I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down

Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Friday 31 July 2009

Investing in Property or Stocks - Revisit

Given that you only have enough capital for just one type of investment, will you invest in Property or Stocks? I have been asking this question again and again as I want to seek a better option to invest my limited capital to create wealth for my retirement fund. I am sure you too asking this question.

Size of Investing Capital

Even if you only have smaller investing capital, you can easily without using any leverage to start investing in stock market; but, unlike investing in property market, you will need a fairly larger capital, and use certain degree of leverage to get started.

You may wish to read earlier posts on leverage:


Quick Entry and Exit

For stock market, you can be very short term or very long term or not so short term and not so long term. You may even to be out within minutes, if you manage to get a good return on it.

Unlike the property market, where you have to go through a lengthy procedure of acquiring a property and then again go through another lengthy procedure when you want to sell it off.

Ease of transctions

Given the power of the Internet, you can easily sit in the comfort of your own home or secretly in the office, and be able to invest in stock market. You only just need to click a few buttons on your brokerage portal and transaction is completed. You can never click a few buttons to complete your property transaction, can you?

For stock market, you can literally start a new transaction every trading day.

Affordable Mistakes

I always remembered my Finance Professor once told me this: "For property investment, if you got it at the wrong Property market cycle, you are going to work many, many hours of labour for free". You have to get it right and there is little room for you to learn from repetitive mistakes.

But, for stock market, you can afford to make repetitive mistakes and still be alright, and hopefully you learn enough to be a smart investor.

Power of Compounding


Yes. You can let the Magic of Compounding works for you in stock market. Not sure as a small investor can you really able to flip property for compounding effect?

Oh. It is going to be a long story to tell and if you may wish to continue the rest of story on Property stuff in your pleasure reading ...


My final answer is:

For limited capital and without resorting to leverage, investing in the stock market is a better option to get reasonable good returns. Hmm ... some of you disagree. Cheers!

STI testing the next Hard Resistance level next?

Will there will be a National Day Rally for STI to break the next resistance convincingly to put to the rest all the talk of brown shoot?


Monday 27 July 2009

STI broke through the mother of all resistance level since 1990???

The Bull is about to push the Bear over the cliff!!!

So are you betting for the BULL???

Sunday 26 July 2009

Using OPM (Other People's Money) for investing?

Using OPM (Other People's Money) to invest can be an effective and fast way to build wealth if you got it right. Got it wrong it can sent you fastest to Dr DOOM.

The world's richest man and greatest Investment Guru, Warren Buffet once gave this advice: Stay away from leverage. Nobody ever goes broke that doesn't owe money.

Why a Buy and Hold and don't even bother thinking of Selling Can be Wrong Strategy for You? - Part 3

http://createwealth8888.blogspot.com/2009/07/why-buy-and-hold-and-dont-even-bother_26.html <---- If you may wish to read Part first. Beware the risks of Value and Average Down Traps

While shares with low valuation may be an undiscovered gem and market may have mispriced them or at other times, shares that appear cheap, and getting cheaper could be due to Big Boys getting out as they believe the company fundamentals continue to deteriorate. Low stock valuation may be a Value Trap.

Warren Buffet and the likes of Warren Buffet (the Big Boys: Institutions) have enormous resources at their disposal to do due diligence to uncover undiscovered gem and avoid the Value Trap. But, it can be very challenging for many small boy value investors as it can take a great deal of time and enormous resources to recognize that a stock is a real undiscovered gem and not a fake one.

As stock price falls further, the margin of safety gets wider, the small boy value investors likely to fall into the next trap: Average Down Trap, and start averaging down with more shares with their free capital and likely to average down until they run out of capital.

So beware of Value and Average Down Traps. Take care!

Why a Buy and Hold and don't even bother thinking of Selling Can be Wrong Strategy for You? - Part 2

http://createwealth8888.blogspot.com/2009/07/why-buy-and-hold-and-dont-even-bother.html <-- If you may wish to read Part 1 If your strategy of "buy and hold" over very long term e.g 10-30 years is for the primary reason to receive dividend income and for future capital appreciation if any.

The truth is that few companies are immune to economic and market cycles, and from time to time, they may need to raise more capital to meet their corporate needs. Companies may raise additional capital through enlarge private share placement, convertible bonds or warrants, or right issues, and etc. Such corporate actions can inevitably expose you to future share and dividend yield dilution risks and may even have some valuation impact on your initial share purchase price.

Do consider this risk. Cheers!

Saturday 25 July 2009

Can I really find back the Lost Wealth in the last Bull Market???

Asian markets rise to pre-crisis levels!!!

STI at 2,533.43 - its highest level in 10 months.

HSI at 19, 9982.79 - exceed 20,000 for the first time since the collapse of Lehman Brothers in Sep 09.

DOW at 9,069.29.

STI has recovered 73.9% from 09 Mar 09 low in 137 days, and 652 days has passed since 11 Oct 07 Peak.

Bulls or Bears. They can be your Good Friends or your WORST Enemies. The Bulls can set Bull Traps to hang their fellow Bulls at the top; while the Bears can set Bear Traps to kill their fellow Bears at the bottom.

So where is STI going?

Are the Bulls climbing up the Wall of Worry or the Bears sliding down the Slope of Hope?

Although my Portfolio Value has recovered 97.7% from its lowest point; but, it is still far away from its highest point in 2007 so can I really find back the lost wealth in the last Bull market?

Peter Drucker once said, “What gets measured, gets managed.”

Insanity: doing the same thing over and over again and expecting different results. said Albert Einstein

Hmm... I will need to go to Labrador Park Hill Top tomorrow to think and to plan ahead ....

Why a Buy and Hold and don't even bother thinking of Selling Can be Wrong Strategy for You?

Who are they? They are the small boy Value Investors who practise Buffetology.

I am NOT saying that value investing is wrong and don't EVER get me wrong. Quite the contrary - if you are the likes of Warren Buffets (and those big institutions) with very, very long holding period where the base unit of time is a Decade (A decade is a period of ten years); buy and hold "forever" strategy makes a ton of sense.

These Warren Buffets have that kind of resources to know the inner workings of a company, and can meet the Management to understand their immediate and long term prospects, assess the real ability of the management team, cognitive of the goals of the board members, their future products in the pipeline, the expected acquisitions, the competitive landscape and many more .....

Honestly, tell me what kind of resources you have to really make near close true valuation of the company's business and its future earning prospects. You are likely at your disposal for detailed analysis of the company's business and its future earning prospects through quarterly and annual reports, and probably attending AGM and asking a few questions; and most of the time the Management is very careful not to mention any undisclosed public information; otherwise, they will have to rush out a press release.

Unfortunately, many so-called small boy value investors are just trying to outguess the Market by using a value analysis with very limited resources at hands to do a really tough job. I am NOT saying they cannot succeed, of course they can definitely do well as we have heard many proven success stories; but, I am saying it is really very, very tough and demand plenty of time and effort to do a good job. BTW, you still have your day job to take care. Cheers!

You may wish to read on ...


Friday 24 July 2009

Measure, Measure, Measure

Read the Secret first ...


The Secret is out!

And Peter Drucker once said, “What gets measured, gets managed.”

So we need a tool to measure our Investment/Trading performance over long term e.g. 5, 10, 20 or even 30 years. For me, I use Average Annualized ROC (Return On Total Capital) to measure my performance and managed it for success.

Computing for the Average Annualized ROC is quite simple. All I have to do is to add the total Realized and Unrealized Profit/Loss and divide it by the Total Capital, and then divide it by the Number of years. Thus, the formula is:

Average Annualized ROC = (Total Realized + Unrealized Profit/Loss) / Total Capital / No. of Years

What is your goal for investing over long term? Mine is for Retirement fund.

Why should we need to evaluate our investment performance? The main reason is to perform an objective analysis of our investment performance to overcome self-deception or over-confidence and take a sober, non-emotional assessment of our investing returns and consider whether we are either under-performing or meeting our GOALS.

We have to remember that the only reason to invest is to create more wealth. If we are not building up more wealth over a period of time, then our strategies may not be effective, and we may have to seriously review and change strategies.

Insanity: doing the same thing over and over again and expecting different results. said Albert Einstein

STI testing the mother of all resistance levels since 1990???

STI closed @ 2533 at a new high and will it continue to stay above 2500 next week due to National Day Rally?

Are the Bulls climbing up the Wall of Worry or the Bears sliding down the Slope of Hope?

Hmm.. so today, I took a step back as I have enough zebras to cross the Mara River.

You can bet your bet.

Just For Laugh

One buys, another one sells, someone waits and all three think that they are smart.

One analyst calls for buy, another analyst calls for sell, and both think that they are smart.

When the Support/Resistance level is near, the brokers tell 50% of their clients to sell, the other 50% to buy, and 50% of their clients will think that their brokers are smart.

Since everyone in the Market are so smart, so where do the Greater Fools come from?

The stock market is so weird!!!

Olam - Sold @ $2.41, ROC 5.9%

Round 4: ROC 5.9%, 15 days, B $2.26 S $2.41

Round 3: ROC 9.6%, 8 days, B $2.18 S $2.40
Round 2: ROC 7.0%, 8 days, B $2.18 S $2.35
Round 1: ROC 9.8%, 161 days, B $1.37 S $1.52

Making the next pillow in progress. Cheers!

Noble - Sold $1.82, ROC 5.7%

Hope to gather more feathers for a bigger pillow soon ...

Round 9: ROC 5.7%, 74 day, B 1.71 S 1.82

Round 8: ROC 34.3%, 100 day, B 0.96 S 1.30
Round 7: ROC 5.7%, 10 day, B 1.02 S 1.09
Round 6: ROC 3.8%, 1 day, B 1.01 S 1.06
Round 5: ROC 12%, 27 days, B 0.965 S 1.08, (2nd Half)
Round 4: ROC 14%, 8 days, B 0.965 S 1.11, (1st Half)
Round 3: ROC 7.1%, 8 days, B 0.830 S 0.895
Round 2: ROC 31.6%, 20 days, B 0.800 S 1.05
Round 1: ROC 16.3%, 28 days B 0.910 S 1.08

Thursday 23 July 2009

STI closing a new high @ 2485

STI has recovered 70.6% from 09 Mar 09 low in 130 days, and 652 days has passed since 11 Oct 07 Peak.

Will STI be able to break the all time RESISTANCE level at 2500 and stay above it next week?

Tuesday 21 July 2009

Tips On Child Life Insurance - Part 2

You may wish to read it first

Read? Tips On Child Life Insurance

Sometime ago, the topic to buy Child Life Insurance or not was hotly debated among the super friends.

Personally, I don't believe in buying Child Life Insurance as I don't think why parent should be looking for financial gain from the death of a child.

But, some argue to buy Child Life Insurance that have coverage on major Critical Illnesses.

OK. Let examine what are the 30 major critical illness that are covered:

Put your emotions aside, and examine carefully what is the risk level that the child will be affected by 30 critical illnesses?

Most of the child in Singapore are already covered by Medishield. 

MediShield is a low cost catastrophic illness insurance scheme. Introduced in 1990, the government designed MediShield to help members meet medical expenses from major illnesses, which could not be sufficiently covered by their Medisave balance. MediShield operates on a co-payment and deductible system to avoid problems associated with first-dollar, comprehensive insurance.

Premiums for MediShield can be paid by Medisave. A very large medical bill can easily wipe out your Medisave balance, as it is only a savings account. For this reason, you are advised to take up MediShield or an appropriate private Integrated Shield Plan in order to stretch your Medisave dollars. Your co-payment and deductibles can also be paid using Medisave or cash.

MediShield will cover up to 80% of your large medical bill at the Class B2/C level.

For Singaporeans who plan to use Class B1 or higher ward classes, you may wish to consider purchasing Medisave-approved private Integrated Shield Plans on top of your Medishield. MediShield and other Medisave-approved private Integrated Shield Plans are designed to cater to your different insurance coverage needs.

MediShield is operated by the CPF Board.

So, the big question is for parents to think over it without the emotion of love for the child, as some of us may have limited financial resources to afford comprehensive insurance coverage and may have to be satisfied with a reasonable insurance coverage as we have to allocate the limited financial resources wisely among competing needs and for investment too.

But, if one can easily afford it, just buy and treats it as a gift to the child. Nothing to debate about. Cheers!

Sunday 19 July 2009

Fear of missing out??? Fear of losses??? Part 3

http://createwealth8888.blogspot.com/2009/04/fear-of-missing-out-fear-of-losses-part.html<--- Part 2

So what will we have for STI next week?

I will simply be more cautious, but there might be National Day rally. One of the great ironies of the stock market is that more people believe it will go down, the more likely it is to go up. When everyone thinks it go down further and delays buying, then market slowly moves up. Market is weird!

The Best Secret in Investment and Trading – Compound Interest

Albert Einstein' once said that Compound Interest was the greatest mathematical discovery of all time", and some said this is the 8th Wonder in the World of Investing & Trading.

Before you make any investment or buy a stock, you have to look at the expected "high" rate of return on capital (ROC), but it is the compounding of the interest (or ROC) on that principal or capital which creates the biggest returns over time.

The compounding of profits, or dividends, or interest or ROC applies in all financial markets, so if you are a short term stock market trader, property investor or other short or long asset holder, you may find the magic of compounding interest very interesting.

The rule of 72 and long term returns

You might not have learnt this at school, but Einstein’s rule of 72 is one of most magical and simple formulas around. What this says is that to work out how long it takes to double the value of an investment, you simple divide the return into 72.

To estimate how long it would take to double you money on an investment just divide 72 by the percentage rate you are earning on your investment; and that's it.

For example, if you have a savings account with $500 deposited in it. The rate of interest is 4% per year. So the doubling point, the length of time it will take you to double your $500 to become $1,000 is:

72 divided by 4 = 18 years

If the rate of interest were 6%, then the doubling point to be 72/6=12 years.

Doubling and doubling again

Once we have the time it takes to double your money, this is where the magic of compounding comes in, because it becomes possible then to extrapolate some very tasty figures over the longer term.

For you to think about .... how long will it take to become Millionaire in Investing or Trading with an initial capital of $100K. if your average ROC per trade is 2.5%, 5% or 7.5% etc?

Now, your first CHALLENGE is to make $100K realized gain from your investing capital of $100K, and rest of the 1st $1M will follow not far from behind.

So are you ready to double your money and take the first $100K Challenge? Put up your hand please!

Saturday 18 July 2009

STI last closed @ 2427

STI has recovered 66.6% from 09 Mar 09 low in 130 days, and 645 days has passed since 11 Oct 07 Peak.

Will STI be able to break the resistance level and stay above for the week?

So ... Are You Married To You Stocks?

Are you married or will you marry? If you are married, surely I bet you won't like the divorce!

So ... are you married to your stocks? If you are married to your stocks, I am betting that you won't like the divorce (SELL)!

http://createwealth8888.blogspot.com/2009/07/time-in-market-or-timing-market.html <--- If you may want to read on Time In Market or Timing The Market The primary reason to buy a stock is to make a reasonably high rate of return on capital (ROC) at an acceptable level of risk to you.

You have to determine what is your high rate of ROC and don't be too greedy? Once you have fulfilled the reason of buying , don't you think it is better to recover your capital as soon as possible. You can always buy back the same stock when you can't find better ones to buy.

So how do you tell that you are married to your stocks and deeply in LOVE with them?

1. You love their dividends. You don't see any reason to ever sell this stock as the stock gives you such a good relative yield. You are madly in love and you don't even have target price to sell it to recover some or all capital.

2. You love the products that the company make. You love the management style. You love the company culture. You love how the company beats their competitors. You are like MacDonald ads: Loving It!

3. You did a lot of research on this company before buying its stock. You are so convinced that the company will continue to grow, and the management style and skills will continue to be effective in the future. (When the company owner who is also the CEO, and there is no clear line of succession plan, this company is damn risky.)

4. You are convinced that it is only just 1-2 bad years when the company didn't do well. You think the company will certainly get better in the near future and fail to realize that no company is totally immune from obsolete business model due to ever changing economic environment and competitive landscapes.

5. You keep averaging down whenever you have more capital available. You are convinced that when its stock price gets lower, the margin of safety gets better. You don't even bother to consider the fact that it is becoming heavier in your portfolio. You don't even bother to look at other stocks that may be as good as this one or even better.

So don't treat your stocks as your wife, but treat them as your pillows. Pillows are good to rest your head and sleep soundly on them. Can you sleep without your wife? I bet you can sleep without your wife when you are on business trip or doing your in-camp training. Can you really sleep without pillow? I can't! http://createwealth8888.blogspot.com/2009/04/pillow-stocks-strategy.html

So what is your PRIMARY reason to buy the stock? Cheers!

Friday 17 July 2009

Time In The Market, or Timing The Market??

http://sgmusicwhiz.blogspot.com/ <-- If you may want to read MusicWhiz post on "Time In The Market, or Timing The Market". Quite a good debate happen there. Now, let me share my version on "Time In The Market or Timing The Market" ..

What is the primary reason to buy a stock?

. The stock is under-valued and offers good margin of safety
. The stock has incredible dividends for many years
. The stock has perfect technical entry
. blah ...

So are these really primary reason to buy a stock?

I don't think so. You buy the stock to make a reasonably high rate of return on capital (ROC) at an acceptable level of risk to you.

In simple words, the primary reason to buy a stock is to sell it.

Since I don't believe in STOP LOSS, the moment after I have bought a stock; it will spent its Time In The Market while I am Timing The Market to make a reasonably high rate of return on capital (ROC) to compensate me for taking the level of risk that is acceptable to me and I will be doing "Timing The Market" to buy the next stock. The cycle goes like this: Timing The Market ---> Time In The Market ---> Timing The Market --> Time In Then Market and so on .....

You may want to tell me your version of the story. Cheers!

Wednesday 15 July 2009

Possible Annualized Returns from Investing

For you to think about .... how long will it take to become Millionaire in Investing with initial $100K capital?

But, your first CHALLENGE is to make $100K realized gain from your investment and rest of the 1st $1M will follow not far behind. Anyone putting up your hand for this challenge? Cheers!

Monday 13 July 2009

Tips On Child Life Insurance

Life Insurance policies for children are sold purely on emotion and not on true need. The advertisements and sales agents will use lines like "if you love your child..." you will protect them with a life insurance policy. They will also explain how inexpensive life insurance is for children. There are a couple of problems with this.

While the commercials and sales agents may appeal to your emotions, the financial facts are that a loss of a child will actually relieve you of a financial commitment. That's not trying to make light of the emotional devastation that comes with a death of a child for which nothing can compensate. The fact, however, when looking at it purely from a financial perspective is that a family will not have to spend as much money when they no longer have a child to care for. It cost less not having a child than having one.

Another ploy is that children's life insurance is cheap. It is inexpensive compared to adult life insurance because, plain and simply, children rarely die. While the numbers that the sales agent puts together may make children's life insurance sound like a great deal, take the time to run what you'd have if you instead invested the exact same amount used on the insurance fees into a Roth IRA and you'll find the true cost of purchasing this type of life insurance.

When purchasing life insurance, it's important to remember that its main purpose is to replace an income that is lost when one dies. A child rarely has an income. Unless your child is a child TV star or the the main source of income for your family in some other way, there is rarely a need to have life insurance for him or her.

The Life Insurance for Children Debate
Wednesday March 8, 2006

I get a good amount of disagreement from other insurance agents about purchasing life insurance for children. Yes, for some people, the life insurance they bought for their child did pay off later. Obviously though, children do not have dependents that need financial care once they are gone. Since life insurance is designed to care for loved ones that depend on you once you are gone, it does not make sense to purchase a life insurance policy for a child.

This does not mean that the risk is non-existent. We could of course insure everything since there is a risk of losing everything, but we need to determine if that risk is high enough for our personal situation to insure. By this, I feel buying life insurance for children should not be a routine insurance purchase. (Createwealth8888: so if you have plenty of spare $$$, by all means go and buy and made yourself an asset to your child). On the other hand, life insurance for parents should be a routine insurance purchase since parents do have loved ones depending financially on them (their children).

There are other insurance choices that should not be routine insurance choices. The article Don't Buy Insurance You Don't Need reviews types of insurance policies that should not be purchased routinely. Again, this does not mean that by purchasing these types of insurance you will never use them, you may. The risk is so small though, that your money could be spent more productively on such things as savings or investments.

By Bobbie Sage, About.com Guide to Personal Insurance since 2002

How Much Life Insurance Is Enough?

There are two common methods for calculating the answer.

By: Richard A. Dulisse, CLU, MSFS, LUTCF

In the aftermath of the World Trade Center tragedy of Sept. 11, 2001, countless Americans are re-evaluating their life insurance portfolios. Many people are taking a hard look at their coverage and asking themselves whether they are adequately protected. They are seeking our guidance in determining exactly how much is required to sufficiently provide for their loved ones if they were to die. To that end, we need to be familiar with the two generally recognized life insurance industry methods for quantifying these desired amounts of coverage.

Human Life Value method

The concept of comprehensive life insurance planning is not new. There is certainly a moral obligation to provide adequate protection for one's family. Dr. Solomon S. Huebner, founder of the American College in 1927, said, "The growth of life insurance implies an increasing development of the sense of responsibility." But how do we do it properly?

Dr. Huebner purported the Human Life Value approach. This theory says that, like a corporation, a person who works has capitalized earning capacity over his or her lifetime. Therefore, although everyone is unique and irreplaceable, "each human life potentially has an economic value, which is derived from its earning capacity and the financial dependency of other lives on that earning capacity." Human Life Value is the present capitalized value of a person's net future earnings after subtracting self-maintenance costs, income taxes and life insurance premiums being paid.

To practically apply this concept, let's take an example. Suppose you have a 35-year-old client whose gross salary today is $60,000. His net take-home contribution to the family after subtracting self-maintenance, life insurance premiums and taxes, is $40,000. Also, assume that this person will work until age 65, which is 30 years. If we discount this earnings stream at a reasonably conservative after-tax discount rate of interest of 4 percent, the amount of insurance required to continue this income stream for the worker's loved ones would be as follows: $40,000 x 17.29 = $691,600.

Explanation: Using a compound discount table, the present value factor for a series of payments of $1 due at the end of each year for 30 years discounted at 4 percent is rounded to 17.29. Therefore, $691,600 today, earning 4 percent interest after taxes, would provide the insured's family with the $40,000 a year that they would have received if the worker lived and worked until age 65. This disregards the effect of inflation. If we factor in a 3-percent inflation rate over those 30 years, $1,036,714 of capital or life insurance would be required.

Although this is a simplification of a process that can be very complex, it demonstrates the point.

However, there are several issues overlooked in the application of the Human Life Value method. First, it presumes that a non-wage-earning spouse has no economic value. Second, it does not take into account that there may be a lump sum needed immediately upon the death of a worker to satisfy certain financial obligations such as loans that may be called in by various creditors.

These quandaries have led to the adoption of the second, and generally more widely used, approach to adequately insuring lives.

Total Needs method

This approach attempts to quantify how much life insurance would be needed to maintain the surviving loved ones' lifestyle by looking at two categories of need: cash needs and income needs.

There is certainly a moral obligation to provide adequate protection for one's family.

Cash needs consist of lump sums required at death for such items as final expenses, an emergency fund, a readjustment fund, a home-care fund, a mortgage/debt liquidation fund, and possibly even an education fund. Income needs address the replacement of a wage earner's income for at least their working years, reduced by any available cash resources already in place such as existing life insurance or possibly even savings. Further reductions in calculating the income need would include factoring in Social Security survivor benefits payable to the dependents of a covered worker. (Many practitioners choose to disregard or plan on a reduced percentage of these benefits due to the perceived uncertainty of the Social Security program.)

To apply the Total Needs approach, let's carry forward some assumptions from our previous case. Suppose the 35-year-old worker had a 30-year-old spouse and two children ages two and five. Let's say that the cash needs at death included a $20,000 final expense fund, a $30,000 emergency fund, an $80,000 mortgage fund and a $160,000 education fund. These amounts total $290,000 of cash needs at death. Let's further assume that the family needs $3,400 per month during the two-year adjustment period, declining to $2,920 per month for the next 14 years until the youngest child turns age 18, and then to $1,942 per month for the rest of the surviving spouse's life. If we discount the stream of income needed at 4 percent, then $589,600 of capital would be needed to provide this income. Thus, the total funds for both cash and income needs would be $879,600.

However, if we factored Social Security into the formula, the income need may be reduced to about $200,000. On the other hand, if instead of systematically liquidating the capital sums required to fulfill the income needs, we take a capital conservation approach, as in the Human Life Value method, then the capital needed would be significantly higher than $589,600. Of course, inflation would compound that number further.

So, which method is better? You need to decide which approach is best for your client. Your company's software programs will surely allow you to make an educated comparison based on a given set of facts.

In the final analysis, it is important to remain focused on our primary mission: to provide comprehensive life insurance protection and thus financial stability for the families of those we serve.

From Createwealth8888:

You may have to consider how to allocate your projected annual income over very long term to meet your personal needs on the following:

1) Housing
2) Living Expenses
3) Insurance
4) Children Education fund
5) Emergency fund (saving for raining days)
6) Investment fund (for Retirement)

You cannot be overly worry about insurance; become over-insured and divest too much cash into insurance, and under-allocate cash into other needs. It is very personal; and you can have to really do soul-searching on how to optimize the allocation of your projected annual income and strike a good balance among all the needs.

You need to understand that insurance product has 15-20 years to breakeven on your premium payment and don't really give good return after that.

http://createwealth8888.blogspot.com/2009/07/saving-life-insurance-and-investing.html <--- read more if you may

Take care!

Sunday 12 July 2009

Saving, Life Insurance and Investing

What are the main differences related to Saving, Life Insurance and Investing?

Saving is NEVER an INVESTMENT and will never get better return as it is almost risk free. There will NEVER be such investment product where there is almost risk free and yet gives good returns. All investment products by nature carry risks and you may potentially lose some or all your investing capital. The provider of such investment product need to be able to earn good margins for them to assume the risks on your behalf. In another word, they assume your risks and expected to be paid first before giving you the leftovers.

Generally, the purpose of life insurance is to provide peace of mind by assuring that financial loss or hardship will be lessened or eliminated in the event of death or permanent disability or in some cases critical illnesses if covered.

The value for the policyholder is derived, not from an actual claim event, rather it is the value derived from the 'peace of mind' experienced by the policyholder, due to the negating of adverse financial consequences caused by the death of the Life Assured.

Since life insurance is not really a "good" investment product so don't expect better returns. So do you use Life insurance as an investment for retirement planning? Weigh the pros and cons carefully when deciding whether life insurance has a place in your investment or retirement plans. If it does, educate yourself and shop wisely as you are sinking probably a huge sum of your potential investing capital in life insurance; and knowing what are your opportunity costs.

A better option is to spare some of your valuable time in educating yourself in active investing and builds a well balance portfolio of saving, life insurance, and investment. Happy learning. Cheers!

Saturday 11 July 2009

Earning more than your boss?

Can someone possibly earn more than one's boss assuming both have the same length of service in the company? Probably, the answer is definitely NO. Why? Your boss's NAV in the company is definitely perceived more than you so he/she will be paid more. So how can one earn more than his/her boss?

http://createwealth8888.blogspot.com/2009/07/your-most-important-asset-is-yourself.html <-- increase your NAV

1) Increase NAV in the company until you can be promoted above your boss, and you become his/her boss.

2) Increase NAV in your investing/trading to earn more income in addition to your employment income.

Remember what Clement said: "Nobody is stopping you from investing your own money. For investing and trading, you don't have to appear physically somewhere. You can make money using the Internet or (createwealth8888: Broadband on Mobile), and you don't need to face suppliers or competitors. You just need to face yourself."

You can do it quietly since the Mobile technology provides you the enablers. Now, with iPhone you have the computer at your palm to trade online.

So it is for your boss to earn more than his/her boss. Maybe your boss is already doing that, didn't you realize it?

Warren Buffett's Top Three Investment Rules for the Average American

aiyo... Buffet has new Investment rules!!!!

there's no mention of intrinsic values, durable competitive advantages, or even buy-and-hold.

Time has changed. Now, we are living in a globally connected economy; and news travel at the speed of electonic light wave and drive stocks prices crazy before you even realized it. Isn't time for Buffetology followers to start thinking on his new investment rules??? Why doesn't he mention his old favourite rules???

Hmm... Buffet's Rule No 3 looks same as one of my own Rules?

If you like to read more http://createwealth8888.blogspot.com/2009/01/understanding-debt-risk-and-leverage.html and follow up with search on keyword: leverage

By: Alex Crippen
Executive Producer

Warren Buffett isn't shy about giving advice. If he hadn't gone into the investing business, he could well have made teaching his profession.

Now that he's the world's greatest living investor, there are plenty of pupils anxious to attend class.

Today (Friday), ABC's Good Morning America featured several Buffett lessons.

In a taped interview, Bianna Golodryga asks Buffett for his "top three pieces of advice for average Americans who want to grow their savings and keep their money safe."

In this venue, there's no mention of intrinsic values, durable competitive advantages, or even buy-and-hold.

Buffett's response:

1) If it seems too good to be true, it probably is.

2) Always look at how much the other guy is making when he is trying to sell you something.

3) Stay away from leverage. Nobody ever goes broke that doesn't owe money.

Buffett also finds important life and investing lessons in his favorite game:

Warren Buffett plays bridge at the 2005 Berkshire Hathaway shareholders meeting

"In bridge, everything anybody does or doesn't do, you're drawing inferences from, including your partner and your opponents. You're working with a partner. If you don't work well with partners you're not going to have a winning bridge team over time. And everything you've learned from the past has some utility on the next hand you play. The next hand, you've never played it before and you'll never play it again in your life. But on the other hand, the problems you've solved in the past are useful in solving the problems there. And you have to keep paying attention all the time. You can't coast."

And while Buffett doesn't think that everyone should necessarily get a college degree, he does strongly believe in the value of learning, as any good teacher would.

"Generally speaking, investing in yourself is the best thing you can do. Anything that improves your own talents. Nobody can take it away from you. They can run up huge deficits, the dollar can become worth far less, you can have all kinds of things happen. But if you've got talent yourself, and you maximize your talent, you've got a terrific asset."

http://createwealth8888.blogspot.com/2009/07/your-most-important-asset-is-yourself.html<--- If you wish to read more ...

Friday 10 July 2009

STI going where?

Gosh. Two big resistance levels ahead???/

Thursday 9 July 2009

Olam - Got back @ $2.26

Back in play again.

Sunday 5 July 2009

Invest in Singapore companies???

LOL. Finaly, come across some big name like CEO of WheelLock, Mr David Lawrence talking in the same frequency band as CreateWealth8888.

He said: “Personally, I never buy any structured product. I only buy stocks… There are very good stocks, with good boards of directors, that pay good dividends. So don’t be greedy. Just invest in Singapore companies (such as the three local banks, Keppel, Fraser & Neave, Singapore Press Holdings, SingTel and Singapore Technologies) … with boards of directors - executive and independent directors - with proven integrity.”

He also cautions retail investors to beware of the risks entailed in exchange traded funds (ETFs). In the US, for instance, regulators have ruled out the sale of leveraged and inverse ETFs to retail investors. 'Personally, I never buy any structured product. I only buy stocks,' he said. 'Even if I buy commodities, I buy shares of mining companies like Rio Tinto and BHP. I buy stocks because I have complete control over it. It's a low-cost entry.

'I don't trust fund managers. You invest in funds. What happens? You get a crash, you get redemptions, they have to sell.'

But Mr Lawrence is not suggesting investors rush into the stock market after the recent surge. 'I think, just start looking at the moment and wait and see. A lot of profit has already been made,' he said.

'If you can get the timing right, or a little bit right - I am never clever enough to buy at the bottom and sell at the top - you can do very well. You can make very good capital appreciation.

'But what you don't do is buy, then panic and sell as prices go down, because you are investing in well-run companies that will survive. They pay you a dividend. So even if you buy high and they go low, you just keep them and live off the dividend. Don't buy unless you're going to hold them for the long term.'

Yalor. I fully agreed with him. If you only have capital like $xx,xxx or even $xxx,xxx, please stop fooling yourself by behaving like big boys investing globally for diversification. Stop making your investing strategy more complicated by taking in foreign currency exchange rate risk. When you made a hundred buck in Singapore market, that is definitely S$100 but it is not same for profit made in foreign currency, it can be less than S$100 or in worst case may end up in nett losses.

Your most important asset is yourself?

Adam Khoo said: "The returns are infinite. When you invest in yourself, it's something that on one can take away from you."

Clement Chiang said: "Nobody is stopping you from investing your own money. For investing and trading, you don't have to appear physically somewhere. You can make money using the Internet or (createwealth8888: Broadband on Mobile), and you don't need to face suppliers or competitors. You just need to face yourself."

Joseph Chong said: "Inertia is an investor's worst enemy. It means time wasted and money foregone. Every year you delay saving and investing, it becomes worse and worse. People should start learning about investing as soon as they start saving. If you don't do that, the tuition fee becomes a lot heavier. the mistakes made earlier are cheaper. It was already mathematically clear then that just working and saving wouldn't do it. To be free from the "bondage" of employment, you must invest and compound your money."

Robert Kiyosaki said: "Most of us are so enamoured of the idea of security that, even when you are unhappy with our jobs, we will stay with them, day after day, year after year. The truth is that staying in situations which are unsatisfying only increases our sense of insecurity. We begin to feel there is no other choice but to sell our souls in the name of security."

CreateWealth8888 said: "I already realized it one day in 2001? after reading the book "Rich Dad, Poor Dad" that I need to be successful in my active investing in Singapore stocks only so as to free from the "bondage" of employment and that is the reason why I am blogging here."

Richard Smitten said: "Certain rules of the market are to be studied as closely as if you were a law student preparing for the Bar."

Jesse Livermore said: "Since I was 15, I have studied this subject (createwealth8888: Market) closely. I have given my life to it, concentrating upon it and putting into it my very best."

Frank McKinney said: "Take risks but never gamble."

CreaeWealth8888 said: "I agreed with Frank. Never gamble. I don't do professional gambling like trading FOREX where there is no assets involved, you are basically playing professional poker game with your retail forex brokers. I like to take risks with stocks that are paying regular dividends that are better than CPF rate of 2.5%,and prefer blue chips that our government has a hand or leg in it and if necessary the government men will kick the asses of those management."

Tom Gardner said: "The best time to start investing was yesterday. The next best time is today."

CreateWealth8888 said: "Kick your ass and get started in active investing and get yourself educated in investing and financially related knowledge." and do the following if you are newbie to active investing:

1. How much capital do you have? (This is the money that you can safely set aside and will not be needed for next 5-7 years as this is the average length of a market cycle if you are caught investing at the wrong time)

2. What is the your final target sum you wish to accumulate over your investing time frame?

3. Set your yearly performance target to reach your final target sum over your investing time frame. (Please note that in the worst years you may not achieve your yearly target; but, it should be reverting to your mean yearly target.)

Happy active investing and be hardworking in getting yourself educated. Cheers!

Saturday 4 July 2009

Live Simply?

Live Simply is NOT THE SAME as trying to save every penny one has and living like a miser. No, it is not like that. Remember that we ONLY live ONCE, and let try to enjoy ourselves and still have fun, and yet not spending too much time and energy acquiring more money to sustain that kind of lifestyle.

We can choose our own lifestyle. We can choose how to spend our time, energy, and money or we can choose NOT to catch up with frenetic urge to acquire more to show off. We can choose to slow down in the later stage of our work life and forgo climbing the corporate ladder once we have less family liabilities.

I have chosen to be DEBT FREE before 40 and will remain that way till the day I say bye bye to planet Earth. I don't bother with the idea of GOOD DEBT OR BAD DEBT. Every debt by nature carries the risk of default in the event of a BLACK SWAN happening. How to live a carefree life if one still have debts to pay off as you will need to divert some time and energy into debt management.

I choose not to upgrade my four-room flat so that I will not get into another debt.

I choose BMW as transport. (Bus, MRT, Walk)

I choose to be partial blind and unable to see clearly what others have in their everyday processions.

So what did you choose and that will determine how you are going to slog it out in your work life?

Friday 3 July 2009

Retirement Planning?

A recent survey revealed that 39 per cent of Singaporeans feel they have a good understanding of their short-term finances. But only 23 per cent can say the same for their long-term finances. The survey also showed that 91 per cent of Singaporeans do not know what their retirement income will be.

'The lack of understanding and knowledge of long-term financial milestones like retirement could be intensified by the current economic downturn, which may have led more people to divert their attention to short-term survival needs instead of long-term goals,' says Sebastian Arcuri, head of Personal Finance Services at HSBC Singapore.

'The consequence of focusing on the short term may be a struggle to make ends meet when it is time to retire.'

Retirement planning includes identifying ways to generate passive income, may be some active income, and manage cash flow, supplement medical coverage, prepare for medical uncertainties and plan for a lifestyle after retirement.

This deep Bear market is a good opportunity for one to carefully build up a base for one's retirement portfolio for future passive income from stock dividends and draw-down for cashflow management.

Thursday 2 July 2009

Anthony Yeo Toon Yong's last wise words

Anthony Yeo Toon Yong was a very recognizable public figure, distinguished by his greying goatee. A much sought after counsellor, he had helped many. The mass media often quoted him on Singapore’s social and political life.

He appeared often over TV, wrote an occasional newspaper column, encouraged others to speak out, and taught from all platforms, church and public. He is credited to have trained more than 1,000 counsellors.

One underlying message of his: live simply, do not be caught up with Singapore’s and Singaporeans’ frenetic urge to acquire more. It was one of the last sermons he delivered last March when, unknown to him, leukaemia had already begun to gnaw away at his life.

He said: ”You can experience the richness of life without the riches of life. You can experience abundant life without the abundance of life. You can experience health and well being without wealth.” (Createwealth8888: Many people still quite blur between being wealthy and being rich. One can be wealthy but not rich. My goal is to be wealthy and not necessary I am rich as I live simply. I think it is not easy to live simply as you need to be thick skin, and you have to learn to ignore how other people look at you)

Of his own mortality, he had said: “If I do not see another day, at least I can leave this earth with open hands, knowing that I am not grabbing on to anything.”
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