Cash Color

Summary of 2009 Performance

Cash Color — Sat, 30 Jan 2010 12:44:19 +0000

I know I should have posted this earlier, but today’s still January, the first month of the year

My investment Returns.

So, I started investing about 14 months ago. How’s my performance for 2009?
Stocks: Including capital gains and dividends, my stock has produced a great 17% return.
Futures: I’ve net about 10% gain from my trading with futures contract.
Unit Trust: I took out money from my EPF to buy Unit Trust. So far, my UT has produced a 7% returns for me.

Goals for 2009.

1. Save RM65k in CD by Feb 2009. This amount is allocated the down payment for buying property. (Achieved: Feb 2009)

2. Buy insurance by Mar 2009 in anticipation of buying a property in May 2009. (Not achieved. There was a couple of times I participated in auction properties but I was outbid. It is not easy to find a good property with discount even in the midst of an economic recession. I have therefore changed my strategy. Instead of looking for properties with at least 20% discount from their fair value, I am not looking at the cashflow instead. As long as the rental income is able to pay for all the expenses associated with the property, then it’s a buy.)

3. Earn a side income of RM6,000/mth by Apr 2009. (Not achieved.)

4. Buy a property in May 2009. (Not achieved.)

5. Earn a side income of RM8,000/mth by Jul 2009. Quit my job once this threshold is achieved. (Not achieved. Glad I’m still keeping my job)

6. Side income of RM10,000/mth by Oct 2009. (Not achieved.)

7. Trade up the value of my stock portfolio from RM8k to RM16k. (This is debatable. I have unrealised gain of more than 8k. But if strictly referring to “trading”, then I made a trading loss instead of a trading gain.)

Highlights of 2009.

1. Achieved my RmM100,000 networth.

2. Invest in unit trusts using money from EPF.

3. Started trading with futures.

New Goals for 2010.

1. Accumulate my second RM100,000 net worth.

2. Buy a commercial property, ASAP.

3. Side income, target RM1,000 a month, from various sources but excluding the rental income from (2).

Government and Media Spins

Cash Color — Sat, 09 Jan 2010 07:19:53 +0000

It’s amazing how the Government and the Press can spin bad news into good news. The latest being “New toll rates to reflect consumer satisfaction.”

It is presumed that consumers would be willing to pay a higher toll rate because the highways will be widened, and hence consumers will enjoy a smoother journey. As far as I know, along the whole stretch of the PLUS North-South Expressway, there are only a few stretches that are congested and in need of adding more lanes. No doubt consumers who ply these stretches will be satisfied. But what about the other millions of consumers who DO NOT ply these stretches? These other consumers are already enjoying smooth rides, and an increase in toll rates will only mean they have to fork out more money. Where’s the satisfaction in that?

Another example, recently the price of sugar has been increased by 20 sen a kg. And the media keeps publishing positive views on this move. Here are two of the articles. “Withdraw sugar subsidy” and “Weaning off subsidy mentality“. But where are the voices of the people ever published? I haven’t read in any media about the consumer complaining of the exorbitant price increase of drinks at restaurants.

Somehow, I’m starting to feel that the Government is using the print media to influence the public to accept and embrace the Government’s decisions and policies.

There is Money in Private Tuition

Cash Color — Sun, 20 Dec 2009 08:18:04 +0000

I caught up with an old friend today. We talked about alot of things but since this is a personal finance blog, I’ll just highlight the financial issues of interest.

My friend, she works part-time giving tuition. She earns about RM8,000 during normal season, and easily double this amount during peak season. She does not declare her income, hence her income is tax free. Simple calculation will show that her annual take-home-pay easily exceeds RM100,000. Bear in mind that she earns this on a part-time basis.

This got me into thinking, maybe I should have gone the academic route instead of going the corporate route. When I first graduated, I got a telephone call from college inquiring if I have an interest in becoming a tutor. I guess they made that call because I scored the highest in one of the subjects. At that time I didn’t know that private college tutors could earn so much money by giving private tuition.

So, people will pay good money to acquire knowledge and tuition. What skills do I have that I can teach others? I need to really give a thought to this issue because this is a good money making opportunity.

And for all others out there reading, it might not be a bad idea to think about giving tuition to earn some supplemental income.

Finally Starting to Get My Repayment

Cash Color — Sun, 13 Dec 2009 02:41:34 +0000

In Jan 2009, I loan some money to a stranger to help her repay her debt with the loan sharks. In the interim, she has asked for more loan. All in total, I’ve loaned more than RM5,000 to her. And yesterday, she has started to repay me…. after many calls to her.

At the rate I’m being paid back, it’ll take about 4 years to collect all my money. It’s good that I am finally getting paid back but I need to press her harder for more money. I’ll keep chasing. I have a goal to reach my next hundred thousand before the end of 2010.

The lesson I’ve learned from this episode is, think thrice before loaning money to anybody.

Hunting For Table Top Calendar 2010

Cash Color — Thu, 03 Dec 2009 15:49:20 +0000

It’s the time of the year again where I ask my colleagues around the office if they have any desktop calendars to spare. Yes, it’s been 2 years in a row that I haven’t received a calendar without me having to ask for it.

I still remember those years when businesses and companies would print calendars and diaries and give them away to their customers and business associates. It was a form of advertising for them. However, since the economy slowdown which began last year, businesses have cut down on spending. The first item on the budget that gets cut is always the advertising budget.

Maybe tomorrow I should give my banker a call and ask about a calendar.

Went To A Couple of Job Interviews

Cash Color — Fri, 27 Nov 2009 01:20:12 +0000

After 4 years, I am in the market again looking for a new job. I went to a couple of job interviews yesterday. Felt a little rusty engaging with the interviewers.

There are a few reasons why I’m looking for a new job. The main reason being I’m looking for a pay increment. My current employer is not known for giving huge salary raise. I know a raise is better than no raise at all, and getting even a small raise in this economic downturn is lucky.

However, I do have my long term plans to work towards to. I need to accumulate enough investments to produce enough passive income for me to retire. And the growth of my salary is one of the drivers of how fast I can achieve my goal.

W-shape recovery on the way

Cash Color — Thu, 19 Nov 2009 14:37:12 +0000

The W-shape recovery is gaining traction. By early next year, many unemployed Americans will run out of unemployment benefits. With domestic consumption declining, another round of fresh layoffs is not impossible.

Countries relying on exports to the US market could face demand cuts. The domino effect could be far reaching.

So, the million dollar question is “When’s the stock market going to dip?” If the stock market is 6 months forward looking, then the market should have dipped a couple of months back. But this hasn’t happened. Then,.. is it dipping now?

Savings Interest Rates Surprises

Cash Color — Sun, 15 Nov 2009 14:37:00 +0000

I have always thought that savings accounts give higher interest rates to current accounts. A check with my Maybank Kawanku savings account, HSBC basic savings account and JustOne current account revealed a couple of surprises.

Firstly, effective 14th May 2009, Maybank Kawanku has stopped paying interest for deposits below RM10,000. And the highest interest rates start from 0.15% up to 1.00%. See table below.

Secondly, my current account pays higher interest compared to both my savings accounts!

Maybank Kawanku interest rates

My HSBC basic savings account pays a flat interest rate of 0.25% for all amounts.

HSBC basic savings interest rate

My SCB JustOne current account interest rate starts from 0.88% !! And not only that, my deposits also earn Choice Points which can be used to exchange for gifts.

SCB current account interest rates

My current account also earn Choice Points

From now on, I’m going to use my current account as my savings account.

Another Financial Crisis in the Making

Cash Color — Thu, 12 Nov 2009 15:12:44 +0000

We are in the midst of the Great Recession, the worst since 1929. This cause of this recession was due to banks making out loans to risky borrowers. These are known as subprime loans.

The FDIC has recommended a program for these banks to loan to people in the lower income group. Isn’t this akin to making out subprime loans? Isn’t this sowing the seeds of the next financial crisis?

Bought Unit Trust With EPF Money

Cash Color — Wed, 11 Nov 2009 15:49:43 +0000

I started buying unit trust with EPF money in June 2009. Yesterday was my second time withdrawing money from EPF to buy unit trust. According to the guidelines, a contributor can withdraw once every 3 months from EPF to invest into approved unit trust funds.

This time, I was recommended by the unit trust agent to buy the Public Islamic Equity Fund. The sales charge is 3%. According to the agent, this 3% is capped by EPF. I wonder if I could get a lower sales charge if I buy directly over the counter without going through the agency or agents.

It will be interesting to see if this managed fund can outperform my index fund (UOB-OSK KLCI Tracker).

My next withdrawal should be after the Chinese New Year, perhaps sometime around March 2010.