Jean’s

I was reading a report from Singapore, dated 5 June 08: -

“ Malaysia’s inflation is expected to rise to 10- year high of 4.7 percent in 2008, after the government sharply raised fuel prices. 

Economists expect Malaysia’s central bank to raise its benchmark interest rate to 4 percent from 3.5 percent currently, by end of the year.

Central bank Governor, Zeti Akhtar Aziz, said on Thursday that energy price rises meant inflation would average 4.2% in 2008 and Prime Minister Abdullar Ahmad Badawi had estimated inflation in a range of 4 and 5 percent this year. An inflation rate of between 4 and 5 percent would be the highest since 5.3 registered in 1998.

Bank of America expects the central bank to start its tightening campaign in July, when it is likely to raise rates by 25 basis points, follow by more rate rises later this year. “

(Further reading can be obtained from http://uk.reuters.com/article/oilRpt/idUKSP16227220080605) (more…)

Well, I have been in “saving mood” lately. How could I not? We just had a petrol hike of 41% on 5 June 08, and now am preparing to have our electricity tariff up by 25% wef 1 July 08. To fill in the gap, I was just informed days ago that Hire Purchase interest will be adjusted upward wef 23 June 08. 

While I am trying to save, here come my two lovely kids’ endless requests   of toys whenever we step foot in shopping malls. Can’t blame them, they are not told that money does not fall from the sky!

So this thought struck me – hey, perhaps I should teach them what money is all about and instill the principles of good money management in them. I am sure one of the greatest gifts parents can give their children is the protection of sound financial habits for life – learning how to manage money, instead of just getting it and spending it all at once without a thought for tomorrow.

I still remember the day when my parents hand over to me my savings account book. I can’t remember how much I had then, but I do remember I have all of them spent in a short period of time, in things that were not required. So if I were to look back now, I wished I had started investing earlier? If I had put the money in Unit Trust then, I would have the money returned over 10 fold now.

Ok, this is my plan to educate my kids, so that they won’t be as “silly” as I was

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Today is Father’s day.

My dad has always been a role model to me, in many ways. His learning spirit; the way he treats his family and friends. His positive spirit even when he almost lost his life due to a critical illness in year 2006. I am blessed to have a dad like him and I have much to thank to him for all that he has taught me, not by words, but by his life..

The following article reminded me the way my dad has always taught us …

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Came across this article and thought it makes perfect sense and would like to share with you..

The Test Results Are In…

A good friend of ours recently told us a true story that made us laugh, but also made us think.

She started off by telling us about a friend of hers—who we’ll call Nate. Nate could never find the motivation to finish what he started. He also struggled to start new tasks. He was constantly complaining about his lack of effort and he was convinced that there was something physically wrong with him.

Finally, our friend became so frustrated she told him to get check-up with a doctor. After some arguing, Nate finally agreed to book an appointment.

During the check-up, the doctor drilled question after question trying to dig deep and discover what this “problem” was. Nate underwent a thorough examination and a series of tests including some blood work. Remember, this is a true story.

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We had the price of our petrol hike up as high as 40% yesterday, and we will expect an increase of electricity tariff around 25%. Many more cost rises to come.

Malaysian Trade Union Congress is urging that private sector employers to give their workers a salary increase up to 15% or cost of living allowance in view of the higher price of petrol and diesel. The point is can the private sector afford it? They too are looking at ever-rising

Instead of looking at your employers to save you from this ever rising cost of living, perhaps we have to learn how to “save” ourselves:-

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In my last post, I talked about how financial freedom can be achieved with certain steps. I thought perhaps I can share with you the steps I am taking. Please excuse me for there are really not any special formula, but they are in fact so simple and have made perfect sense to me. The only requirement, as far as I am concerned, is the willingness to “postpone” the enjoyment later.

I look back all these years, started from an income as little as S$ 1,600 per month back in 1996, with hardly any spare cash to save after deducting the necessary monthly expenses, I would say I have done well by sticking to these steps. Of course having a husband with the same mentality and passion helps

Basically, to accumulate wealth over time, I merely follow these steps, slowly and steadily:

1.First make it. Before I can begin to save or invest, I surely need to have a long-term source of income that’s sufficient enough to have some left over after I’ve covered my necessities. So if I’m ever stuck in a job that do not provide me sufficient funds, I will do something about it. That explains why I quit my first job. I am not suggesting job hopping here but practically we do need to find a job that pays well enough, even if it means to completely change the job nature. Jumping out of comfort zone is never an easy decision to make, but if the comfort zone is leading us financially no where, how comfortable can it be to us and to our family? Make sense?

2.Save it. Once I have an income that’s enough to cover my basics, I started to develop a proactive savings plan in a disciplinary way. I find having 2 saving accounts helps. One is meant for spending, and the other for saving. For the ‘saving’ account, the ATM card was never with me when I went out so no opportunity when the temptation arises to withdraw from here. I made sure I could perform on-line money transfers from one account to another within minutes to avoid any room of excuses to hinder the saving process. I will leave just enough for each month budgeted spending in the “spending” account. The lesser the amount I see in my bank account, the lesser the desire I have to spend on the unnecessary. It works perfectly for me for the past 12 years.

3.Invest it. Once I was able to set aside 3 months worth of living expenses that could prepare me for financial setbacks, I started to invest it prudently. I can still remember the feeling of joy when I made the little profit (S$ 150+) of my first lot of share back in 1997. I don’t think S$150 will excite me that much now though. Till date, we (my husband and I) have our investments spread in share, unit trust, land and properties. Well, the choice of investment is very subjective according to individual risk appetites, time horizon, cash flow/liquidity needs and any other factors that are unique to each individual. By understanding our portfolio needs, we can then determine the appropriate asset allocation. Whatever choices we choose, it is for sure that we have to invest! I have never seen anyone who achieve financially free without involve in any form of investment.

4.Create stream of passive income. I have talked about passive income in my last post. Since I am made aware of the term passive income, I found myself having little interest in any job that failed to provide me with this income. The idea of passive income is far more exciting over earned income. I was working very hard while I was in Singapore. I was promoted from Financial Manager to the General Manager of the company. The experience gained and the sense of self-achievement is priceless. However, once I quit from the company, the effort that I put in all these years earn me nothing more than what I was paid then. Wouldn’t it make more financial sense if I will be continually paid for the effort that I made then, today. Would it make more financial sense instead of having cash, I have cash flow instead? I can deplete my cash (saving), but I can’t deplete my cash flow because its constantly flowing in even when I stop working.

So, what’s next? I will say applying it - to think about how to first make enough so that you can save enough to invest. If it requires you to do part time job, and if you are able, why not?

How could you create your cash flow by generating passive income. There really are so many ways you can create your own passive income if you look out for it.

The sooner we answer these questions, the sooner we’ll have financial and personal freedom.