Archive for the Financial Planning Category

Financial Intel

Posted in Financial Planning on April 18, 2009 by chastoms

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(Please click on the Financial Intel link to download the PDF version of my newsletter from Rapidshare)

I published my Financial Planning newsletter, Financial Intel,back in June 2008, targeting anyone who is interested in saving and investing for a secure financial future, focusing on financial independence. I also wrote about the current financial crisis and what one should do to weather this storm.

My job now is to help people to be better prepared for retirement and financial crises, and show them ways they can reduce their expenses, increase their savings for investment, and to hedge against inflation. Basically helping people to leverage on their savings. Looking at the current financial scenario, banks are not able to give high interests on deposits. It now below 3%! The only way they could do it and in a safe way is to get a proper financial plan. Units trusts are deemed too risky because of the performance criteria place on the fund managers. Granted that their job is to maximize  returns, but they seem to disregard the risks. After all, it not their money! Their prime focus for them is also to get their ‘Awards’, which will help them get more investors. In Malaysia, a lot of people have had their fingers burnt, losing much of their hard earned savings to bad investment advice. Some of them have used their Employee Provident Fund (EPF) savings and have lost a bundle!

Investment Linked plans, or the Variable Life plans, as it is called in the US, is a much safer bet, because of the utilization of the ‘dollar cost averaging’ method. There is also a coverage, which is referred to as ‘insurance wrapping’, to help protect the investor. Banks and Unit Trust companies provide no such thing! Moreover, we help to spread the risk for the investor, and in the long run, the returns one will be getting will be a lot more than what one gets from the banks. Granted that the Unit Trust companies were able to give a bit more higher returns  when the market was bullish, but now, because of the global recession, the Unit Trust companies are doing badly.

As mentioned earlier, fund managers in these companies take a much higher risk on their investors monies, but when things take a bad turn, they fall down hard.There is nothing to cushion the fall. Currently, the scenario for the mutual fund market for Investment Linked plans is quite good because the share values of financially and fundamentally strong companies, especially in China, has been discounted up to 70%.Hence the rebound, which will be inevitable, based on the historical data form the past 70 odd years, will enable a lot of people to make a lot of money! As Billionaire Investor, Warren Buffet said, ‘We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful’.

I have added in a link to my friend, mentor and associate, Dr. Jeffery Chiew, who is a financial planner par excellence. He financial planning enterprise is considered preeminent in the financial planning world, in Asia as well in America.  Dr Jeffrey is the Founder President of the Malaysian Association of Chartered Financial Consultants, President of the Chartered Financial Consultants Alumni, Asia Chairman of the International Association of Registered Financial Consultants, President of the Life Underwriting Sales Executive Board, and listed in the Who’s Who in Malaysia and the New Malaysian Who’s Who.

Dr. Jeffrey has just published a financial planning book,’The Millionaire Formula’, and it is currently the top selling book in MPH for over 4 months, in Malaysia. In it, he emphasized this fact that everyone needs to have at least a million is saving after retirement. Why? Because based on the current Fixed Deposit returns on savings, it is currently about 3% (at it will be going lower still!). This gives about 30K as interests earned annually, which works out to  $2500 per month. Enough for anyone to have a reasonably comfortable life after retirement, provided that inflation and life-style remains the same.

The link to his blog is: