Save $2400 get back $800 = 33% return ?

Someone asked this in a forum ...Save RM200 a month for 21 years with 'Guarantee' RM 800 interest a year, payable every 3 years at RM 2,400.  It sounds like saving RM 2,400 a year can get back RM 800 return GUARANTEE - that is 33% rate  !!  Is it a really a good deal ?I always see this kind of question being asked, the answer is quite simply ... you have to plug in the number and run...

Treat Pocket Money as an Income in PFP

P F P - Personal Finance PlanningAbove shows the whole Personal Finance idea I promote since the very beginning of this blog.  ( old blog link )First you must have some sort of income.  Income can be obtained from business or employment or freely available.  For example money received by house wife from her husband should be treated as some sort of her income.  A lot of time, 'smart'...

Currency Turns Evil - part 3

Money was created to ease up buy sell transactions, you no longer have to take in 100 chickens just because you want to sell your diamond ring.Since each country has its own system and seldom cross borders in the past, each of their money is different in unit called currency.Then, country needs to do business with another country. They have to sychronize the value of their currency, they use gold...

Safe less EPF, pay more TAX, You are now still poor and has no saving !

Full article on http://www.zzzzkini.com/news/93624Da Mook: Let' assume your monthly basic salary is RM4,000.If your monthly EPF contribution is 11% (RM440), then your taxable income = RM3560, and income tax payable = RM77.If your monthly EPF contribution is 8% (RM320), then your taxable income = RM3, 680, and income tax payable = RM109.Conclusion? If you choose to contribute 8%, you will end up paying more income tax to the government which will...

Currency Turns Evil - part 2

At first money is invented to facilitate buy-sell transactions which is the best invention of all time.  Then value of money is tighted to gold as a standard (what I called Big Bang in Finance World).  Then some greedy person use war to conquer and take over other people's gold ( click here to see old post about this )But very soon "WAR" becomes a very costly way to acquire gold to print...

Most Cost Effective Insurance in zzzz

If you are buying insurance for the first time or considering topping up protection to your life, there are some facts you should know :1. each product ( insurance, FD, Mutual Fund) has its own strength ( see this post )2. a hybrid product may give the best of both worlds  2a. some hybrid products are called "Link" products  ( read here for varies type of insurance )  2b....

Stock fee is cheaper than mutual fund

Quite frequently I heard that many people do not buy mutual fund because its 5.5% fee is too high comparing to stock investment where each transaction is charged at 0.42%.( see old post what you should consider with mutual fund high fee )It is no doubt a valid concern. When buying stock, there is only one broker who is earning your commission. While there is a huge team working in your mutual fund,...

Currency turns evil - part 1

I shared before money is tighted to gold in an old post.  That was the good side of money, here comes the later part ...... soon earth is seperated politically into countries.  Some countries grows stronger, 2 particular ones are E and U.  They used their strength to conquer other lands and take possess of the gold there.  More gold means they can print more money.  However...

Low Risk High Return ?

Seems like still quite a number of people do not agree that Risk is dealing with something you don't know (read the post about risk here).So I would like to repeat that yes while Low Risk Low Return and High Return High Risk are TRUE but if you think it that way, you may just settle for "whatever it is, it is !"For example, you may think you are not a risk taker, therefore you will never get a high...

Property as an investment

Just a reminder that Car Loan interest rate is about 1.9X more than the House Loan.  Meaning a 3% car loan is almost as high as a 6% house loan.  Think again if you think car loan has a lower interest rate.  (click here to read more).The fundamental of investing in property is not much different than buying a business to earn you passive income.  However, the nature of brick and...

The right way to lower down price

Generally it is a BAD idea in economy sense for a goverment to influence hypermarket to lower their price ( more on that here ).Because the ultimate great thing that can happen in our market is FREEDOM to trade.  Whoever smarter will think of better ways to save cost and therefore lowering their sale price, those who are not will not survive.  Eventually all the creative ones remains and...

Stock selection - management

I have shared before how to calculate how much a stock is worth and therefore knowing when to buy at what price.However, that is just one of the methods.  The one shared above is a quantification method using calculation.In real world, when you buy a business that is NOT run by you, the ultimate Single Main Factor isWho Is Running The Business ?The company may did great or terrible in the...

tiny Personal Finance Survey Result

A personal finance survey was conducted on http://klsmihosting.com/pfp/survey20080919b.asp/ for about a month.  People who participated range from 19 - 46 years old, with mostly under 30 years old.They were asked where they put their money in right now and what worry them most in their future.See below pie chart that most people keep money in bank which is quite common.  Follows...

Derivative - Options

Just to emphasize, this is not the FULL picture yet ... so dont make impulse decision that you want to go trade options straight away ... it will require quite long a study ...source from http://teraoptions.com/stock1.h...

Reduce EPF from 11% to 8%

Recently zzzz "New" finance minister aka "Next March" prime minister announced some measures to "Save" our economy, shortly after he said our economy didn't need to be saved.  Anyway, this time around I don't have much complains.  Most of the measures are acceptable for the purpose to 'Improve' economy.  Although not perfect and some measures are "Arguable" but nevertheless none is definitely stupid. One of...

Compare by numbers, not the rate

Sometimes ago I share a "Capital Guarantee Investment Link Insurance Plan" that sounds almost perfect :. Your Investment Capital is Guaranteed to increase even at Bad times,.  At good times, you will get all the extra returns,.  Free insurance covers.There were 2 scenarios shared in that post 1) When market drops, you get back $139,200 out of the $120,000 you invest in.  And this...

Calculate Future Living Cost

I mention before that the Real Inflation you should care about is Your Own Inflation Rate, not those published by goverment or experts ... ( read here for old post )In other to calculate future living cost, first you list down your living cost now.  The 4 basis of living standard are Cloth you wear, Food you eat, Place you stay in and Transport that brings you around.Then determine your own inflation...

where to get EPS, PE ?

Where to get historical data like EPS and PE you used in your stock valuation example ?1.  As I think buying stock is like buying a business, where is the best place to get information about the business before I invest into it ?  Yeap !  From the business owner itself !  If the current business owner is NOT able to give you the data you ask for, probably this business is not the one you should invest in.  I was searching...

why EPS, PE in stock valuation ?

Earlier I shared How to value a stock and decide when to buy at what price, and then give a real life example.There are 2 main factors why a stock price goes up and down:1) fundamental strength of that business ( Strong or Weak )2) general public view points ( Positive or Negative )So there are 4 combinations:Weak Company Negative Views : Price Drops ContinouslyWeak Company Positive Views : Price Up and FluctuateStrong Company Negative Views : Price...