Monthly Archives: August 2007

U.S Credit Crisis is affecting the globe

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Posted by pakdi on August 27, 2007 – 8:16 am
Filed under Economy & Finance, Investing, Stocks

This is an interesting article which tell us that what is happening in US will affect the global stock market.

Read: U.S. Crisis Underscores Global Links

Why? Here is one of the reason:


“People thought that was just a U.S. phenomena but it does affect the rest of the world because, as we discovered, the lenders to all those leveraged deals were just as much financed by foreign banks as U.S. banks,” Ugeux said.

The stock market is highly related with other market and it is important for you to have your eyes and ears open to the other stock market around the globe too.

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How to interview your financial planner?

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Posted by pakdi on August 25, 2007 – 8:54 am
Filed under Personal Finance

If you have decide to seek professional help in managing your personal financial planning, you should interview him too. These following questions may help you to evaluate several financial planners before you appoint who is right for you.

1. What experience does he have?

You should ask the planner how long he has been practice and several companies or individuals that has been associated with him. Ask him about his working experience and how he can relate that to his current practice.

2. Does he really certified financial planner?

There are many liars and conman outside there. Make sure he shows you his license and if you doubtful, you must check on his background with the relevant professional organisations.

3. What services does he offer?


Financial planner is a wide aspect of practice. There are several area of expertise such as cashflow management (including debt management), taxation, investment, insurance and estate planning.

Independent financially planner usually doesn’t sell any insurance or investment products and advice unless he is registered with the relevant authorities. Some of them offers consultancy without any products. They may also only specialize in taxation matters or estate planning only.

4. What is is his approach?

Different planners have different approach. Ask him in general what is the general requirement that he needs before you appoint him. There are financial planners who offers services only to high net worth individuals. Some of them may develop you a financial plan from a scratch.

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When do you need a financial planner?

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Posted by pakdi on August 24, 2007 – 8:34 am
Filed under Personal Finance

Certified financial planner is a professional who uses the financial planning process to help individuals work out a plan to meet their life goals. Basically they are known with a qualification such as Certified Financial Planner (CFP) or Chartered Financial Consultants (ChFC).

In financial planning, there are 3 categories. Single purpose, multi-purpose and comprehensive financial planning. For single purpose financial planning, they are basically the person who sell insurance and unit trust / mutual fund. The current development shows there also a person who will help you particularly in estate planning.

The independent CFPs and ChFCs usually can show you more holistic plan because they are not tied-agents who are attached with any financial institutions.

It is very important to seek for a certified financial planner because if you have any problems with your agent or financial planner, you can always seek a recourse from central bank or securities exchange commission, particularly in Malaysia, Bank Negara Malaysia and Securities Commission.

You should find a financial planner for a specific advice on your financial matter especially when you are in these situations:


1. In need of expertise in certain areas of your finances for example how to evaluate the risk level of your financial portfolio, retirement plan and so on;

2. You want to get a professional opinion about the financial plan that you have developed for yourself;

3. You don’t have time to do your own financial planning;

4. You have an immediate need or face an unexpected life event such as a birth, inheritance or major illness;

5. You feel that a professional adviser can help you improve you current financial portfolio; or

6. You know that you have to improve your financial position but don’t know where to start.

Knowledge is Power - Francis Bacon

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7 Ways To Finance Your Business

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Posted by pakdi on August 23, 2007 – 8:04 am
Filed under Business

You need capital to start your business, be it small capital or big capital it doesn’t matter. However, in order to finance your business it is not necessarily you have to use your own money as a capital. There are several ways to do it without using your own money.

Here are 7 possible ways for your business financing purpose:


1. Your own savings

When you’re still an employee or working for other people, it is a very wise decision to save some money. Thus in several years time, you should have enough amount of saving to start your small business without searching for other sources. By doing this, you can keep you day job and build your business slowly until you’re confident that your business can replace your day job.

2. Friends & Family

You could also ask your family & friends to give some cash in order for you to start a business. You have to convince them that you have a good business plan to be executed however the downside is that if your business don’t run smoothly, you couldn’t hide anywhere.

3. Bank

Certain banks could offer your a micro-lending scheme. The best example of micro-lending bank in the world is a Grameen Bank. Basically conventional banks will be reluctant to give their money to any people on the street with untested business idea.

4. Grants & Awards

Business grants always come from the government and awards is from other institutions such as foundations and big corporations. This is a free money from them because of social responsibility to create economic growth in the country. Grants & awards usually given to an established business and you have to follow their terms & regulations. That’s is why it is important to start a business in a small scale first before you apply any grants and awards from them.

5. Other Loans

You have to put a collateral may it be your retirement fund, your home, your life insurance policy. This is a risky step because if your business fails, you will lost everything that has been put as the collateral.

6. Personal loans & credit cards

This can be simply said as a desperate measures for your business financing. The application usually faster to be approved however it comes with a very high interest. Please be remember that there is a credit card scheme that can have an interest up to 24% per year.

7. Partnerships & Investors

If you don’t have enough money to start the business yourself, you might want to have a business partner or you have to find an outside investor for your business. This might become a good idea because you can have extra money and extra man power to run the business however, a good business partner is hard to be found. You may face few times of partnership splits before you are likely to find the best partner.

“A bank is a place where they lend you and umbrella in fair weather and ask for it back when it begins to rain.” - Robert Frost

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14 Questions for you before using share margin facilities

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Posted by pakdi on August 22, 2007 – 8:09 am
Filed under Investing, Stocks

Stocks investor sometimes tend to use share margin facilities blindly without looking into their own financial knowledge and ability. Buying stocks using margin means that you’re borrowing some money from the brokerage company. You must pledge a collateral. It is not a free money.

You should review yourself before you want to use any share margin financing.

Financial Position

1. Do you have any funds that you can access if any shortfall happens?

2. Would you be able to serve the interest and repayment?

3. What much you can afford to lose?

4. How much risk you are willing to take?

Market

1. What is your view of the market?

2. Are you a very knowledgeable investor?

3. Would the potential gains outweigh the interest that you have to pay?

Financial Institution or Stockbroking Company

1. What are the fees and interest charges that you have to pay?

2. How is the margin calculated?

3. What is the margin call level and force-sell level?

4. What sort of shares are acceptable to the financial institution / stockbroking company?

5. How are the shares valued?

6. What are the terms and conditions for withdrawal?

7. How would the transactions be conducted?

These are some questions to be asked to yourself before you’re buying stocks with share margin financing.

Happy investing.

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