Sunday, November 28, 2010

CapitaMalls Asia - i find it dangerous

Is been a year since CapitaMalls Asia went public at $2.12 . There is much hoopla during ipo. Shortly thereafter it rose to $2.65 before it decline. At this writing is $2.04

I find that the malls have little room to grow in terms of their retail space. Corridors filled with pushcarts. Other than jacking up rentals what other option is there? Personally i find rentals a killer in S'pore & is a turnoff whenever i wonder how many % of a product/service 's price am i paying for rent?

How is the company managing? Well this photo of construction of Jurong Entertainment Centre is a clue. Good quality metal panels erected for a construction site & high beam lights shining the metal plates at night. That's a lavish use of $ - a warning sign to an investor.

Friday, November 26, 2010

Beating the Market ≠ Making $

Shocking revelation when i learnt of it. Graphs are depicted on unit trust brochures indicating their past performance compared to index and/or other funds.

If the market drops 50% & the fund lost 48% it's considered as beating the market. What consolation is that when $ is lost? The investor ought to sell near the top of bull market (though is not easy to judge) & not like the fund riding down when the bear takes over.

There is a time to be in the market & a time not to. Perhaps that's why Warren Buffett's #1 Rule: Don't lost $, #2 Rule: Don't forget #1 instead of making $.

Tuesday, November 23, 2010

Insurance Meant for Protection, Not Investment

There's been letters about term insurance in the papers recently. I've never heard of Term Insurance until the 2008-9 financial crisis with those Minibond investors losing $ & Tan Kin Lian attempting to recoup their $. Is on his blog that he talk about term.

A no. of personal finance books talk about buy term & invest the difference. I'm in favor of this approach. No doubt will lose $ in beginning but the learning experience will be worth it in taking control & increased self-confidence & esteem. Furthermore this 'life skill' is applicable in other countries' markets & no age limit & discrimination.

Analogy i can think of for Insurance & Equities are a tank & a sports car. Both are vehicles built for different purposes. Tank=insuranace, Sports Car=equities. A tank can travel too but it won't go fast to reach your destination of financial security (or independence/freedom). A tank is heavily armored to protect the crew as what insurance is supposed to do.

Insurance industry spend a ton of $ on advertising. Little to none is spent on educating. Without ignorant people, it won't be easy to sell high profit margin products to boost its bottomline. Ignorance in financial matters is not bliss. Ignorance is pain, exploitation by others & slavery.

Sunday, November 21, 2010

2nd-hand Badminton Racquet- Reducing expenses

I suck at badminton. Playing it as a form of exercise. Bought a 2nd hand racquet at around half price after my 1st Carbonex 8SP's string is broken. Other better yonex racquet was broken near the T-joint.

I've seen a player with around 4-5 racquets in his bag. Guess he buy & buy in attempt to find 1 that suits him. So much excess stuff. I've played with the 2nd hand racquet a few times as its owner was generous to let me use. Find it ok & definately better than the carbo8. Is a msian brand but brand doesn't matter much to me. All good brands have their start.

There's no way to hit a shuttle in the shop to see how the racquet handles so a 2nd hand racquet is fine with me after playing with it in real conditions.

Ever consider buying 2nd hand stuff to cut expenses & accelerate journey to financial independence?

Carbonex 8SP (String broken near centre):

2nd Hand Racquet (Fleet Brand)

Saturday, November 20, 2010

Startling Msian Retirement Fund Figures

Figures of how much people have in their retirement accounts have always intrigued me. Managing my finances well is of paramount importance as i don't want to end up like the broke masses. Figures for S'poreans are grim & on Msian side it's the same.

When it comes to wealth, the 80/20 Pareto principle is even more pronounced. Azizi Ali, a Msian finance book author wrote that 94% of Msians have less than RM100,000 in their accounts. Forced savings already so pathetic, real savings is even worse.

Amount (RM)
No. of Active Contributors

Above 1,000,000

600,000 to 1,000,000

100,000 to 600,000

50,000 to 100,000

Below 50,000

For S'poreans, the situation is worse with much of it sucked up by housing mortgages & many has been brainwashed that their aging 99 year leasehold flats are worth a lot.

Thursday, November 18, 2010

No Debt = Carefree

Remember how carefree we were up to secondary school/junior college years? A peaceful & tranquil existence with no bad debts. Other than that the other period in my life being carefree is during the basic military training days- tired & fall asleep, kinda cut off from outside world.

People buying unnecessary depreciating stuff on credit have always amazed me. Stuff may bring pleasure in the beginning but then it feels like a weight chained to the body. Reading Kiyosaki's Rich Dad Poor Dad shocked me further as he mentioned about working for bank as well. The more people you are indebted (bad debts) to, the poorer you are.

Do you often buy stuff on credit?

Tuesday, November 16, 2010

Get Rich Quick Stock Seminars

Cottage industry of these stock/forex/option trading seminars have sprouted up since 2002. 1 option trader who proclaimed himself 'guru' has been sued by customers & closed down. All these seminars attract greedy people with claims of quick profits. I used to be a sucker too having lost a few thousand dollars.

Warren Buffett's Rule 1: Don't lose $. Rule 2: Don't forget #1. As simplistic as it is my experience agrees with what he say about concentrating on defense 1st. Mindset is totally different in terms of priority:

Veterans: 1) Don't Lose $, 2) Grow $, 3) Grow $ real quick
Suckers & amateurs: 1) Grow $ real quick, 2) Grow $, 3) Don't lose $

Many people in their foray to get rich quick end up getting poorer quick. Educational seminars are ok but these get rich quick seminars ought to be avoided.

Personally i find those who cannot control their spending impulses have a slim chance of being financially independent. Spending $ is easy but most spend to make themselves poorer.

Monday, November 15, 2010

Mail Order Items

I'm an ignorant fool when it comes to mail order items. Pitch they use is 'Product is not available in stores & can only be bought through mail order'. Why? I didn't give it a deeper thought & just carried on with daily life. I've read many personal finance books & they all repeat the usual topics. Well this mail order stuff is something new that i learnt.

-If product is so great, how come is not sold in stores?

Main reason given is that the product is in 'experimental stage'. If response is great from mail orders they would deem it good & roll it out fast into stores. It is a way of limiting their risk & mass production of unsold items just in case.

Friday, November 12, 2010

Disposable Income

Ever wonder why they call it 'disposable'? I wonder if this word has a part to play as many people now are in debt especially credit card debt.

After income leftover upon paying fixed expenses, the rest is supposed to be disposable? By terming it 'disposable' it unconsiously programs people to dispose of it. Disposal through consumption especially hyperconsumption. More & more clutter in people's homes nowadays (me included).

Wednesday, November 10, 2010

Plastic Bags Banned in Penang, Msia - Got Balls

Penang minister got balls, ban plastic bags from 1st Jan for better environment & citizens. S'pore is too $$ minded, scare lose ConsumerS (note media don't call as CitizenS) Many people are consumers-eat, eat, use, use, throw, throw, divorce, divorce. Can shop for new item/spouse again. GDP up & up as the govt likes to tout as if it is the end all be all indicator of life.

Even in Jusco at Bukit Indah in Johor, Msia they already have no plastic day every Sat which is a high shopper volume day compared to a weekday in S'pore.

They don't refer as Citizen Spending nor Citizen Confidence Level. What is the difference between consumers & citizens? Go figure.

Monday, November 8, 2010

Life 'Thrown Away' Watching TV

Have not watched much tv since NS days. At times i find it annoying with the noise from tv when parents are watching. I'm rather appalled that commercials take up around 25% in a 1 hour drama slot. Likewise for cartoons that i watched on youtube to relive my childhood days the ad time is around 8mins for a 30min cartoon - that's also around a quarter.

Actual part of show is even less if taking in the opening & ending songs/credits. Throwing away around 25% of our life in an hour of tv watching due to ads is too much.

Why not use your watch's stopwatch function & verify how many % of your life is wasted on commercial breaks for a typical show/movie?

Saturday, November 6, 2010

Clementi Hawker Centre Reopens

Is good to see the famous carrot cake & porridge stalls still there after months of refurbishment of the hawker centre. Both can be considered part of clementi heritage as many long-time residents can attest to.

I'm not in favor of government's increasing moves to privatise hawker centres & markets. Recent Kopitiam Square in Sengkang which has turned into a ghost town is a good example. Kopitiam bidded real high & charge exhorbitant rents which are then passed on to consumers. Who is dumb to pay high for commodities when many don't have enough retirement funds?
I find the hawkers operating their small businesses have a sense of pride of their culinary skills unlike those employed in food courts which are there mostly for paychecks. Already we see the food culture deteriorating as the old hawkers retire & their 'kungfu' lost since youngsters nowadays are reluctant to take over.

On tourism side, 2 europeans i know of prefer hawker centre than food court. Food court environment being too corporatised lacks appeal to these tourists.

Wednesday, November 3, 2010

Wealth/Financial Disaster Ingredients

Knowledge + Discipline + Fear + Greed = Wealth

Ignorance + Recklessness + Fear + Greed = Financial Disaster

Above 2 equations from a book of Andrew Chia. Notice the common ingredients are Fear + Greed which took me by surprise. Is true when you come to think of it that fear & greed are present in humans. Is the other 2 ingredients that produces different outcomes.

How come the subject of $$ is not taught in schools?

Mass ignorance = Financial Disaster when the masses are woefully prepared for retirement.
Mass ignorance = Easier to rip & sell unsuitable profits leading to handsome profits for financial institutions.
Mass ignorance = Large numbers of people stuck in a job they don't like.

Tuesday, November 2, 2010

Balls Are Always in Short Supply

Last week a student questioned SM Goh if he is aware that many young people no longer felt a sense of ownership in S'pore. This type of person with balls are rare. That student if he is smart can use that news article about him as badge of honor instead of plain resume. Most people are trained/conditioned to be drones which are easily replaceable/expendable.

No generals dare wake Hitler up when allied airborne dropping at night prior to D-day morning. No balls to call disturb his sleep. Waited till morning & the rest is history.

People who dare to ask the 'inconvenient' question to higher authorities are always in short supply compared to the masses of yesmen surrounding a top person.