Debunking some Misconceptions about Personal Finance

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Postby Dennis Ng » Sat Jul 30, 2011 10:12 am

30 Jul 2011

The Rich Get Richer, while the Poor Get Poorer. Why?

One main reason is the Rich know how to invest and grow their money.
Look at Singapore's 40 Richest people and you will realise that most of their wealth is due to astute investments.

Billionaire Peter Lim did NOT even start a business, most of his billion dollar wealth comes from his investment into Wilmar. The bulk of the wealth of the late Khoo Teck Puat comes from his 10% stake in Standard Chartered Bank, a business he didn't start nor manage. It is simply just buying 1 stock, that's all.

Peter Lim was known as the Remiser King. If even the Remiser King said he didn't make his wealth from Trading. Guess you should know by NOW that all these seminars out there that teach TRADING, be it Option Trading, Stock Trading, Forex Trading is NOT exactly the RIGHT Path to Financial Freedom.

Most of the Rich made their money from investing into stocks and property. The Singapore's Richest 40 list shows this FACT too.

How did Peter Lim become a Billionaire? Through investing, NOT trading. This is what he said about Trading: It's very difficult to make money from trading. Most of the traders, they come, they make money, because they have this gambling instinct. They take the money and spend it. The minute they lose money, they got no money to pay up.

Cheers!

Dennis Ng

S'pore's 40 richest worth US$54.4 billion


SINGAPORE: Singapore's 40 richest are now collectively worth US$54.4 billion, up 19 per cent compared with last year, according to the latest rich list published by Forbes Asia.

The better numbers achieved by the country's wealthiest come despite a slowing economy and weak stock market.

The family of the late Ng Teng Fong remains at the top with US$8.9 billion, up by US$1.1 billion from last year.

Their fortune is tied to their two biggest property holdings: privately held firm Far East Organization and Hong Kong-listed Tsim Sha Tsui Properties.

The family of the late tycoon Khoo Teck Puat comes in at number two with US$6.7 billion, up by US$800 million from last year.

They retain a stake in the Goodwood Group of Hotels.

At number three is veteran banker Wee Cho Yaw with US$4.2 billion, an increase of US$600 million over last year.

Forbes Asia said there are 13 billionaires on this year's list compared with 11 last year.

The two newcomers with billionaire standing are the Lien family and food tycoon Sam Goi.

- CNA/cc
Cheers!

Dennis Ng - When You Master Your Finances, You Master Your Destiny

Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng
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Postby charliebrown » Sat Aug 06, 2011 11:33 am

Dennis Ng wrote:With inflation rate in Singapore currently at 5%, it means that if you borrow Housing Loan and interest rate is less than 5%, you're actually paying NEGATIVE interest (or earning by borrowing).

eg. Housing Loan interest rate 3%, Inflation 5%, you actually GAIN 2% by borrowing since your S$1 now is only worth S$0.95 1 year later.

Think about it.

Yet, there are still people who do NOT want to take Housing Loan or minimise Housing Loan when they buy a property in Singapore today. :shock:


I will like to interpret in following way.

One apple costs $1 now
1 year later, the apple cost $1.05 (due to inflation)

Assume there are 2 persons (A and B)
Assume both persons do not have any money now. Both can only earn $2 in a year time.

Person A
------------
He borrows from the bank $1 and promise to return in 1 yr time $1.03.

One yr later, he pays back the bank $1.03. His money in pocket is $0.97 ($2 - $1.03)

Person B
-----------
He does not borrow from the bank and decide to wait 1 yr later to buy the apple (which will then cost $1.05).

One yr later, Person B money in pocket is $0.95 ($2- 1.05)

Therefore person A is richer than B.


But can be an alternate outcome.
Assume both A and B have $2 each now.

Person A
-----------
Person A decides to borrow from the bank to buy the apple and promise to return $1.03 a yr later.

One yr later, Person A has $0.97 ($2 - $1.03) in his pocket

Person B
-----------
Person B decides to use his money to buy the $1 apple now.

One yr later, Person B has $1 ($2 - $1) in his pocket.

Therefore in this case, Person B is richer than Person A.


This is only an over-simplified analysis on borrowing.
Please comment if I make my analysis correct or not.
charliebrown
 
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Postby jazzmama » Sun Aug 07, 2011 10:30 pm

charliebrown wrote:
I will like to interpret in following way.

One apple costs $1 now
1 year later, the apple cost $1.05 (due to inflation)

Assume there are 2 persons (A and B)
Assume both persons do not have any money now. Both can only earn $2 in a year time.

Person A
------------
He borrows from the bank $1 and promise to return in 1 yr time $1.03.

One yr later, he pays back the bank $1.03. His money in pocket is $0.97 ($2 - $1.03)

Person B
-----------
He does not borrow from the bank and decide to wait 1 yr later to buy the apple (which will then cost $1.05).

One yr later, Person B money in pocket is $0.95 ($2- 1.05)

Therefore person A is richer than B.


But can be an alternate outcome.
Assume both A and B have $2 each now.

Person A
-----------
Person A decides to borrow from the bank to buy the apple and promise to return $1.03 a yr later.

One yr later, Person A has $0.97 ($2 - $1.03) in his pocket

Person B
-----------
Person B decides to use his money to buy the $1 apple now.

One yr later, Person B has $1 ($2 - $1) in his pocket.

Therefore in this case, Person B is richer than Person A.


This is only an over-simplified analysis on borrowing.
Please comment if I make my analysis correct or not.


Your example illustrates the fact that inflation encourages people to spend today to avoid paying higher prices in the future.

Person B in scenario 2 bought the apple today and saved the most money.

Person A in scenario 1 and 2 bought the apple today using borrowed money and incurred interest charges.

Person B in scenario 1 couldn't afford the apple today and bought it one year later at an inflated price which exceeded the interest charges.

Cheers!
jazzmama
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Posts: 33
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Postby jazzmama » Sun Aug 07, 2011 10:32 pm

charliebrown wrote:
I will like to interpret in following way.

One apple costs $1 now
1 year later, the apple cost $1.05 (due to inflation)

Assume there are 2 persons (A and B)
Assume both persons do not have any money now. Both can only earn $2 in a year time.

Person A
------------
He borrows from the bank $1 and promise to return in 1 yr time $1.03.

One yr later, he pays back the bank $1.03. His money in pocket is $0.97 ($2 - $1.03)

Person B
-----------
He does not borrow from the bank and decide to wait 1 yr later to buy the apple (which will then cost $1.05).

One yr later, Person B money in pocket is $0.95 ($2- 1.05)

Therefore person A is richer than B.


But can be an alternate outcome.
Assume both A and B have $2 each now.

Person A
-----------
Person A decides to borrow from the bank to buy the apple and promise to return $1.03 a yr later.

One yr later, Person A has $0.97 ($2 - $1.03) in his pocket

Person B
-----------
Person B decides to use his money to buy the $1 apple now.

One yr later, Person B has $1 ($2 - $1) in his pocket.

Therefore in this case, Person B is richer than Person A.


This is only an over-simplified analysis on borrowing.
Please comment if I make my analysis correct or not.


Hi Charlie Brown

Your example illustrates the fact that inflation encourages people to spend today to avoid paying higher prices in the future.

Person B in scenario 2 bought the apple today and saved the most money.

Person A in scenario 1 and 2 bought the apple today using borrowed money and incurred interest charges.

Person B in scenario 1 couldn't afford the apple today and bought it one year later at an inflated price which exceeded the interest charges.

Cheers!
jazzmama
Silver Forum Contributor
 
Posts: 33
Joined: Sun Mar 06, 2011 9:36 pm

Re: Debunking some Misconceptions about Personal Finance

Postby Dennis Ng » Fri Mar 16, 2012 11:33 am

Hidden Billionaires in Plain Sight Emerge As Stocks Rise
By Brendan Coffey and Alexander Cuadros - Mar 16, 2012 7:01 AM GMT+0800

Billionaire Steven Bresky, 58, has eluded the limelight that usually accompanies great wealth for five years.

In 2007, Bresky inherited his father’s 74 percent stake in Seaboard Corp. (SEB), a $5.7 billion commodities trading and cargo shipping company that generated almost a third of its revenue last year slaughtering 5 million hogs. Bresky’s stock is worth $1.7 billion today.

“He must regretfully decline to be interviewed,” said Bresky’s assistant, Amanda Doyle, from the company’s Merriam, Kansas, headquarters on March 14. “He just doesn’t do a lot of stories.”

An analysis of stakes held in publicly traded U.S. and Latin American companies uncovered Bresky and seven other billionaires who haven’t appeared in any major international wealth rankings. Most of their 10-figure fortunes are derived from public holdings and dividend income.

Bresky, Seaboard’s chairman, has remained under the radar by owning his shares, which are down 9 percent since he inherited them, through two Newton, Massachusetts-based holding companies, Seaboard Flour LLC and SFC Preferred LLC. Seaboard Corp., which also has sugar and power operations, bought half of the Butterball turkey brand for $178 million last year from Garner, North Carolina-based Maxwell Group.
Far From Silicon Valley

American Graham Weston, 48, has also avoided being ranked with the world’s richest, partly by running a technology company in San Antonio, Texas -- 1,700 miles from Silicon Valley. Weston owns about 15 percent of Rackspace Hosting Inc. (RAX), a provider of Web-based information-technology systems. His stock is worth almost $1.1 billion.

The company held its initial public offering in August 2008. Rackspace shares have surged more than 12-fold since hitting a low of $4 per share in February 2009, making Weston, the company’s largest shareholder, a billionaire.

Weston loathes talking about his wealth. After seeing glitzy dot-coms fail spectacularly a decade ago he, along with his Rackspace cohorts, decided to adopt what they call a no- stars policy.

“We said we wanted to be judged on our substance, not our flash,” Weston said in a telephone interview on March 14.

Weston has put some of his money -- he’s sold about $60 million of Rackspace stock since 2008 -- into helping entrepreneurs and local students. Weston and Rackspace employees have contributed $2 million in grants to spruce up local schools, fund mentoring programs and provide supplies.

“It’s a way for a corporation to interface in a philanthropic way, not just with money but with our own enthusiasm,” Weston said. “We really adopted a new model, which is the idea that a corporation takes accountability for the success of the schools around it and gets directly involved.”
Pleasure Aircraft

Insurance mogul William R. Berkley, 66, built his estimated $1.2 billion fortune by creating what became W.R. Berkley Corp. (WRB) The $4.9 billion Greenwich, Connecticut-based company has 48 operating units underwriting a spectrum of property and casualty risks, from pleasure aircraft to cyber security.

Berkley owns about 18 percent of the company, a stake worth almost $900 million today. He has also collected more than $51 million in company dividends since 1980, and has collected more than $85 million in salary and bonuses since 1993. In 2006 and 2007, Berkley earned $58 million selling shares of First Marblehead Corp., a Boston-based student loan company he has been a director of since 1995.

“He’s very private about his wealth,” said Karen Horvath, a spokesman for W.R. Berkley Corp. “He prefers not to be on any lists.”
Holocaust Survivor

Surging economic growth in Latin America is minting a new wave of wealthy tycoons. Booming consumer demand in Brazil has made Samuel Klein, an 88-year-old Polish immigrant and Holocaust survivor, and his son Michael, billionaires. In 2009, Klein sold his chain of home-appliance stores, Casas Bahia Comercial Ltda., to retail billionaire Abilio Diniz.

The Klein family received a combined 47 percent stake in Via Varejo SA (GLOB3), as the unit of Diniz’s flagship Cia. Brasileira de Distribuicao Grupo Pao de Acucar is now known. The stake is worth $2 billion today, with Samuel Klein owning 54 percent. Michael Klein, 59, who is Casas Bahia’s chief executive officer and Via Varejo’s chairman, controls the rest.

The Kleins also have cash. As part of the sale to Diniz, the family kept Casas Bahia’s property holdings. Diniz pays them 140 million reais ($78 million) a year in rent. Casas Bahia’s press office said the family was unavailable to comment.
Chemicals and Copper

Billionaire Antonio del Valle, 74, has turned Mexichem SAB into one of the largest chemical producers in the Americas by acquiring more than 15 competitors since 2007. The Tlalnepantla, Mexico-based company’s shares have surged more than 50-times since 2002, making his family’s 48 percent stake, which he controls, worth $3.2 billion.

Del Valle got his start in banking. He served as chief executive of Grupo Financiero Bital SA until his partners sold it to HSBC Holdings Plc in 2002, paying him in cash and shares of Mexichem -- then known as Grupo Industrial Camesa.

Mexican regulatory filings indicate the family has been able to increase its stake in Mexichem by reinvesting most of their dividends and proceeds from a 2005 stock sale back into the company.

Del Valle also owns closely held lender Grupo Financiero Ve Por Mas SAB and Elementia SA, which makes copper and aluminum products and is part-owned by Carlos Slim, the world’s richest man according to the Bloomberg Billionaires Index. He controls all three stakes through his holding company, Grupo Empresarial Kaluz SA. Del Valle’s personal assistant said he was unavailable for comment.
Precious Peruvian Metals

Buoyed by surging gold prices, Alberto Benavides and his family have seen their 28 percent voting stake in Cia. de Minas Buenaventura SA, Peru’s biggest producer of precious metals, jump five-fold in a decade to $2.7 billion. Today Benavides, 91, owns $1.2 billion of the company’s stock after giving the rest in equal parts to his five children last year.

Based on an analysis of dividends, local taxes and market performance, the Benavides family probably has an investment portfolio worth at least $250 million. “We’re people who have no interest in ostentation or luxury,” Roque Benavides, who has led the company since his father retired, said in an e-mail. “We’re working people whose goal is to contribute to the social development of Peru.”
Banco Santander Purchase

Alvaro Saieh, 62, became a billionaire after his shares of Corpbanca (CORPBANC), Chile’s sixth-biggest lender, jumped 63 percent in 2009, more than doubling the following year. His 63 percent stake is now worth more than $2.1 billion.

Saieh, who earned a doctorate at the University of Chicago and traces his roots to Palestine, formed his company by leading the takeover of century-old Banco de Concepcion in 1995 and using it to buy up rivals.

In December, Saieh oversaw the $1.16 billion acquisition of Banco Santander SA (SAN)’s Colombian unit, helping Corpbanca become the first Chilean financial institution to own a foreign bank.

A press official representing Saieh, who asked not to be named due to internal policy, said his closely held retail, insurance and media assets are worth $2.6 billion not including debt. SMU SA, his chain of supermarkets and retail stores, reported 2010 sales of $2.2 billion.

The number of billionaires that remain uncovered is difficult to quantify. “It’s hard to give you a number. You should question anyone who claims they can,” said Anthony DeChellis, head of Private Banking Americas for Credit Suisse in New York. “It is a very difficult thing to know.”

To contact the reporters on this story: Brendan Coffey in Boston at bcoffey10@bloomberg.net; Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net
Cheers!

Dennis Ng - When You Master Your Finances, You Master Your Destiny

Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
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Re: Debunking some Misconceptions about Personal Finance

Postby Dennis Ng » Fri Apr 06, 2012 10:03 am

职场中的理财生财模式
发布:襄阳人才网 文章资料:xf.hr1000.com 更新时间:2012-3-22

职场中人每天为了生活忙忙碌碌,很多人辛辛苦苦几十年,却时常入不敷出,财务状况不见有任何改善。其实,理财生财是每个职场中人必须掌握的技能,只有掌握正确的理财观念,你才能达到生活无忧无虑,开心工作的境界。

理财生财的概念似乎相当复杂,但只要学好这几招简单的理财模式,这样便能轻松地让你荷包满满。

学习钱生钱

财务专家吴加万表示,多数人只懂得储蓄,但却不懂得“钱生钱”,这也是为什么很多人没有足够的钱退休。

他认为,“钱生钱”是大家要学习的最重要一招,要把储蓄从“金蛋”变成“金鹅”,然后生出更多“金蛋”。

当不同的投资工具所赚取的回报超过工作的收入,那么你就已达到财务自由可停止工作而仍然有足够钱应付日常开销。

职场中人应该把钱投资在哪里?吴加万分析称,以目前的情况而论,股市应该是不错的投资,因为各国的中央银行都在印钞票,许多热钱都会流进金融体系,造成股市上升。香港、新加坡和中国的股价和美国相比还较便宜,有升值的空间,因此建议大家不妨购买这些地区的股票。

至于债券和房地产投资,他则认为现在不是进场时机。他称,债券的利率很低,已不太可能下调,只能往上移动,会造成债券价值下跌,对投资者而言相当危险。房地产方面,房价已很高,上升空间不大,因此不是很好的投资。

他认为,只要可能的利润大于潜在损失的一倍就是不错的投资。不过他警告投资者在投资前除了要有进场计划,也要做好退场准备,如情势不妙,要毫不犹豫退场,把损失减到最低。

学会储蓄

每个月底拿了薪水后,是不是很快便把钱花光,成为月光一族呢?专家指出,投资固然重要,但是也不可以忽略储蓄;关键不在你赚多少,而是在你储蓄多少。要致富就要培养储蓄的好习惯,最好每月能储蓄至少10%的收入。

吴加万表示,储蓄就好像是你的投资种子。你要用这个种子去种树,不断结出果实。没有种子的话,要如何结果呢?很多人有种子,不过他们却没有用来种树,导致种子永远不会开花结果。

为了使储蓄理财能赚取更多的利息收入,对于临时需要用钱的储户,最好采用“连月存储”方式,即储户每月存入一定的钱款,所有存单年限相同,但到期日期分别相差1个月。这种存储方法能最大限度地发挥储蓄的灵活性,储户临时需要用钱,可支取到期或近期的存单,以减少利息损失。

用“七天通知存款”打理“活钱”。“七天通知存款”是一种介于活期存款和定期存款之间的存款业务,储户存入资金后,可以获得比活期存款更高的利息,但比1年期定期存款的利息稍低一些,提取存款需提前7天通知银行。

因此,对于一笔不能确定用途和用时的“活钱”,储户可利用“七天通知存款”来提高利息收益。但是,”七天通知存款”的门槛较高,其起存金额一般要求在5万元以上。

用“阶梯存储”应对利率调整。以10万元为例,4万元存活期,便于随时支取;另外6万元分别存1年期、2年期、3年期定期储蓄各2万元。1年后,将到期的2万元再存3年期,以此类推,3年后持有的存单则全部为3年期,只是到期的年限不同,依次相差1年。阶梯存储使储蓄到期额保持等量平衡,既能应对储蓄对利率的调整,又可获取3年期存款的较高利息。

提升赚钱能力

职场中人可通过上课,提升技能从而加强赚钱能力。所谓“逆水行舟,不进则退”,若你没进步,其实就落在别人后头。

有专家称,赚钱能力也同顾客人数和对服务或产品的增值有关系。如一个记者假如能为一家国际大报社提供新闻,他的薪水自然也会增加,因为报社的市场比较大。
Cheers!

Dennis Ng - When You Master Your Finances, You Master Your Destiny

Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
Dennis Ng
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Posts: 9781
Joined: Tue Nov 29, 2005 7:16 am
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