The Base Lending Rate has finalized remain at 6.30% (OPR 2.75%), Bank Negara Malaysia (BNM) left borrowing cost unchanged yesterday as expected but warned it have to manage the rising amount building up in the domestic financial system.
The central bank said the level is consistent with its assessment of economic growth and inflation prospects. It was a market-anticipated move, which is expecting hiking cycle to start in its next March 11 meeting.
Source: Business Time
Sunday, January 30, 2011
Saturday, January 29, 2011
Understand Types Of Risk!
Risk is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable outcome). The notion implies that a choice having an influence on the outcome exists (or existed). Potential losses themselves may also be called "risks". Almost any human endeavour carries some risk, but some are much more risky then others.
1) General Market Risks
- These are daily market fluctuations caused by the demand and supply situation, which in turn are caused by factors such as : economic conditions, unstable political situations, investor sentiments.
2) Inflation Risks
- This risk will directly affect funds that are placed into those asset classes that are not inflation-hedged, like Fixed Deposits and Bonds.
3) Liquidity Risks
- This type of risks occurs in asset classes where there are not many buyers and sellers that are readily available , like Real Properties.
4) Default Risks
- This risk is where the borrowers are not able to repay the principal amount or the interest. Bonds are particularly vulnerable to this risk.
5) Foreign Currency Risks
- This risk occurs when we invest in overseas or offshore investment, where the currency that we invest in weakens against the currency that we originally invested.
6) Estate Shrinkage Risks
- There is always the risk that a person dies suddenly whilst in the midst of "playing the investment game". There may be a severe market downturn that can adversely affect the value of the investment at time of death.
1) General Market Risks
- These are daily market fluctuations caused by the demand and supply situation, which in turn are caused by factors such as : economic conditions, unstable political situations, investor sentiments.
2) Inflation Risks
- This risk will directly affect funds that are placed into those asset classes that are not inflation-hedged, like Fixed Deposits and Bonds.
3) Liquidity Risks
- This type of risks occurs in asset classes where there are not many buyers and sellers that are readily available , like Real Properties.
4) Default Risks
- This risk is where the borrowers are not able to repay the principal amount or the interest. Bonds are particularly vulnerable to this risk.
5) Foreign Currency Risks
- This risk occurs when we invest in overseas or offshore investment, where the currency that we invest in weakens against the currency that we originally invested.
6) Estate Shrinkage Risks
- There is always the risk that a person dies suddenly whilst in the midst of "playing the investment game". There may be a severe market downturn that can adversely affect the value of the investment at time of death.
Sunday, January 23, 2011
Planning Your Estate
According to Wikipedia, Estate planning is the process of anticipating and arranging for the disposal of an estate. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses. Guardians are often designated for minor children and beneficiaries in incapacity.
There are many tools in estate planning. Some of them are:-
1) Wills
A will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his/her estate and provides for the transfer of his/her property at death. For the devolution of property not disposed of by will, see inheritance and intestacy.
2) Trusts
This is an arrangement where a trustee is appointed to hold property for loved ones (Beneficiary) or other purposes. The person who set up the trust is known as the "Settlor" and the terms he can spell out for the trustee to management the trust is called "Trust Deed". There are many forms of trusts, Testamentary Trust, Living Trust, Implied Trust, Express Trust, Constructive Trust, etc..which can be formed to meet various need of people.
3) Life Insurance
Life Insurance is an excellent tool for providing liquidity to one's estate, for the replacement of income and for those who wish to create a sizable estate with a small outlay. By nominating the spouse and/or children (if the testator is married), or the parent (if testator is unmarried), a trust is created in favor of the nominees. The death proceeds is a separate estate and is out of reach of his creditors in the case of bankruptcy.
There are many tools in estate planning. Some of them are:-
1) Wills
A will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his/her estate and provides for the transfer of his/her property at death. For the devolution of property not disposed of by will, see inheritance and intestacy.
2) Trusts
This is an arrangement where a trustee is appointed to hold property for loved ones (Beneficiary) or other purposes. The person who set up the trust is known as the "Settlor" and the terms he can spell out for the trustee to management the trust is called "Trust Deed". There are many forms of trusts, Testamentary Trust, Living Trust, Implied Trust, Express Trust, Constructive Trust, etc..which can be formed to meet various need of people.
3) Life Insurance
Life Insurance is an excellent tool for providing liquidity to one's estate, for the replacement of income and for those who wish to create a sizable estate with a small outlay. By nominating the spouse and/or children (if the testator is married), or the parent (if testator is unmarried), a trust is created in favor of the nominees. The death proceeds is a separate estate and is out of reach of his creditors in the case of bankruptcy.
Friday, December 31, 2010
FUNDING Needs To Reach RM 100,000..
Invest Horizon | Investment Return | Financial Goal | ||
2.50% | 8% | |||
5 years | 88,835 | 68,058 | $100,000 | |
10 years | 78,120 | 46,320 | $100,000 | |
20 years | 61,027 | 21,455 | $100,000 | |
From table above, we can clearly seen the funding needs to reach $ 100,000. Let's say if you are putting the money in Fixed Deposit for only 2.5% yearly interest income compare with an investment tools for instance Unit Trust - Managed Fund for average yearly return 8%. For the 3 different investment horizon, the effort put in a high investment return is rather small compare with low yearly return investment tools. So, be a Smart" Investors" and choose the realistic investment tools for your investment portfolio, so that you are able to reach your financial goal more faster.
Another important point is- you need to begin investing early and effectively, the power of compound effect enable you to accumulate your wealth , let the money work hard for you ! Happy Investing !
Monday, December 13, 2010
How Do The Rich Escape from Rat Race ?
Accordingly to Wikipedia, rat race is a term used for an endless, self-defeating or pointless pursuit. It is just like a rat trying to escape whilst running around a maze or in a wheel.
The increased image of work as a "rat race" in modern world has led many to question their own attitudes towards work and seek a more harmonious Work-life balance. Many believe that long work hours, unpaid overtime, stressful jobs, time spent commuting, less time for traditional family life, has led to a generally unhappier workforce to enjoy the benefits of increased economic prosperity and a higher standard of living.
So, if you work minimum 8 hours a day and trade your time for paycheck in order to pay bills, there is a high possibility that you are caught in rat race.
The rich who is financially successful do not trade their time for money. Conversely, the rich leverage on other people money and time to make money.
Instead of working hard for money, the rich ensure money working hard for them through investment.
Property investors leverage on other people money by borrowing from banks to purchase properties or assets. They rent out the properties and have the tenants pay off the loans. Other than getting the tenants to pay off their assets, the property investors make even more money when their assets appreciate in value. Property investors leverage on other people money to make money.
Business owners like Bill Gates leverage on other people time by hiring employees to work for them. Investors, who invest in stock market, leverage on business owners and employees time to make money for them through capital gain from stocks.
Can An Average Ordinary Person ESCAPE From Rat Race?
Absolutely Yes!
No doubt it is difficult to leave our comfort zone and risking the secure regular paychecks to pay off our bills. We need to take the first step and action to start somewhere. We need to change our mentality and reprogram our minds to mirror the millionaire minds.
At the same time, we have to start financial planning and saving to accumulate capital. Acquire the skills to generate passive income. Learn how to invest in assets like properties, stock market or own and run businesses.
As our assets growing which in return generating more money, more money will increase our capability to increase the number or size of assets. The same “money working hard” cycle repeats by itself until such time that we no longer need to trade our time for money where we can live, work, play and give freely.
Congratulations! That’s the time that we are out of rat race and achieve financial freedom!
The increased image of work as a "rat race" in modern world has led many to question their own attitudes towards work and seek a more harmonious Work-life balance. Many believe that long work hours, unpaid overtime, stressful jobs, time spent commuting, less time for traditional family life, has led to a generally unhappier workforce to enjoy the benefits of increased economic prosperity and a higher standard of living.
So, if you work minimum 8 hours a day and trade your time for paycheck in order to pay bills, there is a high possibility that you are caught in rat race.
The rich who is financially successful do not trade their time for money. Conversely, the rich leverage on other people money and time to make money.
Instead of working hard for money, the rich ensure money working hard for them through investment.
Property investors leverage on other people money by borrowing from banks to purchase properties or assets. They rent out the properties and have the tenants pay off the loans. Other than getting the tenants to pay off their assets, the property investors make even more money when their assets appreciate in value. Property investors leverage on other people money to make money.
Business owners like Bill Gates leverage on other people time by hiring employees to work for them. Investors, who invest in stock market, leverage on business owners and employees time to make money for them through capital gain from stocks.
Can An Average Ordinary Person ESCAPE From Rat Race?
Absolutely Yes!
No doubt it is difficult to leave our comfort zone and risking the secure regular paychecks to pay off our bills. We need to take the first step and action to start somewhere. We need to change our mentality and reprogram our minds to mirror the millionaire minds.
At the same time, we have to start financial planning and saving to accumulate capital. Acquire the skills to generate passive income. Learn how to invest in assets like properties, stock market or own and run businesses.
As our assets growing which in return generating more money, more money will increase our capability to increase the number or size of assets. The same “money working hard” cycle repeats by itself until such time that we no longer need to trade our time for money where we can live, work, play and give freely.
Congratulations! That’s the time that we are out of rat race and achieve financial freedom!
Tuesday, November 9, 2010
Reduce Maximum Loan-To-value Ratio to 70% for Residential Property
Breaking news for property financing in 2010 had been announced. Bank Negara quote “ with immediate effect the implementation of a maximum loan-to-value (LTV) ratio of 70%, which will be applicable to the third house financing facility taken out by a borrower.”
According to Bank Negara statistics, outstanding loans growth for the banking sector grew 11.9% to RM841.74bil in July year-on-year. Mortgages make up the largest portion with some 26.8% of the total loans outstanding as at end July.
The move is aimed at curbing speculative property transactions in a bid to contain escalating property prices.
For those who buying the 1st and 2nd property still valid for 90% loan financing, 70% loan financing effect for 3rd property home buyers. However, for property investors, may think twice about investing in properties if they have to cough up more money.
According to Bank Negara statistics, outstanding loans growth for the banking sector grew 11.9% to RM841.74bil in July year-on-year. Mortgages make up the largest portion with some 26.8% of the total loans outstanding as at end July.
The move is aimed at curbing speculative property transactions in a bid to contain escalating property prices.
For those who buying the 1st and 2nd property still valid for 90% loan financing, 70% loan financing effect for 3rd property home buyers. However, for property investors, may think twice about investing in properties if they have to cough up more money.
Monday, October 18, 2010
Financial Freedom Mastery Workshop-Yap Ming Hui
It is a great and learnt a fruitful knowledge on money management skill from the workshop dated 16th Oct - 17th Oct 2010, now I would be able to differentiate Money Making versus Money Management and the 4 Quadrant of Money Management. Now I really realized how important on money management where by most of the people usually ignore in their life.
Money Management Strategies including:-
1) Income,Expenses and Debt Planning
2) Insurance Planning
3) Tax Planning
4) Investment Planning
5) Home Purchased & Property Investment Planning
6) Estate Planning
7) Children Tertiary Education Planning
8) Retirement Planning
You may go to Yap Ming Hui website for further details and updated events and I would encourage you to attend his seminar or workshop for self up-grading in financial knowledge and importantly know how to manage our money and let the Money Work For Us instead of You Work For Money!
www.yapminghui.com
Money Management Strategies including:-
1) Income,Expenses and Debt Planning
2) Insurance Planning
3) Tax Planning
4) Investment Planning
5) Home Purchased & Property Investment Planning
6) Estate Planning
7) Children Tertiary Education Planning
8) Retirement Planning
You may go to Yap Ming Hui website for further details and updated events and I would encourage you to attend his seminar or workshop for self up-grading in financial knowledge and importantly know how to manage our money and let the Money Work For Us instead of You Work For Money!
www.yapminghui.com
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