Finance - Value of Money

Finance is basically study about value of money in different time interval and how to determine it. Just look at a simple example: For a RM1 in your hand now, is it still worth the RM1 value as same as today in 10 years later? Today you can buy a product X with RM1, but 10 years later, you may need to spend RM5 or more on the same product X, due to inflation effect.

In economic, we call the above money value measurement as “buying power”. So, let’s have a look at Malaysia inflation rate, it is about 5% - 6% in average annually, if you are going to save your money in a commercial bank fixed deposit, with deposit rate of 2% - 3% annually, it is definitely unable to cover the gap left behind inflation rate, in simple words, it means that your money “buying power” value will gradually reduced in future no matter how much your saving is. Well, how to avoid this?

Set aside on personal view on money; now let’s change your sight to a company view. When a company considering investing in a project, launch new product, buying new asset or else, they will firstly think about the return on the investment, as company is profit-oriented. Well, how do they decide whether to make an investment? If there are more than one investment alternative, which should they go in? How do they determine the minimum required rate of return?

Look, the answers to the above questions were what we study in finance. Even things are quite complicated in this field, but, in a big picture; the main point in finance is just about “value of money”.

Next post will be touch on various rates (return rate, discount rate, interest rate and else) and their what-and-how effect on money value. Thanks for reading my post~! :)

Funniest Ever Political Stories

For them who think that political events are boring stuffs, this blog post should have change your mind~XD

http://www.ahyap.com/blog/mca.php

Anyway, I personally like this blog too besides that post~^^

Buffettology

Among the most important laws that Buffett learned:

1) It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

2) When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.

3) Management does better by avoiding dragons, not slaying them.

4) As if governed by Newton’s first law of motion, an institution will resist any change in its current direction.

5) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds.

6) Any business craving of the leader, however foolish, will be quickly supported by detailed rate of return and strategic studies prepared by troops.

7) The behavior of peer companies, whether they are expanding, acquiring, setting compensation, or whatever, will be mindless imitated.

8) It is not a sin to miss a business opportunity outside one’s area of expertise.

9) If your actions are sensible, you are certain to get good results.

10) Do not join with managers who lack admirable qualities, no matter how attractive the prospects of their business.

11) Fearful when others are greedy, greedy when others are fearful.

12) First investment rule: do not lose money, second rule: don’t forget the first rule.

Securities Investment and Portfolio Management

Securities Investment and Portfolio Management course is an introductory investment course on investment alternatives available and to the theory and practice of investments and portfolio management. This course covers the primary financial securities – stocks, bonds, and derivatives, and methods for combining these underlying assets into a portfolio.

A) Introduction to Investments

1) Introduction

2) Equity Markets

3) Buying and Selling Equities

4) Risk and Return

B) Market Efficiency and Investor Behavior

1) Asset Pricing Theory and Performance Evaluation

2) Efficient Market Hypothesis

3) Market Anomalies

4) Psychology and the Stock Market

C) Investment Analysis

1) Business Environment

2) Financial Statement Analysis

3) Value Stock Investing

4) Growth-Stock Investing

5) Technical Analysis

D) Fixed Income

1) Bond Instruments and Markets

2) Bond Valuation

E) Investment Management

1) Mutual Funds

2) Global Investing

3) Option Markets and Strategies

4) Futures Markets

5) Real Estate and Tangible Assets

Financial Statement Analysis

Financial statement analysis is an integral and important part of a broader field of business analysis. Business analysis is the process of evaluating a company’s economic prospects and risks. This includes analyzing a company’s business environment, its strategies, and its financial position and performance.

Business analysis is useful in a wide range of business decisions such as whether to invest in equity or in debt securities, whether to extend credit through short or long term loans, how to value a business in an initial public offering (IPO), and how to evaluate restructurings including mergers, acquisitions, and divestitures.

Financial statement analysis is the application of analytical tools and techniques to general purpose financial statements and related data to derive estimates and inferences useful in business analysis. Financial statement analysis reduces reliance on hunches, guesses, and intuition for business decisions. It decreases the uncertainty of business analysis. It does not lessen the need for expert judgment but, instead, provides a systematic and effective basis for business analysis.

This subject’s content divided into 3 categories: Overview, Accounting Analysis and Financial Analysis.

A) Analysis Overview
1) Overview of Financial Statement Analysis
2) Financial Reporting and Analysis

B) Accounting Analysis
1) Analyzing Financing Activities
2) Analyzing Investing Activities
3) Analyzing Investing Activities: Intercorporate Investments
4) Analyzing Operating Activities

C) Financial Analysis
1) Cash Flow Analysis
2) Return on Invested Capital and Profitability Analysis
3) Prospective Analysis
4) Credit Analysis

5) Equity Analysis and Valuation

Think Deep In Finance - Part 2: Asian Rare Earth Private Ltd and Bukit Merah Village

Continue on my previous post on the inverse perception on finance. If you had read the supplement of China Press currently (started at 23th Nov 2009), you should have know that there used to be a toxic (rare earth) plant operated near Kampung Baru Bukit Merah, Lahat in Perak a few decades ago, which is also where my house located.

In 1979, Asian Rare Earth (a Japan company) came under close scrutiny after it was discovered that its operation was causing radioactive emissions in the area. It was extracting yttrium, which is used in making colour TV tubes, from monazite, and the process created the radioactive thorium hydroxide waste. The company was de-commissioned in the early 1990s after a long-drawn legal battle and countless public protests.

Even it had decommissioned, but there are lots of things at the back there, from what the protestors said, the government had arrested them under ISA that time. And I was unable to understand what the Fucking Hell of the Damn Shit “high” officer thinking that time.

Man, the solid facts that so much villagers suffering due to that damnable toxic plant, and the officer just to guarantee so easily that there is no problem on the operation of that plant? And when villagers stepped out to protest for the sake to protect their own lives and healthy population for their beloved, but the Fucking authority captures them under ISA, how could it be? Why?

I just wanna keep questioning on the officers in charged, did you Fucking ever live at that area? How do you know there will be no effect on the villagers as you are not one of them and didn’t ever visit them who are suffering once? As you just live at your luxury house and stay at your comfortable working place, but able to judge everything without seeing them by your own Ass Hole eyes?

Well, I just wondering, is that a country development and capital inflow much more important than human’s life? Why the damn authority that time (one of them included country’s top leader that time, Dr. M…), didn’t ever care for the poor villagers? What the hell stuffs running in their mind? That’s why I said before, if you think finance is a field to help developing the world, you should think twice on it, for there are lots of stories behind that beyond yours and mine knowledge.

I am glad and paid my full salute to the peoples who fight endlessly and persistently to banish that toxic plant that time. You are the great people, much greater than the Fucking Hell Ants class which only think of and chasing for power and wealth, in the past, current (presently the cases that most of us seen, almost not “news” anymore…) and forever, but never care for the citizens in sincere. God sake, maybe this is only piece of the pie only…pitiful citizens.

Why Maxis PE As High As 17 Times?

- Brand
Brand will play a significant role in push up Maxis share price up to as high as 17 times PE. But, is it worth that much? In personally, I think this kind of intangible asset shall be worth 3-4 times PE only.

- Stability (Leading position in market share)
The stability of Maxis in earning revenue, without doubt, is performing well for many financial years, and the performance result to their leading position in the industry’s market share. Thus, it is definitely a factor to mark-up their share price much higher than the EPS or Book Value.

- Fair Market
To be fair, Maxis have to fix the share price on the average level of the industry, thus, this formed the basic price level of Maxis share on 17 times PE.

- Expectation
Well, the above reasons is not the ultimate power to push the share price till so high, the most solid reason, in my personal view, must be the share buyer. Why I said like that? Think, if buyer not willing to acquire Maxis share at such price and require the price at a lower level, and insist on that, do you think Maxis still able to fix and sell their share on that price level? Second, because the buyers scramble for the shares, in consequences, this will raise the share demand, and of course, the price level too.

So, why buyers have so high demand on that? The above three reasons should be a few significant of the reasonable answers. Back to the point, do you really think that the above 3 reasons should have the Maxis share mark-up at a 17 times PE? What your say?

Think Deep In Finance

In finance field, it is the responsibility for the professionals to make sure the clients and employers they service for have the most value return to their investment or wealth. However, I always think about something else out of this box, something that worth of us to think deeply in it.

Currently, you should have heard lot of news about the destructive non-stop cloudburst in many places in the world, as a sequent from rapidity critical global warming phenomena. As a finance student, I think and ask myself, what is the relationship between Finance and these natural (or maybe man-made) disasters?

Did Finance help to avoid this, or it is one of the factors which prick up these disasters? In common, we knew that factories, cars, cigarettes, toxic wastes, and lots more things appear and increase rapidly only in modern times, is the main reason which contribute to current earth critical condition. Well, how do these modern things acquire the capital or finance resources to get being build, manufactured and produced? Even this is my field, but as a fact, yes, I have to admit that it is finance world which contribute the capital to the existing of those modern things.

We finance people always proud that we are the one which contribute to a country’s economy and development, but how if we are also the one who contribute towards earth destruction? Is it also worth for us to proud for? Well, I did not deny that we also the one to help gather the finance resources for lots of projects which trying to save the world from the brink of destruction. But, I believe that it is only a small amount if compared to the capital flow in the industries which produce modern things as they can give big return to the investment, for finance field have a rule, great investment must be compensate with great return, thus, it is common that our main investment is always towards industries creating pollution.

Finance did have ethics, but the ethics is mainly on accountability and responsibility on the money only, but rarely a point to point at which field or industry that should be invested. Well, this is what I discussed so far in this post, there will be lots more things I am going to explore and discuss in later post, hopefully my posts on these issues will let people in this field think another way deeply.

Financial Markets & Institutions

This post will introduce on another financial subject under USM management course, Financial Market is a subject on examining how financial markets (such as bonds, stocks, and foreign exchange) and financial institutions (banks, insurance companies, mutual funds, and other institutions) work. Financial markets and institutions not only affect you’re your everyday life but also involve huge flows of funds – trillions of RM – throughout our economy, which in turn affect business profits, the production of goods and services, and even the economic well-being of countries. What happens to financial markets and institutions is of great concern to politicians and can even have a major impact on elections.

This subject’s learning content will be generally divided into two major categories: Financial Markets & Financial Institutions.

a) Financial Markets

1) Fundamentals of Financial Markets
- What Do Interest Rates Mean and What Is Their Role in Valuation?
- Why Do Interest Rates Change?
- How Do Risk and Term Structure Affect Interest Rates?
- Are Financial Markets Efficient?

2) Central Banking and the Conduct of Money Policy
-Structure of Central Banks and the Federal Reserve System
- Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics

3) Financial Markets
- The Money Market
- The Bond Market
- The Stock Market
- The Mortgage Market
- The Foreign Exchange Market
- The International Financial System

b) Financial Institutions

1) Fundamentals of Financial Institutions
- Why Do Financial Institutions Exist?
- What Should Be Done About Conflicts of Interest? A Central Issue in Business Ethics

2) The Financial Institutions Industry
- Banking and Management of Financial Institutions
- Commercial Banking Industry: Structure and Competition
- Savings Associations and Credit Unions
- Banking Regulation
- The Mutual Fund Industry
- Insurance Companies and Pension Funds
- Investment Bank, Security Brokers and Dealers, and Venture Capital Firms

3) The Management of Financial Institutions
-Risk Management in Financial Institutions - Hedging with Financial Derivatives

Corporate Finance

As I had stated earlier, I will post what USM finance major learned in overall. This post will be about the content of Corporate Finance. So, what and why learning Corporate Finance?

Finance and financial thinking are everywhere in our daily lives. Consider your decision to go to college. You surely weighed alternatives, such as starting a full-time job immediately, and then decided that college provided you with the greatest net benefit. More and more, individuals are taking charge of their personal finances with decisions such as:

- When to start saving and how much to save in retirement.

- Whether a car loan or lease is more advantageous.

- Whether a particular stock is a good investment.

- How to evaluate the terms for a home mortgage.

Our career paths have become less predictable and more dynamic. In previous generations, it was common to work for one employer your entire career. Today, that would be highly unusual. Most of us will instead change jobs, and possibly even careers, many times. With each new opportunity, we must weigh all the costs and benefits, financial and otherwise.

Some financial decisions, such as whether to pay RM2.00 for your meal, are simple, but most are more complex. In your business career, you may face such questions as:

- Should your firm launch a new product?

- Which supplier should your firm choose?

- Should your firm produce a part of the product or outsource production?

- Should your firm issue new stock or borrow money instead?

- How can you raise money for your start-up firm?

In this course, you will learn how all of these decisions in your personal life and inside a business are tied together by one powerful concept, the Valuation Principle. The Valuation Principle shows how to make the costs and benefits of a decision comparable so that we can weigh them properly. Learning to apply the Valuation Principle will give us the skills to make the types of comparisons - among loan options, investments, and projects - that will turn you into a knowledgeable, confident financial consumer and manager.

This course main content:

1. Interest Rates and Valuing Cash Flows

- The Valuation Principle: The Foundation of Financial Decision Making

- Net Present Value (NPV) and the Time Value of Money (TVM)

- Interest Rates

- Bonds

2. Valuation and the Firm

- Investment Decision Rules

- Fundamentals of Capital Budgeting

- Valuing Stocks

3. Risk and Return

- Risk and Return in Capital Markets

- Systematic Risk and the Equity Risk Premium

- Determining the Cost of Capital

4. Long-Term Financing

- Raising Equity Capital

- Debt Financing

5. Capital Structure and Payout Policy

- Capital Structure

- Payout Policy

6. Financial Planning and Forecasting

- Financial Modeling and Pro Forma Analysis

- Working Capital Managamenet

- Short Term Financial Planning

7. Special Topics

- Option Applications and Corporate Finance

- Risk Manegement

- International Corporate Finance

Bill Gates' 11 Rules

In Bill Gates' book for high school and college graduates, there is a list of 11 things they did not learn in school. In this book, Bill Gates talks about how feel-good, politically-correct teachings created a full generation of kids with no concept of reality and how this education set them up for failure in the real world.

The 11 things are:

1. Life is not fair, get used to it.

2. The world won't care about your self-esteem. The world will expect you to accomplish something before you feel good about yourself.

3. You will not make 40 thousand dollars a year right out of high school. You won't be a vice president with a car phone, until you earn both.

4. If you think your teacher is tough, wait till you get a boss. He/She doesn't have tenure.

5. Flipping burger is not beneath your dignity. Your grandparents have a different word for burger flipping; they called it opportunity.

6. If you mess up, it's not your parents' fault, so don't whine about our mistake, learn from them.

7. Before you were born, your parents weren't as boring as they are now. They got that way from paying your bills, cleaning your clothes and listening to you talk about how cool you are. So before you save the rain forest from the parasites of your parents' generation, try 'delousing' the closet in your own room.

8. Your school may have done away with winners and losers, but life has not. In some schools they have abolished failing grades; they will give as many times as you want to get the right answer. This doesn't bear the slightest resemblance to anything in real life.

9. Life is not divided into semesters. You don't get summers off and very few employers are interested in helping you to find yourself. Do that on your own time.

10. Television is NOT real life. In real life people actually have to leave the coffee shop and go to jobs.

11. Be nice to nerds. Chances are you'll end up working for one.

*I found this article from an e-book, feel worth to read on it, so post at here for sharing purpose.

Accounting vs Finance

Many people (especially junior) wonder what is the main difference between accounting and finance, I myself had ask the same question many times since I taking accounting subject in Form 6 even till the earlier stage of entering finance major in USM management course.

Well, after studying finance for quite a period, what I had found between the differences between these two fields is:

1) Accounting is a subject mainly focus on determine facts and accuracy of reporting, while Finance is a subject on using facts to determine both current and future value.

2) Accounting is working on accuracy and reliability, while Finance is working on prediction and creating value on money.

3) Accounting is mainly on studying numbers and figures, but Finance is mainly study on variable on real cash.

4) What a people always hear in Accounting is asset, liability, historical cost, matching principle and else accounting terms, in Finance, you will always hear of various interest rates and time value of money.

5) Example: Accountant must responsible for the accuracy on the financial report that he/she prepared or audited. Finance related jobs have to determine and make sure that the current money/cash in hand can have a maximum value in specified future time period.

Even both of the subjects are closely related, but differences are still existed. In USM, the finance major will learn these particular courses: Corporate Finance, Financial Market, Investment, Financial Statement Analysis, and Financial Derivatives.

Later I will post the main contents of the above courses, and hopefully this will help those junior to make a good choice when considering your further study in this field.

Maxis share price ended RM5.42 in 1st day trading

Thursday 19th Nov 2009, the 1st day Maxis listed again on Bursa, as what many people expected, the hot stock had a so high trading volume, as much as 3057843, and thus push the share price up to RM5.42, an increase of 8.4%. And being the top of the list of Bursa in both trading volume and gainers.

As a finance student, I wonder how the buyer of the stock value such a expensive stock, as Maxis share had a PE as high as 17 times, and today ending share price again push it near to 18 times, is it really worth that much? If there is professionals between them, what is the intrinsic value of the company that make them invest (in fact mostly is trading only) in this stock? Well, is it the reason where there is a phenomena where peoples behavior of tend to following popular stock?

I also wonder how many buyers intend to buy and hold it for a long period, with a current dividend yield of 0.04, I personally did not think that will worth enough to hold it that risky long period to cover back the cost. Thus, It is expected a vast of speculative trading will occur on this stock to gain short term capital gain only, and thus in future short term, the price will be quite volatile, barring that Maxis able to generate a enormous profit and reduce the PE and increase the dividend yield.

I am still working on reading the company prospectus to determine the future growth potential, maybe it is a joke for many people for still researching on the prospectus today as it had published long time ago. Well, despite a finance student, it is shameful to say that now I only realized that I learn very little on those practical knowledge, hence, I created a blog to train myself toward this, and try to learn as much from other experienced guru by reading their blog post, hopefully I can became like one of them soon~huh~

Sometimes When We Touch ~Nice~

Today I heard this song when riding a bus, its give me so nice impression in instance, It just so suit my music favor taste, so just get the song and share it here, hope whoever listen will like it too~^^

Sometimes When We Touch (with lyric)
Uploaded by mistresslavender. - Music videos, artist interviews, concerts and more.

You ask me if I love you
And I choke on my reply
Id rather hurt you honestly
Than mislead you with a lie
And who am I to judge you
In what you say or do
Im only just beginning
To see the real you

And sometimes when we touch
The honestys too much
And I have to close my eyes and hide
I want to hold you till I die
Till we both break down and cry
I want to hold you till the fear in me subsides

Romance and all its strategy
Leaves me battling with my pride
But through all the insecurity
Some tenderness survives
Im just another writer
Still trapped within my truth
A hesitant prize fighter
Still trapped within my youth

And sometimes when we touch
The honestys too much
And I have to close my eyes and hide
I want to hold you till I die
Till we both break down and cry
I want to hold you till the fear in me subsides

At times Id like to break you
And drive you to your knees
At times Id like to break through
And hold you endlessly
At times I understand you
And I know how hard you try
I watched while love commands you
And Ive watched love pass you by
At times I think were drifters
Still searching for a friend
A brother or a sister
But then the passion flares again

And sometimes when we touch
The honestys too much
And I have to close my eyes and hide
I want to hold ya till I die
Till we both break down and cry
I want to hold you till the fear in me subsides

Cry Like a Baby

Remember our cry since we just enter this world?

Remember why we cry that time?

I cant' recall that.

But,

I know that is one of my mom's sweet memories.

 

Soon we grow and became a child.

We do still cry, but less,

as we know we cry for something,

But,

I can recall that I just cry for some trivial matters,

and now still remain as one of my cherish memories.

 

Not long later we became teenager,

Do we cry?

Some said yes, some said no anymore.

But,

I know during that time, even if we cry, that is seldom occur,

 especially in the front of other peoples.

As, in our mind we told ourselves that it is shameful.

 

We came to adult soon after our teenager life,

I believe that most of us found it is difficult to cry anymore,

not because we cant' cry,

not because we feel shameful.

The reason is there is scarcely a reason for us to cry out,

We thought that we are able to solve everything by ourselves.

Since then,

we start to hide and accumulate lots of grief emotion in our heart.

Even if we felt going to breakdown,

there is only crystal tears silently roll down.

 

By getting older and older,

cry will gradually became so strange to us,

for there is nothing we gonna chase for,

nothing to worry when we are a step away from the path to heaven,

so much, so much,

since teenager till the end of our journey,

we did not cry out our emotions and feelings,

we just left it in our soul,

and bring it to the heaven along with us,

with deep regret...

So, friends, you know why baby just keep crying since birth?

because when they turn around in the heaven before,

they feel something uncomfortable,

and feel that something miss in their previous life.

They think deep,

and finally find out that they miss so much chances to cry,

and to express their emotions and feelings to other people around them.

So, they decide to enter the world again,

just for a simple purpose:

"To Cry Like a Baby"

*Hope you like this and email it to your friends and family members~:)

Summary of Malaysia Budget 2010 (3rd Strategy)

3rd Strategy: Focusing on Well-Being of Rakyat (Citizens)
1) Preventing Crime

-RM3.7bil allocated to increase efficiency of security force.

-Total RM1bil provided to improve PDRM services.

-RM1.9bil will be provided to armed forces.

-Another RM622mil will be provided for Malaysia Maritime Enforcement Agency.

2) Improving Income and Quality of Life of the Rakyat

2.1) Eradicating Hardcore Poverty

-Distribute Federal Welfare assistance on the 1st day of each month.

-Continue the “Skim Program Lonjakan Mega” with an allocation of RM141mil which will benefit 5000 families.

2.2) Assisting the Poor and Vulnerable Groups

-Continue the SPKR with an allocation of RM180mil.

-Provide skills training and entrepreneurship programs to more than 3000 women.

2.3) Establishing “Kedai Desa” (Rural shops)

-RM30mil will be allocated to UDA Holdings Bhd to build 300 units of shops in nationwide rural area.

2.4) Eradicating Urban Poverty

-RM48mil allocated to implement related programs.

2.5) Increasing Home Ownership

-More than 44000 low cost houses will be sold at a price of between RM21500-RM35000 per unit by DBKL and JPN, besides; JPN also will provide 74000 low cost houses to be rented in 2010. Priority will be given to the low and middle income groups for the above programs.

-RM200mil will be allocated under Ministry of Housing and Local Government to extending appropriate financial assistance to rehabilitate low and medium cost houses.

-The Government will launch a scheme that enables EPF contributors to utilize current and future savings in Account 2 to obtain houses.

2.6) Expanding Public Health Facilities

-RM14.8bil allocated to manage, build and upgrade hospitals and clinics. Besides, Government will also allocate RM10mil to expand 50 community clinic services in selected urban areas.

2.7) Enhancing Social Safety Net

a) RM224mil allocate to the disabled. And also RM174mil provided for the senior citizens.

b) Allocate a sum of RM15mil to assist poor patients and purchase medical equipments.

c) A total RM3.3mil provided, which increase the allowance rate from RM50-RM150 a month for every disabled children enrolled in NGO-organized special schools.

2.8) 1Malaysia Sukuk

The Government will issue 1Malaysia Sukuk (Syariah-Based Government Saving Bond) of total RM3bil, offered to all Malaysians aged 21 and above, with min investment of RM1000 and max RM50000, maturity period of 3 years with 5% annual return rate paid quarterly.

2.9) 1Malaysian Retirement Scheme

-Government will establish the above scheme which administered by EPF for those who self-employed and without fixed income.

-For every RM100 contribution, the Government will contribute 5% subject to max RM60 per annum, which is an addition to the existing dividend paid by EPF. This contribution is only for a 5 year period and contributors may withdraw the savings at age 55.

2.10) EPF contributions

-EPF contributions will be increase to 11% on voluntarily basis and effective immediately. And will revert to 11% starting from 1 Jan 2011.

-Government proposes the existing personal tax relief of RM6000 be increases up to RM7000 for EPF contribution and life insurance premiums.

2.11) Developing Wakaf Properties

RM20mil will be provided for this particular purpose.


3) Strengthening Infrastructure in Rural and Remote Areas.

-In 2010, a sum of RM2.3bil will be allocated to:

a) RM857mil for construction of both rural and village roads

b) Priority will be given to the soil stabilizer in the construction of rural roads, where appropriate.

c) RM530mil allocated to supply water and RM825mil allocated to supply electricity.

d) Provision of RM88mil to implement 5356 social amenity projects.

-Government will spend RM41mil to improve the income and quality of life of the Orang Asli Community.


4) Improving Public Transport

a) Accelerate formation and operation of SPAD as a single authority to monitor and enforce service standards as well as provide a long term plan for public transport and expected to be operational in 2010.

b) Acquire 8 new EMUs and refurbish 9 EMUs by KTMB.

c) Acquire 35 units of LRT trains by SPNB.

d) Construct covered walkways linking LRT stations to nearby activity centers.

e) Expand special lanes and increase the number of buses in KL. And 4 new hubs will be constructed in Penang.

f) Fast-Track construction of the Integrated Transport Terminal in Gombak.

g) Implement dedicated lanes for buses on underutilized expressways and modify Touch’n’Go lanes at toll booths.



Glossary

PDRM: Polis Diraja Malaysia (Royal Malaysia Police)

SPKR: Skim Pembangunan Kesejahteraan Rakyat

DBKL: Kuala Lumpur City Hall

JPN: National Housing Department

NGO: Non Government Organization.

SPAD: Public Land Transport Commission

EMUs: Electric Multiple Units

KTMB: Keretapi Tanah Melayu Bhd

SPNB: Syarikat Prasarana Negara Berhad

*Adapted from Malaysia 2010 Budget Speech by Prime Minister Najib 

Are You Rich in Internal Assets

I found this nice article from a personal finance website, and would like to share it here.

Are You Rich in Internal Assets?

As each of you gets busy working and finding ways on how to increase your net worth, remember to pay attention to the assets that make you a unique person. I am referring to your ‘internal assets’. Your internal assets refer to your intelligence, creativity, generosity, persistence, patience, vision, compassion and all the other good qualities. Let us not forget your other skills like organizational skills, time management skills, persuasion skills, team work, etc. However, you must discard any ‘internal liabilities’ that you are carrying within you. For example, anger, laziness, selfishness, small-mindedness, etc. These negative qualities will drag you down preventing you from achieving your life’s goals.

Your children’s assets

Developing your internal assets is important. As a parent watching my young children grow, I want them to have an abundance of good internal assets. I do not tell them that I wish they would grow up to be a wealthy person with lots of money and material things. I am sure that is not what you tell your children either.
As parents, we concentrate on building our children’s character and internal assets which will ensure that they grow up to be successful and happy people. You can call this important process as building the foundation of their true wealth.
Do you agree that being wealthy also means being rich on the inside? It is not enough to be wealthy by having lots of money, properties or material things and poor in terms of internal assets. I call this having superficial wealth only. I believe we also need to be rich in internal assets to be a happy and well-rounded person.
If you know the story of “Scrooge”, then he is a perfect example of someone who is rich but totally lacking in internal assets.
So, do you want to be like Scrooge?
Read other articles by Jacquelyn at WParent.com on parenting matters and Tips4Everyone.com on solving marriage problems.
This article is posted at: KCLau's Money Tips

The Mayonnaise Jar

I just received this email from my friend, and I like the words, post and share here, and wish whoever read this like it too~!

When things in your life seem , almost too much to handle,
When 24 Hours in a day is not enough,
Remember the mayonnaise jar and 2 cups of coffee.

A professor stood before his philosophy class

And had some items in front of him.

When the class began, wordlessly,

He picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls.

He then asked the students, if the jar was full.

They agreed that it was.

The professor then picked up a box of pebbles and poured them into the jar.
He shook the jar lightly.

The pebbles rolled into the open Areas between the golf balls.

He then asked the students again if the jar was full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar.

Of course, the sand filled up everything else.

He asked once more if the jar was full. The students responded with a unanimous 'yes.'

The professor then produced two cups of coffee from under the table and poured the entire contents into the jar, effectively filling the empty space between the sand. The students laughed.

'Now,' said the professor, as the laughter subsided,

'I want you to recognize that this jar represents your life.

The golf balls are the important things - family, children, health, Friends, and Favorite passions –

Things that if everything else was lost and only they remained, Your life would still be full.

The pebbles are the other things that matter like your job, house, and car.

The sand is everything else --The small stuff.

'If you put the sand into the jar first,' He continued,

'there is no room for the pebbles or the golf balls.

The same goes for life.

If you spend all your time and energy on the small stuff,

You will never have room for the things that are important to you.

So...

Pay attention to the things that are critical to your happiness.

Play With your children.

Take time to get medical checkups.

Take your partner out to dinner.

There will always be time to clean the house and fix the disposal.

'Take care of the golf balls first --

The things that really matter.

Set your priorities. The rest is just sand.'

One of the students raised her hand and inquired what the coffee represented.

The professor smiled.

'I'm glad you asked'.

It just goes to show you that no matter how full your life may seem,

there's always room for a couple of cups of coffee with a friend.'

My Wonderful Financial Dream...

If I am going to start enter in job market in 24 (I will graduate at late 23), then I need to plan my financial goal well for my future.

Well, I wish and would like to achieve financial freedom at 50 years old. That means I have to save and accumulate a total sum of million net cash in 26 year’s time.

Emm…if start working at 24 years old, just to save a proportion of money and have the money being invested at a compounding interest rate of conservative 10% annually, I was just need to save around RM800 monthly in average, that’s seems not a big problem to me.

But~wait wait wait wait….How about asset? I also wanna purchase some property assets too, with an estimated 7% (based to current Commercial Bank BLR) mortgage rate annually, for a common middle class property of around RM200000, if I purchase at 30 and wish to fully occupy it within 10 years time (wishly between 30-40 years old), it means I need to paid a sum of RM394000 for that. In other words, I have to allocate around another RM800 monthly since 24.

What about a car? Not going to set a too high target, If only just going to get a “Middle Class National Car~:P” Perodua Kenari cost around RM40000 once I have reached 24, and finish all the installment within 5 years with an current loan rate of around 3%, that would increase my monthly saving amount of RM650.

Well, insurance is important too; maybe I will just allocate a RM200 monthly for that particular purpose and increase that proportion if it is necessary at future.

Hmm…seems like I had plan enough for my financial needs, but I think it is better to allocate more RM300 monthly for extra or emergency usage, if there is luckily nothing extraordinary happen before I reached 50 years old, huh, it will be another big sum total of RM110000 at that age.

Huh, now lets sum up all my saving needs one by one…RM800+RM800+RM650+RM200+RM300, the total is…….dang dang dang dang~RM2750, RM2750 monthly~is monthly~! And it is just saving only, not included my daily expenses…Oh shit, If I really wanna achieve that financial dream, that means I need to get a very very high paid job…walao, or either seeks for part time job?? Part time job? It will definitely kill me man~!

Sigh…seems like I have to expand my financial freedom due date to 65, or to adjust my financial goal at a lower level…well, that’s means I gonna calculate again…@.@...so now I know that’s not a easy things to become a financial planner…lol….gonna seriously consider whether want to step on to this career or not~haha~

Conclusion...wonderful dreams always hard to achieve one...sigh...so just keep on dreaming...just like what Jacky Cheung song said: "Life is Just Like a Dream"~what your say~??? :D

Summary of Malaysia Budget 2010 (2nd Strategy)

Summary of 2nd Strategy: Ensuring Holistic and Sustainable Development

1) Enhancing Highly Skilled Human Capital
1.1) Expanding Access to Quality and Affordable Education
RM30bil will be allocated to primary and secondary school education, where:
-RM19bil for emoluments
-RM2.8bil for student assistance and scholarship program
-RM1.6bil for schools construction (where RM1.1bil for refurbish).
Besides, 4 NKRA will be focused, which are namely:
a) Strengthening pre-school education – RM48mil will be provided in 2010.
b) Increasing literacy and numeracy rate – RM32mil allocated and all 2010 year 1 school children will be involved.
c) Creating high performance school – RM20mil allocated to target 20 schools to be recognized as SBT in 2010.
d) Recognizing school principles and head teachers – Monetary or non-monetary incentives will be awarded to head teachers and principles who achieve target performance.

1.2) Safeguarding Welfare of Student
a) Award national scholarship to 30 crème de la crème students.
b) Convert PTPTN to scholarship for those who graduate with 1st class honors degree or equivalent started at 2010.
c) Provide 50% discount on KTMB long distance fares for student aged 13 and above, commence at 2010.
d) Netbook package cost RM50 per month for 2 years offered to 100000 local university students by Telekom, commence 2010.

1.3) Enhancing Skills of the Workforce
a) RM1.3bil for polytechnics and community colleges.
b) RM504mil for Industrial Training Institutes and Advanced Technology Training Centre.
c) RM438mil for Institut Kemahiran MARA, Kolej Kemahiran Tinggi MARA, Institut Kemahiran Belia Negara, and Institut Kemahiran Tinggi Belia Negara.
d) RM 110mil for state skills development centres and selected training institutions.
e) Accredit SKM level 4 and above as equivalent to the academic stream.

1.4) Expanding PERMATA program
-RM100mil allocated to implement related programs.

1.5) Strengthening Public Higher Education Institutions
-Government will consider relaxing the rules and regulations on hindering IPTA from generating their own income.

2) Strengthening Banking and Financial System
-A new motor basic insurance and takaful scheme will be offered and expected to be introduced by the mid of 2010.

-Micro insurance and takaful coverage will be expanded for small businesses, small scale businessmen will benefit from coverage ranging RM10000-RM20000, with a premium of RM20 per month.

-Government will review, improve, and enforce Anti-Money Laundering Act and Anti Terrorism Financing Act 2001.

2.1) Invigorating the Stock Market 
a) First stage of allowing brokerage sharing at a minimum rate of 40% for remisier which takes effectively, and second stage of fully liberalized commission-sharing will be effective 1 Jan 2011.
b) Allow 100% foreign equity participation in corporate finance and financial planning companies compared at least 30% local equity before.
c) All PLC required offering e-Dividend, and stockbroker will offer e-Dividend option too.

2.2) Further Developing Islamic Finance System.
Government proposes existing tax incentives be extended to 2015 in financial services especially for Islamic finance. Scope will be extended:
a) Stamp duty exemption of 20% on Islamic financing instrument.
b) Tax exemption on banking profits derived from overseas operations, and also extended to profits of insurance and takaful company which derived from overseas operations.
c) Double deduction on expenditure incurred in promoting Malaysia Islamic
Finance.
d) Deduction on expenditure incurred on the issuance of Islamic securities approved by SC and LOFSA.
e) The tax treatment accorded to SPV established under the Companies Act 1965 is extended to SPV established under Offshore Companies Act 1990 electing to be taxed under the Income Tax Act 1967.
f) Tax exemption on profits received by non-Ringgit Sukuk approved by SC extended to Sukuk approved by LOFSA.

2.3) Ar-Rahnu Micro Credit Program
Government will encourage all syariah-compliant financial and banking institutions to offer this scheme.

3) Combating Corruption
a) Formulate a Whistle Blower Act to encourage corruption disclosure and will be introduced in 2010.
b) Establish 14 Special Corruption Session Courts and 4 Special Anti-Corruption Commission Appeal High Courts.
c) Enhance Malaysia image in anti-corruption.

4)  Development of Regional Economic Corridors.
-RM3.5bil will be allocated by Government in Regional Economic Coridors.

4.1) Developing Putrajaya and Cyberjaya
Efforts will be intensified to increase business, commercial and recreational activities.

5) Improving Effectiveness and Efficiency of Government Administration

5.1) Strengthening Management of Government Finance
-If to implement GST, it will replace the current sales and service tax as well as exemption will be given to the low income group.

-Government proposes that upstream petroleum companies income tax for year of assessment 2010 based on income derived from 2009 be allowed to pay in installments within 5 years.

-Government proposes that a tax of 5% be imposed on gains from the disposal of real property from 1 Jan 2010. But the existing tax exemption will be retained for gifts between close relatives. This exemption will be given on disposal of a residential property once a lifetime.

-Government proposes RM50 service tax per year imposed on each principle credit card and charge card, included those issued free of charge, and also RM25 service tax on each supplementary card, effective 1 Jan 2010.

-Government will impose a sum of RM10000 for each AP to open AP holders, effective 1 Jan 2010.

-Government allows government agencies to rent out certain assets and retain 50% of rentals received while the 50% shall be remitted to the Government as revenues, effective 1 Jan 2010.

-Government has identified assets (lands and buildings) which can be jointly developed or sold to GLC.

5.2) Restructuring of Fuel Subsidy Scheme
-To benefit only targeted groups, Government will implement a fuel subsidy management system in early 2010 as well as other commodities.

5.3) Intensifying Government Delivery System
-Civil servants with monthly household income from RM2000-RM3000 are qualified for the RM180 monthly pre-school fee subsidy. An allocation of RM200000 will be made available for every Ministry and Government department to establish day-care centre.

5.4) Individual Income Tax
-Government proposes income tax rate reduced to 26% effective from the year of assessment 2010, as well as cooperatives and non-resident individual’s tax rate.

-Government proposes personal relief be increased from RM8000 to RM9000, effective from the year of assessment 2010.

-Government proposes income tax on employment income of Malaysians and foreign knowledge workers residing and working in Iskandar Malaysia be imposed at a rate of 15% only.

*Adapted from Malaysia Budget 2010 Speech by Prime Minister Najib.

Glossary

NKRA: National Key Result Areas

 KEMAS: Jabatan Kemajuan Masyarakat

SBT: Skim Bantuan Tuisyen

Crème de la crème: French word, which means the very best.

KTMB: Keretapi Tanah Melayu Berhad

SKM: Sijil Kemahiran Malaysia

PERMATA: Program Pendidikan dan Pengasuhan Kanak-kanak

PLC: Public Listed Company

SC: Securities Commission

LOFSA: Labuan Offshore Financial Services Authority

SPV: Special Purpose Vehicle

GST: Goods and Services Tax

AP: Approved Permit