Father Sez

dy/dx Ben was the nick name given to a good friend Ben from my campus days. Ben was an Arts or Economics student, I think. (He is now a proud holder of a Masters Degree in Law). I still remember vividly Ben telling us about some exam he had sat for, where his brains just fried, emitted smoke and froze when he saw questions like x + 3x – 4 x = ?  

I think that was when I first realised that not all of us are wired the same way. Having attended Science stream in school, questions like these would have been no problem for me or any of my classmates.  

Apparently it was not the same for those of us from non numerate backgrounds.  

This fact struck home again a few weeks ago. 

I saw an advertisement in the local papers about a 3 hour seminar designed to teach us the secrets of tremendously reducing the interest we pay on our mortgages and at the same time shortening the time.  

The first thing that came to my mind was that these guys will probably tell us to pay over and above the minimum payment which would reduce the interest and the period of the loan.  Still my curiosity got the better of me and I signed up. The amount to be paid was very small and I thought the coffee break and the cookies that went with it would cover the cost anyway. 

There were almost 50 of us that day, all eager to find out about this secret. As expected the presenter showed some fancy charts, and finally came to the point that additional payments would reduce the interest and the period. He then struck some uncertainty in us by saying that since most of us would not have read the loan agreements in detail, just making the payment was not enough. And his company offered the service (for a small fee) of analysing the loan agreement and to ensure that the additional payments were properly allocated by the Bank. 

Then came the invitation for people to sign up, and many of the attendees did. 

I wondered as to why we could not read the loan agreements ourselves and settle this. Why should we need to pay for these services?  

The answer is that not all of us are wired the same way. 

Some would have figured this MR trick all by themselves. Others would need some prodding, and then they would be able to figure it out. And yet others would remain baffled despite the prodding and would need someone to sort it for them. 

I think this is yet another reason for us to be financially literate. And those of us from non financial educational backgrounds should for our own good, make a strong effort to get ourselves a little educated financially.    

With so many companies announcing cutbacks and many others freezing new hires it is no wonder that the unemployment statistics are so grim. So many of the laid off workers as well as new entrants to the job market will be looking at other avenues for making a living.  

And a common choice would be MLM. And why not? The advantages of MLM are many: 

-         a low cost of entry,

-         no hassles about keeping and maintaining workers,

-         no need for special premises,

-         no need to carry much inventory,

-         remuneration being closely related to the effort we put in,

-         training provided,

-         tremendous opportunity for growth,

-         being our own boss etc. 

Of course the basic rules of business must still prevail. The product or service being sold has to be useful and meet some clear need and be reasonably priced.  Still this industry seems to have acquired such a reputation that many just slam the door in your face or slam down the phone if you mention MLM.  Some may even be ashamed to admit that they are in MLM. 

I don’t think we should be. And I think MLM is an option that we should not simply write off. If it involves a product or service that we use ourselves and are happy with the price and results, then there is absolutely no reason why we should not recommend it to our friends and family. This is the foundation of MLM.  

Perhaps therein is the problem. Many of the participants are not truly convinced of the product and seek to push it only for the lucrative returns that we get in the form of all those commissions. The low entry barriers also allow for many uninspired participants to get in, try to push the product, fail, and move on to some other MLM company or outside the industry.  

And MLM companies too have had their share of black sheep.  

It’s not surprising that some people have such strong views against the MLM industry and their participants.  

Here is one such view, well written and very well discussed.

Despite all the bad press, I still feel that MLM is an option that is worth considering. As with any other investment or business, we have to do our research and seek appropriate advice if necessary.  

And if you are happy with the company, its product or service, the results that the product or service produces and the price you paid for the product or service, you have a basis for a business.  

I got this picture from a great article on helicopter parents and the feeling of “kidsickness”. Though my elder two girls are certainly not kids anymore, I loved the article and this picture.

My wife and I have 5 children. 4 girls and a boy.

The first two are girls 22 and 21, and have completed their university degrees, whilst the younger three are still in school. 

Lately I have been wondering quite a bit of just where and when parental handholding stop and the children should be allowed to make their own footprints in the sands of their lives.  My wife and I have brought up our kids with the best of what we could afford. Naturally this has been far better than what my wife and I personally went through.

Though the two elder girls are adults now, we just can’t help seeing them as the little girls they were not that long ago. So there is a fair amount of interference in their lives from me. 

I did a little inventory of the plus points the girls had.     

-         The girls have finished their tertiary education without any study loans hanging over their heads. 

-         They already have an emergency fund built up. 

-         They do not have to support us or their younger siblings for the time being. 

-         They have already been given some basic knowledge of the need for their own personal financial planning, as well as goal setting. 

-         They are sensible, stable and responsible girls, and have a healthy fear of God. 

With all these, I think they have a great head start over very many of their peers all over the world.  

So shouldn’t my wife and I just let go and let the girls set out in their lives? Stop dictating what the girls should do? And stop worrying that without our constant guidance (interference???) they’ll be making mistakes.  

Thinking back of my own situation, my parents stopped quite early because that was all they could do or afford. I have no idea how my parents felt when they could not give their children many of the stuff other kids were getting from their parents. I got a lot better than my brothers and sister because my elder brother took over the task of looking after me.  

The time of the year when the girls and I sit and discuss their goals for the next year is approaching. Though they have already started to withhold some of their goals from me; I still look forward to this time of the year. 

I have made up my mind that it is time for me to let go. Time for me to be just there if they need me. Time for them to make their own plans and start living their lives. Time for them to learn that sooner or later they’ll have to do this anyway, and that they might as well start now.   

After all, my parents and eldest brother did let go of me. Though I made my fair share of mistakes in life, (perhaps even more than my fair share), my life turned out not too bad.  

I suppose, today, as I make this decision, will be counted as a landmark in my life.  Maybe there might be a small feeling of emptiness. At least, by the grace of God, I still have my 3 younger kids’ lives to interfere in.   

I am one who can be considered technologically challenged. I am almost always behind in adopting technology. You can rest assured that the cell phones, computers, cameras, TV etc., that we use in our home (those that I buy or am responsible for buying) would be the ones that the would be about 2 or 3 generations old.  

This habit is not a reflection of my frugal nature, rather a reflection of my strong belief in “not fixing something that ain’t broke”. 

We have had internet access in our home for quite some time. We used wires and it was okay when all we had was the home desktop and my laptop. 

The numbers grew when my wife got herself a laptop. And on weekends with the two elder girls and their laptops the total came to 5 machines. Our internet modem had 4 outlets so we could use 4 machines at any one time. Our computer table arrangements further restricted that to 3. 

You can imagine the wires running all over the place. The power cables as well as the internet cables. Just see the mess!   

From the angle of wanting to get the clutter better organised, I consulted a friend about going wireless. And last week we finally got that done.  

The Fathersez family is now wireless! 

The desktop is still connected by cable. Only the laptops are on wireless. The mess is a lot better controlled now. (I did have to shell out some money for a wireless modem). 

Isn’t this a lot better? I think it is. 

The challenge now is to make sure none of the younger three kids take any of the computers upstairs to their rooms and play all night!  

Amongst the mantras of successful stock market investing is to buy when there is blood in the streets or when everyone else is fearful.  

I have gone through a number of such periods in Malaysian stock market history. The famous October 1987 crash, the 1993 steep drop, the 1998 Asian Crisis, the 2001 dot-com crash (which affected us too) and now what seems to the grand daddy of them all, the worldwide financial crisis. 

Though I have a finance background, I never quite learnt to take advantage of these splendid opportunities. I was more influenced by the “end of the world is nigh” theory and did nothing. Then I bought during the times when everyone was buying and as usual, in the words of my wordsmith friend, Jeya, got a royal kanda up my “you know what” when the market inevitably crashed.  

I read a nice post by Newly Corporate on 5 ways this economic downturn could help us. One of the 5 mentioned was the opportunity to learn from a full business cycle. Truly experiencing the flow and the ebb of business and learning from this. 

One of my avowed goals in imparting some personal financial management knowledge to my children is that they should start early and that careful investment in stocks, shares and unit trusts are a great way to accumulate wealth. And included in the list of lessons is the method that I used, i.e. dollar cost averaging and the recommended ways to choose good stocks and unit trusts.  

Another intended lesson is on buying during times such as now, when there is such an aversion of stocks that the good get hammered together with the bad and the ugly.  

And what better time to talk about this to my elder two girls than now? 

I clearly remember that I had no interest in saving or investing whilst I was their age. It was only after the two girls were born that I started. As we are not really a business minded family, I strongly suspect that my two girls may choose the path I followed and start on their own savings and investments only after the need becomes essential.     

I have not succeeded in getting them to regularly read pf blogs. They tell me that they have no time whilst they spend hours chatting with their friends. I have to walk carefully here and create some interest, not turn them off.  

Maybe I should form a joint account with them and work together on selecting stocks. I am not sure if the girls would like investing with imaginary money( as has been suggested), though it may work on my younger children.

My brother bought me my ever first car. I had completed my studies and was then working in an audit firm. The car was a used Mazda Capella and it cost a princely RM3,800 (about USD 1,100 at current exchange rates).

I have no idea from whom my brother bought the car or what rules he applied when he bought it.  

I do remember that those days, I was not very confident of driving. The road to my office had some slight hills where cars would be lined up in the traffic jams. I had my fears about being able to balance the clutch whilst uphill or downhill so I used to get to work so early that I was about the only one on the road.  

I also remember that my brother (who did not even have a driving license then) never made a big deal about this “gift”. He just presented me with the car. 

And this yellow Mazda Capella was the first car anyone in my family ever owned. Since then I have bought 4 other used cars. Three have been sold and the fourth is now being used at our goat farm by Zai.  I have been relatively lucky in the used car purchases. I am quite a dunggu when it comes to cars and by sheer luck have escaped relatively unscathed.  

A 1970 Mazda Capella. The first car ever owned by anyone in my family, although ours did not look anywhere as perky and shiny as this car looks.

Picture Credit: www.dbmathews.com/mazda.shtml  

Now that my two elder girls are moving in together and the eldest girl’s place of work is too far to walk and is not served by public transport (other than taxis), my wife and I decided to buy her a car. 

We decided it would be a used one and small (to save on petrol and make it easy for parking). We also decided that it would be one with an automatic gear shift. (Malaysia still produces manual shift cars!) Then we enlisted the help of one of my wife’s cousins, Zali, who is an auto mechanic. 

Zali checked out the used car dealers he knew and found one that fit our specifications. He checked out the car and pronounced it well maintained. The mileage was about 86,000 kms for the 10 years old car. 

A Perodua Kancil - my daughter’s first ever car

Picture Credit: Google 

So we have signed up and paid for the car. It’ll take a couple of days for the transfer to my daughter’s name as well as the required mandatory check by the Authorities to confirm that it is road worthy. 

When the car is collected, Zali will be showing my daughter, Aliaa or Along as we call her, some basic car maintenance tips such as water and oil checks and keeping the tires properly inflated etc.  Along will also maintain a car log book just like we do. She’ll be logging the time, destination, start mileage and end mileage readings each time she uses the car. Whenever she refills petrol, the amount will also be entered into the log book. 

I have also emailed Aliaa the URL of a driving school that does a one day class called SmartWoman Driving Course. She’ll check it up and should sign up for it sometime in December. 

Unlike the time when my brother gave me my first car, my daughter’s car is coming with some strings attached. There are some rules, some do’s and don’ts. We have talked about these rules and my daughter has given her agreement.  

My wife and I are sure that she’ll handle this car, her first major physical asset responsibly. And Insya’Allah, the car will not turn out a lemon.

I am one of those who love receiving emails which contain words of inspiration. In fact I even save them and now I have a considerable collection. These unexpected words of inspiration never fail to lift up my spirits. 

I don’t believe in chain mails though, you know, the ones that require the reader to forward the mail to another 5 or 10 or 20 people. Whatever dire consequences the mail may me with for not forwarding, I still just hit the delete key.   

So it should be no surprise that I love Brian Kim’s MIT of the day, a daily email which is short, to the point and has a great inspirational message. I have forgotten how I stumbled upon this blog, but I love it.  

Some of my friends are also advocates of forwarding emails that contain such inspirational messages. Some may be in the form of a power point slide, others are just words. I received one last week from a dear friend which I particularly enjoyed. As I think it may be of use to my readers, it is reproduced below. It was headed “Butterfly”. Hope you enjoy it as much as I did. Enjoy! 

Quote: 

A man was walking in the park one day when he came upon a cocoon with a small opening. He sat and watched the butterfly for several hours as it struggled to force its body through the little hole. Then it seemed to stop making any progress. It looked like it had gotten as far as it could, so the man decided to help the butterfly. He used his pocketknife and snipped the remaining bit of the cocoon. The butterfly then emerged easily, but something was strange. The butterfly had a swollen body and shriveled wings.

The man continued to watch the butterfly because he expected at any moment the wings would enlarge and expand to be able to support the body, which would contract in time. Neither happened. In fact, the butterfly spent the rest of its life crawling around with a swollen body and deformed wings.

It was never able to fly.

What the man in his kindness and haste did not understand was that the restricting cocoon and the struggle required for the butterfly to emerge was natural. It was nature’s way of forcing fluid from its body into its wings so that it would be ready for flight once it achieved its freedom.

Sometimes struggles are exactly what we need in our lives. If we were allowed to go through life without any obstacles, we would be crippled. We would not be as strong as what we could have been. And we could never fly.

History has shown us that the most celebrated winners usually encountered heartbreaking obstacles before they triumphed. They won because they refused to become discouraged by their defeats.

My good friend, Lou Holtz, football coach of the University of South Carolina, once told me, “Show me someone who has done something worthwhile, and I’ll show you someone who has overcome adversity.” Beethoven composed his greatest works after becoming deaf. George Washington was snowed in through a treacherous winter at Valley Forge . Abraham Lincoln was raised in poverty. Albert Einstein was called a slow learner, retarded and uneducable.

If Christopher Columbus had turned back, no one could have blamed him, considering the constant adversity he endured. As an elementary student, actor James Earl Jones (a.k.a. Darth Vader) stuttered so badly he communicated with friends and teachers using written notes.

Itzhak Perlman, the incomparable concert violinist, was born to parents who survived a Nazi concentration camp and has been paralyzed from the waist down since the age of four.Chester Carlson, a young inventor, took his idea to 20 big corporations in the 1940s.

After seven years of rejections, he was able to persuade Haloid, a small company in Rochester , N.Y. , to purchase the rights to his electrostatic paper- copying process. Haloid has since become Xerox Corporation. Thomas Edison tried over 2,000 experiments before he was able to get his light bulb to work. Upon being asked how he felt about failing so many times, he replied, “I never failed once. I invented the light bulb. It just happened to be a 2,000-step process.”

My elder 2 girls. Taken by their mother when all of us were much much younger. I look at this picture often and have never failed to feel happy and grateful.

I have earlier written about the job my eldest girl got teaching children. She started her job at about the same time as her younger sister who works in an accounting firm. The places of work were at diametrically opposite sides of town so they could not live together. Along, my eldest stayed temporarily with the family of one of my best friends (who passed way last year). 

Azah, her second rented a room near her office.

Along then resigned from her job and came back home.  And now she has gotten an opportunity to be an apprentice to a counsellor, something that she really likes. The great thing is that this counselling office is quite near to where Azah works. 

Naturally, the family has decided that the two girls should now stay together.  We have now rented a house around where Azah works. The house is too big for the two of them, so they’ll have to get some of their friends as boarders. We have bought some basic furniture and a little more stuff such as kitchen stuff is still outstanding. The plan is for the two of them to move in by the 15^th of this month. 

Luckily, my wife and I are quite prepared for this move. The 2 girls have already spent 3 years away from home during their varsity days.  Though the fussing parent in me keeps worrying about whether they’ll be able to look after themselves, I just have to let go. The two girls just have to sort themselves out.  The girls now have to:-

• look after themselves – hygiene, health, safety, comfort, nutrition. (including going to see a doctor and paying for medical services if they are ill).
• look after their surroundings – tidying and cleaning up, keeping secure
• look after their money – budgeting, saving, making wise choices
• take responsibility for themselves

The good things are that they are sensible girls, are only an hour’s drive away and they have each other to help. They can also come back almost every weekend.

And we have another 3 kids still at home with us! So we don’t have to worry at all about an “empty nest”. Still I cannot help thinking of them as the toddlers they were that many years ago. And worry a little.

I have regretted not discussing personal financial management with my elder two girls during their younger days. By the grace of God they have both grown up to be quite financially responsible. They have not shown any signs of the “must have” mentality for designer jeans, fancy cell phones and the like. 

I realised my shortcoming ever since I started blogging and have started on the younger 3 children. They now operate on a monthly allowance + maintaining books of accounts of their spending. In addition they practice the “pay yourself first” principle by allocating 10% of their allowance for savings as soon as they receive get their allowance. (Our youngest, Ain, has a weekly allowance). 

Coming back to the elder girls. Along and Azah have completed their degrees and have started work. (Along has resigned from her teaching job. More on this later.  Azah works with one of the Big 4 firms).

This budget exercise was done with Azah. Over the last 3 months, she has kept track of her spending and now has an accurate estimate of her monthly outgoings. She has a single income, a once a month paycheck. Her net salary is banked into her account and she withdraws what she needs using an ATM card.  We worked out her outflows, the fixed once a month ones and the other daily outflows. The worksheet looked like this. 

1. Income  This is net of deductions made for the Employee Provident Fund, a statutory requirement under Malaysian Law, and a little also for statutory insurance.  

2. Savings. I have explained the concept of paying yourself first to Azah and she transfers 15% into her savings account. 

3. Rental (she rents a room near her workplace) 

4. Loan Repayment (she has a study loan as well as an investment loan. The investment loan was taken by me under name when she turned 18. The returns are almost sufficient for the monthly payments and there is a small top up). 

5. Food 

6. Entertainment (including her cell phone costs) 

7. Travel 

8. Miscellaneous 

Items 2, 3 and 4 are fixed monthly. At present she does the transfers monthly. I have talked to her to make these automatic bank transfers. I’ll have to check to see if this has been done.  

For items 5, 6 and 7, I have asked her to do withdrawals weekly and keep the money in separate envelopes in her room. Each day she’ll take the estimated amount for that day and keep the money in her purse for daily spending. The purse is “topped” up each day.  

Picture Credit: http://www.money3rd.com/financial-success-2.php 

I have talked to her about joining friends to eat at expensive restaurants. It is likely that some of these restaurants may be too pricey for her budget. In such a case, she just has to turn down the invitation. Perhaps it may seem to be shameful amongst her peers, but I have assured my daughter that there is absolutely no shame in this. It is far more shameful to live beyond one’s means.  

The balance in the envelopes and in her “salary bank account” each month should be  transferred into her savings account.  

I have not talked to her on her yearly expenses like insurance, her new clothes for Hari Raya etc. This year these costs have been in the Ma and Pa’s budget. In January 09, Azah has to start including these. 

I suppose my children are far luckier than my wife and I were when we were at her stage in life. My daughter already has an emergency fund (again, thanks to Ma and Pa) and she does not have to contribute to our household.  

I have not talked to her on investing etc, though she did attend a workshop on property investment earlier. I plan to do this sometime next year, by introducing her to my friends who are far more successful in various investment activities than her parents.   

Note: 

The envelope system seems to be a great way for a start into budgeting. A fair bit has been written on this subject. Have a look at

- Budget Building 101 - Creating a Budget Using the Envelope Method,

- Frugal Dad’s fine tuning when you have to take your envelope system on the road and

- the well written piece on this subject by guest poster Luke from NeoBudget on Gather Little by Little.   (NeoBudget is an online budget manager that uses the envelope method to help you track your spending habits and stick to a budget).

I last wrote about my two elder girls way back in July. My eldest girl Along had started work with an educational institute for children whilst the second, Azah had started with a Big 4 audit firm. The two offices are located at opposite ends of our Federal Capital, Kuala Lumpur which is about 60 kilometres from where we live. As it was not practical for the both of them to stay together we found rooms for them and thought that we would work out the staying together bit later. 

Along did not find the job to her liking and came back home. Her principal interest is in counselling, especially children, and teaching them did not work out the way she thought it would be. She has now found an assignment as an assistant to a counsellor. She found the lady through a blog and met up with her a couple of weeks before Eid. They both got along well and my wife and I have also met and have gotten to know this lady. Along is really looking forward to being involved in the counselling profession. 

The plus points are that the lady’s office is not too far from Azah’s office and also the University where Along plans to do her Masters in Educational Counselling.  So we have rented a house where the two girls will stay together and rent out the other rooms.

The house is within walking distance from Azah’s office so the transport issue for her has been resolved. It’s a little further from Along’s expected place of work and we have agreed that we will buy a car for her (used, of course).  

Last week the whole family checked out the house (which is unfurnished) and prepared a list of the basic furnishings and household items to buy. The dent in my wallet aside(this has to be discussed with the girls later), there is the fatherly fear of whether my girls would be safe and be “all right”. My wife is taking it a lot better (she is a great believer in independence). 

As I would be in Jakarta all this week, Along and my wife will be taking care of getting the house cleaned and furnished. And Insya’Allah the two girls will move in by the 1^st November.  

(Should I or my wife set any house rules or should we just let the girls go with the flow? This will be a thought that will linger a lot in my mind over the next few days).