Personal Finance Portfolio should be dynamic

We often hear experts said

if you are young, you can take more risk, hence put your investment in equity.

then

if you are old, you should keep your capital in safer vehicle like bond etc.

But one important strategy they miss out is ... the dynamic of personal finance portfolio.

Says you are 25 years old, you will need a sum of money at 35 years old. Hence you can invest into equity. However, you must learn something about the equity market you are entering into. For example, you know that for every 10 years in your equity market, there will be a peak and a bottom. So perhaps by 3-4 years before your maturity date, ie. 31-32 years old. You should start considering withdrawing your equity investment and keep them in a money market or bond fund. This will preserve your capital and secure you from unexpected last minute change, ie. a sudden equity collapse.

for example;

age 25 : 90% equity, 10% bond

age 27 : 80% equity, 20% bond

age 32 : 40% equity, 60% bond

age 34 : 10% equity, 90% bond

Keeping a non dynamic portfolio expose you to risk the whole time. If bad luck hits you, you may lost all your 9 years of earning in the 10th year. So one must keep ones personal finance portfolio dynamic.

value for money - linear or exponential ?

Value for Money ( short for V4M ) is basically how much values you get from the money you paid. It is often irrelevant how much is the price of an item or service. Whether or not a person pay for something is simply because of how he perceives the values he is getting.

If a person perceive values more than its price, he would paid for it !

If a person perceive values less than the price, he would NOT paid for it.

There are 3 types of V4M perceptions. This article will cover 2.

Linear model of V4M is basically thinking all features are alike. Hence for every feature the person is looking for, he would be willing to pay some price for it. But if a particular feature is substantially higher price, he would think its NOT worth it.

For example, a person is looking for a phone that has Wifi feature and cool-look feature. A typical wifi phone may cost him $500, a cool looking wifi phone may cost $2,000. A linear V4M guy will go for the typical Wifi phone.

Exponential type of V4M model describes a person who values most on perfection. He understands that many providers can easily give an average services / products but it is very rare for a provider to provide a perfect solution. Hence he is willing to pay any price for one particular feature especially when such feature is not easily available elsewhere.

An exponential V4M guy would have go for the cool looking wifi phone as per above example.

One will always find Linear V4M guy a FRUGAL person. He analyses well before making a purchase. He may go for 2nd hand goods as long as they still work well. Such a person is always the next door millionaires whom you never knew.

Exponential V4M guy on the other hand is the high society type of person. The only way he can sustain his life style is by being filthy rich. His perception on values is also the main driving force for him to stay rich. Such a person is always a very high cash flow fellow but often unable to retain a net profit.

There is no right or wrong in either V4M models. But it is important for you to recognize your own V4M model and then focus on living that life. Problems arise when an exponential V4M model guy thinks he is frugal OR when a linear v4M model guy keeps over pay.

What is your V4M model ?

The Right Truth behind Donation

From time to time we hear about how rich people donate their wealth away. Some donate whole of their wealth, some half and some donate just enough to optimize their tax planning.

Most people would think that the rich has too much, hence they want to give some away since they can't use it anyway. That ... would be 20th century mind set.

The fact is ... the rich who donates, is not only rich, but also smart rich. Whatever they have now, they can continuously have it at anytime. Hence it doesn't really matter if they give anything away tonight, they will have it again tomorrow morning.

That would be the ultimate power of passive income, or smart income.

Once you know how much you 'really' need, you 'find a way' to keep your needs fulfilled without doing anything much. Then whatever extra comes in is the one you can easily donate away without filling any pinch. Yet many will feel much appreciated because it means the whole world to them.

So in short, you can really see which rich man has smart income in him and which rich man is barely surviving with his active income, by seeing the way they donate.

Now, let me ask .... do you think USA rich men is smarter or China's rich men ?

Easy Retirement

This is an extract of what I read in today's newspaper. More and more people start to carry this type of alternative concepts about retirement especially in this 21st century. You can't say its wrong. As a matter of fact, its a rather SMART way to go. But lie within is a huge hidden risk.

The titles in above newspaper read:

1. you don't need much during retirement, coz your liability has reduced
2. living frugal is not hard, mentality is the key
3. you don't need to prepare to retire ?

By the time you retire, you probably don't have any more house loan or car loan to serve. Your body does not allow you to earn that much anymore. Chicks don't get attracted even if you sit in a Porsche. The bigger house you live in the harder it is for you to take care of it. In short, many people plan to 'maintain' their CURRENT lifestyle when they play for their retirement. The fact is you WILL NOT live the SAME lifestyle even if you are financially able to.

Basically the idea of save or accumulate enough so that you can STOP WORKING one day is solely base on the assumption you don't really LIKE what you are doing. You are just doing it for the sake of money or future retirement. Hence when you no longer need that money, you will want to stop working. But what if you REALLY LIKE what you do for a living ? Would you stop even if you have enough money for the rest of your life ? Be it Bill Gates, Warren Buffet or that happy old man by the street ... the answer is obvious. You will keep on doing what you like even if you retire or don't HAVE TO DO IT.

And if you have been doing something that you like for so long, the chance is that you don't really need to worry about living expenses since a long time ago. Incoming cash flow will persist and hence you don't really need to worry or prepare for a retirement. Coz you don't want to retire !!

What do you think about this easy retirement methods ? In contrast to the fundamental of save, invest and accumulate until you have enough to fight against the inflation etc. ?

Which do you prefer ?

There is NO such thing as Passive Income !?

21st century personal finance is moving away from saving and focus into the income arena. In short, the gurus are now educating public that saving is NOT good enough, hence sourcing for passive incomes on the another hand is a BETTER solution, than just saving alone.

While the concept is definitely true and correct but unfortunately as the hypes go bigger and bigger, the idea of passive income has been abused and more scams started to appear in the market, as if they were the gurus as well. Except the 'passive income' they refer to is barely promoting their own original same old products. The personal finance market has become so competitive that even some real gurus have no choice but to go beyond the line in their marketing effort - Robert Kiyosaki is no exception in spreading "Saving is bad".

Although passive income is very well defined here using income ratio 1:100 but is there really such thing as Passive income ? When I looked up dictionary, these words come up

PASSIVE : not participating, inactive, not reacting, inert or quiescent.

None of these words correctly describe a well implemented passive income. I use my best judgement to find a good location, a value property and a pay master tenant. I setup a profit take target and an exit strategy in my investments before I leave and let them auto pilot. All of these are very participating, actively applying my knowledge and experience, reacting appropriately when necessary etc.

The word "Passive" also gives people a psychology of No Need To Do Anything; As if an easy to get rich scheme with a better cover.

Hence this article wants to pursue all readers to stay away from the term Passive Income. Its negative, misleading and now abusive by the over-stress marketing effect. Instead, think of Smart Income !

There is no hard and fast rules for Smart Income. Any income can be earned the regular way or the Smart way !

An employee can use minimum of his time effectively to earn the highest salary or benefits. A self employ can easily leverage on Internet to earn income repeatedly. A business owner can employ a system to run his business. An investor can setup an autopilot mechanism.

So no matter which income quadrant you are in, it is possible for you to turn that income into a smart one. Its a matter of HOW you earn your income, NOT WHAT you do.

Are you pursuing smart income ?

21st century Economy Politic Quadrant

The Economy-Political Quadrant may seems like telling where to keep or invest your money despite good or bad time.

It indeed works very well during 20th century. Unfortunately comes to 21st century, not only has the year changed, personal finance arena has changed drastically as well.

Gold has been speculated so much that it MAY no longer be the standard of money.

There used to be only 'property' in the city. Now there are satellite towns, suburbs ... agriculture lands and even dust bins ( recycle ) have become valuable estates too. While property remains the right category to invest into whenever economy is booming, but predict the right future seems like tougher than buying lottery.

Government bonds used to be de-Facto action when a country is stable. But in today's world, a country is as smart as a taicon's finance. One day they are the LARGEST, the next day they are GONE.

Stock market used to be the back bone of a country's economy. However, the market of derivatives has become so HUGE that the REAL and PHYSICAL is NO LONGER more real than VIRTUAL

So in 21st century, the element of Stock-Property-Funds-Gold is really questionable. However, one fundamental that doesn't change is that

you will have to identify what to do at what time that is BEST for YOU !

Hope you will find your own very best Economy-Political Quadrant soon !

East will take over West in ... 2020 ?

G7 are the 7 countries who have been dominating world finance since 20th century. Most of them are from Europe and North America, plus Japan.

However, most would have known by now that some of them are no longer as great as they used to be in this 21st century.

So E7 comes about where generally people think a new economical forces will emerge out taking over G7, they are (China, India, Brazil, Russia, Mexico, Indonesia and Turkey).

According to chart below, E7 will take over G7 in 2020.

There are also stories that says this will happen in 2050. Either way, generally people expect E7 to take over G7 in due time.

However, the fact is that will NEVER happen.

What will happen instead is that 1-2 G7 members may drop out from the list because they fail to make a come back despite how hard they try. Like wise 2-3 E7 members never make it to the bar, hence E7 will NEVER be formed.

At the end, there may be a G11 formed, which has nothing to do with G7, G8 and G10.

G11 is seamlessly integrated among themselves with latest technology. Forex and logistic are no longer issues a small business owner need to worry about among these G11 member countries.

Individual Income Tax Relief 2010

List of Tax Relief for Resident Individual 2010

No.	Individual Relief Types	Amount (RM)
1	Self and Dependent	9,000
2	Medical expenses for parents	5,000 (Limited)
3	Basic supporting equipment	5,000 (Limited)
4	Disabled Individual	6,000
5	Education Fees (Individual)	5,000 (Limited)
6	Medical expenses for serious diseases	5,000 (Limited)
7	Complete medical examination	5,00 (Limited)
8	Purchase of books, journals and magazines	1,000 (Limited)
9	Purchase of personal computer	3,000 (Limited)
10	Net saving in SSPN's scheme	3,000 (Limited)
11	Purchase of sport equipment for sport activities	300 (Limited)
12	Subscription fees for broadband registered in the name of the individual.	500 (Limited)
13	Interest expended to finance purchase of residential property. Relief of up to RM10000 a year for three consecutive years from the first year the interest is paid. Subject to the following conditions: (i) the taxpayer is a zzzzn citizen and a resident; (ii) limited to one residential unit; (iii) the sale and purchase agreement is signed between 10th March 2009 and 31st December 2010; and (iv) the residential property is not rented out. Where: (a) 2 or more individuals are eligible to claim relief for the same property ; and (b) total interest expended by those individuals exceeds the allowable amount for that year , Each individual is allowed an amount of relief for each year based on the following formula: A x B C where; A = total interest allowable in the relevant year; B = total interest expended by the relevant individual in the relevant year; C = total interest expended by all the individuals.	10,000 (Limited)
14	Husband/Wife/Alimony Payments	3,000 (Limited)
15	Disable Wife/Husband	3,500
16	Ordinary Child relief	1,000
17	Child age 18 years old and above, not married and receiving full-time tertiary education	1,000
18	Child age 18 years old and above, not married and pursuing diplomas or above qualification in zzzz @ bachelor degree or above outside zzzz in program and in Higher Education Institute that is accredited by related Government authorities	4,000
19	Disabled child Additional exemption of RM4,000 disable child age 18 years old and above, not married and pursuing diplomas or above qualification in zzzz @ bachelor degree or above outside zzzz in program and in Higher Education Institute that is accredited by related Government authorities	5,000
20	Life insurance dan EPF	6,000 (Limited)
21	Premium on new annuity scheme or additional premium paid on existing annuity scheme commencing payment from 01/01/2010 (amount exceeding RM1000 can be claimed together with life insurance premium)	1,000 (Limited)
22	Insurance premium for education or medical benefit	3,000 (Limited)

Should I buy that nice little dress/gadget ?

You may think the $1 spent is the same $1 earned. Its really NOT ! One of the fundamental flaws human cannot control their own spending habits is because they DO NOT UNDERSTAND the value of money at the first place. The $1 spent could be equivalent to as much as $7-$10 earning !!

For example if you earn $4,000 a month and you manage to save $400 every month. By year end you would have saved aside $4,800. This money is intended to be put aside earning interest as part of the MeM (Money earns Money) mechanism. So its not just $4,800. It will be more than that as time goes. The longer it is kept there the more powerful compounding factor is working for you.

Says you take out $1,000 from this saving at year end for an unplanned luxury expense. Its not just $1,000 you have used. You have actually dug a hole in your saving - a 21% hole. If you saving return is 3%, it will take more than 7 years for this hole to be refilled back to its original amount. So you have practically used up your future 7 years on this saving for this unplanned expense.

On the other hand, if it took you 2.5 months to save that $1,000; Out of your equivalent earning of $10,000. For every $1 you use from your saving, you will have to earn $10 to get that $1 back. So when you use that $1,000 its not just $1,000 you have to replace but actually a $10,000 worth of your earning.

Does this particular unplanned luxury expense really worth your future 7 years and/or your $10,000 earning power ?

They money you get in ( earn ) does not necessary carry the same meaning to you as the ones you get out ( use ). Especially when there are so many deductions and taxes in this modern world.

It is best to put aside another $100 saving every month for 'unplanned luxury expense' category. That way if you really have to use it, you will still have $200 left ( after a year of saving ). More if somehow you are able to put that aside and go for a better future good.

If you have no such ability for this new saving category, try to increase your income or else settle with NOT use beyond your means.

At the end, this is the ONLY concept that determine if a person is an investor or a consumer all his life. Everyone want to buy Porsche and LV bags, some did it diligently, some others cost in their lives.

Economy Politic Finance Quadrant

There are 2 BIG main external factors affecting our investment decisions

• Economy
• Politic

When the time is really bad (economy downturn and politically unstable), its best to park your money under something that is really stable, ie Gold. Which is by definition usable anywhere you go in anytime.

When its good time, invest direct to the stock market would yield very good return.

When the economy is not so good in a strong country, the government bonds or related money market would be able to yield higher return than just gold.

However, the most dispute solution in good economy unstable country is investment in property. This is mainly due to easier rental and higher chance of capital gain.

By simply moving money around depends on the political and economy situation, one was able to achieve more than 12% compound return for the past 20 years. That is equivalent to a 10X return.

But by no mean this is easily done. Some of the concerns include;

• how would one know exactly when economy/politic turns good/bad ?
• is Gold the ONLY option ?
• property may not easily liquidated
• how to choose which property or stock market ?

. . . which can be explored further.

21st century trick ...

Once upon a time, there was a gasoline called 97. The cost of this item was $1.80. One day, the governing body wanted to increase the price to $2.10. However, the governing body knows that if they simply increase price, that will affect their popularity. Which in turn affect their eligibility to continue to be governing body in next election.

Hence they come up with a perfect idea. They first introduce another brand called 95. Actually this is a much lower quality product than 97. In short, 97 simply means there is at least 97% of pure petrol in the gasoline. On the other hand, 95 only has 95% purity. However, they push out 95 as if it is a better quality product. They even add some 'addictive' into 95 to justify their claim its a better product. It was presented in a way that 95 will replace 97, and stay at the same price at $1.80

More than 90% of the consumer fall for it. Hence the transition of 97 to 95 went through smoothly. Majority of the consumers pay the same price for a lower quality gasoline while thinking they enjoy a great quality petrol. This is the power of marketing ...

A few more months pass by, its about time to gain even more profit. Hence 97 is released to the market again. It was released silently and the price of 97 is $2.10. Now this time they leave it to individual vendor to tell consumer how 97 is better than 95.

16.7% of profit has been gained without a single complain from the public. You have to admit this is a fantastic marketing gimme. Even if you see it coming like I did, even if you wrote letter into the authority request for action taken .... but the majority of the consumers were falling for it, hence there is really nothing you can do about it, like I was, no matter how hard I tried. We just have to admit ... it was a gimme well played.

I waited more than 6 months to release this article. What do you think ? Do you still think this governing body has taken good care of your interest ? Or do you believe this article has some truth ?

Recession over, what's NeXT ?

Sometimes I feel very depress when my prediction comes TRUE.

For those who don't know yet, zzzz is going through a transition where political power could potentially shared between 2 parties; instead of just one-side-say-it-all like the past 50 years. Unfortunately, the initial phase of this transition has ended in a way when our new Prime Minister has strategically resolved it.

At the moment New Economy Model was presented, I immediately sensed the game err they plan to play. Because exactly the same game plan has been played in USA before. While it is true that zzzz CAN become a developed nation by adopting those moves but it has also been proven that such finance structure is NOT sustainable. Just see what has happened in USA and what is happening in Europe.

Although as if recession is over now, actual effective inflation experience the SHARPEST rise in last 2 months, as high as 25% to 50% if you visit hypermarket often. That is not the worst. What is happening now is that major manufacturers are deceiving consumers in large scale openly. While their products have inflated severely, they run advertisements and promotions as if their products are ON OFFER ! All these are done as part of the exercise to smoothen the transition into a developed nation, hence they have government support behind the scene at all cost. Ahem ... at consumer's cost that is. While these are nothing new to those who have seen it all, but sadly ... there are more consumers falling into it than realizing it at all.

As mentioned in what can we do when bully by the big boys, there is probably nothing much we can do to STOP anything now. So there are just a few things we can probably watch carefully and ride on so that we can get a piece of the pie too ...

• Property will rise drastically. Wherever you are staying right now and despite how much you like it, it may become more worth while to sell it off in the next 10 years. So do plan ahead where you may want to stay 5-15 years later. This may become your LAST and ONLY ticket when the nation is developed and you are still under developing.

• Double your salary in the next 2-3 years. If you wait till the wave carries you, you will always stay behind. You salary WILL increase AFTER the effect of inflation fully kick in. But by then, your increased salary will mean much less. So you really have to think for yourself now. If you are really royal to your employer, your employer should have seen this coming too and take care of you but did it ?

Other than that, derived finance products like futures, options and forex will over shine proper financial planning so much that a lot of weird and ad-hoc theories will surface out. Most people will no longer be able to differentiate what the real proper investment is. On the other hand, that is due to more and more improper investments will actually obtain real returns for the new few years. So if all you care is to get more money, then it should fine temporary.

Hence, MalPF only has one advice to all. Be deviated all you want, just remember to engage an exit strategy and keep yourself in high cash flow condition.

zzzz Best Rates 2010 May 26 update

1 month Fix Deposit

Generally now banks are offering 2.50%. Affin bank offers highest rate at 2.55%. However, there are still a few banks offer lower rate than 2.5%. JP Morgan is still offering the lowest at 2.0%

1 year Fix Deposit

Highest offered rates is 3.05% by Affin Bank; followed by 3.0% from AmBank, Bank of Tokyo-Mitsubishi UFJ and RHB Bank.

Base Lending Rate

Most local banks stand at 6.05% now with JP Morgan offers the lowest at 5.65%.

Saving Accounts

Bank Islam offers 1.35% through its Mudharabah and Pewani ( for women above 18 years old ). Women can enjoy up to 1.58% in Pewani saving account if saving is more than RM 5,000.

CIMB's Air Asia Savers Account offers 1.2%.

Don't forget you can get a simple widget

like above to show on your blog / web site.

Just visit here to see how.

Car Loan : NEW Car

Maybank continues to offer the lowest car loan rate starting from 2.7%. However, this is NOT a standard rate apply to all applicants. The actual rate can range up to 4.3%.

Bank Muamalat offers 2.85% for both New and Used cars but it requires an admin charges of RM600.

Most other banks rates offer are 3.25% for New cars.

Car Loan : Used Car

Bank Muamalat offers 2.85% but requires admin charges of RM600.

CIMB offers 3.25% used car loan rate.

Don't forget Car Loan rate is Fix Term Rate

which is effectively a MUCH HIGHER

than variable term rate

like House Loan and Fix Deposit.

House Loan

Affin remains as the best house loan offer at BLR - 2.3%.

Standard Chartered offers BLR - 2.25%

Multi-tiers house loan offers are excluded because it would be impossible to simplify their pro and cons without knowing the actual details of your particular loan details. Hence, only simple and straight forward house loan offers are compared.

Individual Tax exemption in zzzz

Below shows an extraction from zzzz Income Tax department. Some of the highlights are;

1. maternity expenses, traditional medicines exemption are UNLIMITED !
2. if you were terminated with compensation, some are exempted !
3. Scholarship is exempted, so study Hard !
4. Income derived and remitted from oversea is exempted, so globalize your business !

Do take time and go through below details, I am sure it will spark some innovative ideas if you are in the midst of optimizing your tax plans.

source

Leave passage

Leave passage within zzzz not exceeding three times in a year and one leave passage outside zzzz not exceeding RM3000.

Medical and dental benefit

With effect from the year of assessment 2008, medical benefits exempted from tax is expanded to include maternity expenses and traditional medicine like ayurvedic and acupuncture without limit.

Retirement gratuity

The full amount of gratuity received by an employee on retirement from employment is exempt if:

i. The Director General of Inland Revenue is satisfied that the retirement is due to ill health;

ii. Retirement on or after reaching the age of 55 years/compulsory age of retirement and the individual has worked 10 years continuously with the same employer or companies within the same group

iii. The retirement takes place on reaching the compulsory age of retirement pursuant to a contract of employment or collective agreement at the age of 50 but before 55 and that employment has lasted for 10 years with the same employer or with companies in the same group.

Gratuity paid out of public funds

Gratuity paid out of public funds on retirement from an employment under any written law.

Gratuity paid to a contract officer

Gratuity paid out of public funds to a contract officer on termination of a contract of employment regardless of whether the contract is renewed or not.

Compensation for Loss of Employment

This is payment made by an employer to his employee as compensation for loss of employment either before or after the date of termination.

This compensation is exempted from tax

1. If compensation received is due to ill health
2. Compensation received in other cases:
1. Termination before 1st July 2008 - exemption of RM6000 for every completed year of service with the same employer or with companies in the same group
2. Termination on or after 1st July 2008 - exemption of RM10000 for every completed year of service with the same employer or with companies in the same group

Compensation received by a director (not service director) of a Control Company is fully taxable.

Pensions

Pensions received by an individual are exempt under the following conditions:

1. He retires at the age of 55 or at the compulsory age of retirement under any written law; or

2. If the retirement is due to ill health and the pension is received from the government or from an approved pension scheme.
   

For an employee in the public sector who elects for optional retirement, his pension will be taxed until he attains the age of 55 or the compulsory age of retirement under any written law. Where an individual receives more than one pension, the exemption is restricted to the highest pension received.

Death gratuities

Monies received as death gratuity is fully exempted from income tax.

Scholarships

Any monies paid by way of scholarship to an individual whether or not in connection with an employment of that individual is exempted from income tax.

Income of an individual resident in zzzz in respect of his appearances in cultural performances approved by the Minister

Money received under this category is exempted from tax on condition it is approved by the Minister.

Interest

Income in respect of interest received by individuals resident in zzzz from money deposited with the following institutions is tax exempt with effect from 30 August 2008:

1. A bank or a finance company licensed or deemed to be licensed under the Banking and Financial Institutions Act 1989;

2. A bank licensed under the Islamic Banking Act 1983;

3. A development financial institution prescribed under the Development Financial Institutions Act 2002;

4. The Lembaga Tabung Haji established under the Tabung Haji Act 1995;

5. The zzzz Building Society Berhad incorporated under the Companies Act 1965;

6. The Borneo Housing Finance Berhad incorporated under the Companies Act 1965

Dividend

The following dividends are exempt form tax:

1. Dividends received from exempt accounts of companies.

2. Dividends received from co-operative societies.

3. Dividends received from a unit trust approved by the Minister of Finance such as Amanah Saham Bumiputra.

4. Dividends received from a unit trust approved by the Minister of Finance where 90% or more of the investment is in government securities.

Royalty

Royalties received in respect of the use of copyrights/patents are taxable if they exceed the following exemption limits:

No.	Types of Royalty	Exemption (RM)
1	Publication of artistic works/recording discs/tapes	10,000
2	Translation of books/literary works of Education or Attomey or General Chambers	12,000
3	Publication of literary works/original paintings/musical compositions	20,000

However, the exemption stated above does not apply, if the payment received forms part of his emoluments in the exercise of the individual's official duties.

Income Remitted from Outside zzzz

With effect from the year of assessment 2004, income derived from outside zzzz and received in zzzz by resident individual is exempted from tax.

Fees or Honorarium for Expert Services

With effect from the year of assessment 2004, fees or honorarium received by an individual in respect of services provided for purposes of validation, moderation or accreditation of franchised education programmes in higher educational institutions is exempted.

The services provided by an individual concerned have to be verified and acknowledged by the zzzzn Qualifications Agency (MQA). However, the exemption does not apply if the payment received forms part of his emoluments in the exercise of his official duties.

Income Derived from Research Findings

With effect from the year of assessment 2004, income received by an individual from the commercialization of the scientific research finding is given tax exemption of 50% on the statutory income in the basis year for a year of assessment for 5 years from the date the payment is made.

The individual scientist who received the said payment must be a citizen and a resident in zzzz. The commercialized research findings must be verified by the Ministry of Science, Technology and Environment.