Let’s take a look at Cosco Corp below, which used to be a hot potato in the Singapore stock market. Note that the phrase ‘used to’ signifies that its glorious days are already history.

The Ship That Sank Along With Their Money

Cosco is a famous shipping company in Singapore, and its stock has enjoyed spectacular ratings from several analysts and broking houses. Cosco’s share price has been climbing up since its IPO days and whoever bought it during its early days would surely have loved Cosco like crazy! However when its earnings started to decline during the 2007 financial crisis, a lot of people did not pay attention to how overpriced the stock really was.

The shareholders of Cosco were probably thinking “Come on, the price has fallen this much already, how much lower can it go?” Even when the stock dropped to S$6 from a high of S$8.20, they continued to reassure themselves that “good companies will always rebound” and “you just have to be patient in the stock market”.

Come On, It Can’t Go Any Lower.. Can It?

Sad to say, thousands of shareholders who believed in the “it can’t go much lower” theory was proven to be wrong over and over again each time the share price breaks a new low in front of their eyes. Some loyally held on and some even bought more shares on its way down, they totally regretted that decision when Cosco plunged more than 90% from its high of S$8.20 to as low as S$0.605!

The Other GLorious Stock That Gave Them Hope

I recall another famous stock that was on everybody’s lips during the time it was flying high – Creative Technology, a pipping hot stock that used to be loved by a lot of retail investors and big institutions, a name that all Singaporeans are so proud of.

Creative made its name from its famous Sound Blaster sound cards and was listed in NASDAQ. Its CEO Mr Sim Wong Hoo was even named the Businessman of the Year twice. Everything looked rosy with these great fundamentals and the share price rallied to a historical high of S$69.50 in Year 2000. Whoever bought Creative in the 1990’s would have seen their profits went up several folds and imagined themselves laughing all the way to the bank. However, little did they know that it was too early to call for a celebration as a disaster was quietly in brewing.

The Sad History That Never Fails To Repeat Itself

All eyeballs were on Creative when its price broke one new high after another, share-holders rubbed their
hands in greed praying that the stock will continue to shoot through its roof, more and more people were drawn into the chasing game after witnessing their peers’ glorious profits, nobody wanted to miss out on this “sure-win stock”, “gold mine stock” or whatever funny name they gave it.

But most of them have no idea what will be the highest price! In other words they did not know when they should sell the stock, and simply held onto it blindly. In the end, they saw Creative dropped all the way back to around S$2 near the end of 2008.

At the point of time I’m writing this article, Creative has very slowly climb back to around $6 since then, but I can tell you that it will take years before it will regain its historical high… if it ever does… Just like their Cosco friends, tons of shareholders out there would have thrown in more money into Creative thinking that this lucky stock will shine again someday and they will be able to recoup all their losses and even make more money from it.

Can you see that the group of people who stubbornly held on to Cosco and Creative have unknowingly allowed themselves to become what I call “Involuntary Long Term Investors”? More than often, they are just wasting long period of time waiting while missing out lots of opportunity costs because their attention and money are locked in Creative such that they turned a blind eye towards other stocks which could have actually made them more money.

Throughout my 10 years of trading experience in the stock market, I have seen the same old story happening to so called fundamentally good stocks like Informatics, Osim, Raffles Education…etc. And yet, many people are still caught up in the stocks’ former glory and failed to realize that their prices may never regain their all-time high within the next decade or even longer.

This is my sincere advice to all – please STOP FALLING IN LOVE with your stock. Eternal love in the stock market will only hurt your bank account, so when it is time to cut loss and part with a stock, do it promptly without any emotion.

Devote your affection to the loved ones around you and your returns will be greater than monetary rewards. Remember, fickleness should only be practiced in the stock market but not in real life, else you may end up like Tiger Woods!

Money for love or love for money?

Both are intertwined. We need love to live a meaningful life, have relationships, because we need to have a sense of attachment, to love and to be loved. At the same time, we need money to buy at least our basic needs like food or a roof over our heads.

Both love and money are emotional things to a person. It is difficult to separate both and not talk about it in marriage. When there is no love, marriage is meaningless. Same goes for money and marriage. We can’t survive on love alone in a marriage without money.

However, money is a sensitive topic and we usually try to avoid the conversion fearing that it may create unpleasantness, arguments or misunderstandings with our spouse. But do bear in mind that it is important that you and your partner see eye-to-eye about how to manage money as a couple, it is no less important than talking about having children or retirement planning.

Why a pre-nuptial agreement?

Yes, it is not romantic at all to talk about a pre-nuptial agreement with your spouse, but it is something you need to do in order to avoid unnecessary financial fights later in the marriage. It is better to trash out different opinions in managing money before getting married to avoid emotional stress to talk about getting a divorce later in life.

Discuss with your spouse matters regarding allocation of assets that both of you have accumulated before marriage, and even unpleasant topics such as your financial obligations should one of you lose your job, or cannot work due to ill health. If one of you earns more than the other, how will you want to share your contribution for household expenses, savings account and retirement planning? Don’t miss out on details like habits and vices that cost money like shopping, smoking, drinking and medical bills etc.

Remember to respect and listen to each other’s viewpoint when both of you talk about money. It is pertinent to explain and rationalize with your spouse the ideas expressed or suggestions proposed, so that he or she can see your point of view, as what seems logical to you may not seem sensible to your partner.

Insurance protection

It is wise to review your insurance protection needs before getting married. Due to your marriage financial commitment and obligations, there is a need to increase your insurances including: life insurance, critical illness insurance, medical insurance and personal accident insurance.

If both of you own a house or car jointly, you will need to buy general insurance to avoid unnecessary financial difficulties when there is a need to replace the car or upgrade to a bigger house.

Writing a will and creating a trust

Writing a will is a must for you and your spouse. It is your wish list of how you want to distribute your assets to your loved ones after your death.

It is important to discuss who you will appoint as executors of your will and guardian of your young children. Both of you must mutually agree to the division of each other’s assets in the will in order to avoid misunderstands when the will is read to your beneficiaries.

It is also a good idea to create a trust if you have assets worth millions, to ensure you leave a legacy and protect your wealth for the next generation, just you case your spouse is not able to manage your assets after your death.

Pre-relationship and post-relationship debts

This may sound harsh, but it is imperative that you discuss with your partner the debts that both of you will bring into the marriage, if applicable. It is best that pre-relationship debts be kept separate and it is the obligation of each individual to settle those debts as soon as possible. It is important that both of you make a commitment to settle personal debts within a period of time after the wedding, if those debts cannot be paid off before you get married.

Should it become necessary to apply for a loan or even a credit card once you’re married, you will need to discuss your ability to pay for that new debt commitment. Both of you should mutually agree upon the terms of payment and time period to settle the debt.

You and your spouse should not hide from each other your debt history, because failure to fulfill loan obligations by either party can cause financial disaster to the marriage. Remember, it is much healthier to start a life together debt free!

]]> http://moolah.asia/member/features/love-money-blissful-marriage/feed/ 0 http://moolah.asia/member/education/are-you-trader-or-investor-2/ http://moolah.asia/member/education/are-you-trader-or-investor-2/#comments Mon, 22 Feb 2010 08:51:27 +0000 admin http://moolah.asia/member/?p=327

Why The Confusion?

What is the difference between traders and investors? This is one of the most important things to consider when evaluating your investment profile, and yet it is often answered incorrectly.  The main reason why people are confused over these terms is because many people started off as a trader but ended up as an investor when things go wrong.  Most people buy into a share hoping that they can sell it off after the price goes up and make some profit. But when the price drops, they refuse to cut loss and hope that at some point of time it will miraculously rebound. They held on to this hope for years and there you have it – A trader who unknowingly became an investor.

The Investor Has The Patience To Wait

The investor buys stock with the same objective as buying an asset, such as a property. His main concern is whether this asset can deliver an income stream and he is particularly concern about the fundamentals of this asset. The company’s performance, debts, dividend payouts, profits and loss will have directly affect the value of the company and will have a strong impact on the potential of his returns 5 or 10 years down the road, when he decide to sell off the shares.

Just like you are unlikely to sell off your house the moment property prices drop, an investor will not be too concern about short term fluctuation in the stock prices because the fundamentals of the company has not changed, and he will still be collecting dividend along the way. However, if the stock price rises dramatically he may be tempted to sell to collect a capital gain.

The Trader Takes His Profit To Generate More Money

The trader has a completely different objective, his patience for profits is lesser than that of an investor because he just wants to buy a stock and sell it off at a higher price within a short time frame. Using the profits, he will then buy and sell other stocks and continuously generate more money. Trading to him is just an activity that drives profits and it does not matter if the company he buys into is selling food, computers, electronics or clothes. He does not need to spend hours to study fundamentals, balance sheets, profits and loss statements etc, his job is to find a stock which he can sell for a higher price, any dividend is just additional bonus.  A successful businessman will capitalize on the current market fad and buy in items that are in strong demand because he knows that he can easily resell them at a higher price. If Valentine’s Day is approaching, he will stock up more roses instead of chrysanthemums, because those love struck guys will be fighting to buy roses even though their price is much higher than the low demand  chrysanthemums.  Similarly, we should buy stock that has a strong and rising trend so that we can sell them at a higher price within a short time frame.

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Wine investment is attractive to investors because it often does well in years even when other equity products perform poorly. Fine wine is a finite item and its demand more than often outstrip supply, thus leading to limitations on availability and prices can subsequently rise. Premium Liquid Assets, an established wine broking company in Singapore, estimates a 12-30% return per year after deducting seller’s premium.

What kind of wines should I invest in?

You should look out for investment grade wines that are actively traded via auctions around the world. Less than 1% of all the wines worldwide are investment grade and Bordeaux makes up 80% of these wines. Trusted through the years for its premium quality, Bordeaux Wine may be priced higher than other wines but historically they are the best performers in wine investment.

How do I buy at the best price?

Buy en primeur and focus on the top wines for the best vintages. En primeur refers to the early purchase of wine after it is made but before it is bottled, the initial release prices are usually the lowest at which the wines will ever be sold.

How will I know when to sell my wine?

The minimum holding timeframe for wine is 3-5 years, in fact most experts agree wine investment is viable for 10 years or longer. Typically the longer you wait the more likely it is that other stocks of the same wine will have been exhausted, thus making your wine even more valuable. Engage the service of a reputable wine broker and he will help you determine the best time to sell your wine.

What are the risks associated with wine investment?

As with all kinds of investment, the market can be fickle and prices may plummet, you should be mentally prepared that wine investment is for long term holding. Beware of dubious companies which may be involved in fraud activities or even offer counterfeit wines. As an investor, you should also have some knowledge of the wines that your broker recommends, do research on the wine scores and rating systems to make sure you are buying wines that are actively traded. Always deal with established and reputable wine broking companies with a proven track record so that you will receive professional advice.

Besides buying bottled wines, are there any other forms of wine investment?

Premium Liquid Assets offers a Premium Wine Fund for investors who want to participate in wine investment but are not interested in holding wines. You can monitor the performance of the fund on Bloomsberg just like the way you monitor stocks and shares. The minimum entry is US$100,000 and you will be serviced by a designated fund manager.

]]> http://moolah.asia/member/education/wine-investment-faq/feed/ 1 http://moolah.asia/member/menmoney/5-valentines-day-ideas-that-wont-burn-a-hole-in-your-pocket-2/ http://moolah.asia/member/menmoney/5-valentines-day-ideas-that-wont-burn-a-hole-in-your-pocket-2/#comments Fri, 12 Feb 2010 12:50:09 +0000 admin http://moolah.asia/member/?p=270

All men know that Valentine’s Day is a giant conspiracy among ladies to launch an attack to our bank accounts under the glorious name of love. Although I do agree that we should give unconditional love to our partners, there are times when reality sets in and we have to care for the well being of our already-not-so-healthy wallets. If by now you are still cracking your head over how to score big during this Valentine’s Day and yet not burn in a hole in your pocket, here are some life saving ideas for you.

1. Celebrate at Home

If you can pull it off this idea, it definitely has big dividends because you are already behind closed doors and all the control is in your hands. But to make up for the ordinary venue, you have to make the experience really special.

Rather than dining out at the usual commercialized restaurants, why not please your partner through their stomach by whipping up a special dinner? Don’t worry if you are not a fantastic cook, your effort in the kitchen will definitely tug at their heartstrings. Throw in some chocolate, wine and oysters – these foods are believed to have aphrodisiac qualities. Also, alcohol is much cheaper when purchased at a supermarket than in a restaurant, so this can be a big saving too. As for dessert, you can never go wrong with a pint of Haagen Daz ice cream, just be more creative by dressing it up with some whipped cream, cherries or fruits and you call it your own creation! Finally round off the meal with a slow dance or a romantic movie with popcorn, soft drinks and candy – movie-theatre style. Leave the clean-up until the next morning!

Another fantastic idea is to romance your partner with an ultimate home-spa experience.  First, remove all possible distractions – unplug the phones, turn off your mobile phones and get help to look after the baby or pets. Light some candles and play nice music to create a soothing setting. Start with a luxurious bubble bath, followed by a relaxing massage with some scented oil or lotion.  Be your partner’s personal masseur for the day and ask where they’d like to be massaged. After a long day’s work, this unique Valentine gift is bound to make them feel immensely pampered, trust my words!

2. Be A Poet, Write A Love Note

Express your timeless love for your beloved with a poem and paste them strategically in the house where they can easily see it. Tell them how wonderful they are and how much you cherish having them around.  Every one of us loves to be appreciated, and your partner is likely to be won over by your work of love. Worried that you lack literary genius? Don’t worry, a simple love note will be enough to melt her heart, your partner will all the more appreciate your effort for trying hard.

To add more creativity upon this idea, write several “I love you because….” notes and insert them into balloons. Blow up the balloons and spread the balloons across your bedroom for your Valentine to pop and capture each message. Alternatively, you can also use a bar of soap to draft a love note and place it near your bathroom mirror. Or if you shower first, write a love note to your sweetheart in the steam on the mirror.

3. Create and keep fond memories

Create a personalized scrapbook containing photos, notes and other mementos of your love journey. This will include memorable milestones such as the first Valentine’s Day together, your first kiss, the first overseas trip, meeting the parents, wedding photos and so on. Pen in little notes, such as your thoughts and feelings at each event, your love vows and meaningful romantic quotes. It’s a fairly simple gift, but absolutely priceless! This is one Valentine’s gift that can be kept for years and who knows, one day you may be sharing it with your grandchildren!

4. Tour the Romantic Places of the Past

You can go and visit the past romantic places to rekindle your fond intimate memories. For example, visit the beach where you had your first date, waslk along the sandy shores to listen to the waves and pick up seashells. Have a picnic with your loved one at Botanic Garden where you took your wedding photos or rent a chalet at East Coast where you used to cycle together on Sunday mornings. Catch a show at the cinema where you had your first movie date or take a stroll at park where you two first kissed….etc. The ideas are endless, you just have to rack your brains to recall the sweet memories and bring it back to the present moment.

5. Celebrate On A Different Day Or Plan Ahead

Instead of celebrating Valentine’s Day on the actual day itself, do it on the 13th or 15^th. Since this year’s Valentine’s Day coincide with the first day of Chinese New Year, you can even plan to celebrate the weekend before or after, where you can have a whole day dedicated to just the two of you. There may be lesser love sparks flying in the air but the experience will probably make up for it. For one thing, the restaurants won’t be as crowded, the cinemas won’t have too long a queue, it’ll be easier for you to book those concert tickets, instead of buying one miserable stalk of rose with a markup price, you can purchase a whole bouquet with the same amount of money etc.

Speaking of flowers, let me share with you guys some tips to evade the Valentine Day Tax that the florists heartlessly impose on us. Generally, supermarket florists are about half the price of the stand-alone or big name online stores, their packaging is pretty decent as well. Now, the trick to seeing real savings is to order two weeks or more in advance and pay for the flowers upfront. Another cost saving tip is to gather all the other guys you know to join you in ordering flowers together and negotiate for a bulk discount. Now these strategies require advance planning, so if you have already fall victim to the Valentine Day Flower Tax, just save the ideas for next year!

1. Money Market Fund

Our government forecasted that the inflation rate to be between 2.5% to 3.5% this year, so don’t even consider bank accounts with pathetic interest rates. Take a look at the Money Market Fund, which is a low-risk unit trust that easily outperforms a fixed deposit if you can live without a guaranteed return. A typical 12-month fixed deposit (FD) promises us around 0.45% at the moment. Although FD rates may gradually move up as global monetary tightening pressures are felt, they still look paltry in comparison. Money Market Funds are averaging around 1.3% (LionGlobal SGD Money Market) and 1% (Phillip Money Market), nothing exciting to shout about but it’s still a fairly reliable forecast to say that such funds will be better places for our cash during volatile financial times like right now if you’re looking for something with low risk.

2. Supplementary Retirement Scheme (SRS) Account

This is my personal favorite hideaway place because it is killing two birds with one stone. Money deposited into the SRS account is not only tax deductible, but can also be used to invest in stocks, unit trust and insurance policies. We can contribute any amount each year subject to a cap of $11,475 for Singaporeans or permanent residents, and $26,775 for foreigners. SRS savings can be withdrawn upon retirement via monthly installments over a period of 10 years instead of 1 lump sum and 50% of the withdrawal from is subjected to tax at then. With lower or nominal income at retirement, we may end up paying little or no income tax at all. In case you have urgent needs for cash, any early withdrawal will attract a penalty fee of 5%. The sum withdrawn is also considered as part of the investor’s taxable income for that year. But there will be no penalty if we deposit and withdraw it within the same year. Just open an SRS account at any of our local banks (DBS, OCBC, UOB) and hide your money from both your wife and the Taxman.

3. Unit Trust

Placing your money in Unit Trust is a good option for the busy and hectic individual as they do not have to constantly check their portfolio. More catered for long term investment, it provides a wide range for investors to trade in, including worldwide markets. One thing we need to ensure is that our investment strategy is well diversified across asset classes, countries, sectors and stocks. In addition, practice dollar-cost averaging, which involves buying into the market via a fixed sum regularly so when the prices are low, your money buys more units. Over the long term, our portfolio should benefit as markets tend to trend upwards. You can consider this option if you just want to park your money somewhere away for a longer period of time

4. Exchange Traded Funds (ETFs)

An ETF is a security that tracks an index, group of stocks, commodity, etc. but is traded like a stock on a stock exchange, both long and short. If you feel that a specific industry is looking good and would like to invest in the whole sector rather than individual stocks, ETF is the way to go. It has low entry barrier, easy to buy and sell online and ETF holders are eligible to receive their prorated share of dividends, if any, accumulated on the stocks held in an ETF, and interest on the bonds held in an ETF, less fees and expenses. For example, to hedge against high inflation, turmoil in financial market and depreciating US$, one can buy into gold ETF, rather than buying physical gold coins or bullions which require a safe storage.

5. Stock Market

Among all the mentioned choices, stock market is probably the most volatile option but also has the potential to yield the most returns in a short period of time. It is essential for you to understand your investment timeframe and objectives. If you can take more risk and prefer a shorter time-horizon, participate in stock as a trader rather than investor, which means to constantly get in and out of stocks and make money through price variations. Another way of playing the stock market is to invest in good blue-chip companies or Real Estate Investment Trust (REIT) for dividend as income, this is for people who can afford a longer investment time horizon and not eager for profits. You’ll probably have to put in effort to study the fundamentals and determine the best buys. Being a trader and being an investor are completely two different stories and require different set of strategies, to understand more in depth, you can refer to this article on stocks trading.

Much as these are attractive options to grow our money, all kinds of investment carry some form of risks and you can never know what can happen, especially after the recent financial crisis that shocked the world. So my advice to all gentlemen out there, it is alright to invest with your “secret savings” since that is extra money that you can afford to lose, but never ever bet on the living expenses that you and your family depend on. Good luck in trying to grow your hidden stash!

I was once told that a romantic relationship is an investment. Come to think about it, it is true. If your idea of a relationship is merely about physical and emotional intimacies, folks, do think it over.

Let’s get real. Any romantic relationship takes up a lot of our time, effort, and emotions to nurture it. Often, it also costs money as the relationship evolves. Certainly it cannot survive on love and sunshine alone.

Indeed, a relationship may be one of the biggest financial investments one would have made in his/her life. Like many other investments, a relationship can potentially cost a great deal with no guaranteed return of capital. And again, you will claim; “No risk, No gain”. Well, this makes sense and I am not saying you shouldn’t be involved in a relationship. After all, we can’t live by ourselves. But the point that I am trying to highlight here is that any investment should be performed with calculated risk.

Allow me to share an example where the ‘investment’ was done without risk calculation. I got to know Sherman* while I was reading at university. Sherman always wanted a supermodel girlfriend and he did get one. However, he quickly realized that his supermodel girlfriend was a high maintenance girl. He had to fork out about $ 2,000 every month to finance his girlfriend’s expenditures and that included dining in posh restaurants, shopping at boutiques, purchasing exorbitant gifts and indulging in extravagant entertainment. The amount was huge for Sherman since he wasn’t born into a rich family. In the end, he turned to his credit card to solve his financial problem. The credit card bill didn’t seem to bother him very much at first as he could easily cover the minimum payment of the bill. Everything was fine until six months later when his girlfriend decided to walk out from the relationship. He felt completely heartbroken and disheartened by the breakup. To make things worse, his credit card bill amounted to an enormous amount of $20,000 after 6 months. He had a tough time repaying the bill since he was still dependent on his parents.

This scenario can happen to you if your partner is spendthrift and you are responsible for your partner’s expenditures. The priority should then be to manage the problem if you are attached, or avoid it altogether if you are not. Here are some tips to do so.

First, remember to ask yourself what you would like to obtain out of a relationship and the type of partner you would like to go out with. These are crucial questions as they determine the size of your capital investment. For example, dating a high maintenance partner may require you to invest in better clothes and shoes to match his or her image, in addition to other dating expenditures as in the case of Sherman.

Second, never leave out relationship expenditure when planning your monthly budget. Set a certain percentage of your income or allowance for your relationship, and then stick to the budget strictly. It is certainly not something enjoyable to do but this is one way to help safeguard your capital.

Third, understand your partner’s spending habit. Is it compatible with your financial situation? This is especially significant as it will impact your finances unless your partner takes care of his or her own expenditures. If your parents are still funding your expenses or perhaps your monthly wage is just sufficient to cover your basic necessities, do think it over before getting into a relationship with a person who insists on luxuries despite knowing your financial situation. This probably indicates a lack of respect from him or her towards you.

Last aspect is communication with your partner. It is very important to communicate your financial situation to your partner as it changes, and you feel ashamed at your own peril. Seek for his/her understanding and in return, it may help to manage each other’s expectation of the relationship. In any case, should he or she choose to walk out from the relationship, you will be glad that it happens before you both got married.

Remember, the key points to ensure are to know what you want, set a budget, know your partner’s spending habit, and communicate communicate communicate! If you don’t, well, remember what happened to Sherman.

No more for poorer? Modern marriages equate wedded bliss with financial stability.”

So rang the headlines of an article that caught my eye in today’s papers. Intrigued, I continued to read the full article. It tells of a story of a man who was separated from his wife of five years. The catch? She walked out of the marriage because he was jobless. No doubt there were other issues involved, but the fact that the catalyst and main reason for the decision to divorce was that the husband could no longer financially contribute to the marriage. The lady concerned was unwilling to seek marriage counseling or other channels to salvage the marriage.

And I’m sure that this isn’t the first time we will hear of such a scenario and neither will it become the last time.In my mind, I couldn’t help wondering what happened to the promise made at the wedding aisle to stick together “for better or for worse, for richer, for poorer from this day forward until death do us part”? Well, perhaps the answer is all too obvious – money or more accurately, the lack of it happened.

Taking a leaf out of Oscar Wilde’s book, we have to face the fact that money is the most important thing in life. It plays a dominant role in marriages and other social aspects nowadays as mental happiness is increasingly linked with material satisfaction nowadays.

It has always been politically correct to proclaim that money can’t solve all your problems and that money can’t buy you either love or happiness. I humbly beg to differ. In the above mentioned case, if the husband had another source of income, he might not have been subjected to the devastating loss of happiness in his marriage and his wife. Some of you may argue that this is not true love and will probably not last long anyway, but hey, how many couples can survive on love alone without a single cent in their pockets?

Money exerts a great influence on the way we live our lives in the present society and it is often associated to happiness. We ladies know it best that money can indeed buy you happiness especially when it comes to retail therapy. Come on girls, remember that rush of ecstasy when you bought your first branded ‘It’ bag? Or that dreamy holiday you spent lazing in the Maldives, one of the last Shangri-Las?

Now before you become guilty of turning up your nose in superior disdain and dismiss the branded bag phenomenon as nothing more than a superficial materialistic pursuit, let me highlight that the ‘journey’ in acquisition makes a difference. If it was a case of a sugar daddy footing the bill, then no doubt that it is merely a short-term happiness fix providing only temporary euphoria. Boredom of that new possession will probably set in after a short period of time and you start wanting that newer, bigger, better version to get that dose of happiness again. However, most modern women nowadays have the means to buy one with their own money. It is a reward as well as a symbol of achievement that they had moved the society ladder: I bought it for myself because I can afford it and I’m worth it.

But on the other hand, it is all too easy to lose direction and let money become the fixated end motivation rather than the means to help you realize your goals. Just flip a page in the tabloids and you can see countless examples of financially well-off people being so publicly miserable. They engage with the wrong group of friends, have disputes with their family, get into trouble with the law etc. End result is that their lives turned out to be a huge disassembling mess. Happiness seldom visits the lonely and its presence is amplified when shared. Surveys reveal that the happiest people are those who have attained a certain degree of financial security and also formed relationships and bonds amongst family, friends and the community.

Money is the means to providing material comfort, the extra magic to help relationships tide over the rough patches, the brick and mortar to help people materialize altruistic ideals. So can money buy you happiness? The answer is a definite yes, but I would like to emphasize that happiness comes from the way you utilize your money, not from its mere existence.

Gold and silver – a timeless wealth

Wealth presents itself to us today in several forms, one which has long endured the golden test of time is gold and silver. The pure value of these 2 precious metals has been resilient through age, with the practice of using gold and silver as money dating back to some 4,000 years ago.

This timeless form of wealth offers investors reliability and security, by preserving purchasing power and granting stable financial ability to ride out volatile markets, more aptly so in situations today where international governments incline to produce unprecedented amounts of fiat currency through massive printing, which inevitably devalues the paper currency.

Survivability

While the value of paper currency can be affected by supply, precious metals like gold and silver are a hedge against inflation and depreciation as they cannot be produced or printed as quickly as compared to fiat currency, exhibiting an innate ability to conserve intrinsic value. The fact today remains that gold and silver have been tried, tested and proven to be the sole enduring form of money throughout history. In retrospect, countries which initially preferred fiat currency as an alternative reverted to precious metals for its significant financial stability – trading silver and gold for everyday and larger transactions respectively.

By nature or nurture, gold and silver is money. According to Section 10 of the United States’ constitution, “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.” Section 10 recognizes volatility of the U.S. Dollar in paper currency, and thereby acknowledges the capability of gold and silver to protect its value.

Financial security

Prior to US domination of paper currency, China traded on a Silver Standard and for most other countries, a Gold Standard. Back then, the price of an ounce of Gold in the US rose only a mere 74 cents (from approximately USD20.58 to USD21.32) across 100 years during the Gold Standard, proving its security and remarkable ability to withstand inflation.

Of course, gold and silver prices these days are relatively higher. Rapid inflation rates caused by much dependence and circulation of paper currency are conversely resulting in its devaluation and the substantial rising prices of commodities, including gold and silver. The problem of over-circulation of currency derives partially from a current lifestyle tendency to purchase in credit, as every new loan application authorizes the bank to print yet more currency – leading to yet higher devaluation of the paper dollar. More is less when printing more currency ironically makes it easier to obtain and less valuable for the many more people who now own it. Therefore, paradoxically, no one really owns money anymore – since inflation from over supply reduces the paper dollar’s value and its supply rests not within our control.

On the other hand, when one invests in gold and silver, one genuinely owns it, as the investor can be positive that they cannot be produced easily on demand. And so indeed, that gold and silver are a timeless wealth and a practical, worthwhile investment. Now, the only question left is, should we invest in gold or silver?

(Note: In the next issue, we will continue to explore the investment potential of precious metals and help you find out if gold or silver is a suitable investment option for you.)

It is no big secret that the number one thing that couples quarrel about is MONEY. Most of us enter into a relationship with different ideas about money and what we should do with it. We will usually bear a strong emotional attachment to our attitudes of money and when these attitudes are in conflict with those of our partners, the stability of our relationships will no doubt be threatened. Check out these disastrous money habits and see if your relationship is falling victim to any of them.

Living without A Budget

Have you tried driving while being blindfolded? You cannot see where you are and will lose your sense of direction, not knowing when to stop. Living without a budget is exactly like that, you will have absolutely no idea when you are spending beyond your limits and end up digging a bigger financial hole than you can handle.

Break the habit: List down all your fixed expenses such as mortgage loan, car payment, insurance etc. Next, estimate all your variable expenses such as food, petrol, phone bills and utilities. Lastly, add in the occasional expenses, such as clothing and entertainment.

Add up all these expenses and then subtract the total from your monthly income. If the expenses exceed your salary, you should make adjustments to your spending habits. Go through the list with your partner and see which areas you can save on, set a budget and make sure both of you stick to it strictly. Since there may be changes to your lifestyle from time to time (e.g. pay adjustment, new born baby etc), it will be good if you can reevaluate your budget every 6 months and make the changes accordingly.

Feeling to Recognize How Little Purchases Can Add Up

Small amounts are like small leaks that can drain your wallet if you fail to pay attention to them. The daily snacks you buy to office, new iphone covers you change every month and weekly drinking sessions with friends may appear harmless on their own, but will cause you to a good chunk of your paycheck when you tabulate the total cost on an annual basis.

Break the habit: Keep a spending journal and take records of your cash purchases. Keep all your receipts to make sure you don’t leave out any single expenditure, no matter how small they are (like that packet of potato chips that seems negligible to you). Review them with your credit card statements to get a complete picture of what you are spending on, and ask yourself if it makes better sense to save that money instead. For example, by cutting out your daily snacks you’ll probably be able to shed some weight as well, and that’ll save you the gym membership fees!

Not Planning For That Rainy Day

Just like thieves don’t knock on your doors before they steal from your house, bad news normally won’t give you prior notification before they wipe out your bank account. We have learnt from the recent global financial crisis that a hundred year old bank can collapse overnight and cause your bonds to become worthless papers, things like sudden illness and accidents can also occur to us any other day and cause a huge impact on our daily cash flow.

Break the habit: Keep a separate bank account for your emergency funds and make sure you don’t touch it unless all other options run out. The account can be a normal savings account, fixed deposit or even cash fund, just remember that its main purpose is for saving and not investing, so look for an option that gives you a good interest rate but stay away from anything that spells risk. Contribute to this emergency fund on a regular monthly basis and make sure both you and your partner must consent should any of you wish to withdraw money from the account.

Paying For Everything Else First and Save ‘Whatever is Left’

Some people describe expenses as wild fire – they will continue to burn until there is nothing left to consume. Many of us will continue to spend until every cent is gone, no matter how much or how little we have on hand. With all the family expenses like grocery bills, mortgage loans and children’s education fees invading our bank accounts, we are busy paying everybody else but ourselves. Raises and bonuses all seem to vanish without a trace, and we often wonder why we never seem to have enough money.

Break the habit: Learn to pay yourself first, this simply means that you should set aside a portion of your income to save before you pay any other bills. Every month, the first cheque that you write should be for yourself or your joint account with your partner, and that should take priority over any other living expenses including daily necessities. Decide on an amount that you can commit to regularly for at least six months and pay yourself that amount the moment you receive your salary. You can further split that money into your saving and investment accounts, but be sure that you don’t squander it away.

Getting Emotional About Your Investments

You’re saving the money. But you also want to make sure your nest egg is diversified and that you have earning goals for various aspects of your portfolio. This is a great thinking to adopt but problem is that when the investment result doesn’t go your way, many people will start to become emotional and start to find everything around them an eyesore. Before you realize it, you may be quarreling with your partner or scolding your kids over the most insignificant matters, just because you are in a foul mood over your investment losses.

Break the habit: When it comes to investment, high emotions arise when people are playing with money they cannot afford to lose. If you invest with money that was meant to pay for your groceries or mortgage loan, naturally it’ll be hard to keep cool when you lose it due to bad investment choice. They key is to always invest with the money that you can afford to burn, so that the stress is less intense if things really don’t turn out well. If possible, both you and your partner should undergo the same set of financial education so that you will understand each other’s investment objectives. Having someone to support your investment decision makes a world of difference, be it financially or emotionally.