#218. Earn Cash From Gold Investment

Earn Cash From Gold Investment And Get Rid Of Debt Quickly

A Guest Post by Jason Holmes

In the past 2 years, the cost of living has become very high. The price of basic commodities has increased due to inflation. Therefore, if you are one of those Americans who are finding it extremely difficult to meet your living expenses and pay off your unpaid bills, then you can invest your hard earned money in gold and get rid of debt quickly by making a good profit. 

Invest in gold and earn money

Gold is one of the most precious metals. Among all the most precious metals such as silver, zinc, and copper, gold is the most popular and safest form investment. If you invest your money in gold, then be sure to make profit in future. The reason is the price of gold is increasing day-by-say. In July 2010, the price of gold has reached $1208.10 per ounce. So, you can very well imagine the amount of money you can earn from gold investment. The extra money that you'll earn from gold investment will allow you to get rid of debt within a shorter period of time. 

Most of the Americans hire a debt settlement/management company when they are unable to pay off their debt. But these companies charge a fee for their services. This implies that they need to arrange some extra cash. So, like most of the average Americans, if you have hired a debt management/settlement company to reduce your debt, then you can utilize this money towards paying the fee of these companies. Also, you can use this extra money to pay back your creditors. 

Types of gold investments

Let us know some of the primary types of gold investments: 

• Gold coins: This is the most popular form of gold investment. You don't need thousands of dollars to purchase gold coins. You can purchase gold coins and insure them. The insurance companies charge low premium rate on the gold coins.

•  Gold bars: You can invest your money in purchasing god bars and keep them safely in your locker. If you really need money, you can sell those and make a lot of money.

•  Gold mining stocks: You can even invest your hard earned money in purchasing gold mining stocks. If you purchase stocks of gold mining firms/companies, you can earn a lot of money when the price of gold increases.

 Key benefits of gold investment

Some of the key benefits of gold investment are given below: 

•   Gold is imperishable.
•   There is a huge demand for gold in the jewelry industry.
•   Generally, gold appreciates in value.
•   You can transport gold from one place to another easily.  

Finally, if you can invest in gold intelligently, then you can earn lot of money and get rid of debt quickly. Thereby, you can get back to your normal life and sleep peacefully.  

Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like 'Credit Score The Quintessential Therapy for a Happy Pocket', Take Creditors and Collection Agencies to Small Claims Court' and, My Story- From Depression To a Smile'.

#206. Focus Is The Key For Success

Focus All Your Energy To Achieve More

I was once in a job. We have to go through a training before we can move on to the real job. During the training, I did badly. I was called into the manager's office one day.

The manager told me if I don't perform well and pass the training, disciplinary actions would be taken against me. That means they will fire me for not being able to perform the job that I was hired to do.

All the other trainers and managers got tired of me. They thought I was a gone case. No hope. They thought I was going to fail. Then came a new trainer. He was a cheerful guy. I will always remember him and what he told me.


"You got to focus."

He kept saying focus. He pointed two fingers to his eyes and then moved the fingers to the computer screen as he said "Focus".

I passed the training and had a good time with that company for some years.

The word has stuck with me ever since.

I even tell my son now to focus when he is distracted from something. He is a chatty little fellow. Talks a lot, even during dinner. So I have to say to him "Concentrate on your food. When you are eating, eat!"

That's right. When eating, eat. When driving, drive. When playing, play.

Focus is very important. Imagine while driving, you talk on the phone. What is going to happen? When driving, drive.

It's that simple. Focus on only one thing at a time. Check this out. People have always say, "Don't put all your eggs in one basket." Somewhere, I read that a wise person said "Put all your eggs in one basket and watch that basket closely."

To be successful in something, spend all your time on just that one thing. Some people dabble into everything. They want to know everything. It makes you Jack of all trades, but master of none. If you want to be successful as an investor, focus on it. Don't get distracted by what others say to you.

Focus every moment on improving your investment. Think how to do things better.


Less is more

We are taught too many things in school and universities. How many of you can tell me that you need to apply Additional Mathematics in your work? How many of you can tell me that you need to tell the job interviewer all the colours in the rainbow, all the planets in our solar system?

I have always suspected that the modern education is invented by some people to keep us as slaves. They make us Jack of all trades, master of none. Imagine if you study only 5 subjects in school. Would you not be an expert by the time you are 17 years old? Just 5 subjects: Bahasa Malaysia, English, Mother Tongue Language, Maths and Wing Chun. Yes, I have an interest in Wing Chun. Haha. You can substitute it with other things. Perhaps Investment knowledge.

Wait, you ask. Where is Science and Biology and Physics? I would say leave that to University where people want to specialize in those areas. In the school, a little bit of Science (about planets and rainbows and human biology) can be incorporated in the language classes. After all we read Science books written in Bahasa or English, don't we?

And not to mention, Moral Class. I remember reading about mannerisms and moral in my primary school Chinese language class. See, we can incorporate all those subjects into language class. No need to create extra subjects. Why can't they write all the language text books in more meaningful moral lessons? Rather than learning, a cat and a dog went to the market. Why can't they write, the cat said politely to the dog, excuse me why do you bark at me? There are still cat and dog in the story if they want us to learn about cats and dogs.

So the whole nation is going to be ignorant of Science you say? Not really, we have experts studying Science in universities. According to a Taiwan professor, he said there are two types of learnings. One is committed to memorizing. One is committed to comprehending.


Memorizing and comprehending

Language according to the professor is learned via memorizing. The small child before he even knows how to write has already learned how to speak. He can speak because he memorizes the sounds of the language. Language therefore should be taught in a repetitive manner to small children. They read a page again and again until they can read (memorize) all the words.

Science subjects on the other hand is learned via comprehending. It's too hard according to him to teach advanced Science and tough Maths to small children. Because they cannot comprehend the logic of science. The small children (age between 3-15 years old) should learn language more than tough sciences.

Science should only be taught to more matured students. They are able to comprehend it better and apply their logical thinking to enhance their learning. The professor gave examples of the Western and Eastern students.


West vs East

He said in the West, the students learn very simple Maths in primary school. They learn more on languages and literature. And the people in the East laughed at the small Western children for not able to do simple Maths. However, the difficult maths and science taught to small children burden their little minds and make them hate these subjects. When they grow up, they don't want to study them.

The students in university in the West on the other hand enjoy learning Science according to the professor. The matured students enjoy Science because they are able to comprehend the logic. They are taught slowly first in simple Science from age of 15 and then progressively into more advanced knowledge. The professor said, this is the reason why the West has more Scientists than the East.




Focus

OK, back to the subject of this article. Focus. See? Less is more. Focus on only one thing at a time. If you want to be a successful investor, focus on only one thing. If it is the stocks, focus only on the stocks. And only 2 or 3 sectors in the stock market.

If you want to be a unit trust investor, focus only in unit trust. Master it first before you move on to stock trading. And if you focus in unit trust investment, focus on only 2 funds. Spend time understanding the market and sector that the funds invest in. Don't spread your money over 5 funds. Focus. If you invest in property, focus only on property. Don't be distracted by people from unit trust telling you that it is a better investment over property. Focus on the thing you believe in and like.

Stick to your focus for life. Warren Buffett sticks to his job for such a long time and many more years to come. Those that change their focus from one place to another rarely becomes successful.

Plan what you think you would like to do if you are not in your current job. Think how nice it would be if you can do the thing you like for the rest of your life and not get bored with it. Focus on this thing. And work on it till you achieve success. Focus is the key.

#205. Financial Advice For Creating Wealth

Wish Someone Had Given These Financial Advices To Me

A reader wrote this to me. Thank you very much for your email. I would certainly love to share some experience and advices with you.


The reader wrote:

I came across your webpage and i am very curious how Unit Trust can create more and more wealth.


I am a fresh graduate without much savings, but i am enlightened by the importance of financial freedom, and hence i would like to start diversifying my investment for a brighter future.


I now have a savings of around 18k. Can you please advice me on how i can multiply this amount to a bigger value? I would like to be as successful as you.


Thank you.


I wish someone had given me advices on achieving financial freedom after my graduation. Oh well, perhaps I didn't ask for financial advice back then.

The advices that will be shared with you are simple. Following them may not. With discipline, however, anyone can achieve it.

1. Work for yourself. We are advised to study hard. Get a good job. Just ask those people working for someone else, are they happy? Most are not. They work long hours in jobs that they dislike.
Even if you have to work for someone or a company, always work for yourself first. Think about the knowledge that you can gain from the job, not just the pay. Find a job that you truly like and passionate about. Work for yourself first and that means gain whatever knowledge you can for yourself. This knowledge will be useful when you want to use them later (to start your own business for example).

Now, even if you are stuck with a job that you have no passion in, you can still work for yourself. Research and read on the subject that you are interested in. Read on the subject everyday for 1 hour at least. The more you read, the faster you will be knowledgable on the subject. In a year or two years, you will know more than the average people on the subject. That will make you an expert. For example, I read a lot on investment and this knowledge helps me earn extra income. Turn your knowledge into income - you may write a blog, start a website, write a book, start an offline business, etc.



Read the book above to see how you can work less and work for yourself (click it).

2. Money makes money. It's great to hear such and such an investment has risen 30% or 50%. But what good is it if we don't have the money to invest in it. Realize that money makes more money. Save and invest every dollar you can. In fact, that's the first article on this Unit Trust Investment blog.

Think first before you buy anything. Do you need it, or do you think it's better to save the money for investment? RM300 making 10% is RM30. RM300,000 making 10% is RM30,000. The same return of 10% but different volume. See this? Imagine if you have RM100,000 and you can make just 10% return on a monthly basis, that's RM10,000. Do you think you still need to work for someone else, if your money can work for you? To achieve 10% return, of course you first need to have the knowledge as explained above in number 1.



3. Dream. Think big. Dream big. Every moment. Awake or sleep. Dream and imagine in detail what you want to be. How you want to live your life? Where you want to live your life? Always think of positive thoughts.



Positive thoughts improve your health and also attracts positive energy. Read the book by Masaru Emoto on The Hidden Messages in Water (click the book image above) and those law of attraction books. The more you think about a subject, the more you will be guided to more knowledge in that area as if by an invisible hand. Sometimes, you may even get a great idea on that subject coming to you all of a sudden.

4. Do. Remember to put all your knowledge into action. Many people have great ideas but they don't put it into action. Later when their ideas become a best selling product, they just kick themselves. I know a few people who are overly cautious in implementing some of their ideas. They are afraid that it won't work, it may fail.

5. Investment knowledge. The best knowledge that I have gained in my life is investment. I didn't learn it in the university. Some may say the best knowlegde they have learned is business knowledge. Or car repairing business. Or whatever knowledge. There is no wrong or right. As long as the knowledge can help you to create wealth, to me it is investment knowledge. The knowledge that you have invested your time in becomes useful and creates wealth for you.

I like the simple way of investment as I have always stressed on. The simplest way to eat is eating raw fruits and vege. You don't have to spend time cooking it. Healthy people eat a lof of raw fruits and vege.

The same knowledge should be applied in investment, in my opinion. If you want to make money, why not use money to make money. Invest the money directly in unit trust or whatever financial products that are very liquid. Imagine if you have money, and you invest in a shop and equipment and staffs. Then you keep working for the business to grow. You spend on advertisement, website, time, etc. Isn't that indirect and a bit complicated. Of course, if you do it right, your business may even make more than your investment. It's a lengthy discussion where some may say unit trust investment is risky while business is safer. I won't discuss it here, perhaps another day. Anyway, the thing is, be simple. Look for simple ways.

To answer your question, how to multiply your money. Do all the above. It's not as simple as telling you where to invest that RM18K. It's all the above and maybe more. Invest in yourself first. Find time to read and learn a topic that you like. If it is investment that you like, learn it and become your own investment guru.

For a start, open a Fundsupermart account. And read on the timing on my blog on when to buy and when to sell. But the timing to buy and sell is just my own opinion, you decide for yourself.

Learn something you are passionate about, do it right and see wealth coming your way. This is the best financial advice that I can give.

#203. Welcome To 2010

Happy New Year To You

We have ended year 2009 and how time really flies.

How much has your investment grown? Hope you have gained and not lost in the year of 2009. It's been a wonderful year. The stock market is up. The gold is up. Many people have gained a lot in 2009. It's truly a golden year.

Wonder what is in store for us in the year 2010. There are plenty of economic forecast for 2010 on the internet. There are also a lot of gold forecast for 2010.

Taking the lessons learned in 2009 into 2010

In the year 2009, I have to admit, I didn't gain much in my gold investment. You may say I have missed the greatest opportunity in my life. I have relied too much on so called gold news and information and gold forecast. However, in the KLCI investment, I have done quite well showing that the trend is going up because I followed the chart.

From experience, I have found that the news, information and forecast are as reliable as a broken clock. They are not accurate. Following it is simply putting your investment at risk. They are forecast by humans like you and me. As humans, they surely have a lot of inaccuracies.

Therefore, it has prompted me to re-evaluate my strategy for this year 2010. Three important things to bear in mind for 2010.

One. It's best to be your own investment guru in 2010.


Two. Study the charts. If all the humans giving out forecast and information are wrong, who do we follow then? Why, the most accurate thing is the chart. Of course!

The charts never lie. They show you the trends. If the trend is moving up, it is certainly moving up. Forget what the news tell you. Go with the flow of the trend. If the trend is ready to make a reversal, it certainly is. Ignore what the news tells you. Just follow the chart.

The chart is a collective reflection of the market participants. If it is a gold chart, then it is a collective activity of the buyers and sellers of gold. Their action of buying and selling, and their feeling of bearish and bullish are what make the chart ticks. The collective buying and selling of these people move the charts.

What else do you want to believe if not the chart? The chart is something that is truly like the evidence left in a crime scene. Every step the criminal (buyers and sellers) makes is left on the trail of the price trend.

More importantly, the chart tells it the way as it sees it. It captures every moment of history, every moment of the interaction between the buyers and sellers influencing the price. They are certainly the oracle that we should follow instead of the news and forecast put out by individuals.


Three. Timing is still everything.

I am a firm believer that everything under the sun happens for a reason. And because it happens for a reason, there surely is an invisible hand in timing making all these things to happen at the right time and at the right place. Timing is indeed everything, even when it comes to investment.

Many are still arguing that we can't time the market. They rather read the news. How accurate is the news? Read the newspapers in the beginning of every year. The so called economist analysts always say things like "We may see a grow in the stock market if the rates are not raised." See what I mean? They use words like 'may' and 'if'. They are not certain on what they are saying. I treat those news as merely knowledge. At best, you now know that if the rates are not raised, then we shall see the stock market moving up further. Still, the stock market is influenced by 101 factors. That piece of information is totally unusable when the other 100 factors come into play. And then the economists will put out other reasons for why the market move up or down.

Again, referring to the strong point of number two above. It's important to dance with the tune. Invest in perfect timing to the beat of the market. Follow the ups and downs to make the most out of it. Knowledge of these perfect timings don't come from reading the news, they only come from following the charts. Like a good hunter tracking the bear's paws prints on the ground, the good investor tracks the price trend on the chart.


Staying focus

With the above three points, I am making a resolution to improve the profitability for my investment in 2010. And to continually striving for improvement in reading the charts. Hope the readers can benefit from this journey and contribute their knowledge as well.


Happy investing for 2010.

#195. Timing Is Everything

Timing Is Everything Because That Is The Way Nature Works

Generally, the unit trust industry is selling the idea that you can't time the market. They say everyday is a good day to invest. The longer you stay invested, the higher your profits will be.

Some people say, "You can't know for sure when is the peak and when is the valley."


Reality Is What You Think It Is

I have learned that when both people debate on timing the market, it all depends on both persons' perception on reality. It's all in our own mind.

Let's say two strangers walk pass a parked luxury car. One passing by the left side saw the car full of dents and scratches resulting from a recent minor accident. The other saw the right side as he walked pass, admiring the great shiny paint job.

The first person will see the car as undesirable. The other will see the car as a great car to own. They are neither wrong nor right. That was what they saw and that was their realities.

In life, that is the case too. The way we see things in life influenced the way we form our opinions on everything else. Some think there is no easy way to become rich and we have to work very hard. Some think money is abundant in this world, we just need to know how to get it.

A thing I learned very early in life:

Thoughts manifest into words,
Words manifest into actions,
Actions becomes habit,
And habit becomes character.

Be wary of what thoughts you form in your mind. They will eventually become your character. A comedian is always thinking of funny thoughts. They become funny people and that is their character. It's not the other way round. It's not because their character is funny, therefore they always think of funny things.

All things begin with thoughts.

When you want to raise your right arm, you have to first think about it. Every movement begin with a thought.

My thought is there is a set of laws of nature governing the whole universe. And timing is one of the laws.


Timing is indeed the way nature works

Let's start with something simple, the day and night. We know it is cyclical. Day follows night, night follows day. There is a precise timing to it.

In countries where there are four seasons, each season follows another. Spring then summer. Then fall and winter. Do not expect to have them in different order. It's cyclical.

Look at our body, when we are tired, we want to rest. It's cyclical. After a rest, you become more energetic. When you follow this harmony in nature, you achieve a balance and wellbeing.

When you are full, you just can't eat anymore. You just have to wait for a later time to eat again. Timing is everything.

The moon waxes and wanes. There is full moon and new moon. High tide and low tide follow the moon cycle. Even the Earth's orbit around the Sun is cyclical.

When we study the way the market moves, we will know what comes next. After every low, there is going to be a high. Learning to catch this trend is something we have to do well if we want to excel in unit trust or stock investment.

Because I have always believe that timing is important, it has opened my mind to studying the ways to be more accurate in timing when to buy and sell. However, if a person believes timing is nonsense, it will not move them to learn to time the market. Their mind is shut off to such possibility to market timing.

Yet, the simple investment rule is buy low, sell high. If we don't time the market, how else can we buy low and sell high?

You may get lucky when the trend is moving up. And we know the valley will come after the peak. If you are still riding the trend, you will soon find that you have passed the peak and going downhill. Timing when to get off at the station is important to lock in your profits. Simply staying on board the train when it goes downhill is akin to gambling and wishing.

The rule of buy low, sell high is fairly simple. Though not many are able to stick to it. It requires first of all an open mind. Then a deeper study and understanding. However, once you understand how to time your buying and selling, you will be amply rewarded. It's not rocket science. It's simpler than studying to become a surgeon.


The purpose of investment

Rule number 1 of investment is not to lose your money, according to Warren Buffett. But more importantly before this rule, there is another rule.

The most important rule is: Invest well.

Investing well means achieving high accuracy in all your buying and selling. Knowing exactly when to buy and when to sell. What happens when you invest well? You will never lose your money. That is why it is more important then the general investment rule number 1.

Profit will then naturally come to those who invest well and follow market timing. Many success stories in investment have always started with "I have bought it when the price was dirt cheap." Hidden in this statement is the knowledge of the investor on when to buy. It's the timing.

#185. Theory Of Relativity For Wealth

Relatively Speaking - How Wealthy You Want To Be Begins With These Concepts

I am attracted by the way KCLau has put it in simple equation on Wealth Accumulation. Well, the regular readers here will know by now that I like things simple and straightforward.

The equation is:

Wealth = Saving X Time X Return

I found this similar to the philosophy that I have put forward in Article #145 - The Philosophy of Investment.

However, let me take this a step further. My equation was Speed, Accuracy and Power.

The first element from KCLau is Saving. Well, we know that wealth accumulation starts from having some money. And it can come from saving. Whatever income we get, we need to save it and invest it. This element is not in my philosophy because I believe wealth can be created even when you have nothing (read below when I write about Napoleon Hill). Nevertheless, if one is serious about creating wealth, one should seriously start saving every cent that one can possibly have.

In the second element - Time, we are always told that the longer we stay invested, or the younger we start the more wealth we will accumulate. This is so true. Well, let's take this a step further. This is where Speed and Accuracy comes in.

If you can shorten the time to accumulate wealth, wouldn't that make you wealthier in a shorter time? To do so, we need to look for investment tool that has this speed. Of course, it depends on how big a risk-taker you are. Speed comes with calculated risk. And you have to know the tool very well, otherwise it's going to be "speed kills". If you get behind the wheels of an F1 car, and know nothing about it but you drive at a neck-breaking speed... well, you will break your neck for sure. Only the F1 racers who are trained and know absolutely how to handle it will enjoy the speed. Learn and use a tool that you are most comfortable with. And once you are knowledgable, more ideas will come to you on how to make the tool work for you at a faster speed.

Accurary of decision is important in the Time element. We need to know the right timing. We need to know where and when and what. Without accuracy, even if you have time, your investment will wipe out when you get out too late from a crashing market. Know when to exit accurately. Example, when you invest in gold, learn to analyse the chart. Know when to buy and sell to maximise your wealth.

The 3rd element from KCLau is Return. It is advised that you find a tool that you can get the best return. That's true and that is what Power is all about. Get the most powerful tool with the amount of money that you have. It's like the people at the shopping malls comparing two products held in each hand. Both cost the same, and they look at the left hand and right hand over and over to choose the one that is the best value for their money.

Power in my philosophy however goes beyond just getting the best return. We can also look at the company that is providing the tool (you can imagine owning a stock from a company). Is the company good? Does it have good potential to grow further? For example, I am bullish on gold for the reason that it's a scarce commodity. Not enough mines in the world producing it however demand is strong. This provides power for the price to appreciate further.

When I examine deeper, I find that there are people such as singers and actors or magicians who have created so much wealth. Where do they fall into in these elements? Perhaps in the Power element. They have Power within themselves to create wealth. This is something that has become very popular nowadays - The Law Of Attraction. Many authors had talked about that you can create wealth with your own power and everything is within your means to achieve it. Read the book Law Of Success by Napoleon Hill. He talked about how you can create wealth even if you have nothing to begin with, no saving. And that's how many wealthy people came from. They once had nothing. And they started to seize control of their lives and be in power to make changes.

Let's put all the elements and philosophy in relativity to each other. As KCLau has shown, it's like a cube. Stretch one side and the cube becomes larger. Anyone who can just master even one element of the equation will be reaching their wealth accumulation goals faster. And by 'master' I mean really be very good at it. There are people who are superb in Accuracy of timing such as the Master Investor Gann. He had mastered that element and became a very wealthy person.

So, now you can combine all the elements and make a better equation and understand this is the basic knowledge to accumulate wealth.

Of course, don't forget about the bad elements that depletes your wealth - debt, gambling, thoughtless spending, unnecessary spending for unhealthy habits, etc. Avoid them like plague.

All the best in your goals.

#184. Between A Need And A Want

What Do You Want?

In Article #99, we discuss about Buy Less, Be Green. I am posting this article #184 to ask myself a question. Read on and find out whether you are asking yourself the same question.

I remember reading somewhere the story of an American tourist. It's been a long time since I read that story until yesterday, a friend told it to me again. The story goes something like this.

An American senior manager for a big corporation has been working too hard and longed for a break. One day, he packed his bag for a carefully planned holiday trip to South America.

The next morning, he went for a walk by a beautiful pier of Panama. He passed by a man in his early 30s. The man was reeling on a fishing rod pulling up a large fish from the water beneath the pier. The local man then packed his belongings and walked away with the fish in his right hand.

The following morning, the American passed by the same man on his morning walk. The American turned to the man and asked, "Any luck?" The man replied cheerfully, "Soon."

They both chatted for awhile about the weather, the scenery and the fish. The American then said, "Say, why don't you get a boat, go out there and catch more fish." He was meaning well because he found out the man was just doing some odd jobs and he also has a wife and a small child. Also, partly because of the American capitalist thinking that he was so used to. Always wanting to create more wealth through selling some products. After all, he is a senior manager of marketing department for large company.

And the man just nodded while staring at his rod. The American continued, "With more fish, you can sell and make good income. More income, bigger boat. Or boats. Large ship. More fish, you get the idea."

And the man slowly turned to the American, and he asked "And then?"

The American thought for awhile, "And then you can do what you enjoy doing when you have a lot of employees doing the work for you."

The man just smiled and said, "I like what I am doing now."

My question is this: Do we have to work so hard all our lives at a work that we may not like? And we can only finally get to do what we love upon our retirement or when we achieved financial independence?

Does our world need to work like this? Or we should follow our heart and do what we want and live a happier life?

There is no right or wrong answer. Everyone knows what their own answer is.

Translation of the video:

The little girl always have her father picking her up from school and college (when she returns on the train) on his faithful bicycle. One day she has moved to the city to work and told her father that she is coming home. Over the phone, she told the father there is no need for him to pick her up because she has bought a car. Well, he still came on his bicycle.

#183. Scholarship To Study In UTAR

Lending A Helping Hand

I am helping a gentleman to spread some words. Mr. Koon has helped many students for many years.

You can read more about him here. You can find out more about him through a Google search.

Scholarships for the needy

I wish to offer scholarships to 50 poor students for the next academic year to study finance and accountancy in University TAR, Kampar, Perak on the following conditions:-

1. Each student’s family income should not be more than Rm 2,000 per month.

2. Students will be selected more on the basis of their financial need and not merely on their academic achievement.

3. Each scholarship is worth Rm 20,000 which should be enough for each student to cover the cost for the first year foundation course and the first semester of the degree course in finance and accountancy until he or she secures the PTPTN loan. This Government loan is given to all students irrespective of race and financial position who are doing a recognised degree course.

4. Students who receive my financial aid do not require to pay back the money or work for me after they graduate. But I want them to promise me that they will help other poor students when they have graduated and are financially solvent.

U TAR takes in students in January and June every year. Students who are currently doing SPM can submit their applications to U TAR this October with their forecast results to start in January 2010.

Needy students who are currently doing SPM or have passed the SPM can submit their applications to me:

Koon Yew Yin,

yewyin@gmail.com

27, Lengkok Harimau,

31400, Ipoh, Perak

#180. Whose Rules Are You Following?

Whose Rules Are You Following?

I was talking to a friend. She asked how I was. I told her I am tired of the modern day living. We got to follow people's rules, and nobody dare to show their real face anymore. Everyone is living according to a set of conventions that they don't even question anymore why they follow it.

Coincidentally, this friend said she has just attended a training that talked about the "prison in the mind".

She went on to say, "we create rules and beliefs." Anthony Robbins calls it B.S. (belief system). All these BS that someone has created and the others just follow it to the letter. Who says we must eat breakfast to get energy to kick start the day? Who says we must brush our teeth with fluoridated toothpaste? Who says the guys must wear neck tie in this kind of global warming weather?

So much of B.S.! Some decision makers for big companies can't even make changes to the rules when they want because they are so tied up with other people's rules. They don't dare to change the rules! I have questioned the need for a neck tie! I was invited to a formal wedding dinner but I refused to wear a tie. What's the purpose of that piece of cloth? I find it restricting blood flow up above the neck.

And she said further, "What is fashion? Just because someone said it is the latest trend?"
Well, I have a question too.

Why do we have to work faithfully till we reach retirement age? I have seen some people who go to work feeling sleepy. Yawning in meeting rooms and even trying to 'fish' for a big one while the lights are dimmed out for the projector.

Some of these people have already paid up their house loans and cars loans and are with no debts. What more are they chasing for? Why not take a less stressful job that has a fixed work hours (I am assuming here that most high paying jobs that caused people sleepless nights has no fixed working hours, and people stay up late at work)?

In the past I have even asked a friend who has his own big business. "Why do you want to keep on thinking of expanding your business?" How much does he really want? He could have sold of everything and live a peaceful life. I guess priorities are different for different people. Some chase after physical, some chase after spiritual, mental and emotional well being.

Are we following someone's rule to work till we reach retirement age?

Are we chasing after more wealth?

Why not take a less time consuming work and learn how to invest? Robert Kiyosaki's books are a success I guess because that's what he is trying to teach people. He is saying, work less, invest more.

People have no time nowadays for their own families. No time for themselves. They rush from one place to another. Sleep only a few hours before going to work again.

Are you following somebody's rule? Or making your own rules?

#178. Financial Life Journey

Is This A Life Worth Living For? What Can We Do Differently?

This is the life of Joe in today's capitalist world. This article is just to make us look around us and think whether there is another way to our current capitalist life.

Joe was told to complete his secondary school education. And then proceed to college for a degree. Based on his family's financial support, he could only get a normal business studies degree. Of course, there are thousands of people with the same degree.

After college, what next? Without an aim and purpose, Joe just flipped through the papers and browsed the website for jobs. Just about any job will do as long as the pay is reasonable.

In the beginning

Next, Joe got a decent job in a bank. He was 23 when he started working.

With some borrowed money from his parents, he bought a new car. Yes, it has to be a new car of a foreign made. It must not be some local made car. After all, thought him, your car is the way people judge how successful you are. Hmm.

Along the way, he felt that he was not happy with the job. He longed for something better. And so he began to look for another job.

A few years later, now working in a manufacturing company as a marketing staff, he met a lady. Now, you will be wondering how he switched from a job in a bank to a job as a marketing staff. But that is the norm. People move from job to job, company to company, one industry to another. There is no specialisation because most people are just aimless and do not know what they want in their early working lives.

Back to Joe. He then wanted to start a family with the lady he met. Although wedding is for only the two souls, the wedding dinner has got to be hosted at the best hotel in town. The photographer has to be a professional not some family members. The rings must be from a branded jeweler and now just some goldsmith shop.

After a very costly wedding and honeymoon, he was saddled with some debt. And to make things a little bit more challenging, he wanted to purchase a house. Because, according to him, that's what everybody is telling him to do. Get a house, get a house.

Back on land and reality

Where is he supposed to get the money to purchase the house? Work harder? Start some part time business? And Joe thought hard and long on all these. He then participated in some kind of part time business, but failed and lost some money there. Now, he is in deeper debt. With debts to pay, he doesn't have any money for investing in unit trust or any other financial instruments.

Still, he is dreaming to buy a house. And so he borrowed a personal loan from the bank as the downpayment for the house. His family members and friends congratulated him on his new house during the house warming party. Unknown to them all, he is in heavy loans and debts.

Not forgeting, the nice furnitures inside the house. The latest biggest brightest TV. The latest technology in washing machine, fridge, you name it. After all, thought him, he wanted to make the house a nice living abode and not just a place to come home to sleep.

Now what?

How to settle all those debts and loans. And then the wife was expecting a baby. Boy oh boy. Where to get the money to pay the hospital fees? The company only covers a certain portion. The rest will be up to his own pocket or someone else's.

More personal loan borrowed from the bank. After all, according to his relatives and friends, the baby's delivery must be done at the best private hospital. Government hospital is not too good for his wife and baby. So, the private hospital it is.

A new responsibility

The son grew up so fast and it was time to go to kindergarten. The son must go for 3 years of kindergarten, starting at the age of 3. After all, that's what other parents are doing so Joe thought.

Well, the son must be given tuition in primary school after all that's what other parents are doing.

And it's time for the son to go to college. Phew, so many years past and you are suprised how Joe can made it through those years where he was always in debt. Money is always not enough. Money is always on his mind. He could not take a vacation whenever he wanted. It would cost him money that he could not afford.

And just at his retirement, he took all his EPF savings to fund his son's studies. And with little left for himself. What is going to happen to him during his retirement? Would his son be able to care for him financially? Joe has to continue working at a lower pay at some jobs just to be able to support himself and his son's studies. Of course, the wife went through the same thing too.

Don't forget that medical expenses become expensive at this age when illnesses start to set in.

And sometimes, while approaching their retirement age, many people begin to think - oh, what do I want to do during my retirement? They will be thinking should they take up a new course or study some skills so they can start a small business when they retired. Isn't it too late?

Now, think about it?

Are you living a life like that? I am in almost the same situation and I am thinking, what can I do differently if I were to live my life again? Or how my son can live differently instead of following the same path that many of us take.

It seems like there is someone or a group of people that had intentionally introduced the concept of capitalism to enslave us all. So that the majority of the people are forever stuck in the rat race. That makes the world population easily controlled. And these wealthy people at the top of the capitalist food chain, keep on introducing new products for us to buy and consume. They want us to be lifelong consumer to their products to make them wealthy while we suffer financially.

Does it have to be that way? Do we have to go out and buy those latest phones each time the capitalist guys put out an advertisement shouting their latest product?

What's a better way to live our life financially?

I have a thought.

Why can't a young person in his or her primary school start to specialise in some kind of skills?

Maybe specialising in something that he or she has interests in. Whatever the skills are. By the time the person finishes high school, he or she will be an expert in that skill or subject. After all, she has honed the skill for so many years. After all, he has studied the subject for so many years.

He or she will now be an expert in the industry if not a master of that skill. Would this not be better than to start learning a new skill at the sunset years preparing for retirement life? Would this skill not be able to make a good living for the person at the age where most people are only begining to enter college and still feel clueless about what they want to do with life?

You can also notice that some big items that cost a lot in our lives are mentioned above. Car, house, wedding, baby's delivery and child's education. Are we prepared for all this right from the beginning? Right from the purchase of the first car, was the decision correct to go for an expensive car or rather a used car will do?

Think about it and share your thoughts.

#175. A Debt-Free Life

To Be Debt-Free Or Got To Get That Loan? Why Drop A Stone On Your Foot And Then Shout "Pain, Pain"?

I was shopping at a local hypermarket and on display was a spanking new Perodua Myvi car. And a leaflet clipped on the wiper caught my attention. It said something like "Fixed for 5 Years at low payment of RM347 monthly". Can't remember the actual figure but it's around that range of RM300 plus.

I asked the sales lady what it meant. She said, you just need to pay RM347 monthly for the first five years! What happens after the fifth year I asked. "Well, after 5 years, you pay the normal price." I asked her how much would that be. And she showed me a chart that said about RM700 plus monthly for the following 4 years.

WOW!! That surely is a great way to get buyers who are low on monthly budget and yet want a spanking new car. She continued "Usually, after 5 years you can trade away the car for a new car." In my mind I am thinking, that's right, and start the 5-year thingy again at a low monthly repayment.

I also questioned whether when you trade in or sell the car after the fifth year, the selling price or market value is able to pay off the remainder of the loan outstanding.

Well, certainly not the way to get a car. That is a total of 9 years of loan! And living a 9-year life in debt to the bank for a piece of transport. Why don't people get a pre-owned (sounds better than 'used', right?) car instead? It's much cheaper that way and you don't get into debt for so long.

What are the benefits of being debt-free?

1. More disposable income for other things including investing for the future. Money makes money concept.

2. No worries of late payment for the loan and risk getting the car being repossessed.

3. No problem when you have a temporary lost in income such as when you move between jobs. I have a few friends who are being laid off from their companies and are still jobless because of the current economy situation. You certainly have one less headache to worry about. When you are out of job, bills still need to be paid and cause you sleepless nights. I have been in that situation once before, I know how it feels.

4. Not enslaved to the bank. We have discussed about this before, didn't we. He he.

I am now reading an interesting book. I don't want to list the title here, the book is not everybody's cup of tea and the content is thought to be controversial to some. Hint, you can't get this book in Malaysia. I bought it through Amazon.

Well, this book talks about how we are enslaved by the modern things. We are brainwashed into thinking how cool it is to get this and that. Look around you, the media and the advertisement are always subtlely or boldly trying to tell you, "Hey, get this new car, you'll look cool driving it."

The main culprit is the media. It's always showing us it's cool to get this kind of new gadgets even though we have been living almost our entire life previously without it. Suddenly this new invention or creation is a must-get for everyone. Suddenly, you just have to change your car even though the car is running perfectly fine.

That's where we are stuck in the slave world. When we fall into debts, we fall into slavery.

Don't be suckered in. Spend within your limit. I have a friend who budgets RM10 for his daily spending. He is in debt and earns a small package. That's surely a way to save because you limit yourself to how much you can spend a day and you know how much you can save. If RM10 is too little for you, then work on a budget. You will soon be surprised how much you can save and how much things you don't really need and can still get by with your life.

The temptations are always there to spend. I have this mantra, "Don't buy it if you don't need it." That means if it doesn't serve a good purpose that can add value or enhance my life, I won't buy it. Or if you already have something similar at home that ain't broken, don't buy a new one. Look for ways to fix up the things that are not workable, probably can save more.

Well, when you don't spend so much, you have enough money to buy certain things in cash. My friend told me he can't afford to buy a used car cash the way I could. I said, if you have only saved up and not spend so much on the spanking new car, you would be able to buy one.

Enough said, adios.

#170. Tips On Saving Money For Your Car 2

Don't Fall Into The Debt Trap

Previously, on another earlier article last year, I have mentioned about not buying new car. I have been thinking of changing my 10 year-old Proton for some time. There are a few reasons why I wanted to change it. But I won't discuss it here. Hehe.

Putting my money where my mouth is, I bought a year 1986 Mercedes-Benz 190E 2.0 Auto. The picture above is that car. 

It's only at RM14,500. And I have budgeted another a few more Ringgits to make it a nicer and safer ride. I have added in a reverse sensor (very important if you have kids in your family or around the neighbourhood). 

Well, I made a calculation. If I were to buy a new MyVI and take a loan, I will be paying way, way much more upon paying back the loan (7 years). Well, a used Japanese car at RM14,500 should be alright too. However, I prefer the 3 pointed star brand. Just personal preference. I did think about getting a Jap but can't get a model that has the wow factor.  

Finally, my friend was selling one! I was also surprised that I can readily get the replacement parts (new parts even) without much hassle. There are two friendly forums on the net in Malaysia for Benz owners. Merzclub.org and MyBenz.org. A lot of knowledgeable and helpful people in those forums providing advice too for newbies who have just started owning the cars. 

So, now I have a ride that is fantastic. I am smiling everyday when I drive it. The money that I have saved on the loan and the monthly repayment can be paid for maintaining the car and pay for the slightly higher fuel consumption. It's slightly higher fuel consumption compared to my old Proton. Perhaps I need to take it to my mechanic to see if anything can be done on the car to improve the fuel consumption.

I was told there should not be any much major repair on the car. As long as we maintain and service it regularly. Of course, the regular wear and tear parts surely need to be replaced from time to time, but are not more costly than some local cars. You just got to know which shop to go to. 

Some people may say I am rich to drive a Benz. Well, not at all. On the contrary, I am driving this because I am poor. I can't afford the monthly loan installment on new cars. Just can't bear to do it again after the experience with buying a brand new Proton 10 years ago and taking out a 7-year loan.

Anyway, the point that I want to say here is, don't get into debt. Especially on buying cars. I know a lot of people are stuck in the slave game because they have loans to pay for houses and cars. The road to financial freedom is when you have set yourself free from all debts. 

#165. Modern Employees And Ancient Slaves

Are There Any Differences Between Now And Then?

Having watch the Rome movie series by HBO, I have learned that thing has not changed much during Julius Caesar's time and today.

So, here's my observations and take on slavery. And the comparison between the Julius Caesar Roman times and our world today.

Then: A wealthy person can own many slaves.

Now: A wealthy enterprise or business owner can employ many workers.

Then: A slave served their master/owner till either of them died.

Now: An employed person works their backside off till they retire. And then their children continue to work sometimes for the same enterprise or business owner. It can go on for a few generations. This is worse than in Julius Caesar's time.

Then: The master could sell the slave off to someone else if he is not happy with the slave.

Now: A working class citizen can be fired from the company he works in. And has to look for another employment opportunity elsewhere.

Then: The slaves had to provide sexual favours to the masters when required.

Now: The employee brings the boss a cup of coffee when asked to. And other personal favours that are usually not a pleasure to perform. A survey I read somewhere said that employees dislike doing personal favours for their bosses. They don't mind doing job related favours, but not personal favours like going to the banks to pay their bosses' bills.

Then: There was usually a master slave that look after the other junior slaves. The master slave, knowing very well that he is of the slave rank, treated his fellow slaves kindly.

Now: Some managers have many subordinates reporting to them. Some know that they are salaried workers just like the rest of his subordinates and treat them kindly. Others treat their subordinates like slaves and with disrespect.

Then: The slaves' survival lied on the master providing food and lodging.

Now: The working class gets their salary month after month so that they can continue to live, eat and have a house to live in.

Then: The slaves lived in their masters' houses.

Now: Many domestic helpers lived in with the employers.

Then: Some slaves were sold off by their parents to wealthy people to pay off the debts that they had.

Now: Some people are in heavy debts, mortgages, credit card debts and so on. And they have to continue working for business owners in order to earn some money to pay off those debts.

Then: Slaves wore tags to show who they belonged to.

Now: The modern slave, I mean the working class now mostly wear a tag to access to doors in their office buildings. The tag also has their employer's name on it.

Then: When a slave met another slave, he would introduce himself as "I am Sheila of the Julii's house."

Now: People introduce themselves as "I am John, working with ABC Company."

Then: The slaves helped their masters in their businesses such as selling some fruits or goods.

Now: You see salespeople of all kinds. Even financial planners with the banks are selling you something, neh?

Can you think of more? Just would like to share the above with you. And see? Things are not much different today from 2,000 years ago. Can we still be proud to work for XYZ company today knowing that underneath we are just slaves?

Some people admire their friends who work with large multi-national companies (MNCs) saying it's a better job. Don't be, it's the same old thing ~ slavery! I know people working with large MNCs who are not happy with their jobs. Nor those in smaller companies any happier.

Take action today to break free! Have a plan.

#164. Millionaire Investment Plan 2

It's A Good Plan, Where To Get That RM50,000?

Last night, over some Iced Caffe Mocha I shared the Millionaire Investment Plan with my friend.

Me: If you multiply RM50,000 by 10%, and keep going on, how many times do you think we need to reach RM1,000,000?

Friend: How many? 

Me: Just 32 times. Now, if you have 5 chances of making 10% profit in a year... you just need about 6 years to be a millionaire. I have been working for 12 years now. So, I might be a millionaire now if I have known about this plan. 

Friend: But where do you get this RM50,000 to begin with?

Me: After I graduated from the university, in my first job I was only riding a motorbike. I was earning RM2,000 and yet I can save RM1,000 away every month. In a year, I can save RM10,000. If I went on like that, at the end of the fifth year, I would have my RM50,000. And now on my 12th year of working life, I would have been a millionaire last year ~ on my 11th year of working life.  (5 years to get RM50,000 and another 6 years to make it to RM1,000,000.)

Friend: You are right! How come no one told us this? 

Me: We are all ordinary people. People always tell us to study hard, go to the university, get a good job, work hard. That kind of advice. We are surrounded by ordinary people. Even our lecturers are ordinary people who are still working from paycheque to paycheque. 

Friend: Yeah.

Me: Of course then... as we progress further in our working life, we want to buy a car. We want to buy a house. We want to get married. We want to do a lot of things. So that's where I never get to save up that first RM50,000. People say buy house. We need a house.

I say we should rent. Anyhow, succumbing to the pressure of spouse and those around, I bought a house. My advice is, don't ever buy a house. Save up that money for your investment. You will be a millionaire faster. 

You know what's the real meaning of real estate? 

Friend: What?

Me: Have you heard of Read Madrid (the football team)? 

Friend: Yeah.

Me: 'Real' is a Spanish word for Royal. In the middle ages, people had to pay the Royal Families royalty fees to own a piece of the King's estate or land. It's therefore called the Royal Estate or Real Estate. 

Many people mistaken real estate for something real and tangible. That's not the original meaning. It's just bollocks. It's a fee you pay to someone just so that you can live on that land. 

Friend: I see.

Me: Today, it's the same. When you buy a house, you have to pay tax to the Government and pay your mortgage to the bank. 

Let me tell you what is the real meaning of mortgage. Mortgage means mort and gage. Mort as in rigor mortis. You are a doctor, you know the term. It means death. Mort ~ death. Gage means to engage in something. To pledge to do something. Mortgage therefore means 'to engage in something till your death'. 

Think about it, today's mortgage of 30 years is a long time. Something you engage almost to your death. 

Friend: You are right. 

Me: If you buy a house or RM250,000, buy the time you finished paying your mortgage 30 years later, you would have paid more than half the price to the bank. About RM500,000 or more.

I pay about RM1,300 to the bank every month. I can save those money by renting a cheaper property and invest the extra away and be a millionaire sooner than I can. And I can take part of that million Ringgit to buy a house if I so wish for one at that time.

Friend: Yes, I have thought about it. Why would people want to pay so much for a house and pay for so long? It just doesn't make sense.

Me: Now, see here. (I was showing the price of gold to my friend on my iPod Touch using Starbucks' wifi.) Price of gold is now USD997. I bought when it was around USD901 on 30 January 2009. It's not even a month. 10% profit is achievable in investing in gold. We just need to buy at the right time. And sell at the right time.

Friend: OK. I will start to invest. My... why no one tell us this?

Me: People don't spend their time wisely to study how to invest. They rather watch TV. They surf the internet watching YouTube to get entertainment. They play Facebook. They play online games. They are wasting their time. 

I use the internet to get knowledge, to learn how to invest. There are a lot of knowledge on the net. And we just need to read. 

Friend: Yah, people just like to watch TV and those stupid dramas.

Me: Oh, and one more thing. 

It's all bollocks. Those that still think you need to buy a house. You can just rent and still have a roof over your head. A house is for what? It's just to provide us a roof over our heads. If you have money, why worry? You can live anywhere you want. There will always be places where you can rent. 

They say 'oh, if you don't have a house, it's not safe.'

If you stop paying the bank for 3 months, what will happen?

Friend: The bank will take it away.

Me: Yes, exactly. And you lose all your downpayment money, you lose all your legal fees. You lose all the years of mortgage payment.

But if you don't pay your rent for 3 months, you have saved 3 months of rental! Haha.

Friend: Yah. 

Me: So, everyone. Those ordinary people continue to live their lives as slaves for the banks. They continue to be the slaves at the companies they work with. 

I always tell people don't buy a house! What if you lose your job? In this kind of time we are in, where to find a job immediately? You will have a mortgage to worry about when you are jobless. Our job is never secured. The longer your mortgage is, the worse it is. You make sure you can continue to have a job to pay for your mortgage for the rest of the tenure.

Friend: Uh huh.

Me: If we are debt free, no mortgage, we can move anywhere we like. When the neighbourhood turns bad, you just move without worrying the value of the house is going to depreciate. 

Speaking of that, you also have to maintain your house. Spending more money. Painting the house when the paint gets old. I would rather save it up and invest. Haha. 

RM50,000 is everywhere

That first RM50,000 is always elusive. I have shown to you that I can save RM1,000 every month even while I was earning RM2,000 a month! There are people earning more than that today that can't even save a thousand every month!

You need to have discipline. Brutal discipline. No mercy for yourself. Delay all your spending if you want to live a luxurious life later. Otherwise you will just be a slave for the rest of your lives. That's why majority of the population are working class and they are what I call ~ slaves and minions. 

You can have your first RM50,000 within the first 4 or 5 years of your working life if you save hard. And make real good use of the following 6 years to flip it to a million. If you start working at the age of 21, add 5 years and add another 6 years ~ you will be a millionaire at age 32!!

Most of us are above that age and are still slaving away everyday at our office proudly. Stuck in the morning jam and the evening rush hour. Where's the fork? This is not the life that we should subject ourselves to. 

Now that you know this plan. Start taking action. Don't waste the rest of your life away. What do you think?

A disclaimer: Invest wisely. Don't go sell your house to get that RM50,000 and invest wrongly in some investment and then put the blame on me. This are just my thoughts. And all the writings on this blog are just personal thoughts of the respective writers. You make your own decision.

#163. Millionaire Investment Plan

Buy And Hold Or Buy And Sell (Revisited)



I have written about Buying and Selling and Buying and Holding previously. Here's a relook in a different way.

Many unit trust agents will share the power of compounding with you. They will also show you a small chart that displays how many years it take to make a million with your investment at a certain X% return per annum.



One question. Can the agents promise that consistent X% return per annum every year till you make that million Ringgit/Dollars?



Nevertheless, it's good to have a plan.



Here's my plan.



If you have RM50,000 to invest. And if you make 10% profit with each buying and selling, and then reinvest that profit, how many times will it take to make you a million?



Using a spreadsheet on the computer, on the 32nd time, you will have RM1,055, 688.84. Now, if you make 10% profit per annum and compouding that earnings, you will need 32 years to reach the 1 million mark.



Now, what if we can speed this up? What if in a year, we have 5 times of these kind of opportunities to make 10% profit each time. 32 times will only take you about 6 years to be a millionaire.



I remember a friend once told me a long, long time ago: It's hard to get your RM50,000 but once you have it, making a million is easy.



Now I understand his meaning.



How can I reach that million mark? Buy and sell. Start with an investment sum of RM50,000. Make 10% profit on each trade. Do it 5 times a year. That will be 30 times in 6 years. That will make you compound close to a million in 6 years' time.

Buying and holding it for long term won't make you see 1 million. In 6 years time, your RM50,000 has to see a price jump of 2000% in whatever you invest in. In gold is now RM107, you need to see a price of RM2140 per gram 6 years later! Is that possible?

Back to the story of how do you eat an elephant (not that we really want to eat it)? You cut it up into small pieces and eat it one piece at a time. For investment, the same thing is true. If you want to make big profit, make small profits constantly rather than hoping for a big price jump!

CK posted in my comment section in post #160:

However from my perspective, I'll treat gold investment as a long term (a better alternative than FD) which could be a year or so, or even treat it as one of the retirement funds. I believe we will be surprised to see the amount at the time of withdrawal (10, 20 or even 30 years later). Of course it could be the lowest price at the time we sell them years later, then we could have blame ourselves why we didn't sell it when it is in the peak. If we are really that unlucky (like what happen in 1980s), then you may consider to pass it to your next generation because it is not the only retirement fund we have. (Can a bank do a name transfer for gold account then? Ha). But I still don't think gold will depreciate as demand will be higher after years.

Well, here's my response and I reproduce it here.


Thanks for your analysis. Your comments are valid. Sure, if I have hold on to my gold that I have bought at RM86.03 on 28 Oct 08, I will be grinning ear to ear now. A big profit.

However, we will never know what the price is going to be. I would like to take profit when I am at the top. And buy when the price is at a low.

Of course, unless you have the foresight knowing that the price will be at this level now, RM107.42, you would have kept it till now.

We never know what the price is going to be. The price may dip and go down for many months. And your money will be stuck.

I don't want my money to be stuck. That's why I rather buy and sell at a short period even if I get a lower profit.

Another thing, if you take 10,000 and multiply by 10% five times. 10,000 X 10% X 10% X 10% X 10% X 105 = you get 16,105.10.

If you hold it and make 50%, you will only get 15,000. Nevertheless, markets or gold price don't usually make a big jump of 50% in a year. However, it goes up and down and when you catch the waves at the right time, you will get that 10% five times within a year like I mentioned.

In 2008, gold price started on 2 Jan 08 at USD846.75 and ended on 30 Dec 08 at 869.75. That's a mere 2.7%. Buying and holding sure is not a good strategy here when you see the 2008 chart. You could have easily caught 5 to 6 times of 10% profit.

There is the power of compounding if you make constant small profits.

OK, let's look even longer term. Of course, provided if you hold your gold that long.

In 1979 (30 years ago), the average price was USD306.68. In 1989 (20 years), the average was USD381.44 and 1999 (10 years) was 278.98.

See? If you have bought in 1979 and hold it for 20 years till 1999, you are at a loss from USD306.68 down to USD278.98. And you have to hold it for another 10 years till 2009 to see good profit. But I doubt that you will hold another 10 years or have faith for another 10 years once you saw that your 20 years effort has gone down the drain.

And from the Elliot Waves, if you study it, you can see that once price has reached a top, it can come down to a very low. That can happen in a very long term period. That's why you see a drop in price from 1979 to 1999.

One more thing I would like to add. Gold investment does not reap any interest or dividend if you hold it long term. Your money simply doesn't compound while it sits in physical gold or PBB GIA. The only way your money can grow massively is through the power of compounding. Buying and selling. It is as simple as that. I have mentioned in a previous post. The simple true objective for any investment is to achieve a growth in wealth. The best way and fastest way is to compound your earnings. (http://www.unit-trust-investment.com/2008/12/145-philosophy-of-unit-trust-investment.html)

Again, we never know what is going to be in the future. Who knows? Perhaps one day we don't need any money any more. People will learn to live in peace and work together in a peaceful community and no money is required. What will happen to your gold then? It's going to be just a piece of metal. That's all. Read about the coming 2012 Earth change and stuff like that, Planet X, Nibiru, Pole Shift. If you believe in any of them. We'll never know.

Topping up? You mean Dollar Cost Averaging? It's a fallacy. This strategy is for those who clearly don't know about the market. It's a 'trick' in the Unit Trust industry to get people to invest constantly so that the unit trust companies have constant supply of income. Best to buy and sell. When you have more money to invest, wait till you have sold everything, and want to buy again. Then pool all your money together and buy.

If you are a businessman, would you hold your stock for long term and wait for 5, 10 years for the price to go up before selling it? Or would you sell your stock at a small profit, take the money to buy more stock and sell it and repeat the process? We have to run our personal finance the way a business runs it. That way we will see profit.

Property investors are the same. The smartest one I have seen are usually those that buy and sell. They don't hold it long term unless it generates good rental income. In gold investment, you don't get 'rental income'.

My mom-in-law bought a house to live in and still living in it after more than 30 years. So what if you tell me that the price of the property has appreciated so and so much. It's all only on paper, unrealized profit. The wiser thing to do is to sell it and invest in another better property at a better location. Price of property in Kota Damansara for instance and Bandar Utama too, appreciated a lot if you have sold your old property and bought these. The old property's price has just stop growing much after it reaches a certain age.

Your gold investment is also unrealized profit if you just keep it for long term. You don't see the money. Once in awhile, take some profit out and enjoy a holiday trip. That's what I will do.
There are many other things I can discuss with you on buy-and-sell strategy. Many more examples. I hope you understand my points. :-)