Father Sez

From and to parents - parental advice to our children on personal financial management and life.
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Archive for February, 2009

Links – The Appeal to Malaysian Politicians Edition

Saturday, February 28th, 2009

Anas Zubedy has taken out a full page advertisement in the Malaysian local papers beseeching our politicians to stop, well, politicking, and focus on the dark economic clouds that are getting darker by the day.  

Almost everyone, I have talked to, is concerned about the lack of economic leadership in our country. The last one week I have been looking at our newspaper headlines and none of them seem to be on the economy. And this is late February 09, not February 08, for  God’s sake! I really hope and pray that our politicians come to their senses immediately, or they might have a bigger problem on their hands if the unemployment situation gets out of control.    

Patrick at Cash Money Life asks us whether it is ethical to use our business computer for personal use. I think this question can be extended to all business tools, like cars, phones, credit cards etc. The biggest, I suppose, would be the usage of time.  I think there has to be balance. The rules can be set, and action taken only on those clear cut slackers.  

Bigger Pockets wrote about the opportunities available by using distressed properties for a different purpose. I think this is going to be widely available all over the world. Not far from where I live, a building built as a wet market has stood empty for years. It now is a flourishing seafood restaurant. Others are changing vacant industrial buildings into indoor games courts.  

The Glbl guy addresses a very sensitive and immensely important topic. Sort of an instruction manual to guide his loved ones on managing their  financial lives if anything untoward were to happen to the manager. I must say that Glbl’s approach appears to be the most organised for me to follow. But like he said, doing it is sad and immensely difficult.  

TSD asks about the right thing to do when a store overcharges or undercharges us. I agree with his conclusion. Just as we should be unhappy and make a fuss if we were overcharged, it is fair to give the same right to the store if we were undercharged. Like Dr. Covey said, “being principled, means never having to worry about being caught”. 

Lifehacker presented a tutorial on how to build a shoe phone – Get Smart style. Like Jackson commented it is a product that is rivalled in ingenuity only by ridiculousness.  I remember having to take my shoes and belt and getting them X rayed whilst boarding a flight from Turkey to Kazakhstan. Wonder what the guards would do if they saw a phone in my shoe? 

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

Great Opportunities for the creative and the enterprising

Friday, February 27th, 2009

This morning I read a post by Bigger Pockets that talked about the opportunities in turning distressed properties around with different businesses. 

This is a thought I have long harboured in my mind. Malaysia still has a fair number of buildings lying empty and abandoned from the days of the Asian Financial Crisis. That was more than 10 years ago! And quite a number of factories have since gone vacant when we lost our competitive edge in manufacturing to Vietnam, Cambodia and China.

And now, with the present miserable economic climate, many more buildings are going to go empty. Buildings can go vacant or abandoned for any number of reasons. They can be unsold, or the businesses they were meant for fail to take off, or the owners go bust due to other problems etc.  

There is a building not far from where we live, which was custom built as a wet market. It was empty for several years. One enterprising guy seems to have leased the building and it is now a thriving sea food restaurant.  Another nearby factory building has been converted to an indoor futsal and badminton court, and appears to be doing well. 

Like Bigger Pockets pointed out, even if the unemployment rate is 10% (Malaysia’s rate is much lower, apparently), we should focus on the 90% who are employed and see what kind of a business can be created to serve this market. And the chances are that we should get fairly good deal on the vacant building. I also believe the Council Authorities will also do their bit. After all which District Council wants these ugly empty buildings on their watch? 


Abandoned buildings near Lukut

Last week, I saw this row of shophouses about 10 kms from one of our seaside resorts. I last saw them about 3 or 4 years ago and they were empty then. And they are still empty now.  


A closer view. Quite a lot of real estate for the taking. The question is what should we take it for?

I wonder when someone will come up with some creative idea for some new business there. A private school or a trade school perhaps.  An eatery, maybe?  Something that when we all finally get to see, will make us all go, “why didn’t I think of that!!!”

The Ashoka Tree, my curiosity satisfied after 11 years

Wednesday, February 25th, 2009

Picture Credit: The Hindu 

I first saw or rather noticed the Ashoka Tree whilst working in Ghana. This tree looks like a folded umbrella with the branches leaning downwards. I had never seen the trees flowering and neither had I seen any fruits on the trees. I did ask the locals why people grew these trees, since they did not seem to provide much shade and neither were they pretty. I did not get any logical answer.  

During a trip to Mauritius, a couple of years later, I noticed that visiting Indian dignitaries like the late Madam Indira Ghandi as well as her son, the late Rajiv Ghandi (both previous Prime Ministers of India) had planted this tree in the Pamplemousses Garden.

The trees, had markers showing the date and the name of the person who had planted the tree. And this was how and when I got to know that they were known as Ashoka trees. I also realised that there must be some history or significance attached, as they had been the tree of choice for two former Indian Prime Ministers. But I did not do anything to find out more. 

A couple of weeks ago, during my trip to the northern tip of Borneo, I saw these trees again. Some of them had been planted by the roadside and also in several of the village houses around Kota Belud. This time I just had to find out more.   

We stopped over at a roadside tea stall and talked to a couple of locals who were also having tea. It took a little while for them to warm up and then they told us what they knew about the tree. 

They had never ever heard the term, Ashoka. To them the tree was called “Pokok Penunduk”, or “Taming Tree” or “Tree that makes you submit”.  If we planted the tree in front of our house, any visitor would accord us respect and dignity. If we wanted to go into some negotiations then we should have some leaves in our pocket and be assured that the negotiations would go our way.  

This was the first time I had heard this story and I thought that I should write a post on this tree.

Whilst doing some additional research, I was amazed at the seeming “richness” of his tree that I once thought useless.  

Wikipedia says that the tree is considered sacred throughout India and Sri Lanka. Lord Buddha is believed to have been born under this tree. And surprise, the tree does bear beautiful flowers. In fact, the tree is prized for its flowers! 

Dr. Rupa Shah, a trained practioner in allopathy and homeopathy has nothing but high praise for this tree. She ranks it as one of the most sacred and fascinating of the millions of species that are probably available in India.

I quote below from her write up.

Ashoka is a Sanskrit word meaning without grief or that which gives no grief.

In India, drinking the water in which the flowers have been washed is widely considered a protection against grief. It is a healer for deep seated sorrow, sadness, grief, and disharmony in one’s inner being due to events such as bereavement, failure, suffering, disease, and isolation. On using this essence, a profound inner state of joy, harmony and well being is produced. It works very gently, in that it changes one’s perception of the sorrow.

Ashoka is also seen as a remedy for women, allowing them to be feminine. The tree is regarded as a guardian of female chastity. The Vrikshadevatas–the gods of trees who represent fertility–are known to dance around the tree, and are worshipped by childless women.

Herbally, the bark of this tree is a household remedy for uterine disorders. The essence also helps women to be fertile. It is said that ‘weeping woman, weeping womb,’ in that the woman’s emotional state affects her reproductive organs. Therefore, the essence, like the herb, helps in the uterine problems like excessive bleeding, irregular menstrual periods and infertility.

I must say that I was quite fascinated by what I found out from my little research into this tree. Though 11 years late and despite the fact that this research has no commercial value, it sure looks to me like something that the Ririan Project describes as things in the world that make me pause, think, and end in a good ole hmmmm…”

But somehow it feels worthwhile.  And I am sure that during my next trip to Kota Belud, I’ll be able to tell the villagers a completely different view about this tree.

Beware the law of immediate indefeasibility

Monday, February 23rd, 2009

One question that was often asked of me from my Ghanaian colleagues during the time I spent in Ghana was “How do we get rich?” We have to appreciate that the unemployment rate in Ghana then was very high, judging from the number of responses we got to our positions available ads. Apparently it was around 11%. And with a per capita GDP of USD1,500, wages and salaries were not high either.      

At that time my standard answer was “Buy land. Buy a piece of land that is cheap and outside city limits. Just leave it there. At least you would be trying to make sure that your children get a chance to get out of the vicious poverty cycle.” 

I was shocked at the reply that my colleagues gave me. Apparently the land title system in Ghana (then at least) was not very dependable. You could get 2 or even more people with seemingly valid titles in their respective names for the same piece of land. 

Secondly land encroachment was fairly rife. Land left idle for some time might see someone coming in and building a house on it. And the risks were higher the further out the lands were. 

I was shocked because Malaysia had an excellent land title system. Once you had a valid title in your name your proof of ownership was unshakeable. 

So I thought. Looks like I have to rethink my faith in the Malaysian land title system.  

There is a “Adorna Properties Sdn Bhd v Boonsom Boonyanit” case where it seems that someone forged a land transfer and got a title registered in their name. Then they sold the land. And the original owner found out and sued. It seems that the buyer of the land got to retain the land because of this law of immediate indefeasibility. 

I have to take note of this. Though I feel something is not right with the logic of this judgement, this is now the legal precedent in Malaysia, I think.  

At present only my wife and me know about the titles to the land that we own. None of our children, including the two elder girls know the details. If someone quietly forges my wife’s and my signature and somehow gets the land transferred, it looks like the land is gone for good. 

Maybe I should pledge the titles to some bank for some loans. With the pledges registered, the forgers and, I am sure, their accomplices in the land registration offices may not be so successful. 

Links – The Elephant Tamer Stick Edition

Saturday, February 21st, 2009

That our forefathers knew a lot more than we do about the benefits of herbs, leaves, roots and other stuff found in jungles is well accepted. Still the bulk of city folks today might not know that there were sticks that were used to ward off evil spirits, negative energies and even tame wild elephants. This is a story carried by one of our national English dailies today. 

I have seen “tas” sticks sold in the market in Kota Kinabalu, Sabah. I was told that these sticks could ward off wild animals. I did not buy any as I did not see myself meeting any wild animal anytime soon. And also because I had no idea how a genuine “tas” stick or a “tas” tree looked like. I must try to find out more.   

Amongst the other posts that I read, some that found interesting are listed below.

Pinyo has quite a solid tutorial listing the pros and cons for refinancing. In Malaysia most of the banks insist on Mortgage Reducing Term Policies, which cost a bomb for the more senior of us. Hence many of older one amongst us find the cost of refinancing prohibitive. Incidentally a banker friend told me recently that most of the transactions being done these days are for refinancing, both for cheaper rates and additional funds. So some Malaysians seem to be socking it away for either a rainy day or for taking advantage of the opportunities that are sure to come by.  

I really enjoyed this piece by GLB. A frugal family trip just 20 minutes away from where they live for a fun time with the family at a cost of $1 and gas. This is exactly what our family has planned for this year. 6 of these kind of trips. The first has been done and the time is nigh for the 2nd one.    

The DLM wrote about the value of having a personal mission statement. I wrote one, a personal mission statement I mean, many years ago, after reading Dr. Covey’s 7 Habits. Now dust has gathered and it lies somewhere deep in the archives of my laptop. Though I read our Family Mission Statement fairly regularly (something like once or twice a year), I have not done the same of my own. I shall change this with immediate effect.  

David had a bone to pick with his gym which had some rather sly renewal clauses slotted in his membership agreement. Lucky for us David is no pushover, and he gives us a rundown on what he did to contain his losses. No wonder we are told again and again to read the fine print. 

Steve writes about the lifting of financial curtains, as THE CRISIS works its way whittling down people’s savings. Just who are rich and just who were living on debt is slowly being revealed. I felt some goosebumps reading this. We never know when our financial curtains will be opened. Let’s keep our “financial house” in order so as not be ashamed if the curtains ever get drawn.  

I liked this article by Seth Godin on his view that the era of the professional reviewer may be over. I would go even further. It should never have been there in the first place. I mean, how could one person or a few persons ever be the judge on what is good food, good hotel, good airline, good book, clothes, fashion or movie. Many years ago, a Malaysian movie critic listed his ten best and ten worst movies of the year. I had seen none in the ten best list, but you know what, I had seen the worst, not once but twice and I had loved the movie.It was now Governor Arnie’s Conan the Barbarian. And I’ll probably see it again if I get the chance. Ah, well.   

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

I must really guard my multiplier effect. After all, it all starts at a micro level first.

Friday, February 20th, 2009

Recently a friend sent me a link to an International Herald Tribune article that talked about Dubai spiralling downwards. Not too long ago, Dubai was more in the news for the highest and the most posh buildings. And it was unthinkable that the party would ever end.  

Now the IHT reports that cars are being abandoned at the airports as the owners flee the country leaving a trail of debts. Property prices dropping 30% in 2 – 3 months. Well, the party seems to be coming to an end.  

I read this IHT story not long after reading Brip Blap’s “Trickle Down”. BB wrote about how as the heavy hitters got laid off or had to tighten their belts, they would in turn let go others lower down the food chain like nannies and maids. Small business gets hurt and so on. The Trickle Down effect. 

Almost 90% of Dubai’s population are foreigners. Indians, Malaysians, Europeans and God knows who else. I expect that many of the Indians and Malaysians working in Dubai could be considered relatively “upper middle class”. Getting paid in Dirhams and in amounts far higher than those working at comparative jobs back home. They and their families might or might not have adjusted to this upper middle class life.  

I think most Asians working in Dubai would gave lived a fairly frugal life, and not extravagant lives. But some might have been unable to save because of having to support a large extended family back home. These people will be badly affected by this “trickle down” effect if they lost their jobs. On the other hand some of these families might have stashed away significant amounts of this income in the form of savings. Some might have invested in property or businesses back home. When they are sent back, there might likely be a “trickle up” effect as they start small businesses back home. 

The Fathersez family also has this responsibility. We have 3 people earning their livelihood from our goat farm. Two are Indonesians whilst the third is Malaysian, my partner. I am sure the lives of my two Indonesian workers’ families have improved many fold since they started working with us.  

I must try my level best and guard the business of our farm.  

One for reasons of getting a return on our investment.  

And two, more humanly and more importantly, to prevent a “trickle down” effect being caused by me.

MLM – a way out for those wanting to make a change in their lives

Wednesday, February 18th, 2009

There was a time when admitting to being an insurance salesman was a little shameful. This was despite the fact that insurance products were complicated and a very important  part of a person’s financial life. The industry has sort of rebranded and now insurance agents are better accepted as Financial Planners and such. There is also more regulation in the appointment of insurance agents etc. 

Not so for MLM. 

There is so much negative stuff written about MLM that most MLM’ers prefer not to admit their participation in the industry. I am quite surprised.  

I think that MLM is one of the best distribution and marketing channels any company can think of.  If not the best.  

Every business needs:

- to sell a product or service for which there is compelling demand and at a price that is competitive,   

- a set up to produce or make the product or the service, 

- a set up to distribute and deliver the product or service, 

- a set up to coordinate all these. 

These days there are many variations to all these, outsourcing, insourcing, internet marketing etc. MLM is just one of the ways to handle the task of distribution and delivery.  

So how did the MLM industry get tainted with such a bad image? I suppose it may because of some of those ne’re do wells who used the powerful MLM marketing/delivery system for their own shady intentions and along the way fleeced the distributors who had signed up. 

Well, these ne’re do wells and serial conmen exist in every industry and in almost all Governments. We don’t have to brand every MLM company as a con job just because of some previous bad experience or experiences.  

We are now living in dangerous and highly uncertain economic times. Whilst all of us should tighten our belts, we should not ignore the other side of the equation of increasing our income.  

And one way, say what you will, is MLM. 

And no matter what company you work for or own, if there is no compelling product or service to sell at a competitive price, that company is doomed anyway.  So if you are looking for a change in your fortunes, please add MLM to your list of options. But remember to do your homework well. After all, you are about to embark on your very own small business, that does not have many of the disadvantages of traditional small businesses. Here is one guide to help you choose if that particular opportunity is the one for you

I leave you here with one possible MLM opportunity, in which my wife and I have a vested interest.   

Am I qualified to blog about personal finance?

Monday, February 16th, 2009

I have been thinking quite a bit about this lately. I am not referring to the standard disclaimers most personal financial bloggers put up on their blogs. My doubts go a little deeper than that.  

This blog is merely a channel of communication between my elder children and me on learning from the pf and life mistakes I have made. It’s not intended to be a forum for professional advice from a legally qualified pf guy. So I am not worried about the rich widow who ploughs all her money into gaharu trees, based on an article she read in this blog and then tries to sue the pants off me.  

Then why the doubts? 

My doubts have been triggered off firstly by the fact that I am now at an age when I would want and expect my children to be happily living off their passive income. And I am not.  

And secondly, and in fact more powerfully, by Moneymonk’s recent article on his getting fed up with personal finance gurus’ advise. 

What if my elder two daughters ask me why is our family not rich if I am supposed to be smart enough to advise them? What if they start questioning my suggestions?  

I have tried to justify by comparing myself with the giant investment banks who are now hanging around Washington D.C. with hat in hand. They should have had all the McBrainy people with every possible forecasting model known to man. And the best of their best advice should have been reserved for their employers. And we all know what happened.  

But this is a lousy comparison.  

My daughters know that whatever story I am telling them is based on my true life experience. Backed by total sincerity. So if I ask them to do something that I had not done or done the opposite, at least they’ll know that I am asking them to do something that is not a clear no-no.  

This is what I am clinging to. 

So I may not be qualified. So what, big deal!  My daughters know that no one will love them and want the best for them more than their Mama and me. This is what I am banging on to support my intending to give advice to my kids.

I am sure they can live with this logic. And if I feel it’s good enough for my kids, I sure feel it’s good enough for you, my dear reader.

Links – the Valentine Day’s, nope, Kenny Sia’s Edition

Saturday, February 14th, 2009

Today may be Valentine’s Day. Still I think we should celebrate Kenny Sia today rather than St. Valentine. Kenny, one of, if not Malaysia’s most popular bloggers, shaved his head bald to raise money for the Sarawak Children’s Cancer Society and raised a whopping    RM 65,325.01. I think Kenny has done all Malaysians proud. So doesn’t it make sense celebrating Kenny’s efforts today.   

 On to the other posts I enjoyed,  

Jeff over at the Supercharged Life pays a tribute to the good Samaritans of this world. Regular citizens who step up to the plate to help other humans in need without being asked and without any expectations of reward. I am sure everyone of us have either personally experienced some help from some stranger or know someone who has. Let’s all join Jeff in appreciating the good Samaritans of this world. The world needs more of them!!  

Patrick over at CML has just made a major announcement. He is going to be a daddy soon. I am sure that though he may be having some of the doubts of any first time parent, both he and his missus will turn out to be first rate parents. Congratulations again, Patrick.   

Wise Bread writes about the possible shadiness of Cash4Gold’s operations. I have not come across or heard about any such operation in Malaysia. However Malaysians are quick to replicate any scams and I would take a wager that a Cash4Gold clone will be set up in Malaysia quite soon. After all, it seems a classic front for fencing activities, and don’t we all know that the shady people are quite clever. 

Here in Malaysia, we often see advertisements pasted on walls and electric poles about people who would buy pawnshop tickets. And offer the best price, they say. If pawnshops already offer below the appraised value, wonder just how much these people pay. More woes for the uninformed! 

MMND is having a series on how she became a millionaire. What really clicks with me is that she is able to reveal the sources of her wealth with dignity and pride. This statement is included in our family mission statement on the issue of money and wealth.  Mommy’s story is worth reading. My elder two daughters are now at the age when the Mommy started raking in the bucks through hard work, creativity and determination. I am sure they’ll (as I ) find a lot of inspiration and possibly an idea click from MMND’s story.  

GRS finds himself asking “what’s next?” He is already at a stage many of us are striving for, so this is a very logical question for him to ask himself. I am far below him in the hierarchy of needs, so I am not qualified to give him an answer. Some of you might be, though.  

This is it for the week, folks. Have a great happy and productive weekend! 

My view of what is Halal and Haram income for an employee

Friday, February 13th, 2009

I am now “jobless”, having worked for more than 3 decades. My career encompassed jobs that might be classified by many Malaysians as a ticket to the easy life. Somehow I missed the many ticketing offices that lined the roads of my career. 

I have my parents to thank for this. Somewhere along the line, my parents have drummed in the message (I am sure I did not learn this in school) that the only income that is allowed (halal) for me as an employee was that paid to me by my employer as salary, bonuses or share options and the like. (Yes, the pay that I got should have put me on easy street had I practiced sound personal finance management, but this is not the point of this story.) 

As a Muslim, I devoutly and absolutely believe that my rezeki (livelihood) is in the hands of the All Mighty. This doesn’t mean that I should sit at home and just pray for my livelihood. I have to work and strive my best for my living. I have tried to explain this philosophy in one of my earlier posts about the Arab and the camel. 

Much is being written in the Malaysian papers and other media that we could be forgiven for accepting “presents” given to us by our customers, suppliers and others we deal with in our line of work. I don’t agree and disagree strongly at that.  These presents are a form of income due directly to our position or office that we hold. And these are income not from our employer. I deem these to be tainted income. In the clear cases where these “presents” are given by a beneficiary because we did our work or because we did not do it, then it is clearly haram.  Examples may be buying something like, office supplies at a price which is below our office’s budget, but still at a higher price that what we could have obtained from another supplier. In return we get some sort of a gift from the supplier we bought the supplies from. This is clearly haram. Our job is to ensure that our office gets the best price we can get and all the savings should go to our employer. 

Benefits that accrue because of the network built up from the workplace are a different story. So long as we can in all honesty say that the transaction in question has nothing to do with the post or position that we hold, then it is halal. An example may be buying a piece of land together with friends met through work and then selling it for a profit.  

I am sure my daughters, who have just started working, would be facing many temptations along the way. Some easy to turn down and others not so easy. Still the test as mentioned above should be applied and a decision can be made relatively easily. 

There may be some borderline cases. What if someone gives a gift during a festival? This happens a lot in Malaysia where you can see lorries of hampers being delivered to many of the offices around town during festivals. The best would be to open the hamper there and then and distribute the stuff to the office staff.  

It will be tough when we try to take such a stand when so many of our colleagues do otherwise. We just have to remember and keep reminding ourselves that we should earn only halal income and only such an income should be used to feed our families. We don’t have to judge others. That is for them and for their conscience to decide. 

After a while word should and will get around. Word that so and so does not like such gifts. And can still be depended upon to do the right thing.  

This is what is meant by a reputation and this is the reputation I want my children to earn.  

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