Why Gold and Silver? Why Online Store?

Are you first time gold and silver buyers? Why don't you invest in these popular metals? If you did so, you have had a wonderful investing experience after 2008 global financial crisis. But, do you really understand these metals? Were they really precious (especially now)?

Traditionally, gold and silver were one form of exchange. Because of the invention of fiat money, they were being turned into some short of "back-up" currency, in case our fiat money system go burst. It's natural when things go wrong, gold and silver tends to appreciate in value. In other words, people hold precious metals to preserve the value of their assets.

3 Reasons Why Gold and Silver...

1. Still hot in demand, especially by emerging affluent Chinese. Traditionally, Chinese loves gold. They bought it for events such as new born baby, new year, wedding and even funeral ceremony.
2. Strengthening USD ??? Yes. It's a correct reason also. Why? Because of news that US going to stop QE3, USD is strengthening so much. But, we must not forget that Europe is still printing money. Then, how about Japan who jump into the bandwagon of money printing?
3. Simply for portfolio diversifying purpose. As a rule of thumb, 10% of our investment portfolio should allocate to precious metals like gold and silver. When everything goes haywire, precious metals tends to react reversely positive.

Alternative Distributing Channel...

Other than the commonly seen channel like banks and goldsmiths, have you ever think about online purchase? Why?

1. Normally, it's cheaper because it does not need to open a shop and employ security guard.
2. Convenient. You can view and select with the pleasure of your time, comfortably at home.
3. Safe delivery. It's depend. But, I will feel safer if it delivers to my doorstep, instead of going to purchase at goldsmith. Do you know someone might be following you?

Of course, some of you may skeptical about the reliability of the online store. You may try it with small purchase first (test the water before diving in). On this matter, one of the most popular online store in town was SilverMalaysia.com which already features in major dailies with wide media coverage. You may open an account, then explore further.

* Finance Malaysia Blog DO NOT holds any form of liabilities regarding the recommendations. Investors are advised to read and understand the terms and condition thoroughly.

Inequality and the Poverty of Economics

The Journal of Economic Perspectives is an academic journal that summarizes the state of research in various fields of Economics.  Perusing this journal shows the extreme political bias of much of modern day economic research.  The Summer 2013 issue was devoted to "income inequality."  The main theme was that rich folks are getting richer, but, of course, the facts actually show just the opposite.  Not deterred by the facts, the various economists that opine in this edition blithely parrot absurdities such as wealthholders ability to "sustain their preeminence.

What is the analysis?  Imagine that you wanted to know if baseball teams created dynasties and "perpetuate" their dominance of baseball.  What facts would you want to assemble to prove this?

Here's the way economists think:  collect data that shows that back in the old days, the baseball teams that won the pennant won 65 percent of their games each year.  Then show that, today, the teams that win the pennant win 70 percent of their games each year.  (Don't bother to check whether the teams that won in the old days are the same teams that win today.  Why would that matter, say economists?)  Would that evidence convince you that certain teams are dominant and "maintain their preeminence?"  That is the precisely the kind of logic that perpetuates the factually incorrect myth that the rich get richer.  Check out the articles in the JEP and you will see.

The truth is that if you list out the 100 richest Americans today and then compare that to the one hundred richest Americans 25 years ago, you will find very little overlap.  The richest folks have more of the wealth (if you totally leave out the huge proportion of wealth transferred by government transfers such as social security, welfare, medicaid, food stamps and on and on), but it is a different set of rich folks as time goes on.  Wealth rises and falls in the US.

The opposite is true in Europe.  The wealthiest families in Europe are the same families that were wealthy 50 years ago.  Contrary to the complete nonsense you read from economists, the chances of improving your lot in Europe are almost non-existent.

Now, in the US, the Obama Administration would like to create the European model, which traps people into whatever economic group that are born in....or, actually reduces the life chances of the folks born into the bottom half of the income distribution.

Notice the data since Obama came into office.  Since mid-2009, long after the bottom of the financial collapse and well after the Obama $ 800 billion stimulus package, the economic position of lower income folks in the US has deteriorated.  The Obama sledgehammer on business has delivered results.  Jobs are scarce and what few jobs there are, are part-time.  (Obamacare, of course, influences this trend toward part-time employment by creating built-in disincentives to businesses to hire full time employees).

The real truth is that the US has historically always been the best place to be born if you want a chance to move up in the income distribution and it remains the best place for that purpose.  Obama is trying to kill off that opportunity, but so far he has not totally succeeded in this strange endeavor.

Economists have done a disservice to the public by presenting facts in a way that is totally misleading and obscuring the real truth about the economy and about the historical dynamism of the US economy.

3 Tighter Rules for Property Sector? (Sept 2013)

Prior to Budget 2014 (to be tabled next month), speculation has rift up on a few proposal to tighten the rules, especially on property sector. Following the outcry from public stating the alarming high property prices, measure should be taken to tackle the issue before bubble was formed.

The Bubbling Biz...

Among the measures being proposed were:

1. Non-other than Real Property Gain Tax (RPGT)
   
   
   
   
2. Higher Stamp Duty:
   ~ 5% of purchase price for 3rd property
   ~ 7.5% for 4th property
   ~ 10% for 5th property onward
   
   
3. Loan-to-Value ratio reduce to 60% for 3rd property onward
   
   

While the above info need to be ascertained further, some banks already implemented their in-house ruling. What's that? It was to limit the maximum term for refinancing of property to 10 years. Yes. Sooner or later, all of the banks will follow.

* Please note that the above 3 rules need to be ascertained further. Stay tune!

College Grads and Jobs

There is a growing discussion about whether or not college graduates are generally prepared for the workforce.  This is a very interesting (and revealing) discussion.

This is not so much about GPA as it is about more fundamental problems -- attitude tops the list.  Far too many college graduates think that they have 'paid their dues' by attending college and collecting a degree.  Many seem to think that joining the work force is akin to joining a fraternity or sorority.  They seem disappointed that employers' have high work expectations and are in no hurry to provide massive benefits and a club-med work environment to a rookie employee.

What every employer wants is someone committed to work hard, to learn new skills, and to already possess basic writing and mathematics skills.  The vast majority of college graduates, measured against these expectations of business do not measure up. 

That's the sad truth about higher education.  We don't insist that our graduates have adequate writing and math skills to perform at a high level in the work force.  Those graduates who do have these skills, likely had them before they entered college.  They certainly don't gain or nurture these skills in college.

As for attitude, there is no more-forgiving environment than the modern university.  Students can argue a C grade into an A grade, if they understand how things work.  It is a simple task to manage one's GPA to end up with a 4.0 without serious study.  Meanwhile, skipping classes, scrimping on assignments, cheating, massive drug and alcohol abuse are all tolerated with little or no punishment.  Moving from the university environment to a work environment is a real culture shock for most college graduates in the modern era.

More and more the modern college and university is a great four year social experience that probably makes it more, not less, difficult to adjust to the realities of a market-based economy.

Work Ethic of 70s, 80s, 90s

Different generations have their own view on working. You like it or not, working is part of our live. No work = No life. However, this equation has since changed to "Working = No life". Do you agree?

Generally, those born in 70s were perceived to be loving their job. They work hard mainly because of 3 meals/day. For them, a secured life means having a stable job with stable income. They believe that with every efforts you put in, that will reward you back later. As such, over time (OT) is nothing for them.

As a responsible 70s, losing their job is a serious matter they tend to avoid. That's why they usually found another job first, before resigning.

How about 80s?

Other than chasing for stable income, those 80s working adults will also look into the job scope, opportunity for promotion, or working environment. They will take initiative to find for better job. Hence, job hopping is very common for them.

Notably, 80s are reluctant to sacrifice their quality of life because of work. So, don't expect them will OT without paying extra.

Free and easy 90s?

Just because almost all of them are graduates, 90s always hoping to find a "reasonably good pay" kind of job. However, employers reluctant think in contrast. This is why many fresh graduates still unemployed, while employers facing difficulties to find suitable candidates.

Other than salary, they also emphasize on working environment and their interest. Otherwise, will they resign? Yes. They don't care and will resign straightaway, maybe, because of their wealthier parents. Why want to force themselves into job? They can become boss and entrepreneur anytime.

What do you think?

How Much You Need To Save If You Ever Want To See Your Kids Graduate?

In an age where the common degree has become a pre-requisite and not so much an advantage, ensuring that you have enough to see your children through a reputable university has inadvertently become one of the most important responsibilities you’ll face as a parent.

Unfortunately, knowing how much to save for your kids’ tertiary education is not an easy question to answer.  In fact, it is downright complex in view of the vast differences in costs from degree to degree, university to university, and country to country.  And even for those who do have a number in mind, there is still the question of when you should start saving, using which savings / investment vehicle.

If you have been wondering about your financial capabilities to finance your kids’ tertiary education, or you have been seeking a workable method to save a sizable study fund for your children; allow iMoney to shed some light on this matter with their latest infographic:

Courtesy of iMoney.my

Lesser Amount can be Withdrawn for EPF Members Investment Scheme effective January 2014

Are you an EPF member who withdraw money out for investment scheme? Then, this is a very important news to you.

Effective January 2014, the minimum basic savings required in Account 1 was revised upward. This will affect all of YOU who withdrawn certain amount from EPF account 1 for eligible investment purpose. Higher limit means lesser money you can withdraw from EPF in the future.

How much will be increased?

Based on the chart below, the percentage increased can be as high as 64%. Generally, the increasing amount was at least 50% once you're age 27 onward.

How to calculate how much can I withdrawn from EPF account 1?

What's the different or impact?

Depending on your age and how much savings in account 1, the impact varies by members. For better explanation, please see example below:

Finance Malaysia hopes this post can enlighten you on EPF members investment scheme withdrawal. You may share this to your friends. Thanks.