Another item to add in your list of ‘Why I’m Proud to be a Malaysian’ should be our country’s very own central bank, The Bank Negara! They may have not been receiving much attention from us (students) but we were glad to be given the opportunity to visit and learn about them. So what did we discover from our visit?
They are very kiam siap (stingy)… No refreshment & No souvenirs.
They are very kia si (fearful)… A lot of restricted areas. So restricted in a sense that we can’t even taste the meals that are served there. Or rather, give us the chance to feed our starving guts.
Thank god, they are not very kao pei (don’t know how to translate).
Well, we can’t really expect much because after all, they are the central bank. The destination where security is vital for the survival and stability of our country’s currency. But we briefly got to know its functions and responsibilities which I’m not going to discuss in this post. You can learn about it in the text books or their website.
http://www.bnm.gov.my
Speaker’s recommendation for Finance Students:
Islamic Banking! Islamic Banking! Islamic Banking!!!
Learn everything you need to know about Islamic Banking because in the next 3-4 yrs, the banking industry may experience a shift from conventional to Islamic banking. So if you are a qualified Islamic banker by then, you’ll definitely get a job in Malaysia or anywhere else around the world.
Let’s clear up some rumors regarding Islamic banking… They are not only for Muslims. In fact, nearly 60% of the Islamic banking clients are non-Muslim. Islamic Banking is open to all races and religion.
You may wonder what’s so special about Islamic banking…
*No interest charges*
Example: You apply for a RM100,000 loan from an Islamic bank. They won’t charge monthly interest for it. Instead, they will require you to make a full repayment of RM120,000 which will be divided into manageable payments depending on the loan duration.
Unlike conventional banks,
If you were to apply for a RM100,000 loan, they will charge interest until the loan have been fully repaid. The longer you take the repay the loan, the more you’ll end up paying! Often, with conventional banking loans, you will end up paying 200% or more of what you initially borrowed.
So that’s the advantage of Islamic banking! Being fair is what matters most....
Don’t Sabotage Your Investment Success By Giving Into Greed
Many investors sabotage their long-term returns by giving in to greed. Usually, this happens when they are young and impatient for results - which is ironic, because this is the most important time in your life to invest properly.
An experienced investor realizes that investing is a life-long process that yields big dividends over decades. Most of the profits come from compounding - i.e. the return on money that was itself a return on your principle. Therefore, it is critical to invest effectively as early as possible.
When a seasoned investor looks back on a ten-year-old investment mistake that, at the time, cost them $10,000, they realize that they actually lost more than $10,000. They also lost the compounding power of all the dollars that would have been spun off from the $10,000 over the course of the decade.
Unfortunately, when they actually made the mistake, they were not thinking of the consequences ten years down the road. Instead, they were most likely thinking of getting rich NOW, and made the mistake by being too aggressive and reckless.
Here are some of the common mistakes that young, aggressive investors make:
1. Day trading - Technically, day trading is buying and then selling a stock in the same day. In practice, this term is also used to describe aggressive short term trading where a trader jumps in and out of positions within days. Either way, this is a mistake for most people because stocks are harder to predict over the short term, fees are higher relative to profits, and traders are more vulnerable to technical glitches outside their control.
2. Futures and options trading - Most investors should avoid trading these products because they are highly leveraged. For example, corn is actually less volatile than a stock. This makes sense, because there are more factors that influence IBM than a simple food like corn. However, while you can buy a single share of IBM, you cannot buy a future on a single ear of corn. Instead, you have to buy corn contracts of 5,000 bushels each. Trading these large quantities means that you make or lose a lot of money with small, random price fluctuations.
3. Excessive position sizes - This is when an investor does not diversify. For example, they see Google going up, so they invest all their money in Google. This is reckless, dangerous, and a form of gambling - not investing. You never want to be dependent on one stock, because anything outside your control can happen. Instead, you want to create a method that gives you an edge over the market, and then use this system to trade multiple positions to guard against factors outside your control.
4. Leverage - Related to 2 and 3, you want to avoid using leverage. You should assume that there is a 100% chance that your investments, at some point, will fall in value. If you used borrowed funds, you might be forced to sell positions at a bad time. It is better to use your own funds and be in change of your own destiny.
5. Excessive turnover - This is when an investor panics and sells a stock on a short-term dip and/or sells a stock after a small gain. Many times, the stock will come back up, and the stock that made a small gain will continue to climb. The best way to invest is to eliminate all-or-nothing thinking. Instead of buying or selling an investment all at once, create a method to buy and sell stock in increments.
6. Seminar junkie - This is where an investor gets hooked on buying books, DVD's, and seminars on trading and investing. An investor falling in this trap is like someone who pursues multiple graduate degrees in college because he or she is afraid of actually attempting something. It becomes a form of entertainment to learn new technical indicators or trading systems. The problem is that you lose time and money that could have been better spent.
7. Don't quit your day job - If you have investment success, you may be tempted to quit your job for a year or two and live off your profits. Don't do it! Keep working until you have 20 times your salary. At that point, you can realistically hope to live permanently off your portfolio without exhausting it.
An experienced investor realizes that investing is a life-long process that yields big dividends over decades. Most of the profits come from compounding - i.e. the return on money that was itself a return on your principle. Therefore, it is critical to invest effectively as early as possible.
When a seasoned investor looks back on a ten-year-old investment mistake that, at the time, cost them $10,000, they realize that they actually lost more than $10,000. They also lost the compounding power of all the dollars that would have been spun off from the $10,000 over the course of the decade.
Unfortunately, when they actually made the mistake, they were not thinking of the consequences ten years down the road. Instead, they were most likely thinking of getting rich NOW, and made the mistake by being too aggressive and reckless.
Here are some of the common mistakes that young, aggressive investors make:
1. Day trading - Technically, day trading is buying and then selling a stock in the same day. In practice, this term is also used to describe aggressive short term trading where a trader jumps in and out of positions within days. Either way, this is a mistake for most people because stocks are harder to predict over the short term, fees are higher relative to profits, and traders are more vulnerable to technical glitches outside their control.
2. Futures and options trading - Most investors should avoid trading these products because they are highly leveraged. For example, corn is actually less volatile than a stock. This makes sense, because there are more factors that influence IBM than a simple food like corn. However, while you can buy a single share of IBM, you cannot buy a future on a single ear of corn. Instead, you have to buy corn contracts of 5,000 bushels each. Trading these large quantities means that you make or lose a lot of money with small, random price fluctuations.
3. Excessive position sizes - This is when an investor does not diversify. For example, they see Google going up, so they invest all their money in Google. This is reckless, dangerous, and a form of gambling - not investing. You never want to be dependent on one stock, because anything outside your control can happen. Instead, you want to create a method that gives you an edge over the market, and then use this system to trade multiple positions to guard against factors outside your control.
4. Leverage - Related to 2 and 3, you want to avoid using leverage. You should assume that there is a 100% chance that your investments, at some point, will fall in value. If you used borrowed funds, you might be forced to sell positions at a bad time. It is better to use your own funds and be in change of your own destiny.
5. Excessive turnover - This is when an investor panics and sells a stock on a short-term dip and/or sells a stock after a small gain. Many times, the stock will come back up, and the stock that made a small gain will continue to climb. The best way to invest is to eliminate all-or-nothing thinking. Instead of buying or selling an investment all at once, create a method to buy and sell stock in increments.
6. Seminar junkie - This is where an investor gets hooked on buying books, DVD's, and seminars on trading and investing. An investor falling in this trap is like someone who pursues multiple graduate degrees in college because he or she is afraid of actually attempting something. It becomes a form of entertainment to learn new technical indicators or trading systems. The problem is that you lose time and money that could have been better spent.
7. Don't quit your day job - If you have investment success, you may be tempted to quit your job for a year or two and live off your profits. Don't do it! Keep working until you have 20 times your salary. At that point, you can realistically hope to live permanently off your portfolio without exhausting it.
Money Inflation Gold
We have been raised to believe that inflation is a natural phenomenon, but in fact it is a hidden, regressive form of taxation. It is government siphoning away resources from people and spending it without their recognizing it. Why do I say this? And is inflation bad or good?
First, a couple of basics. What is money, for example? Money is a store of value that makes it easier for people providing various goods and services to do business with each other. The smoother the process, the more goods and services there are for everyone. Money must have a generally recognized value and quality so that negotiating parties need not negotiate over that part of the transaction. When money and goods are beyond any individual's control, the market will naturally assign values to products based on what people want.
This is the most efficient form of market, and it will create the most value overall as people energetically compete for wealth. But the economy is rarely permitted to operate in this way. Government steps into the economy in many ways. To put one form of intervention very simply, governments take money away from some people by taxation and give money to others through entitlement programs or simply by spending.
Every time government takes money from successful individuals and gives it to less successful individuals or enterprises, it imposes two inefficiencies. It "punishes" successful actions by imposing costs on them, and it "rewards" unsuccessful actions by subsidizing them. I use the quotation marks because "punishment" and "reward" sound so intentional, whereas in reality most of the interesting features of government spending lie in the area of "unintended consequences." But the economic effect is the same, so naturally taxing and spending create factions of people vying for government largesse or to avoid taxation. There are political consequences for all taxing and spending, and they provide some checks and balances for one another. It is the natural political give and take in a democracy.
But it is also natural for governments in control to try to please as many people as possible while offending as few as possible, and this is made easier if taxation can be hidden. Then government can give to discrete subgroups, pleasing them, without the cost of alienating other groups. How can this be done?
When money is beyond the control of government, the cost of government is relatively obvious because every dollar commanded by government is a dollar subtracted from somewhere else, and the factions are competing for discrete funds. But what happens when government is free to create money out of thin air? This is called "fiat" currency (as opposed to "commodity" currency). Fiat currency depends upon the stability (to survive) and integrity (not to overprint) of the government assigning it value, whereas commodity currency depends on the underlying value or rarity of the commodity independent of government. People in the U.S. now seem to regard fiat currency as a natural and permanent right of government, and a good thing, but historically it is a fairly recent development (and one which was heartily distrusted by the Founding Fathers).
Fiat currency allows inflation, which is the creation of currency at a rate faster than the economy grows.
Let's take a very simple example. If an island has $100 on it and $100 worth of goods, what happens if the island's people learn how to create goods worth $10, while the government prints up an additional $10 in currency? Nothing. The economy has grown, and the currency has expanded in lockstep. The currency retains its familiar value, and so do the goods.
But what if government prints up an additional $100 and distributes it without the accompanying increase in the amount of goods? This is inflation, an increase of money relative to existing goods. The price of all the goods will eventually double to reflect the increase in money relative to goods.
The real question in this model is how the money is distributed, since who gets it, or who gets it first (before the prices reflect the inflation) will certainly redistribute actual wealth. For example, what if the government gave all the money to the twenty percent of the people on the island who owned huts? In that case, not only would the money not actually increase the net wealth of the island, but it would also effectively redistribute wealth from renters to owners. If the government could sufficiently hide the process, it could make the owners happy without actively antagonizing the renters. I hope the parallels between this hypothetical island and the actions of the U.S. government over the past several years (for example) are obvious.
When the government operates at a deficit, what it is doing by definition is spending money without having taxed it out of anybody first. It is printing money into existence and spending it. Because it is spending it in various ways it makes the receiving classes (owners and selected welfare groups) happy. It is actively and thoroughly redistributing income, but doing so in a way which very few people understand. People think of it as giving without taking, but government can never actually do this. Because it is spending without previously taxing, there is no political cost for taking the money and spending it-no counterweight to restrain government. The result is a naturally increasing tendency to inflate and spend.
Not only does inflating and spending redistribute the wealth in unexamined ways, it also skews the economy, increasingly "punishing" economically viable actions and "rewarding" economically foolish actions or conditions. It should be no surprise that all currencies that have gone into this inflationary spiral unchecked have perished, with dramatically negative consequences for the people and countries who possessed the currency. Because the United States has begun this process, a spirit of self-preservation strongly suggests reducing your holdings of fiat currency and increasing your holdings of commodity currency.
Gold is the primary form of commodity currency in the world.
First, a couple of basics. What is money, for example? Money is a store of value that makes it easier for people providing various goods and services to do business with each other. The smoother the process, the more goods and services there are for everyone. Money must have a generally recognized value and quality so that negotiating parties need not negotiate over that part of the transaction. When money and goods are beyond any individual's control, the market will naturally assign values to products based on what people want.
This is the most efficient form of market, and it will create the most value overall as people energetically compete for wealth. But the economy is rarely permitted to operate in this way. Government steps into the economy in many ways. To put one form of intervention very simply, governments take money away from some people by taxation and give money to others through entitlement programs or simply by spending.
Every time government takes money from successful individuals and gives it to less successful individuals or enterprises, it imposes two inefficiencies. It "punishes" successful actions by imposing costs on them, and it "rewards" unsuccessful actions by subsidizing them. I use the quotation marks because "punishment" and "reward" sound so intentional, whereas in reality most of the interesting features of government spending lie in the area of "unintended consequences." But the economic effect is the same, so naturally taxing and spending create factions of people vying for government largesse or to avoid taxation. There are political consequences for all taxing and spending, and they provide some checks and balances for one another. It is the natural political give and take in a democracy.
But it is also natural for governments in control to try to please as many people as possible while offending as few as possible, and this is made easier if taxation can be hidden. Then government can give to discrete subgroups, pleasing them, without the cost of alienating other groups. How can this be done?
When money is beyond the control of government, the cost of government is relatively obvious because every dollar commanded by government is a dollar subtracted from somewhere else, and the factions are competing for discrete funds. But what happens when government is free to create money out of thin air? This is called "fiat" currency (as opposed to "commodity" currency). Fiat currency depends upon the stability (to survive) and integrity (not to overprint) of the government assigning it value, whereas commodity currency depends on the underlying value or rarity of the commodity independent of government. People in the U.S. now seem to regard fiat currency as a natural and permanent right of government, and a good thing, but historically it is a fairly recent development (and one which was heartily distrusted by the Founding Fathers).
Fiat currency allows inflation, which is the creation of currency at a rate faster than the economy grows.
Let's take a very simple example. If an island has $100 on it and $100 worth of goods, what happens if the island's people learn how to create goods worth $10, while the government prints up an additional $10 in currency? Nothing. The economy has grown, and the currency has expanded in lockstep. The currency retains its familiar value, and so do the goods.
But what if government prints up an additional $100 and distributes it without the accompanying increase in the amount of goods? This is inflation, an increase of money relative to existing goods. The price of all the goods will eventually double to reflect the increase in money relative to goods.
The real question in this model is how the money is distributed, since who gets it, or who gets it first (before the prices reflect the inflation) will certainly redistribute actual wealth. For example, what if the government gave all the money to the twenty percent of the people on the island who owned huts? In that case, not only would the money not actually increase the net wealth of the island, but it would also effectively redistribute wealth from renters to owners. If the government could sufficiently hide the process, it could make the owners happy without actively antagonizing the renters. I hope the parallels between this hypothetical island and the actions of the U.S. government over the past several years (for example) are obvious.
When the government operates at a deficit, what it is doing by definition is spending money without having taxed it out of anybody first. It is printing money into existence and spending it. Because it is spending it in various ways it makes the receiving classes (owners and selected welfare groups) happy. It is actively and thoroughly redistributing income, but doing so in a way which very few people understand. People think of it as giving without taking, but government can never actually do this. Because it is spending without previously taxing, there is no political cost for taking the money and spending it-no counterweight to restrain government. The result is a naturally increasing tendency to inflate and spend.
Not only does inflating and spending redistribute the wealth in unexamined ways, it also skews the economy, increasingly "punishing" economically viable actions and "rewarding" economically foolish actions or conditions. It should be no surprise that all currencies that have gone into this inflationary spiral unchecked have perished, with dramatically negative consequences for the people and countries who possessed the currency. Because the United States has begun this process, a spirit of self-preservation strongly suggests reducing your holdings of fiat currency and increasing your holdings of commodity currency.
Gold is the primary form of commodity currency in the world.
Where To Start Making Money With Money
The first rule about making money with money is make a firm commitment (to yourself) to stick to the rules, come hell or high water, before you even start. Because, quite frankly, if you don't stick to your plan, there's really no point in starting.
You may as well save yourself the angst and pain of setting yourself up for another failure that you can beat yourself up with for the next twenty years. C'mon, life's too short. Not every thing is for every body, so if putting a small amount of money aside each month, for the purpose of making more money, is something you don't want to do, or are not in a position to do, then pass on this.
However, if you are ready, willing and able to slot between $5 and $150 per month into your own system for making money with money... congratulations! You've come to the right place.
Like any good plan, this one needs some preparation before you begin. Grab yourself a piece of paper and answer these four questions. Forget the coffee, do this now.
You need to decide on the following:
1. How much to invest? How much cash do you want to devote to the noble task of making more money for you each month? Start small if you have to, there's no shame in that, and there's still meaningful work that a humble $5 can do for you in the beginning. However, it is only fair to say that the more you can start with, the more money your money will be making for you, and sooner.
2. How often to invest? How often do you want to put this money aside. Are you the "pay-by-the-month" type, or is a single annual payment more your thing? If you know that you are likely to overspend each month, and run out of cash before you run out of month, then I suggest you fund yourself as far ahead as you can (up to 12 months maximum) - so $5 per month would mean putting aside $60 now, and $150 per month, would mean putting aside $1,800 now. Whatever works for you, that is the amount to plan on funding your plan with up front.
3. How much income do I want? How much money do you want this money to eventually be making for you each month? Do you want enough to cover your car payment or your mortgage? Do you want to match your full-time income? Do you want a whole lot more than that?
4. How soon do I want to start living off my profits? How quickly do you want to be able to start living off the proceeds of your "make money with money" campaign? As you get clear on these points, you will see that you may need to make a few little adjustments to your first estimates, as your goals and preferences become more defined.
Once you have completed the above, you will have reached the destination point for this exercise - you will now know exactly where you want to start.
You may as well save yourself the angst and pain of setting yourself up for another failure that you can beat yourself up with for the next twenty years. C'mon, life's too short. Not every thing is for every body, so if putting a small amount of money aside each month, for the purpose of making more money, is something you don't want to do, or are not in a position to do, then pass on this.
However, if you are ready, willing and able to slot between $5 and $150 per month into your own system for making money with money... congratulations! You've come to the right place.
Like any good plan, this one needs some preparation before you begin. Grab yourself a piece of paper and answer these four questions. Forget the coffee, do this now.
You need to decide on the following:
1. How much to invest? How much cash do you want to devote to the noble task of making more money for you each month? Start small if you have to, there's no shame in that, and there's still meaningful work that a humble $5 can do for you in the beginning. However, it is only fair to say that the more you can start with, the more money your money will be making for you, and sooner.
2. How often to invest? How often do you want to put this money aside. Are you the "pay-by-the-month" type, or is a single annual payment more your thing? If you know that you are likely to overspend each month, and run out of cash before you run out of month, then I suggest you fund yourself as far ahead as you can (up to 12 months maximum) - so $5 per month would mean putting aside $60 now, and $150 per month, would mean putting aside $1,800 now. Whatever works for you, that is the amount to plan on funding your plan with up front.
3. How much income do I want? How much money do you want this money to eventually be making for you each month? Do you want enough to cover your car payment or your mortgage? Do you want to match your full-time income? Do you want a whole lot more than that?
4. How soon do I want to start living off my profits? How quickly do you want to be able to start living off the proceeds of your "make money with money" campaign? As you get clear on these points, you will see that you may need to make a few little adjustments to your first estimates, as your goals and preferences become more defined.
Once you have completed the above, you will have reached the destination point for this exercise - you will now know exactly where you want to start.
How To Learn Investing
Before you bet the farm and invest money in some investment scheme or stock you don't understand, learn investment basics and learn investing strategy. Investing money is not rocket science. Here's a basic money guide to help you start investing as an informed investor.
First learn investment basics. There are a vast number of investment options out there, but each can be simplified and evaluated to determine whether or not it fits your particular needs. To make sense of it all you need to first get a firm grasp of the following investment characteristics: liquidity, safety, growth, income, and tax advantages. Every investment can be evaluated by ranking it in terms of these characteristics.
Get a handle on stocks and bonds. These are two of the major investment options everyone needs to understand when investing money. Stock investing is geared to folks who want growth with liquidity. Bond investing features relative safety and high income. Notice that we just referred to the terms in step 1 to characterize these investment options.
Get up to speed on safe, liquid investments like money market securities and bank money market accounts. Every investment portfolio should include liquid safe assets as well as stocks and bonds.
Dig into the concept of alternative investments like gold, real estate, oil & gas and other commodities and tangibles. Foreign securities are included as alternative investments as well. These investment options can produce growth for investors when the stock market turns sour.
Now concentrate on learning mutual funds. This should be easy enough since you now understand the types of investments these funds invest money in. Mutual funds manage your money for you, but you need to pick the appropriate fund. Your basic choices are: stock funds, bond funds, money market funds, and balanced funds that invest in a combination of all of the above.
The final step is to learn investing strategy so you can manage and maintain a balanced investment portfolio ... at a level of risk you can live with. You will need to master investing tools and concepts like asset allocation, balance and rebalance, and dollar cost averaging.
If you follow the above steps, in order, the game of investing money will come together for you. Otherwise, you're likely to remain lost and confused like most folks. You can not start on page 47 of a novel and expect to understand the plot, can you?
First learn investment basics. There are a vast number of investment options out there, but each can be simplified and evaluated to determine whether or not it fits your particular needs. To make sense of it all you need to first get a firm grasp of the following investment characteristics: liquidity, safety, growth, income, and tax advantages. Every investment can be evaluated by ranking it in terms of these characteristics.
Get a handle on stocks and bonds. These are two of the major investment options everyone needs to understand when investing money. Stock investing is geared to folks who want growth with liquidity. Bond investing features relative safety and high income. Notice that we just referred to the terms in step 1 to characterize these investment options.
Get up to speed on safe, liquid investments like money market securities and bank money market accounts. Every investment portfolio should include liquid safe assets as well as stocks and bonds.
Dig into the concept of alternative investments like gold, real estate, oil & gas and other commodities and tangibles. Foreign securities are included as alternative investments as well. These investment options can produce growth for investors when the stock market turns sour.
Now concentrate on learning mutual funds. This should be easy enough since you now understand the types of investments these funds invest money in. Mutual funds manage your money for you, but you need to pick the appropriate fund. Your basic choices are: stock funds, bond funds, money market funds, and balanced funds that invest in a combination of all of the above.
The final step is to learn investing strategy so you can manage and maintain a balanced investment portfolio ... at a level of risk you can live with. You will need to master investing tools and concepts like asset allocation, balance and rebalance, and dollar cost averaging.
If you follow the above steps, in order, the game of investing money will come together for you. Otherwise, you're likely to remain lost and confused like most folks. You can not start on page 47 of a novel and expect to understand the plot, can you?
What Sort Of Investor Are You?
Investing your money is certainly a game. We are all taking a gamble with our money when we speculate on where we are going to invest and we do so in the hope that we are going to make some decent money at some point in the future. Let's face it, if this wasn't our end objective why would we bother to invest.
However, there is more to an investment than just speculating where to put your money and waiting. There is the journey and lots of people tend to ignore the fact that to make wealth you have to experience a journey. You need to go on a trip and that trip is full of many surprises and lots of ups and downs.
The Cool, Calm, Controlled Investor
If you are a calm, cool and collected investor you are prepared for your journey. You know and understand that you will have good days, weeks, months and years and you also know and understand that you will have bad days, weeks, months and years. But you will be prepared for this and accept this. You are focused on the end result. During turbulent times you stay calm. When the boat is rocking and you don't jump overboard. You hang on to the side and appreciate it when you come back into calm waters.
You hang on to your investments. Any short term gains and losses that are experienced throughout this journey are less relevant to you. You don't sell when you have made a few dollars to quickly reap a short term profit and you don't sell when you see your value dropping in bad times. You expect this to occur and you remain strongly focused on the benefits you will see when you achieve your end result and the wealth you will have one day down the track.
The Stressed, Anxious, Panicked Investor
If you are like a lot of people though, you find it very hard to remain cool, calm and controlled when you invest. Despite your best intentions, the slightest movement in the price of your investment sees you anxious to sell and to take the profits from any short term gains or to take flight and pull out after experiencing some short term losses. You are now focusing purely on today and have forgotten about your longer term plan and the journey you are taking to build up your wealth for the future.
Unfortunately there are dangers to these sorts of knee jerk reactions. People who have been through an unpleasant investment experience and lost money, generally retreat away from wealth creation all together. Doing this means they miss out on future opportunities as they won't have their money invested today ready to build wealth in the future to meet their long term goals. They also carry around a lot of negativity telling everyone they meet that investing is all too hard and too dangerous.
People who have made quick money are also in danger. Their expectation of investing is all sweet and rosy. They are likely then to make irrational decisions and take greater chances with their money in the expectation that their previous experience will be repeated. The danger with this is investment journeys aren't all uphill and these investors won't be prepared for the falls when they come along. They are too focused on today and making money overnight rather than remembering they were on a journey today to make wealth for tomorrow.
What sort of investor are you?
Are you able to ignore your journey to making wealth and ride out the good and bad times? Do you tend to focus on the short term or the long term? Do you count your losses / gains regularly? Do you forget your end goals and what it is you set off to achieve or do you remain focused on these? You can see it makes a huge difference if you are prepared for your journey and can understand the sort of experiences you will have as a long term investor.
However, there is more to an investment than just speculating where to put your money and waiting. There is the journey and lots of people tend to ignore the fact that to make wealth you have to experience a journey. You need to go on a trip and that trip is full of many surprises and lots of ups and downs.
The Cool, Calm, Controlled Investor
If you are a calm, cool and collected investor you are prepared for your journey. You know and understand that you will have good days, weeks, months and years and you also know and understand that you will have bad days, weeks, months and years. But you will be prepared for this and accept this. You are focused on the end result. During turbulent times you stay calm. When the boat is rocking and you don't jump overboard. You hang on to the side and appreciate it when you come back into calm waters.
You hang on to your investments. Any short term gains and losses that are experienced throughout this journey are less relevant to you. You don't sell when you have made a few dollars to quickly reap a short term profit and you don't sell when you see your value dropping in bad times. You expect this to occur and you remain strongly focused on the benefits you will see when you achieve your end result and the wealth you will have one day down the track.
The Stressed, Anxious, Panicked Investor
If you are like a lot of people though, you find it very hard to remain cool, calm and controlled when you invest. Despite your best intentions, the slightest movement in the price of your investment sees you anxious to sell and to take the profits from any short term gains or to take flight and pull out after experiencing some short term losses. You are now focusing purely on today and have forgotten about your longer term plan and the journey you are taking to build up your wealth for the future.
Unfortunately there are dangers to these sorts of knee jerk reactions. People who have been through an unpleasant investment experience and lost money, generally retreat away from wealth creation all together. Doing this means they miss out on future opportunities as they won't have their money invested today ready to build wealth in the future to meet their long term goals. They also carry around a lot of negativity telling everyone they meet that investing is all too hard and too dangerous.
People who have made quick money are also in danger. Their expectation of investing is all sweet and rosy. They are likely then to make irrational decisions and take greater chances with their money in the expectation that their previous experience will be repeated. The danger with this is investment journeys aren't all uphill and these investors won't be prepared for the falls when they come along. They are too focused on today and making money overnight rather than remembering they were on a journey today to make wealth for tomorrow.
What sort of investor are you?
Are you able to ignore your journey to making wealth and ride out the good and bad times? Do you tend to focus on the short term or the long term? Do you count your losses / gains regularly? Do you forget your end goals and what it is you set off to achieve or do you remain focused on these? You can see it makes a huge difference if you are prepared for your journey and can understand the sort of experiences you will have as a long term investor.
8 Tips to Take Control of Your Finances
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How to manage your finances is one of the important components of having a good life. Regardless of your income level, you will truly save yourself from a lot of worries if you know how to manage your finances well.
(1) Set priorities carefully plan your finances. Know your wants and your needs. Do not be confused with what you need and what you want. If you want to make big purchases like getting a home or a car, careful planning will be your key to make it a little easier.
(2) Make a budget. It is always helpful to make a guide on your spending for the next few months. Having a plan on spending is very much helpful for you to see how much you can afford to spend in a month. Make a list when you go to the grocery or when you go shopping and keep reminding yourself to stick to the list. Sticking to your budget today is definitely one good way of being free from financial worries later.
(3) Do not spend more than what you earn. Do not splurge on spending with your credit card if it is not clear where you will get payment for it the next month. Thinking about spending a lot today hoping you will get a job the next month is a no-no.
(4) Manage your debts. Pay your credit card promptly and do not go over your credit limit. Late payments and maxing out your credit cards will cost you expensively. When credit card companies are giving you lower interest rates, you might end up having to pay for higher fees. Late payments and overspending will likely stain your credit report in the end as well. Knowing how to manage your debts is indeed one huge step in learning how to manage your finances.
(5) Save. Make it a habit to save and include savings on your budget. Allot a percentage of your income as your savings. Having a good amount of savings regularly always helps you face your future with confidence and will save you from a lot of financial worries.
(6) Be informed. If you are borrowing money, making investments, or renting anything, always be informed with interest rates and the terms and conditions. When dealing financial transactions, it is always wise to read the fine prints. This way you will save yourself from financial troubles later on.
(7) If you want to invest your money, be wise. Know your market, know the feasibility and success rate of your investment. Especially these days where the economy is down, you also have to be careful where to invest your money. Find and study the opportunities with lower risks.
(8) Think your way out of debts and overspending. Indeed, it may be difficult for some to overcome the habit of overspending and splurging on many things in life. If you are facing the same situation, try to train the power of your mind to manage your thoughts on spending. Resist the urge to do unplanned spending by waiting for a day or two. In the end you might find out you don't exactly need it.
If you want to live a good life, know how to manage your finances as this comprise a big part of being happy and worry-free in life.
Business Challenge Competition
On the 30th of May, we reached the Securities Commission, Mount Kiara around 7:30am. Although we felt exhausted but the spirit in us was burning. We were here to participate in the Malaysia Future Leadership – Business Challenge Grand Finale organized by CIMB. Ms Chaw , our Finance Club advisor and Billy, Vice President of Finance Club came to support us. Ms Chaw is the source of motivation for all of us. Today, we would be tested on our general business knowledge, the understanding of CIMB Bank and information and news from Wall Street Journal.
We went in the contest against other colleges. We learned from them as they learned from us as well. Knowledge exchange is an important part of every competition as we learn the strength and weakness of our opponents and so our strength and weakness. As the competition went on, we witnessed a group of very outstanding and obvious talented contestants from Sunway College as they were leading far in front of the other team in the final round. As a participant, I believe there were more strategies that could be applied during the last round. In the final round, the contestant could invest any amount of investment money they have for every question. The contestants could try to answer every question and dominate the competition by either invest small sum or all their money.
We learned a lot from this Future Leadership program especially the speech and the Q & A session by Dato’ Sri Nazir Razak. He shared his views and insight with us. He said that the most important trait in a person’s career path is integrity. Integrity is very important to him. He advised all participants to work hard and seek for opportunity.. Overall, it is a fun and great experience competition. Thank you the pom pom squad, our most beloved Miss Chaw and the participants.
Eva
FLP Talk: Commercial/Consumer Banking and Capital Markets - Industry Outlook and Career Prospects
Time: 3-4pm
Venue: Auditorium 7, Sunway University College, Bandar Sunway
Speaker: Mr Lee Kok Kwan, Deputy Chief Financial Officer, Group Treasury and Investment, CIMB Group
Topic: Financial markets are in a turmoil globally engulfing commercial banks, investment banks, insurance companies, hedge funds and mutual funds/unit trust. This talk will focus on the impact and outlook of the financial industry in Malaysia and the region as well as career opportunities going forward.
FLP Talk : A Comprehensive Communication Framework for Brand Building
Venue: Theatre Hall, 6th floor
Admission: Free for All, limited seats only
Speaker: Mr Effendy Shahul Hamid, Head of of Group Corporate Communications, CIMB Group
Topic: Amidst the current financial crisis, corporations and their respective brands are further challenged to make a difference. This session discusses the role of branding, public relations, sponsorship and CSR- and how they operate as part of a comprehensive communications framework.
WSJ-CIMB FLP program: http://www.wsj-asia.com/flp/malaysia.html
Speaker: Mr Effendy Shahul Hamid, Head of of Group Corporate Communications, CIMB Group
Topic: Amidst the current financial crisis, corporations and their respective brands are further challenged to make a difference. This session discusses the role of branding, public relations, sponsorship and CSR- and how they operate as part of a comprehensive communications framework.
WSJ-CIMB FLP program: http://www.wsj-asia.com/flp/malaysia.html
There is a quiz for all students who are interested
RichDadPoorDad CashFlow Game
Time: 1-4 pm
Venue: Theatre Hall
Admission: Free For All
Venue: Theatre Hall
Admission: Free For All
Ever heard of Robert Kiyosaki's RichDadPoorDad? It's one of the most celebrated personal finance book. And CashFlow is the game invented by this author! How this game works is that it teaches the principles applied in the book and it's a fun game for friends to play and to understand money.
Now, this event is fully free for all and we will let everyone to have a chance at this Cashflow game that is not readily available in Malaysia as to buy the game is expensive (note: app. RM 700) so we are giving everyone a chance at this game for 3 hours for FREE!
So, join us for the game at this day and sign up at 10th floor counter before Thursday next week!
Post-mortem on Grab That Chance for Your Dream Job Workshop
As I stepped into the hall, Ms Chaw can be seen moving all around the hall.
“Where’s Billy? Where’s he?” she asked.
“Oh, I just called him, he said he’s coming up.”
One can see the anticipation on her face, hoping for the best.
Billy, the MC for the day, was spotted being so worried about his speech, holding his notebook with that sort of confused plus worried plus blank face. But yet, he said he was fine. Our president was also worried about her speech, but being the sweet Suet Li, she stayed confident and calm.
The hall was filled up, and we know we had to begin the talk. So, our dear Billy stood up, gathered all his courage, and started his speech by first welcoming all the audiences and introducing the speaker, Ms Josephine Lui to the crowd.
She started her speech by asking us the importance of having perfect mannerism and image during our interview. Most of us have different opinions, but it all ends at the same destination, which is to grab that job.
She then proceeded by pinpointing the top ten interview mistakes. I looked through the list and realized that many of the things mentioned were points where many used to neglect.
After that, the speaker progressively went more specifically into the female section, where she gave detailed information on the type of materials, shoes, accessories, color combination, dress code as well as the appropriate hair style and grooming. However, having focused on her objective, she provided audiences with detailed information on the appropriate mannerism that should be performed during the interview. The crowd responded with laughter when her slide reads “don’t show your skinny bits.” The male audiences turned to their female friends, judging, teasing and laughing at them.
Skinny bits? She ended the female section with a short Q n A session, where she then proceeded into the male section. Similarly, she explained on the different aspects that were being mentioned during her talk on females. To make her talk livelier, her statements and opinions were accompanied with examples, where she invited a few of the male audiences to explain on her points. After having to complete on the male section, she ended the part similarly, with a short Q n A session.
Many students popped up questions, where these students were then provided with very detailed and well-supported response by the speaker. Being a professional speaker, Ms Josephine Lui then informed the audiences that they could still approach her after the talk, if they have any doubts or unanswered questions regarding interviews.
Due to time constraint, she had to end the talk. She summarized her speech and again convinced us that dressing appropriately and monitoring our own behavior during the interview would significantly increase our chance of getting our dream job.
The speaker then passed the floor to our MC, Billy, where he then invited our club president to give her speech. In her speech, she reviewed on the importance of having knowledge about finance as well as the diversification of the club, where the upcoming events would provide information beyond the scope of finance.
As audiences were mesmerized by Ms Josephine’s speech, many approached her after the talk with their doubts. True enough, she provided them with satisfactory information and comments.
We were all satisfied with the talk, as well as busy discussing with each other about what she had just said. All in all, it was a pleasant and educational day for us.
Eva
“Where’s Billy? Where’s he?” she asked.
“Oh, I just called him, he said he’s coming up.”
One can see the anticipation on her face, hoping for the best.
Billy, the MC for the day, was spotted being so worried about his speech, holding his notebook with that sort of confused plus worried plus blank face. But yet, he said he was fine. Our president was also worried about her speech, but being the sweet Suet Li, she stayed confident and calm.
The hall was filled up, and we know we had to begin the talk. So, our dear Billy stood up, gathered all his courage, and started his speech by first welcoming all the audiences and introducing the speaker, Ms Josephine Lui to the crowd.
She started her speech by asking us the importance of having perfect mannerism and image during our interview. Most of us have different opinions, but it all ends at the same destination, which is to grab that job.
She then proceeded by pinpointing the top ten interview mistakes. I looked through the list and realized that many of the things mentioned were points where many used to neglect.
After that, the speaker progressively went more specifically into the female section, where she gave detailed information on the type of materials, shoes, accessories, color combination, dress code as well as the appropriate hair style and grooming. However, having focused on her objective, she provided audiences with detailed information on the appropriate mannerism that should be performed during the interview. The crowd responded with laughter when her slide reads “don’t show your skinny bits.” The male audiences turned to their female friends, judging, teasing and laughing at them.
Skinny bits? She ended the female section with a short Q n A session, where she then proceeded into the male section. Similarly, she explained on the different aspects that were being mentioned during her talk on females. To make her talk livelier, her statements and opinions were accompanied with examples, where she invited a few of the male audiences to explain on her points. After having to complete on the male section, she ended the part similarly, with a short Q n A session.
Many students popped up questions, where these students were then provided with very detailed and well-supported response by the speaker. Being a professional speaker, Ms Josephine Lui then informed the audiences that they could still approach her after the talk, if they have any doubts or unanswered questions regarding interviews.
Due to time constraint, she had to end the talk. She summarized her speech and again convinced us that dressing appropriately and monitoring our own behavior during the interview would significantly increase our chance of getting our dream job.
The speaker then passed the floor to our MC, Billy, where he then invited our club president to give her speech. In her speech, she reviewed on the importance of having knowledge about finance as well as the diversification of the club, where the upcoming events would provide information beyond the scope of finance.
As audiences were mesmerized by Ms Josephine’s speech, many approached her after the talk with their doubts. True enough, she provided them with satisfactory information and comments.
We were all satisfied with the talk, as well as busy discussing with each other about what she had just said. All in all, it was a pleasant and educational day for us.
Eva
How Well Would Malaysia Weather the Global Crisis?
Speaker: Mr Lee Heng Guie, Chief Economist of CIMB Bank
Venue: Auditorium, Sunway University College
Date: 13 March 2009
Time: 3-4 pm
Summary
The talk touched on the global and US perspective on the economy, giving a snapshot view of what is happening around the world. It also touched on the global policy response and the current situation in Malaysia. Additionally, the speaker provided some suggestions and recommendations of what would best be done to improve Malaysian economy.
Detail
Mr. Lee Heng Guie, Chief Economist of CIMB first begun with explaining how US finance its spending and what actually caused the recession. It then went into explaining the policies taken such as how bank deposits are guaranteed in the banking system. He mentioned about the Keynesian theory and that if interest is pushed too low but the economy does not improve, it will fall into a liquidity trap. This, he explained, will not be good, because there will not be confidence in the banking system. So, it is necessary to restore confidence and to stabilize the market as although people defer purchases at the beginning of the recession, spending will return to normal after a period of time, when they find that they still need to make those purchases. Mr. Lee further explained that it is gone as inflation will turn into negative and it should be sustained. He agreed that stimulus plans should be taken, but must be pulled back after the economy starts to recover, so that it does not reintroduce inflation.
He remarked that Malaysia will go into a technical recession as we are export orientated. Furthermore, he commented that the good points about the current situation in Malaysia are that there are more money in the system comparing to prevent slumps, the government is managing their debts well, and having a healthier balance sheet for corporations. He also suggested that the government needs to be transparent with their retrenchment numbers, so that the public are aware of the things that are happening. Mr. Lee states that the future of the economy is in the service sector as it drives youths and the human capital. He believes that the pick up in global growth will be gradual and speedy restructuring of the banking sector and the normal functions if credit markets presentation for sustained market recovery.
Venue: Auditorium, Sunway University College
Date: 13 March 2009
Time: 3-4 pm
Summary
The talk touched on the global and US perspective on the economy, giving a snapshot view of what is happening around the world. It also touched on the global policy response and the current situation in Malaysia. Additionally, the speaker provided some suggestions and recommendations of what would best be done to improve Malaysian economy.
Detail
Mr. Lee Heng Guie, Chief Economist of CIMB first begun with explaining how US finance its spending and what actually caused the recession. It then went into explaining the policies taken such as how bank deposits are guaranteed in the banking system. He mentioned about the Keynesian theory and that if interest is pushed too low but the economy does not improve, it will fall into a liquidity trap. This, he explained, will not be good, because there will not be confidence in the banking system. So, it is necessary to restore confidence and to stabilize the market as although people defer purchases at the beginning of the recession, spending will return to normal after a period of time, when they find that they still need to make those purchases. Mr. Lee further explained that it is gone as inflation will turn into negative and it should be sustained. He agreed that stimulus plans should be taken, but must be pulled back after the economy starts to recover, so that it does not reintroduce inflation.
He remarked that Malaysia will go into a technical recession as we are export orientated. Furthermore, he commented that the good points about the current situation in Malaysia are that there are more money in the system comparing to prevent slumps, the government is managing their debts well, and having a healthier balance sheet for corporations. He also suggested that the government needs to be transparent with their retrenchment numbers, so that the public are aware of the things that are happening. Mr. Lee states that the future of the economy is in the service sector as it drives youths and the human capital. He believes that the pick up in global growth will be gradual and speedy restructuring of the banking sector and the normal functions if credit markets presentation for sustained market recovery.
Crystal
GRAB THAT CHANCE FOR YOUR DREAM JOB IMAGE WORKSHOP
Date: 21 March 2009 (Sat)
Time: 2.50-4.00pm
Speaker: Josephine Lui, Managing Consultant (Imagine Image Consultancy)
If you wish to grab that dream job of yours, make it happen.
You've got to be perfect from head to toe, and your mannerism should be as pleasant as from the minute you step into the its office., because your body language shows!
Time: 2.50-4.00pm
Speaker: Josephine Lui, Managing Consultant (Imagine Image Consultancy)
If you wish to grab that dream job of yours, make it happen.
You've got to be perfect from head to toe, and your mannerism should be as pleasant as from the minute you step into the its office., because your body language shows!
Talk Info:
a. What is appropriate working, casual, smart casual outfits. Impress your interviewers with the appropriate dressing
b. Choose colors that compliment them
c. Apply camouflage techiques to give a flattering look
d. Your overall grooming - make-up does it harmonise with the outfit you wore for the day
e. Your first impression : body language tells a million words
f. Little details you should take note in front of your interviewers
Second Post
First of all,thanks to Billy who wrote a very interesting opening speech for the club. Majority of the students in our college has a very funny viewpoint of the word "finance". This happens more obviously in those who take other courses. They think that only students who are pursuing a degree in finance can join our club. But don't they spend money everyday?
This is no longer a world with barter system. You have to pay 20cents even for a visit to the toilet. What will you do when you are in the urgent to settle your business? You can't simply settle it on the street,right? So if you still think finance is not vital,please think twice or thrice.
What made me choose to study finance? Well, girls should know we need to have more money than guys. We want to buy clothes and shoes and that is not all yet. When we look at the mirror, we will start wondering, "Isn't it perfect if I have something to put on my neck? And I regret of not buying the belt." Besides that, we also need to spend money on our monthly friend. There are so many things that we need, and there are so few allowances from our parents. Besides stuff on personal appearance, we want to update ourselves with the latest digital gadgets too, such as
handphone, camera, ipod and so on. What? You say we can work? We sure can, but it'll burden ourselves in our studies. So, once again, money is a crucial thing for everyone.
Apart from the above, the other reason I chose finance is because I can get a job easier. Every field needs to manage their money and cope with the risks of losing money, either it is a small or big company. Look at people who produce pirated dvds, their act is undeniably wrongful. But why are they doing that? It is because they want to earn more money from less costly materials. They just need to download movies or series from the internet, then with a cheaper CD, they can sell it out more costly. They know that the society still needs them as they are saving money to purchase things they want too. Please take note, it is merely an example to show the significance of finance. I'm not encouraging anyone to participate in
this illegal job.
I guess this is all that I wanted to say. So, i hope that our club can be the information center of everyone, before reaching the dream of each of you.
This is no longer a world with barter system. You have to pay 20cents even for a visit to the toilet. What will you do when you are in the urgent to settle your business? You can't simply settle it on the street,right? So if you still think finance is not vital,please think twice or thrice.
What made me choose to study finance? Well, girls should know we need to have more money than guys. We want to buy clothes and shoes and that is not all yet. When we look at the mirror, we will start wondering, "Isn't it perfect if I have something to put on my neck? And I regret of not buying the belt." Besides that, we also need to spend money on our monthly friend. There are so many things that we need, and there are so few allowances from our parents. Besides stuff on personal appearance, we want to update ourselves with the latest digital gadgets too, such as
handphone, camera, ipod and so on. What? You say we can work? We sure can, but it'll burden ourselves in our studies. So, once again, money is a crucial thing for everyone.
Apart from the above, the other reason I chose finance is because I can get a job easier. Every field needs to manage their money and cope with the risks of losing money, either it is a small or big company. Look at people who produce pirated dvds, their act is undeniably wrongful. But why are they doing that? It is because they want to earn more money from less costly materials. They just need to download movies or series from the internet, then with a cheaper CD, they can sell it out more costly. They know that the society still needs them as they are saving money to purchase things they want too. Please take note, it is merely an example to show the significance of finance. I'm not encouraging anyone to participate in
this illegal job.
I guess this is all that I wanted to say. So, i hope that our club can be the information center of everyone, before reaching the dream of each of you.
First post of the year!
As vice president, I get to write the first article. HAHAHA! Next one will be our president’s turn. Miss Chan Suet Li. She is a better writer than me so please keep your eyes open for the next one.
Why did I choose to study finance? To me, a major reason is the glamour associated with the word. Think of the word “Marketing”. What image comes to your mind? For me, it conjures up scenes of people on the street giving out flyers, hardly a great dream in my books. As for “Management”, the word makes me imagine a stuffy middle aged guy in an office doing paperwork and yelling at a secretary (who is not very beautiful). How about “Accounting”? Probably the same image as “Management”, but minus the secretary.
On the other hand, when you mention “Finance” I think of a group of cool-looking men and women dressed elegantly in black, holding laptops and making decisions that will affect the world. We all look up to Wall Street, which is the financial capital of America, and perhaps the entire world. I do not think that any other field of business receives such recognition. Besides, even now our club has a beautiful secretary, Miss Crystal. This makes me feel superior to the management guy with a plain secretary.
Of course, we now live in tough times, and Wall Street is no longer looked up to as a bastion of wisdom which is fit to lead the entire globe in commerce. Yet the importance of finance in our world today is no less than before. It must be more carefully regulated and scrutinized, of course, but its study and application is no less relevant than before the subprime debacle and market meltdown.
Although the future of the world of finance is uncertain, of one thing we can be sure. That is, to rise to the top we must depend on our own efforts. So from today onwards, let us strive to make this club a stronger one, as preparation for our future debut on the battlefields of finance.
Billy
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