by Helmi Hakim | Apr 9, 2008 | Investment
I have clients who tell me,it is better to buy a penny stock than a blue chip because it is CHEAPER.
Example you have $1000 to invest.
The penny stock you have been eyeing cost $0.10 each.
…. and another one, a blue chip cost $50 each.
With $1000, you can buy 10,000 penny stocks.
With $1000, you can buy ONLY 20 blue chips.
So their rationale is its better to buy penny stocks, because it is CHEAP and you can buy more because of that.
Blue chips are too EXPENSIVE.
So….Which is better, blue chip or penny stock?
The holistic truth is that the price of the shares DOES NOT matter.
What really matters is the potential percentage increase in the price, which depends on variables like
-the profits that the company makes
-market sentiments of the development of the company etc2.
Lets assume the above example again.
Assuming both companies are equally strong and enjoy 20% increase in price.
The total value of the PENNY STOCKS will increase to (10,000 X $0.12) =$1200
whereas the total value of the BLUE CHIPS will also increase to (20 X $60) = $1200
So you see… The price of the stocks doesnt makes the difference.
Both investments make the profit! 🙂
by Helmi Hakim | Mar 23, 2008 | Investment
There is this theory known as “Parkinson’s Law“.
In the context of finance, it means “the more you EARN, the more you will SPEND“.
Many of us were illusioned with this myth, “If this person is a director of a company, this person is a big shot, this person is running his own business…. this person must be filthy RICH!
This person, for sure, have LOTS and lots of money.”
My humble experience as a financial associate tell me otherwise.
The MORE the person earns, the HIGHER his expenses will be.
Come on…. Lets face it!
……………………………………………………………………………………………………………………………………………
” Usually when we are earning $3000/mth, we will have a normal house, a normal car, eat in normal restaurants and go holiday in nearby countries.
However, when our earnings grew, say $5000/mth, without us knowing, we will then get a bigger house, a more sporty car, eat at expensive restaurants and travel futher.”
………………………………………………………………………………………………………………………………………….
This is what we called Parkinson’s Law.
This theory does not only happen to other people.
I am guilty of it too! 🙁
Dont feel syiok good right, earn so much, yet spend so little. 😛
So… What can we do, to counter and avoid being a victim of Parkinson’s Law?
Financial advisors across the board have always emphasize in savings at least 10% of your income.
You must always remember, when your income increases, your savings should also increase too, to avoid Parkinson’s Law.
Maybe when you earned $3000, you save $300 (10%).
However, when your income increases to $5000, your savings should not remained at 10%.
Increase it to 20% ($1000).
With this method, you still can enjoy your increment in your income without feeling guilty ($4000), and you still be able to save more and fight Parkinson’s law ($1000) at its root! 🙂
by Helmi Hakim | Feb 29, 2008 | Insurance, Investment
In my course of work as a financial associate, I meet literally hundreds and hundreds of people out there with different types of personalities, different types of attitudes and different types of attributes when it comes to the topic of money.
There are really lots of financial instruments out there that you can use.
I will like to share with you 7 things you MUST know before making decisions to get the financial instruments.
1) Know How Long You Need To Keep The Financial Instrument
I have met clients complaining to me that they have been cheated by their agents.
They claim this and that, often vouching on the topic of losing money.
Often, it is investment.
When I questioned them, on how long they keep and then liquidate their investments.
They will answer 1 or 2 years.
It doesn’t take a genius to figure out that by liquidating with that short period of time, the amount that they will get will definitely be lower than the principal amount.
So first thing first, know how long you need to keep the financial instrument.
2) Know What Are The Charges Involved
It is normal that in everything you do, there will be charges involved.
As an informed consumer, you must know what are the charges involved and how long will it takes for your investment to break-even with the charges.
3) Objective Of YOU Getting A Financial Instrument
You must know your objective of getting a financial instrument.
What is your purpose of getting that life insurance policy?
What is your purpose of getting the savings plan?
You must have a purpose, if not you will be doomed.
If you get an insurance policy without a purpose, you will soon lapse it.
If you get a savings plan without a purpose, you will soon liquidate it and spend all the money away because you don’t feel a need for you to save that money.
You don’t have an objective!
So, remember this, anything you do, you must have an objective.
4) Know the background of your advisor
Ask your advisor if he is practicing what he preached.
If he is recommending you a financial instrument, asked him if he, himself have used the financial instruments he recommends.
If not, ask for the reason.
5) Get the financial instruments only if you understand
Yes. That is a statement.
Only get a financial instrument, if you truly understand.
You will not want to subject yourself to ambiguity and confusing lifestyle in the future.
Clear your doubts before getting any financial instruments.
6) Ensure that you can afford
When you get life insurance policy, savings plan or an investment plan, do ensure that you can afford to do so.
It is not smart to get something you cant afford.
Make sure your financial associate assess your financial situation and recommends strategies that you can use to accommodate that financial instrument in your existing lifestyle.
7) Check if there are backend charges
Some plan don’t have upfront charges, which makes the plan looks impressive.
Ask your adviser if there is any backend charges to your policy.
You wont want to feel happy and end up being disappointed when you liquidate your financial instrument.
I hope all these 7 points will be beneficial to you ! 🙂
by Helmi Hakim | Feb 24, 2008 | Insurance, Investment
I realised that everyone can achieve financial freedom in Singapore.
To me, financial freedom is having your passive income exceeding your monthly expenses.
Which means that even you SHAKE LEG, all your expenses will be taken care of, without having you need to work.
There are many strategies that you can use to earn passive income.
I will share with you on how I will generate my passive income.
1) Through my job as a financial associate
From my job, I can create passive income streams.
Right now, I am earning about $1000 of passive income per month if I choose to sleep at home every day.
I will increase it day by day.
2) I am targeting a condominium house in Malaysia.
Yes. I am targetting, one in Danga Bay.
First reason, because its near my house in Woodlands.
Second reason, because the capital appreciation for the properties there is increasing fast and furious.
Third reason, Malaysia government is going to pump billions of dollars for the Iskandariah project.
…and many many more reasons.
I will get an agent to collect rental on my behalf every single month.
3) Royalties from my books.
As I become popular and successful, I will share with everyone of practical methadologies that I have been using to propel myself to success.
If I can do it, anyone in the world can do it.
Everyone can do it!
I am going to write books (cant disclose the topic now…psst…secret) and earn royalties from it.
4) Invest in shares where the companies have history, giving dividends generously to shareholders.
Yes.
This is one source of passive income you can look into.
Of course, you need to check other relevant factors like the transparency of the management, company performance, ROI, cashflow statement, PE Ratio, etc2.
5) Affiliate Marketing
As I become established, I will work with all the rest of the top advisors in this field.
If I find their products (e-books, softwares etc) is useful, I will definitely recommend to others and gain passive source of income from there.
6) Advertising
This will be something minimal.
I am yet to be expert in it, but I will somehow find strategies to earn passive income from it.
Yup… Pray for my financial freedom to come sooner! 🙂
by Helmi Hakim | Feb 20, 2008 | Investment
Some people asked me for advices.
“When is it the right time for me to enter the market?”
“Will the Singapore economy do well in these coming years?”
“I DON’T think we should invest now. The market seems uncertain.”
” I think we should invest now, because market price is low. We should capitalise on this opportunity asap before it’s too late!”
A lot of statements have been made by others.
Well, I have another SECRET to share with you here.
This is a well known secret.
You may know it.
OR you may not.
OR you can pretend not knowing it.
The truth is “NO ONE IN THE WORLD CAN PREDICT THE FUTURE“.
If someone tell you, that he could, he’s lieing.
He just based on assumptions and hypothesis.
No one can say for sure that the market will go up further or the market will tumble like there is no tomorrow.
No one can say that.
What we know for sure is “market cycles”.
All of us know that whatever comes up will go down and whatever goes down will comes up again.
…and investing in funds is very, very different compared to investing in penny stocks (small, cheap stocks).
Small companies can tumble and go bust.
…but funds are different.
Performance of funds that is worth billons of dollars can goes up and can goes down.
BUT never goes bust.
When you invest in funds, you have to adopt the mindset of an investor.
When the market goes up, it is good for you.
When the market goes down, it is also good for you.
Why do I say that?
You see. You can never control the market BUT you can take advantage of the market performance if you CHOOSE to adopt an investor mindset.
You see, many people are emotional when investing their money.
Emotions and money cannot mixed.
You must SEGREGATE them.
You must think logic when it comes to investing.
When the market goes up, it is good for you because the VALUE of your units goes up, which translate to good profits if you choose to liquidate them at that point of time.
When the market goes down, it is also good for you because it presents you an opportunity to buy units at “discounted” price.
This is where you “top up” your units.
Lots of people out there, start to “kan cheong” when the market goes down and do exactly the opposite to my advice.
They sell and realised their loss.
That is why I always advise my clients on the mindset of an investor.
I am happy that my clients subscribe to my idea and remained as my loyal clients till today.
Thanks to you! 🙂
by Helmi Hakim | Feb 19, 2008 | Insurance, Investment, Miscellaneous
At times, clients feel at ease when talking to me.
They find my explanation simple and easy to understand.
I never talk too long, yet not too short.
Just nice. 🙂
Today, I will let out a little secret here. (You are very lucky, coz I dont have much secrets anyway 😛 )
If you are a financial associate like me, take my advice and I assure you, you will have lots of clients waiting eagerly, to get a plan from you without having you trying to persuade them much.
If you are my client right now, you will be nodding your head in full agreement, acknowledging what I will explain here.
Its a fact.
Everyone in Singapore knows the importance of financial planning.
They know its is very important to have insurance for coverage, to have savings for their future needs,and to have investments to meet their financial objectives in life.
This is the status quo in Singapore as majority are well educated today.
For many, they know all that.
For many, they just wants transparency in your dealings as an advisor and sincerity in your effort in recommending quality financial instruments to them.
When I communicate with my clients, I will always, always be very direct.
Straight to the point.
…and I love educated clients, because they know what I am going to say and usually even before I complete my presentation, they will just say “Okay, I will sign up the plan with you”.
I will retort “I have yet to complete my presentation. Its better for me to complete it so that you can have a clearer picture.”
Some will answer ” No need. My brother, my friends, my relatives etc2, is an insurance agents, and I get the plan from you because you explain about the plan in simple terms and I know it’s for me”.
End of story.
So… First thing first. Be very transparent.
Tell all your clients about the benefits they will get and also the charges involved. Tell you clients, what you expect from them.
Generally, advisor like us expect commitment from the client so as the clients themselves can reapt the fullest potential from the plan they have undertake.
Second thing, trustability.
I am very happy that majority of my clients trust me as their financial associates.
From trust, we build relationship, and from there, the cycle of financial planning continues.
That is what we called “long lasting business relationships”! 🙂
