31 July 2011

Chip Eng Seng - transformation in progress

Chip Eng Seng was listed public on year 1999. Since then it has achieved a very high compound grow rate in it's revenue as well as net profit. It's business model is to joint venture with land owner to build various type of buildings, including high rise residential buildings as wells commercial buildings. In my own opinion, it's grow rate accelerated since Raymond took over the management position in year 2006 from his father-in-law. As this is a family business, hence it is lucky that a son-in-law can assist him to manage daily operation works. He has another daughter who graduated from Australia and worked as senior architect there to assist him in property development division. So I believe that he has connection with the property developers there.

To me, my main concern is that whether it can still achieve higher grow rate in next five year. As Chio Eng Seng has no big land bank and has the advantages on construction sector ( it is one of the Grade A construction companies in Singapore), it relies heavily on the relationship with other property developers to achieve synergy between themselves. With highly transparency and good corporate governance in place, I believe that it is not a big problem for CES to grow it's profit to another sky high level in next ten years.

P/s: please consult your investment advisor before making any investment decision.

30 July 2011

Advantage and Disadvantage of Real Estate Investment Against Stock/Shares Investment

  1. Leverage - Normally we could use the mortgage loan to purchase the real estate. It is also a lower risk investment as normally the housing prices will not move fast or down in super fast pace. You can gain a big chunk of money when you use other's people money to purchase your own
  2. Used for Home - If you cannot rent it out for your house, you can still use it for your own home. It does not matter whether the location is far away from your office, as long as you do not really need to pay rental for the home near to your office. Believe me that, you will still earn some energy & time for not moving around your office due to the end of the tenant agreement.
  3. Symbol of Status - Traditionally, people will judge a person by how many properties he owns, regardless whether how much debt he owe to the bank. For Chinese, we believe that the property or land that you bought will give you some happiness. You can pass it to your next generation or for donation purpose.
  1. Liquidity - It is not easy to sell real estate in short period, unless you are willing to take a cut for your selling price.
  2. Investment Horizon - In Singapore, you will be fined penalty for selling a house within 5 years. So basically you cannot buy a house using mortgage loan and sell it at higher price and earn some margin from there. It always take time for getting positive cash flow in longer term.
  3. Supply & Demand - As Real Estatement investment is a long term investment, you must be careful of the supply & demand issues for the next 30 years. In chinese we  call it '
  4. Tenant Management / Real Estatement Management - it takes time to master the management skills for managing your tenants.
  5. Tax - you will need to make the tax payment for property / rental income.

What should you do when you are in your 30s?

1. Buy a house for own living.

It is a need for you to start a family. However, try not to over burden yourself as you always need to set aside an emergency fund here to counter for difficulty. My suggestion to you is that, try to only use 20% or less for the housing loan. If not, then rent the extra space to your good tenants. After you have a house, then you will have more energy to work harder.

2. Buy insurance including medical insurance.

You will never know what will happen in your daily life. Hence. It is advised that to set about 5-10% of your income to purchase the protection to your family after you setup a family. Please get a good financial advisor to assist you on this.

3. Start investing.

It is never too late to start investing for your kids education or for your retirement funds. You will know the difference of investing versus savings after 30 years later. Try not to mix up investment with gambling as you won't make an easy gain from gambling itself. Get an investment advisor to advice you on this.

4. Estate planning.

It is always advised to plan for your family on this, as it will reduce your family risk to inherit fortune from you. Get a good lawyer to help you on assist.

29 July 2011

Mah Sing wins “Best Of Asia” at Corporate Governance Asia Recognition Awards 2011

As I always said, Mah Sing has a strong corporate governance that gives investors self-confidence. I sincerely hope that its Boss can enter Top 20 Richest Man List in Malaysia one day.

Below are the contents that I copied from the source.

Mah Sing Group Berhad was named The Best of Asia at the 7th Corporate Governance Asia Recognition Awards 2011 whilst its group managing director Tan Sri Leong Hoy Kum won the Asian Corporate Director Recognition Awards 2011. 

Leong said, “We place high priority in ensuring good governance in all areas of our operation, with appropriate controls in place to ensure satisfactory levels of accountability and integrity. 

“We are also committed to ensuring high standards of disclosure and transparency, and we are honoured by these awards which had recognized these efforts.” 

The Best of Asia Corporate Governance Asia Recognition Awards are presented to top organisations in China, Hong Kong, India, Indonesia, Malaysia, South Korea, the Philippines, Singapore, Taiwan and Thailand. 

Among the winning criteria include a previous publicly acclaimed track record for corporate governance, disclosure, transparency and investor relations practices. 

The Asian Corporate Director Recognition Awards 2011 recognizes the winner’s contribution in growing the company’s business, social responsibility, environmental protection, as well as efforts in raising the standards of corporate governance practice in the country. 

Mah Sing is one of the most diversified property developers in Malaysia, with 34 residential, commercial and industrial projects in the medium to high end property segments in Malaysia. 

It has an enviable profit track record of 48% compounded annual growth rate (CAGR) from 2002 to 2011, and is a favourite of the investment fraternity due to its strong track record and visible earnings growth. 

As at June 2011, approximately 32% of its shares are held by local institutional investors and 20% are held by foreign institutional investors.

Mah Sing has a market capitalization of close to RM2.2billion and targets to reach a market capitalization of RM5billion within the next 5 year.

Source from: 

Learn to Sleep Well When You are in Investment Journey

If our objective to invest is to enjoy the happiness and healthy of your mind and body, then you should learn how to sleep well when you are in the investment journey. There are too many traders who are rich but not in healthy mode. Why is that so? That is because of the energy and time that they spend in trading are too much, and it cause them to be in higher stress level. However, if you are very good in stress management, then you could be probably continue your trading life.

However, when your age reaches 40 and above, you must manage your life well and try to learn about the long term investment as it is really a good way for your to stay healthy and sleep well without too much worrying about your investment.

Starting my CFA Level III Preparation

I just registered for CFA level III exam. So I would update my CFA level III exam preparation here. The total cost for the registration + eBook are about 610USD. Due to the help of SGD appreciation against USD, I am able to save more money here. Something to note:

  1. The earlier you start preparing for your examination always better than the later you start preparing for your examination. I would split it to two stages: study stage and exercise stage. As my English is not as strong as others, I would need extra efforts to find out the meaning of term used in the investment field. However, with my few years experience in my own personal portfolio management, I believe that it should not be a problem for me to pass the Portfolio Management portion. 
  2. As CFA level III focus more on asset classes + portfolio management, now my focus for this course is to fully understand how asset classes work and how portfolio management (in another word, asset allocation) can help myself to achieve better result in investment in real world. So after I become a remisier, I would start diversify my asset classes to Futures, Forex, Option, Real Estates and Private Equity/ Venture Capital etc. I am currently looking at investment in private equity to gain my experience on that area. If you have any interest to look for me to discuss about partnership, kindly approach me via my email bd@jackphangnvestment.com.

28 July 2011

Margin of Safety - Second Thought on it

I always emphasize on the margin of safety in the investment. I have adjusted my mind recently after learning yi jing. yi jing is the book written by the Chinese long time ago. It was about 'yin' and 'yang' that lead your to the harmony lifestyle. After I have learnt about it, I realized that we must find a balance on our working or daily activities. You cannot push too hard to get the perfect work or perfect job. In fact, we cannot find the 'perfect' things in our life, as there are still a lot of improvement to be done.

If we use understand this concept, then we would be able to understand that the margin of safety is just a 'guideline' for you to invest in the stock market or real estate market. You could not be able to always buy the stocks / real estate in the lowest point and sell it on the highest point. We must also cannot push ourselves too hard to just follow the investment philosophy without adjusting it after certain period. Most of us know that if you are pushing a people into a corner, there will be any negative impact to the person himself/herself. We should always follow the nature of the investment by setting up the goal, waiting for the buying opportunity as well as selling opportunity to come.

Margin of safety is just a guide line to me. And the formula of the margin of safety is dynamic (in other word, it will not always static as the environment changes).

Prepare for the worst, looking forward to the best

Sometime we really do not have the idea on our future. We have to be more conservative on when the market is in the uptrend an more aggressive when the market is in the downtrend. As most of the time, the market is on the uptrend, hence we should be more conservative when making any investment decision. Nevertheless, we should be prepare for the worst to come, and get ready to enter the market when everyone is upset on the market movement.

Impact on United State Market to Property Investment in Singapore & Malaysia

U.S. DJI dropped to 12,302.55 points or 1.59% from yesterday market. According to the CNNMoney, Stocks retreated deep into negative territory on Wednesday as U.S. Congress remained stalled on resolving the debt ceiling, and an economic report showed a significant slowdown in the U.S. manufacturing sector.The Dow has now fallen four days in a row as investors grow increasingly worried that Washington won't solve the the country's budget woes in time to meet the August 2 debt ceiling deadline. "We will continue to see selling each day until this debt ceiling issue is resolved," said Stephen Carl, head equity trader at Williams Capital.

I believe that the impact of U.S. Market to investment in Singapore & Malaysia,

27 July 2011

Start your investment in the business that you are most familiar with

When you are new to the investment, and try to look for a public listed company to invest in, try to find the company that you are most familiar with. As an intelligent investor, you do not really be good in maths or in finance. What you need to do is to stay in the circle of competence and keep on expanding your circle of competence. Try to pay a visit to the company, have a chat with staffs and clients there, and look for the competitors in this industry. Of course, you must be aware of the fraud by the management. So, if you are new to the equity investment, try to look for the established companies. For example, Maybank in Malaysia and DBS in Singapore are among the leaders in finance industry.

Never Give Up

Never Give Up on the things that you are passionate on. It is never too old to dream, especially when you are in the down trend. I met a lot of failure in investment journey, and I hope that my blog can help to assist you towards a clear direction to your desire destination.

Sometime, we are happy for the achievement we made, sometime we are tired of trying thousands of way of failure we made too. However, it is for sure that you will be happy for what you happy to do. Let me give you an example:

In year 1997/1998 (South East Asia Crisis), we suffered a losses of up to 90%. A million worth of shares could be dropped to 100K or below, especially if you were investing in the small cap stock. If you gave up and left the market at that point of time, you would not be able to enjoy the return in year 1999/2000.

Although you may not agree on what I said above, but I sincerely urge you to re-think that, try to change something before you are giving up, and you will

I passed my CFA level II exam!

It is a great news to me. After a few years fighting, I finally passed my level II examination in CFA course and am now waiting to register for Level III exam. To complete the course, I must pass all three level examinations and hopefully when I be a stock broker/remisier, I would be able to use 'CFA charterholder' in my name card. I like finance and investment so much, that I gave up a comfortable job position and challenge myself in the stock brokering business and hopefully I would be a fund manager one day later.

CFA course comprises of all the investment knowledge, such as Economy, Quantitative Method, Financial Reporting & Analysis, Equity Investment, Alternative Investment, Fixed Income, Derivatives, Portfolio Management, Corporate Finance and most importantly the Ethical & Professional Standards. It assures you that you must comply with the CFA rules & regulation in order to get the 'charter holder'.

If you have any inquiries about CFA, please leave a comment here.

26 July 2011

Be Aware of The Trap

When you are looking for food, please also be aware of the trap. Sometime, you would think that you are perfect in the execution after done several of homework. You are very patient and waiting for the perfect timing to enter the market. You also read a lot of blogs here as well as writings from others. But the most important part here is to stay away from the peak market and start investing in a small amount before you could allocate most of your investment in the market. Always give you some buffer (in another word - margin of safety) in investment. Always set aside of emergency fund to overcome difficulty in at least 6 months. you will be happy that you will not be in the trap set by others.

Review After Visiting Kota Iskandar and its surround

I visited Kota Iskandar recently in Nusajaya area. Let me show you the map to give you better picture:

It is located in the south west of Johor Bahru, Johor, Malaysia and near to Second Link connected to Singapore. As this is a new zone, Educity & Legoland will be soon completed by year 2012-2013. A lot of infrastructures are in placed and we are able to see a beautiful scene to Singapore's Lim Chu Kang's restricted area.

A lot of property developers are building residential buildings as well as commercial buildings in these area. So next time we will be able to see a 'New' Johor Bahru in this area.

25 July 2011

Self Discipline Crucial to Your Investment

There are lots and lots of people who aim to achieve financial freedom during their middle age. However, not many people are able to do so. There are several reasons that I could think of, one of the reasons is 'not enough self discipline'.

I must admit that I also do not have a strong self-discipline in myself. However, I have improved my self-discipline in investing over the years as I always believe in myself that I could able to achieve at least 20%-30% of annualized return constantly. If we keep the pace at 26% per annum, means that we are able to increase 100% of our fortune in 3 years and 10x of our wealth in 10 years. It is quite amazing as we must change our mindset to that direction, that investment can really allow you to earn more with calculated risk. It is always wise that you are able to get a coach to teach you on investment, especially when you have no direction in your investment journey.

Over the year, self-discipline plays a very major part in my investment decision making process. Besides that investment philosophy, you must allocate your time to do the research on the investment for at least 1 hour a day, so that you can catch up the new term / information from internet or from the local environment. Take for example, if we do not know about 'Google +', then we might not be able to participate it and explore the business opportunity that Google has brought to us. Of course, you can also expand your circle of competence to bigger circle (or more sectors) so that you are able to find out more opportunity in investing.

24 July 2011

Investment Is Like Climbing Mountain

Today Morning I just finished 'climbing' mountain near to my hometown. The mountain is called 'Gunung Pulai' in Malay or 'Mountain Pulai' in English. We started walking to the peak at 8:45 am and reached the peak (about 5 km of distance) at 11:00am. It was the first time I walked to the peak as it was a very enjoyable experience to me. I will be soon 'retire' from my working life ('E' quadrant) and moving to Self Employed ('S' quadrant) starting September 2011. To be a good self employed person, I am now learning to be more preseverance and never easily give up on the things that I do in daily works.

I still remembered the experience of climbing Mountain Kinabalu in Sabah, Malaysia on Year 2008. That was the experience that I will never forget. Although the distance was only around 8KM, but it took us about 1 day to finish walking to the peak. However, the feeling was really very great. I appreciated that my parents give me a healthy body and mentality.

How do we connect climbing mountain with investment?

23 July 2011

How to enjoy investing while you are still in working age

Some of my friends asked me to share with them on how to stay investing while busy on the daily works as well as the housework. I must admit that to invest and enjoy a good return, you must have a good investment philosophy. (Please refer to my posts below to better understand investment philosophy).

First of all, we must find out the objectives of investing. Some of the reasons that I may think of could be:
  • Enjoy the comfortable retirement life. Sometime, we may miss out something during the investment journey. For example, you may missed out the growing phase of your children due to busy on your work. For those reason, not many people like to climb up the corporate ladder, as they know that they cannot cope with family with the heavy workload from office. Some cannot survive with their CPF/EPF savings within 5 years. We may think of to rely on our children for the retirement. However, with only 1 or 2 children for young couple, we can foresee that we really cannot rely with our children.
  • Children Education Purpose. It is a long term journey to raise a kid until he/she enters University. We have to take a higher risk to invest in long term investment instruments to raise the education fund in 18-20 years. We may find that it is necessary for us to invest rather than just park in the bank as the fact shows us fixed deposit can never beat the inflation rate in long rate.
  • Short Term Purpose. We may need a certain amount of money 2 to 3 years later for renovation or down payment. It is wise that we can park the money in fixed income securities or REITs to enjoy better return compared to fixed deposit.

22 July 2011

What kind of investor type are you?

Recently I met up with a friend who has his own business. He enjoy trading online with a small amount to him. So I just wonder why he likes to spend his precious time on making small amount (refer to his fortune).

He is a successful businessman who got the business knowledge from his father. So he is quite a savvy guy on investing. However, he is quite conservative on his long term investment. He told me that what his father taught him was to be conservative in business by managing cash flow well.

So I believe that most of his own fortune is in cash deposit & real estate & fixed income instruments. Equity should be in a smaller portion.

I am quite surprise with his asset allocation. What I am guessing is partly due to his family business that he cannot afford to lose as he has the responsibility to protect his family's fortune.

The impact of Technology to Investment Process

I remembered that there was no such thing called 'Online Trading' during early 1990s as all of my family members needed to go to the stock brokering firm to watch the stock prices. However, the improvement in technology changes the whole way of performing investment process. We are now able to watch  the stock movement from the internet or even the mobile smart devices (e.g. iPhone & iPAD etc) and receive the SMS alert that we had set earlier on the system.

Many of the applications that we can easily download to our mobile devices have granted us the convenience and efficiency of trading online. There are tons and tons of useful information that we can receive from the internet. Many of the well known financial investment firm are putting useful information online so that we are able to perform the homework ourselves without too many hassle. I really think that we should be able to invest through our hard work after learning the basic investment skills from the financial advisers as well as stock brokers.

Things to take note when trading online:
  • Always be aware of the security. Even though the security has been enhanced time to time, we must be assure that we logged out from the system after we have done any trade. 
  • Double confirm for the big trade. We have to make sure that all the trades done online have been processed successfully by the securities firm. 
  • Payment online. We have to be aware of the non established online trading firm as we do not really have the knowledge of it. It is better that we start trading online by opening stock trading account in local stock trading firm before we have another choice of online trading platform in other places.
  • Book Keeping. Record keeping is very important for us to make sure that we do not need to pay extra tax due to the capital gain from the stock market.
Last but not least, good luck in your online trading!

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21 July 2011

What do you think of the company below?

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Recent Volatility in Malaysia Property Stocks

I am not surprised that Malaysia Property stocks rebound recently due to the oversell activity. To curb the inflation rate as well as to reduce the household debt level, one thing for Malaysia government to do is not only to carry out affordable housing scheme to the citizens but to increase the household income of Malaysia.

It is really a very sad thing that most of the Malaysia talents are moving to another countries. However, I believe that Malaysia property market is supported by those citizens that are currently working in oversea who are hoping to retire in Malaysia one day later (Including Myself).

Recent rise in property in Klang Valley is too over to me as I believe that most of the people are looking good on property market and can't hesitate to enter property market hoping to earn some fast earn money. It is similar to Singapore property market now.

Nevertheless, I will keep on watching the property market in Iskandar Malaysia and Singapore and report to you.

Mah Sing Group Bhd and SP Setia Bhd rose in Kuala Lumpur trading after CIMB Investment Bank Bhd said the recent sell-off in the Malaysian property developers was overdone.

Shares of Mah Sing climbed 7.7 per cent to RM2.39 at 10:27 a.m. local time, set for their biggest gain since Nov. 25.

It was the stock’s first gain in eight days.

SP Setia added 1.3 per cent to RM3.80, snapping an eight-day slide.

20 July 2011

Park Money under Flexiloan or Invest in other Asset?

Under flexi-loan scheme, you are able to reduce the principal by parking the extra money under the current account. By doing so, you are able to reduce the loan interest payable as well as the paying period.The question now is that how much is the opportunity cost for parking money under flexiloan or use it to invest in another investment assets.

Let me illustrate one example for you:

If the loan interest is 5% and fixed deposit is 2.0%, I would rather to put the money in the loan account. However, if loan interest is 5% and fixed deposit is 7%, I can choose to park the money under fixed deposit.

In real world, it is not possible that the fixed deposit rate is higher than loan interest. Hence, we should find another alternatives. For example, we can invest in REITs or high yield stock or even fixed income assets.

But please bear in mind that higher return always come with higher risk. However, after we have calculated the risk, then we should be able to figure out the balance of parking money in flexiloan as well as in the higher return asset classes.

Please share with us your opinions above.

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Know when to rest in Investment Journey

Follow up with my post on 'learn investing similar to learn driving' as well as the post on 'investment is a long term journey', I would like to share with you my thought on investment. As it is a long journey, we have to know when to rest.

Sometime, when the market is in the bull market, we (as the long term investor) have to rest for a while to wait for a good opportunity to come. As I do not like the bull market, I always hope that the market can turn worse so that I can have a better chance to accumulate the stock for the good company.

We have seen several crisis in this ten years, namely Dot Com Bubble Burst and Global Financial Crisis, yet there are still companies to grow bigger and stronger. You can look at the market value of the Apple compared to 10 years ago. I always believe that, to invest and hold a stock for a long term, management is the most important factor.

So, if we have more than 10 years time horizon, please rest for a while when market is in the bull market, and wait for the worst time to come.

Good luck in your investment!

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19 July 2011

Can Iskandar Malaysia public transport system equals to Singapore's

I am writing this post when I am on the bus to office. Singapore is well-known on it's public transport system. The MRT as well as bus system are praised by travelers and foreigners.

To me, a Johor Bahru borne people who is working in Singapore, I am deeply hoping for a good public transport system in my hometown. Let's see what's happening in Iskandar Malaysia now:

1. Senai-Desaru highway is finished built
2. Coastal highway is near to complete
3. Train system to be upgraded by 2013
4. Rapid Linked System in between Woodlands in Singapore and Tanjung Puteri in Malaysia to be completed by 2018
5. Primary roads and secondary roads upgrades are under planning stage
6. LegoLand, Chelsea Premium Outlet and Educity are targeted to be opened at 2013
7. Senai Airport to JB highway is near to completion

With so many projects going on, I believe that Iskandar Malaysia can be 'Shen Zhen' to Singapore, provided there are co-operations in between both countries.

Yes, I sincerely hope that it will and can happen one day.

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What factor(s) should you consider for long term investent in Shares/Stock?

Over a 8 years experience of investing in stock market (especially in Malaysia), I have concluded a very important yet simple factor that everyone has forgotten when they are making their investment decision, that is 'the Management'.

Let me give you examples to illustrate how the business grows in below companies (you can correct me as below are all my opinions):

1. Air Asia

Led by Tony Fernandez, his background is from a business family. He went to UK to study and worked under Virgin Boss. His great achievement is to use RM2.00 to purchase the aircraft company and turn it around to be a profit-generated company. It is a proud of Malaysia as many people around the world know about Malaysia through it. I believe that everyone in Singapore / Malaysia would have the chances to take the flight to Asean countries (as well as another 2 low-cost carriers). Tony is now Top 30 Richest Man in Malaysia. His brilliant ideas and aggressive move to Asia makes him famous. I still remember that AirAsia sponsored Manchester United Football Club (MUFC) shirt. As an agreement, you would be able to see the MUFC logo and stars on its air-crafts. I like its slogan - 'Now Everyone Can Fly'.

2. Mah Sing

Led by Tan Sri Dato Seri Leong Huy Kum, he managed to create his own real estate empire in Malaysia since year 199x. After about 15 years of hard work, his team now is one of the top 5 developers (in term of sales) in Malaysia. The 'Perdana', 'Residences' and 'Lagenda' series shows a high quality in manwork in design as well as building.

Its target is to expand the business to region and to be the regional world class property developer. The market values appreciated since year 2000 and now stands as over MYR2.0 Billion.

3. Top Glove

Tan Sri Dr. Lim is the founder as well as executive chairman of the company. Its ambition is to be the Top Glove Maker in the world. The market shares that it acquires is around 20%-30%. Its plan to further grow is to acquire more agricultural land to build the rubber plants. I believe it can maintain its advantages over other competitors through economy of scales.

4. Public Bank

Public Bank is a famous bank in Malaysia led by Tan Sri Tay Hong Piow. He was ex-GM of Maybank and subsequently set up his own bank. Over 1,000 shareholders attend Annual General Meeting and praise him for making them millionaire over 40 years.


CIMB is currently led by Malaysia's Prime Minister's brother - Nazir bin Razak. His ambition is to grow investment banking in Asean region. We can now see CIMB in various Asean countries. CIMB once became the biggest market value public listed company in Malaysia.

6. SIA

SIA is an example of excellent execution company. Due to its talent policy, a lot of talents are working under the company and making it the top carrier in the world. I believe SIA can remain its competitive strategy over other competitors due to its strategic location (Singapore).

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Leveraging - Pros and Cons to Your Property Investment - Part 1

Follow up from the Introduction post, I would like to share my opinion and discuss with you on questions below:

1. How do I fully utilize the Maximum Loan To Value ratio given by the bank?

For a normal person, the Maximum Loan Payment to Income Ratio is about 35%, it means that if your monthly income (basically is salary for working person) is 5,000.00, then your maximum monthly loan payment is about 1,500.00. With current BLR for Malaysia (6.6%), you may only take up loan up to 300,000.00 (rough figures). If your salary is 10,000.00, then you may take up loan up to 600,000.00. So what should you do if you wish to get more money from bank? Here is my suggestion to you:
  • Rental Income is the best to get additional money from bank. It is one of the techniques that we use other people's money to get other people's money. However, tenant management skill is crucial and you have to master it time by time. 
  • Re-finance is another alternatives to get extra money from bank. Via re-finance, you may get lower loan rate (according to market condition) as well as extra money comes from property appreciation. Please note that not 100% that real estate can appreciate in long run. If you purchase a property during property bubble, you may end up losing your money + risk on too high current debt to be paid to Bank. 
  • Sell & Buy is another alternatives. As your experience gains more, you will be able to tell when is the right time to sell the real estate and purchase the real estate back at the right time. As what I am always telling you, that please treat your investment as a business.

2. How do I manage my cash flow and strive a a balance?

You can read through my posts on cash flows to understand how cash flow works in your personal portfolio.

3. What are the Pros and Cons of Leveraging (Taking maximum Loan from Bank)?

  •  It is always a wise choice to get other's people money to purchase an investment property. Why am I say so? Because by using other's people money, you are saving your time to save the money to purchase the property. Why takes so long time just to buy 1 property? You might as well invest your money in real estate when you are young and enjoy appreciation in value in long time while seeing your long term debt decreasing over the period.
  • Debt management skill is not easy (ya, also not hard) as you think. You must always equip with the knowledge of the debt & management skills. You can find some clues on my personal portfolio management demo.

4. What to take note when we are using financial leverage
  • Must fully understand the law and rules & regulation on the mortgage loan in Singapore / Malaysia.
  • Must always consult your accountant on reducing the tax payable to government. Especially for Singaporean, you have to take note the property tax (around 10%) paid to Government. 
  • Must understand the tenant management if you are doing rental business. 
  • Must always leave cash in your emergency fund. It is crucial so that your property will never get into trouble (for example, auction).


What are your own opinion with the questions above? Welcome to write your comments below.

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18 July 2011

3 things we should do when market drops

There are 3 things we should do when market drops:
  1. Stay calm. Be greedy when others is feared.
  2. Prepare for your money. Cash Flow Management is very important for you to purchase the investment products at lower point.
  3. Wait for the best purchasing time. Normally the big elephant will not move fast. So you will have a long period to accumulate the investment products that you have waited for a long time.

Why Buy a property for own stay in early age is a wrong move?

Why buy a property for own stay in early age is a wrong move?

Consider that you are a fresh graduate with a lovely girl friend / handsome boy friend. For a fresh graduate in Singapore/Malaysia, your starting salary could range from 2,000.00 to 3,000.00. Now, both of you decided to own a house after few years of working experience. Your household annual income could be in the range of 50,000.00 to 100,000.00. To buy a private property for own stay, the private property must be at least 500K in Singapore and at least 400K in Klang Valley.

If your saving to annual income ratio is 20%, you would have  10K to 20K savings every year. So, if you want to make the 20% down payment, you must save at least 3 to 4 years before you can purchase a private property.

After you have your own property at early age, you will have to start make the mortgage loan payment to the bank and it is opportunity cost for you to:
  1. Use the money to open your own business, although not many people want or like to do their own business. They would prefer to enjoy life and get the stable fixed paychecks from their boss.
  2. Use the money to invest in any other sort of investment products to generate positive cash flow.
  3. Create more financial burden and it would cost you to work for bank for longer time. After you have your own house (family), you will start to have as many children as you wish. And it will stop you from fulfilling your dream if your cash flow are all flows to the expenses that cannot give you income.
Of course, you would think that your own private property will appreciate in long period. But you will only see the real value after you liquidate your own private property. And you loss the opportunity to learn more investment products and experience of investing in it. 

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17 July 2011

The Importance of Personal Finance

Recently I met a few cases where couples went to hospital at the age of 50-60 years old. It becomes very common that middle age people admitted to hospital to due various reasons. It could be due to healthy reason or incident reason. Hence, personal finance plays a very important role for those who are in the middle age. Below are my suggestions to middle age people:

  1. Purchase a term insurance that covers 36 critical illness as well as permanent disability. The amount should be at least 5x of your annual income. It can ensure that you leave a certain amount to your dependents.
  2. Purchase a medical card. For Singaporean, although you have the medishield, but my suggestion to you is to upgrade medishield to better insurance policy so that it can cover better range. For Malaysian, you definitely need to purchase it as you will reduce the risk for admitted to hospital for either operations or medical purpose.
  3. Save at least 6 months of monthly expense in emergency fund.

15 July 2011

Do you need a credit card?

In Singapore and Malaysia, it is very common that every fresh graduates to own more than 2 credit cards issued from various banks. Oversea banks such as Citibank and Standard Chartered hire many salespersons to boost their credit card business in these countries.

According to the survey made by Malaysia Authorities, household debt levels in Malaysia reached a new high. Most of the debts are used for purchasing house and car. Unlike Singapore that has a probably one of the best public transport systems in the world, it is a need for Malaysian to go to work. When debt level increases, most of the citizens have to use their cash to pay on the mortgage loans and car loan. If this continues, my opinion is that it would reduce the level of savings as well as level of investing.

Credit card stands as a need for both Malaysian and Singaporean.

14 July 2011

Leveraging - Pros and Cons to Your Property Investment - Introduction

In Singapore, maximum Loan To Value ratio is 70% set for second property purchase, while Malaysia maximum Loan To Value ratio is 70% for third property. It comes to a point that I am still able to purchase the 1st property in Singapore and 2nd property in Malaysia so that I can fully utilize the benefit of maximum loan to value ratio given to me. After that I will be able to purchase more properties under my family member's name.

Some time, I feel that it is unwise to take loan to purchase a property,
as it will incur long term debt and you will have to work forever for the bank until the day you retire. However, with my mindset changes, I realize that I am able to utilize the debt to generate more passive income to me (Please read my posts - Demo of Personal Portfolio Management series as well as Cash Flow Management series as both are my few days hard work on my opinion on the investment).

So, the questions now are:

Be Nature

Sometime, we are trying very hard to get something done. However, it might not turn out to be what we expected after we have done a very hard work. However, we should always be ready for the battle, and try our best to do it. In Chinese, we call it '尽人事,听天命’,which means that we should do our best and let the God (In science, we may call it the power of nature) to decide for us.

I would like to delicate this articles to those who are trying hard to get a baby,
trying hard to get a promotion, trying hard to get more money in their business, trying hard to be more healthy, trying hard to travel around the world, trying hard to improve in their daily activities and trying hard to be a better men/women etc. You are all well done. Believe in yourself and always pray God / (power or the nature) to give you internal power to

13 July 2011

What Happen to Ringgit?

What happen to my dearest Malaysia Ringgit? As what I can see from here, the currency rate SGD against RM is now RM2.4692 to SGD1.00.

I believe it is time for Malaysia government to review its fiscal policy as well as its money policy to avoid any further drop in currency. I do

Iskandar Malaysia - News Update (From Reuters)

Source From: 

(Reuters) - Like a giant Lego project, Malaysia is assembling the pieces of an investment zone that is destined to become a metropolis about three times the size of neighboring Singapore.

Demo of PPM - Part 4 (Current Asset to Total Portfolio Ratio)

Following from my previous posts (Demo of Personal Portfolio Management - Introduction, Part 1, Part 2 and Part 3), I have illustrated all my opinions on personal portfolio management, that make my life easier. I am able to choose what life I would like to be, and in the mean time, to pursue my dream of becoming a long term investor cum money manager in near future.

In this post, I would like to share with you on the Current Asset to Total Portfolio Ratio and what its impact to your short term and long term risk. As all you have known in my previous post,

12 July 2011

Control Your Fate, Do Not Let It To Control You

There are too many friends telling me that they need a luck or fate to be success in their life. Hence, they keep waiting for the good luck to come to them. To me, they are living in a passive mode. A passive mindset will create a passive motion and hence create a passive body. When your body is sick, you mind will also get sick too. It will create a negative cycle that will shorten your life and hence bring miserable life to you.

In contrast,

My Thought on Buy Low Sell High or Sell High Buy Low

Basically there are too many techniques to buy low sell high OR sell high buy low. My thought on the technique above is:

We have to follow the trends

Why do we have to follow the trends? In Chinese, we call it "顺势而流”, which means that we have to follow the trend to buy and sell and not against the trends. When the whole markets are in down trends,
it is very hard for us to purchase the stock as the prices keep moving downwards. It would be like a falling sword that will hurt you if you hold it too hard. If you do not have the holding power, you have to sell it at lower price.

We have to against the trends.

Sometimes, people are getting greedy of the positive market outlook. They will tend to buy a lot of stocks and push the price even higher.

Page Views Breaks 2nd 10K within 1 Month

Thank you everyone for supporting my blog till today. I would like to thank my parents for giving me continuous support especially in finance industry. I would also thank my friends to spread my blog out to other people. It gives me motivation to write more high quality articles.

Summaries of my posts here:

Shares: 26
Investments: 49
Investment Philosophy: 5
Property: 14
Savings: 2

For those reader who prefers Mandarine, you may go to my another Mandarine blog -http://tian-ya-ren.blogspot.com.


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11 July 2011

Why should I need to sell if my investment horizon is 50 years and above?

My friend asked me on the current market view. My answer to him is 'Why should I sell if my investment horizon is 50 years and above?'

Consider the following scenarios:

You are the business owner of a small business that co-own with Mr. Market. Everyday, Mr. Market will ask you to sell or buy according to his mood. Sometime, he is very optimistic of the future, and he is willing to buy at a higher price for your stake. Sometime, he is very pessimistic of the future, and he is willing to sell you at lower price for his stake.

We should always make use of Mr. Market's mood to gain the arbitrage profit from there. 

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10 July 2011

Demo of PPM Part 3 - Financial Ratio Detailed Explanation

In Part 3, I would like to explain in detail on the financial ratio in the spreadsheet which can be found in here:

The item 1-2 (Current Financial Ratio)

1. Acid-Test Ratio
2. Current Ratio

Both ratios measure how long you can survive if you stop generating active income and utilizing your current asset to cover the current liabilities. Basically if

09 July 2011

Mah Sing Update - Best Corporate Governance

Mah Sing Group Bhd was named as "The Best of Asia" at the Seventh Corporate Governance Asia Recognition Awards 2011 whilst its groupm managing director Tan Sri Leong Hoy Kum won the Asian Corporate Director Recognition Award 2011.

08 July 2011

Demo of Personal Portfolio Management - Part 2

From my previous post (Introduction and Part 1), I have explained to you that the key factors of managing a personal portfolio are to allow your cash flow flows in between the 4 quadrants - Non Current Assets -> Non Current Liabilities -> Current Liabilities -> Current Assets -> Non Current Assets which could be illustrated as below:

07 July 2011

Demo of Personal Portfolio Management - Part 1

From my previous post - (Introduction), I mentioned that I would like to demonstrate a personal portfolio management that I have been practicing since I was in early 20s.

Before that, let me give you some concept of the cash flow. You may wish to know more about the cash flow from my previous posts related to cash flow:

06 July 2011

Demo of Personal Portfolio Management (Introduction)

I would like to share with you how I perform my own personal portfolio management.

As my asset classes include the property, hence, I am now learning to utilize the debt to help me generating more cash flows from the asset classes.

05 July 2011

Investment is a Long Term Journey

One of my friends asked me why I would like to be a long term investor. My answers to him were:

1. Need a Map/GPS

Without a clear route or direction, we are easily loss in the middle of the way. As investment takes time to compound the interest to a very big amount, we usually have to be very focus on the investment philosophy that we have set before. Since I invested in stock market from year 2003 onwards, I already remind myself that I have to follow the rules that I have set and adjust it along the way. Sometimes, we will also need to update the GPS map as there is new shorter route appears in the map, but we must remember where our destination is.

2. Up and Down

Sometime the road is not smooth. You will meet a up trend and down trend. So you have to adjust the gear to drive it slow when you are in up or down and drive it fast when you road is a straight line.

3. Rest in the middle

After a while, we might get tired of driving in a long journey. We have to rest for a while, take a coffee and enjoy the scene nearby. You will find that the scene in the journey is always beautiful. Sometime it's even beautiful than the scene in the destination.

4. Lonely Journey

If you are in a super long term journey, you are hardly get a mate to accompany you

04 July 2011

Learning Investing is Similar to Learning Driving

For a newbie investor, you will find investing is a very though job, especially when you have no idea to start with. let me share with you my experience in learning driving. It was a very exciting experience as I was longed waited to get the driving license. When I was 17 Years Old (12 years back), I took a driving license course where I have a coach teaching me to drive.

02 July 2011

Health Care Insurance & Term Insurance - Important to Your Family

I have a friend whose father is in hospital recently. His dad has been in the hospital for couple of weeks. Luckily his dad is recovering soon and he managed to pay the bill by using his medical card.

In Singapore, we do have the medishield which helps us to cover some of the medical expenses in hospital. We can enhance the insurance by upgrading it to medishield plus or other insurance plan.

01 July 2011

Mah Sing Updates - 01 July 2011

Just a quick summary after the AGM:

Mah Sing now has about 34 projects on hand. Its target to acquire 7B worth of GDV land is still in progress. The revenue stream will be coming in 2-3 years later. According to Mah Sing, the landed property takes 2 years to realize the earning, while high rise property takes 3 years.
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