Check Balance Portfolio

Its June…. meaning it’s time for me to check-balance my portfolio. It took ~ 2 hours to update my 3 category portfolio , cash , bond & equity.

As you can see from my allocation of each type , clearly I’m an aggressive type of investor. After a check- balance, last year return is ~ 27% , my equity still gives me the biggest return for last year as compare with others. I will maintain this portfolio for another year since it’s not an economy disaster yet, at least here in Malaysia, but will continue to monitor and make the necessary adjustment over time.

Gold breached the USD1,500 an ounce threshold !

Its good news to me ..... as anticipated gold struck the new record high yesterday. Its surpass the USD1500/ounce .... for all gold investors congratulation ...

The few main reason of the price breech is, fear of weakening dollar , no alternative currency, high inflation, decreasing investor faith in European Bonds .... according to uk.ibtimes.com ...

Will writing …. Is it important for us at this age ?

In recent days, a lot of financial experts / speakers emphasis on will writing or estate planning. How important is this will writing for a middle age couples like me in their 30’s ? I know that retirement planning is good if you plan it as early as possible … but will writing , what good can it bring ?


I’m currently reading a book authored by famous financial adviser Mr. Yap Ming Hui ,“Maximise What You’ve Got: No Matter How Much You Have Now” …. And find it very interesting; even though the book is meant for millionaires, I personally feel that it’s for everyone no matter what your financial standings are …..

Although all the topics discuss in the book is quite useful and interesting, one particular topic makes me thinks a lot…. It’s about will writing and the consequences if you not doing so …..

Mr. Yap, discuss about double tragedy, where both husband and wife loss their live …. What will happen to their young children’s? …. Are you prepare enough for them, did you plan ahead for them for any circumstances …. Do you want your young children’s to be place in an orphaned home? What will be their future …

These really make me not sleeping well at night ….

To Be or Not To Be …..in Debt !?

Is it good to be in debt or it’s a total nightmare? What kind of debt do a person can have and what type of debt should a person must avoid totally … Are all the debts behave the same?

I have come across on 2 different term for debts .. a good debt and a bad debt ….. do debt really exists with such a behaviour, good or bad ?

If it so …which debt is good? Is housing loan a good debt? Any loan pertaining to wealth building, such as property buying, gold investment or unit trust investment can be categorized a good debt?

Is buying a car consider a bad debt? Is buying a expansive Tag Heuer watch with your credit card consider a bad debt even though you are effort to pay the minimum payment every month ….

Too much confusion here ….. Let me share you an illustration of a life story, which I read from an article of a friend some years ago ….

Disclamation: - The name appeared on the below example are not from those who still leaves or death. The usages of the names are sole purpose of examples for financial education purpose only. .. ha ha ha ….

There are 2 good friends in their late 40’s … Mr. Washington Vetrivel (WV) & Mr. Chicago Saktivel (CS), their understanding of debts are totally different.

               Mr Washington Vetrivel believes that debt must be totally avoid no matter it’s a good debt or bad debt, thus, he is avoiding all kind of debt and likes to pay in cash for all its expanses. He is a well renowned architect earning a 5 figure pay every month. His property (double storey semi-D house) is bought by using its hard earn cash. His spouse is a teacher working at a private school earning 5k a month. They have 2 children currently pursuing their tertiary study abroad. All the expanses for their studies were paid by their parent’s cash and this leads the couple to save less money from their monthly income. Life goes on smoothly until one misfortune day where Mr. WV has a stroke and paralyzed half of his body. This force the employer ‘retired’ Mr. WV with a small compensation payout. Since the family loss their main source of income, the wife is currently running the family with her pay added up with the compensation money from her husband company. Few months have pass though, but, Mr. WV have no sign of improvement and the family is in financial crisis now, they have no enough cash to fund their children education overseas, thus, now the wife already desperate to sell the house well below the market value, yet they find it difficult to sell the house or re-finance the house due to their age limit and limited source of income. This of course interrupt their children education abroad.

                Mr Chicago Saktivel who is also a renowned architect, earns 5 figure pay a month, believes that good debt is actually can help in long run. So, he bought his property ( a double storey semi-D ) with a bank housing loan with a MRTA ( Mortgage Reducing Term Assurance ) and conservative enough to save the balance to purchase another shop house ( on loan ) for the purpose of rental with a MRTA of course. Further he continues to regularly save his income in few investment tools such as unit trust and share market. His wife, also a teacher in a private school earning 5k a month have 2 children studying abroad. Mr. CS also takes up an education loan for the children and pay them slowly till the children complete the study, which of course he spend a little money to buy the MRTA. Life goes on well, till the same misfortunate day where he suffers from a stroke and paralyzed half of his body. He cannot continue his current job and loss the main source of income. With a same small compensation from his company, he his forced to rest at home. Now, the after effect of Mr. CS stroke is different, since almost all his loan is good debt, the MRTA fully paid his house, shop house and his children’s education loans leaves no burden to his wife to run the family. With the dividend returns from his share market, unit trust and rental income, he is still able to run his family happily without any disturbance for his children education and future.

Now, base on the 2 illustration above, which category do you want to be? Are you wants to be a debt free or otherwise?

Being in debt is not the end of the world, some debts can actually helps us in the most wanted time, such as the above Mr. Chicago Saktivel’s illustration. The main killer is the bad debts, such as over spend on credit cards or personal loans are actually pull down your overall net worth.

It’s good to think twice before every use of the credit card; do I really need to purchase this item? Is it a need or wants? Can I survive without the item I intend to purchase another month? Can I pay back the credit I use by end of the month in full?

Answer the entire question by your self and evaluate your answer logically before you ever swab the credit card at the cash counter …..

Why my loan application rejected .....

Recently I'm applying for a housing loan. This is my planning of 3rd house solely for investment. But loan application of  $100K , with re-payment period of 30 years was rejected by the bank.

Why is this happen at first place ?? I know my income is good enough for a such loan, but after discussion with the bank officer , she tells me ...my monthly commitments is more than 60%, which banks treat as above loan limit. I feel sad ... but this makes me think ... there is no point of investing if your monthly loan commitment more than the limit ..... now , where should I focus ?? Keep on investing or reduce all my bad debt and than think of investing ?

Now have to plan how to reduce my monthly loan commitment, and than later plan on investment.

999.9 Gold bar

Ok , as per plan I've bought the 50 gram 999.9 gold bar with a price of $7968. Re-sale my 20 gram bar for $3010. That's a handsome return of 20.6% in 1 year. Actually I bought the 20 gram gold bar last year February. Its only been year , not 2 years as per my previous post.

My precious holding the 50 gram precious bar ... :)

Now, lets wait the price appreciate again, hope it can reach $1500 dollar per-ounce as predicted. With the Japan disaster, most probably the price of the yellow metal will go up.

I still believe, invest in precious metal will some how won't let you down in long run .......

Gold Bar or Gold Saving Account ?

Lately, I’m focusing on Gold investment. As you can see, the price of gold has climbed dramatically from $85 a gram 2.5 years ago, till now $145 a gram. That's an appreciation of almost 70% in 2.5 years!

Wow... say you bought a gold of 100gram in 2008, the price will be somewhere Rm8500 give and take. You cash out now with a spread of 4% (Public GIA account), you can have an immediate cash of $13900 ... a gain of Rm5600 or a handsome return of ~ 60% in 2 years. That's a 30% return a year !

Can FD match that!? I' haven’t touch on the inflation part of the currency yet !

Actually I did open a Public GIA account in 2008 and buy 23 gram of gold with $85 a gram , but I partially sold ( 13gram ) of gold few months later and make a profit of $130 and sold another 8 gram when the price climb to $96. Another small profit of $85. In total I make a gain of ~12% in 4 months time. I still keep the 2 gram till now ….

I have heard about Public Gold selling 999.9 gold bar, with less spread somewhere in 2010. So, for just to give a try and of course excitement of holding a 20gram gold bar, I bought a unit for $2490. The current price of the bar ( minus the spread of 6.8 % ) is $3008 today !

Decided to bought another gold bar today for $3200 , but on the other hand , decided to buy a bigger qty. The next option I have is the 50gram bar. The selling price of this bar is at $7962 today pricing.

Now this is the trickier part …..

As I know, saving regularly on unit trust can help on dollar-cost-averaging, I thought if we practice the same technique in gold buying can actually lead me to something ….

Now lets do the math :-

20g – Buy price (2009) - $2490 – 1 gram is $124.50
20g – Selling price ( 2011) - $3008 – 1 gram is $150.40
Gain of $25.9 a gram or 20.8%

Option 1 :-
I buy another 20 gram of 999.9 bar
20g – Buy price ( 2011) - $3200 – 1 gram is $160

Thus my holding of gold is 40 gram now with average buying pricing of $ 142.25 / gram. The spread of 20g gold bar is ~ 7%. Thus, my yielded price of 40g gold is $152.21 / gram.

Option 2 :-
Resale the 20g bar for $3008 ( With gain of $518 )
Buy a 50 gram of 999.9 bar instead.
50g – Buy price ( 2011) - $7962 – 1 gram is $159.24

Thus my holding of gold is 50 gram now with average pricing of $ 148.88 / gram. The spread of 50g gold bar is ~ 6%. Thus, my yielded price of 50g gold is $157.81 / gram.

Option 3 :-
Resale the 20g bar for $3008 ( With gain of $518 )
Invest in Public GIA the whole lump sum including the capital for 50g bar.

Capital for 50g - $4954
Re-sale for 20g - $3008
Total - $7962

Current GIA account gold price is; Buying - $143.04 Selling - $137.51
Its going to give me 55.66 gram of gold. ( In numbers )

Pro of doing this
• Spread is less ~ 4%
• Save , no need to hold on physical gold
• Save , since Public bank is renowned bank in Malaysia

Con of doing this
• Cannot pawn the GIA saving book, you can do so with physical gold.
• Need to sell the units for immediate cash rolling.

Which option to choose ? mmmm …… Considering the spread of 6% for 50g bar, and the convenience of cash rolling and the current bull market for gold …… I think I will choose option 2 ….. What do you think ?

Its been a while since my last posting ..... perhaps busy with my MBA and as usual work ....

Pass my MBA with good result though ...3.33 in CGPA not bad for a man with a wife , 2 children and elderly mother and also sister to take care ..... its really a challenging life out there ...

Anyhow , I didn't loose any of the knowledge learn in my MBA course, Corporate Finance is the best subject I ever found in the course ..... and you know why i like the subject , because my dream is to become financial independent by the year 2019 ... another 8 years to go .... phew ! looks how time fly by ... need to keep the phase .....

OK lets talk about my achievements here .....

Recently, I review my net worth and its shows a wonderful figure .... my net worth now is almost reaching to 250K ..... that a quarter of a million ..... thanks to blogger KC LAU and Azizi Ali .... this are 2 of my mentors to achieve this level ....

I bought their books and its worth every penny !

KC LAU - Top Money Tips for Malaysian
AZIZI ALI - Property power pack

As per my previous post , I do investment in several investment tools , and majority of my $$ in unit trust.

As what Warren Buffet said ... " Every crisis is an opportunity " Some of the unit trust I bought have tripled in their NAV ..... my unit trust portfolio return for the year 2010 is ~ 18%.  My biggest return comes from gold investment which is ~ 27%.

Will try my hard to reach my goal to be a financial independent by the year 2019 ..... there's always room for growth !