Teach financially smart kids by example?

An etract from The Sunday Times, Jan 15,2012...

For parents wondering how to pass on financial wisdom, Ms Zimmerman suggests starting

with the ABCs:

"A” is for allowance, where a child earns a certain amount for doing a job.

“B” is for balance, where you tell kids that you don't want to spend all of your money
        right away because there are things you want to save for;

“C” is for charity or contributions to causes the family cares about.

The most important thing parents can do to teach their children about money is not only to lead by example, but also to share what they are doing, Ms Zimmerman says.

Her advice? Ask children where they think money comes from the next time you visit the ATM. "Of course the kids don't get it," she says. "It's not an endless money machine, and that's the start of a great conversation you can have with your kids."

That practise-what-you preach mentality on living within your means is at the heart of Money Savvy Generation, a company that develops products to teach basic personal finance skills to school-age children. Founder Susan Beacham practises what she preaches with her daughters, Allison, 2O, and Amanda, 17. Since she was eight, Allison has had her standard piggy bank replaced with what Ms Beacham calls a "Money Savvy Pig" - a special bank she developed that has four slots instead of one.

The slots correspond to "save”, “spend", "donate" and "invest”, helping children grasp the abstract nature of cash allocation in a concrete wav. Before Allison started college, she sat down with her parents and created a spending plan. "We do this each August and she lives within her budget all year," Ms Beacham says.
When her daughter considered moving into a student apartment, the budget played a role in getting her to reconsider. "One of the big mistakes kids make is to move into an apartment, when it costs twice as much. Indeed, delayed gratification gets to the heart of what separates doers from dreamers.

Ms Braxdale offers: "lf there's something your child wants, that's a great opportunity to say, 'Okay, this is how much it costs, this is how you can get that money, and here's how you can reach your goals'."

82 yrs old come back kid bounces back from bankruptcy

Read this on Adam Khoo website and wanted to keep in my blog as a reminder to me.

At the age of 72 years old, Lim Tow Yong was declared a BANKRUPT. The company he founded in the 1960s, Emporium Group Holdings which he and his brother started in the 1960s and it grew from a turnover of $10 million in its first year to $300 million at its peak in 1984.

In mid 1980s, the recession and severe competition hit the company hard. Saddled with debts of more than $100 million, Emporium was bought over by a Hong Kong company and Lim Tow Yong was declared a bankrupt at age 72.

He struggled to move on. As a 72 year old bankrupt with millions to pay in debts, it was not difficult to fathom why. However just as he had given much hope of overcoming his bankrupt at his age, 800 of his previous employees threw a dinner party to cheer him out.

“I was so touched by what they did. They didn’t have to do it, as I hadn’t been their boss for 10 years, but they did,” he said.

“It touched my heart, and I have never forgotten it. I’ve thought about it every day for the last years and I told myself I must work harder and one day pay them back”

To remind himself, he framed pictures taken from the dinner and looked at it every single day.

Most people at the age of 72 would either be dead or half-dead. Instead of feeling sorry for himself, he picked himself up decided to START ALL OVER AGAIN at the age of 72. After getting discharged from bankruptcy in 1999, he began to work his way back. He went to Malaysia and Brunei, and started stores that partner local retailers. Slowly but surely, he began to grow the business. It was tough at times, Lim Tow Yong had to carry supplies himself on his aged body.

Ten years later, at the age of 82, he sold his 17 stores and supermarkets for $4.2 million making him a millionaire all over again!

Lim Tow Yong had not forgotten about that day where his employees threw a dinner party for him to cheer him on. It was that dinner that changed everything.

So, 10 years after his previous employees threw a dinner party for him, it was his turn. He placed advertisements in newspapers, and about 1,500 people responded. In the end, the dinner cost him about $300,000.

Mr Lim said, “I think about that dinner every night and every day. It touched me. It is the relationship, the bonding, and the strong sentiments that make me want to give back to them.” “That dinner is the thing that brought back some financial fortune for me.”

So for all those of you who are whining, bitching and complaining that you are too old, too tired and no money to make your millions, then stick this article on your wall and stare at it every single day. Think about it. This man not only started with ZERO, he started with -----$. And at the age of 72, don’t you ever dare tell me that you don’t have more energy than him. These are the stories you should continue to read to remind you of the POWER OF THE HUMAN SPIRIT and that everything is possible when you believe in yourself.

Never ever give up. Fight till the very end. I remember watching Rocky (the movie about boxing) where Rocky Balboa (Sylvester Stallone) was being bashed up his stronger opponent. It looked so helpless and it seemed impossible for him to fight back and win.

When he turned to face his coach, his coach Mickey shouted to him ‘ I DON’T HEAR NO BELL’. ‘IF I DON’T HEAR NO BELL, THEN YOU KEEP FIGHTING!’ (The Bell signals that the match is over)

So, until you HEAR THE BELL that your life is over and that you are DEAD, you KEEP FIGHTING!

Fear Cannot Not Stop Us From Dying, But it Stop Us From Really Living

ISAAC CHIN: $5M In REITS, $2M In Properties....And More

Isaac Chin is 1 of the most successfully investors in Singapore...
Below is a copy of the interview Nextinsight has with him.

For the past decade, Isaac Chin has been a full-time investor after a career as a chartered accountant. “I didn't have an inspiring career as an accountant. Nothing great came out of it. If I have to work hard for a salary and put up with a lot of stress, I might as well work for myself - and earn more,” he said.Now aged 62, he has reaped handsome profits from investing in property, equities and bonds. Here he shares his views with NextInsight on the investment landscape and what he is betting on - plus how he spends his money. If you have investing questions to ask Isaac, post them in our forum here.

Among his investments, Isaac Chin has $5 m invested in REITs and collects about $300,000 in dividends a year. Photo by Leong Chan Teik

Q: How did your investments perform in 2010? What has been great and what has been bad, if any?

Isaac: My investment tracked the relatively lacklustre STI performance (up 10.9%) in 2010. My investment returns from equity and bonds paled in comparison to my gains in 2009 which was the best year ever for me. 

Selling my SGS bonds (totaling $1.5M) in Oct 2010 @ 106.85 cents (bought in 29 June 2010 @ 100.75 cents)  was one of my great investment decisions in 2010.

I purchased $500,000 worth of DBS preference shares in October with a dividend yield of 4.7% (10 year SGS Note yield had then dropped to 1.9%). By Dec 2010, I had invested about $5M in A-Reit, CapitaMall Trust, and Suntec REIT. 

Q: Care to give a figure for your 2009 investment return? 

Isaac: I made about $2 million from equity and bonds in 2009. I was lucky to take a big gamble when the STI plunged to 1457 in Mar 09, 2009. 

I remember at that time an investor friend advised me to wait a little longer as he believed STI could hit 1260. My own conviction was that STI had fallen from 3900 in just one year and buying at 1500 level cannot be too far wrong. My defence mechanism was that if STI did fall further to 1,000 say, many people with much higher entry points would get more seriouly hurt than me.  

Moreover, I was paying only 2% interest on my mortgage loan against a 12% dividend return from CMT, Suntec, CapitaCommercial Trust and A-REIT at that time.There was a lot of fear in the market,.so mathematically and psychologically I could not be wrong. 

Isaac has a zest for life - and holidays. He takes good care of his health through jogging and swimming.

Q: What led you to make those REIT purchases?

Isaac: The interest rate is very low, as you know. Bank deposits are paid interest at less than 0.5%p.a. Currently the SGS 10 year bond pays about 2.7% p.a.

The yield spread between S-Reits and SGS Bond will remain attractive at least for the next 6 months.

I have chosen to invest in those 3 Reits because of their large market capitalisation and asset class quality. Moreover I can receive a constant stream of dividend Income of about 6% per annum.

Q: What have you been busy with in the stock market in January?

Isaac: Not just in January but since Mar 2009, at the bottom of the global crisis, I have spent lots of time figuring out the performance of the stock market. My view is that there should be a mini bull run from here with, say, a 15% upside. 

Thereafter, I may switch some funds back to SGS Bonds (whose yield could have risen to 3.5% by then).

The STI was roaring ahead in the 1st week of 2011. It closed at 3279 on Jan 6 but finally dropped to 3179 on Jan 31. I am convinced that it will break out of this tight range and move up to 3500 level in the next 6 months based on fundamentals and technicals.

Q: Currently, aside from REITs, what are your other significant investments, if any?

Isaac: I have 2 freehold condos valued about $4.5M, and insurance policies with cover of over $1M. I pay $36,000 a year in premium for the policy with NTUC Income that provides my family cover against 30 diseases.

Q: Do u use leverage for investing in stocks and property?

Isaac: Less than 50% leverage for the 2 properties and none for the stocks.

* One-off expenses

Q: What is the net yield on your investment property?

Isaac: The rental income after expenses is $45,000, so the net yield is $45,000 divided by $650,000 (capital employed or the cash I paid) = 6.92%

The property purchase price was $1.75M (inclusive of $50k stamp duty) while the loan was $1.1M for which I now pay 1% interest a year.

Current valuation of the property is about $2.15M.

Q: Aside from investing success, what can you say about success in other areas of your life?

Isaac: I have never aspired to be a wealthy person and do not consider myself wealthy at this moment. I think success in life is more than just having money management skills. It should include enjoying a healthy lifestyle, having positive attitudes, a proper mindset and correct relationship with family and friends. All these help to create a balanced personality. Basically I am happy, healthy, optimistic and confident.

Isaac and wife are headed again for a holiday in Europe soon.

Q: I understand that you place good health as a top priority. What do you do to achieve good health?

Isaac:  I do not smoke but drink a glass of red wine each day. Every morning I would exercise 20 mins on the treadmill, swim 20 mins, take yogurt, wheat germ, raw oats and milk for breakfast, and salmon, snow fish and pumpkin for dinner.

Only occasionally do I eatfried kway tiao and hawker food with friends. I think my life is quite regimented with 6-8 hours of daily work, 5 days per week. 

I read, watch comedies and documentaries on Discovery and National Geographic channels, listen to music and have regular lunches with old friends and school mates for relaxation, and holidays to Europe, Japan and China every 4 months to de-stress. I retire to bed early, before 10 pm and wake up by 5 am.

Q: You do enjoy travelling. Why so?

Isaac: Travelling is a form of education. I have visited the Versailles in Paris, the Vatican City in Rome. I have been to Venice, and to Mt.Titlus in Switzerland where I was awe-struck by what I have saw. I thought: the beautiful scenery and architecture must be the Creation of a Superior Being!

I normally cover only 2-3 countries in each trip lasting 15-20 days. Free and easy travel is what I best enjoy. Once in Japan we spent a long time watching the rainbow and sunset by a lake, without the time limit usually set by tour agents, and it was a wonderful experience.

At age 62 now, I can still remember the Chinatown in which I was born and grew up in the 50's and 60's. We lived in cubicles, with 35 people (mostly migrants from China) squeezed into a tiny flat of about 700 sq ft. Such memories of hardship have made me easily contented today.

Additional NOTEs

-> 4-7 years typically for a property cycle.

-> Longer the investment horizon, greater chance of making profit.

What makes a good investment

a) 2nd  property

b) commercial / industrial / residential

c) Rental

d) Rental yield should be greater than 3% (after excluding property tax,  
    maintenance fee,etc)

Simplified Rental yield calculation  =      monthly rent x12

                                                                       Purchase Price

if it gives > 5%, it is consider 'safe'

if it gives >10%, mai tu leow....!

(takes about 20 - 25 yrs to cover your capital)

Isaac Chin: $5Million in Reits, $2 Million in Properties... and More

The Big Fat Greek Gravy Train: A special investigation into the EU-funded culture of greed, tax evasion and scandalous waste

I was shocked when I read this article...!!!


By ANDREW MALONE
Created 11:42 PM on 24th June 2011

China Frets: Innovators Stymied Here

An article on The Wall Street Journal by Li Yuan.
Let hope more countries are abled to 'breed' such talent and creativity of Steve Jobs (I'm still short changing Steve by saying using these words).

Millions of Chinese flooded the popular micro blogging site Sina Weibo to tweet their condolences on the death of Steve Jobs over the past two days. They also raised the question: Why isn't there a Steve Jobs in China?

The tone of the resulting discussion was almost unanimously pessimistic. As is always the case on the Chinese Internet, the discussion quickly moved to talk about the problems in China's political, economic and legal systems. Wang Wei, chairman of the Chinese Museum of Finance, tweeted, "In a society with an authoritarian political system, monopolistic business environment, backward-looking culture and prevalent technology theft, talking about a master of innovation? Not a chance! Don't even think about it."

China may be the manufacturer of the world, but many are frustrated that Chinese companies are better at knocking off others' original work than coming up with innovative ideas. The commemoration of Mr. Jobs' genius highlighted the dilemma.

Chinese companies themselves will perform as well as Apple Inc., but their products won't match up, Kai-Fu Lee told his eight million followers on Weibo. "Chinese companies can be expected to have the market valuation and business model like Apple's within a decade, but it will be difficult to expect any type of Apple-like innovation," he tweeted.

The former head of Google China and founder of a start-up incubator Innovation Works said by phone that Chinese schools focus too much on memorization and don't encourage critical thinking. "It's not that Chinese are not smart or don't have the potential. Look at Jerry Yang of Yahoo Inc. and Steve Chen of YouTube," he said, referring to the two Internet entrepreneurs who were both born in Taiwan and migrated to the U.S. at young ages.

Chen Zhiwu, a finance professor at Yale University, tweeted that in Chinese schools, "The first thing the teachers do is to rub down the edges of those students who are different from the crowd."

One of the most popular postings on Mr. Jobs' legacy came from scholar Wu Jiaxiang. "If Apple is a fruit on a tree, its branches are the freedom to think and create, and its root is constitutional democracy," he wrote. "An authoritarian nation may be able to build huge projects collectively but will never be able to produce science and technology giants." On that, Wang Ran, founder of a boutique investment bank China eCapital Corp., added, "And its trunk is a society whose legal system acknowledges the value of intellectual property."

—Li Yuan

A Look Back at the Life of Steve Jobs

This is a link from MarketWatch which describe the life of Steve Job

12 lessons for us all from the life of Steve Jobs

This article from Brett nicely summarized keys points for us to learn from Steve Jobs (Steven Paul Jobs)

The death of the Apple co-founder has dominated the news from Cupertino, Calif., to Kuala Lumpur. Many are focusing on the way his products and services changed our world. Others are talking about Jobs, the man.

But this was the most successful business leader of his era, and one of the greats. Few have achieved so much, so quickly, and so publicly. It got me thinking: What are the lessons we can all take away? What do his extraordinary achievements tell the rest of us?

Here are 12 lessons from the life of Jobs:

1. Yes, you can make a difference
Anyone trying to achieve real change — in life, in a company or in any organization — probably feels the urge to give up half a dozen times a day. The naysayers and seat polishers will do everything to slow you down. No one is suggesting that what Apple achieved was the result of Jobs alone, but his career is proof of just how much one individual can change things.

2. You need a vision               

It’s not enough to conduct opinion polls and customer surveys, and rely on consultants’ projections. Those are all based on the conventional wisdom and the world as it is today. Jobs imagined things — most obviously the iPod, and the iTunes services — that didn’t yet exist and for which the market was uncertain. While his competitors were still building the products of yesterday, he was imagining, and building, those of tomorrow.

3. It’s not about you
It’s horrifying how many business decisions are still made on the assumption that “well, we have to do something with the XYZ division, so let’s give them this project” or “Buggins has seniority, so he’s in charge.” Do you think the customer cares about Buggins or XYZ? Jobs built Apple into a streamlined operation, focused on the output, nothing else.

4. Focus, focus, focus
Hard to believe, but mediocre managers everywhere like to keep their staff “busy” because they think that’s “productive.” It isn’t. (Ask them what their top priority is, and they’ll name two things. Or four. Or 16.) Apple sure was “busy, busy, busy” when Jobs arrived. And it was going bust. One of the first things he did was ax about 90% of the company’s activities and focus — first on the iMac, then on the iPod.

5. ‘OK’ is not OK
Look at the way Apple’s competitors keep putting out mediocre or unfinished products and thinking they’ll get away with it. Are they for real? The days when you could get by with second best are so over. Jobs was famous for a fanatical perfectionism. It was a core element of Apple’s success.

6. It’s not about the money

Steve Jobs’s life was a thumping rebuttal to all those who are obsessed with cash. The guy had billions: far more than he could ever spend, even if he had lived to 100. Yet he kept working, and striving to achieve greater things. Money? Bah. Something to think about the next time a CEO demands another $20 million a year as an incentive to show up.

7. It ain’t over till it’s over
Fifteen years ago Steve Jobs appeared to be a has-been in Silicon Valley. And Apple was circling the drain: plagued with losses, executive turnover, reorganizations, desperate asset sales and research cuts. Apple’s stock hit a low of $3.23 in 1996, and hardly anyone wanted it even at that price.

8. Give people what they really want
Sounds obvious, right? But most companies don’t do it. They simply produce what they’ve always produced, or what’s comfortable, or what Buggins thinks people want. For years the computer industry churned out ugly, clunky beige products with complicated operating systems. They all did it, and they all assumed that’s what people wanted. Turns out it wasn’t at all.

9. Destroy your own products — before someone else does

Jobs made sure that Apple kept innovating, and rendering its own products obsolete. Creative destruction came from within! That’s why Apple is a $354 billion company, and, say, Palm has vanished from Earth, even though a 2004 iPod is just as out of date as a 2004 Treo. How rare is this? Jobs knew full well that his $500 iPad threatens to cannibalize sales of $1,000 laptops. But he moved forward nonetheless. Most companies wouldn’t.

10. We are all spin doctors now
Critics point out that a lot of what Jobs achieved at Apple was put down to hype and hustle. But that was the point. And Jobs was a master at it — the product teasers, the showmanship on stage, even the black turtlenecks. Truth be told, we live in a superficial age of infinite media. We are all in the spin business. Deal with it.

11. Most people don’t know what they’re doing
It takes nothing away from Steve Jobs to point out that he couldn’t have done it without his competitors. Microsoft, Palm, Nokia, Dell, H-P — the list goes on. They missed opportunities, stayed complacent, failed to innovate and generally mishandled the ways their industries changed. It’s normal to assume that the people around us — and in power — know what they are doing. As Jobs proved, they often don’t.

12. Your time is precious — don’t waste it
Steve Jobs was just 56 when he died — a comparatively young man — and yet during his short spell on Earth he revolutionized the way we live, several times over. What are we doing with our time? It is the resource we waste the most — and it’s the one we cannot buy. Make the most of your short spell on this planet. Make each day and hour count.


Brett Arends is a senior columnist for MarketWatch and a personal-finance columnist for the Wall Street Journal.

Photo from Apple website - Steve Jobs (Steven Paul Jobs) 1955 - 2011

Market undergoing huge change

MARK HULBERT Sept. 30, 2011, 12:03 a.m. EDT
Commentary: Market’s dividend yield now higher than T-Note’s
Believe it or not, the stock and bond markets are behaving in a way that, with only one exception at the depths of the 2008-2009 credit crisis, they have not since 1958—53 years ago: The stock market’s dividend yield is now above the interest rate on the 10-year Treasury note.

For example, the dividend yield on the Dow Jones Industrial Average is 2.8%, and on the S&P 500 index,  it is 2.2%. The 10-year T-Note yield, in contrast, is just 2.0%. This might not initially strike you as that big of a deal, but it is. Most investors who are active today cut their eye teeth during the go-go years of the 1980s and 1990s, when dividends were considered to be little more than an afterthought. Price appreciation was the name of the game. In fact, many of the most widely-held stocks paid no dividends at all. 


But what we’re seeing today could very well be heralding the return of the pre-1958 era in which the market’s dividend yield was consistently higher than that of 10-year Treasuries. In that long-ago era, the bulk of stocks’ total returns came from dividends. Price appreciation contributed relatively little to that total return, if anything at all.


What might account for such a shift to the previous pattern? The best analysis I have seen was published over a decade ago, in the March/April 2000 issue of the Financial Analysts Journal. It was written by Cliff Asness, who is managing and founding principal at AQR Capital Management.


Upon carefully analyzing the yield histories since 1927 for both the stock market and U.S. Treasuries, Asness concluded that the key factor in understanding them was investor expectations of the markets’ relative volatilities.


Prior to 1958, according to Asness, investors expected the stock market’s volatility to be much greater than bond market volatility. To entice investors to incur that greater volatility, the stock market had to provide a higher yield than bonds.


Then those expectations began to change, according to Asness, and with it investors needed a smaller dividend yield to entice them to hold equities. And that is why the stock market’s yield dropped below that of bonds, and stayed there for decades.


Asness’ theory also helps to explain recent developments. The stock market’s extraordinary volatility has so traumatized investors that they now need a much higher dividend yield to make holding equities an attractive proposition.


Will the current situation persist? According to Asness, it depends in no small part on investor expectations of relative volatilities, which is impossible to predict.


But Asness points out that investors’ memories live for a very long time. The memory of the Great Depression lingered for years after it ended, for example, which is one reason why stocks’ dividend yields remained so high for so long.


The bottom line? If investor memories of recent market volatility persist, then prepare yourself for an extended period in which dividends become one of the central preoccupations of the investment community.


Click here to learn more about the Hulbert Financial Digest. 

1984 : Steve Jobs Introduces The Mac

National Debt: CNBC Explains

An article from CNBC. Very explicit....

National Debt: CNBC Explains
Posted By: Mark Koba | Senior Editor CNBC.com