Wednesday, April 8, 2009

How to Set S.M.A.R.T Goals

In financial planning, the most important thing that you need to do is to set financial goals. Your goals could be controlling your spending so that you could pay off your study loan or buy a home/car. Regardless of what your goal is, ensure that it is SMART i.e. specific, measurable, realistic and can be achieved within a certain time frame. So learning to identify and set clear goals is key to your success in life.

Your specific goals will depend on a number of factors-your values, age, financial situation, and interests.

Sample of financial goals

  • controlling your money so you have a little left over every month
  • paying off debt
  • having an emergency cushion in case of car break down or medical emergency
  • buying a home
  • buying a car
  • saving for retirement
  • purchasing "big-ticket" items, like electrical appliances
  • planning a vacation

What is SMART goal?

img_smart.jpg


Example: Johan's goal:

To save for a vacation in Pulau Redang that costs RM1, 000 in 4 month's time. He needs to save RM250 per month.

Specific

To go for a vacation in Pulau Redang – NOT want to go for a vacation

Measurable

Need to have RM1,000 – NOT need to have money

Attainable

Must save RM250 per month – NOT waiting for someone to give free traveling gift voucher

Realistic

To go to Pulau Redang in 4 month’s time – NOT to go to London in one month’s time based on RM250 savings per month

Time-bound

To buy it in four month’s time – NOT when I have money




img_smart1.jpg


Examples of goals based on certain timeframe:
  • Short-term goals can be done in a week or a few months, but no longer than a year. Buying new clothes and saving for a vacation are short-term goals.
  • Intermediate-term goals can be accomplished in one to five years, such as buying a new car or paying off debts.
  • Long-term goals are five years or more, like buying a house or saving enough money to put your children through college/universities.

Remember, you may have all three types of goals, but keep them realistic. Goals that are set too high will frustrate you and you will be tempted to abandon them. Goals that are vague will not motivate you at all. Rigid goals will not work especially when your situation changes. Whatever your goals are, leave some space for adjustments. Prioritise your goals based on which are the most important to you as an individual and which are the most important to your family? Good luck!



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Cara Mengenal Skim Penipuan!

Minimumkan risiko kehilangan wang simpanan anda dengan mengetahui pelbagai jenis pelaburan tidak sah di sisi undang-undang yang terdapat dalam masyarakat kini. Berikut ialah beberapa ciri dan janji yang umumnya ada dalam sesuatu skim penipuan:
  • Untuk setiap pelaburan yang dibuat, anda menerima pulangan yang tinggi, umpamanya, 20-30% sebulan bagi setiap bulan.
  • Anda tidak pernah ditunjukkan produk yang kononnya berkualiti yang perlu anda jual, sebaliknya dibayar mengikut bilangan orang yang anda latih atau mendaftar diri.
  • Anda diberitahu bahawa tawaran itu hanya untuk tempoh terhad dan anda MESTI membelinya sekarang.
  • Anda diminta memasukkan wang ke dalam bank asing dalam mata wang asing untuk mendapatkan suatu hadiah tetapi anda tidak ingat pun pernah masuk sebarang pertandingan atau cabutan bertuah.
  • Anda menerima panggilan telefon menawarkan peluang-peluang pelaburan dan anda sendiri tidak tahu bagaimana syarikat itu mendapat nombor telefon anda.
  • Anda menerima e-mel yang meminta nombor akaun bank anda kerana mereka mahu menghantar wang kepada anda, biasanya berjumlah berjuta-juta dolar Amerika, dari beberapa negara asing. Ini sebenarnya bukanlah satu bentuk skim penipuan pelaburan, tetapi tetap satu lagi skim penipuan yang popular.
  • Anda ditawarkan satu produk pelaburan yang menjamin keuntungan besar tanpa sebarang risiko kewangan.
  • Anda diminta melabur dalam satu skim pelaburan. Alamat dan maklumat perhubungan syarikat pelaburan yang menawarkan keuntungan besar kepada anda itu terletak di sebuah negara asing yang anda tidak dapat pastikan di mana kedudukan sebenar syarikat itu.
  • Anda ditawarkan “hadiah percuma” untuk mendapatkan sesuatu kemudian, contohnya, sejumlah wang yang besar.
  • Anda ditawarkan peluang pekerjaan dengan gaji besar tanpa memerlukan pengalaman dan kelayakan akademi yang berkenaan.
  • Anda didatangi oleh seseorang yang mengaku sebagai ejen bagi syarikat dagangan asing (umpamanya yang beribu pejabat di Makau, Bahamas, Kepulauan British Virgin, dsb) untuk berdagang dalam indeks asing (contohnya, indeks Hang Seng), komoditi (contohnya kopi) atau mata wang asing (contohnya AS$, Yen dsb) tetapi anda perlu mendepositkan sejumlah wang dalam mata wang asing sebagai “margin”, sebelum sesuatu urus niaga boleh dilakukan.
  • Sukar untuk menemui sebarang maklumat mengenai lesen atau kewujudan syarikat itu dalam tapak web mana-mana pihak pengawal selia atau pihak berkuasa yang berkenaan.

Jika anda mengalami mana-mana keadaan di atas, apakah yang perlu anda lakukan untuk melindungi diri anda?

http://www.min.com.my/min/article.aspx?menu=3&menuAttch=282&sec=article

Is this a good time to buy stocks?

Wednesday April 8, 2009

Personal Investing - By Ooi Kok Hwa


THE current financial crisis is making it hard for some investors or analysts to derive the intrinsic value of a company.

Some long-term investors intend to accumulate stocks during this period.

However they are not too sure whether this is the right time to buy stocks even though the share prices of some companies are much lower than analysts’ computed intrinsic value. They wonder whether the current share prices have already factored in all the incoming bad news, like poor revenue, earnings or further write-down on inventories, debtors or other assets.

Some investors may argue that the stock prices are real and truly reflect the value of certain companies – the very low stock prices for these companies may imply that they will go bankrupt soon.

Investors always ask why different analysts compute different intrinsic values for the same listed company. Sometimes they wonder which one should they rely on. Besides, they are unable to comprehend why some analysts keep changing their intrinsic values for certain companies. It may appear that the value changes according to the market and economic situations.

Investors notice that whenever the market recovers, analysts start to revise upward the intrinsic value of some companies, much higher than their market prices.

However, whenever market sentiment turns negative, they start to revise downward the intrinsic value, much lower than the current market prices. This has created confusion among investors and they wonder why analysts cannot provide a fixed intrinsic value for each listed company.

As a result, one common question arises from most investors: can we really rely on analysts’ intrinsic value to buy stocks? Some may even argue: can we really trust analysts’ research reports?

To answer the above questions, we need to understand the meaning of intrinsic value. According to Benjamin Graham, the father of value investing, intrinsic value is the value of the company to a private owner. It is the price of a company that the owner will sell, which should reflect all the facts, including the value of its assets, earnings, dividends as well as potential future prospects.

We need to understand that it is an estimate rather than a precise number. It changes according to market valuations as well as the economic outlook. Besides, analysts’ computed intrinsic values are only valid on the research reporting dates.

They are not valid even a day later because the estimation of the intrinsic values will change whenever the market receives new information on the companies, new economic outlooks or new market conditions.

The movement of interest rates, currencies, commodities, introduction of new stimulus packages, overseas market movement can affect the estimation of the intrinsic values. Furthermore, those variables change every day. Hence, we need to be careful on the reporting dates whenever we read any research reports.

Different analysts use different methods to derive the intrinsic values. Warren Buffett suggests that the intrinsic value is derived from discounting all future free cash flows of the company to present value. He named these free cash flows as owners’ earnings. This method is commonly used in most business appraisal reports and being taught in investment valuation courses.

According to Graham, intrinsic value can be determined by the earnings power of a company. It is the earnings capacity of a company in a normal year – the earnings that it can earn year after year during normal business conditions.

He suggested that we should use normalised earnings and normalised market valuation to derive the intrinsic value. Examining the company’s past earnings trends as well as future average expected earnings will provide us a clue to its normalised earnings. We can use historical market valuation to derive the normalised market valuation.

Hence, we notice that different investment gurus use different methods to derive the intrinsic value. This explains why different analysts compute different intrinsic values for the same company.

As long as they have reasonable basis, supported by appropriate research and investigation, we can accept those values. Nevertheless, we need to pay attention to the assumptions they used as well as the suitability of the valuation methods during that period.

Unfortunately, investors with limited financial training will have difficulties to evaluate the quality of those research reports. We suggest investors read more research reports on the same listed company before coming to a conclusion to buy or sell.

  • Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting.
  • Beware of Fraudulent SMS and Telephone Calls Requesting Confirmation on Credit Card Transactions

    Beware of Fraudulent SMS and Telephone Calls Requesting Confirmation on Credit Card Transactions

    Bank Negara Malaysia would like to caution members of the public to be vigilant when receiving any calls or SMS claiming that it is from Bank Negara Malaysia or any commercial banks. 

    The facts are:

    • There is no department called "Unit Kad Kredit Palsu" in Bank Negara Malaysia
    • 8659-XXXX is not a Bank Negara Malaysia telephone line
    • Bank Negara Malaysia will NEVER request for personal banking information through SMS or telephone calls.

    Based on recent complaints received by Bank Negara Malaysia , there has been an increase in incidents of fraudsters making such calls and sending SMS to unknowing members of the public in order to fraudulently obtain their personal banking information, with the aim of siphoning monies from one's account. 

    From Bank Negara Malaysia 's investigations, the modus operandi of the scam is as follows:

    1. Victim receives SMS or telephone call: Requesting victim to confirm a credit card transaction for the purchase of goods or services purportedly charged to the victim's credit card. 
    2. When victim calls the telephone number provided in the SMS, the fraudsters identify themselves as agents of a commercial bank, and again, ask the victim to confirm whether the credit card transaction had taken place. 
    3. When victim informs the fraudster that he has no such credit card or transaction, the fraudster will start to sound concerned and will advise victim to lodge a report with Bank Negara Malaysia 's "Unit Kad Kredit Palsu", or with the commercial bank's "credit card management department". The fraudster will provide the victim with the telephone number for the "Unit Kad Kredit Palsu". 
    4. When victim calls the telephone number provided, they are greeted by a automated voice message which identifies the company as Bank Negara Malaysia, and the call will then be answered by someone claiming to be a Bank Negara Malaysia officer. This officer will request for information relating to the victim's banking and credit card accounts under the pretense of lodging a complaint on behalf of the victim. 
    5. The fraudsters now have sufficient information to illegally transfer funds out of the victim's bank account.

    Members of the public are reminded not to disclose their personal banking information to any unknown party without verification.

    For further information, enquiries or complaints, members of the public may contact or visit:

    BNMTELELINK (Customer Contact Centre) 
    Tel: 1-300-88-5465 
    Fax: (03)2174 1515 
    Email: bnmtelelink@bnm.gov.my

    BNMLINK (Walk-in Customer Service Centre) 
    Block D, Bank Negara Malaysia 
    Jalan Dato' Onn 
    50480 Kuala Lumpur 
    (Business hours: Monday - Friday, 9:00 am - 5:00 pm)

    ABMConnect (Hotline to Association of Banks in Malaysia ) 
    Tel: 1-300-88-9980 

     

    Bank Negara Malaysia
    7 April 2009