Cancer is a gift?

Well, I could almost say everyone will hope that they are free from some terrible disease and I'm sure cancer is one of those dreaded ones. However, I had a friend who viewed cancer as a gift because he believed that everything happens for a reason. For this, he took it as life lesson instead of as part of statistics of people died out of it.

Well, as you might have guessed, the person passed away. But in the 1.5 years that he was confirmed suffering from cancer, he did a lot of things most people won't do - making a meaning out of it besides the usual gung-ho fight of 'I will survive'.

Along the way, this guy inspired many of his friends including me, and from friends who passed on the word, had inspired many friends of friends. There are many meaningful lessons from this chap and for me, the ones below are the most inspiring:

• instead of using blogs to defame someone, vet our frustration, this guy introduced blog as a way to 'visit' him virtually and a way to share his experience with those who are interested. This blog was actually inspiration from this friend and I earned a compliment from him as 'the new kid on the blog'
• this guy printed out 'business cards' that say 'Occupation : Cancer patient'! He introduced to me the concept that we must have a role in our life, not merely in our job. Since he had cancer, his new life job was to share his learning
• we have ups and downs and there are times things seem to happen with or without a cause. But instead of the typical positive thinking of 'things will get better' or 'the tough gets going' kind of mindsets, he chose a new dimension called 'make meaning'. Whatever should not happen has happened. But since it has happened, should we just lament it or can we 'make meaning' out of it? There was one time I felt very bad that I spoke bad about someone via sms and I didn't realize that I was sending this sms to the guy I spoke badly about! It had already happened and besides cursing myself for being stupid, I made a meaning out of it by telling myself 'good words wont betray others; betraying words cant be good'

Recently, a few friends of his edited all the postings in his blog and made a book out of it. To this group, I salute their commitment and perseverance despite the busy schedule that everyone has. For those who want a copy, please refer to the following blog for details:

http://www.fhbadventure.blogspot.com/

But for those who want to read the blogs in its original form, just go through the blogs. The comments could be equally interesting too.

There is also one party that most of us forget to thank, blogger.com itself for being the enabler. So to blogger.com, thank you for providing the blog site that have benefited millions!

Appointing God as the Gangster

To start with, I'm not trying to be blasphemous here and there is no intention to belittle any religions or showing any disrespect. The title is such because we sometimes are literally doing it but are not aware of it. This article this time is to make all of us aware of such appointment.

It is very natural for humans to react to any bad sources coming from other humans. It could be due to natural reaction to protect ourselves ir it could be a way we solve our problems. This 'reaction' which is usually as negative as the source itself is called 'revenge' and sometimes it tastes sweet.

Now, the word 'revenge' has been modified, packaged, advertised and manipulated into many other forms and words. Some prefer to call it 'punishment', some say 'teaching someone a lesson', some justifies that 'it takes fire to fight fire', some tell you 'it's for his own good'...well, there are many variations and whatever it is, it is actually attempting 'to let out' that little energy that gets accumulated in our heart.

I'm not trying to discuss anger management today. The main subject I want to bring out is the subconscious way a lot of relatively more religious people (or those who want to better themselves) that they are advocating revenge without realising it.

How many times have you heard a guy that says 'for those bad people, let's forget them. God will punish them' or 'those guys will one day receive their karma'. The original idea here is more of 'hey, let me refrain myself from taking revenge as advised by my religion'. But what the idea became finally was 'I will not react or take revenge. God will punish him or karma will burn him'. Basically, we still want to take revenge but in this case we don't have to because we think God will do it on our behalf!'

So as what the title states, we are appointing God as our gangster to settle our old scores with people we don't like. When we are not taking revenge, the purpose is to forgive or to practice compassion. However, it can end up as 'my boss (God) will settle for me' if we are not careful.

So, ask ourselves next time when we forgive someone in the future...we forgive because we are really forgiving or we forgive (or actually close the case) because we believe God will handle it....aah what a fine line :)

October fest is not in October (neither is time management about time)

Once, I tried to ask a stupid question as a joke. But finally I realized that it was actually true that October fest in Germany is not in October. It's actually September!!

Now, if we ask a 'stupid' question "what do we manage in time management?", I'm sure most of us will reply "Time, stupid!" And just like October fest, I have to say that time management is NOT about managing time.

Sound like a shocker? Yes, it does because that is what many of us have believed or taught to believe in. Time ticks away all the time. It is unstoppable. It is the result that we want. Now, do we manage results (time) or we manage factors that influence our time? Actually we are managing factors that may cause us to lose time. Hence, you may now agree that we actually don't manage time but try to work on the factors that can steal our time away.

So, what do we manage actually? Time management can be divided into 2 parts : the technical part (internal efficiency) and the strategic part (external factors)

Technical part (efficiency)
This is one part that you can find in most books. There is a long list that you can pick up but below are golden rules that I believe strongly in:

1. Plan 2 steps ahead in your first time - then you are always one step ahead after that
2. Always have a contingency plan so that we are not caught with fire-fighting
3. While waiting, do something. Read a book, call someone you should have been calling more often especially while waiting for a plane
4. Review your activities and find the biggest time waster - eg. meetings, reading emails. A lot of people complain that they are stuck in meetings and so they cannot do other work. The problem is 'why are we choosing other work that cannot be done during a meeting?' If the subject is not related to you at that time, do some thinking! (unless someone can read minds!!)
5. Know the peak performance time of the day. Even if you know, try different timing because as we age, our peak period may vary too
6. Get tools that can help us organize better. I'm a firm believer in PDA phones.

The above list can go on but I'm sure you can find that in many books. Now, for the strategic part (or external part) this is where the major outcome is almost fixed if not managed well ie even if we can be very efficient, we probably can cut down by 20%.

Changing methods

This is one key part. We will always have 24 hours. And there is a maximum of things we can do in a day. We need to have a belief that changing the way we work can improve our efficiency. But to know exactly where to attack, we need to know where the bottle neck is. In my past job, I had a guy who was very good in IT. But his work was slow despite his expertise. Then, we found out later that it was delayed by his poorer command of English! So, in this case, he has to tackle the bottle neck by changing the way he works. He may ask someone to help, he may set an easier format or even may have to improve his command of the language. Do we use spell check? Are we thinking more in front of the computer or doing? If it is thinking, think over it during those boring meetings or during your coffee break.

Asking for or getting more resource

This is usually done but we are not aware of. Each time we are bogged down with work, we skip lunches, work overtime...it is actually a form of putting in more resources. But the problem is that this should only be used for emergency. If a task is continuously going to suck time, we need more resources. Same method, which area is the bottle neck? Once identified, we need to check if changing methods is necessary. If not, then we need more resources. But a few famous reasons thing pop up most of the time:

"My company has a budget constraint. We are not allowed to get more people"

"Everyone is busy, none of my colleagues can help me."

"The work is too complicated. I cannot delegate. "

Well, that is what teamwork is for. To start with, do you help others? Can others help you in more mundane work like keying in some data while you focus on this critical task alone? One key example : a friend's mother is sick and is hospitalized. There is not much you can help your friend but you can always help her pay some bills or bring food for her...

There is another resource that sometimes we forget. Extending deadlines! It IS actually asking for more resources.

Prioritization

When the above has been done and the list is still too long, then you need to prioritize. Of course all are important. But remember that we are now not choosing good from bad. That is done in the above. We are choosing 'worse' out from 'the worst'. It is about renouncing, letting go some for the benefit of all. It is about getting complimented for the good work done and AT THE SAME TIME, screwed for not doing the others. One may say not fair, but having ALL TASKS screwed is the worst.

Life on rental

After a long silence, I'm back!!! So much for my resolution to blog once a month. I guess it is due to the concept of trying to be perfect and ended zero (the worst in the scale of perfection!)

First, I have seen people renting cars when they go on trip or check into hotel during holidays. You sure bet they will maximize the car or room because they know they have paid a fixed fee and they feel they 'lose out' if they do not use it to the maximum.

Secondly, I have also seen people buying cars. They sometimes love their new assets so much that they take care of it to the extent of not using it to keep it new and shiny. Unfortunately, I have to say that we actually do not own it. Whatever that we buy with the intention of selling it off later at a price is actually 'a rental'. For example, we bought a car for $50k. 5 years later we sell it for $30k. What it simply means is that we actually spent $20k renting the car for 5 years or $4k per year.

While a car with better condition can command a better price when we sell it off, it is actually minimal. However, if we consider those years where we did not use the car, we actually lost out. Why not use the car to the max (without abusing it of course) as it is actually a fixed rental (in a way through depreciation).

Now, that's only a car. But let's take a look at life. If we assume we rent our physical body which has to be returned some day (ie we die!), it is a fixed rental. The price for rental is probably our past actions (if you believe in past life) or our current hardship that we go through all this while. There is a price we pay and if it's going to be that way, why not maximize our life? For the same price we pay, we get more out of it, a concept that sounds like music to the economists, financial analysts, production managers, advertisers and of course you.

So in life, the tougher the hardship means the higher the rental we pay
The higher rental we pay means the more we should get out of life!

Now, go and get it... you sucker

Inconvenient truth about retiring - Part 3

If you are still at part 2, hope you are moving smoothly and well. For those who have just started entering part 3 or well over part 3, hopefully this article is able to give you some ideas on the plan of retiring. First to recap. In part 2, we are not supposed to save but to accumulate depreciating assets with good residual value. At the same time, you are also building your skills to increase your job market value. Now you are like most ‘walking zombies’ of the twilight zones whereby you have a car but nothing to shout about.

You have a house but nothing to show to others. You have some savings but you know that is not enough to let you retire. You seem to have everything and yet nothing :o Some turn more philosophical by telling themselves that ‘thou shalt not be greedy’. Appreciate what you have, good family, good health and stable income. Some lost interest in getting better because there is just nothing in sight and their current work demands 101% of their time. If you were to change jobs, there is a dark fear of losing what you already have.

Sound familiar? It's definitely the common mid-life crisis you are going through. There is no light at the end of the tunnel. Everyone goes through that plateau some time in their life. You are no exception. In a positive way, this is the BEST stage because it can determine the possibility of how you will end in your career life. It comes with risks of course but so is not doing anything.

What should we do? While there is not really a specific formula to follow, the attempt here is to try to give an all-rounded discussion to aspects that one has to pay attention too.

Time
First, you need time, not time to postpone deadlines but time to allow yourself to start organizing your life. If you are those that have no nights and days during weekdays, you then have to sacrifice some weekend time for a better tomorrow. Calculate your assets and liabilities that you have...and do it honestly. How much EPF, how much bank loan to go, how much your take home pay is...You will then be able to assess your status. Most likely it is still a net negative . No worries.

Income
Technically, what are the monies that come into your account. The most blatant one will be salary. However, if your plan is to work and rely on increment so that you can retire, you better do something else. If you do get a promotion every 3 years, yes then stay on for a chance to be part of the senior management. If you want to retire by working on a job, the ultimate goal is to get into the senior management level where you are offered better perks, profit sharing and stock options. Trust me, it’s those that make you rich.

If your skills and experience cannot get you to that level, then you need plan B i.e. your salary is not the main source to allow you to retire early. Your salary now plays the role as the main source for investment that will get you into earlier retirement. In other words, you want to spin your money to get more money.

Other income
How do you increase your other income? Other income is something that can either give you consistent money over a period of time. It can be a house that you rent out, it can be a business that gives you some profit every year or anything that can give you money consistently. If you fall into the group where you cannot get you into the senior management, then yes you need your salary as a form of fund to get more money. There are many possible business opportunities that can give you that.

Property
Property remains a main area that has proven over time that can bring more other income. A lot of people prefers to speculate property. That is not right if you are talking investment as it should be long term. A period of 5 years seem ok as it will have enough appreciation and also able to cover for legal fees and bank penalty for early settlement. Treat your property like a Fixed Deposit rather than as a dream home. Most people lose out in property because of 2 reasons:
1) They do too much renovation and hence trapping themselves into the need to sell the house at higher price.
2) They take too much risk by buying a property that has yet to grow rather than one property that is in an upward trend. I know you make less when you buy second hand, but think of it differently – you are outsourcing your risks to the 1st buyer

Business
In a country where fixed deposit rate is around 3.7%, we are all ears when we hear anything that can possible give us 5% interest per annum. While that may sound interesting, we do not have the same interest for a business venture that give us 5% return per year! Imagine you see a nice food stall in a coffee shop that is doing decent business. But for some reasons, this guy is getting old and is willing to sell his stall for RM30,000. If the profit is going to be RM300 per month, you probably is not interested. That is actually 12% interest per annum! The biggest trap that anyone could get into is trying to set up a NEW one. No, we do not have the skills and we do not have the time and the risk is too high. We have to look for EXISTING business that is already generating a steady income.

Direct selling
Multilevel, pyramid whatever you call it…it can also be a good business. But most people will tell you ‘I have been there and done that. It doesn’t work’. Sure it won’t if you are joining when the business is already at a stable level. To be filthy rich in such endeavors, you must START early. It’s usually the 1st to 3rd generation that makes tons of money, not when you are at 15th generation. You may want to invest a few potential direct selling that is at an early stage and work on it.

There are always more ways how we can make more ‘other income’. The basic principles remain:

If your current salary cannot get you to senior management that open up to profit sharing, steep bonuses and stock options, you need to find other income.

Happy exploring and Happy New Year!

Inconvenient truth about savings - Part 2

Now, here comes the more controversial part where some may argue my thoughts or strategies won’t work while some may agree. Whichever the case, remember, we decide our own lives and must be willing to accept the consequences of our decisions.

It is a cycle of life where your parents may have supported you and then you support yourself and maybe later you support your kids and maybe (only maybe) your kids support you. But we have to start somewhere. So, let’s start from when you start working. In today’s job environment, there are too many degree holders! Hence, when you have a degree, you still start at the very first rung in your corporate ladder i.e. management trainee or sales rep. Unlike in the past, we started at executives which are merely 1 to 2 grades below the manager.

Most people start their career with nothing. If lucky, the father lends them his car to go to work. Regardless of what, most people try to start their savings at this age. When you are starting at this stage, there are basically 3 important things you need to be clear in your mind:
a) what are the things you cannot afford to lose?
b) when you will break even given your current income?
c) what are you good for?

In the 1st part, you may notice that there is no mention on savings. Most young people attack this point. It is pointless to talk about saving when you have yet to accumulate some depreciating assets (eg. Car, mobile phone, gym membership), leave alone money-making assets. So, it is really not practical to start your working life by savings. Not only that it won’t work, in fact it can be very discouraging when you realize that after a few years of savings, you basically still don’t have any savings! And probably end up with even more debts!!

So as you first start, stop thinking about savings. The time will come but definitely not now. What is important is to focus on things that you cannot afford to lose. Can you lose a job? No! Can you lose your health? Definitely no! So, your first wealth accumulation is your life assurance. We all know, we are worth more when you are dead or sick than when we are alive :(

Then, you begin your journey of accumulating ‘depreciating assets’. These are simple things that you have with a salvage value. For example, when you buy a car and sell it off 5 years later, it still has a residual value. Why is this important? That’s because once you own some of such assets, you basically pay the differences when you change to a new car rather than paying full price. Accumulating such assets is also in a way forced saving. With interest rates for car running at 3% p.a., go for it man! Even your fixed deposit is generating about the same amount of interest. But remember, you must include your maintenance as part of your car purchase. If your car maintenance cost is higher as your salvage value, you are back to square one. House? Yes if it is cheaper than renting after you pay your down payment. Don’t expect to make money on your first house. Treat it as rental. It makes getting the 2nd house easier in the next round as you start paying the difference, not from zero. Remember, consider maintenance cost as well. There are jokers who renovate their house more than the salvage value. Other depreciating asset will be your mobile phone, house air cond, computers but all with the same guideline, make sure maintenance and upgrades do not exceed salvage values.

At this stage, always remember that your savings on your current salary will not get you anywhere. It is time to earn more, not save more. Ask yourself a simple question. If your salary is RM3k per month, and you can save 100% i.e. RM3k, will you have a perfect life ever after? If the answer is ‘no’, then stop talking about saving at this stage! It is a time to make more.

How do you make more? If you are an employee, always remember to upgrade your skills. Ask yourself what you are good for. Never see what you need to learn from your current position. See it from where you want to be. Imagine yourself being in that position, look back to your current position and ask yourself what skills you need to build. Forget about increment, at best it helps you in your inflation. But go for promotions as this is where you quantum leap. Always set your own horizon in your current job. To me, 3 years is good and renew every 2 years. This horizon will help you see what you need to do with your career and also put some urgency in your action plans.

The above principally addressed the 1st stage – accumulating some assets and building what you are good for. This blog is long and so I have decided to put the next stage in my next blog i.e. when can you break even.

Until then, continue accumulating depreciating assets with maintenance cost in mind, and continue upgrading your skills. Good luck!

The inconvenient truth about savings

Recently, there has been quite a number of discussions on saving money and retirement. After a few rounds with different friends and colleagues, I noticed that the outcome is almost like golf – more heartache than good memories!

Now, I don’t claim to be a financial expert and for the same token, I don’t think financial expert should claim they are the greatest financial planners as well.

I’m writing a 2-part articles this time and for the first part, I prefer to bring out a few shallowly understood concepts and also some possible misconceptions.

Here we go:

Investment
We buy a new phone and just because it’s expensive, we call it an investment. Hello…when you are using something immediately, you call it ‘buy and use’. Not investment. Investment simply means something that today it costs more but in the long run, it is still cheaper. Does your phone appreciate in value?? Stop cheating ourselves with nice literature words :)

Depreciation
There are a lot of people that buy Japanese cars because of their relatively higher resale value. But we need to understand that this is only true when we are buying new cars so that when we want to sell it, we lose less in depreciation. However, if we are buying a second hand car, what‘s the difference? You buy at lower prices and so you sell it away at lower prices, right??

Packages of 10’s are cheaper?
Well, if you go for massages or facial treatments, you will always come across the promotional packages they are offering. No doubt that they could be cheaper to buy en bloc, but that doesn’t mean you see more money in your savings. Imagine this. I usually go for my massage biweekly and the attendant suggests me to buy sets of 10 for the price of 9. While it is true mathematically in my savings, but how sure am I that I will see the RM80 I saved in my savings? Can I be very sure that that I will not spend RM80 on something else for the next 4 months? But one fact is clear. I have to pay RM800 upfront first!! So, packages only work if you have a fixed pocket money but you intend to stretch it further.

Getting loan for investment
This is a real funny one. Investment usually refers to the money you ALREADY have and you try to invest carefully so that they work harder for you. But sometimes especially when during market boom, there will be guys who borrow money to invest. No money but plan to invest?? This is not investment. This is called trading i.e. buy low and sell high but using banks to finance the transaction. So remember, that’s called trading. Same thing for a house. When you plan to buy a house and go for 90% loan, you are not investing because you don’t have the real money. You are…TRADING. You try to buy a house at lower price and sell it at higher price and trying to finance this transaction through a bank.

Unit Trust
This area is also quite misunderstood. I’m not against trusts. I have some myself. But again, we need to understand that there are such things called commissions (between 5 to 6.5%) and management fees (0.5% to 1.5%). It could be front loaded or backloaded but the fundamental questions we must always ask ourselves are: if I today buy 1000 units for RM1,000, how much will I get back in REAL cash when I sell that 1000 units 3 years later? Most agents will tell that if the price is RM1.50 per unit, then you will get RM1,500. However, one must understand that the growth of 50% in the 3-year period is actually not 50% but probably 56% to 58%. That is because there is commission and management fee involved. So, buying prices need to be lowered to accommodate for the fees.

Financial planners
This is also quite interesting. It is good to talk to some financial planners and see their views and that’s a great way to cross check against your plan to make sure that it is still a sound plan. But, you still need to be caution because that very guy who comes and sees you and tells you how to achieve financial freedom is probably also actually a guy who has not attained financial freedom himself. There will naturally be discussion on diversifying risks in different investments, but at the end of the day, it still stretches from insurance on one hand to stocks on the other and are usually services from the company he works for. If there’s one guy that also considers buying property, opening a coffee shop, insisting you pay your credit card first, then he is most likely the right guy you can pursue. Otherwise, you could be talking to a salesman actually.

Save money for your kids?
It’s true that we need some cash. However, we need to know how much cash we need for our usual expenses and rainy days. But there are guys who try to save money for kids’ future. We all know that death is certain. So, why not ‘maximize your death’ by buying insurance? Then, your kids use your current and mid-term savings, but use your insurance money when you check out from earth.

Interest – tool or enemy?
I have seen a lot of friends who frantically compromise lifestyle in order to clear their loans. Interest, in their belief, is the no.1 enemy. I beg to differ. Interest from loans is actually like a knife. It can be used for cutting vegetable and it can be used for killing. But the knife is not the cause but the user is. The knife is merely a TOOL. I strongly suggest we don’t go bonkers about interest and treat it like your family’s foe. It’s a tool and use it wisely. Evil of interest is widely known and I will not elaborate. But I need to share some benefits of interests. Interests ‘fast forward’ time so that you can start using something before you are qualified to. If you need to save to own a car but your job requires a car immediately, interest comes to the rescue. If you have a business that will yield 20% returns but you don’t have the money, an interest rate of 10% will realize your opportunity. For those who still disagree, try to find yourself an aunt that can lend you RM200,000 for 20 years and do not need any collateral. If you find out, please introduce to me too!

Well, hope the 1st part is of some values to you. On the 2nd part, I shall talk about what I think we should do at different stages of life in the road towards retirement or financial freedom.