Friday, December 19, 2008
Am sure many EPF contributors have had made their decisions regard to whether to heed the Gov's call to reduce their statutory retirement savings fund (EPF) contribution from 11% to 8% effective January 2009. The call was made with the aim to increase the circulation of cash in the economy to mitigate recession. The suggestion no doubt may increase the people's purchasing power as they have the extra cash in their hands to spend but at whose expense later? Would the Gov that has encouraged its citizen to reduce their retirement fund now (which every one knows is insufficient due to the effect of inflation) bail the same group of people out later from poverty when they are unable to support themselves due to old age/health/lack of savings? Am sure those who decide to reduce their contribution are those who belong to the lower income group as their current take home pay may not be enough to support the ever increasing cost of living but is this wise?
Of course it does not mean that we should not support the Gov's effort to "save" the country from recession, but am sure there are better alternatives than to look for a quick short term solution which may lead to greater problem for its citizens in the future. The Gov needs to put on their thinking cap and work hard on solving this economic crisis otherwise what's the use of electing them and remunerating them with the tax payor's money?
Furthermore, there are numerous articles written regards to the same issue and there was one
(1) The writer did not mention at all about the inflation factor in his article which all of us know is higher than EPF's average return thus is insufficient if we are to rely soley on EPF's conservative investment approach with a return of about 5%. If EPF which is meant for our retirement (say 20-40 years later) does not address the inflation factor but prefers a "safe approach" it ultimately means that we are allowing our EPF value to shrink caused by high inflation rate!
(2) the amount allowable to be withdrawn from EPF to invest is very little. Therefore the risks that EPF contributors are subject to is low as the negligible amount is used to invest in different portfolios which no doubt has more risk than EPF's but pottentially has higher return (high risk, high return or no risk, no gain)
(3) in Unit Trust investment, customer is able to switch their funds from one to another fund depending on their investment objective, strategy and risk profile. They are being assisted by a trained UT Consultant to achieve this.
(4) being a responsible person, investing using EPF is a necessity (not an option) to ensure that we have sufficient in the future instead of relying on our loved ones to support us or to continue slaving till we reach our grave? When does one actually retires?
(5) investment is a necessity to protect the value of what we have been working for 30 - 40 years which if left unattended will deminish in value due to inflation (a silent killer)
(6)EPF is also a fund manager who seeks ways to earn income for its contributors and one of the method is through equities acquisition.
(7) UT investors are advised to invest for the mid (min 3 years) to long term. Therefore, investors are usually advised to wait for their investment value to improve in the event the market is not performing even after the age of 55. However, prior to their golden age, their investment portfolio may have already been changed to reduce their exposure from equity market to income type of funds eg bond/money market and some into equity which are dividen in nature.
On the other hand, if a retiring investor has opted to do some investment, he would have been advised to choose those funds that do not have much equity exposure or dividen in nature in order to safe guard his retirement fund.
As a reminder, there are basically 3 types of funds namely
(a) equity fund (60-95% in share mkt, 5 - 40% in money market, bond, treasury bills)
(b) balance fund (60% in share, 40% in money market, bond, treasury bills)
(c) bond and money market
To reiterate, as a person nears his retirement age, his equity exposure would be lowered. However, it depends on the person's risk profile and strategy - which he has to discuss with his UT Consultant or financial planner.
As all of us know, we need to diversify our investment to create/protect our wealth and UT is one of the best managed investment tool that you could have/use.
Always think long term and ponder on the effect of inflation on your retirement fund and the benefits of compounded interest.
Savings and investing is a necessity. One has to undertake it to create and protect his wealth from inflation. Instead of tapping on your savings / retirement fund to support your current lifestyle, try managing your expense better (reduce it if needed) and increase your income by increasing your own productivity or supplementing it.
Sunday, November 30, 2008
I feel it is timely to remind the general investors especially the Unit Trust investors how UT works.
Currently the equity market is very low (as a matter of fact is so...cheap as its PE is 9x compared to 7 years average of 16x! In layman term, it requires at least 9 years to recoup your profit compared to 16 years for the same amount of investment).
The low market sentiment has affected the prices of the stock market as prices of shares are determined by Supply and Demand. Should the demand of a particular share is lesser than the supply (as we are experiencing now) the price of the share drops irregardless of whether the company is fundamentally strong or otherwise as right now human emotions are running gamut instead of the practical approach of staying focused on personal objectives for the long term. Sigh....
Those who are able to analyse a particular company's account will look at the company's income PROJECTIONS, FUTURE development/marketing plan, the current management team, the POTENTIAL of the product/services or even industry,etc to determine the feasibility of investing in the company. You will note a smart investor will look for the company's potential as investment involves putting money into a company's potential/future not its histocal performance (no doubt it does have some impact). Because it requires a professional to undertake the analysis task which some viewed as tedious, most "investors" follow hearsay or whatever free advice readily available from friends, neighbours, colleagues, etc who may or may not be qualified to dispense such advice. This, somehow, further aggravates the current poor market performance or rather as the saying goes "follow the herd" mentality prevails.
As you will note, monitoring the market's performance requires much time which many working professionals do not have due to their work commitment. Furthermore, investment requires capital and good counters are quite expensive. A majority of investors are small time investors due to their capital limitation. Those with high risk appetite used to contra their purchases or even take loan to invest! No doubt in the short term they may benefit but in the long run with wrong timing, some investors may get hurt, badly as occured in 1997/8.
Those who are able to invest directly into the equity market must be able to withstand the low periods which may take a while to correct. In other words, the investor's holding power must be strong enough to weather the storm. Investing in the Bursa Saham limits an investor to the local market which poses greater risks as the market may be affected by political and economic policy which directly affects the local industry, people's sentiment,foreign investors, etc. Moreover, to diversify the investment portfolio into various local industries require huge capital outlay which many people are unable to do so.
Due to the limitations from direct investment, UT is an alternative investment tool to address its weaknesses.
A UT company pools money resource from the investing public. It consists a pool of fund managers who are qualified professionals responsible for analysing and recommending the purchase of shares of companies that they believe are under valued, has income or capital appreciation potential, growth potential or even economic sector/industry that has potential to grow. Based on their recommendation, they will pick or dispose shares of companies in order to meet their fund's objectives using their investors' money. Most fund managers' decisions are collective decisions which benefits the investors.
A particular UT fund is liken to a basketful of shares. In a fund, it may consist between 50 - 80 shares from various sectors or even countries. The advantage being that the risk exposure is much lower due to the diversified nature of the fund. I have been asked numerous times whether a fund's value or NAV could be equal to "0" . What do you think? For the NAV to be "0" it would require ALL the 50 - 80 shares to be "0". Is it possible? NAV which is the Net Asset Value of the fund represents the value of the shares in the basket/fund. Its value co-relates to the average value of the shares in a fund.
Furthermore, the accounting works, shares log, distribution computation, administrative matters relating to the shares purchased/held for a particular fund are placed with a trustee company which is not a member of the UT company eg Amanah Raya, etc. A trustee company also ensures that the UT Company complies with the objective of a particular fund which is clearly stated in the fund's prospectus. A copy of the prospectus is also filed with the Securities Commission to ensure compliance.
Unit trust involves sales of shares by unit to the public. One lot of share is equal to about 700 - 1000 units. Sales in unit enable the investing public to participate in the equity market as it is cheaper compared to direct investment in the share market.
Since it is affordable, UT investors are able to do a regular savings/investment in their chosen fund/s. The advantage of doing a regular investment/savings is that they are able to lower their average investment cost thus enable them to realise their profit / break-even point faster. This is useful especially during volatile market condition. You could read this in my previous blog on Dollar Cost Average.
As UT funds are managed by the fund managers, this allows their investors from having to monitor their investments and enable them to concentrate on their own profession/work. It is similar to outsourcing your investment to the fund manager.
UT allows individuals, especially those who does not have the time nor knowledge, to participate in the equity market thru a third party. To me, it is the stepping stone for young investors who does not want to miss out on the investment opportunity whilst they are equipping themselves with its knowledge or chasing their dream profession or etc, etc. The advantage of investing for a long period of time is the benefit of compounded return. It would be good to check with your UT Consultant who would be able to advise you on this powerful benefit.
Saving using UT is very flexible as a person is able to invest or save according to his affordability and objective. It is always advisable to invest using the extra money that you have no plan to use within 3 years. Please be reminded that UT investment requires you to look at a period no lesser than 3 years. The duration depends on your objective and the amount that you are currently saving to achieve your goal. Please discuss with your UT Consultant to come out with a proper saving/investment plan.
UT caters to the various risk profiles of its investors. There are basically 3 types of funds ie equity, balance and bond/money market. Besides, a particular equity or balance fund does not mean that 100% of the investors' money are into equity as a certain percentage of it will be kept in the money market, treasury bills, bonds which generates income and provides liquidity to the fund managers or its investors. This feature also addresses the investors' concern on the possibility of the NAV being "0". Furthermore, a UT investor is able to switch from one fund to another in order to diversify/balance his portfolio, to lock in his profit, to reduce his risks in a volatile market, to cater to investor's risk appetite, investment strategy, etc.
The distributions earned from UT are paid according to the number of units held by the investors and is devoid of any service charge. Therefore, each time a distribution is declared and is being reinvested, the average cost per unit is lowered thus creating greater possibility of hitting break even point at an earlier date. This also explains the reason why as a responsible UT Consultant we usually advise our customers to top up their investment despite the market going downhill as the low price enables them to acquire greater number of units which lowers their average cost. It is a norm for the market to correct itself eventually. When? No one knows but if we are to refer to history, the market always comes back.
"Never time the market" is another piece of advice that you will usually hear from us. Well...I am glad to let you know that Warren Buffet is a firm believer of this adage too. No one knows when will the market hit rock bottom or hit sky high rate but being a long term investor, we should not be swayed by what is happening around us.
Always looks towards the future and potential of a company / country. To be successful in the investment world, hold on to your objective and act smartly. Be rational and devoid of emotions. As Warrent Buffet said, "Be Fearful When Others Are Greedy and Be Greedy When Others Are Fearful".
In summary, UT investment
(1) is managed by a pool of professionals
(2) is held in trust by a trustee company
(3) is affordable
(4) is well diversified whether in industry/sector or country or asset allocation
(5) caters to the needs of its investors according to their risk profile
(6) is flexible
(7) enable investors to enjoy Dollar Cost Average
(8) is for mid to long term investment period
(9) is suitable for young investors who may or may not have the time or knowledge to invest.
Sunday, November 23, 2008
Part of the reasons for being rich is so that we are able to give to others who are in need. Mr T Harv Eker is of the opinion that it is our responsibility to be rich so that others may benefit as being poor would make us be a burden to other people especially our loved ones. Furthermore, being rich for yourself may not be a good motivator to success but if we are to include other people in our reasons for being rich, we may find the fulfilment for living.
Have you heard of this adage, "the more you give, the more you will receive"? I guess we could not have more if our jar is already full. Therefore, by giving, we are actually creating space for the universe to fill up thus creating more for yourself. It's difficult to describe here but I hope you could understand.
Click here to read about some multimillionaires who are great philanthropers
Therefore, in our quest to manage money successfully, it is suggested to allocate at least 5% of our revenue/income to charity/to those who are in need or for a cause which you believe/support. Those who wishes to allocate more is to take the extra amount from the Necessity Jar only. However, if the revenue / income that we are earning is insufficient for us to contribute for a good cause, we could trade it with our time. Time similar to money is precious. Therefore, for those who are unable to contribute cash, sharing your time with other people who either need assistance and/companion is equally honourable. Some of the causes which I used to or currently support are Malaysian Nature Society (MNS), All Women's Action Society (AWAM) and other impromptu requests.
Besides being a good giver, we must learn to be a good receiver too. All things comes in pairs, black/white, in/out, up/down, long/short, rich/poor, hot/cold, etc. This is to ensure balance and ability to create more.
How do you feel when you give something to someone genuinely? Happy? Great? In order to reinforce the good feeling of that giver so as to empower his/her power of giving, the recipient's ability to accept the gift with warmth and gratitude without returning the same favour (on the same day) helps. One good example that I could think of is when receiving a compliment. As a recipient of a compliment, a simple thank you to the giver is suffice. It is a norm for us to return a compliment to the giver but in actual fact, that reduces the giver's joy of giving and the reciprocated compliment becomes fake! Ouch! So, if you as a receiver needs to return the same, do it some other time and create a genuine compliment not because you have to!
Take it and own what has been given and be thankful!
Thursday, November 13, 2008
The 5th jar should be an interesting account to create - the Play jar. Yup, if you have been following my blog ;) you'll note that this jar is set aside to help us satisfy our playful side/child in us or just to have fun. This is an equally important jar however, it is imperative to use it completely every month or in the event the amount saved is insufficient to serve its purpose, you may accummulate the amount up to the max of 3 months only.
Our life needs to be balanced; work and play. All work and no play makes us a dull person. Furthermore, in order to manage our money successfully, this jar has its purpose. Have you ever wondered why at times the money that we have been saving (the traditionaly way) seems to be in the deficit? At times on purchases that we later regret? Or we just bust our account in a particular month especially during our all time emotional low period?
Therefore, the play jar could be viewed as our emotional release jar which we could spend on anything that we like. This jar is also an "ALL ABOUT ME" jar. Use it only on yourself and for yourself. Pamper yourself. Go crazy and do something fun! As you practise this, observe its effect on you. Hope you'll like it!
Wednesday, October 29, 2008
Tuesday, October 21, 2008
Malaysia's inflation rate jumped to a 26-year high of 8.5 percent in August 2008, driven by the escalating cost of food and fuel. It is said the cost of food and non-alcoholic drinks rose 11.7 percent in August compared to a year ago.
The August data showed escalating prices in most categories, including transport which jumped 21.8 percent, and restaurants and hotels which rose 6.5 percent.
Malaysia's government hiked the fuel price by 41% in June 2008, in a move to rein in the ballooning cost of subsidies but it has on numerous occasions since then lowered the fuel price from a high of RM2.70 to current price of RM2.30 when the global fuel price has decreased from a high of USD147/barrel to USD69/barrel in October 2008.
The high inflation is already hurting many consumers especially those with fixed income with many Malaysians cutting down on food bills.
In managing our money, it is suggested that one's expenses should be lower than one's income to ensure that there is surplus for other uses eg savings and investment. The recommended amount that one should cap on one's expenses is 55% max.
Some of the suggested ways to ensure that our expenses do not exceed the 55% cap is by preparing a budget and identify our needs from wants. Following a budget requires discipline however, if a person stays focused on his financial goals, the whole process could be easier.
Identifying one's needs and reducing or eliminating one's wants would help tremendously as priorities are set thus reducing wastage of resources and ensure there is a surplus for other usage.
In the event that the situation does not permit one to place a cap on his expense account due to the depleting purchasing power of cash, it is recommended that one should look for another source of income to boost his take home pay.
Sunday, October 5, 2008
Let's continue with the basic wealth creation lesson...managing money (thought I had forgotten about this huh?).
The 3rd account shared by T Harv Eker is called the Long Term Saving for Spending account (LTSS). This account is created to enable us to fulfill our dreams of owning something in the short to medium term eg notebook (my 12 year old nephew's wish list), house, car, holiday, etc. The recommended amount to set aside is 10% of our net income..... to purchase whatever you desire. However those who have more than 1 item (max 2) in his/her wish list is to halve the required amount (5% x 2). The time taken to save to achieve your dream is dependent on the amount set aside, however, to expedite the process, one of the ways that you could do is to increase your income :) It is still 10% max for this account as we have other uses for the extra cash.
Managing our money is imperative to ensure that we do not spend what we do not have. Do avoid using credit facility if possible unless you are able to repay it promptly or the return for taking the loan is greater than the cost of repaying the loan itself. This is considered a good loan.
A most popular and easily available credit is credit card. Nowadays, many such companies are issuing preapproved cheques to their customers! Credit card if used wisely could be a blessing but if abused, it could be the beginning of your nightmare!
I personally like the use of credit card as it means having to carry lesser cash - for security reason. Furthermore, we are able to redeem the accummulated points against the vast array of products offered by the company free vs cash payment which has no benefits. At times, using credit card enable us to purchase a certain goods/services at special price or via instalment method with zero cost. All these are being offered at no subscription fee at all (it is time to change your credit card if you are paying the annual fee). Moreover, a copy of our monthly expenses transaction is provided by the company enabling us to record our spending and thus facilitating keeping track of our expenses. These are the benefits of using credit cards and it remains to be so as long as we clear the full amount due from us promptly. Please bear in mind that it does not mean paying the minimum amount but the full amount due on the statement. Paying only the minimum amount means you are taking a very expensive credit facility offered by the credit card company (15% - 18%pa) and it could be the beginning of your sleepless night!
Malaysians who are having problem with their credit card payment and need counselling, please refer to Agensi Kauseling dan Pengurusan Kredit (www.akpk.org.my) for assistance.
As mentioned in my previous blog, spending could be fun now but it is wiser to save and invest as much as possible for your future.
Saturday, September 27, 2008
Hope the previous column helps you to refocus on your long term gain instead of the short term pain that you are experiencing. As usual, to me, this is an opportune time and it has never been better than now for those who wish to amass wealth at low, low price. Invest on a regular basis to capture the benefit of Ringgit Cost Average (please refer to my previous blog on this subject) and be patience. You will reap its benefits in due time.
Did you noticed Warren Buffet, Li Ka Shing, Kenneth Lewis (Bank of America), Jamie Dimon(JPMorgan), back home our Tan Sri Francis Yeoh and the likes are busy right now buying up shares and expanding their empire? Would these multimillionaires/billionaires aggressively acquire companies if they are of the opinion that there is no hope for the economy or company to improve? I am sure they are unsure when the sun will shine again but being long term investors and knowing that they are buying good potential companies at very low price they continue to pick up what normal people would not. What about you?
Wednesday, September 17, 2008
The past couple of days of bad news further aggravate the already cloudy equity market. The old financial wound from the States has reopened to reveal gangrenous state of its financial woes infecting other markets. Furthermore, our current political situation rubs salt to the already bleeding local equity market making it one of the most undervalued market in the world! As people continue to speculate how bad the world's financial market will be in the next couple of months, it dawned on me that people generally prefers to dwell in the current negative news instead of looking forward and finding the glimpse of light that the situation poses them.
Going back to basic, the definition of investment (which I've obtained from Google, Investopedia) is
"An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price."
Take note of the above words in italic especially "hope" and "future". They refer to the "belief" and "time" that investor have and placed on their chosen investment vehicle to bring them the benefit they desire.
A wise investor looks for potential / growth opportunity in whatever he sow and is willing to wait to see his decision bear fruit. Of course the investment timeframe is dependent on the individual himself which reflect his capacity to wait for the fruit to ripe or financial objective that he has set.
Some investors may harvest their crop upon it being ripe whereas some choose to do so only when they are ready to enjoy the fruit. However, there are some investors who may decide to remove what they have just sown as they have changed their investment strategy or due to their inability to wait for their investment to fruition which causes them to incur losses. Lack of planning could be another reason for this type of investor.
Generally investor would like to see a big crop but not many are willing to do what is necessary to ensure they reap a bounty eg investing regularly and reviewing their investment portfolio to ensure it is in line with their objective. Placing seeds in good soil may help them to grow however regular watering and fertilizing is needed to ensure it reaches its full potential.
At times, bad weather may damage the crop but does it mean the farmers abandon their land or stop planting? Or hold on to their bagful of seeds and what? Would the seeds give them the kind of rewards that the crop gives? Farmers also face uncertainties but they proceed to sow their seeds inspite of the challenges they may face. They continue to plant and take care of whatever they have sown as they believed that bad weather will give way to good weather and await for the sun to bring their crop back to life.
Being a responsible investor, it is time to review our investment objective and relook at our strategy for achieving our financial goals. Understand that for anything to grow, it requires time and constant care especially to withstand bad weather (financial/economy crisis) or even pests (politics/inflation).
Diversification is the word that smart investors hold dearly to their heart as they understand that is the key to protect their investment portfolio and wealth. Take it upon yourself to read and learn more about investment and its various tools. Choose only the tools that you are familiar as you progresses in the wonder of the investment world to achieve your financial goal/s or create greater wealth for yourself and your family.
Friday, September 5, 2008
Hey, didn't managed to post my entry last week as I was away for training and it was an awesome week for me! It was a 5 day training and last till past 11pm and therefore had to recuperate for another day in Singapore to avoid having the panda's eye look. But it's worth it!
Continuing our previous entry on managing money, hope you are excited about this, the next jar that I'll introduce is the Education jar. What a coincidence! ;) ;)
Would you agree that our income is in parallel to our knowledge/skill? Therefore, putting aside 10% of your net income to improve your skills and knowledge is imperative if you desire to see your income grows. Training should be continous and should not be restricted to vocational / technical skills as soft skills eg management or leadership skill is equally important.
Depending on your interest or your vocation, investing in public seminars, books, magazines or even to learn new skills or opportunities to expand your mind and interest is highly recommended too. For example, if you are interested to learn more about investment and the various tools available, sign up for such seminar which is abound in the market. At times, such seminar is even FREE! Therefore, by investing your time and/money in such knowledge we are actually shortening our learning curve as we learn from other people's experiences, ideas and mistakes and thus enable us to achieve our dreams faster with fewer mistakes.
At times, from such trainings or even reading certain books, you would even discover new things about yourself which you never knew or even opportunities that you did not know exists thus enables you to explore further and hopefully finds your new destiny. Exciting isn't it?!
Therefore, invest in yourself and see how it rewards you in the future! But of course, knowing and doing what you've learnt (action) have to go hand in hand in order to see some results otherwise, it is just knowledge. Input must have an output => results. Hope the below audio/video would inspire you to ACTION! You have to click (act) to view though.. Ke, ke!
Just to share with you, to create this blog, I took the time to attend the class held in Kota Kemuning on a Sunday morning. Even though the class was free, but by making the commitment to learn something new and spending the time and losing my way there (as I've never driven to Kota Kemuning before) I've acquired a new skill which enable me to share and teach via this lovely channel. That's the reward for investing in learning new skill and am proud of myself for that! :) Furthermore, I've also found a lovely place for a nice bowl of duck noodle ala Bidor. Yum, yum!
Sunday, August 24, 2008
This time, I would like to share an idea by T Harve Eker on managing money.
According to Mr Eker, in order to have great wealth, one has to know how to manage whatever wealth one has right now before greater wealth could come. Based on his observation and experience, he said that people who possesses poor money management skill would not be rich as they are capable of losing everything within a short period of time.
What he has said reminded me of the Felda settlers' case of many years who were paid millions of ringgit by the government for taking over their land for development purposes. Most of these land owners became millionaires overnight but did not maintained their rich status for long as they used whatever they had to settle their existing debts AND incurred further debts as they purchased more material possessions that do not increase their Networth Value.
Mr Eker, author of The Secrets of the Millionaire Mind is of the opinion that money should be used to generate more money so that it is able to produce passive income to support the lifestyle that we desire for a long period of time.
Being a practical person, he has shared with us his method of managing money...
Create 6 jars or accounts. This week, I'll elaborate on the first jar ie the Financial Freedom jar.
This jar is our Golden Goose (hope you remembered the Golden Goose story otherwise click below video). The objective of this account is (yup) give us our financial freedom. We could only deposit money into this account and withdraw it only to invest, buy a business, or any ideas that could help to generate more money/income. This account is to be left as a legacy. It is important for the next generations to be taught the same method of managing money. The amount to be placed into this account is 10% of your net income.
The income generated from this account could be used to support your lifestyle but in no circumstances should the principal be used/spent. If you recalled the Golden Goose story, the principal is the bird itself and its egg is the income. It is advisable for us to use the eggs initially to produce more birds so that there will be more eggs to be enjoyed later. Spending the principal placed in this account is liken to killing the goose that lays the egg.
If we are able to use the eggs wisely and protect the goose/geese, we need not have to worry about our future as there will be adequate eggs to enjoy for a long period of time.
So, save and invest now so that it could multiply (the effects of compounding) and become big enough to acquire more goose to produce eggs for you daily. One way to achieve this is to live a simple life so that your objective for a comfortable life in future is achievable for a long period of time.
Start managing what you have now, no matter how little it is, and you'll be rewarded in due time.
Sunday, August 17, 2008
Spending money now can be fun, but it can hurt your future financial well-being if you don't save enough.
I was at a seminar on financial planning organised by SIDC yesterday. An enlightening and full of insight seminar which has reinforced what we've read, taught and learnt on the importance of budgeting and financial planning. This is oh-so-true especially in our current high inflation!
Higher gas and fuel prices are making it harder for us to do something that most of us are not too keen on anyway—saving for the future. Now that economic times are tough, many of us are looking for ways to cut back spending.
To permanently cut spending and increase our savings requires a shift in attitude. However, by cutting back, you're not really giving up anything. The money you saved will still be available for future needs. Plus, if given enough time to compound, those savings double and triple in value when invested properly—giving you even more to spend later.
At the seminar we were reminded that overspending today makes it impossible to achieve dreams tomorrow—whether the goal is a major purchase, an early retirement, or an adequate income in retirement. Save enough now so you can maintain the same standard of living throughout your life
One of the ways to reduce expenses is to analyze exactly how the money is being spent. Retain and record your purchase receipts. At the end of the month, analyse them. Identify which is your need and want. Am sure you'll note that the items in "want" list is recommended to be reduced or eliminated.
Match your spending to your goals and values in life. Align your spending with what you think is really important to you. The process of cutting spending would really makes you look at what you want to get out of your life and assist you in setting your priorities. Coincidently, I have also sent an email on The Secret of Wealthy Living which I hope is helpful to you.
With this perspective—thinking long-term and focused on what really matters to you—cutting expenses can be easier.
Controlling spending requires extra thought every time you open your wallet—being an educated, responsible consumer. It can take some time to adjust to a tighter budget. Extra measures are usually needed to help people stick to a new spending regime eg hiding or cutting your credit card? You may liken it to a diet. If you don't focus on it, it won't happen. Just as dieters need to step on the scale and tally up their calories and exercise each day, spenders must track expenses carefully.
However, does cutting back means depriving yourself? I've also noted that T Harv Ekar, author of The Secrets of the Millionaire Mind, advocates his readers the essential of setting aside 10% of our net income as our "play fund". According to him, it is important for us to satisfy the child in us otherwise the deprived feeling may cause us to blow our hard earned money thru irrational purchases whenever we have a windfall. Makes sense especially for those who are used to spending! Therefore, set aside a little bit of money each week, perhaps $10 or $20, for small luxuries or just for fun! ;)
And that's the whole point of cutting spending: The goal is to save money now so you can continue enjoying your money—on both essential and frivolous expenses—for decades to come.
Sunday, August 10, 2008
People work to pay for their bills, save to purchase their dream car/house/holiday, retirement, etc. Some save to invest with the hope that their investment would help them to generate profit, amass wealth for their retirement, enable them to generate fast money to help them to achieve their dream faster, etc.
Those who save/invest for their retirement hope that their retirement fund would be enough to sustain their live for the next 20 to 30 years. In reality, usually their retirement fund is inadequate due to high cost of inflation, high medical fee, etc.
Those who does not even save for their retirement years, will have real problem if they thought their statutory retirement fund is adequate. It's generally not enough especially if we are to take into consideration the net return the fund earned which is even inadequate to cover inflation rate! To put it bluntly, our retirement fund value depreciates as inflation appreciates if the return on the fund is negative!
Therefore, it is important to set aside additional amount of money in vehicles that are able to generate income passively eg interest income, dividen, mutual fund, rental income, etc. Or purchase assets that may appreciate in value eg real estate, gold, collectibles such as antiques, stamps, etc. Another venue is to create or involve in businesses that are able to generate passive income eg network marketing, royalties from books, songs, sales referrals online, etc. Setting up a business with the intention to sell it off in the future is another method to create great wealth.
Passive income is generating enough income to live the lifestyle that we desire without having to work. Of course, to generate such income, initially we would have to work hard in building the chosen vehicle with the hope that in future it is big enough to generate enough income on its own to support our lifestyle and without our involvement.
There are a number of people that I've met that lamented that they do not earn enough to set aside for saving/investment. My advice, reduce your expenses/simplify your lifestyle and work on another source of income! Yet, I am surprised, most of them refuses to change their lifestyle or even work to improve their situation! No wonder, as Harv Ekar said, they are broke!
Invest to create wealth! To be financially free, we must be committed to achieve it, otherwise ....it is just a wish.
Therefore, set aside a portion of your income on any vehicles that has the potential to generate income, appreciate in value or involve/create/buy a business that is able to generate passive income to ensure that your desired lifestyle is able to be sustained for a long time.......
Monday, August 4, 2008
We have just launched a new fund which is our first; capital protected fund. Suitable for risk averse customers who do not want any risk to their investment capital yet want to enjoy a certain rate of return hopefully better than FD.
The duration of this fund is for 3 years only. 85% of the fund is being invested in fixed income such as debentures, money market and zero coupon negotiable instrument of deposit (ZNIDs).
The balance of 15% is being invested in equities, EFTS and equities related to gold and oil and gas sectors.
In layman term, ZNIDs is an instrument whereby loan is given to a company without any interest rate. Of course the company that offered the loan has to earn something in return since no interest is being charged.
To explain the mechanism of this loan instrument; we assume Company A requires $85million and approached Company B. Company B offered to provide the loan to A company who has agreed to pay $100milion for the loan. Therefore, the difference of $15m is the profit B company earned.
In this instance, Company B has to ensure that Company A is reputable and able to honour the loan repayment. Therefore, with this assurance and confidence, Company B is able to offer protected capital fund to its investors.
In addition, since 15% of the fund is being used to invest in equities and equities of companies involved in gold and gas & oil sectors, the possibilities of investors earning from the capital appreciation looks positive as these sectors are rare commodities and act as good hedge against inflation.
This fund eventhough its benchmarks is based on the bank's FD rate which is at 3.5% , investor could expect higher return on their investment if they believe the future outlook for gold and gas&oil look positive.
In addition, their investment capital is fully protected and there is no risk for them especially if the investor prefer to place their excess fund in the bank as FD. Now, there is an avenue where they could place their money "safely" with the hope of getting more than FD return, with the condition that they fulfill the fund's minimum investment period of 3 years.
Some customer may want to know the difference between Capital Protected and Capital Guarantee.
Using the same assumption as mentioned above, a Capital Guarantee fund would require Company B to approach a Banker to act as a Guarantor that Company A will honour the loan. In this case, there will be extra cost involved whereby investors would have to bear. The cost is to pay the banker/guarantor for their services.
Therefore, investment cost for Capital Protected Fund is much, much lower compared to the conventional equity or balance fund and also Capital Guarantee fund. The lowered cost would enable the investor to enjoy better rate of return on their investment.
Final word, this fund is only suitable for those who do not want to take any risk (ignoring inflation risk), usually prefer to keep their money in the bank as FD for many years, able to invest for 3 years and for those who may want to diversify or balance their investment portfolio.
For greater details, discuss with your UTC or drop me a line........ :)
Sunday, July 27, 2008
What is Dollar Cost Average (DCA)?
It's a benefit whereby investors who do regular fix amount of investment will enjoy. Very suitable in a market that is uncertain/volatile. The key word is regular investment and fix amount.
Let's say an investor invests $1,000-00 regularly in today's equity market scenario, whereby the price is going downhill (assuming no service charge incur).
To read the data below, pls follow its header's colour with the data below (sorry, cud not prepare a proper table in this page, so has to be creative here) ;)
Mkt Prc Units Ttl Units Total DCA Investment
Sen/unit Bought Collected Cost (Total Cost/Total Units) Value
------------ ----------------- ------- --------- -----------
0.25 4,000 4,000 1,000 0.25 $,1000-00
0.22 4,545 8,545 2,000 0.234 $1,999.53
0.21 4,761 13,306 3,000 0.225 $2,993.85
0.19 5,263 18,569 4,000 0.215 $3,992.34
0.20 5,000 23,569 5,000 0.212 $4,996.63
0.17 5,882 29,451 6,000 0.204 $6,008.00 (began to make profit)
0.18 5,556 35,007 7,000 0.200 $7,001.40
0.16 6,250 41,257 8,000 0.194 $8,003.86
0.17 5,882 47,139 9,000 0.191 $9,003.55
0.18 5,556 52,695 10,000 0.190 $10,012.05
0.20 5,000 57,695 11,000 0.191 $11,019.75
0.21 4,761 62,457 12,000 0.192 $11,991.74
0.23 4,348 66,805 13,000 0.195 $13,026.98
0.25 4,000 70,805 14,000 0.198 $14,019.39
0.26 3,846 74,651 15,000 0.201 $15,004.85
It's an investor's objective to BUY LOW and SELL HIGH (that's how profits are being made). In mutual fund, another objective an investor has is to ACCUMMULATE UNITS.
Dollar Cost Average is Total Cost divide with Total Units. It represents the ACTUAL COST of each unit on average basis of what the investor have on hand (total units).
Look at the first purchase of $1,000 at 25sen, total units was 4,000. Therefore cost of each unit is 25sen.
As the price goes down (25sen to 22sen), with the same investment amount ($1,000), the number of units the investor is able to buy increases (extra 545 units). Take note of the DCA value which also reduces (25sen to 234sen). This is made possible as the cost of each unit at the current low price (22sen) helps to reduce the cost of other units on hand (4,000 units originally at 25sen/unit ) thru additional units.
For an investor who decides to practice one time off investment ie to invest $1,000-00 only at 25sen, the investor would have to depend on the fund's price to increase above 25sen in order to make any profit or, to wait for any distribution/dividen to be declared in order to increase the number of units owned. It may take awhile in the current market condition. Furthermore, the dividen earned may not be significant as the principal is low ($1,000 only or 4,000 units). "Not enough power leh!"
By practising regular investment, investor is making sure his money works hard for him as he amass greater number of units at lower cost thus enable him to make profit faster and greater once the market improves as shown in green.
Investor is able to breakeven at 17sen compared to those who invest as a one time off at 25sen. Making profit even when the market price is low?! Yup! Makes sense to invest regularly right? Imagine when "free" additional units are given during distribution or as dividen. The DCA would be lowered further as no additinal cost incurred for the extra units! That is your bonus! Up goes your profit! :)
Invest for the future especially for your retirement as during our golden years our income stops but we still incur expenses in terms of food, lodging, holiday, higher medical cost, etc.
In addition, with the current equity market which is so.......... cheap and with higher......... inflation rate; this method of investment is one of the best way to ensure that our hard earned money's value is being protected otherwise inflation is quietly draining our money's purchasing power.........
Did you noticed you have to fork out extra money to get the same item? That is inflation my friend!
Saturday, July 26, 2008
A story to share with you on creating passive income. Btw, if you have any questions, please contact me directly. Any details that you may leave on the given link will go some where else as it's not mine but I find the story to be very useful.
Friday, July 18, 2008
I was in town yesterday and noted that the Mega Sales is back from 5 July - 1 Sept 2008!
Lots of discount were in the offering from 10% - 70%! As it was a working hour day, the crowd was .....ok. I used to remember many years ago whenever there's a sales, the traffic would be bad and the queue to the changing room was long......! I've even heard of people using their annual leaves to take advantage of the huge discount. Is it the same now?
People are willing to queue either in the changing room or at the cashier to take advantage of the huge discounts being offered. Or be in the tight crowd, jostling in their attempt to look for items on sales. Their purchases could be huge and some of the items bought could either be used immediately, kept for future use, to give away or a just-in-case purchase.
This scenario is somehow missing whenever there's huge sales in the equity market. Currently it is also having Mega Sales but investors are dumping their shares (making losses) and prefer to be on the sideline, watching for any signs of recovery. Buy when prices going upwards?
Many investors that I've met bemoaned that they are making losses but in actual fact they are currently facing paper loss and not real loss unless they have sold off their shares/funds. It is funny, as the same is true when the equity market was good. Investors were pleased when the equity market was doing well and they assumed that they were making money and were ever more than willing to invest more even when the price was high! In actual fact, no real profit is being made unless the investors sell off their investment and pocketed their money! It is just a paper profit if nothing is being done!
The two situations are similar but somehow they have portrayed human's love for immediate gratfication through spending and lacks patience and the wisdom to take the necessary risk to await for greater profit.
If investors were to adopt the same attitude when they shop to how they invest, I am sure they would note that the current equity market is their goldmine.
With long term strategy in mind, wise investors would right now select quality low priced shares and keep them. For those who are unsure which shares to collect/buy, appoint a reputable mutual fund company to manage your investments. Let the fund managers do the shopping for you.
As all of us are unsure for how long the market will be this cheap or getting cheaper, the only practical strategy is to pick the shares / buy the funds in a gradual manner (bits by bits) in order to take advantage of the dollar cost average benefit in the event the prices continue to head south. Furthermore, based on history, anything that goes down will eventually goes up. Therefore, for long term investor, there is never a better time but now to invest when prices are heading south whilst waiting for the market to correct itself, which it normally does.
So what are you waiting for, jom, shopping!
Wednesday, July 9, 2008
From my past blogs, you'll noticed that I have been harping on the issues of investing in the current low priced equity market. The current market conditions, brought about by the States' mortgage prime issue, seems to have domino effects on other countries' equity market even though they do not have the same problem back home. That's baffling isn't it? Its surprising that the State could be saddled with such problem despite not too long ago, Asian countries were saddled with somewhat 'similar' financial crisis. The States apparently do not practice what they had preached to the East who viewed them as their 'panadol' to their various ailments. Well, since our usual panadol has a problem, I wonder who will be bringing the next remedy to cure the current ailment?
I heard over the news that the crude oil price is expected to go as high as USD180 this year and could even touch USD200 next year! What does this mean? Worse equity market and higher inflation?! So which is your greatest fear?
I recalled when I was working in an office building in Kuala Lumpur between 1992 - 1994 which houses a share trading company and a very chic chinese restaurant. During lunch time, the same restaurant could either be very busy or very quiet depending on the share market of the day. When the market was doing very well, one of my colleagues used to take leave to sit in the trading house together with many retirees who even carried their own foldable stool as there were insufficient seats due the house being full. The office lifts were also packed and the only conversation that was swirling in that little lift cabin is ...you guessed right and with lots of excitement too! The restaurant would be housepacked and being a chinese restaurant, whether its chic or otherwise, the noise was impeccable! That was the good times. The opposite holds true when the market was down and weak. Reserving a table in that same restaurant for lunch was very easy.
What's the effect on me at that time when the equity market was good or bad? Well, at that time, I was very ignorant about share market but knew that good money could be made if we choose the right share. But being a non investor, I could only feel the excitement or the quietness of the market only. However, over the years, I had noticed that the money that I had been hoarding in the bank's account gave very low return that it was insufficient to buy what I've desired ie a house or good holiday. This had caused me to be bold to dabble in the share market but of course I piggyback on one of my relatives who used to make lots of money from share market. Guessed what? Called it back luck, I lost everything and as the chinese used to say, there's no dust left!
The moral of the story is......whatever happens to the share market, it does not affect the non investors. However, all of us, living mortals, have dreams ie to buy house, dream holiday, retire comfortably, start a business, etc and all these requires money. We do hope to achieve our dreams quickly and safely.
We knew that placing our money in a place that's safe ie bank would not help us to achieve our dreams in this lifetime and therefore, we need to invest to earn greater cash and at shorter time so that we could enjoy our fruit whilst we are still here. Besides, if we are to place our money in a place that does not give us higher return than our inflation rate, our cash purchasing power will depletes and we need to work extra hard and longer to ensure that we have enough cash to buy our dreams. All these are vicious cycle and if we are not careful, we may end up chasing for more and more money and no time for ourselves or family.
Being ignorant about investment does not mean we do not invest.
Based on my experience, since investment is necessary, we need to piggyback on someone who is the expert ; no, I don't mean an "expert" investor according to our definition but a professional person who has good track record and has a mission to create and accummulate wealth for its investors.
Dabbling in the share market is too risky for most of us due to various reasons, therefore, my recommendation is to place your "future" with a mutual fund company with good track record. Furthermore, the risk is minimal, diversified and managed by professionals. That frees you to do what you are skilled in and let the experts take care of your money.
I am able to recommend mutual fund with certainty based my experience with one who is currently still managing my money. Right now, I am even promoting their services to those who care enough about their future and prefer their money to work hard for them.
As always, invest with long term in mind, and with the current bearish market, there's no better time but now to gradually pick and invest in your favourite funds. Do regular savings and you'll be rewarded in due time on this new habits of yours .
Happy realising your dreams!
p/s: Am able to post this blog as am right now confined to the house due to bad cough and loss of voice. Might as well use my down time to share my 2sen worth of thoughts!
Friday, July 4, 2008
Inflation, to me is like cancer. On the outside everything looks fine but its effect to its host by wasting its cells is unknown until its too late.
Inflation reduces the value of money but the written value on its surface remains the same. The pinch could be felt every time price adjustment is being carried out and once inflation has set in, it never leaves. Thus, the buying power of cash deteriorates as inflation increases.
In treating leukemia, the number of red cells is being increased to overcome the white cells count. Similarly, to overcome cash's reducing puchasing power, we need to generate more cash faster than its depleting rate. To do this, investment is the only way to generate more cash. It could be in various forms and its choice is dependent on its owner's capability, experience, knowledge, etc.
Generally, investment knowledge is very low in Malaysia. We have never been taught in school nor in uni. Most of us were only aware about it once we have had started working and depending on the type of crowd we associate with, our knowledge expands accordingly. It is easy to blame our education system, friends, teachers, parents, etc but the onus is on us to do something to improve our current situation. Therefore, one form of investment that is very important, to me, is to invest in knowledge relating to wealth creation. It could be in the form of books, magazines, journals, seminars, trainings, or just network with the correct group of people, you'll notice your learning curve is shorten. So does this equation makes sense "income = knowledge". I do now. :)
Inflation could be seen as a foreign word to lots of people as they are aware that prices of goods are increasing but did not realise that is the effect of inflation. Despite having known that the cost of goods and services have increased, yet they do nothing to protect what they have had worked hard for. They merely adjust their way of life as they try to fit into the changing economy. Most of the time, they work harder chasing for more money whose value keeps reducing in order to maintain their standard of living. Is that what life is all about? No wonder it has been known that Asians are the hard working lot!
It has been said that the rich lets money work for them. I guess they realised that much earlier thus able to be where they are now than the ordinary people who are still in the dark, chasing money.
The rich invests so that their money works hard for them whilst the poor works to pay for their expenses. The rich use their passive investment or business income to support their desired lifestyle, the poor continue working for money and be a slave to money. Which is your preferred choice?
Since we knew that inflation reduces our money buying power, don't you think you should multiply it quickly by letting your money works hard for you and be your slave instead of the other way round? So, is investment important? You decide.
Thursday, July 3, 2008
These past weeks have been a tough week for the Malaysian and the world's stock market. The Malaysian market has reached its lowest level of 15 months surpassing the historical 10 Mar 08 index of 1157 point with PE ratio of 15x yesterday. We have seen the worst in the 80s and 90s but we don't think the CI would ever come to that level again as we are now fundamentally stronger in terms of corporate earnings, stringent listing ruling, good economic policies, etc.
There are various contributing factors to the current situation but the most glaring factor is the unstable local political situation. Technical forecaster expects KLCI to dip to as low as 1120. Remember, it is just a forecast only. If we are to examine Malaysian political scenario, it usually is amicable and our PM has actually announced his plan to do a proper hand over. However, human being human with emotions especially when it comes to investment, any hiccups is construed as TB. So, how to invest in this yo-yo and uncertain market situation?
Foremost, investors should ask themselves, what's their investment objective (besides the obvious reason of making profit). Is it for quick profit which is short term or is it to accummulate enough wealth so that investors are able to retire comfortably and overcome the silent purchasing power zapper ie INFLATION?
Everyone has been focusing on the equity market situation but neglect to pay attention to the effects of inflation on their current and future wealth which affects their cash buying power. The global's inflation rate has increased in tandem with the increased in the crude oil's price but the rate has never been adjusted when the oil price dipped. Various countries' government gave various figures on their country's inflation rate but their citizen knew the rate published is beyond truth.
Less than a decade ago, I recalled having to spend on average RM35-00 each time I refilled my car but today at RM60-00 it's hardly half tank full! What has happened here? Does that reflect a mere 2% increased in our CPI? They must be kidding!
The question everyone should ask is; "Is my money's purchasing power getting better or worst in face of the ever increasing inflation rate? If the latter, how do I ensure that my hard earned money is able to sustain my living past my retirement age?" or "How do I ensure that I maintain my standard of living during my retirement period? Would I need to adjust my lifestyle during my retirement to a level that is lower than the current lifestyle?"
Investment is a necessity to overcome inflation and create greater wealth. But the big question is what investment vehicle to choose? When is the right time?
Forget the bank's fixed deposit interest please! It exists only to enable us to place our money safely (from theft not inflation) for a short period of time and is not meant to generate revenue for individuals as its too low to overcome inflation rate, or even appropriate for corporate's excess cash as its taxable in Malaysia.
For those who are too busy working, lack of know-how, insufficient capital for bigger investment vehicle (equities, property, gold, commodities, etc) or is risk averse, isn't it better to appoint someone who is professional, dedicated, has mission to generate income and preserve investment capital for their customers, has no emotional attachment as they are able to cut losses or exit at certain profit margin?
Mutual Fund is not the only investment vehicle available but it addresses the problems mentioned above. The beauty of this vehicle is that it is a basket of well DIVERSIFIED shares, picked by professional fund managers.
The keys to successful investment using Mutual Fund especially in this uncertain equity condition are as follows:
(1) Do regular savings to take advantage of DCA
(2) Do not time the market as no one has the crystal ball
(3) Suitable for mid to long investment period
(4) Review your investment objectives regularly with your UT Consultant
(5) Rebalance your investment portfolio with your UT Consultant
(6) Be a responsible investor by knowing what you are investing
(7) Let the professional fund manager do their work by observing all of the above.
The current market is actually an OPPORTUNITY to enter as it is cheap and the risk is much, much lower for those who have never invest and good for those who are already in the market as they are able to get more units at lower cost thus reducing their average cost per unit which translate to higher profit opportunity. Continue to pick those low priced funds / equities and remember, market always comes back.
Be a responsible investor, invest only when you are ready. The final decision is yours. Only YOURS to make.
Hey, I am not bias but am also an investor like you. ;)
May the good force be with you!
Tuesday, July 1, 2008
Smart investors are those who:
(1) do not follow the herd
(2) buy when price are low
(3) do regular investment to take advantage of Dollar Cost Average benefit
(4) are not involve in speculative investment but invest based on strong fundamentals
(5) look at long term
It's a fact :-)
Market ALWAYS comes back/rebounce.
Friday, June 20, 2008
Thursday, June 19, 2008
Money is one of the most important subjects of your entire life. Some of life's greatest enjoyments and most of life's greatest disappointments stem from your decisions about money. Whether you experience great peace of mind or constant anxiety will depend on getting your finances under control.
-Robert G. Allen-
The moral of the excerpt above is Manage Your Money Well!!
Wednesday, June 18, 2008
Sunday, June 15, 2008
"Is it the right time to invest with the current volatile and uncertain market condition?" A very frequent question whenever I meet a new prospect. Worries clearly reflected in their eyes.
Being an investor myself, I knew the feelings......."Oh my God, market down again! Die lah, I am making losses now! When will the market improve? Ahhhhh!!!"
It is normal to feel as you do, as we are humans, an emotional one too. Therefore, your decisions to invest or not is also emotionally influenced. Agree? So, isn't it better to leave your investment matter to a third party ie fund manager to manage your investment instead? The investment vehicle that I am referring to is unit trust.
So back to the earlier question, should we invest in the current market?
I am of the opinion that it depends on the individual itself. If the investor has intention to invest for a period less than 3 years, then no. This is because no one knows how long it would take for the market to bounce back. Moreover, investing with such a short frame of time disallow any fund managers to do their work effectively thus posing higher risks to the investors themselves. On the other hand, investors that are coming in for long term is however encouraged to pick up the funds that are currently at huge discount. The current market situation is considered an extended MEGA SALES period for long term investors. Pick them up before the sales is over!
Another word of advice, do regular savings instead of a one time off investment. It is one of the ways to mitigate the risks of uncertainties and volatilities. The benefit is that when the fund's price is high, the units purchased would be lesser, however, when the price is low, at the same investment amount, the number of units purchased would be more. In the long term, the average cost per unit of the investment would be lesser than its current market price thus the investor would have made some profits already.
Another factor every individual should be aware in deciding whether they should start investing their hard earned money is whether they are willing to face the risks of inflation which is undermining the purchasing power of their cash.
A research was done by The Star newspaper last year stating that our money's purchasing power diminishes amidst rising inflation. It gave an illustration that the cost of 3 meals NOW costs us about $20-00 (minimally) and in 20 years time, with the assumption that the inflation rate is only 6% , the same meal would costs us a whopping $64! It goes further to illustrate that those who have $500,000 NOW has a purchasing value of only $145,000 in 20 years' time!
So tell me, could you afford not to invest or you would prefer to procrasinate? And miss the discount?!
Yesterday, was a fruitful day for me....one, I've learnt a new skill which will be my other source of income and two, I believed I had touched a number of people's lives through sharing a subject which I've recently learnt from T Harv Eker, on the Power of Belief, from The Millionaire Mind Intensive seminar, held recently in Kuala Lumpur. Harv is a very generous speaker and trainer as the value we derived was much greater than what we had paid for! He has also produced a best selling book of the same title. Would strongly recommend you GET one! I've never read any books like his and am re-reading it hungrily! I am always excited whenever I shared with anyone on Harv's teachings! And am also recommending my business associates and customers to attend his upcoming seminar in Singapore in November 08! Check this link http://www.millionairemind.com
As I was preparing and sharing the subject of Power of Belief with my business associates, I began to understand deeply why there is such a disparity between the rich and the poor people. Harv has pointed out that it's all because of our past programming in relation to money, work, success, etc whilst we were growing up. Thanks to our family and society who have had meant well.......Whatever we believe or others believe of themselves or of other people, those are only OPINION! Belief is just an Opinion. Influenced by our past programming. There is no right or wrong, true or false opinion but any beliefs could empower or disempowers any person to act or otherwise. If that is the case, why not have a GOOD BELIEF of yourself to empower you to do something GREAT! Have a good belief in others too so that they could do something good to bring goodness to themselves and others too!
Wealth is a Result, Health is a Result, who YOU are is also a RESULT. If you don't like the results you see in your life, you need to identify the cause (your previous programming) and change it! We can't change our current results, but we sure CAN CHANGE our FUTURE RESULTS. Agree? To do that, change your existing mind program (your beliefs) and replace them with positive program (sorry, you can't change your hardware (your head) but you sure could change your software!). Do a daily positive affirmation of yourself and see yourself transformed! I Deserved to be Rich as I Add Value to Other People's Lives! Cheers!