Sunday, June 27, 2010

Independent Financial Adviser - Really Independent?

Are Independent Financial Advisers (IFAs) really independent in Singapore? "A financial adviser who claims to be so may not be telling you everything" as reported by Lorna Tan in The Straits Times Saturday, June 26 2010 article - Excuse me, are you an independent adviser?

So, what is so special with the word "independent" before a Financial Adviser? With the word "independent", firms market themselves as champions of the consumers by recommending financial products based on consumers' financial needs and not by pushing or hard-selling financial products because of commissions. Is that really the case?

The next time a Financial Adviser tells you he is Independent or from IFA, you may want to rethink what it really means. As defined in Singapore's Financial Advisers Act (FAA), "only financial advisers who can demonstrate that they do not have financial or commercial links with product providers that could influence their recommendations should use the term "independent". Just like perfect competition in  Economics, is it really possible in the real world? The only way IFAs can be truly independent is IF they have access to all the products in the market and that is not the current situation.

Most financial advisory firms actually do not qualify as independent if the definition from FAA is strictly adhered to. So some firms skirt the issue by only saying so to their customers verbally and being smart enough not to label "independent" even on their stationery for fear of being revoked of their licenses.

The main issue as highlighted in the article? Volume Bonuses - which can be in the millions, given to financial advisory firms as bonuses for hitting quota of sales or renewals of specific products. The even more shocking thing? Volume Bonuses may be paid in advance when financial advisory firms make commitment to the quotas they will be hitting. Failure to hit the targets will result in financial advisory firms having to repay these volume bonuses. 

As the article rightly pointed out, these financial incentives may result in not so independent advice as financial advisory firms may skew their remuneration structures to fulfill their commitment to avoid returning bonuses. What makes these firms' pro-consumers and independence stance even more questionable is that often times, these volume bonuses or commissions are not transparent and are hidden from customers.Which makes it a greater hidden danger.

Instead of basing your judgement and decision when selecting a Financial Adviser on whether they are independent or tied-company's Financial Consultant, judge them on their merits and professional advice.

Thursday, June 24, 2010

Suze Orman - for the Young, Fabulous and Broke

Suze Orman - Young Fabulous and Broke

I have read about and seen Suze Orman on TV giving financial education a couple of times. Whenever I am in the library, I have seen her books, audio CDs and DVDs as well. After such a long time, I finally decided to borrow her Young Fabulouse & Broke DVD. I believe the DVD and the book is different.

The DVD shows her at a talk she was giving at a University. She is of the opinion that times and circumstances have changed, many graduates if they are not careful end up Young, Fabulous and Broke with lack of financial education.

Although some of her talk was specific to US, I will highlight some pointers she gave to the Undergraduates that I think we can all learn from:

  • Now is not the time to work for money. Now is the time to do what you love without financial and family obligations. (for fresh graduates)
  • Don't be dependent on the cheques coming in, make the people paying cheques to you dependent on you - Make yourself indispensable
  • Bankrupt - Don't look at them as a bad person. Oftentimes they are people who managed money poorly due to lack of financial education.
I think one point to note was there was this person who became bankrupt after joining a Multi-Level Marketing (MLM) or Network Marketing organization. Sold by the potential success and payoffs, she used her credit cards to buy products and it just did not work out. It is not about MLM networks, I think it is true for any business in general. To use a credit card to start a business, you really have to take into consideration the high interest rate. Jump in with your eyes wide open!

Repeatedly, the issue of pre-approved credit cards and individuals owning tens of credit cards also came up. Which is quite shocking for these are students! Which is also why I am concerned like I blogged previously, if we are note careful, Singapore may go down the slippery road of Banks Irresponsibly Promoting Credit.

I think the book should be much better but the DVD was concise and easy to understand as well. Perfect for beginners and Visual people.

Monday, June 21, 2010

Review of Google Blogger for Dummies – A Quick and Easy guide on Google Blogger, Monetization and SEO Tips

A review of Google Blogger for Dummies, a book I completed reading a few days ago. It could be the must-have for all beginners wanting to eventually run internet marketing businesses
Even though I have been blogging for a few years, I found the tips and guides beneficial. 
Of course, like all “Dummies” guides, you can skip this book if you are tech-savvy and you are 
well-versed in Blogging, Monetization, IT and SEO (Sales Engine Optimization).

Google Blogger for Dummies
However, if you do not fall into the category, like me you would probably have only explored the basic publishing of blog entries. 
Minimal idea of monetization and SEO tips
(I have not even heard of the term SEO before I read this!)

The book gives you a list of links and websites you can check out for each topic. 

Obviously, what I paid most attention to was the Monetization section, which to me basically means 
“How to Make Money from Blogging” section. (I love to write and getting paid for it will make me love it more!) 

Here’s a quick look at Monetization and if you find it useful, you’ll probably find the other sections useful as well.

There are a few ways you can monetize. 
1. Online Ads> Check out  Google Ads and Kontera for more information
2. Sell ad space on your blog
3. Paid Reviews> Check out Pay Per Post and Review Me
You may want to pick up the book if you would like some recommended sites and information on the following:

  • Free Pictures that you can use
  • Free Blog Templates as compared to the limited few given by the official Google blogger  
  • Social Bookmarking Sites
  • Microblogging
  • Sales Engine Optimization (SEO) Tips
  • Analyzing your Blog Statistics – for example, Visitors and Page Views
  • Checking your Page Ranks and Links
  • Podcasting
  • Vlogging

Email me at mywealthmodel(@)gmail. com if you would like some of the sites recommended by Google Blogger for Dummies for specific topics.

My Rating? 3.5 out of 5 (Read it!)

If you like this entry, you may also be interested in Complete Idiot's Guide to starting a home-based Business

Thursday, June 17, 2010

Do you feel like you want to stop working for money immediately?!

There are thousand and one ways to earn money - as an employee, entrepreneur, businesses, investments, Forex trading, internet marketing, home-based businesses, and the list is endless. 
The litmus test of whether you are doing what you love? 
A question that you always hear periodically: 
If you were to strike the lottery of $10million, would you still continue in your job?

This will tell us how much you love your job.

Would you continue in your job to 100 years old if do not need the financial rewards of it?

This man did, working till he is 100 years old!

Can you imagine that?
That’s really doing what you love, isn’t it?

Lucky is the man who can find a job he loves! 
We should all start the process to get lucky.
Finding a career we love!

It’s not impossible, remember this? 

And if you are interested to start following your passion of running a home business and do not know where to start at all.. you may want to consider

The Complete Idiot's Guide to Starting a Home-Based Business 2nd Edition - Barbara Weltman

Good Luck!

Tuesday, June 15, 2010

How many Millionaires in Singapore?

If you are wondering how many millionaires there are in Singapore and how likely is it to be a millionaire in Singapore? Read on. Singapore has the fastest growth of number of Millionaires in the world last year!  As reported in The Straits Times 12 June 2010 - Singapore millionaire club the fastest growing. This growth is despite the recession that affected the wealthy in many other nations. Singapore topped the list with a 35% per cent growth of its millionaire club.

Though fewer in numbers than millionaires household in United States, Japan and China, Singapore had the highest concentration (11.4% of households) of millionaires in 2008 in a study by Boston Consulting Group. So you are more likely to bump into a millionaire in Singapore while strolling down the streets. The qualification criteria? Households with investable assets of over US$1million exclusive of property and items like art. 

Figures from Singapore's taxman showed that there were 3,838 taxpayers who earned more than $1million in 2007! A Merrill Lynch Cap Geminin report last year gave the number of millionaires in Singapore as 61,000 in 2008.

Some of the lessons learnt?

Property Investment
One of the reason cited was the profits earned by property owners from en bloc sales. 

Right place at the right time
Singaporeans likely would have invested in regional shares due to the familiarity with the region. This familiarity helped them as Asia-Pacific stocks traded outside Japan rose nearly 70% last year, far outpacing expected gains of just over 20% in US and European Stocks.

Higher Savings Rates
The high savings rate means that the average households in Singapore (about 60%) have bankable assets worth between US$250,000 and US$1 million.

So I suppose US$250,000 in bankable assets is a benchmark we should at least aim for since 60% of Singapore households have that amount?

Keep it growing, all of us have to start somewhere.

Sunday, June 13, 2010

Land Banking in the Spotlight again? - Profitable Group / Profitable Plot Is it a Scam?

As reported in The Sunday Times June 13 2010 - Land investors show up at Speakers' Corner, 5 year-old Singapore-based investment firm Profitable Group which has dealings including land banking and Boron a fuel product, had been placed on the Monetary Authority of Singapore's (MAS) Investor Alert List in the latter part of last year. 

Land Banking - Profitable Group / Profitable Plot

40 people turned up at Speakers' Corner yesterday in what is Part 2 of the saga. Profitable Group was also in the headlines recently when angry investors stormed its headquarters in Stanley Street demanding their payouts.
The disgruntled investors revealed that they were convinced by Profitable Group that their investments would bring them guaranteed returns! 

Why are these investors so angry? Many have not seen the "guaranteed returns" despite persistent calls to the company. Promises of guaranteed profit of 12.5 per cent after six months were made to one investor who invested in their fuel product called Boron but he has yet to see the money despite the maturity being end of April. It is reported that some investors have parted with as much as $180,000. Calls to the Profitable Group by the journalist went unanswered.

Why did people part with their money? Some of the reasons given are that they were taken in by the sleek presentation, roadshows were at nice shopping centres like Raffles City, it looked professional and impressive.

That's not to say all Land Banking companies are like that but we can all learn some lessons from this episode.

Lessons Learnt?

  1. Always do your homework before you part with your money. Especially in lesser-known companies. 
  2. Before investing check Monetary Authority of Singapore's (MAS) Investor Alert List
  3. Diversification. No matter how profitable or impressive an investment vehicle is even when it has been around a long time and has been giving you handsome returns, the basic applies - Never put all your eggs in one basket. (Read about ONE of the examples Madoff Investment Scandal which went on for close to half a century!) 

You may also want to read about another Land Banking Company in my previous entry $6million Lost in Land Banking  

As highlighted in the previous entry on Land Banking,

"Land-banking investments involve investors acquiring direct interests in real estate rather than in securities related to real estate and, as such, fall outside the scope of the Securities & Futures Act (SFA) and Financial Advisers Act (FAA)"
- spokesman for the Monetary Authority of Singapore

If you would like to highlight this to your loved ones,
You should email this entry to them or Share it on Facebook.

Thursday, June 10, 2010

Turning Passion and Hobby into Business

Ever wondered if your hobby or passion can ever be turned into a million-dollar business? 
Ever faced the dilemma of pursuing your passion or doing what is "practical"?
Wouldn't it be great if you can earn a living ( a very decent living) from doing what you truly love and not dragging yourself through the monotonous job requirements?
If you still have the passion in you to really pursue what you love, do not let the passion die. There's hope yet, read on!

I always enjoy reading success stories. They are so inspiring and it gives us all a chance to recharge and pursue our dreams with the positivity gained! To do anything different from the norm of corporate job - be it Financial Consulting, Property Sales, Business, Internet Marketing etc - is oftentimes mentally tough. Quite often, people will be telling you statements such as "be like everyone else and get a job", "I don't think you are suitable" and "please be practical". Sure, take all the advice especially those of loved ones who mean well. However, sometimes it is about overcoming obstacles, including well-meaning loved ones.

If you are looking for another inspiring story, the following article could be one of them:

Her hobby is now a million-dollar business - The Straits Times Wednesday, June 9 2010

Who? Nicole Yee

What I learnt from reading the article:

Lessons on Turning your Hobby to a Million-Dollar Business Secrets

1) You are never too young to start - She was 25 years old when she started. So for people (cause I am past that age) who put things off or who like to convince yourself that you are too young to do anything. Act NOW!

2) Perseverance - Success does not come overnight - It has been 9 years since she started. Though not reported in the article, I am sure there would have been times where thought of giving up crossed her mind.

3) Opportunity in Adversity - It is always easy for us to blame the external environment such as the economy. She started in the aftermath of the bust when the sites she visited for information were shut down. She saw the opportunity to fill the gap.

4) Hardwork - She was an OMO (one-man-operation) for 6 years. Single handedly managing the business. 

5) Visualization - Growing up, Nicole and her brother played games and acted like they were running the business of her dad's hardware and machinery factory.

6) Innovation - From a site started as a cosy corner for women to read up on things that interest them, it now makes money from advertisements, organizing events and offering product samples. They have even developed an iPhone application!

The rewards? Last year her firm posted revenue of $1.16million. 

So ladies and gentlemen, continue pursuing your dreams and passion!

Cliche as it may be, 
"If you love your job, you never have to work a single day in your life."

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Sunday, June 6, 2010

Cheques in the letterbox! - Can we trust the banks to do what is right for its clients? Credit Loan Crisis in the making in Singapore?

Cheques in the letterbox! How low can the banks go? 
Not that anybody should be unhappy if we receive cheques in the letterbox. Keep them coming by all means! 
However, a reader emailed a copy of it to me and I was disgusted by what I saw and it set me thinking: Can we trust the banks to do what is right for its clients? And is a Credit Loan Crisis in the making in Singapore? 
A reader’s father received what seemed like a perfectly normal cheque, written in his name with the amount stated. Pleased that he is receiving money from the bank, he happily went to his child (my reader) to get help in depositing the cheque into his account. My reader was appalled when he saw the letter and cheque.

And the following is the reason why:

Cheque in the Letterbox from the Bank

Touted as extra cash at a special rate of 1.88% for six months with no processing fees! Doesn’t it sound like a bargain already? 
Recipients are encouraged to “take advantage of this promotion now” to “REWARD” yourself with a well-deserved holiday or “INDULGE” in something that you’ve always wanted. 
A bank asking you to borrow money for a holiday and pandering to your wants! 

Wondering what is the interest rate after six months? You have got to read through the fine print at the back to know that it is 24% per annum!
So for someone who does not understand English as in the case of my reader’s father, are there safeguards in place?

This is not to pinpoint any bank in particular. Most (if not all) banks have marketing campaigns for their credit and loan facilities. The tricky part is in finding a balance and drawing the line. 
It is a reminder that banks are not longer the service provider of just depositing and withdrawing money that we were all so used to. 
Mini-bonds and Lehman Brothers, anyone? 
As listed companies, they have profit motives and have to answer to shareholders as well. That is how the Credit Crisis happened. (Click here to watch the simple to understand video of Credit Crisis Visualized

Which is why, getting ourselves Financially Educated is of great importance. So we can all come to our own decisions and not have products or credit pushed to us.

More importantly, I hope it is not the beginning of us being led down the slippery slope of living on credit. I remember watching on TV about the situation in US where someone who was on the verge of bankruptcy (or already one) who continued to receive pre-approved credit card in her letterbox!

Again, it is really simple. Back to basics of Personal Finance 101 – differentiating Needs from Wants and NEVER borrow a single cent for Wants!

So next time a mail comes into your letterbox, read carefully and think twice - thrice - before taking any loan or credit!

Wealth Matters! If money isn’t coming into your pocket, money is going into someone else’s.

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Thursday, June 3, 2010

Money Saving Tip on your Mobile Phone Bill - To Roam or Not to Roam

This money saving tip can save you up to $120 per year and all you need to do is to drop your mobile telco a email or call.

See the innocent looking line in your monthly mobile phone bill that reads "AutoRoam"?
Monthly deduction of up to $10 per month for this AutoRoam subscription. (depending on telco - 
Starhub: $10 Registration, $5 monthly fee; 
M1: $20 Registration, $10 monthly fee;
Singtel: Registration Waived, $10 monthly fee)

Usually, it starts off innocently enough. Free subscription for a few months after which the monthly fee starts. A sales strategy to capitalize on people's laziness and forgetfulness to deal with it. 

So what is AutoRoam? It allows you to make calls on your mobile phones when you are overseas. 
Some of you will be asking, "But I do go overseas occasionally, if I cancel AutoRoam, won't I be unable to make calls while I am overseas?"

Well, you can still make calls overseas whether or not you subscribe to AutoRoam.

So what is the difference?
20% Surcharge on your calls

Of course, if you are overseas often for pleasure or work, it makes sense to subscribe to AutoRoam if you use your mobile phones regularly while overseas.
However if you are like me, you do not travel overseas very often and even if you are overseas, you  do not need to make regular or lengthy phone calls, it may be better to cancel the AutoRoam subscription.

Do the maths, it may save you up to $120 per year! 

Information on Roaming for the Respective Telcos