Father Sez

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

Harsh economic times and rising number of scams – let’s not lose our hard earned money

Sunday, June 29th, 2008

As the present harsh economic realities sink deeper and deeper into our lives, we are forced to look harder and harder for ways and means to make our Dollar (or Ringgit or Yen or Rupee or whatever) stretch further. Frugal ways of living become the norm. Wants are tossed aside as we struggle to meet our needs. 

This situation also forces us to look out for ways to improve our income. We look far and wide for such opportunities and our minds may become more susceptible to “get rich quick scams.” 

I am not sure if there are any scientifically proven relations between rising scams, fraud and con jobs during harsh economic times, but it sure feels like it. 

The world has already been exposed to the Nigerian scams, or what is commonly known as 419 schemesVariations of these scams are now circulating over the Internet, seeking the gullible amongst us to invest or to pay some sort of fee in the promise of some untold riches.  

We, Malaysians have been exposed to a variety of scams. And some of us are still falling for them. 

Like this lady who lost a total of RM200,000 (US$ 62,500) in the belief that she had won RM90,000. 

And this lady who tried to ward away bad luck and ended up getting a lot more than she bargained for 

And yet another lady who fell for the “I am from your bank and I need your credit card as there is a virus in the chip” line.  

It seems that certain types of people are more susceptible to fall for scams. The victims are usually: 

-         married men, (despite the examples above)

-         have college degrees, (so education does not seem to be a major diferentiator)

-         more optimistic about the future,

-         earn more than USD30,000 and

-         those who rely on themselves for investment decisions. 

I also think there has to be an element of greed involved, in that the victims expect returns that are ballistic.  

There is a lot of skill involved in scamming. Those of us who have seen scam themed movies like “The Sting” can appreciate the amount of planning and precision that was put into the whole exercise.  

These scam artists are now armed with technology and throw their nets far and wide at negligible costs. Even if one or two victims are caught in the net and reeled in, the ROI’s the scam artists gain are truly phenomenal. 

As fears of economic depression gather steam the scam artists are going to have a field day getting their victims.

Over the last six months, I have been approached by: 

- a person who called my mobile number and claimed to be calling from our High Courts on some offence that I was supposed to have committed. Luckily our local papers had been carrying stories about such scams so I was able to get off. (The scam is to frighten the victim that they were being charged by the Anti Narcotics police and that all their bank accounts would be frozen. They would then be “advised” to transfer their money to a “safe” account, which of course would be emptied soon after by persons unknown.  

- a person who emailed me claiming to be working for a reputable London jeweller. She claimed that the jeweller was buying some cleaning fluids which could be obtained from Malaysia at a fraction of the sales price. She wanted me to be her agent so that I could buy the stuff and export it to her. 

- a person who claimed that his client, a philanthropist had died leaving a fortune and his will required that the money be given to another philanthropist. And that my name had been selected! 

I urge each and everyone of us to be even more careful now. When approached by people we don’t know (these days the approached are usually by text messages and email) offering fantastic investment opportunities…..just stay away. 

As bloggers we can also do something about these scams. We, too, can spread the word around. We can tell ourselves, our family members and friends about any scam that we run into and remind them that opportunities that are too good to be true are usually just that.  

Additional useful readings: -

a) Former con victim, Annie McGuire’s web page to help prevent fraud 

b) The FBI’s page on some common fraud schemes. 

My grateful thanks to those of you who have Stumbled my posts

Friday, June 27th, 2008

                 

Image Credit: flickr.com 

Recently I have noticed spikes in traffic coming from Stumble Upon.

As I am still technically and technologically challenged, I have not been able to determine who Stumbled the posts.

I must admit that, as a new and inexperienced blogger, I feel a tremendous rush whenever I see this spike in traffic. Just like the baby…..you can’t get happier than a happy child, that’s for sure.

I just want to say many, many thanks to those of you who Stumbled the posts.

God bless you all!

Thank God, my two elder girls have secured their first jobs

Monday, June 23rd, 2008

Since February 08, I have written a series of articles on how I intended to help my daughters secure jobs they would like. The first article in the series, posted on the 24th February covered an overview of the process and the last article that covered the preparation for the interview was posted on the 4th May 2008. 

At the time of writing these articles, both the elder girls were still in college. In April the second girl returned home after completing her studies in Finance and Accounting whilst the eldest girl, Along, returned on the 10th June 08 after completing her studies in Psychology at the University of Bangor, Wales.  

Along, our eldest has always wanted to work with children. (However it seems that her younger sisters and brother don’t quite count….hehe.) She has gotten a job with an educational company teaching children. Along will be involved in evaluating the methods of teaching used by the institute. She has indicated that she might pursue her Masters in Educational Psychology in a Malaysian University on a part time basis.  

Azah, the second has gotten a job with one of the Big 4 (or 5 or 6) accounting firms. With no experience, she would be starting at the bottom of the ladder (as I did so many years ago.) And yes, she’s well aware of Steve’s concerns over working one’s heart out in the Big 4 or 5 or 6 firms.  

My wife and I are very happy for them, as they prepare to step out of the Fathersez household to begin their lives as self sustaining adults. We believe we have done our best to educate them, at least the basics, of life skills and have no doubt that they’ll do justice to the Fathersez name.  I am now working on the talks with them on the next phase of their lives, career as well as financial.

Above all, I want to try to ensure that they do not make the gross mistake I did in not managing my career. 

Today, as I see the looks of joy on the kids’ faces, now that they have secured their first jobs, I want to thank God and all the very kind bloggers whose resources were freely made available to me. 

On the top of the list would be Free Money Finance, who has a truly rich and extensive resource list on careers. 

Clever Dude, Life Clever, Job Mob and Gather Little by Little are also blogs I referred to frequently whilst writing my series.  And of course the indefatigable Squawkfox, who is also running a series on the intricacies of a job hunt. 

I thank God and all of you for this “gift”.

The Carnival of Personal Finance – 3rd Anniversary Edition

Friday, June 20th, 2008

Picture Credit: Google Images 

The Carnival of Personal Finance has chalked up its 3rd Anniversary. This 3rd Anniversary edition was hosted by Consumerism Commentary, the blog which also has the distinction of having started off the Carnival with the 1st edition being posted on the 20th June 2005! 

I particularly enjoyed the following posts: 

a)    Alex is of the view that we can get rich by helping others, and he has a solid argument to support his case. (He thinks the term “trade” may not convey the same emotional meaning . Read his post and find out if you agree.)  

b)    Jake has reached what he calls the end of the road. Luckily one of his readers has worked out a plan that might get Jake out of the pits. It needs discipline and commitment, but then, when we are at the end of the road, should we not be d and c and try to get out! Jake should also remember that “Rock bottom should be the solid foundation on which to re-build his life.”  

 c)     Dog Ate my Finances is doing some soul searching. It seems that being the one in the family with the biggest paycheck had lulled her senses into spending a little too much. Thus not only missing her debt reduction goals, but getting deeper into debt. I think that if she continues to blog about her finances, the motivation will be strong. 

d)     Dorian gives 9 tips on how to actively manage our careers. I wish I had read this post years ago. I have listed “not managing my career” as one of the biggest mistakes of my life.  

e)    Uncommon Cents gives some great advice. We should look at everything in our life and evaluate whether it is a need or a want, and even if it is a need, we should check if it could be done in more frugal ways. Really sound advice indeed. 

This is the great thing about the Carnival. The articles presented are many and address a great many issues many of us face or might be soon facing. So there should be always something for everyone.  

Go on  and take a look, yourself.   

Applying 5 S Methodology, the cornerstone of Japanese lean manufacturing strength in our daily lives – Part 2

Tuesday, June 17th, 2008

disorganized1.jpg

What do you want your life to look like…organized or diorganized?

Picture Credits: Google Images 

Last week we talked about “SEIRI”, the 1st “S” of the 5S methodology that forms the cornerstone of Japanese manufacturing practices. 

Consistent practice and application of the 5 S Methodology helps to form a strong foundation for our journey into continuous incremental improvements in our workplace, homes and lives.  

Today let’s look at the 2nd “S”. 

As quoted from SiliconFarEast.com

Seiton

Seiton, or orderliness, is all about efficiency.  This step consists of putting everything in an assigned place so that it can be accessed or retrieved quickly, as well as returned to that same place after use.  If everyone has quick access to an item or materials, work flow becomes efficient, and the worker becomes productive. 

The correct place, position, or holder for every tool, item, or material must be chosen carefully in relation to how the work will be performed and who will use them.  Every single item must be allocated its own place for safekeeping, and each location must be labeled for easy identification of what it’s for.  

All of us must have at one time another seen some workshop, where more time is spent in looking for tools or parts than actually doing the service.  Examples may be motor workshops with wrenches, pliers and screwdrivers strewn all over the workshop floor. The mechanic will be spending time looking for spanners and pliers amongst a disorganized pile of tools. 

Other examples may be we ourselves spending time looking for car keys, remote controls, the fever medicine that we are sure we have, etc. 

Time wasting and unproductive activities done only because we did not store or keep them in their assigned places.                        

It is clear SEITON has its place in our daily lives, in our workplaces and our homes. 

The more established blogs have written about the usefulness of organization in our lives. I don’t think I can do better, so I am providing the links. 

a) Clever Dude’s guest post on Five Cent Nickel on organizing one aspect, i.e. tax records, 

b) Get Rich Slowly talks about how keeping everything in its place helps in organizing our finances, 

c) Dumb Little Man’s excellent write up on the 7 secrets of the super organized and

d) The Simple Dollar’s take on the value of getting organized. 

Make an attempt to be organized.  

Keeping everything back in its rightful place after use is a step that we should practice as a matter of course.  

This is SEITON at its best.

Applying the Bengkang Theory on our goat farm

Monday, June 16th, 2008

Some years ago I worked for a boss who was one of the best communicators I have ever known. He could colourfully describe almost any management fad or theory in such a simple manner that anyone could understand.    

His description of getting ISO certification was his “Bengkang Theory”. No Malaysian can profess not knowing what a “bengkang” is. It is a local Malaysian delicacy served at almost every function, and we have busloads of functions all year around.  

A Malaysian delicacy……..a bengkang cake.  For a recipe, please check out this site.

My former boss’s theory was that: 

If the correct and required amount of ingredients are listed, and the way to mixing them up shown clearly, and the temperature setting of the oven and time needed in the oven are stated, then any body could make a “Bengkang”. 

So relatively complicated tasks can be simplified in such a manner that novices can produce the desired results on a consistent basis. 

And for our goat farm, we intend to implement and practice this Bengkang Theory.  

The farm will be manned by workers who do not have degrees or diplomas. The workers would be just normal people with basic intelligence and perhaps a lot more street smarts than the most of us who read blogs like this one. 

My intention is :- 

a)    Sit with the workers and prepare simple drawings of the basic work flow and processes. 

b)    Go through with the workers on these processes until there is complete and clear understanding. 

c)     Prepare checklists for the repetitive work to be done daily, weekly and monthly. And let them have the freedom to simplify the work processes as they go along. These simplified processes, once agreed upon to be re-documented and the process repeated.  

The primary goal is to keep the goat sheds scrupulously clean, and the goats well fed, healthy and reproducing profusely.  

If we get this right….the rest should be easy.  Time will tell.        

My children’s allowances – Phase 2

Sunday, June 15th, 2008

Google Images 

Since January this year I have been giving weekly allowances to my younger children.  

Abang, our only son who is 13 and his sister, Nana, 12 years old both get allowances, whilst the youngest Ain, 9 years old has been told to wait.  (I thought she was a little too young.) 

Abang and Nana also have to write up their receipts and payments in an accounts book which they have to show me each time they receive their allowance. 

And they have to save at least 10% of their allowances. 

On the 2nd June, all four of us went to the bank and banked in their savings into their accounts. (In Ain’s case, I contributed some money. I was a little surprised when she reminded me about the promise I had made on her savings.) 

Now we have changed the allowance interval to monthly for Abang and Nana. They still have to keep their accounts books updated, and save at least 10%.  

Ain has also asked for an allowance and an accounts book. She has been started off on a weekly allowance and I have showed her how to write up her accounts. She surprised me with her understanding of how the spending should be done. I think she will be a frugal spender.  

These are the money lessons we have learnt over the last 5 months. 

a)    The boy “misplaced” his accounts book. As such I could not sit with him and reconcile the amounts shown as “savings” in his accounts book and the amount banked in. This upset me a bit. A new book has been bought for him to start the monthly accounts, and he has been given a “lecture” on not to misplace the book again.  

b)    Nana, on the other hand, went out with her friends on an outing and spent almost all her savings. She now fully understands how easy it is to spend something that took so long to save up. Her record keeping is meticulous and, I must say, excellent.  

The lessons may not seem much, still, my children have learnt more in the past 5 months than in all their lives before this. I have some regrets about not starting this allowance system earlier, but better late than never, right?

At least some hard money lessons are being learnt now and the stage is being set for the “always earn more than you spend” talk with my children.                

Round up for week ending 12th June 08

Thursday, June 12th, 2008

Last week was pretty hectic.  

My wife and I went to Tanjong Balai, an Indonesian port that is about an hour’s ferry ride from Malaysia, for sourcing the Indonesian workers for our goat farm.  If all goes according to plan, the 2 workers should be in our farm by the end of this month. 

My eldest daughter returned home from Wales after completing her Bachelor’s Degree in Psychology.  

Meanwhile posts that I think are worthy of mention are listed here.

Malaysian fuel prices were raised by a whopping 41%, to RM2.70 a litre on the stroke of midnight, the 4th of June 08. This is going to (actually it already has) unleash a tsunami of price increases across the board. Malaysians now have to tighten their belts and it’s not going to be easy to tighten one’s belt by at least 20% overnight! 

A guest post on Clever Dude makes some compelling points for the better side of debt. The roads to all mistakes are paved with good intentions, so if we are not disciplined, then all debt becomes bad. If we are disciplined, debt can be a useful tool.

The Chief Family Officer celebrates the 3rd anniversary of her blog. And the Dude who is also Clever celebrates his 2nd!  To the CFO and CD, my heartiest congratulations on your anniversaries and all the best for many more to come.  

I found Pinyo’s post on how he started the M Network very informative. Over the past year, I have seen a couple of networks being formed and it looks like a good idea. Maybe I should try to see if I can help form a Malaysian PF Group.  

Congratulations to the Frugal Duchess on the launch of her first book, “How to Live Well and Save”.  She is a great writer and has shown her prowess at frugality in her blog postings, so I’m sure her book will be a great success. 

This post by Jeff on following our dreams and desires was an inspiring one for me. Especially his No: 3 …..”Don’t be afraid to fail”. This statement dovetailed well with another quote I read earlier, attributed to JR Rowlings….Rock bottom is the rock solid foundation on which I shall build my future…..or something to that effect. 

The fear of failure keeps us from trying to live our dreams. Reading inspiring posts like Jeff’s helps in overcoming these fears.  

The Art of Manliness had an interesting listing of good and bad TV Dads. My favourite role model would have to be Dr. Huxtable, that witty cheerful doctor who has a way of resolving every issue a family with 5 kids could possibly encounter. 

Have a great weekend, folks.   

Converting my car to a NGV – My Experience

Wednesday, June 11th, 2008

In view of the recent steep increase in fuel prices in Malaysia, my friend, KC Lau who blogs about personal finance suggested that I write about my experience in converting my car to a NGV. Thanks, KC for this idea.

I don’t remember when the option to fit cars with NGV kits was made available to Malaysians. (Harry says it was 23 years ago.) 

Predictably and completely befitting the name “Government”, the follow up was, shall we say, sad. Reading Harry’s blog should give us an idea of how sad! 

- There are only 40,000 users after 23 years of implementation.  

- The number of NGV filling stations (58 stations) is still very low causing  long queues at almost all of Petronas Petrol stations with one or two dispensers installed.  

And Malaysia is a huge producer of natural gas! 

So with petrol prices being relatively low and NGV availability very poor, very few Malaysians bothered to convert.

(You can see the history of petrol prices in Malaysia extracted from Najib’s Blog. (RM3.80 = USD1)) 

01/05/2004 - RM 1.37

01/10/2004 - RM 1.42

05/05/2005 - RM 1.52

31/07/2005 - RM 1.62

28/02/2006 - RM 1.92

04/06/2008 – RM2.70

The price increase in February 2006 made me start feeling the pinch. I drive an average of about 130 – 150 kms per working day and the fuel bill was getting a bit painful. I researched some websites on NGV and then took the plunge in August 2007. 

I got the car fitted in a workshop near my home and that cost me a total of RM 6,025. This included a “fee” of RM 125 because I used a credit card and another RM 700 when I changed the tank to a larger one.  

My distance travelled from January 06 (when we purchased the car) to August 2007 and fuel costs were 48,752 kms for RM 9,194.49 or RM 0.189 per km.  

Since then I have travelled a total of 40,907 kms (as at end of May 08), and paid RM3,332.97 in fuel costs or RM0.0815 per km. 

A savings of a whopping 56.8%.  (We keep detailed car logs, so these figures are easily available.) 

And these savings are before the recent 41% price hike and a relative high use of normal fuel. The savings will really start kicking in after I factor in this huge increase.  

Besides the obvious cost savings the other issues are:- 

a)    The full NGV tank can only be used for about 150 kms, thus needing frequent refilling. In my case it is daily. For me this is the biggest negative.  

b)    The filling up of the tank is dependent on the pressure at the dispenser being used. So there is some inconsistency. A full tank today may not give the same distance as the full tank of yesterday. Still the differences are not that great. 

c)     There are insufficient NGV stations around. Another big negative. So quite often I have to use normal petrol after the gas runs out. The National Oil Company, Petronas has announced that they’ll be adding in another 100 stations. Whilst this is good news, I’ll feel better once the stations are up. 

d)    I keep a print out of the NGV stations in the country. Then if by chance, I am near one, I try to fill up. Now a number of the stations have been etched in my memory.

e)    Sometimes, there seems to be some delay in the NG reaching the carburettor. Hence the car sort of jerks or doesn’t move. This only happens when we are starting the car. A little irritating at times, but not really a big negative.  

f)      There is less power when we use NGV. This is hardly a problem, since we can seamlessly switch on to petrol if we need a burst of speed for overtaking or something like that. 

g)    The NGV tank takes up part of the boot space. This problem is worse for the MPV’s and the smaller cars. I drive a Toyota Camry and so far I have had no problem with the reduced boot space.  

h)    NGV is acknowledged to be better for the environment as well as for the car. However, I have not noticed any clear savings on the servicing costs.  

I think NGV is the way to go. It is clear that Malaysians are moving by the droves to convert. Good for them!  

With increasing consumer awareness and pressure, I am sure more  NGV dispensing stations will start sprouting up. Then Malaysian motorists would be back to the days of “cheap fuel.”   

Applying 5 S Methodology, the cornerstone of Japanese lean manufacturing strength in our daily lives – Part 1

Tuesday, June 10th, 2008

An organaized work place - A Teppanyaki chef at work

Jeff at the Supercharged Life said it best….A better life requires continual commitment.  A commitment to relentless series of small and incremental improvements in all facets of our life. Occasionally we may hit a dramatic leap forward, but the cornerstone has to be our ability and commitment to improve slowly and steadily. 

Jeff also mentioned Kaizen, the Japanese art of continuous improvement. The Japanese, in their wisdom, have created a methodology which if learned and applied will help us achieve this continual improvement. The whole concept of Kaizen may be a little complicated, but there is one aspect of Japanese manufacturing methods which can be quite easily understood and applied.  

The 5 S Methodologies. This will help form a strong foundation for our journey into continuous incremental improvements in our workplace, homes and lives.  

SiliconFarEast.com, a comprehensive online resource for semiconductor manufacturing has this to say about 5 S. As their write up is simple and easily understood, I’ll quote them here. 

Quote 

The 5S Process, or simply “5S”, is a structured program to systematically achieve total organization, cleanliness, and standardization in the workplace.  

A well-organized workplace results in a safer, more efficient, and more productive operation.  It boosts the morale of the workers, promoting a sense of pride in their work and ownership of their responsibilities.      

“5S” stands for five (5) Japanese words that start with the letter ‘S’: Seiri, Seiton, Seiso, Seiketsu, and Shitsuke.   

Seiri

The first step of the “5S” process, Seiri, refers to the act of throwing away all unwanted, unnecessary, and unrelated materials in the workplace.  People involved in Seiri must not feel sorry about having to throw away things. The idea is to ensure that everything left in the workplace is related to work. Even the number of necessary items in the workplace must be kept to its absolute minimum.

Because of Seiri, simplification of tasks, effective use of space, and careful purchase of items follow.                                                                                                                                                                                                          Unquote  

This is the process of no mercy decluttering. Anything that is not needed is kept or thrown away. This frees the worker from having to spend time on unnecessary actions or steps in sieving through tools etc. to find the one needed.  

                                                                                       

Can this workplace be more organized. Perhaps, perhaps not. 

This process can be done for the home or on ourselves. Much has been written about the advantages of decluttering our homes. Blog posts with tips on decluttering as well as the joys of a decluttered environment are many. You can have a look at:- 

- The Closet Entrepreneur’s 4 part series on this. (Some of the parts are still on the way.) 

- Tipnut’s 10 tips on mastering a messy home. 

Blunt Money’s one in – three out theory that works for him. 

- Clutter is alleged to breed negativity and low self esteem. 

On a personal level, we can also practice SEIRI. 

 I am sure; we have seen people or even personally experienced looking for something or another by checking each of the 20 or so pockets all over our pants and shirts. Not only is this time wasting but irritates the people who are all standing in line behind us. For example at immigration or ticketing counters. It’s all a function of having too many pockets.  

I cringe when I see people carrying 2 cell phones and answering the wrong one. Or too many credit cards, or too many store cards or handbags full of all kind of things including forks and spoons. Or two handbags!  

There are also many blog posts on how decluttering can help us at the personal level.  

- Read how decluttering even helps in promoting our career. 

In following posts, we shall look at the remaining four of the five “S”.

Though I have yet to sit down and formally talk about 5 S to my children, I have yelled 5 S, 5 S often enough while they are looking for something or another. My kids already know that 5 S is some system or method. I now have to take steps to make this a formal internal system in our household.    

Images Credit: From Google

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