Understanding the Habits of the Rich

Fancy getting rich? Here are the rich man’s habits.

Seminars, webinars, Social events/ gatherings, book launches... These right here are some of the main events circled on the rich people’s calendars!

Ever wonder why?

At one of the many book launches I have been to I had a chance to chat up the local best-selling author Azizi Ali, brilliant mind I must say. He told me that the number of books published in a country mutually relates to the wealth of the citizens.His explanation therefore was the more publications per annum, the more the development countrywide hence increase in the wealth of the individuals.

Not so long ago while I was at a luncheon with this brilliant friend of mine, he mentioned that “rich people seldom eat alone”. I was quite ecstatic because this is a habit that I unknowingly practiced for quite a while now. What he said is totally true come to think about it. Its quite funny that there is an entire book dedicated to this subject “Never Eat Alone”. If you read this book, you will learn a thing or two and where you have been going wrong all his while.

According to the above scenarios, did you notice the common customs of the rich people?

Ask yourself why the rich become richer, the poor become poorer and the “Average” stay stagnant?

THE RICH ENJOY READING. TREMENDOUSLY!

In this dynamic era, the rich still find time to read despite the diverse media. They have plenty to choose from that is to say magazines, books, newspapers, and  of course the internet which is the most dominant of them all.

In this world we live in, you have got to spend money to make money. I know it may sound cliche but take a look at the those thousand dollar seminars and courses, they are always full to the bream! They never go unattended, why? Simply because the rich love to learn. If you fancy an opportunity to meet all these filthy rich people all congregated in one room, I suggest you attend one seminar or course in the area near you. Trust me.

Now I understand not everyone has a couple of thousands of dollars at their disposal that is why I advise you to get familiar with the term webinars. This term is a derived from two words that is to say web and seminar. Thanks to technology we now have webinars which you too can enjoy from the comfort of your couch. They are always scheduled to happen at some stipulated time over the internet. Usually there is a number of slots available depending on the organiser of the webinar. Guest speakers and renowned financial consultants are the people that run these webinars. 

Are you rich yet?

NO! Me neither. So until we all regard ourselves rich, let us acquaint ourselves with the these terms below:

●     Seminars

●     Book launches

●     Webinars

●     Courses

●     Social events/ gatherings

This way, we will keep track of the rich and hey we could be involved in their circles.

Thank me later!

This is a guest post by KCLau. KCLau is the best selling author of Top Money Tips for Malaysians. His popular personal finance blog is one of the most visited websites in the financial blogosphere with thousands of email subscribers. He also hosts regular and free online financial training featuring different financial experts. You can follow his latest updates by visiting www.KCLau.com. 

How to Become a Financial Planner?

After the two series of article on Financial Planning and Financial Planner. Some of you may asked: "Is it difficult to become a Financial Planner? What's the requirement needed?"

Hmmm... Good news is it is not difficult, but the bad news is it's not easy either and the requirements for sure will be raised in the future.

So, how?

In Malaysia, those who practice as Financial Planner must pass any one of below examinations:

1. Registered Financial Planners (RFP) issued by Malaysia Financial Planning Council (MFPC)
2. Certified Financial Planners (CFP) issued by Financial Planning Association of Malaysia (FPAM)

After you have passed the said examination, it doesn't mean that you're a Licensed Financial Planner straight away. Why? It's just serves you an entry passport only. Once you have accredited the qualification, you must apply the required licenses with Bank Negara Malaysia (BNM) and Securities Commission (SC) before you can carry out financial planning activities.

By then, you can claimed the following title:

• Financial Adviser Representative (FAR) by BNM
• Licensed Financial Planner by SC

Please take note that passing the said examinations doesn't carry you the titles, getting the licenses does. If not, you're deem to have convicted an offence which can land you in jail or subject to hefty fine.

Other requirements include:

• Must be a Malaysian citizen
• At least 21 years old
• Have minimum 3 years related experience
• Must be a FULL time practitioner
• Then, you must fulfill the minimum hours for personal development programs every year

Next, we will talk about "The Challenges Faced by Financial Planning Industry in Malaysia"

This article was contributed by Alex Yeoh, a licensed financial planner with a reputable financial planning firm. Finance Malaysia blog will work together with Alex in bringing more interesting articles on personal financial planning. You may reach him via email alexyeoh@vka.com.my

New Fund: Kenanga Asia Pacific Total Return

After merging with ING Funds Berhad, Kenanga Investors Berhad launched its first new fund of the enlarged family. In this uncertain global economic environment, how much return can a fund generated was the main concern for many investors. Want to get higher return? Then, we cannot runaway from higher volatility! Are there any balance in between?

Yes. To cater for such investors, this new fund aims to provide a compounded rate of return of at least 10% per annum over market cycle (5 years) by investing in a diversified portfolio of Asia Pacific equities.

3 Reasons WHY it benefits you:

Well... Unlike others, this fund DO NOT has any benchmark constraint. This allows flexibility in identifying and implementing the most optimum investment strategy. Picture below shows the differences between Absolute and Relative return:

Still not yet convinced? How about the proven track record?

Click here to download prospectus

Source: Kenanga Investors Bhd

A Guide To Home Loan Refinancing

For those who have never been exposed to the concept of “refinancing”, home loan refinancing may seem like a baffling notion.  After all, what good could possibly come from getting a new home loan… just to pay off your old one? Wouldn't you just go back to square one after the whole process? These could be some of the questions you’re asking yourselves, and understandably so.

In reality, home loan refinancing is a widely-adopted practice with many potential benefits. Home buyers far and wide undertake it in order to lower the interest they’re paying on their home loans, reduce their monthly loan repayment amounts, and generally alter their loan terms to better suit their financial needs.  In fact, some even refinance to free up cash riding on the inherent values of their properties!

Want to refinance your home loan in Malaysia?
Click here to compare different rates by different banks.Courtesy of: iMoney.my

[Property] 3 Critical Factors to Watch Out by Year End (July 2013)

Ever since the property boom started in 2009, right after the global financial crisis, investors were laughing to the bank. But, can these sustain until next year? Many analysts doubt so. Why?

The most crucial determining factors might uncover itself in the next few months, approaching year end. In short, we have summed out to the below 3 critical factors:

1. Banning of DIBS
   This is not a secret anymore. Speculation rife up recently, saying that BNM may ban the Developer Interest Bearing Scheme (DIBS) by year end. BNM is studying the implications of DIBS which benefiting speculators more than serious buyers. Note: Singapore already banned such scheme few years back.
   
   
2. Interest Rate hike
   BNM also may revised the Overnight Policy Rate (OPR), which determine the cost of financing in the country including Base Lending Rate (BLR) for mortgage loan. A 25 basis points hike was expected. This will affect all type of loans, except fixed interest loans. Let's get prepare for higher monthly loan installment amount.
   
   
3. Higher RPGT
   Coming this 2014 budget to be tabled on 25th Oct, watch out for higher Real Property Gain Tax (RPGT). Currently, it was 15% for first two years and 10% for disposal from 3rd year to 5th year. Note: RPGT was much higher before 2008.

In our view, once DIBS was banned, developer no need to bear the interest, financier no need to bear the risk, new launching properties should be selling at lower price. Then, this is bad news for existing property, especially bought under DIBS before?

Example, phase one selling at RM500k under DIBS, phase two selling at RM500k without DIBS. No effect?

Think again... More supply now releasing for secondary market, assuming phase two also selling at same price, which is very good already. Right?

ARTHNEETI JUNE 2013 ISSUE

Gold in India has a special place apart from just an instrument of investment. Indians have a sentimental connection with gold. This is the reason that the gold imports of India show no signs of reduction in spite of all the measures like increase in the import duty. This is worsening the situation of Current Account Deficit (CAD) for the country. CAD is one of the major problems that India is facing today and hence not able to achieve the growth as expected. The depreciating rupee is worsening the situation further. So gold imports are now becoming a problem for the country though they are adding to the assets of the citizens of India.

To read further click here

New Fund: AmAsia Pacific REITs Plus

Do you remember the AmAsia Pacific REITs fund? I'm sure you have heard about it. Yes, backed by its success story, AmInvestment Management Bhd has launched a new version called AmAsia Pacific REITs Plus. The word "Plus" is used as a continuation of the AmAsia Pacific REITs and the fund may invest in listed equities in the real estate sector.

The fund aims to provide regular income and to a lesser extent capital appreciation over the medium to long term (at least 3 years) by investing in real estate investment trusts (REITs) and equities in the real estate sector.

What's the strategy?

Minimum 70% in REITs and a maximum of 29% in listed equities in real estate sector, which are in the Asia Pacific region. This is the asset allocation of the fund. Diversification in terms of country and different REITs sub-sectors (etc. residential, commercial and industrial) is expected.

An active allocation strategy will be employed by fund manager, based on macroeconomic trends and REITs market outlook of respective countries in Asia Pacific region. Meanwhile, bottom-up security selection strategy will be used for equities, with focus on undervalued companies.

Who is suitable for this fund?

• Those who wish to have investment exposure in real estate sector through a diversified portfolio of REITs and real estate equities in Asia Pacific region.
• Those seeking regular income and to a lesser extent capital appreciation over medium to long term

What's AmInvest aiming?

4% payout on yearly basis, which AmInvest said is achievable and is higher than fixed deposit rate offered by banks. AmInvest favors Australia, Singapore and Japan for REITs and China, Indonesia and Thailand for listed equities.

Click here to download the fund prospectus

"X"pensive AirAsia X IPO ?

Slate for its debut trading tomorrow (10th July 2013), can AirAsia X follows the footsteps of its sister company AirAsia? What would happen tomorrow pretty much depends on the fair value given by various research houses.

AirAsia X is a leading long haul low cost carrier since operating on Nov 2007, primarily in the Asia Pacific region. Currently, it serves 14 destinations acorss Asia, Australia and the Middle East, with 11 A330-300 planes.

Investment analysis:

1. Benefits from synergies as part of AirAsia group
2. Strong brand name
3. Operate in the fast growing aviation market in the world
4. Lowest unit cost base in the region
5. Strong ancillary income at RM141/pax and expected to grow further

How about the risks?

1. High jet fuel price
2. World crisis i.e. war, terrorism, epidemic outbreak
3. Slowdown in world economy
4. Emergence of other long-haul LCCs
5. Delaying of KLIA2 which may hamper its growth prospects
6. Strengthening of USD against MYR, because 79% of its debt is denominated in USD

So, what's the fair value?

Either Rm1.40 or Rm1.20 given. Seems like this is not an exciting IPO for investors. Anyway, tomorrow debut most likely will remain in positive territory because there is a "king card" in hand. Yes. Maybank Investment Bank will be the stabilizing manager who can purchase up to 15% of the total number of shares offered under the IPO. No worry.

New Fund: Eastspring Investments Target Income Fund 2

In the current low interest rate environment, investors continue to chase for yields which resulted in strong demand for close-ended bond funds that potentially offers higher return than fixed deposits. Keeping this in mind, Eastspring Investments is launching a new fund.

The fund endeavors to provide regular income during the tenure of the fund (3 years), by investing in local and/or foreign debt securities.

Investment Strategy

A minimum of 70% will be invested in local and/or foreign debt securities, while the remaining of not more than 40% may be invested either in non-rated debt securities and/or debt securities rated below investment grade rating.

• lower than BBB3 rating by RAM; or
• below investment grade rating by other rating agencies

Although the fund is expected to invest up to 40% in non-rated issuers and/or issuers rated below investment grade, there is a risk that this limit may be exceeded as issuers of investment grade debt securities held within the portfolio may be downgraded by rating agencies and thus resulting in the fund's over exposure in such category.

Additionally, up to 30% may invested in money market instruments, and worth to note that the fund may exercise Early Repayment. As such, this is a moderate risk fund, instead of low risk.

The fund is suitable for investors who:-

• seek regular income distribution;
• have 3 years investment horizon; and
• have a moderate risk tolerance.

Click here to download fund prospectus

Latest BNM measures to Curb Excessive Household Debt (July 2013)

Hot from oven. Bank Negara Malaysia (BNM) today announce some measures to address the alarming household debt among Malaysians. As reported, household debts have continued to increase at a strong pace, averaging at an annual rate of 12% over past 5 years. While this has been supported by positive income and employment conditions, in the more recent period, there has been a growing trend in the offering of financial products that are not in the long-term interest of consumers.

What does this mean?

This includes extended financing tenures of up to 45 years for house financing and 25 years for personal financing!!! Wow... Is it too long the tenure? While this may reduce the monthly repayments, in the long run, this increase the overall debt burden of households. If we don't stop this kind of practice, it will encourage excessive debt accumulation by households and increase the vulnerability of this sector.

Hence, BNM has to take actions...

The implementation of a set of measures aimed at avoiding excessive household indebtedness and to reinforce responsible lending practices by key credit providers. These measures, which take effect immediately, complements the earlier measures introduced since 2010 to promote a sound and sustainable household sector.

What are the measures?

1. Maximum tenure of 10 years for financing extended for personal use;
2. Maximum tenure of 35 years for financing granted for the purchase of residential and non-residential properties;
3. Prohibition on the offering of pre-approved personal financing products.

Who will be affected the most?

For sure, borrowers (excessive one) will be short-handed. However, those good quality borrowers will not be affected. Meanwhile, the hands of financial institutions once again being tighten further. It will definitely impact the loans growth, but with a more quality growth. Property sector will face some minimal impacts, given most of the loan approved is within 35 years of financing.

For Finance Malaysia, this is good news for our country's financial sector. Excessive household debts, coupled with poor quality loans, will endangers the financial system. Worth to highlight here is the pre-approved loan is being banned now. Long time ago, Finance Malaysia is very uncomfortable with such offerings, with the intention to "indulge" bank clients to borrow. Now, we are relieve. Do you agree?

New Fund: OSK-UOB Capital Protected Essentials Fund

As the world population continues its growth led by the emerging countries coupled with the higher purchasing power, the demand for the essentials or basic commodities (i.e. those that we use daily such as cotton for clothing, corn and sugar for food, crude oil for energy) have significantly increased. Further, with the imbalance of increase in demand and slower growth in supply, this has also resulted in a situation where consumers now and going forward have to pay more for fuel, clothing and food.

With the expectation of further increase in the prices of these essentials or basic commodities, OSK-UOB has established a fund that will capitalize on the price movements of these essentials or basic commodities, which is OSK-UOB Capital Protected* Essentials Fund.

Fund Asset Allocation:

Indicative Asset Allocation

Over The Counter (OTC) Option:

A 4-year option whose underlying reference is a basket of 4 commodities, i.e. Brent Crude Oil, Cotton, Sugar and Corn, and each commodity is represented by a listed futures contract.

Why it also called "Memory Option" ?

This is because the option is structured to provide 4 annual coupon payments during the tenure of the fund, if at the relevant observation date, all of the 4 underlying reference commodities prices are greater than or equal to their initial reference prices determined at the commencement date of the fund. It has a "memory" component i.e. the annual coupon payable can be carried forward if it failed to met the conditions for a particular year.

103% Capital Protection?

Yes. The capital protection covers the investors' capital investment and includes the 3% sales charge payable by investors.

Hence, the fund is suitable for investors who:

1. have a low risk tolerance;
2. seeks capital protection*;
3. seek potential returns from commodities essential to our daily lives;
4. have a medium term horizon; and
5. seek income

Download the fund prospectus here

Source: OSK-UOB Investment Management

* Investors are advised that the fund is not a guaranteed fund. Capital protection is provided through investments in ZNIDs and not by a guarantee. Consequently, the return of capital is SUBJECT TO the credit/default risk of the issuers of the ZNIDs and may result in losses.