Tuesday, June 23, 2009

10 Types of Scam

1) Animal vaccine:
These vaccines are ostensibly for farmers to use on their animals to help them breed faster. The demonstrations conducted by the con men are so convincing that the victims do not hesitate to buy the “magic vaccine” despite its high price.

2) Currency exchange:
Customers are offered extraordinary rates when they want to convert their money.

3) Inheritance:
Syndicates would use seemingly authentic documents to assure their victims that a great grandfather or close relative had died, leaving tons of money without an heir.
The victims are told that they would be charged a service fee and that they would then have a share of the riches. Once the money is paid out to the fraudster, he would disappear.

4) Parcel delivery:
Professionals such as lecturers and executives who surf the Internet frequently are often the victims. After befriending the victims through online chats, the conman would send them a parcel purportedly containing a “gift” such as a laptop, a watch or even jewelery.

Victims are told that the parcel had been held up by Customs, so they must pay a processing fee to retrieve the parcel. Once the fee is banked into a local bank account, there would still be no sign of the parcel.

5) Job offers:
Foreigners are dangled job positions in Malaysian hotels, multinational companies and telecommunication firms with promises of good salaries. All the dealings are done via Internet. They would be asked to pay for “visas” and “work permit fees”.

6) Lotteries:
Victims are told that through their email addresses, they have been selected as lottery winners where the prizes come in US dollars or pound sterling. To get the money, the victim has to be a member of a club and would be asked to pay very high membership fees.

7) Jewellery:
A syndicate would offer to sell gold in a form known as “granules”. The dealings often take place in hotel rooms where victims would be shown the genuine stuff initially but they would later discover that all they got is just a packet of metal powder.

8) “Bomoh”:
This usually involves celebrities and the wealthy who are eager to double their riches. The syndicate would use a piece of yellow cloth, a candle and the Quran, besides chantings. Victims are persuaded to leave a certain amount of money inside a bag. The are not allowed to open it until a specific time. Later, they would discover that all the money inside the bag had been quietly taken out and replaced with paper.

9) Credit card:
The suspects would use forged credit cards to settle their purchases at shopping malls, then reselling the items at a higher price later.

10) Drug-dealing:
Local women are made use of to smuggle drugs out of the country in exchange for jobs overseas.

Friday, June 12, 2009

Mistakes Mistakes

Here are some commonly made money mistakes that everyone should avoid:

Mistake #1:
Failing to Plan
Not many of us plan our finances. The most common response that we can anticipate would be the classic excuse “We are just too busy with work and family that we hardly have any time left to do the planning”. As a result, most of us end up paying higher taxes, leave our savings sitting silently in lousy investments for years or overpaying for financial products. Since there are always deadlines to be met at work, we tend to let our finances run its own course, thinking that it is of lower priority as there are no deadlines to meet nor is there anyone to force us to look into our financial plans, unless of course we run into serious deficit.
However, the important point to note here is that PLANNING is typically found to be a strong habit among people who have successfully accumulated wealth, even with just a modest income.

Mistake #2:
Spending Beyond Our Means
We constantly overspend due to peer pressure and consumer temptation that surround us on a daily basis. We are exposed to mild brainwashing with TV commercials, newspaper ads, sale circulars, and flashy shopping malls promoting the lifestyles adopted by the rich and famous, which of course involves having the latest mobile phone models, the latest luxurious cars, latest fashion trend. All these tempt us into spending exorbitantly and unnecessarily. The signals we get from not jumping on the bandwagon are that we will be considered left out of today’s scene. However, in order to do so, we end up spending way beyond our means. We will find that at the end of each month, the net salaries that go into our bank account are usually meagre, after servicing our car loans, housing loans, credit card bills and other utility bills.

Mistake #3:
Spending Future Money
Buy now and pay later! This has become a norm and the credit card has become a must-have item in our wallet. In fact, a lot of us carry more than one in our wallets. No doubt it is a convenient item to have around; however, some of us misuse it and treat it like a vehicle to spend our future money at will. It has become a common phenomenon where, by just settling the minimum payment at the end of the month, you will buy more now. As a result, the credit card bad debt snow-balls to an extent beyond our control. According to the bankruptcy report, the percentage of people declared bankrupt due to default in credit card payment has increased in the last few years especially among the younger age group. Be wise when using credit card. Making minimum monthly payment on credit card debt allows you to buy more now, but it will cost you dearly in the future.

Mistake #4:
Delaying Saving for Retirement
Most of us aim to take up early retirement. In order to achieve this, we need to plan our finances to make sure that we have enough savings to sustain the life style that we desire even after retirement. However, many of us find that even when we approach retirement, we still struggle to meet the savings target that we have set for ourselves earlier. As our income grows, our savings are supposed to increase as well, instead, we more often than not, have big items to spend on, i.e. house upgrading, new car purchase, club membership to keep up with our peers, etc., that prevents us from depositing more into our savings.

Mistake # 5:
Investing in the Wrong Products
There are various kinds of financial products in the market. However, in order for us to identify the right product that suits our risk and return profile, we need to equip ourselves with some basic investment knowledge and do the homework ourselves. Instead, most of us end up investing in some products, simply because we rely too much on the financial advisers, who might have the agenda of pushing higher sales for their products and therefore providing misleading information to us. It is always important to study the product characteristics or the management team track record before investing.

Mistake #6:
Not Saving for a Rainy Day
Some of us think that purchasing insurance is a waste of money. However, we are vulnerable if we and our family do not have insurance to cater for any loss of income. In the event of some unfortunate incident, especially those affecting the family’s bread winner, without any cash reserve or insurance, it will be devastating to the whole family. By then, it would be too late to start thinking of income replacement.

Mistake #7:
Focusing Too Much on Money Matters
All the above tell us to focus on our finances. However, on the other extreme, we must also not be too engrossed in accumulating our wealth to the extent that we lose sight of other priorities in our lives. While we plan our financial health, we must not neglect our own health, family and friends, career satisfaction and fulfilling interests. Without these, even with tons of money, we will not be happy.
Lastly, we need to remind ourselves of the importance of planning our finances. If we are not fully, totally and truly committed to creating wealth, chances are wealth will remain estranged to us.


Friday, June 5, 2009

Tax Planning Strategy - Unit Trusts

Unit holders will be taxed on distribution received from a unit/property trust. The income distributed will include a tax credit which is actually tax paid by the unit trust company. The unit holders can therefore utilise the tax credit available to set off against their tax payable. Any excess of tax credit over the tax payable will be refunded by the tax authorities to the unit holders.

Income distributed out of exempt income or gains made from the sale of investments (shares/property) of a unit/property trust is not taxable in the hands of unit holders.
Unit holders who choose to receive their income distribution in the form of new units are regarded as having purchased extra units and these fresh units are not subject to tax.

Gains realised by unit holders on the transfer or redemption of the units are treated as capital gains and therefore not taxable.

Tuesday, June 2, 2009


"If you are first you are first. If you are second you are nothing." Bill Shankly

This blog is ONE year old! It has evolves from 'the story of my life' and all the jazz to a more investment and economy centric blog.

After close to 200 hundred articles, unfortunately, instead of going and growing stronger, due to work and personal commitments, I have to sacrifice this writing passion on the back burner! No, it is not the end of life but expect a less frequent updates.

How time flies and as we could not turn back the clock, got to prioritize the urgent and important matters that need to be attended in the given 24 x 7!