Father Sez

From and to parents - parental advice to our children on personal financial management and life.
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Archive for April, 2008

Round up for week ending 18 April 08

Friday, April 18th, 2008

It has been a nice easy week. Blogging took a back seat. Though I kept up with the “Reader”, I did not do any posts.  I could really get used to this!

Meanwhile here are some of the more interesting stuff I ran into this week. 

Get Rich Slowly had a post on an “el cheapo” way to exterminate ants. I must try this method. We, too, have an ant problem. Malaysians are peculiar in welcoming certain type of ants. My wife would say, “Hey, look at this row of black ants. We are in for a windfall”, or stuff like that. 

Lately we have been having an invasion of those tiny red ants. We have been told that the heavy rains are driving them out of their homes, and they are a real pain when they sting. (Judging by the comments, it looks like lots of people have ant problems.)

I am not sure of our hardware shops carry the product JD swears by, i.e. Terro, but his advice is worth checking out. Thanks, JD. 

FMF has a thought provoking question. “What is the best way to make more money?” FMF has also displayed for us his thought process in choosing the option he wanted.  This is a question I have asked myself late last year and have decided on an answer.

It may be useful for all of us to ask ourselves this question regularly as we work on crafting our goals. 

The Million Dollar Journey chronicled the story of his childhood friend who had a passion for restaurants and was just about to launch one. His friend had also started a blog on his journey into restauranting. (Is there such a word?) 

I have a good friend who talks about his dreams in the food business. Though he is clearly passionate about the business, he has yet to make any start. Maybe the Restaurant Blog will be just the thing the doctor ordered. 

Flexo at the Consumerism Commentary asks us whether we are missing out on life by being frugal. This dilemma has lately played out in my life a little and another is also looming ahead. When my mother passed away, I just used my credit card and charged the air tickets. No looking for cheaper fares etc. The handphone bills for last month have also hit the roof due to the almost every 15 minute calls I was getting from my brothers on my location during the longer than expected bus journey. All at international roaming rates.  

I am just grateful that I could afford not having to worry about the expenses too much at this unfortunate time.  

Now we are facing my eldest girl’s graduation. Though this will be in an UK University, it is a once in a lifetime event for her and no way am I going to let this pass, frugal or no frugal. At the very least, her mother will attend this event.  

This is all for this week.

Cheers and have a great weekend, folks     

 

We sold our house – the emotional factor

Monday, April 14th, 2008

Selling a house is not just a simple dollars and cents issue. Emotions do play a major role. Just ask Emily, she’ll tell you. 

The house we have just sold is so intricately intertwined with our family history.  

a) This is the first house my wife and I bought.  

b) This is the house I came back to one day after work. That morning I had left for work from our rented house. During the day, my wife with our two elder girls (who were then about 6 and 7 years old) handled the complete shifting assisted by some hired help. Even though we had much less “stuff” than we have now, this accomplishment by my wife still astonishes my friends. 

c) This is the house where three of our kids were born. There can be no more important memories than those of our kids when they are at the “My Mommy knows everything” stage.  

d) This is the house we were living in when I suddenly realized that my corporate career was not what I really wanted and just quit. Without proper planning and preparation, it was a bad move and I had to jump back in not too long after.  

e) This is the house, where we discovered after moving in that our opposite neighbor was the father in law of a dear friend. This created instant friendships and made the easing into a new neighborhood so much easier for us. 

f) This is the house where we planted our first tree, a neem. This tree is almost a given in every Indian home which has some land. Reading what Wikipedia says about the neem tree, one cannot be surprised. The tree is now a healthy strapping 20 footer. 

We have treasured the house ever since we moved in. We have looked after the house and maintained it well.  Perhaps the house’s rough patch was when we first rented out the house. Our first tenant cannot be classified as an ideal one. We did up the house after he vacated and spent slightly more than the sum total of the rental he paid during his tenure. 

The house is presently tenanted by a truly wonderful family, with admirable housekeeping habits. (We made an offer for them to buy the house, but they were otherwise committed.) My wife will be meeting with them on Tuesday or Wednesday to tell them about the sale.  

The buyer seems to be a good person. He has said that he wants to buy the house because his mother and sister stay not too far away from the house. (I do suspect the neem tree might have played a small role in helping to tilt the decision.) 

This house has served us well. It has also worked hard and created some financial equity for us.  

For this and everything else, my family and I shall always remain grateful. It is unfortunate that we have to sell the house, but we really could not see any other way out of the financial hole that I had dug my family into. We can only say that we are confident that we are passing over the house to someone who will treasure and look after the house as well as we would like the house to be looked after.  

And this house will always retain its illustrious role in our family history.     

We have sold the house

Sunday, April 13th, 2008

This journey, leading to the signing of the S & P last Friday, started shortly after my wife and I studied the first ever family budget that we had done. Not good! 

Then we did a review of the family loans and applied the DTI ratio that I read about in Moolanomy. (The Digerati Life has also written about this. Both are very useful pieces of information for would-be borrowers and others like me, who may never have run a health check on our loans.)  The results of the loan review were, needless to say, not good, and this was the final straw that led to my wife and me deciding to put up the house for sale.  

(We bought this house quite sometime ago. About ten years ago, we shifted and this house has been rented out since then.) 

I have read that some bloggers, like Brooke would prefer to handle the sale themselves. We appointed an agent and are very happy with her efforts. Still, I must mention that there was hardly any interest, until I followed FMF’s sound advice on not making the single biggest mistake of home sellers  

I have now signed the S & P agreement, and the buyer has paid the 10% deposit. There are still a few formalities to be settled before the property actually changes hands, and we receive the rest of the money.  

My wife and I have agreed that the proceeds, after paying the costs of the sale will be used primarily for debt reduction. Our loan profile “before” and “after” our planned debt settlement will be as shown below.  

All figures in %

 Before  After
     
 Overdraft             7.00               -  
 Car Loans           60.00               33.00
 Mortgages           33.00               67.00
     
 Total         100.00             100.00

Some amounts are being set aside now for family expenses expected to arise over the next couple of years. (This was at the reminder of my wife and I think it is lucky that I did not overlook this.) 

At the time of the loan review, we figured our “after sale” DTI (Back ratio) to be 7.40%. The present estimates (after debt reduction and amounts set aside) are at 11.80%, still a fairly respectable rate, I think.  

The sale also marks another milestone of my plan to quit the rat race 

Selling the house was not that simple a decision to make, despite the fact that we had not been living there for almost 10 years. The house is in the capital city (we now live in a slightly more rural setting, about 60 km away from the capital), and there were thoughts about shifting back to the capital someday.  

Even after making the decision to sell, signing the S & P was another toughie. There are emotional ties to the house.

I’ll write more about this tomorrow.  

 

Round Up for week ending 10th April 08

Thursday, April 10th, 2008

Finally, I gave up and just clicked the outstanding pile of posts in my reader as “read”. The wonders of technology! I felt as if a major burden had been lifted from my shoulders. I don’t know how to explain this. I owed no one any obligation to read the posts. Yet, just because they were THERE, I felt as if I would be doing something wrong by not reading them.  

I must have missed a number of great articles, and that would be my loss. At least, I am back to start again. Still, I managed to catch some interesting reads.   

Steve at Brip Blap ponders over the religious influences his 2 year old son is getting whilst attending preschool. Whilst listing several plus points for the school, this seems to be the one negative weighing on his mind. Almost all the comments were for him to take it easy. Let the little fella enjoy himself and his mother (who is expecting) have a well deserved rest whilst he is in school. I also take the view that perhaps Steve is taking it a little too seriously. 

When I first read this post, I looked for the date…nope, it was not April 1st.  Lily has declared that she is done with blogging. As a former investment banker, she is well qualified to write about finance, and she has a really neat and cool looking blog. I became an avid follower of her blog after reading her thundering piece in defense of personal finance bloggers. I wish her all the best and hope that she will reconsider her decision and perhaps blog as and when she feels like it. 

Mrs. M wrote a piece on preparing an alien abduction manual for Mr. M to follow in case she was suddenly beamed away by some aliens. Madison at the Dollar Plan has also earlier voiced out her thoughts on a “similar matter” in the form of a letter to her dear husband. This is a very interesting thought, and I’ll have to follow up on Mrs. M progress reports on her manual as it takes shape.  

This story by David on survival after leaving his high paying but incredibly stifling corporate job without another gig in hand is reassuring. I have my plans to do the same. I believe I have planned for it reasonably well and so far the plan is on track. I can almost taste the freedom now. 

Gather Little by Little wrote a very timely and useful post on 10 things not to do during an interview. As a regular interviewer he is well placed to make these statements. My second girl is now at home sending out resume after resume. She has an interview scheduled for this Saturday, and I am sure she’ll appreciate these words of advice.  

Many of the personal finance bloggers are now writing about the tough times ahead. Newspaper headlines about downsizings, food lines and even food shortages are also getting more common. Against this backdrop, Lynnae’s post on a busload of frugal tips to stretch the dollar is most timely and should be recommended reading for all. 

Many of us wonder if it would be worth paying a professional to do our taxes for us. Well, the Iowahippiechick should be voting for “Yes! You must!”, as her “rockstar” CPA unearths deductions she otherwise might have missed. Good for her. At this rate ole Uncle Sam will have a lot less to waste away in the national budget. 

This is it for this week, folks. Have a great and happy weekend. 

Hah! Phase 1 of another major financial commitment has now been done with

Thursday, April 10th, 2008

I wrote recently about one financial burden that I had. Something that was not in black in white, rather it was just something that I had to do. 

It’s a little difficult to explain why I should take this financial burden upon myself. Perhaps this can be better understood by families who have members who have immigrated to other countries, to seek better lives for themselves. Nevertheless, by the Grace of God and sheer chance this commitment has now been taken care off. 

Another major commitment my wife and I have is the expenses of tertiary education for our five children. I am aware that many responsible and respectable personal finance bloggers have written that this should not just be a burden of the parents.  

Lily of the Honest Dollar wrote a very balanced article on this issue of the Parent Trap, some time ago. Whilst this article did not focus on tertiary education per se, the general idea is clear.

 And there are really compelling arguments for making the kids pay their way  

My wife and I had never ever considered the possibility of setting the children loose and to let them sort out their tertiary education costs themselves (with or without our help). This was something we were going to take care of. So it was the “Pa and Ma scholarship way.” 

My eldest girl wanted to do psychology. All the local universities needed the students to have done Biology, which my girl did not do (for reasons that were completely my fault.) So the option was overseas universities. We have a number of local institutions that do “twinning programs”, where the kids study in Malaysia based on an overseas university’s syllabus and marking standards.  

To cut a long story short, my eldest girl finally ended up choosing University of Wales, Bangor, where she is just about to finish her basic degree in Psychology. The cost of this degree is far more than the cost locally. 

For the past 3 years, my wife and I have somehow managed to make the payments for the fees.  Today I am sending by registered post the bank draft for the final installment of her University Fees.  

My eldest girl is having her final exams in mid May and then, God Willing, she graduates.  

For our three younger children, my wife and I will revisit and follow Madison’s sound advice.  The cost of tertiary education for the younger children is going to be probably the biggest financial commitment my family will have in the years ahead. We’ll plan for this far better than we did for the two elder girls. And the kids themselves will be playing much more involved roles.  

A good piece of advice on marriages

Wednesday, April 9th, 2008

Ron over at the Wisdom Journal wrote an interesting article titled “My worst decision ever” and that everyone should learn from the mistakes he had made. 

Ron detailed that the two lessons that his worst decision ever had taught him were :- 

a)    Marry a good person and 

b)    Never to take a job because of money. 

I want to talk a little about Lesson (a). 

Marrying a good person may be a little easier said than done, as I am sure that though all of set out to do exactly this, the divorce statistics do not bear testimony to our outstanding success. 

Courtship and marriage are two different stages in life. It has been said that man is deaf and the lady blind during courtship and these senses come alive again after marriage.

Last November, my wife and I celebrated our 23rd wedding anniversary. When one of my younger colleagues asked me about my secret to this long marriage, I answered, (a little tongue in cheek, perhaps), that all I did was to keep saying “Yes, dear”. 

This morning, I received an email from a friend, titled “Trust”. In this mail, there was a paragraph on accepting and forgiving our spouse’s shortcomings. (As usual, we are more receptive and forgiving of our own shortcomings.) 

The advice given was:- “Never criticize your spouse for his/her shortcomings or when he/she does something wrong. Always bear in mind that because of the shortcomings and weaknesses, he/she could not find a better husband/wife than you.” 

These are great words of wisdom. Words that should automatically run in our minds as soon as we feel the urge to open our big mouths and start saying things that we would most probably regret. 

It’s not just a matter of chance that we marry a good person. There is “work” involved in making the marriage work. Work to be done by both husband and wife in showing appreciation and respect for our significant other. 

Ron’s article may give us an assumption that he simply married a great, thoughtful and understanding wife.  But I am sure he has put in more than his fair share of work in ensuring that this is so.

Children…….and their effect on budgets….sigh!

Tuesday, April 8th, 2008

I have written earlier that we have cancelled our cable TV subscription as part of our austerity measures. As expected there were some wails of objection from the younger three children, but it died off after a while. 

After all, they had the trusty computer and the endless list of websites they could surf and otherwise waste their time. 

Then the computer went down! 

This machine was bought a long time ago. It has been repaired and upgraded a number of times. The latest repair was having its power source replaced.  In a recent thunderstorm, the computer went down again, and this time, I refused to send it in for repairs.  

Each time, I came home from work; I would be met with sullen looks from the three younger kids. I used to joke that our neighbours would think that I was mistreating them.

They used all the tricks up their sleeves to work on their mother who also managed to fend them off. 

Sigh…..I finally gave in. Though I had read Brooke’s post on “no video games till her son got straight “A’s”, and thought that was the right way to go, I just succumbed.  

Last night, my wife went with my son and youngest daughter and brought home a fancy desktop. It has a wireless keyboard, a 17” LCD screen, a sleek looking black CPU and fancy looking speakers. 

The children are ecstatic. They have promised their mother that they would use the machine wisely etc., but I have my doubts on this. I am sure there will be a fair amount of video games and such. 

My budget had no provison for this purchase. I just have to somehow sort this out.   Sigh…..children. And what parents have to do to keep them happy.    

Looks like it’s going to be a very busy time ahead – should I give up blogging?

Monday, April 7th, 2008

These thoughts have been running through my mind a lot lately. The goat farm is about to start and the Indonesian project also seems set to take up quite a bit of my time. Should I give up my blog? 

Luckily (for me), good sense prevailed and I reminded myself to revisit the motivation behind the blog. 

Starting this blog has been the single best thing that I have ever done towards self improvement. In fact, I strongly recommend that anyone who seeks to turbo charge their self development in any area of their life to start their own blog  

The blog has also now become a channel of communication between my elder girls and me. Through the blog, I have been able to update and inform my girls on the mistakes I have made in life and what they should do so as not to repeat them.  

The younger children have also started being more responsible now that their activities and (antics) are put up on the blog. 

So am I going to stop? No way!  Perhaps there may be a number of 16 – 18 hour days, maybe some missed posting days, but I am just going to plod on.    

The sun is rising again in my life

Sunday, April 6th, 2008

Last week I took a few days off from work to just laze around at home. To sort of come to terms with the new equation in our family. 

My partners in the telecommunication contracting company asked me to come along for a trip to Jakarta. I gladly accepted, as it would be a good break. And what a trip it turned out to be! 

As I wrote in my guest post in Free Money Finance, an opportunity with great potential (the building and leasing of telecom towers) was badly dashed when the Indonesian Government issuing a decree placing the business in their negative list for foreigners. 

It appears that whilst I was in India for my mother’s funeral, my partners had been having some tentative talks with another Indonesian company who had also been eyeing the same opportunity, but for another part of the country. 

The night we arrived in Jakarta, we had a dinner together. There were 6 people from their team and the three of us. The vibes were great. Both our Chairmen got along well and the rest of us got along like a ball of fire.

We agreed to meet the next morning to go over some specifics. To cut a long story short, on Thursday, we signed an agreement for mutual cooperation in the business.  Now, the business is back to “GO”, and in a form much larger than what we had in the first place.  

 We have agreed on the broad organization structure and the only Malaysian would be the CEO of this operating joint venture company, the rest of the staff would be Indonesians.  

The tax department of a Big 4 is reviewing the proposed corporate structure and should give their final views in the coming week. 

We had earlier received several promising leads for financing from Malaysian Banks with operations in Indonesia. We’ll be revisiting these Banks with the revised corporate formula which should strengthen our standing.  

Our local partners, too, had made their own approaches to their bankers. So now we have a larger pool of banks to talk to. Things look pretty good at the moment.

God willing, by end of April, the JV Company will have set up its own office and the business will start.    

Still feeling listless

Tuesday, April 1st, 2008

It was with a vastly different feeling that I left for India last week.  

The trip was at very short notice, but my planning mechanism served me well. A quick scan of my weekly calendar showed only 2 “must do” things. These did not take long to settle.  

I informed my family, office, the agent who is handling the sale of my house and my partners in the Indonesian project. A little time was spent with my youngest daughter whose birthday fell on the 26th March, in case I did not make it back in time. Ain takes her birthdays a little more seriously than her elder brother and sisters and she had been dropping hints ever since her brother’s birthday on the 4th January. 

I talked to my second girl, Azah, with whom I was due to have discussions on her career choices. I gave her the research sources I had and asked her to go through them.  

With my wife’s consent, the opening of the farm which had been planned for the 5th April was postponed to a date to be set later.  

And I was all set to go. 

Now that I am back, the fire seems a little lower. Life seems to be a drag and I think it will be a little while before my life gets back into its normal routine.  

We went out for a small family dinner on Saturday to a Japanese restaurant. The place was the birthday girl, Ain’s choice.  Azah has gone through the resources I left her and now seems to have a good idea of the career options available to her. 

My eldest brother held a small prayer in his house on Sunday night in memory of my late mother. This was well attended by the many relatives we have in Malaysia.  

I went back to the office on Monday. I have yet to get back to the daily routine and am still feeling very listless. I am taking a few more days off to sort myself out.  

On blogging, I am trying to clear the reader that seems to be overflowing. Writing any sensible post seems too much of a task. I am just going to go with the flow and see where the rest of the week takes me. 

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