Saturday, November 8, 2008

Building An Investment Portfolio

Your investment portfolio is like a marriage certificate into the investment world. It binds and holds all investment commitments that you own, but unlike a marriage certificate, you can be bound to it with a few partners or a whole institute for as long as you like.

An investment portfolio is important to ensure a strong backbone to your portfolio once you start investing.

First of all, you must have a goal. Your goals should be specific, precise and personal. (you are starting this investment because you are saving for an early retirement, for your children’s college education funds, to go for Hajj, a holiday villa or a trip around the world.) Only after you know what you want can you easily make sound decisions.

The next important thing is how much you can save without hurting your bank account. This decision is determined at the beginning of your investment journey, while it could be changed from time to time according to your needs and lifestyle affordability.

With a special amount of money set aside to be invested, some people also include 10 – 20% of their monthly income to be invested.

Then the next important question is : When do you want it by? Knowing an estimation of when you will retire or when your children are ready for college will give you a clear idea of how much you have to set aside as investment budget and a realistic timeline.

All investments come with a price you cannot run away from and that is unavoidable risk, but then again, everything in life contains risk. Only you will know how much investment risk you are willing to take.

You’ve done your research, determined your needs and set yourself a timeline to reach your goals, but many investors, whether experienced or not may overlook some basic measures to maintain a good investment portfolio.

The most important concept that will follow through until the end of your investment period is diversification, meaning your portfolio will have a mixture of different assets, such as money market, bonds, dividend funds , balanced funds and equity.

To know more about how to go about doing that, please feel free to contact me ;
Dzul Rashidi at 019 2833318

Or email me at

Wednesday, November 5, 2008

Business Opportunity.

I’ve been in the business for over 7 years now. I have realized that the longer I stay in financial industry, doing the business is easier than ever. As usual, I am now opening up vacancies to recruit new comers to join me and prosper in this industry.

Because time limit is a factor, I can only personally train five people in a year. If you are interested to join me, please follow through this article. I will show you why being a financial planner is one of the best overall job.

Check out this website

Financial planning is a job that combines professionalism and entrepreneurship. It requires high level of social skills, and also technical knowledge. Don’t ever look down on this professional career.

When you engaged a professional service, it normally involves a professional fee. And some specialists charge for the performance of job, not on the result of their work. For example, a brain surgeon charges thousands ringgit for a procedure that doesn’t guarantee 100% success rate. The patient still need to pay whether the surgery is successful or not.

But as a financial planner, most of the time we give advice free of charge. We ask people to save, to invest, to protect and manage their wealth wisely. My clients become richer, not poorer. We ought to be welcome everywhere.

The best part about this career is that you work as an entrepreneur, not an employee. You can do recruitment, build your sales force and prosper as a solid business with long term customer base. The more people you train to be successful, the more successful you are. That is the beauty of this career if you choose to do it..!

If you are looking for a career change, or feel that you deserve a better life, send your resume to me at

Success is a matter of choice.

If you:
* are a graduate
* are above 21 years of age
* love challenges
* want to start a business
* possess entrepreneurial spirit
* have good social/networking skills

You are the perfect candidate to succeed in this industry.

Don’t hesitate any more. Call /SMS Dzul Rashidi at 019 2833318 and let me show you how we can progress together!

Monday, November 3, 2008

Don’t rely on your EPF

Many Malaysians believe their retirement can be funded by their Employee Provident Funds (EPF) savings. By relying solely on your EPF savings, you underestimate the amount needed to retire and overestimate how much you can withdraw once retired.

Malaysia’s pension scheme is meant to provide contributors with the basic necessities.

Unless you plan to make drastic lifestyle changes after you retire, there is a big chance of exhausting all your funds in just a few years, with escalating living costs and increased longevity.

The amount that we have in our respective EPF accounts depends on how much we make. For salaried employees, the mandatory contribution rate to the country’s pension fund is 23% of the employee’s monthly salary; 12% is contributed by the employer and the rest is deducted from the individual’s pay.

At age 55, contributors can opt to take the sum along with annual EPF dividends declared to finance the rest of our lives. Any withdrawals made before this age, such as to buy a property or pay for medical and educational expenses, will reduce the amount that you receive at retirement age.

All things being equal, with a monthly contribution of 23%, those relying solely on EPF funds for their retirement will have to live on slightly less than a quarter of their current income every month. Is it possible to live frugally on this sum?

Even EPF have consistently highlighted the need for contributors to supplement their retirement funds with other sources of income. According to Deputy Finance Minister Datuk Seri Ahmad Husni Hanadiah, the average Malaysian will have approximately RM120,000 in their EPF account at the age of 55. This amount provides the retiree with RM500 a month to live on for 20 years. While it can be argued that this meagre sum can be stretched to provide for basic necessities (families earning this amount are classified “hardcore poor” and are eligible for government aid), it is not sufficient to provide for those that live beyond the age of 75.

Inflation is another reason why you should not depend solely on your EPF funds for your retirement.

Inflation pushes up the cost of living. At the very core, inflation means we have to pay more for the same amount (and quality) of goods and services consumed. It eats away the value of your EPF funds. For example, a yearly 5% dividend declared by EPF translates to a real return of 1% if inflation for that particular year averages out at 4%.

As shown below, the EPF’s annual dividends have been just slightly more than the country’s inflation rate, which is measured by the consumer price index (CPI).

2005 - EPF Annual Dividends - 5.00% , CPI - 3.1%
2006 - EPF Annual Dividends - 5.15% , CPI - 3.6%
2007 - EPF Annual Dividends - 5.80% , CPI - 2%
2008 - EPF Annual Dividends - N/A , CPI - 5.7%

Bank Negara’s estimate
Source: EPF and Bank Negara

However, one criticism of the CPI is that it does not reflect the actual consumption patterns of different regions and different income groups. This is could be due to controlled prices for a generic brand of several items in the CPI’s basket of goods and services, including cooking oil, white bread and rice. Controlled prices do not reflect actual market prices paid by the majority of Malaysians, especially those living in cities.

Revisions to the CPI basket are also infrequent - the last revision was in 2005. Recognising these shortcomings, the government reportedly reassessed the composition of the CPI and is considering publishing separate inflation rates for urban and rural areas.

CPI is also a poor reflection of inflation experienced by individuals. In June 2008, the CPI jumped to a 26-year high of 7.7%. However, in reality, most people experience a jump in prices which exceed 7.7%. It is more likely that the good and services purchased, especially in the urban areas, reflect the 40% increase in fuel prices and the 18% increase in electricity tariffs.

As more and more producers start passing down rising transportation cost to consumers, we believe inflation will continue at higher levels for some time. This will eat into the value your EPF savings, especially if annual returns declared for this year do not surpass 5.7%, the estimated inflation rate for 2008.

The first step is to stop depending on the EPF. Take responsibility for your retirement and invest with a clear goal in mind. The objective is to invest in assets such as equities that have historically been able to provide inflation-beating returns.

To get started, here are some tips:

1. Invest now.
The sooner you start investing, the sooner you start building your wealth. Take a long-term view and invest small sums over a long period.

2. Take a look at how much you will need to retire.
This is, at best, a guesstimate of the expenses that you will incur when retired. Aim for a higher percentage of your current income, for example 65% to 80% of what you are earning now to sustain the same lifestyle once you stop earning.

3. Diversify.
This can be easily done with unit trust funds. Invest your EPF funds in approved local funds but your selected investments must make better returns than EPF’s annual dividends. However you still need to diversify your portfolio with different asset classes and geographical coverage.

4. No matter what happens – whether the market falls or climbs - always keep retirement as a financial goal and stay invested.

To know more , kindly contact me, Dzul at 019 2833318 or 017 6830333.