a standard contract. You are entitled to negotiate the terms of a contract you wish to enter into based on your own circumstances and facts. Investing in good legal and professional advice will reduce risk and save you a lot of legal cost in the long run.

    Lawyer’s fees may seem expensive when you voluntarily decide to hire them initially but it is wise to remember that lawyers become more expensive when you have no choice but to hire them just because you decided not to in the first place.

    This article was written by Sharmila Ravindran

  • Should I Take Out My EPF To Settle My Housing Loan?

    Should I Take Out My EPF To Settle My Housing Loan?

    I saw a news today regarding housing loan, and there are many netizens comment that they took their Employees Provident Fund (EPF) money to settle their housing loan earlier.

    Is it a wise decision to take out EPF money to settle housing loan earlier?

    Here is an example:

    Housing loan amount: RM199,000
    Interest rate: 3.15%p.a.
    Loan tenure: 25 years
    Outstanding balance at the end of 15th year: RM98,635.60

    Based on the information above, if I would like to do early settlement, I have to take out RM98,635.60 from EPF to settle off my housing loan at the end of 15th year (180th month).

    According to the calculation shown below, I can save a total of RM16,477.72 interest for early settlement.

    However, I could have made a potential of RM62,031.40 dividend if I leave the RM98,635.60 at EPF with expected 5% annual return (expected return based on past performance) for 10 years.

    I might be earning additional RM45,553.68 (RM62,031.40 – RM16,477.72) dividend if I do not take out my EPF to settle off my housing loan earlier.

    Hope that this simple calculation can solve the doubt of everyone who is planning to take out the EPF to do early settlement.

    Yet, I received some queries regarding the high housing loan interest rate of about 4%-5% in 20 to 35 years back, is it worth to take out the EPF to settle their housing loan when the rate increases back to 5%?

    Based on EPF historical performance, the time where the housing loan interest rate is at about 5%, the EPF dividend is about 7%-8%. Despite the historical performance does not guarantee future performance, but it can always serve as a guide for us before making our financial decision.

    About the Author

    Angel Chan is a Licensed Financial Planner attached to UOB Kay Hian Wealth Advisors Sdn Bhd. Besides providing comprehensive financial advisory to her clients, she is also committed to educate the public about the correct financial management mindset and methodology through article, YouTube video and Financial Management Workshop conducted by her and the team. Do reach out to her for more information.

    FB page: https://www.facebook.com/angelchan.financialplanner

    FB page: https://www.facebook.com/profinance.my

    YouTube channel: https://www.youtube.com/channel/UCf5f7O3vuOhnwy_wflDuuKA

    Smart Finance: https://smartfinance.my/planners/chan-aun-kei-rfp

    To book a free 1-hour consultation with Angel Chan: https://forms.gle/8Ur46Dox9T6g3yKS8

  • Is It Possible To Earn A Living With Play-to-Earn Games?

    Is It Possible To Earn A Living With Play-to-Earn Games?

    Most of us like to play games in our spare time. But did you know that there are also those who earn a living just by playing games? With the rise of digital games, we now have Play-to-Earn games that rewards its users well enough for those who stay invested in it.

    Smart Investor spoke to Mr. Lucaz Lee, Founder and CEO, Affyn to gain more insights on this interesting new concept. Affyn is a newly launched play-to-earn metaverse, that aims to bring people and communities together and allow them to play a mobile geolocation-based game (similar to that of Pokemon Go), and earn Fyn tokens to be used for transactions at the same time.

    Let’s find out more from him on this interesting topic.

    How Did You Started With Crypto Investment?

    I first heard of Bitcoin in 2016, which was worth around USD400. Many people in my immediate circle warned me not to get involved, claiming that it was a sham with no foundation. In my experience, I have learnt to recognise that the best kind of opportunities are those that most people do not understand, are uncertain about and are sceptical of; yet, it is obviously working and growing at a progressive rate. 

    Unlike today, buying cryptocurrency was a highly complex process back then. My friend and I would spend the whole day figuring out how to buy it. Even though it was complicated and we didn’t understand it, we decided to go for it anyway. Nonetheless, we took the leap of faith first and learned about it later.

    How Does Play-to-Earn Works?

    The gaming industry has thrived for years, with gaming companies reaping the benefits. While a large amount of money has been flowing into the industry, the players have largely been left out. I believe that the concept of Play-to-Earn will be able to rebalance things so that players can earn while playing games. 

    Play-to-Earn is a concept where players can earn financial rewards such as cryptocurrencies or NFTs, which can be traded or sold to other players in their games. Most Play-to-Earn games are still largely unsustainable because this is a relatively new concept that many Web 3.0 companies are still figuring out. However, I believe that Play-to-Earn games will eventually transform the gaming industry.

    What Do We Need To Get Started?

    Typically, an initial capital layout is required in most Play-to-Earn games. To get started, players must learn how to buy crypto and then use the token to buy the NFT. The barrier of entry is too complex for Play-to-Earn games to breakthrough into mainstream adoption.

    I think the future of Play-to-Earn is Free-to-Play games where players can download an app, sign up for an account as easily as signing up for a Tik Tok account, play for free, and earn without realising that the whole app is powered by blockchain or crypto.

    Can A Player Really Make Money And Turn It Into A Full-Time Job?

    Just like in any other industry, what you put into it is what you get out of it. You get part-time results if you put in the part-time effort. There are definitely opportunities for players to make gaming a full-time income, depending on how much effort and time they are willing to put into it.

    With The Recent Crash Of The Crypto Market, Is Play-to-Earn Affected?

    As someone who has been through the bull market of 2017 and the crash and bear market of 2018, I can say that no cryptocurrency is immune to a crash. The Play-to-Earn ecosystem will undoubtedly be impacted. When there is a crash or a bear market, it usually means that speculative money is leaving the ecosystem. Products with utility will thrive because, while speculative money is leaving, money will flow into games with utility and demand. 

    Play-to-Earn games have the potential to thrive in bear markets because people are looking for financial vehicles to generate income when the economy is bad. Despite the fact that it has yet to be proven, I believe Play-to-Earn games can thrive during bear markets.

    What Are Your Plans For The Future?

    We intend to become the largest and most successful platform that creates fascinating experiences for our users through gaming and lifestyle, where they can earn virtual rewards and spend them in the real world within our lifestyle ecosystem. It’s also free to play.

  • Why Digital Transformation Is Important For Companies?

    Why Digital Transformation Is Important For Companies?

    The impact of the pandemic on organisations has been uneven, both in Malaysia and elsewhere. While some adapted well and thrived, others were less fortunate, often at no fault of their own, and had to restructure or shut down their business.

    Regarding the trend of digitisation, it is not new given the well known benefits of cost savings and increased customer engagement. However due to lockdowns and business disruptions, this trend became less of an option and more a matter of survival.

    We recently got in touch with Inter-City MPC (M) Sdn. Bhd, a homegrown company with over 30 years of experience that focuses on clients’ digital transformation. This includes data document processing, record management services, and many more that can help us embrace the changes caused by the pandemic.

    How Has The Pandemic Affected Organisations All Over Malaysia?

    “As a service provider of physical and digital end consumers statements, Intercity recognized the opportunity and expanded into digital transformation – that being we work with clients to solve the challenging task of transitioning statements and end consumers from print to digital, including data transition, process improvement across all modes (paper or digital), and omnichannel sending (mail or emails)”, said Nick Liew, Chief Executive Officer of Intercity.

    What It Requires To Go Digital?

    As a business owner, you will need help to go digital because the transition itself is challenging. There are three things that you need to look at:

    Data transition: Going from print to digital requires high-quality data. You need to run a series of campaigns to collect end consumers’ data on behalf of clients, from web links to on-ground surveys.

    Record transition: From physical records to digital records. You can do this by scanning, digital archiving and secure destruction of physical records for data privacy.

    Process transition: From physical forms to online registration. You will need to run processes such as data entry and call centers to further support end consumers who are not fully digital.

    Are The Organisations Now More Open To Go Digital?

    This image has an empty alt attribute; its file name is Brandon-Smith-Option-2-200x300.jpeg

    According to Brandon Smith, Chief Commercial Officer of Intercity, “Organisations continue to identify specific business processes or operating segments that can shift towards adopting digital methods, especially where there is potential for revenue gains, cost savings, or efficiency improvements.”

    Intercity understands these business objectives and tailors our offerings to ensure our digitisation offerings are impactful and deliver real value.

    How Does Organizations Transform Themselves?

    For example with Majlis Bandaraya Shah Alam, they managed to increase the collection rates of quit rent (cukai pintu) by 30% in 2021. The increased revenue to the local council was crucial to support ongoing frontline services like waste collection and local infrastructure maintenance, especially at a time when many were working from home.

    In the case of Majlis Perbandaran Klang, they are able to optimise their mailing of local resident statements and bills, resulting in a 25% cost reduction in 2021, in preparation for further digitisation efforts. These cost savings were then quickly allocated to other crucial services during the pandemic.

    “Besides cost savings, digitisation supports the broader goals of environmental sustainability. Given our clients’ focus on impactful ESG actions, from 2020 to 2021 Intercity worked with their clients to save approximately 140,000kg of paper which is the equivalent of saving 3,400 trees,” said Nick Liew.

    With The Rise Of Inflation And Interest Rates, How Does Intercity Help Its Clients To Weather The Storm?

    As organisations review their operations to adjust to rising costs from inflation and interest rate changes, there is a trend to focus on their core businesses while delegating non-core processes to specialist external service providers to save costs.

    In an inflationary environment, Intercity is not immune to supply chain disruptions and rising raw material costs. However as a specialist service provider, Intercity has sufficient scale and ability to manage input costs thus ensuring minimal cost increases for our clients.

    To take it one step further and exploit cost savings from digitisation, clients work with Intercity to transform their end consumers’ communication from physical to digital.

    Brandon Smith says, “To do this, Intercity runs a digital BPO service on behalf of clients to ensure full communication via print and/or digital channels. The BPO service includes multi-stage data collection, a step-by-step physical-to-digital shift by customer segments, and hands-on technical development & support.”

  • 4 Mistakes People Make In Stock Investing

    4 Mistakes People Make In Stock Investing

    As a dividend investor who derives dividend income regularly from a portfolio of dividend paying stocks, I believe all of us can move towards financial freedom investing in the same. However, many fail to build additional income or grow wealth sustainably over the long-term despite having a sincere desire to move ahead financially.

    So, where do we fall short?

    In this article, I will list four major mistakes that most people make when attempting to make money from the stock market.

    1. Investing without a Plan

    First, investing starts with one having an investment plan.

    Basically, it has four key elements:

    1. Your Current Financial Status
    2. Your Future Financial Goals
    3. Duration
    4. Choices of Investment Vehicles and Strategies

    An investment plan is likened to one planning a trip. It starts with where you are now, where you want to be, when you intend to reach your destination, and how you intend to get there safely. The subject of investing is confusing but usually this is due to one trying to invest without having a plan beforehand. It is like driving around in circles when investing their money.

    This leads to:

    2. Investing Becomes a Game of Chance

    Today, we have 900+ stocks listed on Bursa Malaysia. Which stocks should you invest in?

    Logically, the answer depends on your investment plan as it helps you select stocks that would propel you towards financial success. However, many do not bother to sit down and have their plans crafted as the process seems boring. Thus, how would most people pick their stocks?

    1. Feel, Guts, and Emotions?
    2. Colleagues, Friends, or Relatives?
    3. Stock Tips, Rumours, and Commentaries?

    As such, many treat stocks like lottery tickets. They may buy stocks out of hope after having heard of some “exciting news” about them. Many expect the prices of these stocks would go up forever. It is a fallacy as they would soon met with disappointment when their stocks fall in prices. This leads us to:

    3. Buy High, Sell Low

    investing stock market

    Ideally, success in investing revolves around four words: “Buy Low, Sell High”.

    However, it is easier said than done. As mentioned, many buy stocks after gaining knowledge of exciting news about them. What is this news usually about? In most cases, they are about stocks that have experienced the highest appreciation in a short span of time. Instead of “Buying Low”, many resort to “Buying High” as they want to join the bandwagon.

    Usually, a savvy investor would stay away from such stocks or would have sold their shares at high prices (“Sell High”).

    This is a reality of the stock market. Stock prices go up and come down. It is the norm and hence, a savvy investor would have prepared for what to do if his or her investment fell in price. But since most people do not have a plan, they panic when prices drop and “Sell Low” out of fear even though they “Bought High”.  

    At these times, an investor with know-how would enter the market to accumulate more of these stocks as their prices would be trading at a discount (“Buy Low’).

    This brings us to the next question: What gives these investors the guts and confidence to invest in stocks when their stock prices drop?

    4. Not Treating Stocks as Businesses

    Investing is more intelligent when it is businesslike.

    Warren Buffett, the living legend and an example of how one who can amass billions by investing, advised not to speculate the markets.

    So, what is the meaning of being “businesslike”? It is one who views stocks as businesses which own assets and generate profits and cash flows from their customers. Thus, an investor would first study, in great length, a stock’s business models, financials, and its future plans for growth. If the stock is fundamentally solid, he proceeds by assessing its stock price and would only commit his capital into it if its prices are relatively cheap. This explains why savvy investors, like Warren Buffett, can be confident on their stock purchases in a bad market.

    Regrettably, many do not view shares as certificates of ownership of a business and thus, buy stocks with little knowledge on what businesses they are into and how much money they are making. It is a mistake and the biggest downfall is one who bought into stocks where their businesses are unprofitable.

    Think about it. Are they able to grow shareholders’ wealth sustainably over the long term? In short, it does not take a genius or a crystal ball to build a stable and a regular source of income from stock investing. It takes a plan, logic, willingness to learn and a business mindset to profit consistently from the stock market.

    This article was written by Ian Tai. Ian can be reach via email iantai888@gmail.com.

  • Insurance: Planning for the Future

    Insurance: Planning for the Future

    Insurance planning is the foundation of a good financial plan, ensuring that you have a backup plan to provide enough family income and to fund medical expenses in the event of unforeseen circumstances such as premature death, total permanent disability, critical illness, accidents and hospitalisation, in terms of personal risk.

    You should also extend your insurance planning to cover properties risk, liability risk and professional liability risk based on your circumstances and needs.

    In the financial planning process, you must first determine your current financial position and make sure you have emergency funds for six to 12 months before you proceed to insurance planning.

    With proper assessment of your current financial position, which includes your cash flow and net worth statements, you can determine your insurance needs more clearly in terms of family expenses and outstanding debts obligations.

    insurance

    As a financial planner, I would normally advise my clients to have adequate emergency funds and insurance coverage before they consider venturing into investment. As far as investment is concerned, all investment assets need time to mature to meet your financial goals without any disruption from personal risks, property risks, liability risks or professional liability risks arising from unforeseen circumstances.

    Insurance serves as the cheapest and most effective tool to cover potential financial losses without touching your investment assets.

    When engaging in insurance planning, seek advice from your trusted professional financial advisor to assist you while working out which insurance plan will best fit the requirements of you and your family, according to the following guidelines:

    • What kind of insurance do you need?
    • What will your insurance policy cover?
    • How much insurance coverage do you need?
    • How much will you be paying for the insurance coverage?
    • What happens if you fail to pay the required premiums?
    • Should you replace an existing insurance policy?
    • What happens if you terminate your policy?
    insurance

    Your active participation is required when working with your financial advisor to work out an insurance plan that best suits your needs. Be honest about your financial situation. Communicate your goals and objectives. Do not be afraid to ask questions! 

    In the attached charts, I have provided some guidelines as to the types of insurance coverage to consider. You may then determine the quantum of coverage to ensure you and your loved ones are protected. Take time to make your decision. Regard your financial advisor as a trusted partner, and not merely a salesperson.

    What Type of Insurance Do You Need?

    If you are worried about… You may want to consider this type of insurance…How it helps…
    Life insurance
    Death of breadwinnerLifeProvides some money for your family if you die.
    Total & permanent disabilityLifeProvides some money for your family if you suffer from a total or permanent disability.
    Death of mortgagor/main borrower of home loanMortgage term reducing insurance (form of life insurance)Pays off mortgage if mortgagor dies.
    Health insurance
    Trauma/critical illnessCritical illnessPays a portion or lump sum on first diagnosis of serious illness.
    Medical bills for major illness or accidentMedical expense,
    other hospital and medical plans & riders    		The main medical expense insurance plan pays a portion of hospital and surgical costs if you are ill or suffering from injuries due to an accident. Complementary plans such as riders cover co-payment portions (eg deductibles and co-insurance) that are not covered under a main plan.
    Long-term care for disabilityLong-term care, eg supplementsPays a fixed monthly amount for long-term treatment upon the insured’s inability to perform a number of “activities of daily living” like bathing, dressing, etc.
    Loss of income because due to hospitalisationHospitalisation cash plansProvides income if you are hospitalised.
    General insurance
    Loss of or damage to your belongingsHome contentsPays for repairs or replacement if you suffer loss or damage to your home or contents.  If you are renting your home, it’s your responsibility to cover loss of or damage to the contents of your home.
    Damage to car/theftCarPays for repairs or replacement if your car is stolen or damaged.
    Damage to your homeFire/homePays for repairs or replacement if you suffer loss or damage to your home as a result of perils such as fire, flood, and burglary.
    Loss of luggage/trip delays/cost of medical care while travellingTravelPays for repairs or replacement if you suffer loss or damage to your belongings. Also pays for financial loss if there are delays or cancellations. Pays for costs related to personal accidents while overseas, including medical and repatriation expenses.

    About the Author

    Tan Kim Book, CFP, IFP is a Licensed Financial Planner with Phillip Wealth Planners Sdn Bhd and certified member of Financial Planning Association Malaysia (FPAM). 

  • 7 Rights As A Financial Planning Client That You Should Know

    7 Rights As A Financial Planning Client That You Should Know

    Working with a financial planner can be an extremely rewarding and valuable experience for you and your family. If you’ve decided to work with a financial planner, it’s important to understand your rights in the professional relationship. By knowing your rights and what to expect from a financial planner, you can take an active role in shaping your financial future.

    1. You have the right to a planner who has integrity

    financial

    Trust between you and your financial planner is central to a successful financial planning relationship. You rely on your planner’s honesty, professionalism and abilities to achieve your financial and life goals.

    When you know that your financial planner takes his or her professional obligations seriously, placing principles over personal gain, you can develop the type of partnership that is crucial to the success of any professional relationship.

    2. You have the right to objective advice

    Your needs should be at the heart of all recommendations made by your financial planner. Your financial planner should use his or her experience and judgment to carefully consider your situation, and provide you with advice that best meets your goals.

    Sometimes, this objectivity may require your financial planner to explain that your goals are unrealistic given your current resources and financial commitments. He or she may then suggest alternative goals or priorities.

    3. You have the right to be treated fairly

    Your financial planner should treat you the same way he or she would like to be treated in a professional relationship. This involves clearly stating what services will be provided and at what price. Your financial planner should also explain the risks associated with his or her financial recommendations and any potential conflicts of interest.

    For example, does her or she gain personally or financially from your purchase of a particular product, or from the outcome of a suggested strategy?

    4. You have the right to a planner who is professional

    Your financial planner should not provide investment advice or stock brokerage or insurance services unless he or she is properly qualified and licensed to do so. If your situation requires expertise that your financial planner does not have, he or she
    should suggest other professionals who may assist you.

    5. You have the right to a planner who is competent

    You have the right to expect your financial planner to demonstrate an appropriate level of knowledge to offer financial planning advice, such as the attainment of CERTIFIED FINANCIAL PLANNER certification, the standard of excellence in financial planning.
    Your financial planner should complete continuing education courses as part of his or her ongoing commitment to competency.

    6. You have the right to privacy

    To get the best results from your financial planning relationship, you need to divulge relevant personal and financial information to your financial planner on a regular basis. Your financial planner should keep this information in confidence, only sharing it with others to conduct business on your behalf, at your consent, or when required to do so by court order.

    7. You have the right to a planner who is diligent

    Your financial planner should discuss your goals and objectives with you and explain what you can expect from the relationship before engaging you as a client. Once the financial planner has determined that he or she (or his or her staff and/or network of related professionals) can assist you and has gathered sufficient information, the financial planner should make – and, if appropriate, implement – recommendations that are suitable for you.

    A diligent financial planner reasonably investigates the products or services he or she recommends. A diligent financial planner also closely supervises any staff working with you.

    This article is courtesy of Financial Planning Standards Board Ltd (FPSB).