It is general true that many Malaysians are ill prepared financially for retirement. As reported by EPF,within 3 years of withdrawal upon retirement their funds are exhausted. Basically, when these Seniors were younger they did not have the opportunity to be exposed to financial planning, unlike nowadays we have many financial planners as well as plenty of financial information and products. However, it is better to start somewhere for the Seniors.
Read the following..
Malaysians less confident about preparing for retirement
By LAALITHA HUNT
LOTS of working adults are paralysed when it comes to planning for retirement. Most people will delay this as long as they can, possibly due to their lack of knowledge about financial matters.
Generally, the more knowledgeable an individual, the more confident he is in taking control of his financial destiny, which usually is about securing a comfortable retirement.
A recent study by the non-profit Employee Benefit Research Institute in the United States found that only 13% of Americans said they were confident of a comfortable retirement – drastically reduced from 27% in 2007.
Figures in Malaysia show a similar sentiment. The AXA Life Outlook Index findings for 2009 indicate that Malaysians’ satisfaction with their preparation for retirement has dropped. In 2007, 23% were confident about their retirement years, but this has since dipped to 14%.
While many working Malaysians are reasonably financially literate, certain groups are less so and therefore less confident in managing their finances. This is a worry considering that the elderly make up an increasingly large proportion of our society.
Demographic and socio-economic forecasting provider Global Demographics Ltd forecasts senior citizens (those 50 years and above) to increase from 15% to 25% of the total Malaysian population over the next 20 years.
As the Malaysian population ages and retirement looms for many, the issue of financial literacy in a retirement planning context has become particularly salient.
Abacus for Money chief executive officer Carol Yip says that there is no single product or solution available to guarantee one’s comfortable retirement.
She notes that the main asset likely to be available to most working Malaysians upon their retirement is their Employees Provident Fund contribution.
Other assets may include property, shares, unit trusts, term deposits, inheritance, insurance, government pension as well as emerging private pension funds.
Yip asserts that individuals must increase their level of financial literacy so that they can go cherry-picking from the wide array of products available in order to ensure a comfortable retirement.
Besides the usual means of consulting financial planners and reading financial magazines to improve financial literacy, Yip calls upon employers to provide training to their staff in order to empower them with financial knowledge to plan their future.
Yip also encourages retirees who are in the early stage of retirement to equip themselves with financial knowledge in order to wisely invest their money so as to protect it from inflation as well as to provide recurring income over the medium term.
The senior citizen population of 50 and above in Malaysia as well as regionally is said to be rapidly expanding into a large, affluent market.
MasterCard Asia Pacific, in a study, estimates that the spending power of the retired population in Malaysia to exceed US$10bil (RM35bil) by 2015 – more than double the figure from 10 years before.
Madam Chong (not her real name), 56, who recently retired but is still an active investor with a moderate risk profile, was looking to diversify her portfolio.
The ideal product that she is looking for is one that can offer recurring income with double-digit returns annually, monthly or quarterly. It should also be capital-guaranteed as well as easy to liquidate with no penalties over five to ten years.
“I was prepared to consider regional investments with a slightly higher risk,” she says.
After looking around, she discovers that there are no such products that meet all her criteria except for two that offer returns between 6% and 7% per annum, but require high deposits of RM250,000.
“There are a couple of insurance companies that offer returns of about 4% annually with smaller deposits,” Chong says.
Given the current economic uncertainty and the absence of investment products specifically catering for retirees, Chong reiterates the need for retirees to be financially savvy instead of just depending on advice from third parties to manage their wealth.
Monday, August 24, 2009
Thursday, August 20, 2009
Warren Buffet warns budget deficit harms dollar
Warren Buffett warns budget deficit may harm dollar
Warren Buffett has given warning that the US’s $1.8 trillion (£1.1 trillion) budget deficit could harm the purchasing power of the dollar, even though he admits the American economy “appears to be on a slow path to recovery”.
By James Quinn, US Business Editor
Published: 8:07PM BST 19 Aug 2009
Warren Buffett admitted that the American economy
Warren Buffett admitted that the American economy "appears to be on a slow path to recovery"
Mr Buffett, the world’s second-richest man and famed for his ability to make astute investments, believes that the “gusher of federal money” flowing in to the US economy could eventually fuel inflation and devalue the greenback.
In a comment piece in yesterday’s New York Times, Mr Buffett said that while he “resoundingly applauds” the efforts the Federal Reserve and both the Bush and Obama administrations have made to support the US economy, it does not come without a price.
Writing that the “US economy is now out of the emergency room,” he continues: “Enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects.”
“For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.”
Mr Buffett likened the threat of what he called “greenback emissions” to that of greenhouse emissions, before urging members of the US Congress to work to reduce the budget deficit by making changes to taxes and spending.
His comments were made as the Pacific Investment Management Company (PIMCO), warned that the dollar’s status as the world’s reserve currency will undoubtedly come to an end.
Curtis Mewbourne, PIMCO’s portfolio manager said in a report that “ we are clearly seeing a loss of status for the US dollar as a store of value”.
Warren Buffett has given warning that the US’s $1.8 trillion (£1.1 trillion) budget deficit could harm the purchasing power of the dollar, even though he admits the American economy “appears to be on a slow path to recovery”.
By James Quinn, US Business Editor
Published: 8:07PM BST 19 Aug 2009
Warren Buffett admitted that the American economy
Warren Buffett admitted that the American economy "appears to be on a slow path to recovery"
Mr Buffett, the world’s second-richest man and famed for his ability to make astute investments, believes that the “gusher of federal money” flowing in to the US economy could eventually fuel inflation and devalue the greenback.
In a comment piece in yesterday’s New York Times, Mr Buffett said that while he “resoundingly applauds” the efforts the Federal Reserve and both the Bush and Obama administrations have made to support the US economy, it does not come without a price.
Writing that the “US economy is now out of the emergency room,” he continues: “Enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects.”
“For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.”
Mr Buffett likened the threat of what he called “greenback emissions” to that of greenhouse emissions, before urging members of the US Congress to work to reduce the budget deficit by making changes to taxes and spending.
His comments were made as the Pacific Investment Management Company (PIMCO), warned that the dollar’s status as the world’s reserve currency will undoubtedly come to an end.
Curtis Mewbourne, PIMCO’s portfolio manager said in a report that “ we are clearly seeing a loss of status for the US dollar as a store of value”.
Tuesday, August 18, 2009
Credit Card Scam
Subject: Duped by credit card scam upon check in at Hotel
You arrive at your hotel and check in at the front desk. When checking in, you give the front desk your credit card (for all the charges for your room). You get to your room and settle in. Someone calls the front desk and asked for (example) Room 620 (which happens to be your room).
Your phone rings in your room. You answer and the person on the other end says the following, 'This is the front desk. When checking in, we came across a problem with your charge card information. Please re-read me your credit card number and verify the last 3 digits numbers at the reverse side of your charge card.
Not thinking anything you might give this person your information, since the call seems to come from the front desk. But actually, it is a scam of someone calling from outside the hotel/front desk. They ask for a random
room number. Then, ask you for credit card information and address information.
Sounding so professional that you do think you are talking to the front desk.
If you ever encounter this problem on your vacation, tell the caller that you will be down at the front desk to clear up any problems. Then, go to the front desk and ask if there was a problem. If there was none, inform the manager of the hotel that someone called to scam you of your credit card information acting like a front desk employee.
If you feel that the tips are useful, please forward it to your relatives, friends & colleague.
You arrive at your hotel and check in at the front desk. When checking in, you give the front desk your credit card (for all the charges for your room). You get to your room and settle in. Someone calls the front desk and asked for (example) Room 620 (which happens to be your room).
Your phone rings in your room. You answer and the person on the other end says the following, 'This is the front desk. When checking in, we came across a problem with your charge card information. Please re-read me your credit card number and verify the last 3 digits numbers at the reverse side of your charge card.
Not thinking anything you might give this person your information, since the call seems to come from the front desk. But actually, it is a scam of someone calling from outside the hotel/front desk. They ask for a random
room number. Then, ask you for credit card information and address information.
Sounding so professional that you do think you are talking to the front desk.
If you ever encounter this problem on your vacation, tell the caller that you will be down at the front desk to clear up any problems. Then, go to the front desk and ask if there was a problem. If there was none, inform the manager of the hotel that someone called to scam you of your credit card information acting like a front desk employee.
If you feel that the tips are useful, please forward it to your relatives, friends & colleague.
Thursday, August 13, 2009
Becareful with your Credit Cards!
Dear Brothers & Sisters,
I would like to relate an incident that my former colleague ( age 75 yrs) encountered at the General Hospital Kuchng (GH) on 8 th Aug, 2009.
My former colleague went to GH for a check up in the morning, in the process his wallet was picked by someone. After he realized what happened, he reported to the police immediately. By the time he got home around 10.00am the Bank called regarding his credit card and the officer asked whether he has used his card at several petrol stations that morning. He said no, as he has just reported to the Police of his lost. The Bank stopped the card. In fact, the thief has spent around RM600 at Everise, 4 th mile.
Well, this thing happened, but it is good for all of us to be careful with our credit cards. Thieves like to get Senior citizens, so you may want to pass this information along.
Tips about handling Credit cards:
1. If stolen, immediately report to issuing Bank to stop card(s). Important, so that who ever got hold of your card cannot use it like what I related above.
2. Report to the Police in order to secure a formal report for future use with the Bank(s).
3. While in Kuching, just bring along one card only ( if you have several cards ) to reduce your risk.
4. Keep the telephone numbers of the Banks handy so that you can call immediately you experience a card lost. ( Load the number(s) of the Bank(s) in your mobile phone.
5. NEVER keep your PIN numbers with your cards or in your wallet. Memorise the numbers.
These are immediate actions and not exhaustive. What ever it is please be careful.
God bless. Pray that you will never encounter this type of incident.
Brother in Christ,
Alwin
I would like to relate an incident that my former colleague ( age 75 yrs) encountered at the General Hospital Kuchng (GH) on 8 th Aug, 2009.
My former colleague went to GH for a check up in the morning, in the process his wallet was picked by someone. After he realized what happened, he reported to the police immediately. By the time he got home around 10.00am the Bank called regarding his credit card and the officer asked whether he has used his card at several petrol stations that morning. He said no, as he has just reported to the Police of his lost. The Bank stopped the card. In fact, the thief has spent around RM600 at Everise, 4 th mile.
Well, this thing happened, but it is good for all of us to be careful with our credit cards. Thieves like to get Senior citizens, so you may want to pass this information along.
Tips about handling Credit cards:
1. If stolen, immediately report to issuing Bank to stop card(s). Important, so that who ever got hold of your card cannot use it like what I related above.
2. Report to the Police in order to secure a formal report for future use with the Bank(s).
3. While in Kuching, just bring along one card only ( if you have several cards ) to reduce your risk.
4. Keep the telephone numbers of the Banks handy so that you can call immediately you experience a card lost. ( Load the number(s) of the Bank(s) in your mobile phone.
5. NEVER keep your PIN numbers with your cards or in your wallet. Memorise the numbers.
These are immediate actions and not exhaustive. What ever it is please be careful.
God bless. Pray that you will never encounter this type of incident.
Brother in Christ,
Alwin
Monday, August 10, 2009
Worst is over
According to world famous economist Paul Krugman, the worst is over for the world. World economies are recovering, but these will take longer than expected, something like at least two years. In Malaysia we are optimistic, as the government put in several stimulus plans and other economic activities to move the economy out of recession, we are seeing some results. Hopefully by second quarter next year we may see a positive economic growth. Considering the facts, Malaysia is doing fairly well.
KUALA LUMPUR: The worst is over in the world economy, but full recovery will be a long time coming, said Nobel prize-winning economist Paul Krugman.
He said measures such as sustained government spending, coupled with fiscal stimulus had brought the world to the point of "rough stabilisation", adding a technical recovery in the US was currently in the works.
"The US is roughly at a turning point as we speak," he said at the World Capital Markets Symposium on Aug 10.
Krugman, who is also professor of economics at Princeton University, said it appeared the global economy had avoided "Depression 2.0".
He said, however, there was every reason to believe a recovery would be characterized by higher growth and industrial output, but lagging employment.
"The world looks like it is heading towards becoming a globalised version of Japan in the '90s," he said.
He said a full recovery was at least two years away, and governments would need to try all different measures to bring recovery, such as implementing more stimulus packages.
KUALA LUMPUR: The worst is over in the world economy, but full recovery will be a long time coming, said Nobel prize-winning economist Paul Krugman.
He said measures such as sustained government spending, coupled with fiscal stimulus had brought the world to the point of "rough stabilisation", adding a technical recovery in the US was currently in the works.
"The US is roughly at a turning point as we speak," he said at the World Capital Markets Symposium on Aug 10.
Krugman, who is also professor of economics at Princeton University, said it appeared the global economy had avoided "Depression 2.0".
He said, however, there was every reason to believe a recovery would be characterized by higher growth and industrial output, but lagging employment.
"The world looks like it is heading towards becoming a globalised version of Japan in the '90s," he said.
He said a full recovery was at least two years away, and governments would need to try all different measures to bring recovery, such as implementing more stimulus packages.
Thursday, August 6, 2009
ASM 1 Malaysia
Yesterday 5 th Aug, the fund was launched. From the news it seem that the reception from the investing public was encouraging as many lined up at ASM offices and Post Offices across the nation to purchase the units. Unlike previous issues which were snapped up on the first day, this one has not. Mostly likely it was because of several issues prior to this one where many had already invested, and perhaps the amount of RM10 billion which is the biggest single issue so far. Well, this means more people can invest in this issue. Because of timing issues, many may not be able to make it on the first day, so this situation is good for these people.
RM10 billion
RM5 billion for Bumiputra
RM3 billion for Chinese
RM1.5 billion for Indians
RM0.5 billion for others
Monday, August 3, 2009
ASM 1 Malaysia
KUALA LUMPUR, July 31 — Malaysians aged 18 and above will be able to subscribe to Permodalan Nasional Berhad's (PNB) Amanah Saham 1 Malaysia (AS1M) starting from Aug 5.
A minimum investment of 100 units at RM1 per unit has been set.
During the 30-day offer period, investors below the age of 55 will be limited to a maximum of 50,000 units while those above 55 will be able to buy up to 100,000 units.
Fifty per cent of units have been reserved for Bumiputeras during the offer period, while the quotas for Chinese, Indians and others have been fixed at 30, 15 and 5 respectively.
Units not taken up under the various quotas will be opened up to all after the offer period expires.
This early commitment that units unsubscribed under racial quotas will be released for general purchase reflects Prime Minister Datuk Seri Najib Razak's resolve to open up the economy and comes after a recent decision to lift ethnic quotas in the stock market.
The move is likely to be well received by the non-Malays who have responded overwhelmingly to recent PNB offerings and fully subscribed all units that were allocated to them in the Amanah Saham Malaysia fund in April and also rushed to buy unsubscribed Bumiputera allocations offered later in July.
The time-limited ethnic quotas will also help boost the credibility of Najib's 1 Malaysia campaign which stresses national unity and after which the fund was named.
"I believe this (limited quotas) is the fairest and most sincere way for PNB to get genuine investors while at the same time giving all Malaysians an equal opportunity to invest," Najib said at the launch of AS1M this morning.
The new fund is one of the "goodies" announced by Najib to mark his first 100 days in office.
Today, he added more "goodies" when he announced that some 50,000 incoming first-year undergraduates at public universities will receive 100 units of AS1M free, courtesy of PNB, Maybank, CIMB Bank, RHB Bank and Pos Malaysia.
According to PNB president and group chief executive officer Tan Sri Hamad Kamarul Piah Che Othman, AS1M will be benchmarked against the Malaysian Government Securities average 5-year yield which is currently between 3.7 and 4 per cent.
"Of course we target to do better," he told reporters this morning.
Hamad also revealed that PNB currently manages about RM120 billion worth of funds of which RM90 billion are funds sourced from the general public. Of the general public funds, some RM7 billion is sourced from the Bumiputera community.
At 10 billion units, AS1M is PNB's biggest fund to date.
Investors can buy it at ASNB, Pos Malaysia, Maybank, CIMB Bank and RHB Bank. No sales charges will be imposed during the offer period.
source: The Malaysian Insider
Another view from Malaysiafinance.blogspot
You can establish more local funds, RM5bn here, RM10bn there, but all stocks will fall in line with a certain kind valuation parameters. Say, there is a 30% foreign funds participation now in the market, they are here because of certain growth assumptions relative to valuations offered. If you increase the amount via new local funds, yes it will create more buying, but institutional funds will also have the ability to take profit and seek out less expensive markets. So, say new funds add 5% demand for equities, that could be taking out foreign funds exiting the market by a similar quantum as the move up might look expensive.
The second assumption is that these RM10bn are new funds, these funds are from the public. Who is to say these funds would not have gone to buy equities as well on their own?
There is a danger which no one in mainstream media is saying. You are literally taking out these RM10bn from the economic system. Unless 100% of these funds are in fixed deposits, then the net effect is muted. If these funds come from disposable income, you can argue that the RM10bn is being sucked out of the system. If anyone studied the velocity of money, each RM1 circulating in the economy is actually worth about RM8 to the real economy. Too many of these funds is deflationary and slows domestic economic activity.
Why are ASM PNB funds seemingly being assumed to "guarantee" to return 6%-8% a year? That is not a true certainty. The track record is good though but its not a guarantee.
Think people, think. I do agree that the fund is ok, but we need to be aware of the wider implications and not be blinkered to think at a superficial level only. After all that, I still think this is a "good thing", but we do need to have an appreciation of how the whole thing works.
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