Never Say Die

"If you want something in your life, you have to keep at it. There will be obstacles and challenges along the way. Every time you fail or do something that does not meet your standards, try again. If you fall down 20 times, go for 21. You may not be able to do exactly what you want in life but there are different ways to approach your dream.

If you are in the middle of a crisis, do not panic. Take a deep breath and stay calm. You may be in a tight spot but if you keep your cool, the situation can be resolved. In life, when you feel lost, don’t be ashamed to ask for help.

If you want to develop your skills to their greatest potential, you too will have to work hard, overcome difficulties and doubts and push yourself beyond levels you may have achieved in the past. You can do it. You can make it happen. The choice is entirely yours.

I believe that the true meaning of success in life is to use your talents and abilities, your gifts to better not only your life but the lives of others."

Tan Sri Ani Arope, former executive chairman of TNB

Don't Leave Home Without It

According to The Association of Banks in a letter to the editor published last Saturday, credit cards in circulation have grown 278% in eight years from 2.8 million in 2000 to 10.6 million in 2008.

This showed that credit cards are accepted as a convenient electronic payment tool. As the economic condition remains unclear, stronger financial discipline has to be instilled to avoid a critical problem in the future. The most important step in responsible credit card use is to completely pay off the bill every month. Think of the credit card as using cash that is reserved each month for the items charged. With this method, no interest accrues and credit cards become legitimate and helpful financial tools.

Banks in Malaysia monitor the credit cardholders’ payment record for the 12 consecutive months to determine their repayment track record. Based on such record, one of three tier rates will apply under a unique tiered interest rate system.
With the tier rates, credit cardholders are encouraged to continuously make at least the minimum payment of 5% of the amount outstanding within the due date to stay at tier I at all times or, as the case may be, move from a lower tier to a higher to enjoy better interest rates with a steadily improving repayment track record.

About 30% of credit cardholders pay the amount outstanding in full. A large number, however, typically only pay the interest and a bare minimum amount of the principal outstanding and thus never fully repay the entire sum. (This is a very worrying statistics, meaning many are spending like the Americans!)

If a credit cardholder pays only the minimum 5% of the amount outstanding on a RM10,000 balance, with an interest rate of 18% per annum, it would take seven years and three months to pay off the amount owed, assuming no more charges are added to the card. (Wow! No wonder many are broke. Now you know why banks love this product and keep sending you pre-approved cards at your doorstep!)

Thus, educating credit cardholders as to the importance of good spending habits cannot therefore be overlooked. The following are tips to be shared for handling credit cards wisely:

> KEEP one or two cards only and use as a means of payment and not as a source of long term credit.
> CHARGE only what you can afford to pay back; avoid living beyond your means.
> SHOP around for the best interest rates, annual fees and service fees. There are a few banks offering “no frills cards” at lower interest rates. These cards do not attract the annual and joining fees nor enjoy insurance coverage and/or reward schemes.
> PAY off the debt each month, or at least pay more than the minimum if one elects to pay in installments.
> AVOID withdrawing cash advances as there are charges involved. Remember that a credit card is not the same as free money.
> IN the event of inability to settle credit card amount outstanding, do not delay approaching the bank concerned for an amicable resolution which may include restructuring of the credit card debt.

Bookmanship

Today with so many distractions and many mode of entertainment including laughing our heads off listening to the politicians’ verbal diarrhea, the number of people who read regularly is dwindling. How do we make sure it is not a dying art?

1) Make it a point to ask others what they are reading. When a few friends were talking about The Secret, I had to read it. Busybody ma! want to know secrets!

2) If a movie that is based on a book, interests you, get the book! Da Vinci Code came to mind; oh no it was the other way round, read the book first!

3) Read the book review sections of newspapers. If something sounds interesting, check them out. Grandfather stories by Lim Goh Tong and Lee Kuan Yew!

4) Visit the library. I have a habit checking the re-shelving carts to see what others are reading! Recently read To Kill The Mockingbird and 45 Years Under ISA, picked up from these carts!

5) Keep an eye out for used book sales.

6) Go to the bookstore.

Back In The High Life Again

Leaders have an obligation to set compelling example by incorporating a set of values, attitudes and practices not only at work but in their personal lives as well.

The majority of the current leaders in our political and sports arenas are unfit to led us. Change is imminent. It is time for us, the silent majority to spearhead the change.

There are many very capable leaders out there who could do the job but were sidelined due to various factors. Are you one of them? Unsure? You are one of them if you possess these key traits:

1) Practice what you preach
Simple but yet difficult to comply. If you preach work life balance, but then always require staff to work long hours. If you promote ‘promote from within’, but keep recruiting from outside! There goes your credibility!
CEO of Renault, Carlos Ghosn said “I personally believe the best training is management by example. Don’t believe what I say. Believe what I do.”

2) Walk the tightrope
People look up to leaders for directions. The difference between a leader and a boss is that leader leads, clearing all obstacles along the way while the boss simply drives where he is told to go. Leaders require sound judgment and ability to make tough decisions.

3) Be a good follower
The Greek philosopher Aristotle said ‘He who has never learned to obey cannot be a good commander’. The best way to learn is to be a good follower and to benchmark against those whom we aspire to be. Good followers usually make the best leaders.

4) Treat your people as assets
Jack Welch, GE ex CEO said “A leader’s role is to impart vision and a healthy corporate culture, build great people and teams and show them how to lead.” A good leader should intervene, coach, mentor and influence his people to perform at their best. A great leader takes people where they don’t necessarily want to go but ought to be.”

5) Assess yourself regularly
Leadership is an ongoing process of learning and refining management styles. Stay ahead of the game and be highly adaptable to changes. Take responsible when things go wrong and turn the spotlight on people in good times. JFK said “Leadership and learning are indispensable to each other.”

C'mon guys, stand up and be counted.

Be Present

Imagine there is a bank that credits your account with RM86,400 every day, It carries over no balance at day end. It will delete the balance that you have failed to utilize. What should you do? Of course, draw every single sen!

Each of us has such a bank. It is called TIME. Every morning, it credits you with 86,400 seconds. At day end, it writes off the balance that you have failed to invest to good purpose. It carries no balance and allows no overdraft. Each day, it opens a new account. If you fail to use the day deposits, the loss is yours. There is no going back. There is no drawing against tomorrow. You must live in the present on today’s deposit. Invest it wisely in achieving good health, wealth and happiness. The clock is running. Make the most of today.

To realize the value of One Year, ask a student who failed a grade.
To realize the value of One Month, ask a mother who gave birth to a premature baby.
To realize the value of One Week, ask the editor of a weekly newspaper.
To realize the value of One Hour, ask lovers who are waiting to meet.
To realize the value of One Minute, ask a person who missed a train.
To realize the value of One Second, ask a person who just avoided an accident.
To realize the value of One Millisecond, ask the sprinter who won a silver medal.

Treasure every moment that you have. Time waits for no one. Yesterday was history. Tomorrow is mystery. Today is a gift, which is why it is called present.

Four Non Blondes

This story is about four non blondes namely Everybody, Somebody, Anybody and Nobody. There was an important job to be done and Everybody was asked to do it. Everybody was sure that Somebody would do it. Anybody could have done it but Nobody did it. Somebody got angry because it was Everybody’s job. But Everybody thought that Anybody would do it and Nobody realized that Everybody would not do it. In the end, Everybody blamed Somebody and Nobody blamed Anybody!!!

Investment Poser for Retirees

Case 1: Choong Mun Fook, 58, a retiree, intends to invest in unit trusts and investment-linked insurance using his savings. These investments now offer attractive opportunities as considerable value has emerged from the downward spiral in asset values.

He also plans to pick up some blue chips in the stock market which have been battered in terms of valuation. Although it is considered risky for his age, it is a good alternative over the medium term compared with FDs, which offer such low yields. The current market situation was a rare opportunity for investors to obtain better returns since the KL Composite Index had fallen by more than 40% since the beginning of last year.

Case 2: Grace Matthews, 62, a former civil servant, purchased unit trusts using her gratuity upon retirement. The unit trust market proved to be a profitable venture initially but her investments were badly affected last year. She also put some savings into the New Zealand and Australian foreign currency deposits but has made losses as well recently.

Her savings were now mainly placed in Amanah Saham Nasional Bhd’s fixed-priced equity-based unit trust funds namely Amanah Saham Wawasan 2020 and Amanah Saham Malaysia, which offer consistent average returns of about 7% yearly.

Case 3: Cheah Kay Eng, 78, believes that FDs still present the least amount of risk compared with other financial instruments in the market. Although they are not substantial, returns from FDs still give him a bit of pocket money every month.
From the above scenario, there are many choices but it depends on individual’s risk appetite. Higher returns come with higher risks compared with safe but low-yielding FDs.

However, the financial expert said the level of risk associated with financial products was relative. FDs and savings accounts in banks are no longer a sure bet, as Citibank, Lehman Brothers and Merrill Lynch either go bankrupt or bailed out by the government.

Additionally, many people had the wrong perception that savings entailed investing in just one particular product. The right way for a retiree would be to take a diversified approach to risk so that he is not too exposed to a particular risk sector. Then, he has to determine what is the combined risk taken and monitor the risk exposure over his investment time horizon so that it is reasonable to the returns he wishes to get.

Ideally, early financial planning would help retirees avoid the stress of dealing with insufficient retirement funds or seeking additional means to ensure financial stability. Plan ahead to counter the effects of inflation – many retirement plans are built with flexibility in mind, allowing you to decide and control how much to set aside each month.

Top 10 Sales Slip Up!

1) No Empathy
Most salesmen get caught up in own needs – meet the quota make the commission - that they do not feel the customers’ pain. E.g. currently, most customers might find it hard to justify purchasing luxurious items. However if they could manage where it hurts and bring the feel good factor to the customers, everything goes!

2) The Goal – Make Money
Money should not be the goal. Strive to be the best in your field. Make that the goal and the money will come.

3) Just a Job
Selling should be your life, not just a job. Have passion. Never stop selling. Otherwise quit now!

4) Down and Upset
Always be happy even though the doors are slammed in the face. Rejection inspires to greater heights. Getting upset bring you down.

5) Unprepared
Do your homework. Prepare your presentation. Arrive before the agreed time.

6) Over Prepared
Be prepared does not mean following a script, which will make you seem wooden (kayu)! Rehearse and improvise instead of memorize!

7) Treat Customers As Adults
Many customers do not buy based on logic and intelligence. Deep down, many buy based on impulse and rationalize like teenagers! They want excitement and status. E.g. they will still buy the latest Ferrari even though they hardly drive the 3 that are parked in the garage.

8) Don’t Believe in the Products
If you are having trouble to use and believe in the products, quit now!

9) Neglect the Relationship
Build the relationship. Convert the customers to friends. Better the devil you know that the angel you do not know!

10) We Are Basically Reptiles
The most important part of our brain has embedded animal instincts of survival and reproduction. Sing together in karaoke, swing together in golf course etc will assist in satisfying these instincts.

Modified from article written by Dr. G.Clotaire Rapaille, Fortune Sept 29, 2008

Hey Big Spenders!

Even the most careful spenders can find themselves with too much debt on occasion. The biggest culprit is impulse buying. So start developing good habits. Here are some ways to regain control :

a) Make a list
Make a list before you go shopping. Try to stick to it. Ads, store displays and coupons will entice you to buy things that are not on your list. Use your list to help you resist.

b) Shop when you need to
Shop when you need something. Not for fun or to cheer yourself up.

c) You are the boss
Before making any sizeable purchase, leave the store to think it over. Don't go back if the sales person has been using pressure tactics like "It's the last one in stock." "If you buy one right now, I'll give you an additional discount." "This is a once-in-a-lifetime deal."

d) Is there an alternative?
You can save by buying a less-expensive model. You can also buy just about any quality item second-hand. Check the classifieds in your local newspaper, or use the Internet.

Delicious Buffett

Stock market guru, Warren Buffett, made headlines when he bought substantial stakes in technology and services giant General Electric Co (GE) and financial heavyweight Goldman Sachs Group.

Just when everyone else was pulling out their investments from Wall Street, Buffett stepped in to inject some US$8bil in these two companies via his investment company Berkshire Hathaway Inc.

“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well,” he once said.

The five main criteria Buffett uses for stock selection are earnings versus growth, high return on equity, minimal debts, strength of management and simple business model.

Buffett is an astute long-term investor and has always investigated the underlying fundamentals of a company, rather than market sentiment. He has always determined the intrinsic value of a business and paid a good price for it. He believes price is what you pay, value is what you get.

Being prudent, Buffett is said to never invest in any business that he could not understand, a principle that paid off when he escaped the dotcom market crash. His investment principle is simple— always analyse a company’s annual reports to check its fundamentals and know what you are investing in.

Should we emulate Buffett? Many investors would say yes if we are buying for long-term. Investors should generally hold on to three principles — be long-term oriented, only buy what we can afford and be focused in what we buy.

Inflation Buster

Amanah Saham Nasional Bhd (ASNB) fixed-priced unit trust funds launched in the past few years have proven to be big winners due to their commendable returns.

These equity-based funds, namely Amanah Saham Wawasan 2020 (ASW 2020) and Amanah Saham Malaysia (ASM), have achieved compounded annual growth rates of 10.78% and 6.3% respectively since the time of its launch. ASW 2020 and ASM have been providing an annual average distribution income of 7.74 sen and 7.12 sen respectively.

Say if an investor had placed RM100,000 in ASW 2020 10 years ago, his investment value would amount to RM251,360 today. Similarly, by placing the same amount in the ASM fund 10 years ago, the investor would have RM173,340 today in his investment account.

ASM was launched on April 20, 2000, with an initial fund size of two billion units which were fully subscribed in 21 days. In June 2000, one billion units were fully subscribed in four months. In April 2006, one billion units were fully subscribed in 45 minutes. In the most recent offer in July 2007, all the 500 million units were taken up in 30 minutes.

All good things are well loved. Investors have confidence in these funds. Besides being managed and backed by a GLC, the returns are commendable. However the demand is more than supply. Additionally most of us will either have too much pride or too little time to join the crowd in queuing during the launch!

Do not be despair; there are options in the market. Investors could find similar funds that are well managed by private fund managers backed by the leading banks. The returns are equally impressive (if not better) in the long run and have now become relatively cheap.

Unit trust investments are good for those who think they do not have a lot and want to start saving money effectively. More so in current situation where the banks could only offer 2.5% returns for investment in fixed deposit!

Recommendation of funds are welcomed!

Sign 'O' The Times

According to the Reshaping Economic Geography Report in East Asia, an East Asian and Pacific region companion volume to the World Development Report 2009, real wages (wages that have been adjusted for inflation) in Malaysia have dropped dramatically over the last 10 years since the Asian financial crisis.

Real wages growth for export-oriented industries had reduced significantly to 1.9% post-crisis from 5.6% per annum. Meanwhile, for domestic-orientated industries such as food, beverages as well as tobacco, growth in real wages had fallen to 1.4% post-crisis from 6.8% per annum.

According to report author Dr Yukon Huang, the fall in real wages was in tandem with the drop in gross domestic product (GDP) over the last 10 years.

No surprises here as we have to deal with high inflation and global credit crunch. In fact, the current buzz word is retrenchment! So better make yourselves valuable – be more productive, learn new skills, reduce surfing time!!!

However, personally I believe there are opportunities in current situation. Many will be playing safe and not take risk. If you could tolerate higher degree of risk, then the sky is the limit! The thing to fear is fear itself!