My 18 Hours Under ICU

“I was discharged from oncology ward at 7pm on Thursday 11 September. 18 hours later I was knocking on heaven’s door. I was readmitted as my life was under threat. During those hours, which was filled with a lot of uncertainties, I felt there was some unknown strength that supported me through it all. I have gone through a lot. The medical staff treated me well during my ‘detention’”. Say No to ISA, oophs ICU!

Dad’s condition has deteriorated since the article “Cancer” was written on 4 June. He is a frequent boarder of the hospital. Friday the 12, it was a close call. Mom called “Dad was not responding too well and was sweating profusely. There was not much urine in catheter bag” It was almost lunch hours and it should be wee-wee time. That could only mean one problem – the urinary tract was blocked. Luckily the traffic was kind and with no chicane to tame managed to reach the hospital in a quick time.

Dad was wheeled into the A&E in a semi conscious frame. After briefing the doctor, the medical staff sprung into action. It was show time. As a bit part player, the only role for me was to spread loving kindness “May You Be Well & Happy” at the waiting area. Many thoughts were floating around and the best decision made during that moment was to feed myself with tuna sandwich and 100 Plus (otherwise might had ended on the drip too due to dehydration!)

It felt like ages when the doctor pulled me aside “Can we talk?” I was ready for the worst. “The bladder infection is quite bad, the blood pressure is dropping, there is a possibility of a heart attack as he has a mild shock and dehydrated. Due to his condition and age, and the fact that he is terminally ill, it does not look good. There are 2 options – let him go naturally or go for active resuscitation. The choice is yours. Go naturally, does not mean we are not doing anything….” The truth hurts. The doctor heaved a sight of relief “ I am glad you took it well as I was not sure how to tell you” as I did not scream and pull her hair or called her names!

After making a quick look at him in all the tubes, I started making calls. The doctor gave the green light to get the loved ones over to kiss and say goodbye! The first call was to my brother and told him to wrap up his work and drive mom and my kids over. As usual mom was cool. It was going to be a long night. He was wheeled to the general ward after he was stable to free up the bed. As the eldest, you can’t just enjoy the perks. You got to take in the dirty jobs too, meaning I qualified automatically to stay the night beside him.

As I was preparing to take forty winks on the lazy chair, the midnight news woke the dead. Someone got arrested under ISA. Quick walk to the television set hung at the common area. No surprise to hear the first name – RPK. Was stunned when the next 2 names were read out - Theresa and Tan who? The pendatang journalist. Disgusted, disoriented and despaired. It was the point of no return. Whatever support to the government had just evaporated. It was abuse in the first degree. Period.

However all is not lost. During my 2 nights stay, I witnessed a bunch of dedicated medical team. There is definitely hope for mankind. Even though they were understaffed, they showed lots of caring and patient attitude in caring the patients (pun intended). Kudos to them. Agreed the public healthcare sector is still riddled with many horror stories namely long waiting list to be treated and if your stars are not aligned properly you might be treated by a rookie who used you as a guinea pig! However the facilities are on par if not better than the private sector. Just like any entity, there are bound to have a few bad apples but overall the dedicated and caring lots stood out.

I am quite embarrassed to share this true story. When I, wife and children are ill, we would be treated at a leading private hospital whereas when our parents are ill, we would check them in the public hospital! Huh? It was purely economy reason, nothing malicious. We are covered under our employment terms and conditions. In addition, we are spoilt for choices as the insurance industry has evolved. Those days insurance was associated with death – Choy! Choy! Choy! These days, in addition to protection we are using insurance as a tool for education planning, retirement planning, health and medical coverage etc.

The take home is that we are in a position to decide whether we want to be treated in a public or private hospital. The cost of medical treatment is ever rising, growing faster than the official inflation rate and to make it for ‘affordable’ when we needed medical treatment, perhaps we should look at insurance in a different way. We do not need to be over insured, just insured based on our affordability.

The other financial related lesson is the asset distribution and estate planning. Dad does not have a will and do not need one. He had gifted us the house a decade ago. The only piece of paper work was to transfer the ownership of the beaten Wira. It would be a totally different story for us. With some assets in tow and for those young parents, it is wise to explore writing a wills. Get the paper right and unfreeze the assets the quickest time. Public fights and court disputes are the last thing to leave behind in the time of grief.

Fast forward a week later, dad was discharged on Friday the 19. He did recover from the infection. However, it did not warrant a thanksgiving party as the battle is not over. Not a seventh heaven scene. Mom was exhausted as she stayed overnight to be with him when I was back to work. Another wise decision that we made was to ‘terminate’ her services as babysitter and cook during this ‘ordeal’. We have engaged her sister, my aunt to baby-sit Jo Ven, my 15 months old junior. The slight drawback is that we are spending more time on the road. Crazy crazy traffic scene at Cheras. The sight was unpleasant with streams of vehicles as contra flow system was employed during peak hours with never ending road construction and diversion!

The expenses just shot up. Petrol, toll, food, babysitter allowances and not forgetting medical expenses. Thank goodness we have our safety net. It is so so true that we really do need to have some savings – for the rainy days! Otherwise I would not have the liberty to write this story.

What’s next? For dad, everyday is a bonus. Heaven knows if he could celebrate the next Chinese New Year. For the rest of us, life goes on as we could not wait until hell freezes over. Enjoy the calm before the next storm!

To Attend Or Not To Attend Seminar

"Make More $$$" "How To Be A Millionaire".

These are some of the bold captions that captured our attention in the media. The advertisements invite us to learn the tricks or success stories of the speakers in one of the leading hotels. There are so many seminars that 'could' lead us to the world of wealth abundance. The topics range from option trading, Internet marketing, stock market investment, property investment etc. We could definitely acquire some knowledge but the question posed is it worth the fee / cost effective as they do not come cheap!

How does it work? The organiser normally entice us with a free 2-3 hours preview. In the preview the speaker will tempt us with some tips and at the same time doing his sales pitch as well! Some preview seminars are structured to be emotionally charged. Incentives are dangled so that they could close the sale there and then. If we are unsure, don't sign up.

Seminar is a quick and condensed way to obtain training and information. However there are other wealth of information available at a cheaper price namely from mentoring and good old books. Of course, there are authors becoming speakers and vice versa so obviously we could learn from the books. So why bother to attend the seminar? According to the speakers / authors, even though there may be redundancy, there would be new updates and materials in the seminar, moving along with time.

By attending seminars, we could cut the learning curve tremendously and may be more effective than reading. The three dimensional approach may work out best for certain people. (Just imagine attending a lecture in university vs reading a text book in the library!) We may read something but the experience is different when we hear the speaker saying it with conviction. There are other benefits in attending seminars i.e. networking and buying merchandises at discounted prices.

How do we select which seminar that is right for us since we have limited budget and time? For a start do some research on the speaker. The Securities Commission (SC) clarifies that services related to investment advice and fund management are regulated under Security Industry Act 1983, thus those offering such services need a license from SC. Anyone can become a speaker and claim to being rich.

Then research on the subject of the seminar. Advertisement normally paint a pretty picture but does it suit our risk profile? Find out if the seminar teaches those aspects that we could relate to and apply. Bear in mind some strategies work well overseas but might not work here due to different tax laws, culture, readiness etc. Find out if there is a money back guarantee if the contents fall short of expectation.

Rule of thumb. Too good to be true yardstick still applies. Be skeptical of high or guaranteed returns as every investment comes with some degree of risk. Just be wary of any claims and promises of high rewards without corresponding risks. However just going to seminars itself does not make a difference. We must apply what we have learnt!

Long Term Investment Goals

Regardless of the uncertain global economic conditions in the near term, investors should remain focused on their long term goals and make their money work harder and smarter. As the higher inflation is here to stay, investors will see the wisdom of moving some of their savings from low yielding investments to outperform the inflation rate.

Investors should keep their emotions from influencing their investment decisions. A disciplined and methodical approach to investing is the key to long term investment success. They will achieve better returns than those who engage in timing the market.
This approach entails buying and holding the investments for the medium to long term period of at least 3 years with portfolio rebalancing done on regular basis.

The buy and hold principle is based on the notion that a good investment will generate reasonably attractive returns. The advantage of this strategy is that it is easy to manage your investments once you have made them. You don’t have to time the market. Over time, the upward bias of the market will overcome and outweigh any temporary pull-backs in the value of your portfolio.

Investors who want to reduce market volatility are advised to practice dollar cost averaging (DCA) as this strategy enables investors to focus on the long term investment goals and not worry about prevailing level of the market. DCA is simply investing a fixed amount of money in a financial asset on a regular basis regardless of what direction the market is moving. By investing a fixed amount on a regular basis, investors will buy more units when the market is lower and fewer units when the market is higher. This strategy will produce a lower average cost of investment than the average price over any given period.

Conclusion – investors should have a disciplined perspective that focuses on achieving medium to long term investment goals. Focus on the long term horizon and refrain from over-reacting to the short term movements of the stock market.

"Failure is no reason to quit. Every failure gives us valuable information for future improvement" - Happy Malaysia Day!

Unit Trust Industry

Introduction to Unit Trust Industry

The local unit trust industry is vastly untapped. It is a multi billion Ringgit industry. In a period of just 15 years since 1992, the amount managed by private unit trust companies grew from a mere RM400 million to RM71 billion! (source: Lipper, 28 January 2008)

According to Securities Commission, in December 2007, the Malaysian unit trusts boasted 15.32% equity penetration rate. In comparison to the same period, the equity penetration rate for United Kingdom was 41.62%. (source: London Stock Exchange and Investment management Association, UK)

In December 1992, the Malaysian unit trusts equity penetration rate was merely 6.40%. This means that Malaysia's rate is low in comparison with more developed countries like the UK and Malaysia's ratio is rising rapidly.

Why would I want to be a Unit Trust Consultant?

Because YOU deserve to have a well-paid and fulfilling career in an industry that is enjoying explosive growth in Malaysia.
It is definitely a sunrise industry. It has evolved into a lucrative profession. Unlike traditional career with has limitations in terms of personal growth, income potential and time, it is the exact opposite.

Too many of us are frustrated at the prospect of squandering our best years on a 9 to 5 mundane job that is structurally incapable of giving us what we dream of most – personal and financial freedom. So why not take back the reins of your life. Why not, indeed!

Most of us are educated to pursue a traditional career in the corporate world. However in the current globalization and high technology driven climate, unit trust industry is fast becoming popular with the younger generations.

Resources that join the industry come from a broad range of backgrounds. There are those who graduated with first class degrees. There are also people who switch to this industry with totally unrelated work experiences. This industry is quite a versatile industry in terms of recruiting human capital. It is no longer the industry for people who can’t make a living elsewhere.

Young graduates and newcomers to the industry need not fear the lack of knowledge or understanding as ample training and opportunity is available. Training programs are held to educate product knowledge and to build or refine soft skills. Be assured that there will be guidance and support from mentors. Mentors will build their people to higher level. Mentors are ever ready to reach out, to nurture and guide you.

Today, an estimated 60% of associates are earning a five figure income monthly with job loads equal to those working in the financial investment houses. The different is the networks you build are your own and do not belong to the company.

How do I join?

You may join as a part timer and keep you regular job, before gradually turn into full time Unit Trust Consultant (UTC).

You must be above 21 years old and hold a SPM certificate in order for you to be registered to sit for the Computerised Unit Trust Examination (CUTE) conducted weekly by Federation of Malaysian Unit Trust Managers (FMUTM) in designated colleges all over Malaysia.

Upon passing the 2 hours computerized all multiple choice paper, you qualify as the licensed Unit Trust Consultant.

You will enjoy direct commissions from your personal and overriding sales, indirect commissions like year end bonus and profit sharing and other benefits like overseas incentive trips, insurance coverage and subsidies on car and notebook computer.

In a nutshell, in this industry, you are earning both active and passive incomes.

So, what's in it for me?

Unit Trust Consultants enjoy great benefits. Amongst them are:

1) Highly competitive incentive structure and benefits programs
2) The potential to earn unlimited income
3) Flexible working hours
4) Overseas trips, awards and public recognition
5) Subsidised Certified Financial Planner (CFP®) certification course and
diverse training programs
6) Personal development
7) Opportunity to be an entrepreneur and own a business
8) Early retirement / financial independent
9) Help others in retirement planning
10) Noble act to promote investment planning and encourage savings

How does it differ from the traditional career?

You will not be stuck in a rat race. No office politics and back stabbing. Promotion to a higher level which earns you higher remuneration is purely based on sales figures. Promotion is not based on personal judgment, thus eliminate discrimination.

Remuneration has the high unlimited potential based on sales volumes. Remuneration is not fixed to a salary scale with fixed annual increment.

Do you wake up happy knowing you have to go to work? If the answer is NO, perhaps it is still NOT too late to embark on this new found sunrise industry.

So it is time to move on! Be your own boss.

Dive into Diversification

Most of us keep our hard earned money in fixed deposit or saving accounts (Trust the bankers - still don't know why?). When we have the little extra we might be tempted to indulge in property market. Many still do not consider alternative investment instruments like equity, bond, unit trust, gold and foreign currency. Are we simply just being ignorance or being risk averse?

EPF had stated that the forced saving will not be sufficient for our retirement. If we are solely dependent on it, we will surely be financial dependent! Start asking ourselves - Have we saved enough for the rainy days, children education and retirement? Has inflation escalated too fast that made our investment in the red? Yes, agreed that investment risk is high but the risk of not investing could be higher! The good news is that there are ways to manage the risk!

Many of us are risk averse. So it is not surprising that we prefer to invest in guarantee or capital protected products. However, by doing this, we have passed on the opportunity to earn better returns to the banks! The banks get the difference between what they pays out e.g. FD rate and what we could earn e.g. dividend and capital gain.

Start exploring the investment world. Adopt a diversification strategy. Start moderately with established providers. Happy Investing. Sikit-sikit lama-lama jadi bukit!

Building Pipelines

Once upon a time there lived two ambitious men called Anwar and Abdullah in a Penang village. They wanted to be the richest men in the nation.

One day they got their big break after months of lobbying. The village chief gave them a contract to carry water in buckets from a nearby river to storage tank for the usage of the villagers. Both were overjoyed and started to work immediately. At the end of the day they were dead tired. That prompted Anwar to do some serious thinking to provide a better solution to transport the water. The next day he was excited to tell his friend about his new idea. Instead on lunging back and forth, they can build a pipeline from the river to the village. Abdullah was skeptical as it sounded new and there were no short term benefits. He rejected that idea outright and was happy with whatever he was earning.

Anwar did not give up and worked on building the pipeline during the evenings and weekends. He kept on reminding himself that “Tomorrow’s dreams are built on today’s sacrifices” and “Short-term pain equals long-term gains”.
Hours turned into days, days turned into months and months turned into years. Finally the project was completed. The pipeline transported water non stop to the village. The pipeline isn’t the end of a dream. It is only the beginning! He started to use the same system and build pipelines all over the world.

After his retirement he still has millions coming in from his pipelines. He continued to share the pipeline idea to many people. A few would jump at the opportunity but most would dismiss it with excuses like “I don’t have the time”, “My friend tried this and failed”, “I’ve done this all my life and would like to stick on with it”, “I know some people who lost money in this, I don’t want to take the risk”.

So are you “A BUCKET CARRIER” or “A PIPELINE BUILDER”?

EPF - 8th Largest Fund in the World

The Star, 4 Sept 08

According to the latest Watson Wyatt Global 300 survey, Malaysia’s national pension fund, the Employees Provident Fund (EPF), was ranked the eight largest fund of its kind in the world with US$94.66bil. The list included the country’s Pension Trust Fund (KWAP), at 22nd spot with US$14.55bil.

Watson Wyatt Asia-Pacific said that Asia-Pacific sovereign pension funds grew by about 20% to US$1.8 trillion in 2007. The strong equity returns last year contributed to the boost in asset growth. Among sovereign pension funds ex-Japan, funds that enjoyed growth of more than 30% included China’s National Social Security Fund (up to 38th from 69th), India’s Employees Provident Fund (from 88th to 68th), Singapore’s Central Provident Fund (from 32nd to 22nd) and Thailand’s Government Pension Fund (from 285th to 241st). Eh, where’s EPF?

Need not compare with countries far way, just glance over down the causeway. As at June 2007, a total of 1.9 million Singapore residents are in the labour force (source: Ministry of Manpower). On the other hand, as at end 2007, there are 5.4 million active EPF contributors. There are another 4 million members that had stopped contributing but have yet to withdraw the money.

Why oh why Singapore’s CPF with much smaller contributors could grow >30% and ranked ahead? Size does not matter? As a stakeholder and contributor, I am concerned. EPF is the custodian of our hard-earned compulsory savings; the policies it makes affects every working Malaysian.

Last year, there was concern when EPF paid RM9 billion to acquire 75% stake in RHB Banking Group. For the record, the debts of RHB have run in excess of RM 3.4 billion as of August 2006, and it is presumed that these debts will be taken over by EPF. (For the record II, the government has spent more than RM3.5 billion to bail out Bank Bumiputera on 3 separate occasions in 1984, 1990 and 1998).

So is EPF being selected to do national service?

EPF simply does not have the capacity and experience to manage a banking group with such heavy debts. Additionally, such large investment in a single stock clearly represents poor portfolio allocation and diversification. EPF has put at risk by 'betting' heavily on a single large investment. EPF had been ‘burned’ before but do they learn? EPF equity investments had suffered severe financial failure in the last few years, amongst them the staggering financial losses incurred in the investment into Malaya Borneo Building Society (MBBS).

Let us revisit the founding principles of EPF as a fund manager that commit to ensure good financial returns to its members within a 25 to 30 year period. During the formation year in the 50s, EPF was required to invest 70% of its assets in securities or government bonds. EPF needed to be conservative in its investments. From the 80s onwards, government bonds were reduced when privatisation was introduced. EPF started to transfer its investments to equity. However it remained as a passive investor. By 90s, EPF investments in government bonds had been reduced to about 30% whereas investments in equity had risen from 2% in 1990 to 19% in 2005.
The acquisition of a bank will not only change its charter and increase the risk, it may also cause poorer performance in its fund management objectives. By redirecting the attention to managing a bank, fund management may inadvertently become a secondary concern for the EPF management. It is important for EPF to retain its function as an investor and not become involved in the management of any company. EPF needs to retain its conservative nature because it is the only long term fund that is responsible for the welfare of its 9 million members.

EPF should emulate the investment principles of Warren Buffet. His primary approach is to invest in low-value securities that guarantee returns on investment and not to interfere in the management of any company. This practice would allow EPF to sell or exchange equity without any conflicts of interest.

Can we do something as a contributor? No action, just talk only?

Well, EPF saw the rebel inside Since November 1996, EPF allowed all eligible contributors to withdraw part of their savings to invest in unit trust. Contributors can invest 20% of their credit in excess of Basic Savings in Account 1.
Put money where the mouth is, so for the past 3 years, me, myself and I has been consistently withdrawing from EPF Account 1 (every 3 months) to invest into unit trust. This diversification creates a second pension fund! The long term objectives are to beat the EPF annual dividend and to wallop the ever increasing inflation rate! Join me or forever keep your peace!

20% Rise in Tax Collection

There has been a 20% increase in tax collection in the first eight months of this year compared with the same period last year. In 2007, the IRB collected a total of RM74.669bil. This year target is RM77bil in revenue after refunds.

So far, refunds have totalled RM6bil for individual taxpayers, companies and big organisations. IRB usually received about 400,000 refund notices, but only 200,000 to 300,000 were genuine. And 20% to 30% of the refund cases needed auditing.

Another statistic worth noting is that this year saw about 1.2 million people using the e-filing system, compared to about 800,000 last year.
Non believers out there, just try it, avoid the hassle in joining the last minute rush to the agency!)

IRB the cash cow of the nation. The nation can go bust if this agency is not on tip top condition. Worth noting is the high amount i.e. RM6bil of refund! Major chunk is being claimed by the business entities. There surely must be a better system to reduce this amount and thus reduce the refund administration.

In the present self assessment system, the companies are paying taxes monthly, in advance based on projected income for the year. There is a drain on the cashflow especially for SME as the trade collection might be slow.

Our wish is that the leaders and those in the Treasury to make good use of the billion! Yeah, really make good use of the billion for the rakyat!

5 Things to Consider Before Buying House

Buying a house would probably be the largest and most significant investment we will ever make in our lives. (Beside choosing a life partner?). Although a daunting task, research and preparation will help us to reduce the anxiety and to make a wise choice. Here are the 5 important things to consider :

1) Location, Location, Location
New development will pose higher risk especially with unproven developer. Established area with proven investment track record is a surer bet. Better to pay a slight premium that end up with an abandoned 'baby'.
Spot on, you will get Bukit Damansara. Bomb out, you will get Bukit Beruntung.

Location that is popular, has the necessary amenities such as market, school, mall, eating joints and transportation options. Also consider the traffic situation.

With the increase in crime, security and safety is also a major issue. Gated and guarded housing estates are becoming popular.

2) Location, Location, Location

3) Location, Location, Location

4) What Should I Look Out For?
During the house inspection, bring someone along, preferably one with a sharp eye to spot things that we may miss. Visit during the day. View the condition of both interior and exterior. Knock on the floor, tiles and doors. Lookout for leakages and water mark. Check if there is any plumbing, electrical and termites problems. Find out the reason of sales from vendor and neighbours.

5) Financial Issues
Compare the market price from a few agents and classified advertisements. Decide on the loan amount. Most banks would provide loans of up to 80 to 90% of the purchase price. Compare the bank rates. Decide on either fixed or floating rates. Ensure you have enough money not only for the down payment but also to cover the expenses like legal fees (both S&P and loan agreements), valuation fees, stamp duty and insurance. If you intend to renovate and furnish, allocate more money. Make sure you can afford the monthly installment, maintenance and taxes.

Happy House Hunting!

Only RM25m Out of RM537m Recovered

This alarming report was published in The Star today.

“After investing RM537.04mil in the US-based Columbia Aircraft Manufacturing Corporation (CAMC) through Composites Technology Research Malaysia Sdn Bhd (CTRM), the Government only managed to get back RM25mil.

The 2007 Auditor-General’s Report stated that CTRM, owned by the Finance Ministry Incorporated and Petronas, invested and lent RM537.04mil to CAMC as of September 2007. CAMC, which produced four-seater light aircraft suffered an accumulated loss of US$132.28mil (RM480.18mil) at the end of 2006 and filed a bankruptcy notice at an Oregon court on Sept 24 last year.

The Report said the investment failure was due to unscrupulous spending by its senior management officers, CAMC’s board of directors being unable to tackle production of aircraft quickly and the Finance Ministry Incorporated's lack of monitoring of CAMC.”

Oh dear! More than RM500mil gone down the drain or perhaps contributed to someone’s retirement funds! This was not the first case and yet the authorities choose not to learn from previous investment failures. The authorities can never be good investors because the decision makers and appointed honchos are using public money and not their own money. Bad investment? Never mind la, not my money, doesn’t feel the pinch and who knows, might be given another toy! Another RM500mil to try building space shuttle, any taker?

Leave these investments thingy to the private shareholders. Heads will be chopped if their hard earned money is burned! As stated in the above case, the foundation for financial disaster was erected as the honchos spent like nobody business with the knowledge that there was a lack of monitoring.

Accountability is the name of the game. The authorities can go back into this game once they embrace this accountability game rule! Choose to ignore this rule; don’t see how they can win the game.

p.s. Can ACA poke their noses into this case? Enough is enough!

Budget 2009 - Any Goodies For You & Me?

The good old politicians claimed the budget put money into our pockets. Hmm! 'our pockets' - you and me pockets or their pockets? It is a deficit, an expansionary budget as the main chunk is to pay for the operations. The budget deficit is projected at 4.8% of GDP, the highest deficit in a decade.

How about the next budget? How is the government going to cut the widened deficit next year? Time to introduce GST or other taxes to boost revenues? Probably not as these measures will lose them more votes. Seriously, it is time to cut the fat and excesses and reduce wastage at the bloated government set-ups.

Back to Budget 2009. How do we benefit? At a glance, I concluded that those in civil service will gain the most! As for private sector employees, time to restructure the paycheck. In the name of tax planning, reclassify the salary into various allowances i.e. travelling, handphone and Internet allowances and housing interest subsidy. All these are tax exempted. The total package remains the same but the 'take home' should be more. Additionally, the reduction in taxable income will put us in a lower tax bracket. More good news - there is some reduction in the personal tax rate with the highest rate at 27%. Ah-ha, for once, can trust these politicians - this is the money into our pockets!

Another incentive that is worth noting from investment point of view - 50% stamp duty exemption on loan agreement for medium cost houses below RM250,000. As the first RM100,000 is charged at 1% and subsequent at 2%, there should be a saving of RM2,000 at the maximum. Nothing superb but better than nothing for those that are house hunting!

The budget announcement injected some positives with KLCI rising above 1100 points for the first time in 2 weeks. However the political risk factor remains.