"Cash is King"

I was watching an interview of the Australian champion "butterfly" swimmer who won USD1 million in a swimming championship and was asked by the interviewer what she did with the money she won. She said she heard that "Cash is King" so her money is still tucked safe in her saving account!

Is that what you are doing as well? I guess with the madness in the world now and whichever corner of the world you are in, it does seem not safe to put your cash anywhere, even in the bank. What a predicament nowadays for people with plenty of cash!! It does seems like there is no where to go; definitely not safe under your mattress!

Let truth be told, it is definitely better to still have cash than a whole portfolio of investments that is worth a quarter of what you have invested. But, nevertheless, take to heart that you are not the only one in this dismay situation, even the best investors, people like our investment guru Warren Buffet have lost money in their investments, have made a bad judgment to the "what will be in the future" prediction. So hang in there, I believe that time cannot get any much worst if not better.

Meantime, people with hard cash should make some good, safe and sure-win investments to earn some profits while waiting for the good and better times. A lot of people will just take the easy way out by putting cash in FDs, it is, no doubt, a good, safe and sure-win investment but definitely not earning your cash's worth.... so think about it and make a harder effort to source for better "sure-win" ways....

Are you hoarding your Cash?

Another point to ponder! Is keeping cash a good move? Cash is liquidable and a lot of things else. But is it wise to hoard them? Not so .... according to Mr Warren Buffet; this is what he said ... maybe we should listen to him:-

Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts too alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: "I skate to where the puck is going to be, not to where it has been."

By the sound of this report which was extracted from "The New York Times", looks like it is wise to look at Equities especially now....

Yes, I know.... decision, decision and decision... That's what life is all about!

"The Worst is Yet to Come!"

With today's economic situation, we are all in quandary and I am sure even the most experienced and expert investors are finding it hard to make the right decision or any decisions at all. We kept on reading and hearing that "The worst is yet to come!" Nobody knows when this perplexity is going to bottom out. We can all just give it our good guess and your guess is as good as mine!!

But after reading what was written by the financial guru, Mr Warren Buffet, on "Buy America, I am" in The New York Times on 16 October 2008, I guess we have to be brave to ride out the turbulence!! I kind of like his simple rule ~~ mind you simple and yet very powerful ~~ "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful."

Mr Warren Buffet further mentioned as follows:

"Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over."

Mr Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company. Do read about him and his success and then his advice will be more valuable to you.

So like everyone said "The Worst is Yet to Come!" Are you waiting for the rock bottom before deciding to buy? The decision rest on you and you alone!!

How to know to invest in the right business?

If you know yourself that you are ready to invest, you should start right away because time wait for no one. Also, there is never a right time to start to do something. For me personally, anytime is the right time ..... most important is not the time, is yourself..... are you ready?

We have talked about "Investing In Yourself first" and if you have done that, learn all you can and continue to learn, you are on the right track. Of course, nobody can be perfect in investing, sometimes the experienced and the experts make mistakes too. Just make sure that you learn from

According to the book "The New Buffettology", the 4 areas in which Warren Buffet discovers companies with hidden wealth are 1) businesses that have a repetitive consumer need with products that wear out fast or are used up quickly and have brand appeal 2) the advertising business 3) businesses that provide repetitive services that people and businesses are consistently in need of 4) products that most people have to buy at some time in their life.

These 4 areas are very closely related to consumer demand and expenditure. In summary, they are a business simple to understood, with good managment, attractive prices and has long term prospects.

The above guidelines will show you these mistakes and grow with them. Always stay positive."How to invest in the right business"? There are many avenues for investing but what categories are for you.... you have to decide that base on your disposables and your risk levels. Lets analyze the options we have .......

• invest in one business by oneself, be an entrepreneur
  
• joint venture with some friends or business associates
  
• join a reputable direct selling company; multi-level marketing
• invest in the stock market
• invest in property
  
• invest in mutual fund
  
• invest in Fixed Deposit

invest in one business by oneself, be an entrepreneur
joint venture with some friends or business associates
There are lots of successful businesses out there for you to emulate but for a business to be worth your money and effort, you must be able to leverage your time, money and location. Also, the ROI must be quick and the income you are going to derive from this business must be able to beat inflation. Not to mention the facts that you have to know the business you are going into and for option2, you need to be in business with trustworthy people.

I always believe that "there is never a free lunch" so do not expect to throw in your money and your partners will work their butts out to earn a steady income for you.

join a reputable direct selling company; multi-level marketing
Lets look at option3, direct selling. This option is good if you really have very little capital to start with because in this case, you leverage human power by multi-level. Ensure that you join a reputable company with proven track records. Another point to note is that the products you are selling are repetitive consumable products. If you are successful in this line of business, the compounding factor works.

invest in the stock market
Buying stock are like buying businesses, you have to know how to buy into the right business for the long term returns. If you are a working person and are buying into stock on a part time basis, go for the good fundamental stocks, one that give you good dividend returns. The value of the company is dependent on the present value of its future cashflow, a business that you buy must be simple and have predictable future cashflow. A company with a turnover of RM500mil a year is considered one of the key players in the market.

Sometimes companies with new technologies look like a good opportunity to earn quick and big bucks but I would rather advise that it is safer to rule out this great opportunities if you do not understand how these businesses generate their cashflow. Avoid going with emotion when investing in stock. Used the head not the heart.

invest in property
Buying houses and shoplots are a good investment but this require some capital. If its a new property sometimes you can get good deals with the property developers who has tie-in with the banks for a zero-cost deal, meaning they (bank and developer) will absorb the legal fees and other related costs. Buying a property is a permanent deal, your cash are tied in for long term. It will take time to liquidate, therefore it is important that you do your homework before venturing into this type of investment. Ensure that your property is in demand for rental or sales with a good return. It is not easy, but if you are intending to rent out your property, to be worthwhile you need to get around 8 to 10 percent return per annum.


invest in mutual fund
Investing in trust or mutual funds is similar to buying stocks....the only difference is it removes the emotional strain from you because you are employing some investing expert to study the stocks and make the decision on what company is best to invest in. Other advantages are you get to diversify, you can start invest as little as RM1000 and your money are being compounded.

invest in Fixed Deposit
Fixed deposits is good for "parking" your fund for temporary measures, for the "just in case" scenario. Meanwhile, your money is earning money for you.

Interesting Aspects of Warren Buffet's Life

In an one-hour interview with CNBC news, Warren Buffet, the 2nd richest man who had donated USD31 billion to charity has the following interesting aspects of his life to share:-

1. He bought his first share at the age of 11 and he now regrets that he started too late!! Mmmmmm let me think.... where was I when I was 11? still in my primary years struggling to learn English......interesting isn't it?

2. He bought a small farm at age 14 with savings from delivering newspapers.
Mmmmm again, it brings back memories of my twin sister and brother selling newspapers in PESTA... it brought tears to my eyes seeing them so timidly trying to earn a few cents.

3. He still lives in the same small 3-bedroom house in mid-town Omaha, that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.
Hey... what do you think? If you were only half as rich or has a fraction of his wealth would you not shift in to a mini castle???

4. He drives his own car everywhere and does not have a driver or security people around him.
This sounds fine with me.... at least he appreciates privacy....keep a low profile.

5. He never travel by private jet, although he owns the world's largest private jet company.
Wow...thats not enjoying life .....

6. His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEOs of these companies, giving them goals for the year. He never holds meetings or calls them on a regular basis. He has given his CEO's only two rules:-
Rule number 1: do not lose any of your shareholders money
Rule number 2: do not forget rule number 1
Nice boss to have.......

7. He does not socialize with the high society crowd. His past time after he gets home is to make himself some pop corn and watch television.
Here again, a simple lifestyle.... now you know why he is the 2nd richest man ...popcorn is cheap and watching television is the lowest cost of entertainment. Hey people, we should emulate....emulate....emulate

8. Bill Gates, the world's richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffet. So he had scheduled his meeting only for half hour. But.... the meeting lasted ten hours and Bill Gates became a devotee of Warren Buffet.
I suppose the only common thing they share is the amount of money they have!!!!

9. Warren Buffet does not carry a cell phone, nor has a computer on his desk.
Wow.... how did he survive that for so long, even a 6 years old these days carry a cell phone. And for computer... I wonder how can he live without blogging..........

His advice to young people:
"STAY AWAY FROM CREDIT CARDS AND INVEST IN YOURSELF

I second his advice

Moral of the story

Money does not create man, it is the man who created money
Live our life as simple as you are
Do not do what others say, just listen to them, but do what you feel is good
Do not go on brand name, just wear those things in which you feel comfortable
Do not waste your money on unnecessary things
Its your life, do not allow others to rule it!!!