Get Your Family to be Financially FIT!

As the economy recovers gradually, we tend to leave the past lessons learnt behind us. Hence, it’s important to prepare yourself and keep your family’s financial state healthy in order to protect your family.

Set aside at least 10-20% of your income and put it in an account to build your “Golden Nest” towards financial freedom. Use this money for savings (6 months worth of expenses) and put the rest into any suitable investment plan that suits your risk appetite. Set a realistic budget and track your monthly spending to see if you can cut down on that so that you can contribute more towards your “Golden Nest”.

Here’s a checklist that you may use:

• Pay Yourself First
  Set aside a percentage that is at least 10-20% of your income and put it in a separate account. Do not use this money other than for investment purposes to grow your fund. The 1^st portion of this savings will first contribute to your savings for rainy days (i.e. 6 months worth of expenses or 3 month worth of income). The rest will then be used for investment purposes as mentioned earlier.
  
  
• Set a Family Budget
  Come up a cap that you would like to limit your total family expenses to. Make sure that this cap is realistic and it can cover your groceries, bills, transportation, entertainment, etc. Make sure that your family agrees and keep to the limit.
  
  
• Debt Management
  Make an effort to pay off your credit card bills and other loans such as home loan, car loan etc. This will ensure that you do not have any roll over interest unnecessarily. Other bills are usually less worrying as they normally have a 2 month grace period, such as phone bills etc.
  
  
• Insure your family
  Ensure that your family have enough insurance protection so that you will not be tied down by any unnecessary burdens should any unfortunate event occur. You may want to consider preparing for your child’s education plan as well. (My suggestion for such plan is more of term plan to ensure that you are covered enough to pay off your child’s education should anything happen to you, and the rest of the money set aside for this will directly go into investment, such as stocks and shares, properties etc. But please bear in mind that for whichever investment mode you choose, you need to ensure that you have enough education / knowledge for that investment mode in order to make money from it. In other words, you must know what you are doing and not follow the crowd blindly, not even follow what your financial planner has to say without first understanding fully what exactly is going on.)

Millionaire Investor Program

I'm glad that I've attended the Millionaire Investor Program by Ken Chee and Clive Tan as it taught me how to analyze the fundamentals and value of a company. It helps in letting us sleep better at night especially during major market correction and under volatile market conditions.

In Millionaire Investor Program, I've learnt how to read financial reports, understand the fundamentals of stocks and discover the intrinsic value of stocks so that I know when to buy and sell stocks the investor way. With this, I am able to maximize my potential returns and minimize the risk so that I can sleep well at night and even smile in my dreams.

I personally felt that even for traders should also learn about value investing because in a way, value investing can help them in some ways during their trading activities. Such as if the market price of a particular stock is under valued, the chances of that price going up is higher than another stock that is also on a upward trend but then the stock is already overprice. This can also help in reducing the risk on top of the current market condition.

If you are also interested in stocks and shares investment but not sure how to, wants to compound / multiply your money the safest way, so that you can sleep well at night, find out more about value investing. If you are interested in attending the 2 hours Millionaire Investor Program's free preview, every tuesday 2 - 4pm or 7.30pm - 9.30pm? Just visit their website directly.
http://exec-directions.com/index.php?c=course-detail&id=4&name=Millionaire-Investor-Seminar

What is Warrants?

Warrant is an investment tool that enables the holder to gain exposure to a security at a fraction of the stock price. It is tied to the exercise price, a price at which you can have the right to either buy or sell the underlying stocks at, before the pre-determined date tied to the warrant, depending on the type of warrant. Hence, it can be used to profit from both a rise and fall in the stock price itself. It has this leverage feature. However, as we all know, leverage cuts both ways, when it goes in your favour, you may earn twice, when it goes against you, you may also lose twice.

The main downside of warrant is that its holders are not entitled to share dividends and they have an expiry date so they can't be hold over long term period. The good thing is that warrants can be bought or sold in a similar way as compared to shares.

Although the underlying issuer is different, it functions in a similar way as compared to options.
Read more about options.

Continue to Hold Gold?

Reference: Marc Faber, Jim Rogers Continue to Hold Gold

Here's my summary of that article:-

The market currently is unstable and fluctuates so much hence affecting gold prices as well. In fact, it has begin to dip a little. But investors and pundits like Marc Faber and Jim Rogers both have no intention of selling and are looking at acquiring more. The main reasons why these guys continue to do this is there overall understanding of the macro-economic circumstances.

In general, macro-economics as it relates to gold, will deal with issues like national debt, inflation, paper currency and the practices of central banks; all of which the above are highly affected by. In fact, the more money countries print and the more hyper inflation caused, the better it is to hold gold. This is why Faber and Jim Rogers continue to hold gold. The central banks and governments have become addicted to these practices even more than in the past, and it's not sustainable by any stretch of the imagination. As trust in paper currencies erodes around the world, the price of gold should continue to move in a upward direction no matter how much the temporary correction is.

This is why Marc Faber and Jim Rogers, among others, continue to hold and invest in gold, and will continue to do so for many years to come.

Income Tax - Course Fee Relief

What can be claimed:
And I've came to realised that actually almost all course, which includes private courses, seminars and even conferences can be used to claim tax relief up to $3,500. So do remember to keep all your courses receipts and claim them for income tax rebates. But it has to be related to your current trade, business, profession, vocation or employment.

What can't be claimed?
For courses, seminars and conference that's meant for leisure or hobby (e.g. art & craft, photography, learn Japanese etc that's non work related), or of general skills (e.g. How to use computer or even how to surf the net etc.)

When can you claim?
In the event that it doesn't fit the criteria, don't worry as you will have up to 2 years to claim for your course fees. e.g. For a course that you've attended in 2007, you can claim it when filing for income tax of assessment year 2009, (which is around apr - may 2010), provided that you fit the criteria of the course being related to your new trade, business, profession, vocation or employment then. This 2 year period also apply in the case of that your assessable income is  <$22,000.

For more info, see http://www.iras.gov.sg/irasHome/page04.aspx?id=194.