hjteo - Personal Finance and Learnings in life

Some interesting words of advice

2012-01-27T21:55:00.000+08:00

Interesting words of advice from this article - Some Investment Advice to Live By (by FNN)

Have a long-term investor’s attitude towards stocks and market fluctuations
Invest with a margin of safety added in
Don’t trust anyone who’s glamorous, flashy and claims to have a secret formula for making money
If it’s too good to be true, it isn’t true
Invest in companies that are in good markets, have a great culture, people and values and is constantly reinventing itself
Save, save a lot and save often
If you live for today, you have less for tomorrow
Dividend yield and earnings growth are two fundamental factors that drive long-term stock market returns
You accumulate wealth by acquiring equities
Ask the right question to get the right answer
Don’t short stocks
There is always something to worry about. The question is whether the market has already worried about it.
Stay away from businesses you don’t understand and if the fundamentals are not there, don’t invest
Know your investment goals, invest regularly and avoid market timing
Investing is having sound judgement and common sense
Buy low, sell high (this is very basic to making money but many fail to follow this)
Listen to the market as it tells you things
Don’t trust the experts as they can be wrong too
There’s a fundamental relation between a profitable company and a company with great service. Look at the customer loyalty, the types of repeat business, the way staffs are trained and turnover rate of staff.
Baruch once said, “Whatever men attempt they seem driven to overdo. When hopes are soaring, I always repeat to myself ‘two plus two still equals four and no one ever invented a way of getting something for nothing’. When the outlook is steeped in pessimism I always remind myself ‘two plus two still equals four and you can’t keep mankind down for long.’” (Means going against the grain when things get euphoric or excessively pessimistic.)
Another quote by Baruch – “Sell to the sleeping point” (If you lie awake at nights worrying about your investments, you own too much or are taking too much risk. When you go to sleep at night and not wake up wondering how the markets did, you are adequately invested.)
Livermore said, “An investor has to guard against many things – most of all against himself”
Learn to control your emotions as you need to grind it out to win over the long run
Ask a few basic questions before investing in a company: Can you explain the company’s business model in a single sentence? Do they have clear goals and strategies that don’t change from year to year? Do they stay close to their consumers or customers they serve? Do they have a track record for executing with excellence, managing cash and costs for long-term growth and delivering on the commitments they make to investors? Do they develop leaders for the long-term?
Have a formula, an investment plan and follow it
Don’t live beyond your means
Educate yourself about investments and you have to do your own homework
Don’t get greedy. If you want to try to shoot the moon, take 5 to 10 percent for your play money and run it yourself. You are not risking too much of your net worth so you can be greedy and have some fun with it.
Follow the path of your own experience. Your experience is your best teacher.
Diversify your portfolio
Avoiding losers is every bit as important as finding winners. You can lose more money in a matter or minutes than you can make in a matter of years.
You cannot be successful in the long run without being successful most of the time in the short run. Don’t justify bad decisions with the notion that you are in it for the long haul.
Invest with a competent successful management
Start investing as early as possible
Cash is a potent weapon. Don’t be fully invested and keep some cash in the bank to take opportunities of falling equity prices. (Cash in the bank generates meagre returns but once deployed during a crash/correction diligently, will make up for the “lost returns” and generate much more profits than being fully invested.)
The worst thing to do is to dwell on your mistakes and do nothing. If you’re wrong, act quickly to accept it and get out of the investment.
The three most important characteristics to consider when selecting a stock are price, price and price. Paying the wrong price is equivalent to buying a bad company.
The most important virtue of a value investor is patience
It’s better to have 50 percent of something than 100 percent of nothing. Don’t be greedy.
Trust yourself more than you trust others. Nobody is going to care about your money than you do.
Losing money is the best way to see what you’re made of. Remaining resilient once you lose money teaches you about yourself and the market.
Don’t be complacent. The market knows more than you do.
Invest in businesses you are passionate about
The four most dangerous words in the world of investing are: “This time is different”
Stay focused on the key investment principles of diversification, buying quality investments and maintaining a long-term perspective to reach your long-term goals
It’s those who come to the market early, ahead of the crowd, who realize the greatest profit
When there’s nothing to do, do nothing
To know how much risk you can assume, ask yourself, “How much money can you stand to lose?”

Blessed Christmas !

2011-12-26T11:30:00.000+08:00

Wishing all a Blessed Christmas and Happy New Year !

It's a good time to review and revisit plans for this year and next. =)

For me, it will still be putting aside a certain percentage for saving and investing via regular investing. Dividends will be reinvested to compound the interest.

Blessed day !

Running

2011-11-07T10:57:00.001+08:00

Been training for a long distance run for the past few months and in this time where the market is volatile, I would like to bring across some long distance running quotes into the area of financial wisdom.

"Even Mt. Everest was defeated on step at a time." - Anonymous

"We are what we repeatedly do. Excellence, therefore, is not an act but a habit" - Aristotle

"Continuous effort, not strength or intelligence, is the key to unlocking our potential." ~Winston Churchill

"I often hear someone say I'm not a real runner. We are all runners, some just run faster than others. I never met a fake runner." - Bart Yasso

Hence, I am still choosing to stay invested and doing what I have tried and proven for me Take a step at a time, overcome a hill at a time, towards smaller goals and milestone.

Blessed day !

Something to learn from Steve Jobs

2011-10-11T20:36:00.000+08:00

Steve Jobs pass away recently. I believe he did not go without a fight and it seems to me that he have the satisfaction of putting in his best efforts.

Blessed day!

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Read/see more of Steve Job 2005 speech.

Source: http://news.stanford.edu/news/2005/june15/jobs-061505.html

Transcript of the speech:

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: “We have an unexpected baby boy; do you want him?” They said: “Of course.” My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.

And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents’ savings were being spent on my college tuition. After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn’t interest me, and begin dropping in on the ones that looked interesting.

It wasn’t all romantic. I didn’t have a dorm room, so I slept on the floor in friends’ rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:

Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, it’s likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.

Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

My second story is about love and loss.

I was lucky — I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.

I really didn’t know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down – that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me — I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.

I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.

During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I returned to Apple, and the technology we developed at NeXT is at the heart of Apple’s current renaissance. And Laurene and I have a wonderful family together.

I’m pretty sure none of this would have happened if I hadn’t been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.

My third story is about death.

When I was 17, I read a quote that went something like: “If you live each day as if it was your last, someday you’ll most certainly be right.” It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn’t even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor’s code for prepare to die. It means to try to tell your kids everything you thought you’d have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I’m fine now.

This was the closest I’ve been to facing death, and I hope it’s the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:

No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960′s, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.

Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: “Stay Hungry. Stay Foolish.” It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

Stay Hungry. Stay Foolish.

Thank you all very much.

Mistakes to Avoid when buying a car

2011-09-12T13:42:00.000+08:00

This interesting article from ChristianPF is a good timely reminder for me particulary at a time when I been driving the car for 7 years and with a high COE price tag.

The key take away for me is to be content with the current car ! Only replace when there is a need, not a want.

Have a blessed day !

Special screening !

2011-08-14T15:42:00.000+08:00

Do your part for charity and watch Cars2 in 3D ! Give and receive !

http://www.touch.org.sg/movie

COE rising !

2011-07-09T16:25:00.000+08:00

COE is rising as the authorities control the amount of COE and keep it in relation to the amount of car being scrap. From a simplistic point of view, it's a supply and demand issue.

I would consider COE as a additional fee and from past experience with high COE, those car with high COE will be scrapped around 5 years old when the COE drop and then the cycle will be reversed - more COE on the market.

From a stewardship point of view, I think getting a used car is better for the pocket as well as using the earth resources wisely. Imagine the amount of energy, material etc use to fabricate and assemble the car. Will probably used my 6.5 year old car, which has already clocked 191000 km till it meet the criteria set in this post. My car has brought the family to round the pensinular of West Malaysia (Penang - Gerik - Trengganu). Maybe this car will bring us to Krabi and Phuket, Thailand.

Blessed day!

Lessons from John Wesley

2011-05-19T20:09:00.000+08:00

This is a interesting article about John Wesley - we know him as a man of God and he laid down some financial principles - Gain all you can, Save all you can and Give all you can.

Do read the article here from christianpf.

Blessed day !

4 Fundamentals of Christian Finance

2011-04-10T07:39:00.002+08:00

A post from ChristianPF which mentions 4 fundamentals that is a good reminder.

Full post here.

Blessed day!

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Principle 1: Spend less than you earn.

In the house of the wise are stores of choice food and oil, but a foolish man devours all he has. Proverbs 21:20.

Financial success and peace are based on having financial margin, a positive difference between what we spend and what we earn.

Principle 2: Avoid the use of debt.

The rich rule over the poor and the borrow is servant to the lender. Proverbs 22:7.

We can only serve one master. If our servitude has been committed to a lender, we are not financially and spiritually free to serve Christ with all of our heart.

Principle 3: Build reserves.

Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest. Proverbs 6:6-8.

Financial reserves give us the flexibility to respond to the unknown. According to the passage above, they do not represent a lack of faith, but a prudent response to planning for an unknown future.

Principle 4: Set long term goals.

I press on toward the goal to win the prize for which God has called me heavenward in Christ Jesus. Philippians 3:14.

The first three principles are means to the end of accomplishing the goals that God has placed in our heart. Effectively funneling money toward what matters most requires that we avoid debt in order to live within our means and develop a financial margin . . . a margin that is first used to provide a reserve and then toward long term financial goals.

Warren Buffet

2011-03-25T20:33:00.000+08:00

Always wanted to read books abt Warren Buffet but needed something to start with? Here's one link .......https://www.bsp-capital.com/documents/WarrenBuffettmethodology.pdf

Some recommended books abt the man himself for reference:

Buffettology by Mary Buffett and David Clark
Warren Buffett and the Interpretation of Financial Statements by Mary Buffett and David Clark

Blessed day !

Warren Buffet and Reserve Fund

2011-03-10T22:28:00.000+08:00

Having read Dave Ramsey's books and his seven baby steps and now reading Warren Buffett’s 2010 Letter to Berkshire Shareholders (available here. Read page 22 & 23 for personal finance). Emergency / Reserve fund is mentioned. Food for thought.

Blessed day !

Generosity

2011-02-16T20:08:00.000+08:00

It's Chinese New Year and it's a season to practise generosity. Hence I like this article by ChristianPF - 4 Qualities of a Generous Life

1. Live a Simple Life

Those who are generous should cultivate the quality of simplicity. In other words, generous people are not always looking to build their own little earthly kingdoms with perishing goods, but rather they look to build up everlasting treasure.
Generous people look to simplify their lifestyles. It’s easy to miss opportunities to be generous when we’re overly busy.
All to often, we plunge ourselves into self-centered activities, hobbies, and endeavors and give little regard to those in need.
Don’t get me wrong, activities and hobbies are wonderful. But, my question to myself and to you is, “Are we too busy to give freely of our time and money?”
Look for areas in your life that you can scale back a bit. For example, can you cut back on going out to eat so you can give more to your church or to those in need?

2. Live Like Everything is God’s

Nothing is ours. Our houses, cars, clothes, and iPads are not ours. Sure, we bought them with money we worked for, but where did that job come from? Who gave you the health and faculties to perform your job functions?
It’s only by God’s grace that you have what you have. Everything we own is God’s. When we begin to realize that, we can start to understand the biblical concept of stewardship more easily.
We are stewards – or managers – of what God has given us. And someday, we will have to give an account.
Let’s ask ourselves, “If everything is God’s, what would he want me to do with my money and possessions?”
We already know what the answer is. Jesus says,

Lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. Matthew 6:20 ESV

3. Live With Open Hearts

There are over 2,100 verses in the Bible that talks about God’s heart for the poor.
Living with open hearts simply means that we develop and cultivate a heart like God’s – one that thinks about, cares for, and is generous to, the poor, weak, and marginalized of society.
Practically speaking, we need to let the gospel sink deeply into our hearts so we have a heart like God’s and not like the world, which seeks after earthly goods.
Letting the gospel sink deeply into our hearts requires that we spend time meditating on, reading about, and thanking God for the tremendous gift in Jesus Christ that he’s given us.

4. Live With Open Hands

Living with open hands means that we have a loose grip on life. In other words, we don’t clutch tightly to our earthly goods, but rather are willing to have a loose grip on all our possessions! Learn to give!
It’s easier to do this when we view everything as God’s.
Unfortunately, many things prevent us from living with open hands. Debt is one of those things that is a major generosity killer!
Ask yourself, “What is preventing me from living with open hands?” Is it debt, greed, stinginess, or simply a lack of compassion?

Blessed day and wishing you a Happy, Healthy and Successful New Year with a deeper walk and talk !

Stewardship - MM Lee

2011-01-24T22:12:00.001+08:00

(Source ST online / financialfreenow)

Recently read an ST article on MM Lee about his recently published book "Hard Truths" and his life - not having a big car to impress others or changing suits to keep up with the latest trends. Even read from another article that his home furnishing or decor is more functional than grand for a man of his status. In my view, another example of a good steward.

Blessed day!

2011 - What's the plan?

2011-01-10T23:17:00.001+08:00

Received these motivational messages from my wife -

"Dream as if you'll live forever. Live as if you'll die tomorrow." ~James Dean

"Having visual images of your dreams, goals and heart's desire helps manifest them in your life." ~BJ Gallagher

As stewards, I think having some goals in this area is useful. Some of mine are :

Continue investing a little by little - with xx amount in mind.
Reduce or minimise buying from the market - particular at this time where value stocks are getting fewer - there are still some though.
Continue to participate in certain companies through rights issues.

Still not sure of what to set - here are some for reference:

Blessed day !

Blessed Christmas !

2010-12-24T18:07:00.000+08:00

Wishing all believers a Blessed Christmas as we remember and rejoice in the greatest gift given !

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An interesting article in Christianpf
http://christianpf.com/10-things-christians-must-do-with-their-money/

Borrowed Comforts

2010-11-11T20:49:00.000+08:00

Read this article from Living Life - and what a reminder.

Blessed day!

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As Christians, there are many times we forget where our home really is. We try so hard to build our homes and our wealth here on earth that we lose our perspective and forget about the mansions that Christ is building for us in Heaven. Charles Spurgeon says that "the wisdom of the Christian is to disentangle himself as much as possible of the things of this life. He will act kindly towards the citizens of the country where he is called to dwell, and he will seek their good: still he will remember that he is not as they are. He is an alien among them! He may have to sell and buy in this world, but that is merely as a matter of transient convenience.

He neither buys nor sells for eternity; for his has 'bought the truth,' and he 'sells it not.' He has received God to be his treasure, and his heart and his treasure too he has sent on ahead. On the other side of the river of death are all his joys and all his treasures to be found. Here he looks upon his earthly joys as things that are lent him - borrowed comforts. If his children die, he does not wonder: he knew they are not immortal. If his friends are taken away, he is not astonished: he understood that they are born of women, and therefore would die like the rest. If his wealth takes to itself wings, he does not marvel: he knew that it was a bird of passage, and he is not astonished when, like the swallows, it flies elsewhere."

Stewardship in taking care of our body

2010-10-16T11:56:00.002+08:00

In this journey of stewardship in my personal finance, I begin to apply the principles of stewardship in other areas of my life. One of them is eating habits. This came after running 2 marathons in a year. I was expecting to lose weight - alot of it - but it was just moderate and I have moved into the veteran category. Hence I search in the opposite direction - the eating portion while running less.

My search started in March while reading a discussion in MCF (Link - Note : It's a long discussion with many pages of information but I was rewarded with the information and experiences as the context is localised i.e. Singaporean. Information on Cholesterol can also be found in this discussion ).

The essense of the eating habit is as per the words in the forum:

1) Eliminate sugar (including fruit juices and sports drinks) and all flour
2) Start eating proper fats - Use healthy animal fats to substitute fat calories for carb calories. Drink whole cream or half and half instead of milk.
3) Eliminate grains. No rice, no bread, no noodles, no pasta...
4) Eliminate grain and seed derived oils (cooking oils). Cook with butter, animal fats, or coconut oil.
5) Get daily midday sun or take 4-8000 iu vit D daily
6) Intermittent fasting and infrequent meals (2 meals a day is best)
7) Fruit is just a candy bar from a tree. Stick with berries and avoid watermelon which is pure fructose. Eat in moderation.
8) Eliminate legumes
9) Adjust your 6s and 3s. Pastured (grass fed) dairy and grass fed beef or bison avoids excess O-6 fatty acids and are better than supplementing with 0-3 supplements.
11) Eliminate milk if you are sensitive to it

I started the experiment for a month with the key focus of reduce carbs, reducing sugar and moderately increasing fats. The experiment did not stop after 1 month as the reducting was gradual with the body adjusting to reduced carbs and yet energised especially after lunch. For the exercise bit, it's mostly Hi Intensity Intermittent training twice during weekdays with a longer run on the weekends. (Hey, got a 'persistent run/hunt of 42km long at the end of the year.) It's been 7 months since and my weight has dropped abt 9 kg.

Blessed day!

Related reading:
1. Discussion topic in MCF
2. http://www.paleonu.com/get-started/
3. Mark's daily apple (Primal Blueprint 101)
4. Eat Fat and Grow slim (1958)

Children Learn What They Live

2010-10-10T17:46:00.000+08:00

Interesting piece from Fathering Matters.

Blessed day to all fathers / parents.

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“Children Learn What They Live” by Dorothy Law Nolte, Ph.D. (1924 – 2005)

If children live with criticism, they learn to condemn.
If children live with hostility, they learn to fight.
If children live with fear, they learn to be apprehensive.
If children live with pity, they learn to feel sorry for themselves.
If children live with ridicule, they learn to feel shy.
If children live with jealousy, they learn to feel envy.
If children live with shame, they learn to feel guilty.
If children live with encouragement, they learn confidence.
If children live with tolerance, they learn patience.
If children live with praise, they learn appreciation.
If children live with acceptance, they learn to love.
If children live with approval, they learn to like themselves.
If children live with recognition, they learn it is good to have a goal.
If children live with sharing, they learn generosity.
If children live with honesty, they learn truthfulness.
If children live with fairness, they learn justice.
If children live with kindness and consideration, they learn respect.
If children live with security, they learn to have faith in themselves and in those about them.
If children live with friendliness, they learn the world is a nice place in which to live.

Long Term or Short Term

2010-10-05T21:10:00.000+08:00

Like many issues, we always like to chose the short term goals as the rewards comes quickly. These few weeks, there are some questions that I had to address to for the long term benefits and those questions are not neccessarily just finances. Some of them for thoughts:

1. Spiritual
The passing of Mrs Lee is a reminder of our relationship with our maker on a daily basis. It also raises deeper thoughts on the legacy that one would pass on when he/she is brought home.

2. Physical
For the past 6 months, I have been on a low carb, moderate protein and fat experiment. Details of the experiment can be found here (local) and here. It's been positive so far. The transition into VFF is also working quite well and there's plan to run a 20K this few weeks in prepartion for the Stand Chart.

3. Financial
Since cooling measures imposed by HDB, steps had been taken to reduce the housing loan significantly that it won't take long before clearing baby step 6.

Blessed day !

Related posts:
a. The Seven Baby Steps
b. Vibram Five Fingers

Change the car or repair it?

2010-08-31T17:12:00.000+08:00

Needed to make that decision of changing the car or repairing it? The article below mentions 2 factors to consider:

Safety – you don’t want to drive anything unsafe

The hassle factor. Sometimes it’s time to sell and get another car when the maintenance is driving you nuts.

Apart from the above 2, I would also say choosing a car that has as little electronic components as possible (apart from Air-con, engine operation systems, etc. Manual gearbox prefered). Unfortunately, cars that's simple and with those criteria are usually B&B cars of less than 1.6L range. So something gotta give.

Blessed day!

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Should You Sell Your Car or Repair It?

by Jason Price on August 26, 2010

Vehicle problems may be one of the most frustrating expenses to me. Most people are striving to prevent vehicles from becoming budget busters. We all know vehicles are mechanical and have electronic components. Murphy’s Law says anything that can go wrong will go wrong. So, just relax and realize we’re all going to have vehicle troubles sooner or later.

Such troubles always seem to come at the most inconvenient of times, don’t they? There are many people who work hard to get out of vehicle debt. Yet, they get their vehicle paid off and Murphy (from Dave Ramsey) is around the corner with some sort of problem. Or, Murphy creeps in just a short time after buying a car.

My Murphy was a VW Passat which we thought was a cool car at the time. We took out a loan and bought it used [car loan=BIG mistake]. Yep, just a few weeks later we had our first minor mechanical failure. Then, it seemed like problems came one after another until a 3-4 years into owning the car the big one arrived. A problem under the hood would require us to spend over a thousand dollars for a repair. By this time, the car was paid off, but we had reached our pain threshold, so we cried uncle and sold it to the mechanic.

That decision put us back into car debt for another 4 years. Was it the right decision? I don’t know. I certainly don’t think the issue and issues to come would have added up to what we paid for our new used car (Honda Civic). So, one could argue we’d be better off financially having ran the course with the Passat. However, one might consider the type of car we purchased and reasonably see that we could save a lot more money in the long-run with a Honda Civic which may drive 200,000 miles requiring little problem resolution.

Should you sell your car or repair it?

I suppose that’s the question several people face and it’s not an easy one to answer. At least for those that want to avoid car debt.

I recently read some good advice from Dave Ramsey on his new personal finance iPhone app about this particular subject that nicely fits the situation I’ve described.

Dave says you get another car for two reasons:

Safety – you don’t want to drive anything unsafe

The hassle factor. Sometimes it’s time to sell and get another car when the maintenance is driving you nuts.

Almost always it’s cheaper to pay for repairs versus making a payment on a vehicle. I would agree. At least in the first 5 years, but some cars have Murphy sitting in the backseat. For those cars (my Passat), I think you have to guess whether or not Murphy is going to stay around indefinitely. If so, you might just reason you’re going with the hassle factor, unload the vehicle and try to save in the long-run.

Of course, if you opt to sell you’ll want to avoid going into debt on your new used car or at least minimize it (unlike what we did). In hindsight, I think I made the right decision to unload the car, but I should have minimized the debt, or purchased an older Honda Civic and continued to save for the upgraded Honda Civic.

Finding a good agent for insurance and investment

2010-08-07T17:55:00.001+08:00

Looking for a good agent for insurance and investment, here is a good article in sgfunds.

Some key points for good agents, apart from WL, they also should mention BTIR (Buy Term Invest the rest).

Blessed day !

Related reads:

1. Insurance matters

How much are you going to get for your car?

2010-07-15T21:41:00.000+08:00

With the current shrinking COE supply, car price are going up - new and old. So if you are thinking of selling your car or thinking of offering for a used car, what is the market rate that is going for that specific car model.

Here are some ways to find out:

http://www.sgcarmart.com/used_cars/index.php - This website gives a indication of the new and used car prices for sale by dealers and direct seller a like.
Newspapers like the Straits Times.
Contact dealers to get a quote
http://www.quotz.com.sg/main/index.php - Found this recently. It's a site where you get quotation from dealers. From the completed deals, the prices can be used a indication.

Blessed day !

The 50% solution

2010-07-15T21:30:00.000+08:00

This article sounds so much like my current diet strategy of cutting the carbohyrates down by 50%.

Blessed day !
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The 50% solution (from GRS)

This post is from staff writer Sierra Black. Sierra writes about frugality, sustainable living, and getting her kids to eat kale at Childwild.com.

When I started getting serious about frugal living, my husband dredged up one piece of juicy financial advice he recalled from his grad school days: Use half of what you normally would. He was talking about consumable goods like shampoo and dish soap. The idea is to reduce by half the amount of these things you use by doling out smaller portions. Normally use a quarter-size dollop of shampoo? Try cutting back to a dime.

There’s no need to stop at half, actually. You can keep scaling back your usage gradually until you hit a point where you actually don’t have enough, and then creep back up to the last place it felt good. Maybe that dime-size drop of shampoo isn’t enough for your hair, but a nickel-size portion gets the job done nicely.

This approach works. I bought a large container of dish soap at Costco in March of 2009 and have not run out yet. This is not for lack of doing dishes: There are five people in my household, and we do all of our cooking from scratch. We make a lot of dirty dishes, and we wash a few sinkfuls a day.

One reason cutting back on consumption has worked so well for me is that I automated it. Rather than depend on my fragile mind to remember to use smaller sloshes of soap or shampoo every time I wash, I buy my cleaning products and personal care items in bulk and pour them into smaller containers — at half strength. The small plastic bottle next to the kitchen sink contains half water and half soap. I use the same amount when I wash the dishes, but I’m going through the soap at half the rate I used to.

The 50-percent solution has worked so well for me with my household goods, I decided to expand it to other areas of my life. In addition to basic consumables, I’ve applied to 50-percent solution to:

• Shopping for clothes. I mostly don’t shop for clothes, but on the rare occasion that I do, I’ve learned to ask: Do I need two of these? I picked up the habit of buying multiples of something I like when I was younger. While that often works out well, just as often I can get by with one pair of jeans or one new bra.

• Going out to bars and restaurants. This is often a trouble spot for me, since I love going out with friends. Scaling back that type of social activity by half lets me stay close to the people I care about without busting my budget.

• Over the counter medications. Take two aspirin and call me when you’ve tried cutting back to see if one will do the trick. I wouldn’t suggest trying this with your prescription meds, but for simple over-the-counter stuff like headache medicine, I’ve found that a half dose is often perfectly effective.

• Groceries. My kids will eat a near infinite amount of fresh fruit, pretzels, and yogurt. How much is enough? The only way to tell was to gradually buy less until we ran out and they complained. We’ve cut our grocery budget in half combining this with other grocery savings hacks. We also waste practically no food these days, which is a pretty great feeling.

• Therapeutic appointments. My husband sees a chiropractor regularly for chronic back issues. Over time, they’ve gradually scaled back their appointments from twice a week to only twice a month. This saves us time and money. As with all these measures though, the key is to get to Enough. Cutting back too much on these appointments would cause him pain and interfere with his life. The balancing act is to be sure he gets what he needs from his chiropractor, without over-committing resources that could be better used elsewhere.

Basically, we’ve tried tapering off anything I routinely spend money on where I have some control over the amount I use. For example, cutting dinner dates with my husband down from once a week to once a month felt too scarce, but every other week is a good balance between staying frugal and staying connected.

In general, this approach saves me money. In a few cases, it’s prompted me to spend more. I wasn’t spending enough time with my husband, for example. As our financial situation has stabilized, that’s a problem I’ve started throwing more money at, taking us out for “date nights” a few times a month instead of insisting that we always stay in. Yes, eating out is expensive. But the time alone together away from the weight of housework and unfinished tasks at home is priceless.

As with any money hack, the most important thing isn’t how I save the money, it’s what I do with it. A dollar saved is only really saved if I don’t immediately spend it on something else. The savings from these gradual reductions in consumption are often harder to see than the clear figures one gets from canceling a subscription and saving the monthly fee.

How much have I saved on laundry soap over the past year? It’s possible to track that data and get a real answer, but I don’t keep records that detailed. The dollars I’ve saved didn’t get banked straight into my savings account. Instead, they’ve padded my margin a bit, making it easier to stick to our budget each week and possible to splurge on treats like dinners out with my husband.

Even beyond the actual money saved, I get a psychological benefit from doing this. Like my commitment to buy nothing new or my 30-day list, the 50-percent solution acts as a checkpoint for purchases. Do I really need this? Do I need all of this? Could I make do with less?

Being in the habit of asking myself those questions has saved me a lot more money than just cutting my shampoo with water does. It helps me stay in a frugal mindset when I’m shopping. That’s not easy to do. Stores are designed to push you towards impulse buys, and being armed with mental money hacks helps me fight back against their subtle (and not so subtle) marketing.

I love this approach because it helps me find balance. It’s not about committing to a life of extreme austerity, it’s about avoiding waste. I often think of the curve at the beginning of Your Money or Your Life that shows a person’s happiness increasing as they have the resources to supply their basic needs, and then some comforts and finally a few luxuries. Beyond that magic point of Enough, the curve calls off as more and more luxuries are piled on but fail to satisfy.

The 50-percent solution helps me know what my personal Enough is. What’s Enough soap? Enough entertainment? Enough snack food?

Scaling back incrementally lets me find those magic points on the curve and stay close to them. I get to have Enough to be happy, without wasting resources like money, time and energy on acquiring more of something than I need or want.

Lesson from Wal-Mart’s Sam Walton (from ChristianPF)

2010-07-03T16:04:00.000+08:00

Read this interesting article on Wal-Mart’s founder Sam Walton. The full article can be found in http://www.christianpf.com/a-big-money-lesson-from-sam-walton-walmart/ .

The article mentions that he had it all and his biggest regret – blewing it with his family.

What does it mean for us then? As believers, apart from questions the writer had brought up, some that I ask myself are:

• Are we good stewards?
• Are we going for the vision and mission?

Quote from the article......
‘As Christians we know that the quality of our relationships, pursuing our passions by using the gifts God has given to us, and living out the mission He has for us are the most important things in life!

So, I have to ask you – just like I ask myself:

• Do you think money is the answer to all your problems?
• Are you spending too much time at the office?
• Are you wasting your life?
• Do you wish the quality and quantity time with your wife, your kids and your loved ones was better?
• If so, why? What is more important to you than the time with your family?’

Blessed day !

Cash Envelope System

2010-05-30T22:28:00.000+08:00

Do you use the Cash Envelope system for your budgeting? I do when I started budgeting with my wife and we are be using the system for close to 12 years now.

There is a modernised version of the Cash Envelope system. For further information, you can read this article from ChristianPF.

Blessed day !

1st 5 km with Vibram 5 fingers

2010-05-15T10:20:00.013+08:00

This is not a post about personal finance but about some of my other budgeted expense. Hence you may not want to read through this post. It fits here as I ran quite a few marathons and consider life as a marathon and applies the same philosophy to personal finance and investments like wise.

Blessed day!

I have been running quite a few marathons and since picking up mid foot running (from books by Danny Dreyer), I have using techniques close to mid foot. Clocking my current shoe for over more than 1000 kms, I have been thinking of getting a pair of shoes when I bump into a colleague who used 5 fingers for his ultra and marathons.

Hence I decided to try 'barefoot' running to further improve my running posture. I got my Vibram 5 Fingers through Outdoor Life (for other sources, please contact Innovatez).

Review of my 1st 5 km

Reading some other runners reviews and feedback from my colleague, I brought my current Asics and left it in the car in the event that if I suffered from calf muscle aches after 2 km, I can change to my Asics.

1 km into the run affirms that I already switched from 'heel striking' to 'mid feet' technique and hence I continued the rest of the distance with the Vibram. Completed the 5 km  with almost the same timing and with a slight calve tightness. For me, it was good and enjoyable run with thanksgiving to Abba Father.

Some pointers that I think attributed to today's run as I transit from the Asics 2140 to the Vibram:

1. Switching over of running posture from 'Heel Striking' to 'Mid foot'
Don't wait till you get the 5 fingers. Start now with the current running shoes. (I got my info from Danny Dreyer and you get borrow the book from the NLB to learn about the techniques). Pros from this - no more knee aches and a very fast recovery.

2.  Cadence and stride
Maintain a cadence of 85 to 90 and start with a shorter stride. Feel the feet's landing position.

3. Calf training
While I did not specifically did any Calf training, I did some skipping (4 cycles intervals of 50 steps,  which I find it acceptable as cycles with 100 steps causes my knee pain to recur). I believe this is the main reason that helps.  I have read reviews runners transiting over with calf solidification - it's no fun considering that I have actually torn a calf muscle before.

Apart from a blister that was due to a new 'shoe', I am happy with this Vibram 5 fingers and will try to give another review sometime later.

One thing am sure is there won't be any cushioning liquid leakage (don't worry, it's not Asics) or dynamic fatigue of the foam in cushioned shoes - there is none. It's like wearing a toughen skin over your sole. Bare foot running.  Feels like the days' of the fabled Marathon.

Giving thanks and have a blessed day!

Other related sources of information
1. Bare foot running in SGrunners forum
2. Krisandro's Experience on Vibram
3. Barefoot Pua's blog and his review

Reminder - Live like no one else, so that later you can live like no one else

2010-05-14T19:51:00.000+08:00

Been reading this article by 'Hank' on The Total Money Make Over and it's a good reminder.

Here is a review of the Basic Steps for Saving, Eliminating Debt, and Building Wealth

Ramsey’s program and book, “The Total Money Makeover”, include the following baby steps to financial freedom…

Step One: Save $1,000 for an emergency fund

Step Two: Use the debt snowball method to pay off your debt

Step Three: Complete the emergency fund

Step Four: Invest 15% for retirement

Step Five: Save for your children’s college

Step Six: Pay off your mortgage

Step Seven: Start building wealth

Blessed day!

From GRS - Lessons from the Armish

2010-05-09T20:51:00.000+08:00

Interesting post from GRS - Three Things the Amish Taught Me About Money

The pointers are :

1. Lower tech, lower costs
(This point reminds me to keep my car as long as possible. The car bug is here again. Anyway, will be utilising the current car for a road trip instead of waiting for a bigger capacity car.)

2. Debt is a tool — and a bit of it is healthy
(I guess if used for housing - it's fine. Apart from this, would have consider really hard.)

3. “Little things make a big difference at the end of the year.”

(the 3 Rs - Reduce, Reuse and Recycle)

Hence don't reinvent the wheel.

Blessed day and a Happy and Blessed Mother's day to moms - giving birth is a life and death issue for some !

True Wealth?

2010-04-24T09:49:00.000+08:00

Read this article and it does give me something to think about.

Blessed day!

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A boat docked in a tiny Mexican fishing village.

A tourist complimented the local fishermen on the quality of their fish and asked how long it took him to catch them.

"Not very long." they answered in unison.

"Why didn't you stay out longer and catch more?"

The fishermen explained that their small catches were sufficient to meet their needs and those of their families.

"But what do you do with the rest of your time?"

"We sleep late, fish a little, play with our children, and take siestas with our wives. In the evenings, we go into the village to see our friends, have a few drinks, play the guitar, and sing a few songs. We have a full life."

The tourist interrupted, "I have an MBA from Harvard and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat."

"And after that?"

"With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers.

Instead of selling your fish to a middle man, you can then negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City , Los

Angeles , or even New York City !

From there you can direct your huge new enterprise."

"How long would that take?"

"Twenty, perhaps twenty-five years." replied the tourist.

"And after that?"

"Afterwards? Well my friend, that's when it gets really interesting, " answered the tourist, laughing. "When your business gets really big, you can start buying and selling stocks and make millions!"

"Millions? Really? And after that?" asked the fishermen..

"After that you'll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take a siesta with your wife and spend your evenings drinking and enjoying your friends."

"With all due respect sir, but that's exactly what we are doing now. So what's the point wasting twenty-five years?" asked the Mexicans.

Work Less to Get More Done!

2010-04-16T20:18:00.000+08:00

Countering what the title suggest, most of us would work more to get more done. So how do we answer this question - 'Where do we get the best ideas from? '

Just read this article and I agree with it as I got some ideas while taking a break. Those ideas generated some passive income.

Just note that we do still need to work :)

Blessed day !

Investment Strategy

2010-04-01T14:18:00.000+08:00

Just got a GPS in preparation for the mother of all Malaysia road trips. Fiddling with the GPS impresses on me the importance of a road map and this applies to every aspect of life (finance including).

Hence the question pop up based on the current economic changes and with the STI hitting 2900, has your investment strategy changed?

John C. Bogle's mantra hasn't changed in 50 years: Diversify, take a long view and don't waver. From this article, his advice in short is :

Invest consistently and for the long haul in a widely diversified portfolio of stocks and bonds. Pay attention to taxes and costs. But leave your investments alone.

Another interesting read is the discussion in Sgfunds on investment strategy.

Have a blessed weekend and Thank God for this Friday.

Interesting Article of a Wise and Generous person

2010-03-13T09:43:00.000+08:00

Came across another article that is inspiring. Lessons from this person are mine in italics.

Blessed day !

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http://www.suntimes.com/business/roeder/2087394,CST-NWS-curious07.article

Grace Groner was an uncommonly wise and generous person. She died in January and is still teaching us lessons.

Groner was 100 when she died, and she willed her estate to Lake Forest College. She lived in Lake Forest, one of the wealthiest communities around, so you're probably thinking she was a dowager, maybe the last in some line of old money. Groner was much bigger than that.

She had never married and lived penuriously in a tiny house in a part of town once reserved for servants' quarters. Groner graduated from Lake Forest College in 1931 with a degree in English and went to work at Abbott Laboratories (ABT), where she stayed 43 years and became the president's secretary.

In the 1930s, the young woman bought three shares in Abbott costing $60 each. She was thinking ahead. She never sold the shares, which split many times over the years and paid dividends that she reinvested. At her death, that $180 was worth $7 million, and it became the largest gift in her alma mater's history.

'Start investing young and it doesn't need a lot of money '

Groner had set up a foundation for the college, declared its mission and specified how it would be run. The college said her gift will generate about $300,000 annually that it will use for scholarships, especially for students interested in studying abroad.

Pastor Kent Kinney of First Presbyterian Church in Lake Forest said travel was one indulgence Groner allowed herself. This was a woman who didn't have a car, wore second-hand clothes and didn't even buy the home she lived in; she rented an apartment for years and got the house in a friend's will. In turn, she has donated the house to the college for use as a residence by Groner Scholars.

Kinney said she took many trips after her retirement from Abbott and believed in the broader outlook that travel bestows. She also believed costs should not bar someone from pursuing knowledge or a dream. Kinney said Groner volunteered for years at his church and would send gifts anonymously to local residents through her attorney.

Investing in Abbott probably was an act of faith, like much of what she did. Her success invites two observations, one of which unfortunately mars this uplifting tale: Don't try what she did.

It is a grave error to put your nest egg behind a single company, and it is worse when the company is your employer. Groner had a winner, but others have done this with Enron, General Motors or Bear Stearns. Joseph Scanlon, senior managing director for investor advisory services at Mesirow Financial and not involved in Groner's account, said clients shouldn't place more than 10 percent of their money into a single source, especially if the cash is for a future need such as retirement or college expenses.

But Groner's endowment shows the value of dividends and reinvesting them, part of the magic of compounding interest. Her $7 million would represent ownership of more than 129,000 Abbott shares, based on the current price. Groner got there simply by reinvesting the dividends and reaping the splits from her holdings.

'Compounding interest'

Abbott is one of the all-time great dividend performers, part of the aptly named S&P 500 Dividend Aristocrats index. The company said it has paid a dividend since 1924 and increased it annually for the last 38 years.

This is where Groner the stock picker shines. Abbott said that since her first purchase in the mid-1930s, it has split its shares 13 times, most often by two-to-one ratios. The last split was in 1998, meaning the company's overdue. But purely on those splits, Groner's three initial shares would become 19,353 shares.

The value of those is about $1 million. The additional $6 million comes from the reinvested dividends that built her holdings to the level that stunned her college. People just don't appreciate the power in those quarterly payouts.

Scanlon said long-term studies of the S&P 500 say it produces annual returns of 8 percent to 11 percent with reinvested dividends. Without them, the average annual return is 4 percent to 5 percent, he said.

'Reinvesting the dividends'

Despite the risk of her eggs-in-one-basket approach, Scanlon said Groner obviously knew what she was doing by not tapping her Abbott wealth and living modestly off other sources of income. And he said her devotion to Abbott contrasts with the flightiness of most investors. "It's more likely that people buy a stock and if nothing happens in a year, they sell," he said.

'Several lessons here : Diversification for other sources of income. Aiming for the long run. Living within the means and being a good steward.'

Sound but unspectacular companies often escape Wall Street's alert system, he said. "If the business is good, eventually you'll get your reward," he said.

Groner passed her reward to others, the final testament in a wonderful life.

'Extending God's Kingdom, eradication of systemic poverty and can't bring the material to the presence of God'

DOING THE SPLITS

How one share of Abbott Laboratories has multiplied over the years. The chart does not account for reinvested dividends.

SOURCE: Abbott Laboratories

Living Simply

2010-02-27T20:57:00.000+08:00

Came across this article of interest. It builts on the knowledge of a simpler life.

Blessed day !
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Living Simply Part 3 (Ten Steps to Living Simply)

This three part series is lifted from thoughts in Richard Foster’s book Celebration of Discipline. (I would highly recommend it).
To wrap up this mini-series on living with a call to simplicity and contentment, I will give you Foster’s ten suggestions for living a simpler life. They are worth taking the time to think over and reflect on. Again, I would highly recommend his book to anyone interested at some practical ways to grow spiritually. It is a Christian classic.

1. “Buy things for their usefulness rather than their status.” Clothes are a perfect example. Do you really need more clothes, or are you simply trying to stay in style?

2. “Reject anything that is producing an addiction in you…simplicity is freedom, not slavery.” We instantly write this one off, but Foster goes on to include things like TV, magazines, etc.

3. “Develop a habit of giving things away…De-accumulate! Masses of tings that are not needed complicate life.” Worth taking a walk through the house and garage and take stock of how much stuff you have that you never use.

4. “Refuse to be propagandized by the custodians of modern gadgetry.” Keeping up with the latest and greatest forces you to pay premium prices for all purchases (and often incurs the headaches of companies working the “glitches” out of their products).

5. “Learn to enjoy things without owning them. Owning things is an obsession in our culture…Enjoy the beach without feeling you have to buy a piece of it.” It’s true what they say, the best things in life are free.

6. “Develop a deeper appreciation for the creation.” This one definitely connects to number 5.

7. “Look with a healthy skepticism at all ‘buy now, pay later’ schemes…certainly prudence, as well as simplicity, demands that we use extreme caution before incurring debt.” Well said.

8. “Obey Jesus’ instructions about plain, honest speech…Make honesty and integrity the distinquishing characteristics of your speech.” An interesting slant to call our words to simplicity.

9. “Reject anything that breeds the oppression of others.” Again, purity of heart and motive are called into question here.

10. “Shun anything that distracts you from seeking first the kingdom God.” Amen.

Other articles of interest :
Living Simply Part 2
Living Simply Part 1

Lessons from the Chinese New Year visit

2010-02-21T12:16:00.000+08:00

This week we celebrated Chinese New Year and one of the key event is to visit our relatives. Of the visits, we had the opportunity to meet both a rich relative and a 'former' rich relative.

The rich relative had a good landed property, nice continenal car and several other properties with good rental yield. We had a good chat about cars, personal finance, generation of income. This relative is humble and manages his money well.

The 'former' rich relative used to stay in a landed property, had a good car and holds several other business. Unfortunately, we did have a opportunity to talk.

This visits caused my wife and me to discussed of money management and some of the key observation we made were :

1. We should be good stewards of the money/gifts/talents entrusted to us. We should strive to use them well to multiply.

2. While it's good to have faith, we should also be wise in how we spend. We may have them all now, it maybe taken away earlier than we wanted. In any case, we won't be able to bring it along in death.

Blessed day and Happy Chinese New Year !

Related articles:

1. Managing money based on the oldest best selling manual
2. The Master and the steward

When to Replace your car.

2010-02-18T21:09:00.004+08:00

Last weekend, our pastor talked about temptation and one of the temptations for me is to replace the car. It's coming 5.5 years old and have covered 150 000 kms. The kids are getting older, bigger and looking into getting a bigger car for touring as the current Accent is kind of a subcompact. It does give good fuel economy (at 14 -15 km/l) and have been reliable so far considering it being Korean. (Not that I am biased, this is my 2nd korean car but the typical mindset here is Japanese cars are more reliable.)

In order to fight the temptation and say NO, a list of reasons compiled so that we will be objective. We will change a car when :

- Repair cost hits $1500 and more. The dealer offered only $500 above the scrap value for the current Accent.

- When the car hit 7 years and 200 000 km. High mileage may have higher repair/replacement cost. Used to have a 16 year old bike and the maintenance is high.

- Freed from car loan and saved the extra into a 'replacement car account' - done

- When a good condition replacement car that fits the requirement of FC, size for touring, manual gear box preferred and $2-4K above scrap value is found with no car loan.

Blessed day !

Related Topics:
1. Freedom from car loan
2. Fuel Consumption cost
3. Why buy a Used car
4. Is it possible to drive a free car in Singapore
5. When to replace your car (grs)

Keep it Simple

2010-02-10T08:52:00.003+08:00

Interesting article on Sunday Times - Keep it Simple...

I like the article as it reminds of the principles and values that I am learning and applying since the start of this blog.

Blessed day and Happy New Year !
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Keep it simple in the Golden Tiger Year

By Goh Eng Yeow

Past Tiger Years have marked milestones in my life and it is with anticipation - and some trepidation - that I await the arrival of the Golden Tiger Year next Sunday and what it might hold for me.

I started working in a Tiger Year - 1986 - just as Singapore was fighting off what was then its worst economic slowdown since it achieved independence 21 years before.

That calamitous experience shaped my working attitude for life. Jobs were scarce, and even graduates with good grades were competing for jobs which paid them less than $1,000 a month.

The uncertainties encapsulated for me early on the importance of setting aside some savings every month for the proverbial rainy day.

Around this time, I was introduced to the joys of investing, quite by chance, when I bought 1,000 Singapore Bus Services shares in order to qualify for the concessionary bus passes which the transport company had offered its shareholders.

I have kept the investment until now and it has multiplied due to stock splits and bonus issues over the years to 16,040 ComfortDelGro shares, as the company is now called, and 1,200 SBS Transit shares.

This part about Comfort reminds me of the ST Eng shares that I used to have and then sold it. My father still have them and they also 'multipled'.

The next Tiger Year - 1998 - coincided with the Asian financial crisis which bankrupted businesses across Asia as they struggled to cope with the plummeting Thai baht and Indonesian rupiah.

Ordinary investors like myself found it agonising to watch our painfully accumulated nest eggs dwindle to a fraction of their original value as blue chips were lashed by the crisis hitting the region.

At that time, I had in my possession some shares in the now defunct Overseas Union Bank (OUB), which I had bought a decade earlier. As OUB's price plunged and the value of my investment fell by half, it badly shook my belief about buying blue chips to keep as long-term investments.

Fortunately, there was a happy twist to the story. Investors who kept faith with OUB during those dark days were compensated handsomely when United Overseas Bank (UOB) bought the bank for $10 billion three years later.

As I await the arrival of yet another Tiger Year, I find myself taking stock of the hits and misses in my investment portfolio, as the market succumbs to fresh turmoil due to fears that some European countries may default on their debts.

'Buy and hold' has always been my approach and it has worked well despite the three major financial upheavals in the past 15 years - the Asian banking crisis in 1998, the dot.com bust in 2000 and the United States sub-prime crisis in 2007.

Squirrelling away money into high-dividend-paying counters such as Hong Leong Finance and Cerebos Pacific has reaped huge rewards. For a few investments, I have more than recouped my initial capital outlay from the accumulated dividend payouts over the years.

As a conservative investor, I find that it pays to stick to a few simple objectives like realistic investment expectations and a reasonable timeframe to give the investment time to work out.

Buy 'quality' stocks

If you buy quality companies, you would not be tempted to sell when the market suddenly dips and the airwaves are filled with tales of gloom and doom - like during the recent global financial crisis.

Take our well-run local banks. It was business as usual for them in the past two years, even as banks elsewhere were under pressure from the global credit crunch.

And rather than collect their dividends in cash, shareholders of OCBC stood solidly behind the bank and gave it a big vote of confidence by taking up the payout in shares instead since being given the option last year.

It turns on its head the argument that cash is king during troubled times

Trust the explosive power of compounding

Investors have often been sold the idea of how compounding the returns on their investments could help them to build their wealth faster. Set aside $3,000 a month and earn a 10 per cent return a year and it will grow to $1 million in 40 years.

In practice, this idea is sometimes difficult to implement, but there are ways to go about doing it in the stock market.

For decades, banking giant HSBC Holdings has offered investors the option to collect dividends in shares, rather than cash - and many of them have ridden on the coat-tails of the bank to riches, doing so as it expands its global reach.

A few firms have upped the ante and refined HSBC's winning formula. In its past two dividend payouts, OCBC gave shareholders the choice to convert the dividends into shares at a 10 per cent discount from the market price.

Set aside at least 10 per cent of income as savings

Being frugal is the cornerstone to wealth-building. The rationale is simple: nothing saved equals nothing invested equals nothing for retirement.

One trait among successful businessmen is their thriftiness - with many of them living well below their means.

Some will argue, however, that there are few incentives to save, with banks paying a paltry 0.125 per cent interest on savings.

But keeping money in the bank is not necessarily the only option for savers. You can park your cash in the form of preference stocks issued by UOB and OCBC, which work like bonds and offer a dividend payout of about 5 per cent.

In a nutshell, I will keep my investment strategy simple, pick up bargains for the long term and enjoy doing what I love: Grabbing a beer - a Tiger - as I reunite with old friends in the coming Chinese New Year week.

Remember there are far more important things in life - loved ones, family, hobbies, movies, sports. Gong xi fa cai.

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Related articles:

1. Compound Interest
2. Managing money based on the oldest best selling manual
3. The Master and the steward
4. Diversification and statistics

Is Retirement Biblical?

2010-02-06T09:21:00.000+08:00

Came across an interesting article 'Is Retirement Biblical?'

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Should Christians pursue retirement as one of their major goals - or in doing so, are they pursuing something that is in complete contrast to what God has purposed for them?

I think this is a good question to ask, and one that I’ve often wrestled with.

As Americans, we generally want to work for 30 to 40 years, retire with a nice nest egg and spend the rest of our time doing things we really want to do, when we want to do them.

Retirement has become the quintessential American Dream.

But is this something that a Christian should pursue – and does the Bible have anything to say about it?

Retirement in the Bible

After a quick search for the word “retire” in a few different versions of the Bible – I noticed there weren’t many references to view.

Of those that were listed, all but one had to do with either retiring to bed (going to sleep) or retiring from battle (retreating or pulling back).

Numbers 8:23-26 was a passage that mentions retirement in terms of withdrawing from labor. Here’s the passage:

23 And the Lord spoke to Moses, saying, 24 “This applies to the Levites: from twenty-five years old and upward they shall come to do duty in the service of the tent of meeting. 25 And from the age of fifty years they shall withdraw from the duty of the service and serve no more. 26 They minister to their brothers in the tent of meeting by keeping guard, but they shall do no service. Thus shall you do to the Levites in assigning their duties.”

One of the responsibilities of the Levites was to transport and guard the tabernacle.

So basically what’s going on here is that the Levites who were over age 50 were able to “retire” from carrying the tabernacle, but still served in guarding it.

As far as I know there is no other mention of retirement in the Bible – but does that mean we should throw out the notion of retirement just because it’s not in there?

Rest in the Bible

God’s word has a lot to say about the idea of rest.

On the seventh day of creation, God rested from all His labor. God instituted a day of rest in the 10 commandments, and we see Jesus resting and withdrawing from His work often to get refreshed.

But is this rest the same as retirement? It doesn’t seem like it. The Bible typically refers to rest as a temporary rest to get re-energized to go back to work.

So once again, the Bible seems pretty silent on the issue of retirement. I got to thinking about what a conversation about retirement would sound like between the Apostle Paul and Peter. Maybe something like this:

Paul: “I’ve been making tents for the last 30 years – my back is just killin’ me – I gotta get out of this business.”

Peter: “Your back is killing you? Try pulling a giant net of fish into a boat every day! My dad had me helping him since I was 12 years old – 50 years of catching fish has caught up to me for sure.”

Paul: “Yeah, I wouldn’t mind taking my pension early and getting a nice little place on the Mediterranean.”

Peter: “I hear ya, Jerusalem for the summer and Greece for the winter would be the life!”

There’s no evidence a conversation like that ever took place. In fact, I would be willing to guess that retirement to a guy like the Apostle Paul was something that never crossed his mind.

He never wanted to be a burden to people so as to create any barriers to sharing the gospel.

Read the rest here......

Blessed day !

Thoughts for the Year

2010-02-01T22:55:00.001+08:00

The greatest handicap : Fear
The best day : Today
Easiest thing to do : Find a fault
Most useless asset : Pride
The greatest mistake : Giving up
Most disagreeable person : The complainer
Worst bankruptcy : Loss of enthusiasm
Greatest need : Common sense
Meanest feeling : Regret at another's success
Best gift : Forgiveness
The greatest moment : Death
Greatest knowledge : God
The greatest thing in the world : Love

Great Lessons from great men

2010-01-29T20:57:00.001+08:00

Part of my devotions includes reading the Book of Proverbs and I like this article as it reflects 'Great Lessons from Great Men'-getrichslowly.org.

Blessed day !
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Be Tenacious

“Anybody can be a halfway man, but the one who rises above this class is the one who keeps everlastingly pushing.” — J. Ogden Armour, Touchstones of Success (1920)

More than any other, one lesson stands out from the books I’ve read: Never give up. If you have a goal or a dream, pursue it. If there’s a cause that you truly believe in, then fight for it. That’s not to say that you should doggedly chase greed or gluttony, but that you should do your best to achieve those things that are important to you. Great men struggle through daunting obstacles to reach their destinations. In everything that you do, do your best. And remember: The road to wealth is paved with goals.

Exercise Self-Control

“‘Tis easier to suppress the first desire, than to satisfy all that follow it.” — Benjamin Franklin, The Way to Wealth (1758)

Benjamin Franklin famously attempted to codify his quest for self-control. As Brett wrote at The Art of Manliness, Franklin committed himself to thirteen virtues, and he developed a system for tracking how disciplined he was in his daily pursuit of these ideals. There’s nothing wrong with an occasional indulgence. But when the indulgence becomes a habit — or worse, a vice — this can affect your life. Even destroy it. If you have habits that prevent you from fulfilling your potential, find a way to boost your self-control. (You might, for example, use Joe’s Goals to track your progress, much like Benjamin Franklin did.)

Do the Right Thing

“To be truly rich, regardless of his fortune or lack of it, a man must live by his own values. If those values are not personally meaningful, then no amount of money gained can hide the emptiness of life without them.” — John Paul Getty, How to Be Rich (1961)

Have a code of honor, and live by it. Your code of honor might come from your faith, or from your education, or from your family. Whatever the source, live by these values. Life is filled with temptations. The more you accomplish, the more people will tempt you with offers for quick gains or passing pleasures. Many men succumb to these, but those who do rarely achieve what they might have if they’d stuck to their principles. The books I’ve read are filled with stories of men who have resisted the urge to compromise, and who believe that this has been a key to their success. Don’t cheat. Be honest. Work hard. And embrace the golden rule.

Embrace The Golden Rule

“Good will is one of the few really important assets of life. A determined man can win almost anything that he goes after, but unless, in his getting, he gains good will he has not profited much.” — Henry Ford, My Life and Work (1922)

James Cash Penney — the man behind the J.C. Penney chain of department stores — believed that success could be measured by how a man treated others. In his book, Fifty Years with the Golden Rule, Penney describes his life-long adherence to this maxim: “Do unto others as you would have them do unto you.” Other great men believed the same. They believed that their fortunes came not from pursuing money itself, but by producing something of value to others. But this principle also holds true outside of business. In your dealings with your friends, your family, and with strangers, treat others as you would like to be treated. Doing so builds social capital, strengthening the fiber of the community.

Pay Yourself First

“Many a man is poor today, although he has worked like a slave, simply because he could not save.” — Orison Swett Marden, The Young Man Entering Business (1903)

Another common thread in most of these books — and in personal-finance classics like The Richest Man in Babylon — is the importance of saving. “Pay yourself first,” the old adage goes, and it’s great advice. If you will set aside ten or twenty per cent of all that you earn, your fortune will grow far beyond that of your peers. Some of this money should be invested in a manner that makes you comfortable. (You should learn about the concepts of asset allocation and diversification, if you haven’t already.) But some of your money should also be set aside in a high-interest savings account to act as an emergency fund. When you save — when you pay yourself first — you are using the strength of your youth to insure your uncertain tomorrow.

Avoid Debt

“Be assured that it gives much more pain to the mind to be in debt, than to do without any article whatever which we may seem to want.” — Thomas Jefferson, Letter to his daughter Martha (14 June 1787)

Debt is slavery. When you owe money to another man, you are obligated to work for his benefit, not yours. Many young men struggle with debt — I did so myself. But those who are not able to overcome their spending habits are likely to find themselves always poor. When you pay interest to someone else, you cannot earn interest for yourself. When you’re in debt, your options are limited. You cannot choose, for example, to take a month off to travel across the country with a friend. You cannot quit a job you hate. If you did, how would your bills get paid? To be sure, a certain amount of debt is useful in business, but make it a policy in your personal life to never borrow for something that will decrease in value. (And if you’re already behind, make it a priority to get out of debt as soon as possible.)

Keep Well

“The foundation of success in life is good health: that is the substratum of fortune; it is the basis of happiness. A person cannot accumulate a fortune very well when he is sick.” — P.T. Barnum, The Art of Money Getting (1880)

Your health is your greatest asset. If you lack health, you cannot work, and cannot produce an income. Health allows you to engage in productive activities, at work and at play. It allows you to enjoy the company of your friends and family. And it allows you to live with vigor. Guard your health. Do not neglect your body. Eat well. Exercise regularly. If you drink or smoke, do so in moderation. You will not live forever, but with some care and foresight, you may get a little closer!

Do Not Covet

“By wishing to be what he calls ‘up-to-date’ as his friends or boon companions, many a young man mortgages his future.” — Orison Swett Marden, The Young Man Entering Business (1903)

It never pays to compare yourself to others. For one, you can find yourself longing to own the same things they do. Your best friend buys a new Ford Mustang, and suddenly you want one too. The guys from work go out for drinks on Friday evening, but you’re broke — the temptation to join in, to have what others have, can be unbearable. Focus only on yourself and how the things you own and do relate to your goals. Don’t be jealous of others. (This is one message in the famous essay, “Acres of Diamonds”: Instead of looking elsewhere for wealth, look at your own life.)

Live Modestly

“This, then, is held to be the duty of the man of wealth…To set an example of modest, unostentatious living, shunning display or arrogance.” — Andrew Carnegie, The Gospel of Wealth (1889)

This is the flip side to “Do Not Covet”. Just as you should not allow the behavior of your friends to influence your spending decisions, so too be conscious of your influence on them. If you have money, don’t flaunt it. And if you don’t have money, don’t pretend that you do. It’s fine (even good) to buy quality products, but don’t be flashy. Live simply and well.

Practice Patience

“No matter how great the talent or the effort, some things just take time: you can’t produce a baby in one month by getting nine women pregnant.” — Warren Buffett, Berkshire Hathaway Annual Report (1985)

Too many men want to “get rich quick.” They’re on the lookout for fast money. They also want to lose weight now, to be a great golfer now, to be in management now. This obsession with “now” is a problem. In his new book Outliers, Malcolm Gladwell writes that the difference between those who succeed and those who don’t is 10,000 hours. That is, those who achieve mastery have patiently practiced their craft for at least 10,000 hours — the equivalent of five years of full-time work. When people ask me why Get Rich Slowly is so successful, one of my responses is that I’ve worked at it 60+ hours a week for the past four years. Practice may not “make perfect,” but it certainly breeds success.

Give Generously

“Thrift does not end with itself, but extends its benefits to others. It founds hospitals, endows charities, establishes colleges, and extends educational influences.” — Samuel Smiles, Thrift (1875)

I wasn’t raised in a culture of giving. It’s only something I’m beginning to learn in middle age. But as I read about the choices of men who have come before me, it’s clear that they have derived satisfaction (and done a lot of good) by giving generously — not just of money, but also of time and knowledge. Do not hoard the things you have. Share them so that others might profit, too.

Read the full article here

How little can we live with? =)

2010-01-26T22:11:00.000+08:00

In line with personal finance, we plan in a way to have xx amount. Here is a interesting article of a woman in London who lives without money.

The story of Katharine Hibbert, a woman who lives in London without money. Whereas other “no money” types live lifestyles that don’t appeal to me (living in a cave, drinking urine, and so on), she’s able to make a go of it without anything too radical. (She could even use a cell phone. How is that possible without money?)

NB: Not a avocate of this but it does change allow some food for thought

The Marathon

2010-01-18T22:23:00.002+08:00

The Marathon is used many times as a depiction of our walk in life. There are moments that we run, moment that we walk, moments that we are surround by positivity and vice versa. After running a few marathons, the main thing to reach the finishing line is to keep moving forwalk - walk a bit some time but keep going.

How can we use this example in our personal finance? It's to keep moving forward, a step at a time (gathering little by little - value investing, participation of rights etc), walk for a while then continue running/jogging to reach the goal.

At the same time, I take the marathon training as part of the means to lose weigh ( to lose weight - my energy output must be less than the calories input). Like wise for winning in Personal finance - 'You can't get poorer if you spend less than you earn. You obviously can't get richer if you spend more than you earn.'

Some interesting articles :

His firms are his best investments

Businessman used to guard eggs in a coop

Blessed day !

Related issues:
What are rights issues?

Free download of David Bach's 'Start Over, Finish Rich'

2010-01-04T09:26:00.000+08:00

David Bach is the author of many personal finance books - one of them is 'The Automatic Millionaire'. He is giving away his newest book for free (via eBook download) on 4th January 2010 only (Today!).

Here is a short excrept of what the publisher say about it:

Designed to be read in a couple of hours, Start Over, Finish Rich offers readers a powerful, take-action plan that spells out the ten most crucial steps that Americans can take to put a secure financial future squarely back in reach, including getting out of debt, fixing credit, rebuilding retirement savings, automating finances, and rebuilding with real estate. The book is published by Broadway Books, an imprint of the Crown Publishing Group at Random House, Inc.

David Bach is donating $1 for each copy of Start Over, Finish Rich sold in 2010 (up to $20,000) to charity: water, a non-profit organization bringing clean and safe drinking water to people in developing nations. His donation will go towards sponsoring a freshwater well and latrines at a school and will serve 1,000 students.

Download David Bach's Latest Book for Free on Walletpop on 4th Jan 2010 only .

Freedom from Car Loan

2009-12-28T13:20:00.001+08:00

PTL! I am free from the car loan as I paid the last installment. So what is the next stop forward? I plan to continue being free for the price that was paid and promised from the Gift. The plan is to continue putting the amount freed from the car loan to a 'fund' that will allow driving cars 'free (from car loans)' and leading towards driving free cars. =)

Have a blessed day !

Related Posts:
1. Becoming debt-free with Dave Ramsey’s plan
2. Dave Ramsey critics
3. Is it possible to drive a free car in Singapore?
4. Drive Free, Retire Rich by Dave Ramsey (Video)

Food for thought from Drive Free, Retire Rich

What if you decided to stop messing with car payments?
What if you invested that old car payment every month instead of giving it away to the bank?
What if we showed you a six-year plan that would put you in free cars for the rest of your life?
What if that plan also made you a millionaire?

The Greatest Gift

2009-12-24T16:44:00.001+08:00

If you sacrificed all you had to buy me a priceless and personalized Christmas gift and I never took the time to unwrap and open it, how would you feel? You will be disappointed, hurt, and angry at my callous rejection of your generous love. And for me, the gift would be worthless if I left it wrapped and sitting in the corner. There would be zero benefit to me.

It's astonishing that so many people have celebrated Christmas every ear of their lives without ever having opened their greatest and most expensive Christmas gift. .......

- The Purpose of Christmas by Rick Warren
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Have a blessed Christmas !

What are Right issues?

2009-12-14T09:01:00.029+08:00

This is some thing that I been looking into. There are several sites that provide information of rights. They are:

1. Sgfunds
2. Central Depository

I found this from VR -zone that explains it quite well too.
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What are right issues?

Under a secondary market offering or seasoned equity offering of shares to raise money, a company can opt for a rights issue to raise capital. The rights issue is a special form of shelf offering or shelf registration. With the issued rights, existing shareholders have the privilege to buy a specified number of new shares from the firm at a specified price within a specified time. A rights issue is offered to all existing shareholders individually and may be rejected, accepted in full or accepted in part. Rights are often transferable, allowing the holder to sell them on the open market.

To issue rights the financial manager has to consider:

1. Subscription price per new share
2. Number of new shares to be sold
3. The value of rights
4. The effect of rights on the value of the current share
5. The effect of rights to existing and new shareholders

A right to a share is generally issued on a ratio basis (e.g. one-for-three rights issue). Because the company receives shareholders' money in exchange for shares, a rights issue is a source of capital.

Rights issues may be underwritten. The role of the underwriter is to guarantee that the funds sought by the company will be raised. The agreement between the underwriter and the company is set out in a formal underwriting agreement. Typical terms of an underwriting require the underwriter to subscribe for any shares offered but not taken up by shareholders. The underwriting agreement will normally enable the underwriter to terminate its obligations in defined circumstances. A sub-underwriter in turn sub-underwrites some or all of the obligations of the main underwriter; the underwriter passes its risk to the sub-underwriter by requiring the sub-underwriter to subscribe for or purchase a portion of the shares for which the underwriter is obliged to subscribe in the event of a shortfall. Underwriters and sub-underwriters may be financial institutions, stock-brokers, major shareholders of the company or other related or unrelated parties. The Panel’s guidance covers both non-underwritten and underwritten rights issues.

Basic example

An investor: Mr. A had 100 shares of company X at a total investment of $40,000, assuming he purchased the shares at $400 per share.

Assuming a 1:1 rights issue at an offer price of $200, Mr. A will have the option to subscribe to additional 100 shares of the company at the offer price. Now, if he exercises his option, he would have to pay an additional $20,000 in order to acquire the shares, thus effectively bringing his average cost of acquisition for the 200 shares to $300 per share ((40,000+20,000)/200=300). Although the price on the stock markets should reflect a new price of $300 (see below), the investor is actually not making any profit nor any loss.

What this means is that you have been “forced” to pump in more of your money just to maintain your ownership of the company.

The company: Company X has 100 million outstanding shares. The share price currently quoted on the stock exchanges is $400 thus the market capitalization of the stock would be $40 billion (outstanding shares times share price).

If all the shareholders of the company choose to exercise their stock option, the company's outstanding shares would increase to 200 million. The market capitalization of the stock would increase to $60 billion (previous market capitalization + cash received from owners of rights converting their rights to shares), implying a share price of $300 ($60 billion / 200 million shares). If the company were to do nothing with the raised money, its Earnings per share (EPS) would be reduced by half. However, if the equity raised by the company is reinvested (e.g. to acquire another company), the EPS may be impacted depending upon the outcome of the reinvestment.

Example: CCT ISSUES RIGHTS

CapitaCommercial Trust (C61U.SG) said Friday that it will offer 1.4 billion units under a rights issue to raise about S$828.3 million. The trust will offer one rights unit for every existing unit at S$0.59 each, it said in a statement. Units of CapitaCommercial closed Thursday at S$1.06 each. Proceeds will be used to reduce borrowings, and for general corporate and working capital purposes. CapitaCommercial is managed by CapitaCommercial Trust Management Ltd., which is an indirect wholly owned unit of CapitaLand Ltd. (C31.SG). The rights issue is fully underwritten. DBS Bank Ltd., Cazenove & Co. (Singapore) Pte. Ltd. and United Overseas Bank Ltd. are the joint lead managers and underwriters, the trust said.

The reasons for doing so is to reduce their gearing, improve financial flexibility by boosting its balance sheet and improving its credit profile. According to Daiwa Institute of Research, CCT is building up capacity to refinance debt and creating a buffer against potential asset write-downs. What this simply means, is that CCT’s assets (their buildings) are falling in value and are raising more capital in order to build more confidence with their existing or future lenders and to prevent early redemption of loans for etc their $885million due next year in 2010.

WHAT TO DO NOW?

Basically there are only three decisions for the unit holder to decide. Either..

1)Activate your rights issue
2)Sell your rights issue.
3)Sell everything.

Do give me the opportunity to explain the process of each decision in detail to the best of my knowledge

Take for example you bought CCT at 0.70 per share in march 2009, say you bought 10 lots, spends a total of $7000 barring out all commission and extra transaction cost to make things simple. So, initially your expected yield from CCT for FY 2009 is $1200 which is 17.1%

Now, if you choose decision 1) which is to activate your rights issue, you have to spend another (0.59*10,000)= $5,900. The rights issue share price of 0.59 represents a 44% discount to the stock’s last traded price of $1.06

And a discount of 61% discount to their new estimated calculated NAV figure of $1.51 after taking into account the revaluation and completion of the rights.

Therefore in total you spent $12,900 in order to maintain both your expected yield % for FY 2009 which is $1200 and margin of safety to NAV. And if you have noticed, the % yield has dropped from 17.1% to a mere 9% , this is because i did not factor in any positive effect coming from the extra capital that will help CCT this year or in the future, just to be conservative. Therefore the downside here is, the opportunity cost , what you can do with the $5,900 if you didn't put it into the rights?

Ok, now.. if you choose decision 2) which is to sell your rights issue, then you need not spend $5,900 and he initially get the extra profit if he sells his right at $1.06? WRONG! The stock market will not be soo stupid to maintain the share price of CCT at $1.06, my good guess is that the market will pressure the share price of CCT to about $0.80-0.91 at best. So, if we assume that the share price of CCT after their trading halt is lifted at $0.80, the profit made from selling his rights would probably amount to ($0.80-$0.59= $0.21*10,000 = $2,100). Looks like a good decision to make right? Can save the extra $5,900 plus get another extra $2,100 from selling his rights. However... if he decides to sell, he compromises his dividend yield for FY 2009 and the future years for holding CCT. His expected dividend yield will fall 50% from getting $1200 to getting only $600 for FY 2009 and for the rest of the years. Your margin of safty from NAV was intially 75%, will drop to 53% , this then is evident of dilution.

Finally, if you choose decision 3) which is to sell everything, you probably earned, assuming share price of CCT is 0.80 after trading halt , [(0.10*10,000)+(0.21*10,000)]= $3,100 , you get back roughly $3,100 in pure profits and no worries of any exposure to things related to CCT. CCT also will have no worry to you dividends for the future years to come. All is settled,closed and silent

To decide which decision creates more value for the holder, it has to be determined by the investor him or herself. It all boils down to whether you still have confidence in CCT's growth and business model and assets.

As for me, lets look at the reasons why i bought CCT in the first place.

1) Want to gain exposure to Singapore’s rental of Office buildings, mainly banking, insurance and financial sector. In addition, a bit of Malaysia’s rental business

2) This Trust has formidable reputation with strong backing from parent company CapitaLand

3) This enables the trust to easily obtain loans, like the recent $580million using one building as collateral. Refinancing in this credit crunch environment is supposedly not a problem.

4) Past performance reviews consistent increase in revenue/profit margin and operational cash flow. Note that these are bull years, might be misleading.

5) It is also known that the trust builds good relationships with their clients

6) Their clients’ a.k.a tenants are well known and respected, like GIC, Starhub, JP Morgon, Standard Charted Bank (Big client with 15.2%)

7) Potential Upside in the future, involves increasing of rent rates (cause theirs is low as compared to market rates $7.18 vs. $11.40 psf), growth in further acquisitions in the future via Asia or mainly Malaysia.

So, since they issues the rights at 0.59 per share..should i choice 1)? 2)? 3)? Hahah :]
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Blessed day !

Climate and changing cars

2009-12-10T21:05:00.000+08:00

In recent news, the world is now coming together in Copenhagen to tackle CO2 emissions. CO2 levels affects the climate changes that we are now facing. What has that got to do with changing cars? Here is a food for thought - think of the energy and materials needed to produce the parts - all those need to get their power somewhere.

So changing cars is not just about finances, it is also about being a good steward of the earth given to us. I will hold off (thoughts of) changing cars as long as possible.

Have a blessed day!

Another View of SRS

2009-12-02T13:12:00.000+08:00

SRS

Last week there was a newspaper article of the benefits of SRS. SRS is a way of reducing income taxes as well as preparing for retirement funds. That's the good part. How about another angle or looking at SRS..............Look at the article below.

What’s not good about Supplementary Retirement Scheme (SRS)

Fuel consumption and cost

2009-11-09T16:10:00.000+08:00

I have been looking into changing a bigger car due to a growing family and hence was looking at all the cost. The bit that intrigues is the cost with respect to the fuel consumption. The calculation is based on a monthly 2100km and fuel cost $1.86 per litre.

My current car consumes 15 km/l and if the next car's fuel consumption is 9km/l, there is an additional cost of $173.60 or a 66% increase in the monthly fuel cost. Food for thought.

Contentment

2009-11-04T17:09:00.000+08:00

Interesting article on contentment.

Adage of the financially wise

2009-11-03T15:21:00.005+08:00

Found this interesting and in a way true.

Spending: If you buy things you don't need, you'll soon sell things you need.
Savings: Don't save what is left after spending; spend what is left after saving.
Hard work: All hard work brings profit; but mere talk leads only to poverty.
Laziness: A sleeping lobster is carried away by the water current.
Earnings: Never depend on a single source of income.
Borrowings: The borrower becomes the lender's slave.
Accounting: It's no use carrying an umbrella, if your shoes are leaking.
Auditing: Beware of little expenses; a small leak can sink a large ship.
Risk-taking: Never test the depth of the river with both feet.
Investment: Don't put all your eggs in one basket.

Those who have already been practising these principles remain financially healthy. Those who resolve to start practising these principles will quickly regain their financial health.

Continue working for good health?

2009-10-26T14:28:00.002+08:00

Thinking of retirement? Read this 1st and plan for the 3rd & 4th stage of life. It may be better to continue working after retirement be it a full or part-time work.

For a Healthy Retirement, Keep Working

Have blessed day!

Spend money wisely

2009-10-22T11:56:00.012+08:00

Interesting article.

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4 steps to spend your money wisely
by Craig on October 21, 2009

http://www.christianpf.com/spend-money-wisely/

4 Steps To Help You Control Your Spending

Budgeting is essentially the process of asking: should I spend my money on this or that? A person’s income represents the fixed dollars with which they have to spend. When someone sets their budget they must decided (based on their preferences) what to spend on ‘this’ and what to spend on ‘that’. The problem is that sometimes people prioritize the wrong things. They buy ‘this’ when they should have bought ‘that’. Being able to control you difference is the differences between being frugal instead of cheap. If you find yourself in a situation where you often buy things you regret then these four steps will help you focus your spending.

Step #1: Take a visual inventory of the stuff already in your home.

Have you ever helped someone move? If you have you know that a question people often ask while moving is, “How did we get so much stuff (junk)?” Every item in your home has been purchased with money you labored for. As you walk around the house look at your items and ask:

- Does this item give me satisfaction?
- Did it end up being as useful as I wished?
- If I had to buy it again would I?
- Do I have more things than I know what to do with?

If you answered negatively more often than not, it is likely that you are having trouble directing your spending towards things you truly care about. Perhaps you are purchasing impulsively. Nevertheless, your spending is such that it brings more frustration than satisfaction.

“But store up for yourselves treasures in heaven, where moth and rust do not
destroy, and where thieves do not break in and steal.” (Matthew 6:20 NIV)

Step #2: Ask your spouse a simple question – “What are some of your favorite memories?”

Our Experiences with Stuff Dulls Over Time

In the book Your Money and Your Brain author Jason Zweig writes:

“We get used to almost anything we are frequently exposed to. That’s why
the money we spend on big purchases gives us such a perishable pleasure.” (bold
added. pg 236)

Zweig goes on to use the example of a new car. Remember that new car? It “glistens like a gigantic jewel”. However, the cycle of auto life requires that within months (or even days) there will be dings and scratches in your fine automobile. After just a few short months, we are disillusioned because the car is not bringing as much satisfaction as we intended. So before you know it you are on the market for another new car. Regarding this tendency Zweig writes:

“Unfortunately, the vision pales by comparison when it collides with reality. …
Instead of realizing that big spending will probably never make you happy, you
conclude that you simply spent your bundle on the wrong thing.” (pg.
236-237)

Our Experiences with Memories Sharpen Over Time

Spending that brings satisfaction is spending that creates memories. While some spending is pragmatic and functional (i.e. fridge and stove) we must ultimately remember their function. I think about great time saving appliances like the dishwasher and the microwave. That time void has not been filled with activities that create memories; instead it is filled with more activity. Things like vacations actually leave a sweeter taste (assuming you pay cash!) as the days go by.

“The vacation in your photo album is more pleasant than the one you actually
had, and that may skew your memory. … Your memories, then, are not just
recollections. They are also reconstructions” (Jason Zweig, 238).

Why not plan your spending in such a way that you spend a larger percentage of your money on things that are rewarding (like giving) and steer away from spending money on stuff that dulls over time?

Step #3: Have a ‘this’-and-‘that’ face off.

This really is a simple exercise. It has been observed that hindsight is 20/20 so go ahead and use that clear vision of the past to guide your future spending. Take a few items in your home and place them side by side and ask, “Right now which item am I happier that I purchased?” Your answer will help guide your future spending.

Sample A: Luggage

Exhibit A

Exhibit B

These two pictures of luggage have the same purpose – they help haul my useless junk around the world. So far both of these items have accomplished the task with equal effectiveness. Any time my junk does not arrive it is typically the fault of an airline, not the luggage itself. There is one significant difference – cost. The two bags in Exhibit A cost about $85 and the cost for Exhibit B was $5. Using my 20/20 perspective I now know what a complete and absolute waste of money to pay $85 for something I can find for $5 at any used clothing store in America. As a result, I have now decided that I’ll buy all my luggage second hand.

Sample B: The Vacation and the Fridge

You will notice that my fridge (which has only been used for less than three years) is rusting. I’m finding that the type of a fridge does little to contribute to my spending satisfaction. In the future I am going to think about functionality without any fancy bells and whistles.

I have a whole slew of vacation pictures I enjoy looking at. Those great memories grow year after year. Vacations always provide some special family times. As a result, I enjoy spending money on vacations because I feel like they contribute something to my life’s satisfaction.

Step #4: Adjust your spending accordingly.

Take what you have learned about yourself and create a future where you spend your money wisely according to your values. A budget is the best way to help direct your spending. Don’t keep making bad money choices! When setting amounts for your budget categories make sure they fit your personal preferences.

A final thought.

Try incorporating your gifts to people into the same evaluation. I suspect you will find that there is a growing pleasure that comes from giving.

Let me leave you with one final quote from Jason Zweig:

“While the money you spend on acquisitions tend to feel more and more like a
mistake as time passes, the money you spend on experiences is apt to grow in
value as your memories grow warmer.”

How do you focus your spending to be sure you’re spending money wisely and not wasting too much on perishable stuff?

Why God’s way takes longer

2009-10-12T08:08:00.004+08:00

I have always enjoyed the nature as it's a reflection of God's work. The trees particularly reminds of the walk a believer goes about and it also can be applied in personal finance.

I enjoyed the article recently written in christainpf.com. May it be a blessing to you too.

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It is kind of like becoming a tree
http://www.christianpf.com/becoming-a-tree/

I was staring at a tree the other day just day-dreaming and kind of worrying about how long it was taking to get answers to prayer for a few issues in my life. I was reminded of…

Psalm 1:1-3
How blessed is the man who does not walk in the counsel of the wicked,
nor stand in the path of sinners, nor sit in the seat of scoffers! But his
delight is in the law of the LORD, and in His law he meditates day and
night.

He will be like a tree firmly planted by streams of
water, which yields its fruit in its season and its leaf does not wither; and in
whatever he does, he prospers.

In my case I have been diligently trying not to “walk in the counsel of the wicked,” and it seems to be making my answers to prayer take even longer. I have been earnestly trying to do things the right way, knowing full well that by cutting a few corners or compromising my values I could make the answers appear faster. The major difference being that I can get mediocre answers doing it my way or the fruit God promises by doing it His way.

The pre-requisite for our fruit bearing from Psalm 1 is that we:

1. Do things God’s way
2. Stay in the Word

If we do these two things we have the promise that whatever we do will prosper and that we WILL bear fruit IN OUR SEASON.

Trees grow slowly

As I was staring at this tree I began to realize that trees grow slowly. You plant a seed for a tree and it takes a while to sprout and takes a while to grow to a decent size.

Grass and even plants, on the other hand, grow a lot faster. They sprout up quickly and sometimes you can even notice growth one day to the next. I have been enjoying watching this rapid growth with all of the plants in my vegetable garden.

Grass grows fast

Then it kind of hit me that God wants to make me “like a tree.” He isn’t interested in seeing rapid growth that will not make it to the next season and is ultimately unsustainable. A tree, though it grows slowly, becomes a lot more sturdy and is able to withstand challenges that grass and plants can’t.

I am reminded of a storm we recently had that snapped my tomato plant right in half. The plant had grown to about 2.5 feet in a matter of months and was not strong enough to survive when the winds came. God wants to make us strong and sturdy to withstand the storms in our lives.

Psalm 92:7
“That when the wicked sprouted up like grass and all
who did iniquity flourished, it was only that they might be destroyed
forevermore.”

Psalm 92:12
“The righteous man will flourish like the palm tree,
he will grow like a cedar in Lebanon.”

Trees yield more fruit

I am excited about the tomatoes that my plants will produce this summer, but even the best tomato plant would be lucky to produce 40 lbs of tomatoes in a season. But older mature trees can produce over 1000 lbs in a season.

The downside, of course, is that trees don’t bear fruit 3 months after you plant them like many vegetable plants will. Some trees will take a few years or even longer to bear fruit. I remember the frustration I had with this when I wanted apples from a new tree and learned that I may have to wait a while.

Patience seems to be a rare virtue in our society these days, but it is one that we ought to develop. God seems to like taking the long road with a lot of things and as I begin to see the reason behind it, it causes me to say, “huh, God really is smarter than I am.”

Trying to be a tree

It’s tough watching the grass sprout up all around you and seeing others bearing fruit when you have been faithfully doing what is right, but we must not be short-sighted. We need to try to look at these things the way God sees them.

Though the tomato plants around us may be popping out some fruit, while we seem to wonder what is taking so long, our day will come. God is doing a work and creating something in us that will be around long after the grass has come and gone.

Galatians 6:9 (AMP)
“And let us not lose heart and grow weary and faint in acting nobly and
doing right, for in due time and at the appointed season we shall reap, if we do
not loosen and relax our courage and faint.”

Diversification Statistics

2009-10-05T09:01:00.003+08:00

Always wanted to know the statistic behind diversification and found this information in Joel Greenblatt's book, You Can Be a Stock Market Genius. He provides the following statistics by owning the following number of stocks:

2 stocks eliminates 46% of non-market risk of just owning one stock
4 stocks eliminates 72% of the risk
8 stocks eliminates 81% of the risk
16 stocks eliminates 93% of the risk
32 stocks eliminates 96% of the risk
500 stocks eliminates 99% of the risk

Now to do the mathematical calculatons to confirm his statistics.

Have a blessed day.

For a man's ways are in full view of the Lord, and he examines all his paths - Prov 5:21

Also read:

Diversification

Teaching Kids About Life and Money

2009-09-29T13:41:00.005+08:00

Do you have children? I do and in my daily devotion in Proverbs. I came across this "Train a child in the way he should go, and when he is old he will not turn from it. - Prov 22:6".

How do we train in child in the area of life and money? I got my 'training' through observing my parents and that is one way. However, to accelerate this learning curve for them in this age, we have also shown our children in the mathematics of compounding, delay gratification, saving and giving.

I found this article by Dave Ramsey recently and am thinking about the applicability in our asian context. Feel free to comment.

Blessed day!

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Top 3 Kids and Money Q&A
Teaching Kids About Life and Money

Let parents bequeath to their children not riches, but the spirit of reverence. - Plato

Plato said it well. Parents are not just responsible for providing food, clothing, and shelter for their kids. They are also responsible for teaching their kids about life…and life includes handling money.

When it comes to kids and money, the three most common questions I get are:

When should I start teaching my kids about money?
Should I give my kids an allowance?
When should my kids go to work?

Teach kids about money as young as pre-school age and no later than third grade. Just think about it: if your kids can grasp this money stuff early on, they’ll avoid many of the pitfalls later. After all, it’s better for little Billy to make a $10 mistake than a $10,000 mistake!

1. Start paying them a commission for chores they do around the house.

Typically, one dollar per completed chore is sufficient with a list of five or six chores each week. Remember that each child is going to respond differently. Just keep evaluating your child’s maturity level and make sure their chores are age-appropriate.

2. DO NOT give them an allowance.

After all, what are you making an allowance for? You don’t want to have the kind of kids who think money grows on trees, do you? Don’t set them up for frustration and unrealistic expectations. And don’t miss out on the teachable moments that come when you give them a commission instead of an allowance.

3. Send them off to work.

“Child abuse” is letting a kid sit in front of a TV all day playing video games and eating junk food. Kids need to understand what a little dirt under the fingernails means. Delivering newpapers, mowing lawns, or working at a concession stand are some appropriate jobs they can handle.

Guiding your children in the choices they make with money is HUGE! The lessons you teach them as they earn money and learn to spend, save, and give will lay an influential foundation for their lives. Remember, if you don’t teach your kids how to handle money, someone else will. Continue

Never buy on the spot

2009-09-23T20:36:00.004+08:00

Ever been pressurised to buy things on the spot or leaving the supermarket with more than the shopping list? I have - we went to an agency to interview a person and almost end up hiring the person the spot.

That was a close call to not 'committing your actions/work to the Lord (Prov 16:3)'

Here is a article written by Mr Tan Kin Lian which I find interesting...........................

Never buy on the spot

Creative property consultants work hand in hand with developers to create false impressions. You can see them under different creative names in different forums generating waves to enrich themselves.

Some years back when I was looking for a property this agent with a big Mercedes Benz brought me to see a condo in the east. The way he conducted the sale he has a 95% chance of closing the deal at a high price. He was able to use tactics like high pressure sales to lure the potential buyer capitalising on the average human greed and fear.

Later when I was sitting in his Mercedes, he asked me what I do for a living. I told him I teach advance negotiation techniques to fortune 500 companies executives and he then muttered: "No wonder".

The simple advice to follow is simply this. Do not buy anything on the spot, there is no such thing as no more supply, only no more money. Determine your own price based on value, which you can determine after some basic research.

Do not go beyond your calculated price as agents will use your emotions to jack up the price. Always use the technique of having to consult your spouse to buy time.

Some agents know this and insist that both you and your spouse be present, ever wonder why time shares promotions always want you and your spouse to be present so you have to make a decision on the spot?

Just do not make a decision on the spot. Say you need to consult your father, mother or God, if necessary. Make it a philosophy never to make a spot decision.

Whenever I buy something, the sales agent will always ask for a deposit. I will tell them my philosophy is no deposit. They will then say what if someone comes along and buy the last piece. My answer is always: "Congratulations, I will look for another piece"

Remember, there will never be no supply, this impression is created by agents so they can pressurise you. There is only no money!

Insurance matters

2009-09-01T15:26:00.003+08:00

In my journey as being a steward, I have recently been thinking about the area of insurance coverage.

Most if not all of us do buy insurance and we need it. But there are so many types of insurance out there and in most case, we will probably buy whole life insurance thinking it will be double as savings. However, through the regular insurance statements, the recent financial climate had eroded the 5-9% interest rate. Hence, it would be better to buy term as much as possible and invest the rest. This is applicable to Education insurance policy too. This I hope to pass down to my children so that they will learn and move forward.

Why buy term insurance?

It is for coverage purposes and has no investment return values. That's fine as we build our financial wisdom and gather little by little. Returns are higher as well as we are able to participate in certain corporate actions like rights issues which is typically under valued. For a small sum, we are well covered and can use the rest for investments.

Some adovcates:

Tan Kin Lian
From his website on Personal Insurance , he mentioned this about critical illness:

“There is no need to buy insurance to cover critical illness. Your Medishield or private Shield plan can cover most of the medical expenses.

The chance of making a critical illness claim is small. Less than 5% of people make this claim during their working life.

If you wish to have insurance to provide a cash payment, a sum of $50,000 should be adequate. The cost of critical illness cover is high. You should not spend too much premium on this risk, as the return is poor.”

Suze Orman:

Dave Ramsey:

Numbers worth remembering

2009-08-28T15:43:00.002+08:00

Some interesting numbers that is a constant reminder.

Hope I can pass of these down to my children.

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7 Quick Numbers To Fix Your Personal Financial Situation
http://www.gatherlittlebylittle.com/2009/08/7-quick-numbers-to-fix-your-personal-financial-situation/

100 minus your age to determine your asset allocation

This is a classic in financial planning circles. While this financial rule of thumbs won’t fit for every case, the basic principle remains: The older you are, the less money should be invested in equities.

Fixed income (like bonds, certificates of deposit) will provide stability in your investment portfolio. At retirement, the last thing you want is to see your nest egg losing a quarter of its value in a single year. Those who are retired and didn’t follow this rule of thumb suffered tremendously in 2008.

8,6%: Dow Jones Yield since 1930 (including the 2008 crash!)

As a financial planner, I usually tell my clients the stock market average return is about 9%. It is important to have a realistic yield expectation. This will allow you to build a stronger (and more reliable) retirement plan and will also avoid belief in the Maddoffs of this world who promise double digit annualized returns at all times. The truth is: there are no free lunches in finance!

Another word of caution; 8.6% over the past 78 years doesn’t include management fees. Therefore, if you buy mutual funds, you will have to pay, what we call, MERs (management fees). Make sure to ask your financial advisor what are the fees and how they impact your investments.

70% of you gross income should become your revenue at retirement

This is another great rule of thumb in financial planning used in creating a retirement plan. Most people carry several expenses related to working (transportation, specific clothing, eating out, etc.). Once retired, you should not have these expenses anymore. You should also be close to paying off your mortgage (we all hope!). Accordingly, 70% of what you earn before you retire should be enough to support your new lifestyle.

Don’t make the mistake of decreasing this amount when you reach 70-75 thinking you will do less activities and be traveling less often. It is true that you won’t spend in activities but chances that your health expenses will increase. Keep the same level of income (adjusted to inflation) in your retirement plan.

10% of your income should be saved for your retirement

In order to respect your financial plan and meet 70% of your income at retirement, one should save 10% of his gross income and invest it. This should be enough to support your lifestyle at retirement while putting 10% aside won’t kill you once you have done a budget.

This financial rule of thumb will vary depending on your age (and the age you want to retire) and your risk tolerance (that will influence your investment yield). These topics will be covered later on.

The Rule of 72

This is a quick mathematical rule to calculate how many years it will take for your investment to double depending on its yield. For example, if you invest $10,000 at a steady yield of 6%, your initial investment will worth $20,000 in 12 years. You simply divide the number 72 by your expected yield, it tells you how many years it will take to double your investment. So when you get a CD at 3%, you will need… 24 years to double your investment!

25% of your gross income should be allocated to your mortgage/rent payment

This should be used as guidance for your budget when you are looking to buy a house or change apartments. Considering that you already have to save 10% of your income for retirement and pay taxes, taking an additional 25% of your revenue should be enough to provide shelter without jeopardizing your financial situation.

You still need money for food, transportation, utilities and don’t forget to put money aside for your children’s education! You can always exceed 25% for your house payment but be aware that you will have to sacrifice something else in order to pay for the house of your dreams.

Is it possible to drive a free car in Singapore?

2009-06-30T13:53:00.005+08:00

Is it possible to drive a free car in Singapore?

After watching Dave Ramsey's presentation on driving free cars. I went through a period of calculation, contemplation and searching for examples in Singapore.

Owning a car in Singapore is a costly affair. Apart from the cost of the car, the car buyer needs to know the running cost of a car in Singapore.

I found a couple of examples from our local car forum and hence hyperlinked the posts for you.

http://www.mycarforum.com/index.php?s=&showtopic=2639731&view=findpost&p=2796944

http://www.mycarforum.com/index.php?s=&showtopic=2639731&view=findpost&p=2796882

It's possible - with discipline, diligence and dependence on our Father.

Have a blessed day!

How do you pay off a car

2009-06-16T13:13:00.003+08:00

Just came back from a trip to Kuantan via route 3. The drive was great for me but my kids at the back was getting sick from the road conditions. Hence there is this strong urge to look for a more comfortable used 3 year old car to replace the sub compact for long trips. The current car is now 5 year old and has served us really well (covering >130,000 km).

Car purchases is really a big ticket item and reading this blog from ChristianPF generate some questions if buying a car without a loan is possible in Singapore. Time to put on the thinking hat, plan and then be diligent in carrying out the plan.

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How do you pay off a car?
http://www.christianpf.com/how-do-you-pay-off-a-car/

Linda (my wife) was out with one of her friends this weekend and they were discussing cars and what kind each of them are interested in getting. The conversation progressed and Linda’s friend asked, “do you mind if I ask you how much your car payments are each month?”

Of course Linda replied $0, because they are all paid off. To that her friend was completely shocked and asked, “how do you pay off a car!?!” She was completely floored and truly didn’t think that anyone had a paid-off car - except the super-rich.

I have to admit that when Linda told me the story, I was almost as surprised by it as her friend was that our cars were paid off. I live and breath this stuff and as I have immersed myself in it that last five or so years it has become like second nature to me. This was a good reminder for me about how I used to think about money. I used to assume that a car payment was a fact of life and that it was pretty much unavoidable, so I understand where she is coming from. But having done it both ways, I must say driving paid off cars is a lot more fun!

So anyway, I figure I better answer the question - just in case her friend stops by to find out how we did it.

1. Don’t pay too much for your car - I have done this in the past and it made it much more difficult to pay that car off.

2. I always suggest checking out ConsumerReports.org before making a car purchase. It costs about $5 for a month subscription and will steer you away from buying junk cars and will point you to the best ones.

3. In most cases the best financial decision is to buy a used car about 2-3 years old. (Read more about saving money on car depreciation.)

4. Never pay the minimum payment. Our last car loan we had we were paying double or triple payments each month. This would have been impossible for us had we not set up a budget.

5. By shopping around for car insurance, we saved over $500 per year - which then could be applied to paying down our car loans.

6. Say NO to your temptation to keep up with the Joneses by getting a new car every other year! Realizing how rich you really are helps!

The goal should be to find a car you like that you can drive for a long time! Then when you do reach that wonderful moment when the car is paid off, you can celebrate! And then start using the few hundred dollars you were using for the car loan and start putting it in a savings account. While you are driving the paid off car for a couple years, you will have money in the savings account to cover the maintenance and repairs, meanwhile you are saving to buy the next car with cash!

Example of Living within your means

2009-05-11T21:13:00.002+08:00

Interesting interview of a millionaire next door from getrichslowly.org

http://www.getrichslowly.org/blog/2009/04/30/the-secrets-of-financial-freedom-an-interview-with-the-millionaire-next-door/

The Secrets of Financial Freedom: An Interview with the Millionaire Next Door

Thursday, 30th April 2009 (by J.D.) This article is about Frugality, Interviews, Real-Life

Today is the last day of Financial Literacy Month. To tie everything together, I thought it would be fun to share an interview my real millionaire next door, a man we’ll call John. He used the basic tenets of money management to build wealth and to retire early. Here’s how I described John when I first wrote about him last year:

John is a 71-year-old retired shop teacher who lives in a modest ranch
house on half an acre, the same house he’s had for over forty years. He has an
old barn filled with salvaged lumber, outdated appliances, and who knows what
else. When he’s around, he drives a junkie 25-year-old station wagon. But most
of the time, he’s not around.

He spends his winters in New Zealand helping friends on a dairy farm.
His summers are spent fishing in Alaska. For a couple of months each year, he’s
home, puttering in the yard. Year-round, he rents his house to boarders. He
leads a very active retirement.

John’s story was popular with Get Rich Slowly readers, and many of you asked me to interview him. I had to wait for him to return from New Zealand, but earlier this month, the opportunity finally presented itself. John agreed to sit down for a chat.

“I want to take you to lunch at the Chinese place up the street,” I told him.

“What the hell for?” he asked.

“Just to be nice,” I said. “To thank you for taking the time to speak with me.”

“I don’t need that,” he said. “Save your money. Let’s just sit at your dinner table.” And so we did.

In the beginning
Before John left for New Zealand just after Christmas, I mentioned the idea of an interview. He liked the notion, so on his flight home at the end of March, he made some notes about his financial philosophy. “These are my secrets to financial freedom,” he told me, showing me what he had jotted on the back of an envelope. “This is what I did to get where I am today.”

“I’m ready,” I said. I had a yellow legal pad and a Bic pen. I motioned for him to continue.

“It was interesting to do this,” John said. “It’s really the story of your web site. The real secret is to spend less than you earn. I don’t care how much you earn, you spend less than you earn.”

I laughed. “My readers aren’t going to like that,” I said. “There’s a vocal group that complains that personal finance writers are always preaching ’spend less than you earn’.”

“It’s not funny,” John said. “Because that’s the secret. They don’t have to like it, they just have to do it.”

“Right,” I said. “There are no magic bullets. There are no special shortcuts. Now, before we get started, can you tell us a little bit about your background?”

“Well, I’m retired,” John said. “I’m 72 years old. I spent twenty years as a shop teacher at a junior high school. I retired at 58. Before that, I did other things. I worked as a carpenter for eight years, and I spent six or seven years working in the juvenile court system.”

“Did you have good financial habits growing up?” I asked.

“Yeah, I really did. My family had a lot of money. We owned a big hardware store. But I saw money wasn’t the key to happiness. There were other families that were happier that had far less. But I’m grateful for having grown up with a solid financial background.”

On frugality
“What advice do you have for people who want to spend less?” I asked.

“Well, I made this list,” John said, pointing to his old envelope. “I listed all of the things I do. First of all, people should learn what a kilowatt hour is. A kilowatt hour is a thousand watts burned for an hour. All of these appliances left on standby draw power. And don’t leave your lights on.” John gave me a look.

I was sheepish. The lights were on in the bathroom and the kitchen, but we were sitting in the dining room. I got up to turn them off while he continued speaking.

“Learn to figure your own power bill and know why it is what it is. People should learn about electrical use. That’s a drain on your monthly budget. Every penny saved on electricity is a penny you can use for something else.”

“No smoking or alcohol consumption,” he continued. “This has nothing to do with morals and health — okay, maybe health — it’s all about the money. I see people with a cigarette in their mouth, and I think, ‘That’s 25 cents!’” I laughed.

“Don’t have a credit card without autopay. And if you have a credit card, you should benefit from it. I use a credit card for everything I can, but I get things back from that.”

“Like air miles?” I asked.

“Exactly,” John said. “Air miles or a cash rebate. And I have my bank automatically pay the bill every month.”

“Next is food,” he said. “I think people’s eating habits are hell-bent on spending money.”

“Yeah,” I said. “I offered to take you to lunch while we talked.”

“I know, but I don’t need that gesture. I appreciate it, but that’s money that could be spent on other things. Like your new car!”

“You don’t have to spend a lot on food,” John continued. “When I go to the grocery store — which is rarely — I don’t know how anyone could afford to feed a family on that stuff. It seems outrageously expensive. People need to learn to cook from raw ingredients.”

“But where do you get the raw ingredients?” I asked.

“From the farmers market! Or Costco! You don’t need the little individual servings. That’s crazy. You have to be creative. Part of the problem is that you need to buy a freezer. Or look,” he said, waving his hand at Kris’ seedlings. “Over there are your tomato starts. Those cost you what? 50 cents? You’ll get 50 dollars of fruit from those! Plus I buy what I can in bulk.”

“Eating in-season food is important. It’s less expensive and it’s better quality. I also like this eating close to home thing. That’s neat.”

“Kris makes her own granola,” I offered.

“Yeah,” he said. “Exactly. But nobody advertises that. Nobody advertises ‘make your own granola’. Again, it makes sense to own a freezer. The electrical use of a freezer is pretty tiny. That’d be an interesting article for you, J.D. How much electricity does a freezer use versus how much you save by buying in bulk? People don’t understand about electrical use. They have a foggy notion about it.”

“Yeah, I have this device called a Kill-a-Watt,” I said. “It measures electricity use. But I’ve never checked our freezer.”

“Here’s another thing,” John said. “It’s okay to buy used. There’s nobody advertising to be thrifty. There’s nobody advertising to go to Goodwill. That’s not where the profit is. People have to get permission to buy used from somewhere else, because they’re not going to get it from advertising. I buy all sorts of stuff used, but especially cars. I bought my minivan off Craigslist.”

“How did that work?” I asked.

“It worked great,” John said.

“I bought my Mini Cooper used,” I said, “but I didn’t do it as well as I could have. I didn’t take it to a mechanic, for example.”

“I took my car to two mechanics. I wanted to be sure.”

He rattled off a few more tips. “Do your own home repairs. Use the library more — movies and books, and it’s totally free. I think that’s great. Remember: A dollar spent will never produce dividends. Money spent is gone and will never earn you anything.”

On investing
“That’s a good transition,” I said. “Let’s talk about your approach to investing.”

“I advise people to look for good investments. Take some time to do research. And think outside the box. I just re-opened my account with Reliable Credit. They offer 4%, which keeps up with inflation.” Reliable Credit is a nearby consumer finance company. But it’s not a bank. They take deposits from people like John and they loan them to high-risk clients. They do a lot of used car loans.

“The thing that worries me about Reliable Credit is that they’re not insured. There’s no FDIC insurance,” I said.

“Doesn’t bother me,” John said. “I’m not putting a whole lot in there. It’s just part of my money.”

“What would happen if you lost it all?”

“Not a big deal. I own my home. I have a guaranteed pension. I have no debt. That’s the key. Because I’ve done these other things, I can afford to take some risk. A lot of people can’t.”

“What about your other investments?” I asked.

“If you’re going to do stocks, diversify your stock holdings,” John said. “But for me, no-load mutual funds are the only way to go. To give anybody 3-4% of your money off the top is insane. It used to be I wasn’t aware how much I was paying. Once I figured it out, I thought, ‘Shit, I can make these mistakes myself. Why should I pay anybody to do it for me?’”

“I invested in small-cap funds at Columbia here in Portland. What a great move that was. Those did very well. I tracked their growth in the newspaper. Every week I drew a graph. I plotted the weekly high and the low and where it closed. I had to keep making new pages for my records because it was growing so much. I didn’t mind,” he said, laughing. “Back in the olden days, if I wasn’t getting 20% a year, I looked someplace else. But I can’t hold that up as an example — although it may happen again if things get turned around, once this economy corrects itself.”

“Does this economy worry you?” I asked.

“No. I don’t have to worry about it. I don’t need the income. I’m debt-free. If I was retired and had a mortgage or other debt, or if I had health problems, it would worry me. To my mind, even if you invest and it goes to hell, it’s still better than nothing. The odds of that are pretty slim, though, especially if you diversify.”

“What are your financial goals?” I asked.

“I used to say that when I reached $100,000 I would have arrived. But I got there so fast, I just kept going. Some people plan for retirement, but I didn’t plan. I did go to investment workshops — free workshops — that were put on for the teachers, and I learned from them. You’d be surprised at how few people showed up to them. Nobody cared.”

“When did you start to save?” I asked.

“It must have been 30 or 35 years ago,” John said. “And I’m glad I did. I think there are people who still don’t take advantage of tax-advantaged savings and investments accounts. I did this as soon as I could. I was amazed at how many teachers didn’t take advantage of this. That’s crazy.”

On choosing a lifestyle
John looked back down at his list. “Here’s another thing,” he said. “Volunteer to help others. I really think that’s an important personal lifestyle choice. It feels good to me. I used to do scouting. I had a Boy Scout troop for fifteen years.”

“You know, scouting was important for me when I was a boy,” I said. “I think it can be a great experience.”

“Sure it can,” John said. “When I was growing up, a lot of people shared things with me. It feels good to be in a place to be able to share myself now.”

“What kind of things do you share?”

“Well you know I rent the house, but it’s basically at cost. I don’t charge much at all. I host guests on my boat [in Alaska] at no charge. I do my work in New Zealand. Earlier today I picked up some sheet metal. I went and bought some scrap sheet metal and I took it in to Franklin High School. I took it to their metal shop. They can really make use of that.”

“What do you splurge on?” I asked. I’ve seen the things John owns. They’re very functional. He doesn’t have a lot that I would consider “fun”.

“Some people would say that buying a boat is a splurge,” he said. “But I bought that boat right. I bought it for less than market value. I’ve taken care of it. I’ll get a lot more use out of it.”

“I guess I could eliminate a couple thousand dollars airfare getting to New Zealand and back, but I spend very little money when I get there. If I spend a couple hundred dollars in New Zealand, I’d be surprised.”

“How do you keep your costs so low there?”

“I work on farms. I’m part of Willing Workers on Organic Farms. You travel to someplace and do work on their farms for them. They provide room and board. Sometimes they take you to do local stuff. This year I got to see sheepdog trials. That was fun. Anyhow, I do carpentry work. I build stuff and fix things. There are four farms I go to, about three weeks at a time, and I do what needs done.”

He paused for a moment and smiled. “But Alaska is just for fun.”

“How long have you been doing this now?”

“I’ve been doing this for about fifteen years, ever since I was retired. Back when I was 58.”

Reader questions
We’d come to the end of John’s list, but we weren’t finished yet. “I told some of my readers that I was going to interview you,” I said. “They sent in some questions. Would you be willing to answer them?”

“Sure. Of course.”

“Annie Blue wants to know how money affects your daily happiness.”

“Well,” he said. “I can buy whatever I want. Not need, but want. I just don’t want very much. I always have $100 in my pocket, but I don’t piss it away. I don’t stop for coffee. I seldom eat out.”

“I understand why people buy things,” he said, “I like to buy things, too. There’s a certain satisfaction in looking at the things you’ve accumulated. It’s like an affirmation that you’re doing things right. So you surround yourself with things that make you think you’re doing well — but they’re not necessary. That’s one of the advantages of being older. People just leave you alone to do what you want.”

“Next,” I said, “Suburban Dollar wants to know what advice you’d give to a 30-year-old.”

“Spend less than you earn. This is true whether you’re on welfare or a millionaire. And remember: wealth is created by investing money, not by working longer and harder.”

“Here’s another thing,” he said. “Remember that when you’re raising kids and stuff, that’s really hard. The demands on your money are so great. But you’ve got to be willing to say no. So much money is pissed away to keep kids happy.” (John has grown children. He’s speaking from experience.)

“Here’s a final question from Bill in Detroit,” I said. “He wants to know if outer wealth causes inner wealth. Or is it the other way around? Or are they completely disconnected?”

“There’s a lot of personal power from personal spending,” John said. “If I’m feeling down in the dumps, going out and buying something gives me a lift. But I’m aware of that. I’m aware of how it makes me feel and it helps me to not do it.”

“I think it all has to do with how you feel about yourself,” John said. “I learned long ago that it was okay to spend less than I earned. It wasn’t going to kill me. And I learned that by doing so, I felt really good about myself. I still do. I’m happy. I feel really comfortable.”

I thanked John for answering my questions, and we walked out to look at the vegetable garden. He admired our onions and peas and asparagus. We discussed whether it was time to rototill. At last, we shook hands and said our farewells. I was headed to California in the morning, and he was off to Alaska. He’ll be there until about the time his grapes are ready to harvest in September. I’ll miss him while he’s gone. But if I’m lucky, I just might get to spend a week with him on his boat this summer, catching a glimpse of what early retirement is like.

Diversification

2009-04-28T12:49:00.005+08:00

I read from ChristianPF a interesting article on diversification based on the word of God and would like to share it with you.

Blessed day!

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Diversification strategy from the Bible
http://www.christianpf.com/diversification-strategy-from-the-bible/

One of the common tenents of safe and prudent investing has been to keep your investments properly diversified. If you think about it a little bit, it is really common sense if you are trying to minimize risk. Why have all your eggs in one basket, when you can have them spread around into 7-8 baskets. That way if one of them falls, you can still make some scrambled eggs for breakfast!

I get such a kick out of it when I find scriptures that are still amazingly relevant to our lives today that were written thousands of years ago. Hurray for the timelessness of the Bible!

Diversification scripture

Solomon actually left us with some investment advice about proper diversification in Ecclesiates 11:2

“Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”

So, this is great that the Bible has specific advice about diversifying, but it gets better… I just
finished reading an article by Robert Katz in which he was talking about this same verse of scripture mentioned above. Robert goes on to talk about a recent study that was done comparing a variety of asset allocation (or diversification) strategies over the last 37 years to see how they compare…

Dr. Israelsen had decided to study various asset allocations, such as a
one-asset portfolio (all cash), two-asset portfolios (cash and bonds),
three-asset portfolios (cash,bonds and large U.S. stocks), etc., up to
seven-asset classportfolios. He also studied traditional portfolio mixes, such
as 60 percent stocks and 40 percent bonds, or 40 percent stocks and 60 percent
bonds. He studied a total of ten possible portfolio combinations. He then
compiled statistical data on each portfolio for the last thirty-seven years to
see which would produce the highest return on your investments with the lowest
amount of risk.

Here is the truly amazing part that was like an arrow of revelation hitting
me as I read his study. The absolute best portfolio allocation, providing an
average yield of 11.25% over thirty-seven years with the lowest standard
deviations for risk, was the portfolio that included all seven assets. In fact, with this portfolio, the chance of losing 10 percent or more of the value of
your portfolio in any one year was zero.

I love when Science “discovers” something that has been in the Bible for thousands of years.

The seven asset classes

Now Solomon didn’t specify which asset classes to invest in, so we have to take care of that part ourselves. Robert has seven that he recommends and I assume that he talks about this in his book The Solomon Portfolio but his recommended seven asset classes are…

Large-cap U.S. stocks
Small-cap U.S. stocks
Non-U.S.stocks
Commodities
Real Estate Investment Trusts (REITs)
Intermediate bonds
Cash

According to Robert all seven investments should be made and maintained in equal portions.

How to control your spending

2009-04-04T16:22:00.003+08:00

It's been some challenging times that we are now living in. The economy doesn't look good but on a bright side (looking at the glass half full), the opportunity to be a good steward is here. My aim is to acknowledge Him in all my ways, gather little by little and be a good steward.

Here is something that I read from Christpf.com
http://www.christianpf.com/how-to-control-spending/

Have a blessed day!

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How to control spending

Control your Spending
The day Janet came to see me she appeared to have it made: years into retirement, she had a few hundred thousand in various savings accounts, a house that was paid off, and financial freedom. However, what appeared to be built on solid ground in reality had a foundation made of sand, and possessed the ability to become quicksand if immediate financial remedies were not administered.

Janet lived a secret life as a closet shopaholic. Her late husband had kept her on a very short leash. She had no freedom to spend any money on herself while her husband was alive, and after he passed away, she became addicted to spending. It started out harmless enough with a few trips to the department stores, and then she upped the ante by watching the home shopping networks. Before she knew it, she was hooked. She spent hours by the TV, scouring for good deals and spending thousands of dollars a day on purchases she was not even opening when the items were delivered.

She often bought things she already owned from previous episodes. She became a collector, collecting the day’s latest sales. She wanted to stop, but she couldn’t. She was like a heroin addict who kept saying, “Just one more fix, one more. This is it, I promise.” This went on for years. Her daughters were even deceived by their mom’s habits. It wasn’t until Janet and I met that we began to look at the symptoms of her problems and how close she actually was to financial disaster. After “financial” therapy, Janet is back on track. We need to explore what money meant to her and develop new healthier behaviors. She has learned how to get her spending under control, give money to causes she cares deeply about, and still have financial freedom.

Put your spending under God’s control
Once you recognize that you are a steward of God’s resources, you often will begin to look at spending from the vantage point of whether He will be pleased with the purchase. Also, discover the factors that drive you to spend money. This could be anything from self-esteem to feeling like you just need a pick-me-up. When you go to shop, justify the reason why you are going, set a spending limit, and have a written list of what you need. This will help you avoid the many spending pitfalls.

A great way to control spending is to find a partner to hold you accountable for everything you spend for a specified period of time.

Ecclesiastes 4:9-10 “Two are better than one because they have a good return for their labor. For if either of them falls, the one will lift up his companion. But woe to the one who falls when there is not another to lift him up”

When accountability is in place, your partner is aware of your weak spots and you both can focus on ways to become more cautious with your spending habits. If looking keeps you tempted, don’t look. Window-shopping often leads to purchasing. One great way to maintain accountability is to develop a spending record.
Keep a list of spending and purchases and share these with your accountability partner. This list will include everyday items as well as monthly items. Review this at least twice a month with your partner. Pray for and encourage each other.

Financial Freedom Can Become Your Reality!
Wealth comes to those who spend carefully, use debt wisely, and develop a regular savings program. There are some common threads that run throughout many areas of one’s financial life. When I look at where the typical family in America is financially, I am saddened. I believe that if each family lived with these rules, the world would be a much better place:

Live below your means.
Allocate time, energy, and money efficiently to build wealth.
Turn to God in times of need.
Question needs versus wants.
Financial freedom is more important than high social status.

Are you working for your money or is your money working for you? Until you learn how to control spending, it doesn’t matter how much you make, it will be difficult to achieve true financial freedom!

Happy and Prosperous Chinese New Year !

2009-01-28T13:33:00.004+08:00

Happy Chinese New Year ! This week is the festive season for all chinese around the world and the greeting 'Gong Xi Fa Chai' had the connotation for prosperity. For a believer, is it fine to be wealthy - it is fine to be rich? I have come across one who stumbled that Christians cannot be rich. We have to be clear of God's word for us. Recently, I come across a article for Jay Peroni which I attached below for you reading pleasure.

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From a Biblical Perspective, Is it OK to Seek Wealth?

Written by: Jay Peroni on January 5, 2009 8:00 PM

http://www.jayperoni.com/2009/01/from-a-biblical-perspective-is-1.php

If You're Going to Quote the Bible, Get it Right!

We have often heard the 1 Timothy 6:10 misquoted by many. Many reason "money is the root of all evil". Yet they neglect to include the three most important words in that verse "the love of". It is when we love money that it becomes evil. When we put money above God than it becomes a bad thing.

Money when used properly is a blessing! Have you ever noticed that most of the great men of the Bible were fantastically wealthy? Coincidence? Hardly! Well, what about the Rich Young Ruler? Why did Jesus tell him to give up all his worldly possessions and follow Jesus? Why do Matthew, Mark, and Luke conclude, "It is hard for a rich man to enter the kingdom of heaven?" So is pursuing wealth good or bad?

The First Question

Why are you accumulating wealth? This is the central question to determine if pursuing wealth is good or bad for you. You see...it all starts with your attitude. Money is morally neutral. Your attitude reflects what is truly important to you. Pursuing wealth can be a good or bad thing based solely on your attitude or reason for accumulating.

You may be struggling financially so pursuing wealth is merely a way to survive as you struggle paycheck to paycheck. Well...what if you have a surplus? Shouldn't you be giving it all away? Why should you continue to accumulate wealth when so many people need help?

The Answer

God gives us the answers to almost every question we have in His Word. First, let's look at a few reasons why you shouldn't accumulate wealth:

* Accumulating wealth because the world tells you to. Financial planners tell us to invest for our future. Well what about today? Why are you investing in the first place? Seek good counsel, but look at the purpose and motivation behind your money.

* Accumulating wealth because of greed or envy. Wanting more and more is an endless game. Trying to keep up with the Jones is just foolish. Envy is not a part of God's plan for your life. Wealth is not a game. He that accumulates the most things does not win. Have you ever seen a U-Haul going to the cemetery? As a manager for God, we will all stand accountable before him to justify our financial management. We should all long to hear the words, "Well done good and faithful servant!"

* Accumulating wealth to increase your power, self-esteem, or self-worth. If you correlate accumulating wealth with your self-esteem, this is a dangerous road. Self-worth is found only in Christ. No amount of wealth on earth will ever satisfy or fulfill you. Money and happiness do not go hand in hand. Contentment in Christ goes beyond this world.

* Accumulating wealth because for protection. This world offers no guarantees. Wealth comes and goes. No amount of money can protect you from sickness, from injury, from losing it all. True protection is tied to your personal relationship with God through Jesus Christ. Do you know Him as your savior/ Do you have a relationship with him?

So I Shouldn't Pursue Wealth?

So now that we've looked at reasons not to pursue wealth. Why in the world should you pursue wealth? What are some God-honoring reasons to accumulate wealth? What are the requirements of a proper, godly wealth accumulation attitude?

God's Word gives us a response: use wealth to build his kingdom. In other words, use wealth to be able to give more freely, more generously, and more cheerfully. Just as Romans 12: says "let him give generously...". Wealth with a purpose is not only biblical, it is what God desires for His people. Now don't hear me wrong. I'm not saying God wants all of his people to be rich. What I am saying is that God desires us to be willing to seek out the needs of others with the heart of God.

Some questions for you to consider:

What has God entrusted to you?

What has He given you the ability to do with His wealth?

How do you reinvest His investment in you?

Do you use it for your own good or do you use it to help the Kingdom?

So why accumulate wealth? It's all a matter of your attitude!

Contentment

2008-12-30T16:53:00.009+08:00

This month had been great spending time with family and friends. While the world go truth the cycle of financial volitility (which affects my investments as well), I am learning to be a good steward of His providence and also to be a blessing by giving.

This week I walk through the issue of contentment - the verse that reminds me is in 1 Tim 6:6

But godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it. But if we have food and clothing, we will be content with that.

Learning that my basic needs are food and clothing was a good reminder. It is not to live like a miser but to live modestly.

With this I leave this article that I read recently. Wishing all a blessed Christmas and Happy 2009 !

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http://www.getrichslowly.org/blog/2008/12/27/learning-to-living-modestly/

Frugality is all the rage. And a good thing too. With the economic situation as it is, we had better learn to take pleasure from the simple things if we want to keep our sense of balance and be able to sleep at night.

The rise of materialism
Before the advent of retirement savings plans, government pensions and a social safety net, most people had to save without incentive by living modestly. Frivolous, uncontrolled spending was virtually unheard of because the risks were so huge. If you go into homes that are 60 years old, the cupboards are tiny. That’s because nobody had much stuff. Kids slept two or more to a room, sometimes two to a bed! And people made do with just one or two of anything.
How many different pots do you have in your kitchen? How many pairs of shoes do you own? What about sweaters, t-shirts, pants, skirts, bottles of perfume, ties, scarves, purses, face creams? How about CDs and DVDs? What about sound devices like radios, stereos, iPods? How many telephones are there in your house? How many televisions? How many tools, hair clips, sets of dishes?

How much of your life’s energy have you converted into Stuff?

Learning to live modestly
Never mind beating yourself up for past waste. That’s a waste of energy too. But think about what you’ve been spending, and what you might need that money for in the future — like food or medical care. Think about how much you already have, and whether you actually have to spend any more money for while. Maybe it’s time for a Spending Holiday.

Figure out what it takes to live modestly for a month. You’ll need to cover your regular bills, such as:

Mortgage or rent
Utilities
Car payment and gas for work
Food, etc.

Once you think you’ve got the bare bones covered — the bare bones — then look at how much cash you think you’ll have to spend (since many bills come right out of your account.) Planning to spend $600 this month on everything from groceries to gas to your sister birthday present? Cut that in half and challenge yourself to live on less.

The power of saving
Before you throw your hands up and say, “Ridiculous”, just try it. There’s no failure here. It’s an experiment. It’s to see if it can be done. After all, even if you miss by $150, you’ve still spent much less than you thought was possible. Hit the mark and you’ve experienced living modestly and saving money at the same time. Double Whammy!

How much could you save every year if you decided to live modestly? How much less Stuff would you have? How much happier could you be?

Save just $200 a month by living modestly, put it in an RRSP (or Roth IRA) earning an average of 5%, reinvest your tax refund, and in 25 years you’ll have $90,000. Save $300 a month and you’d have $134,000. Save $500 a month and you’d have $224,000. Amazing!

Living modestly usually means battling the motivations to spend: advertising, friends and their new acquisitions, the mall. It often means taking a little more time to find what you need, and really really really wanting it before you buy it. And it means being willing to accept that what you already have is good enough.

I have so much Stuff that’s not only good enough, but great, that I shouldn’t have to spend a cent for quite some time. I wonder how long I’ll last?

Money and the Bible

2008-11-18T12:58:00.007+08:00

I believe you have heard this saying that the Bible talks more about money in the Bible than Heaven and hell put together. This is true and on the web, bloggers have been written on this. One good source of this list can be found in this article by christianpf. If you like to research on the word directly, you can go to BibleGateway.

Some of the verses (promises) that I am putting it to memory and declaring it are:

Budgeting
Proverbs 6:6-8 Go to the ant, sluggard; consider her ways and be wise; who having no guide, overseer, or ruler, provides her food in the summer and gathers her food in the harvest.

Contentment
Matthew 6:31-33 “Do not worry then, saying, ‘What will we eat?’ or ‘What will we drink?’ or ‘What will we wear for clothing?’ “For the Gentiles eagerly seek all these things; for your heavenly Father knows that you need all these things. “But seek first His kingdom and His righteousness, and all these things will be added to you.

Debt Scripture
Proverbs 22:7 The rich rules over the poor, and the borrower becomes the lender’s slave.

Romans 13:8 Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law.

Investing Strategy
Proverbs 13:11 Dishonest money dwindles away, but he who gathers money little by little makes it grow.

Proverbs 21:5 The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.

Giving
Luke 6:38 Give, and it will be given to you. They will pour into your lap a good measure, pressed down, shaken together, and running over. For by your standard of measure it will be measured to you in return.

There are many others, do search for them. With them, act by declaring them on your life, live a life of obedience to His word and delight in the Lord.

Have a blessed day.

Why buy a used car?

2008-11-14T17:13:00.010+08:00

It's been some weeks since I have updated this blog. The last few weeks had been interesting. The global financial shaking as well as the change in the certain political issues have had some effect in the altitude of how people are spending their money. In a way, the equities are now getting into value and some in bargain.

Due to the growing family, I been looking at the used car market to evaluate a certain model that I am interested in. Prices of used cars are now attractive. Only thing is my own car is also lower in evaluation and I bought it new. Will probably change the car when it's worn out in a couple of years or when there is a major catalyst.

For those interested to find out some supporting facts of buying a used car, I have included some websites that I been reading.

Why buy a used car by Dave Ramsey
Car Shopping by Dave Ramsey
Don't let your car own you by Dave Ramsey
Cars-Financial Freedom by christianpf

Be a good steward and have a blessed day!

Christians and Debt

2008-09-17T11:36:00.005+08:00

This is another interesting article I read about debt. Happy reading and that you will be 'freed'.

Have a blessed day.
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http://www.christianpf.com/christians-and-debt/

Should a Christian be in Debt?

The Bible makes it clear that being in debt is not God's best for us. I haven't found anything to indicate that it is a sin for a Christian to be in debt (unless of course you are disobeying God's personal instruction for you), but Jesus came to set us free, not make us slaves. Therefore, when Proverbs says "the borrower is slave to the lender," I get the impression that God wants us to be debt-free.

We live in a unique time, with unique challenges. We are inundated with so much advertising and marketing almost everywhere we go. The world is screaming a lot of things, and most of them aren't in agreement with what God is whispering to us.

It is a challenge to live within your means. Especially when you see so many others living way beyond their means and enjoying the fleeting pleasures of the moment. It requires great sacrifice to see long term and to think beyond what our flesh wants right now.

Debt is NOT normal

I am not going to go on a tirade against credit cards or car loans right now, but we have got to start understanding that debt is not normal. Just because most of society calls it normal and good does not make it either of those.

Isaiah 5:20
Woe to those who call evil good, and good evil;Who substitute darkness for light and light for darkness...

Just because everyone else is doing it, does not make it right!! God's principles, regardless of how few people follow them, should be our guide. Not the noise of society.

Debt is Slavery

Every time we enter into lender/borrower agreement we are actually entering into a master/slave agreement.

Proverbs 22:7
The rich rules over the poor, and the borrower becomes the lender's slave.

Just as there is a bondage that comes from being in debt, there is a opposite and equal freedom that comes from being liberated from it. I am still working on this one myself. I am doing everything I can do by being disciplined with my money and being the best steward possible. And I am trusting that God will do His part.

He wants to see us liberated from the slavery of debt more than we do. By doing our part and asking Him for help a lot of power is present to break us out of the bondage of debt.

Being Debt-Free isn't just for us

Whether God wants everyone to be a millionaire, I can not answer. But I do know that he wants all Christians to prosper.

Psalm 35:27
...And let them say continually, "The LORD be magnified,Who delights in the prosperity of His servant."

He wants us to thrive and use that which we have been blessed with to bless others. He says, we will lend to many nations and not borrow. In order to lend to others we need to get ourselves in a solid financial situation that will allow it.

That said, we need to start giving no matter what our situation looks like. It is easy to say, "Oh, I will give when I have more money to give." God wants us to give when we feel like we have nothing to give. It is a true step of faith when you give before you have an abundance.

Luke 12:41-44
And He sat down opposite the treasury, and began observing how the people were putting money into the treasury; and many rich people were putting in large sums.
A poor widow came and put in two small copper coins, which amount to a cent.
Calling His disciples to Him, He said to them, "Truly I say to you, this poor widow put in more than all the contributors to the treasury;
for they all put in out of their surplus, but she, out of her poverty, put in all she owned, all she had to live on."

Sowing seed for the harvest

The Bible makes it clear that we will reap what we sow. Once you start thinking of that like a farmer it makes it a lot easier...

I am getting ready to plant some tomato, lettuce, herbs, and a bunch of other seeds. I know that if I don't drop any seed in the ground, I will not get any of the harvest in a few months. But if I do plant those seeds, I can count on receiving a bunch of tomatoes, peppers, lettuce and everything else that I sow.

We need to look at every dollar we have as seed. We can either spend it on ourselves or we can sow it into the Kingdom of God (our local church) or sow it into someone else's life.

Galatians 6:7
Do not be deceived: God cannot be mocked. A man reaps what he sows.

It is okay to expect a harvest for what you sow. God said it. We can trust Him. Let's make it a point this week to sow a little bit more seed, and just see what God does.

Drive free cars

2008-09-05T11:14:00.002+08:00

I had read Dave Ramsey's book on Total Money makeover and recently stumble into his website and saw his video presentation on a method of driving free cars.

http://www.daveramsey.com/etc/lms/drive_free/

The context may be for the US but it could still be applicable in Singapore. Start with a motorcycle or COE car, continue to pay the instalments to your own account. When the time comes in a few years, upgrade to another pre-owned car with the amount and continue with the cycle. It's workable. Claim it with the wisdom our Heavenly Father has given us!

Have a blessed day!

The Bible and debt

2008-08-21T11:42:00.004+08:00

I had been memorising Psalm 146 and Ps 146:7 mentions that He came to set prisoners free. While being the word prisoner literally means being captive, aren't we in a way being a prisoner of debt. Debt can be found in loans we take for our homes, cars and for some credit cards. While we can say we need a loan for a house, it is still a debt. However our Father wants to set you free from it too.

Here is a article about the bible and debt writen in www.christianpf.com/the-bible-and-debt.

Have a blessed day!

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Before you begin your journey to get out of debt, it is important to know what the Bible says about debt. You can then use these truths to build your faith since faith comes by hearing the word. Once you have a solid understanding of what God has to say about the issue, then you can boldly pray about your debt in faith.

What does the Bible say about Debt?
The borrower is slave to the lender. When you are in debt to another, you enter into a slave/master relationship with your creditor. (Proverbs 22:7)
God wants us to lend to others. Obviously, this is difficult if you don't have anything to lend. (Deuteronomy 15:6, 28:12, Matthew 5:24)
We are required to pay back what we borrowed. It is easy to take this lightly, but if we borrowed it, we should pay it back. (Psalm 37:21, Ecclesiastes 5:4).

What the Bible does NOT say about debt
That it is a sin to be in debt. Like mentioned above, it is not God's best for us, but the Bible does not say that it is a sin.
There are no instances in the Bible where God provides through a loan. He provided for His people in many ways but loans were not one of them. That is something to think about next time you get tempted to reach for the credit card. (added later: see the comments below regarding this. A reader pointed out an instance where God did encourage borrowing)

Here are some more

Bible verses about debt.

What are the Biblical promises about debt
The way I look at it, Jesus came to set us free from the bondage of sin. We were slaves to sin, until He set us free. If He wanted to set us free in one area, why would He want us to be slaves in another?

I also love Deuteronomy 28:12:
"The Lord will open for you His good storehouse, the heavens, to give rain to your land in its season and to bless all the work of your hand; and you shall lend to many nations, but you shall not borrow."
This verse is one of the promises that I stand on when praying about my debt. The pre-requisite listed in Deuteronomy 28:1 is that we "diligently obey the Lord your God."

God can NOT keep us out of debt
I believe God would love to see His children living debt-free lives. But, as stewards of the money that He has entrusted to us we have a free will to do what we wish with it. We can choose to give it, save it, spend it, or even spend more than we have.
I also believe that God will work on our behalf to help get us out of debt, but we have a big part to play - to stop spending more than we have! It doesn't matter how much God provides - as long as we are spending more money than we have, we will always be in debt.

It's bigger than us
As Christians we have the opportunity to use our finances to build God's Kingdom. Every decision we make with our money may be much larger than we realize.
Speaking for myself, I know it is easy to get caught up in trying to store up treasures on earth, when I know I should be storing them up in heaven. Every time I do, I get a gentle nudge back on to the narrow path that I am so thankful for. Storing up treasures in heaven is the way to live!

How to save money on car depreciation

2008-07-25T10:56:00.005+08:00

My family is growing and I am looking for a bigger car. Having interest in cars since young, the urge to purchase a new car is there. However, during my financial education walk as well as now being reminded of the amount energy needed to manufacture a new car and to be a good steward, maybe a used car will be good.

Here is a good article on saving money on car depreciation. Even though it is from the States, the principles are applicable in SG. Happy reading and a blessed day =)

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How to save money on car depreciation
http://www.christianpf.com/save-money-on-car-depreciation/

Cars are terrible investments. In their most basic form, they are merely a tool to get us from A to B. In their most elaborate form they can be a "shiny" tool that gets us from A to B, but with more luxuries. But either way, they are not likely to be much of a financial benefit. Everyone has heard that a brand new car goes down hundreds or even thousands of dollars the minute you drive it off the dealer's lot.

This is just the beginning. Over the first year some cars depreciate as much as 35%. KBB.com says that the average car loses 65% of its value in the first 5 years. Add on maintenance, repairs, interest on the loan, and insurance and you can quickly see that automobiles can have quite a large negative effect on our finances. We dump all this money into our cars and what do we have to show for it? An asset that just continues to go down in value and still becomes LESS reliable. So, if we are not likely to benefit financially from our cars, how can we minimize the damage?
Minimize depreciation loss by buying used cars

I have always heard (and I agree) that a two year old car is a good age to buy, because you are still getting a fairly new car that is likely to have some amount of manufacturer warranty remaining, but yet a huge chunk of depreciation is knocked off.

SafeCarGuide.com says, "A stabilized rate of depreciation (7% - 12% per year) makes used cars a better value than new ones. New vehicles lose an average of 20% of their value the instant they are driven away from the dealership. When coupled to the average yearly depreciation of 7% to 12%, your first year's loss is anywhere from 25% to 35%. That translates to a first year $6,000 to $8,000 loss on a $22,500 new vehicle, or a $10,000 to $15,000 loss on a $40,000 one. And that's for a vehicle only driven the average 13,500 miles. If you drive more than that, your depreciation will be greater (35% to 50% for the first year)."

For more information, Bankrate.com has a good article about the basics of depreciation and although I am not sure how accurate it is, you can also try this car depreciation calculator.
A good way to find a reliable used cars is by checking Consumer reports. They are a Not-For-Profit organization that reviews thousands of products to help consumers get the most for their money. They have a very thorough and detailed list about the reliability of various different makes and model. Since they do no advertising (which helps them stay unbiased) they do charge for the service. They offer a one-month online subscription for $6.00 and a one year for $26.00. If you are in the market for a car, this would be a few bucks well spent.

If you buy a new car, plan on keeping it for a long time If you do buy new, plan on keeping it a long time. This is one of the best ways to get your money's worth out of a new car. On the other hand buying a new car and trading in the "old" one every two years is one of the worst financial moves you can make. This seems to be what many Americans are doing these days as they try to keep up with the Joneses. As mentioned earlier, it is the first two years in the life of a car that are the most expensive. So why would you want to own the car only on the most expensive years?

One of the advantages of buying new is being able to break the car in properly and having the assurance that you know how the car was cared for all of its life. If you take care of your car and stay on top of your car maintenance, many cars these days can last 200,000 miles. I recently drove past a Toyota dealership that had an old Corolla that had been driven over 500,000 miles. I need to get hold of the owner and find out what he did to keep it running that long. I will let you know

Some of the best investments

2008-07-04T13:21:00.000+08:00

It's been a month since I have penned my thoughts on my personal finance. I have not been sitting idle but been building my wisdom in this area.

Some of the best investments that I have made are :

1. Reading books and
2. Reading blogs and forums.
Apart from those that I have on my blog side bar, I found www.gatherlittlebylittle.com, www.christianpf.com and www.getrichslowly.org. Those have few websites have sparked some thinking. One of them is on the question of emergency fund - Does Jesus have an emergency fund? The other is on the area of Debt - Shouldn't we seek to be set free from it?

Being a car enthusiast, those site discusses on car-related issues as well. I will let you find out those gems yourself.

Have a blessed day!

Building my financial wisdom

2008-06-02T13:12:00.002+08:00

It's been 9 months since I first started writing about my journey in my financial education. I have read several books and would like to recommended those who are starting out as well:

1. Total Finance Make over - Dave Ramsy
2. Financial Peace / Financial Peace Revisited - Dave Ramsy
3. The Millionaire next door - Thomas Stanley
4. God own $ - Benny Ho

All the books above can be borrowed from the National Library.

In my own personal opinion, the steps towards financial freedom are small, disciplined and yet dependent. Some of those are :

a. Live within your means - budget, pay yourself 1st and rejoice with the remaining the Lord has blessed.
b. Save and Invest - Prepare the emergency fund, put aside a percentage for compounding
c. Give as much - Be a blessing cause in the end, we can't bring them along. Our children may not be financial wise to reinvest the amount.

Have a blessed day!

Surviving (and Thriving) on $12,000 a year

2008-04-22T14:45:00.006+08:00

I happen to chance on this article by Donna Freeman on Surviving (and Thriving) on $12,000 a year and her follow up article a year later.

It really shows that we can desire less. In the area of finance stewardship, having a clear goal does help. Knowing Him also shows me that He wants to bless you and me.

The word that's been brought a lot recently is complacency (For those in Spore, there is the MS case). Act on the knowledge and wisdom given. Read, ask and build on the wisdom given to us.

Have a blessed day!

Simple Living

2008-03-18T15:29:00.005+08:00

Article from a good friend and life coach. Link here

Have a blessed day!

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Hi People

We just completed teaching 5 lessons for 7 couples in TOUCH’s Marriage Preparation Course last Sunday (go to www.tcs.org.sg to find out more about the FREE lunchtime talks coming up 25 - 27 March 2008 and other family life events).

Among the topics covered is Financial Intimacy. I cannot overemphasise the importance of financial education to these eager young couples, for afterall, a long lasting successful marriage is more than just a glam wedding.

I shared with the class how we can learn from the collective wisdom of people who have been there, done that, e.g. Dave Ramsey’s book on Total Money Makeover (available in the public library and at Borders). Here is another article lifted from the internet by Janet Luhrs:

“Simple living yields simply millions in savings. Many people who lead simple lifestyles are millionaires. Their wealth is the result of hard work, perseverance, planning and self-discipline.

Many people already lead simple-living lifestyles and don’t know it. And many of them are millionaires. Proof can be found in the best-selling book, ‘’The Millionaire Next Door,” by Thomas Stanley and William Danko. You’d never guess that the subject of millionaires could have anything to do with simple living, but it does.

Compulsive savers vs. the rest of us

The millionaires in this book were not born wealthy, nor do most of them have high-level, exotic jobs. What they do have are simple lifestyles.

It’s the simple lifestyles, not the big paychecks, that turned these people into millionaires. According to the book, their wealth is the result of hard work, perseverance, planning and most of all, self-discipline.

So why aren’t all of us hard-working souls rich?

Answer: We regularly and continually give our money away to other people so they can become wealthy, while we live paycheck to paycheck. We buy the latest cars, biggest houses, full wardrobes, daily espressos, high-tech gizmos and gadgets of all kinds. As a result, we’re on treadmills, never allowing ourselves the time to create the kind of lifestyle we want.

On the other hand, the millionaires are described in the book as “compulsive savers and investors.” After surveying 1,115 millionaires around the country, authors Stanley and Danko came up with seven common denominators among those who successfully build wealth:

They live well below their means.

They allocate their time, energy and money efficiently, in ways conducive to building wealth.

They believe that financial independence is more important than displaying high social status.

Their parents did not provide economic outpatient care.

Their adult children are economically self-sufficient.

They are proficient in targeting market opportunities.

They chose the right occupations.

This list represents simple living at its finest. Here’s why. Simple living is about living consciously and with a purpose. This means being in control of your money and your life. When you save your money rather than continue spending, you buy yourself control. Then you have a say in how you’d like to spend your time.

With money saved and invested, you can live for years without earning money, or you can at least afford yourself the luxury of working part-time. This is vastly different from living paycheck to paycheck. These millionaires have created lifestyles and jobs that are meaningful to them because they took a look at the big picture and made choices accordingly.

The Millionaire Next Door:

“The flashy millionaires glamorized by the media actually represent only a tiny minority of America’s rich. Most of the truly wealthy in this country don’t live in Beverly Hills or on Park Avenue — they live next door.”

The authors say that the typical wealthy individual is a businessman who has lived in the same town for all of his adult life and owns a small factory, a chain of stores or a service company. He lives next door to people with a fraction of his wealth. Their survey indicated that while the paycheck-to-paycheck crowd drives new cars, most millionaires don’t. They’re not wearing expensive clothes and watches and their houses are relatively modest compared to their financial status.

You don’t need to be a millionaire to lead a simple life, and indeed, no one said that money equals happiness. But you can learn from millionaires how to get off the treadmill and create a satisfying life.”

In this time of financial market turmoil, when there is a crash, cash is KING! Have you got enough spare cash to tide you over the long haul or just a fading memory of the designer coffee you used to have when times were good or the designer handbag whose colour is fading in the cupboard covered with dust?

Like Dave Ramsey says: “If you will live like no one else, later you can live like no one else.”

Personal Finance - Car

2008-03-18T15:15:00.006+08:00

This is a interesting article from Musicwhiz on the cost of car ownership. (link to his article here.) I post this article here as a reminder. The cost of car ownership can be high but it can be managed well and used purposefully, the decision lies upon oneself. (I am a car owner and it brought me and my family to many places and purpose =) )

Have a blessed day!

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Personal Finance - Car

The latest news in the almost never-ending series on "inflationary" price increases includes new adjusted pump prices from Caltex for all three classes of petrol. Regular 95 now costs S$2.046 per litre, Regular 98 at S$2.12 and Premium 98 at S$2.286 per litre. As Singaporeans may know by now, there is a worldwide commodities "boom" which had led to prices of everything from steel, oil, pork and flour rising quite a bit. This has inadvertently resulted in an inflation rate of 6.6% which was recently reported in the news. Yet, when I recently passed by a car road show at Suntec City atrium (open area near Carrefour), there were scores of people literally lining up to purchase cars !

Well, this post is about cars and the cost, benefits and disadvantages of owning one. Readers should be aware by now that I do NOT own a car and have no intention of owning one in the near future. It is in my interest to evaluate the real cost of owning a car, both in monetary terms and social terms; and today's Business Times has a good article on the approximate costs of owning a car which I shall proceed to list down. Singapore is basically one of the most expensive places to purchase a car (yeah, even a second-hand one !), yet it is a fact that more and more Singaporeans are owning cars as the total car population has actually increased about 6%, such that the government has to resort to measures to limit the car population by increasing ERP charges on road usage. Sounds like a pretty drastic measure to me.....as I do not see a big problem with our current public transport system (I take buses all over the place), except for the occasional long wait and over-crowded buses.

Anyhow, let me break down the numbers according to BT and comment on them. According to the article, if you spend S$50K on a car with a 70% loan at 3% p.a interest for 7 years, then you will end up paying close to S$130K after 10 years. The breakdown is as follows:-

Cost of Car including COE - S$50K (assume a medium size car with average horsepower, though I think most families seem to like the MPV, while youngsters love the sports car variety with 2 doors)

Car Loan (70% of purchase price at 3% p.a. for 7 years) - S$7,350 >> I guess 3% per annum is a reasonable rate though I've never enquired.Insurance (S$1,500 per year for 10 years) - S$15K >> This seems like a hefty cost to me because S$1,500 per year is S$125 per month which is quite a high fixed cost. Just to provide a comparison, my monthly transport bills come up to at most S$80 to S$100 using buses.

Road Tax (S$500 per yearfor 10 years) - S$5K >> This is basially the "cost" of using roads. It's something like a TV licence fee which you have to pay even if you don't watch the TV ! So take it that this is the tax you pay just to put your car on the road (not to use the road !).

Parking Charges for Home and Office (S$250 per month x 12 x 10 years) - S$30K >> Wow, another very hefty bill to pay just to park your car ! The problem with parking is that it can be a real nuisance when car parks are full, there are insufficient spaces or it's hard to maneouvre. I personally disliked parking when I took my driving test, though I never knew that season parking charges could be so high. The author assumes S$90 per month for HDB parking I guess, while the rest of the S$160 is to park at the season lots at your office block. If you don't drive to work (which sort of defeats the purpose in having a car eh ?), then you can just assume S$90 per month in car park charges, which means S$10.8K instead of S$30K after 10 years. Still a pretty large sum by any standards.

ERP Charges (S$3 per day x 240 working days x 10 years) - S$7.2K >> OK, maybe it's my imagination, but I think most people will spend more than S$3 per day to get to and from work, especially those using CTE tunnels and hitting MULTIPLE gantries. I think some people could end up paying as much as S$6 to S$9 per day if they are "unlucky". So this cost can balloon into something of a nightmare, especially since the government is considering implementing GPS-based ERP charging. This means that you can literally be charged per kilometre of travel instead of just passing through certain roads. A scary thought, and ERP will certainly be the bane of many drivers as time passes. This is the main reason why I do not own a car; the usage of the car per month (assuming S$5 per day in ERP) easily comes up to S$100 and that's not counting petrol costs yet.

Petrol Costs (S$200 per month x 12 x 10 years) - S$24K >> Now we come to the ultimate money-drainer, which is petrol costs. The author assumes a petrol cost of S$200 per month; but this cost may vary significantly depending on your frequency of use, model of car (whether it drinks petrol like you drink water) as well as, of course, oil prices. I would say that larger cars probably need about S$80 for a full tank and if the family/individual drives often, then he needs to pump once a week which comes up to about S$320 per month. Thus, using this figure, this expense may come up to S$38.4K in 10 years time using a pessimistic scenario.

Maintenance and Repairs (S$300 per annum x 10 years) - S$3K >> Somehow I find it hard to believe that one only spends S$300 per year servicing their car. I would think a regular spare parts check would cost at least S$50 to S$100 each time, and for the total to be much higher. But I shall leave the figure as it is for now.

The rest of the assumptions are for fines and accidents, which I assume one should and would not incur unless one was driving recklesly, or drink driving ! The BT article totals up the figures to give an approximate S$132,550, which boils down to about S$1,105 per month. If you take into account the "additional" potential extra costs, the cost per month is about S$1,360. Thus, for a person who takes home about S$3K (median income level per individual), this makes owning a car very challenging indeed !To end off, all I can say is that if one forgoes a car, he can hope to achieve financial freedom sooner. But the material comforts and convenience of a car cannot be under-stated, and those who seek this or who require a car because of an infirmed member of the family or young children should ensure they work out the numbers as I had, to see if they have sufficient funds to sustain a car. As I always say, it's easy to own a car, but darn hard to maintain one !

Book Review: Dave Ramsey’s The Total Money Makeover

2008-02-28T13:28:00.005+08:00

For the past few weeks, I had some time to read a book by Dave Ramsey - The Total Money Makeover. This book can be found in our libraries.
His method is not easy. It is not a get rich quick scheme. It requires sacrifice, hard work, and focus. In fact, printed on the bottom of every page of The Total Money Makeover is the book's motto:

If you will live like no one else, later you can live like no one else.

Dave explains: 'If you make the sacrifice now that most people are willing to make, later on you will be able to live as those folks will never be able to live.' Filled in the book are testimonies of people who has use this philosophy.

The seven baby steps are :
1. Save $1000 as a Starter Emergency Fund
2. Debt snowball - pay down debt (become debt free except for the house)
3. Finish building the emergency fund - Kick Murphy out
4. Invest 15 percent of your income in retirement (for me, at least $2.5K a year)
5. Save for children's education. (Why? Don't pass a legacy of debt like study loan to my children, Look also into scholarships, bursaries)
6. Pay off the Home Mortgage. Read the myths and truths - can you really make the extra 2-4 % over the CPF rate? When the smoke clears, we really don't make a lot.
7. Build wealth

Have a blessed day!

A detailed review by another blogger can also be found here.

What is Financial wisdom?

2008-01-30T13:19:00.000+08:00

A story was told of a cunning but dishonest servant who was about to lose his job. He called in his master's debtors and started reducing their debts. The master, instead of punishing the servant, commended him for being wise. Some of us has a problem with this parable. How can dishonesty be commended? What is the lesson of this parable ? This parable teaches us a basic lesson - relationship is more important than money. Use worldly wealth to gain friends for the Kingdom of our Lord, friends whom you can help to send to heaven.

A wise man said - 'Be wise! There are two things that will last for eternity - the Word of God and the souls of men. Use money to send these souls in advance to heaven! The bank in Heaven does not transact in money but in souls. In the years to come, focus on reaching your community! Be generous when it comes to spending money on the lost because it is the wisest thing to do with your money.'

Rich Man, Poor Man

2008-01-07T13:10:00.000+08:00

I was reading my friend's blog that talks about parenting, children, family and finance. This friend has not just the theories but also the process and the end results. Therefore I would like to share this with you. His blogsite is http://simonsimple.blogsome.com/

One of the articles he written is on finance enhancement and he reproduce a article by Richard Russel verbatim.

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Rich Man, Poor Man
By Richard Russell

Making money entails a lot more than predicting which way the stock or bond markets are heading or trying to figure which stock or fund will double over the next few years. For the great majority of investors, making money requires a plan, self-discipline, and desire. I say “for the great majority of people,” because if you’re a Steven Spielberg or a Bill Gates you don’t have to know about the Dow or the markets or about yields or price/earnings ratios. You’re a phenomenon in your own field, and you’re going to make big money as a by-product of your talent and ability. But this kind of genius is rare.

For the average investor, you and me, we’re not geniuses so we have to have a financial plan. In view of this, I offer below a few rules and a few thoughts on investing that we must be aware of if we are serious about making money.

I. The Power of Compounding

Rule 1: Compounding
One of the most important lessons for living in the modern world is that to survive you’ve got to have money. But to live (survive) happily, you must have love, health (mental and physical), freedom, intellectual stimulation — and money. When I taught my kids about money, the first thing I taught them was the use of the “money bible.” What’s the money bible? Simple, it’s a volume of the compounding interest tables.

Compounding is the royal road to riches. Compounding is the safe road, the sure road, and fortunately anybody can do it. To compound successfully you need the following: perseverance in order to keep you firmly on the savings path. You need intelligence in order to understand what you are doing and why. You need knowledge of the mathematical tables in order to comprehend the amazing rewards that will come to you if you faithfully follow the compounding road. And, of course, you need time, time to allow the power of compounding to work for you. Remember, compounding only works through time.

But there are two catches in the compounding process. The first is obvious — compounding may involve sacrifice (you can’t spend it and still save it). Second, compounding is boring — b-o-r-i-n-g. Or I should say it’s boring until (after seven or eight years) the money starts to pour in. Then, believe me, compounding becomes very interesting. In fact, it becomes downright fascinating!

In order to emphasize the power of compounding, I am including the following extraordinary study, courtesy of Market Logic, of Ft. Lauderdale, FL 33306.
In this study we assume that investor B opens an IRA at age 19. For seven consecutive periods he puts $2,000 into his IRA at an average growth rate of 10% (7% interest plus growth). After seven years this fellow makes NO MORE contributions — he’s finished.
A second investor, A, makes no contributions until age 26 (this is the age when investor B was finished with his contributions). Then A continues faithfully to contribute $2,000 every year until he’s 65 (at the same theoretical 10% rate).
Now study the incredible results. B, who made his contributions earlier and who made only seven contributions, ends up with MORE money than A, who made 40 contributions but at a LATER TIME. The difference in the two is that B had seven more early years of compounding than A. Those seven early years were worth more than all of A’s 33 additional contributions.
This is a study that I suggest you show to your kids. It’s a study I’ve lived by, and I can tell you, “It works.” You can work your compounding with muni-bonds, with a good money market fund, with T-bills, or say with five-year T-notes.

Rule 2: Don’t Lose Money
This may sound naive, but believe me it isn’t. If you want to be wealthy, you must not lose money; or I should say, you must not lose BIG money. Absurd rule, silly rule? Maybe, but MOST PEOPLE LOSE MONEY in disastrous investments, gambling, rotten business deals, greed, poor timing. Yes, after almost five decades of investing and talking to investors, I can tell you that most people definitely DO lose money, lose big-time — in the stock market, in options and futures, in real estate, in bad loans, in mindless gambling, and in their own businesses.

Rule 3: Rich Man, Poor Man
In the investment world the wealthy investor has one major advantage over the little guy, the stock market amateur, and the neophyte trader. The advantage that the wealthy investor enjoys is that HE DOESN’T NEED THE MARKETS. I can’t begin to tell you what a difference that makes, both in one’s mental attitude and in the way one actually handles one’s money.

The wealthy investor doesn’t need the markets, because he already has all the income he needs. He has money coming in via bonds, T-bills, money-market funds, stocks, and real estate. In other words, the wealthy investor never feels pressured to “make money” in the market.
The wealthy investor tends to be an expert on values. When bonds are cheap and bond yields are irresistibly high, he buys bonds. When stocks are on the bargain table and stock yields are attractive, he buys stocks. When real estate is a great value, he buys real estate. When great art or fine jewelry or gold is on the “giveaway” table, he buys art or diamonds or gold. In other words, the wealthy investor puts his money where the great values are.
And if no outstanding values are available, the wealthy investors waits. He can afford to wait. He has money coming in daily, weekly, monthly. The wealthy investor knows what he is looking for, and he doesn’t mind waiting months or even years for his next investment (they call that patience).

But what about the little guy? This fellow always feels pressured to “make money.” And in return he’s always pressuring the market to “do something” for him. But sadly, the market isn’t interested. When the little guy isn’t buying stocks offering 1% or 2% yields, he’s off to Las Vegas or Atlantic City trying to beat the house at roulette. Or he’s spending 20 bucks a week on lottery tickets, or he’s “investing” in some crackpot scheme that his neighbor told him about (in strictest confidence, of course).

And because the little guy is trying to force the market to do something for him, he’s a guaranteed loser. The little guy doesn’t understand values, so he constantly overpays. He doesn’t comprehend the power of compounding, and he doesn’t understand money. He’s never heard the adage, “He who understands interest, earns it. He who doesn’t understand interest, pays it.” The little guy is the typical American, and he’s deeply in debt.

The little guy is in hock up to his ears. As a result, he’s always sweating — sweating to make payments on his house, his refrigerator, his car, or his lawn mower. He’s impatient, and he feels perpetually put upon. He tells himself that he has to make money — fast. And he dreams of those “big, juicy mega-bucks.” In the end, the little guy wastes his money in the market, or he loses his money gambling, or he dribbles it away on senseless schemes. In short, this “money-nerd” spends his life dashing up the financial down escalator.

But here’s the ironic part of it. If, from the beginning, the little guy had adopted a strict policy of never spending more than he made, if he had taken his extra savings and compounded it in intelligent, income-producing securities, then in due time he’d have money coming in daily, weekly, monthly, just like the rich man. The little guy would have become a financial winner, instead of a pathetic loser.

Rule 4: Values
The only time the average investor should stray outside the basic compounding system is when a given market offers outstanding value. I judge an investment to be a great value when it offers (a) safety, (b) an attractive return, and (c) a good chance of appreciating in price. At all other times, the compounding route is safer and probably a lot more profitable, at least in the long run.

II. Time
TIME: Here’s something they won’t tell you at your local brokerage office or in the “How to Beat the Market” books. All investing and speculation is basically an exercise in attempting to beat time.
“Russell, what are you talking about?”
Just what I said — when you try to pick the winning stock or when you try to sell out near the top of a bull market or when you try in-and-out trading, you may not realize it but what you’re doing is trying to beat time.
Time is the single most valuable asset you can ever have in your investment arsenal. The problem is that none of us has enough of it.

But let’s indulge in a bit of fantasy. Let’s say you have 200 years to live, 200 years in which to invest. Here’s what you could do. You could buy $20,000 worth of municipal bonds yielding, say, 5.5%.
At 5.5% money doubles in 13 years. So here’s your plan: each time your money doubles you add another $10,000. So at the end of 13 years you have $40,000 plus the $10,000 you’ve added, meaning that at the end of 13 years you have $50,000.

At the end of the next 13 years you have $100,000, you add $10,000, and then you have $110,000. You reinvest it all in 5.5% munis, and at the end of the next 13 years you have $220,000 and you add $10,000, making it $230,000.

At the end of the next 13 years you have $460,000 and you add $10,000, making it $470,000.
In 200 years there are 15.3 doubles. You do the math. By the end of the 200th year you wouldn’t know what to do with all your money. It would be coming out of your ears. And all with minimum risk.
So with enough time, you would be rich — guaranteed. You wouldn’t have to waste any time picking the right stock or the right group or the right mutual fund. You would just compound your way to riches, using your greatest asset: time.

There’s only one problem: in the real world you’re not going to live 200 years. But if you start young enough or if you start your kids early, you or they might have anywhere from 30 to 60 years of time ahead of you.
Because most people have run out of time, they spend endless hours and nervous energy trying to beat time, which, by the way, is really what investing is all about. Pick a stock that advances from 3 to 100, and if you’ve put enough money in that stock you’ll have beaten time. Or join a company that gives you a million options, and your option moves up from 3 to 25 and again you’ve beaten time.

How about this real example of beating time. John Walter joined AT&T, but after nine short months he was out of a job. The complaint was that Walter “lacked intellectual leadership.” Walter got $26 million for that little stint in a severance package. That’s what you call really beating time. Of course, a few of us might have another word for it — and for AT&T.

III. Hope
HOPE: It’s human nature to be optimistic. It’s human nature to hope. Furthermore, hope is a component of a healthy state of mind. Hope is the opposite of negativity. Negativity in life can lead to anger, disappointment, and depression. After all, if the world is a negative place, what’s the point of living in it? To be negative is to be anti-life.

Ironically, it doesn’t work that way in the stock market. In the stock market hope is a hindrence, not a help. Once you take a position in a stock, you obviously want that stock to advance. But if the stock you bought is a real value, and you bought it right, you should be content to sit with that stock in the knowledge that over time its value will out without your help, without your hoping.

So in the case of this stock, you have value on your side — and all you need is patience. In the end, your patience will pay off with a higher price for your stock. Hope shouldn’t play any part in this process. You don’t need hope, because you bought the stock when it was a great value, and you bought it at the right time.
Any time you find yourself hoping in this business, the odds are that you are on the wrong path — or that you did something stupid that should be corrected.

Unfortunately, hope is a money-loser in the investment business. This is counterintuitive but true. Hope will keep you riding a stock that is headed down. Hope will keep you from taking a small loss and, instead, allow that small loss to develop into a large loss.

In the stock market hope gets in the way of reality, hope gets in the way of common sense. One of the first rules in investing is “don’t take the big loss.” In order to do that, you’ve got to be willing to take a small loss.
If the stock market turns bearish, and you’re staying put with your whole position, and you’re HOPING that what you see is not really happening — then welcome to poverty city. In this situation, all your hoping isn’t going to save you or make you a penny. In fact, in this situation hope is the devil that bids you to sit — while your portfolio of stocks goes down the drain.

In the investing business my suggestion is that you avoid hope. Forget the siren, hope; instead, embrace cold, clear reality.

IV. Acting
ACTING: A few days ago a young subscriber asked me, “Russell, you’ve been dealing with the markets since the late 1940s. This is a strange question, but what is the most important lesson you’ve learned in all that time?”
I didn’t have to think too long. I told him, “The most important lesson I’ve learned comes from something Freud said. He said, ‘Thinking is rehearsing.’ What Freud meant was that thinking is no substitute for acting. In this world, in investing, in any field, there is no substitute for taking action.”
This brings up another story which illustrates the same theme. J.P. Morgan was “Master of the Universe” back in the 1920s. One day a young man came up to Morgan and said, “Mr. Morgan, I’m sorry to bother you, but I own some stocks that have been acting poorly, and I’m very anxious about these stocks. In fact worrying about those stocks is starting to ruin my health. Yet, I still like the stocks. It’s a terrible dilemma. What do you think I should do, sir?”
Without hesitating Morgan said, “Young man, sell to the sleeping point.”
The lesson is the same. There’s no substitute for acting. In the business of investing or the business of life, thinking is not going to do it for you. Thinking is just rehearsing. You must learn to act.

That’s the single most important lesson that I’ve learned in this business.
Again, and I’ve written about this episode before, a very wealthy and successful investor once said to me, “Russell, do you know why stockbrokers never become rich in this business?”
I confessed that I didn’t know. He explained, “They don’t get rich because they never believe their own bullshit.”
Again, it’s the same lesson. If you want to make money (or get rich) in a bull market, thinking and talking isn’t going to do it. You’ve got to buy stocks. Brokers never do that. Do you know one broker who has?
A painful lesson: Back in 1991 when we had a perfect opportunity, we could have ended Saddam Hussein’s career, and we could have done it with ease. But those in command, for political reasons, didn’t want to face the adverse publicity of taking additional US casualties. So we stopped short, and Saddam was home free. We were afraid to act. And now we’re dealing with that failure to act with another and messier war.
In my own life many of the mistakes I’ve made have come because I forgot or ignored the “acting lesson.” Thinking is rehearsing, and I was rehearsing instead of acting. Bad marriages, bad investments, lost opportunities, bad business decisions — all made worse because we fail for any number of reasons to act.
The reasons to act are almost always better than the reasons you can think up not to act. If you, my dear readers, can understand the meaning of what is expressed in this one sentence, then believe me, you’ve learned a most valuable lesson. It’s a lesson that has saved my life many times. And I mean literally, it’s a lesson that has saved my life.

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If you have taken the time to read this long article, I hope that you will act on it. With this, I leave you with this proverb - Easy come, easy go, but steady diligence pays off.

Have a blessed day!

5 principles for retirement funds and other aspects of life

2008-01-04T16:45:00.000+08:00

Here is some interesting read from this site which uses 5 personal finance business cards/principles and applying it to life.

http://www.thesimpledollar.com/2007/12/27/life-and-discipline-using-the-five-personal-finance-business-cards-for-other-aspects-of-life/

Bank deposit interest rates in Singapore

2007-12-28T13:09:00.000+08:00

After learning about compound interest, I been keeping a look out for bank interest rates in Singapore. This link show the bank deposit interest rates in Singapore.

Wishing you a blessed Christmas !

2007-12-24T10:28:00.000+08:00

While working on my financial wisdom, I realised that the most important thing is the process that takes priority before the end result. Though we wanted to invest and reap that investment as much and as soon as possible, the process of growing, waiting, reaping & utilising the fruit of the investment to expand God will is important to me as well.

Thus I wish all believers and readers a blessed Christmas as we celebrate the reason for this occasion !

A Christian Approach to Investment

2007-12-20T21:27:00.000+08:00

It been quite some time that I been writing at this blog as I was away for some trips. But I have picked up something during the trips.

From the parable of the talents (Luke 19:L11-27), Jesus makes it clear that He expects us to be a good steward of the time, talents etc that He has given us. Therefore as stewards in our finance, we are to let them grow or yield dividends.

5 considerations in investing are offered here:

1. Ability

It is important that we do not invest what we don't have (Don't borrow to invest). It is also better not to invest at all than to invest what we cannot afford to lose.

2. Security

Prioritise the protection of your capital 1st, increasing profits comes later. Protect what you cannot afford to lose.

3. Liquidity

It is a good idea to have a significant percentage of the investment to have a fair degree of liquidity so that they can be convertedto cash for God's work and His purpose.

4. Profitability

Ask the question, "will the investment yield good returns?" Seek to grow your financial education 1st before investing. Read and ask.

5. Suitability

Is the investment, to the best of our knowledge, socialy sound and morally uplifting?
I use those considerations in my financial planning recently. While it is tempting to buy into the market now. It is better think through the process before jumping in.

Have a blessed day!

Meeting needs, Muffling wants

2007-10-27T14:13:00.000+08:00

From Matt 6:24-33, John Wesley uses this text to teach Christian the spirit of simplicity, which is to give away everything beyoind the basic necessity of life. He himself is also a example of a man who escaped the grip of materialism and refused to bow to the god of money. When he was making 30 pounds as a minister, he would use 28 pounds and give the rest away. Later on in his ministry, when he starts writing books, he makes 1400 pounds. However, he still spends 28 pounds and give the rest away.

Passages to meditate on:

Matt 6:33 But seek first the kingdom of God and all these things will be given to you as well.

John 4:34 'My food', said Jesus, is to do the will of him who sent me and to finish his work.

To consider as well : Psalm 27:4 Luke 10:42 Philippians 3:13

Therefore, armed with the above, there are several keys to simplicity.

7 keys to simplifying our lifestyle

1. Buy for Utility value rather than for Prestige

Does this mean we cannot buy branded goods? No, just be sure we are buying for quality and not for status.

2. Develop the Habit of Giving Things Away

3. Beware of Modern Advertising

4. Stop Impulse buying

It may seem buying a $100 dress for $50 is a good idea but the question is, do we really need what we buy?

5. Eat Sensitively and Sensibly

6. Enjoy Things without having to own them

Rejoice with others when are are blessed without feeling that God must grant us the same blessings.

7. Enjoy nature and See God in It

Not all things need to be electronic. Many good things in life are free: such as fresh air, sunshine, beaches, hills, trees and flowers. God has created all thses for us to freely enjoy.

GK Chesterton said, "there are two ways to get enought. One is to accumulate more and more. The other is to desire less and less." Let us all resolve to live simply so that others may simply live.

The Danger of Greed

2007-10-27T14:10:00.000+08:00

The story of the Goose and the golden eggs ended with the farmer deciding to kill the goose in order to get all the golden eggs at once. Once the goose is killed - no more eggs and no more goose. The farmer driven by greed, lost everything! The god of greed and materialism is prevalent in every afflebt society today. There is an exaltation of the earthly over the heavenly and the material over the spiritual. Jesus called this god Mammon.

The encounter between Naaman, commander of the army of King of Aram, and Gehazim, the servant of Elisha in 2 Kings 5 illustrate the nature of greed.

There are 6 character of Greed from 2 King 5

1. Greed is hidden

2. Greed rationalises

Greed always gives us a reason for wanting to possess or accumulated more. It can be hard to draw the line between need, greed and providence.

3. Greed is compulsive

The more you get, the more you want. This infact is tantamount ot idolatory (Eph 5:5, Col 3:5-6). Greed affects not just the rich; the poor can be too. It is the condition of the heard and altitude towards money and possession.The issue for believers is this: why do we who have tasted the life of the kingdom want to go back to the death of greed and materialism? Let us ask God to set us free from discontentment and greed, and to enjoy whatever He has blessed us with instead of striving for more.

4. Greed is Deceptive

5. Greed Distorts (our values system)

6. Greed Destroys

Choose Christ

The biblical alternative to a lifestyle of greed is to dethrone the god of Mammon and pull down the stronghold of greed in our lives. 1 John 3:17 "If anyone has material possissions and see his brother in need but has no pity in him, how can the love of God be in him?"

Using the golden eggs for different stages of our lives:

More golden eggs: Some of us have reached the stage if being able to share some golden eggs with others. Perhaps God is challenging you to increase the number of golden eggs with others.

Some golden eggs: Confront and dethrone greed by being generous.

The golden goose: God may be challenging yet others to taken an even greater step of faith, He may be asking us to surrender the golden eggs and the goose - do not fear because we may be surrendering our resource to the One who them to us in the first place.

The Delight of Giving

2007-10-27T09:52:00.000+08:00

Do you know that 16 out of 38 parables refers to money and possessions. Since Jesus speaks of those, let us dwell on it as well.

One of the myths concerning money is that it is the root of all evil. This is misquoting 1 Timothy 6:10, which says, "For the love of money is the root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs." The root of evil is not 'money' but the 'love' of money.
When the Bible talks about giving in terms of money, it always speaks of tithes and offerings. Tithe means 'a tenth'. When we tithe, we are recognising that God is the Sovereign Lord who owns everything and we are but stewards of what He has given us.

The act of giving is not simply a act but the altitude that God is looking at.

There are 6 Principles of Giving:

1. The Principle of Proportion - 1 Cor 16:2
Setting aside a proportion - the most basic is tithing.

2. The Principle of Priority - Malachi 3:10
To set aside for God first.

3. The Principle of Purpose - 2 Cor 9:7-8
Prepare purposefully, give as a act of worship.

4. The Principle of Privacy - Matt 6:1

5. The Principle of Privilege - 2 Cor 9:7
How can you give willingly and cheerfully? Only if you recognise that giving is a privilege! You do not have to give. You get to give.

6. The Principle of Profit - 2 Cor 9:6

From Scarcity of abundance
The biggest hindrance to giving is the scarcity mentality. Using the example of Elijah and the widow in 1 King 17. Notice the language:

Language of Scarcity
I don't have....
only a handful of flour
a little oil
a few sticks
eat it and die

Language of Abundance
Don't be afraid
bring it to me
will not be used up
will not run dry
the LORD gives

Are we living with a scarcity or abundance mentality? We are challenged to take a step of faith in the area of giving. Make this year a breakthrough year in giving.

Perspective on Wealth

2007-10-08T08:35:00.000+08:00

Reflecting on the words of a wise king who spent his most of time observing life. One key area he reflected on concerned mone and riches. As he was a wealthy man himself, he was very qualified to do so. From Ecclesiastes, we see what King Solomon noted about the world of money.

4 Observations about Wealth

1. The Materialistic Grip of Wealth (Ecc 5:10-11)

2. The Danger of Hoarding Wealth (Ecc 5:13-17)
There is danger in hoarding wealth - you will lose it, not only once but twice! You could lose it before you die, and you will definitely lose it when you die.

3. The delight of Having Wealth (Ecc 5:18-20)
Despite the dangers inherent in having wealth, the wise man went on to say that it could still be a gift from God. Wwalth can be a blessing from God, to be enjoyed by man. When we see our wealth a gift from God and not something we have acquied by our own hands, we will not fight to keep it.
We must learn to have an "open palm" approached to riches. Hodl every blessing that God brings to you wih an open palm - be it condominiums, cars, cash or every country clubs. Enjoy the blessing while you have them without desire to possess them. Then, if God should choose to take them aswat, He need not pull your fingers apart! This way, it would be a delight to have material possessions.

4. The Grace to Enjoy Wealth (Ecc 6:1-3)

Have a blessed day!

Mitigating risks of investing in Foreign Currency Fix Deposits

2007-10-03T08:55:00.000+08:00

One of my instrument of getting higher than the current T-bills interest is through Foreign Currency Fix deposits. While I have some rules to mitigate the risks, Panzer Grenadier wrote his rules which I also abide in. Do read his blog here

http://fivecentstencents.blogspot.com/2007/10/mitigating-risks-of-investing-in.html

(for those who just want the summary, the 3 options are:
1. Rollover of both principal and interest
2. Rollover principal but collect interest
3. Invest in foreign currencies whose economies are strong)

Have a blessed day!

Compound interest

2007-09-28T15:20:00.000+08:00

One of the things I learnt while building my financial wisdom is compound interest. It is also know as the rule of 72. The concept is adding acccumulated interest back to the principle so that the interest is earned on interest from the moment on.

Attached is a graph to illustrated the growth of the principle being over 10 years in 2%, 5% and 7% compound interest.

This leads towards not touching the savings for an extended period so as to earn as much as possible.

Have a blessed day!

Another bank account

2007-09-27T15:55:00.000+08:00

I read this story today of another type of bank account. Time to start depositing =)
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A 92-year-old, petite, well-poised and proud man, who is fully dressed each morning by eight o'clock, with his hair fashionably combed and shaved perfectly, even though he is legally blind, moved to a nursing home today.

His wife of 70 years recently passed away, making the move necessary. After many hours of waiting patiently in the lobby of the nursing home, he smiled sweetly when told his room was ready. As he maneuvered his walker to the elevator, I provided a visual description of his tiny room, including the eyelet sheets that had been hung on his window.

"I love it," he stated with the enthusiasm of an eight-year-old having just been presented with a new puppy.

"Mr. Jones, you haven't seen the room; just wait."

"That doesn't have anything to do with it," he replied. "Happiness is something you decide on ahead of time. Whether I like my room or not doesn't depend on how the furniture is arranged .. it's how I arrange my mind. I already decided to love it."

"It's a decision I make every morning when I wake up. I have a choice; I can spend the day in bed recounting the difficulty I have with the parts of my body that no longer work, or get out of bed and be thankful for the ones that do. Each day is a gift, and as long as my eyes open, I'll focus on the new day and all the happy memories I've stored away. Just for this time in my life. Old age is like a bank account. You withdraw from what you've put in. So, my advice to you would be to deposit a lot of happiness in the bank account of memories! Thank you for your part in filling my Memory bank. I am still depositing."

Remember the five simple rules to be happy:

1. Free your heart from hatred.
2. Free your mind from worries.
3. Live simply.
4. Give more.
5. Expect less.

The Master and the Steward

2007-09-15T22:42:00.000+08:00

The Master and the Steward

This chapter starts with the statement that money is a tool that can be used for great good or great ill. John Wesley preached a sermon based on Luke 16:9. He said:

It is a excellent gift of God answering the noblest ends. In the hands of his children, it is food for the hungry, drink for the thirsty, raiment for the naked. It gives the traveler and the stranger where to lay his head. By it we may supply the place of a husband to a widow, and of a father to the fatherless. We may be a defense for the oppressed, a means of health to the sick, of ease to them that are in pain; it may be eyes to the blind, as feed to the lame; yea a lifter up from the gates of death! It is therefore of the highest concern that all who fear God know how to employ this valuable talent; that they be instructed how it may answer these glorious ends and in the highest degree.

John Wesley then went on to give us three simple rules concerning money:

Gain all you can.
Save all you can.
Give all you can.

This chapter gives a glimpse of understanding on both the poverty and the prosperity theology. The theology that provides a pivot between these two extremes views in tension is the theology of stewardship. We have a stewardship responsibility to manage all resources (i.e. talents, treasures, time and territory) faithfully and wisely, according to the will of the Master. Our ultimate goal is to be able to give a account of all that He has given to us.

Have a blessed day!

Managing Money based on the oldest best selling manual

2007-09-10T13:19:00.000+08:00

Being trained in engineering, I understand the importance of reading manuals. This habit helps in a lot of the projects I have been working on.
Therefore as I start looking for principals of financial wisdom, I started with one that is based on age old values (for some of us by our maker). A recent book that I am reading is ‘God own$ - Managing Money the Biblical Way’ by Benny Ho. This book answers views and application of money and is full of solid theology, practical wisdom and, if applied, life changing truths. It is based on the oldest best selling manual.

The writer give a balanced and biblical view of money and to challenge us to view money as a means to abundant living and a tool to serve the purposes of God. A summary of the topics as follows:

Chapter 1 – the concept of stewardship in general and money in specific.
Chapter 2 – A biblical perspective on wealth
Chapter 3 – The delight of giving
Chapter 4 – grapples with monster of greed that attacks us so frequently in an affluent society.
Chapter 5 – challenges us to resolutely return to the discipline of Simplicity.
Chapter 6 – the Christian approach to investment
Chapter 7 – the Christian approach to insurance
Chapter 8 – Remember the poor
Chapter 9 – the Riches of Our Inheritance

For me, the takeaway is we are so blessed that our only appropriate response is to be a blessing to others.

Stay tuned. Have a blessed day and be a blessing.

Treasury bills

2007-09-06T09:42:00.000+08:00

I was looking for a way to increase 2x the bank's interest rates as well as protecting my capital and found that this is the best kept tools - Treasury bills. Treasury bills starts with a minimal $1000 with a 3mth term and also 2-3% interest.

The article from Panzer Grenadier below describes the ways to get them. Visit his blog at fivecentstencents.blogspot.com

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How can I find out more about treasury bills by Panzer Grenadier

How can people find out more about treasury bills? In today's internet enabled world, it is shocking that an internet search for the term "Singapore treasury bills" only yields 73 results!

The top secret investment in Singapore
That shows that treasury bills are indeed the "secret" that financial institutions in Singapore appear to be keeping close to their chest. And who can blame them? Treasury bill transactions are basically borrowings by the Government, through the Monetary Authority of Singapore, from financial institutions, corporates and retail investors. But retail investors have not been educated on this very low risk and at time reasonable yielding product that is available for the low investment amount of SGD 1,000 (Singapore Dollars One Thousand Only)! Financial institutions who are primary dealers in Singapore Government Securities (SGS) do not earn any fees from their customers walking into the banking hall and asking to buy treasury bills. They need to process the application as part of their role as a primary dealer in SGS.

Treasury bills compete against fixed deposits
If bank customers put money in treasury bills, banks would not be able to borrow from them and would lose out a valuable source of cheap funds which is their fixed deposits and savings accounts. Banks are borrowing at such low rates they pay on savings accounts and then in return lending out such funds to consumers in terms of credit card debt, personal credit, car loans, home mortgages and business loans etc. Why rock their gravy train? Why make it difficult for themselves to borrow cheap funds from the domestic market to fund their profitable lending? Why not make more money?!!

We need to be more aggressive in educating ourselves
Dear reader, for too long, we have not been more aggressive in educating ourselves on low risk reasonable yield investments such as treasury bills issued by the Government of Singapore through the Monetary Authority of Singapore. For too long, we have been losing side of information assymetry. For too long, we get hit with low fixed deposit rates for our hard earned monies while banks make use of these funds for very profitable lending.

Rise up and become financially literate
It's time to empower ourselves with the internet! Rise up and get ourselves financially literate! Teach our children and youth to appreciate the value of hardwork, savings and investment. Rise up to learn more about how to get into safe and decent yielding financial assets. Learn to make use of the power of compound interest to grow our wealth, lead us to financial freedom... one realistic step at a time!

Lessons from my father and mother

2007-09-01T10:22:00.000+08:00

A couple of days ago, I read this article by Panzergrenadier with interest. His mentioning of his parents reminded me of this age old value : Honor your father and mother, as the Lord your God has commanded you, so that you may live long and it may go well with you in the land the Lord your God is giving you.

As I reflect on this. I thought of my own parents. Thought they have not taught any face to face lessons on the value of money and saving/investing, the example of the life they now live about - through years of living within their means, saving and investing and now living in their golden years with self sufficiency - is one that I thank God for the heritage. The years of living with them with more than sufficient (in contentment)is also another good lesson. I am also grateful that I have still this opportunity to share with them my own investment plan as I honor them with respect and love for the sacrifices of love that they deposited in me.
In another area of heritage and honor, I am also grateful for my spiritual parents in the heritage that we receive - one is the life changing view of things not seen. There will be others which we may not see now but find in time to come.

Therefore this blog in honor of my parents, the lessons I take away are:

1. To live within our means.
2. To save and invest wisely in preparation for self sufficiency.
3. To deposit the same heritiage my parents has passed down to my children.
4. To bless others as we are being blessed

Have a blessed day!

Application of T-bills from banks

2007-08-22T15:35:00.000+08:00

Other then application of T-bills from POEMs, we can bid for T-bill from banks too. Here are the procedures to bid for T-bills for newbies from DBS bank (can also buy from OCBC & UOB):

1. On Thu afternoon check http://www.sgs.gov.sg/ and copy down Issue/ISIN codes and issue date

2. Goto a big DBS branch and ask the staff you want "To bid for new SGS Treasury Bills"

3. You will need to fill 2 forms, one is security account and one for deducting funds from DBS account

4. Fill in ssue/ISIN codes, issue date and how much you want to bid (in $1,000s)

5. You can select "non-Competitive" or "Competitive" bid, if donno select "non-Competitive"

6. The bank will process your forms (fax your bid to MAS)

7. DBS will not earmark anything from your account (UOB/OCBC will earmark 10-100% first)

8. On next Monday afternoon, check the yields from http://www.sgs.gov.sg/ and call DBS to check if your bids are accepted

9. You should ensure that your funds are in your DBS account on next Thu

10. DBS will try to deduct your $ in the morning and if failed, DBS will try to deduct in the afternoon

11. If not sufficient fund, DBS will charge you OD rate or DBS will advise you to sell the TBILL to them

12. If the yield is 99.232% (or 3.08%pa) and you bid for $10,000, you only need to pay $9923.2013. When T-bills mature in 3 months, $10,000 will be credited into your DBS account

Managing finance God's way

2007-08-17T13:48:00.000+08:00

I read this article with interest as it talks about God's way to managing finance

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Managing Finances God’s Way - New Sunday School
February 13, 2007 - Category: Books, Biblical Finance

My church is starting a new Sunday School series called Managing Finances God’s Way. I’m pretty excited about starting this series because it gives our whole church a chance to be challenged and grow.

In addition to a DVD we will watch in each session, we will also have a supplemental workbook for study and discussion. This biblical finance study was co-developed by Crown Financial Ministries and Rick Warren’s Purpose Driven Ministries. Here are the topics we will be covering:

Intro. The Big Picture — Rick Warren
Session 1. Dedicate it All to God — Chip Ingram
Session 2. Plan Your Spending — Ron Blue
Session 3. Giving as an Act of Worship — Chip Ingram
Session 4. Saving and Investing — Ron Blue
Session 5. God’s Solution to Debt — Howard Dayton
Session 6. Enjoy What God Has Given You — Chuck Bentley

These looks like pretty applicable topics. Look forward to future posts about each lesson. I’ll be commenting and reviewing on each one as we study them in out Sunday School.