Okay, this is not a blog post about passive income but rather how you can and should automate certain aspects of your income and investments. Without automation, normally we have other things on our minds and if you have to think about all the time, eventually it won’t get ourselves to take action.

Well Ramit Sethi talks about setting up systems to ensure that your savings and investments are automatically done regularly. By setting up systems that automatically take action, it reduces the possibility that we do not take action.

In my own experience, I tend to agree with this. For example, I put quite a bit of money into my investment link life insurance policy. Since I do not contribute to the government imposed compulsory retirement scheme that most salaried employees are required to do, I put them in my insurance policy to maximize the tax allowance as well. Now, I bought a significant amount of insurance for the cover and not for the tax benefit. That was a secondary consideration just in case you think that is a silly financial decision. Yes, don’t buy insurance to get tax advantages. Get it for the cover.

Since I pay the premiums through my credit card monthly, the money there accumulates and have been doing quite well these last 10 years. There is a reasonable return on the premiums paid and I’m happy about it. Compared to the money sitting in my savings account that I actively need to look at shares prices and other forms of investment, the money has been sitting there for a while. I know that is the way I want it to take advantage of potential good buys but honestly, I don’t really look at stocks and property all that much. Not like some of my friends do. So, I’m NOT getting the most out of making my money work for me. Shame on me. True but that is how it is.

Talking about automation on another level, being in sales, I admit that I hate to make cold calls to people. Yes, I’ve done it in the past enough to build up a small clientele but I absolutely hate it. It take a lot of my energy and it drains me. Being introvert and preferring solitude and quietness, I’m a person that is naturally prefers to be alone a large portion of my time. Crowds and people drain my energy when I’m with them too long. So, what do I do?

Well, I have a website that generates leads for me. Once a lead come into my email inbox, it is easy to reply the enquiries. Some of the leads turn into meeting appointments and others don’t. I notice that once a lead comes in and the sales process is started, it is easy for me to follow up. I can just email the potential customers to see if they are still keen to proceed. If they are not, it is fine with me. If they want to proceed, then, I’ll do what is necessary to ensure they get the product they want.

What I want to highlight is that once the process gets started, it is easy to follow through. If I have to initial the process via phone calls, it is a pain for me. After being in sales for so many years, I know it is still a problem for a lot of sales people. Some of us just absolutely hate to get the process started.

And so back to the topic of making your income and investment go on automatic. I think it is very important to make use of automatic systems to our advantage. This does not mean you don’t look at your investments from time to time. Perhaps a review is also important to set up as part of automating your investment. Why not ask your agent or broker to call you every 6 months for an update? That way we are forced to look at the investments and make decisions to adjust.

If we have to make that decision every time, then it will be hard. Let’s face it. There are much more interesting things to focus on than to look at money and investments all the time, for the majority of us anyway. People are lazy anyway. I know I am too, in certain aspects.

I know there are people who absolutely love to focus on money. It is a hobby for them. Any free time is devoted to looking at investment, whether to buy or to sell and researching the next best thing. However, I think most of us are not wired like that. I know of a friend who concentrates a lot on property investments. Even for him, there is a process. He has set it up so that real property agents will contact him when certain properties are on the market. If he is interested, he will go and look and decide whether to buy the property or not. He has his bankers lined up so that he knows what types of loans he will be able to get for the property he is considering. For him, the starting point is when someone else contacts him to look at a property.

So knowing ourselves in a key part in making systems and process work for us.

What about for you? Do you have a system that will kick start a process you know you will follow through? If you have, and don’t mind sharing in the comments, that would be great. I’ll be glad to learn your process as well.

Original article from Personal Money Tips

I took part in a street rally a few days ago. You may or may not have heard about it. The street protest took place in many cities around the world beside my city here in Kuala Lumpur. The street protest is for a fair and free election. Search for Bersih, which means clean in Bahasa Malaysia and you will be able to know what it is about.

Gathering at Leboh Ampang during Bersih 3.0

The protest where I went to being the main city in town has the authorities and protestor on either sides and there were some violence involved. Considering the number of people there, I think the damage is minimal and there were allegations of police brutality and agent provocateurs. I do not want to write too much about the protest but my thought about doing something that feels right and I believe is the right thing to do yet it is not profitable. Not immediately to me anyway.

You see, I knew there were risks going to the protest since the last’s years rally saw people got hit by tear gas, water canon and also people being roughed up. By my calculations, it will take almost the whole day, I need to pay for rail transport to get to the city center and then, there was the risk of damaging my camera and phone not to mention the real risk of being arrested and beaten up. I didn’t really mind spending a day for a good cause but I wasn’t too keen about spending a few thousand to replace a damaged camera or any time is hospital. Yes, it was bad for some people and I found out that many reporters and amateur photographers got their camera smashed. Some had their memory cards taken away. But then, I could not sit at home like I did last year when the protest took place.

And so I went, I saw, took some photos, stayed alert and when at the first sign of tear gas, I got away. I did not suffer any damage to my gear so financially it was the time I used and the train fare which was minimal. If I didn’t go, I probably would have used the time in front of my laptop to keep myself updated on the unfolding events anyway. So the time expended that I could have done something productive would have been negligible anyway.

However, there are many others in the city were impacted in negative ways. The authorities choose to cordon off an area and with the potential trouble, many businesses closed on that day. I know of others in my country who felt that the street protest would not achieve what it set out to do, which is a call to fair and free elections.

For me, it was something I felt I need to do. To show the authorities that many want change. Even if doing that meant it doing something unprofitable. I could have just ignored the things that are happening in the country. In fact, most people in my country had done that for many years. We have ignored negative changes for so long that the rot that set in will take a long time to repair.

What has all these got to do with a financial blog? Well, in life as well and in your financials, I think if we ignore doing the right and necessary thing, eventually it will come back and haunt us. The fact that for many years, many of us Malaysians did not speak up that has brought us to this point. The internet has brought us freedom of information that many know of the many injustice and corrupt practices that were easily hidden in the past. For an individual, it could be not paying your taxes or not saving up for retirement. It could be not taking care of your health and now, you have to incur a high and on going medical bills.

Besides doing the right thing at the right time and not ignoring things we need to handle, it could also mean doing the right thing to protect your reputation and integrity. If you are a business person or a sales person, would you sell a product you know won’t fit your customers’ needs? Or at the very least tell them so that you’ve done your part and if they still insist, then sell it to them. Would you use up a part of your profit to make things right with an unhappy customer? These are some of the things that is right to do but won’t be profitable.

What do you think? Would you do the right thing at times when it is unprofitable? Hope to hear your response.

Original article from Personal Money Tips

It is always dangerous to put all your eggs in one basket. Recently I noticed some online entrepreneurs have their income cut by Google. A significant part of their business depended on how one big corporation decide. And the best thing is, big G is known for the way they treat these type of entrepreneurs.

I’m talking about those that earn a significant amount of income from Adsense. Those that pay money to Google, those that spend money on Adworks are treated well. After all they are giving money to Google.

Let’s not dwell too deeply into what happened to them, let us explore the all the eggs in one basket scenario in a wider sense. In my own experience, working based on an agency type contract, the terms in my contract gives the company the right to terminate the contract. The terms are rather broad and so I’m at their mercy. In the past few years, there were changes in how products are designated. How these products are designated has an effect on the compensation we get. Suffice to say, they have been designating products that give lower commission. Sneaky of them. Whereas the competition has not been doing so, so we know.

Further more, the nature of the business is such that we get compensated over several years for the sale we make. However, if we our contract is terminated, we won’t get the money that is due to us. This is an example of a bad business or income arrangement. In was the those days that I didn’t bother to check the contract. Even if I did, I wouldn’t have make a big fuss about it then. I wouldn’t have known better. At this point in my life however, I won’t touch any of this type of business arrangement with a ten feet pole. Okay, I’m exaggerating.

The thing about big companies is that eventually, just a matter of time, they will squeeze their people. Whether you are an employee, an agent or a franchise. Which is why, today I’ll avoid any business that has such an arrangement. Where one party holds all the cards and can determine your fate.

Let’s look at another example. Multi level or direct sales. The idea is to build a large network of down lines and you get to override on their sales. Assuming you are good enough at sales and good enough to recruit, train, motivate others, you know that it will take a significant amount of time to build your network. However, the company can change the agreement at any time. If you don’t like it, that’s too bad for you. All that effort to build a network comes to nothing. Okay, not nothing but depending on when changes affect you, you do not reap the most of what you have invested in. If the company closes down, your network goes with it as well. If you really like direct sales or multi level, maybe it is better to be the company and the first person in the network rather than just in the network only. Make sure is you have a good enough level of control.

I’ll say the same about the franchise business model as well. Your business is dictated by how the franchisor wants to do business. While a franchise has great potential and you get a blueprint to follow, at some point, things will change. Sure you can sell off your franchise but I’m sure there are also terms and conditions you have to meet.

I read sometime back that a rather well know franchisor forced their franchisee to sell a product at a loss as part of promotion. The franchisees were not happy at all. I can’t remember which one. At the end of the day, however, it is about control. When things are going well, such problems to not surface. When things are not going too well, then the issues will surface and it is just a matter of time before they do. Think about this if you want to get into a franchise. If you can, be the franchisor. If you really want to get into a franchise, have a lawyer go through the agreement before you sign on the dotted line.

So you ask, what is there left? There are plenty of other options. You can be an independent sales person. Just make sure you get paid everything. The same if you hold an agency contract. Make sure you are not restricted to represent one company alone. I know of people who carries several brand so that if a company changes the terms, at least you have others to fall back on.

Also look at regulations. Depending on where you live, the regulations can be non existent or very strict. Consider the type of regulations. Safety regulations are okay in my opinion. However, you really have to think about regulations that determine how you are to price your products and/or services, the opening hours etc. I’d also be wary of how I can market the products in a creative ways. The more restrictions, the more I’d think twice about such business arrangements.

You may think that thinking of all these parameters before you start a business may limit you. In a way, yes. On the other hand, it will also help you to zoom down to things quicker without having the “so much choices available but can’t choose one” syndrome. Just like when you walk into a food court and there are multiple stores to choose from, you have difficulty choosing. If you have 2, then making the choice is much easier.

While you can’t think of everything before you get started and in some cases, it is better just to start, for something that you intend to build it for the long term, it is better to read the fine print. I’m not saying take months to go through your options but consider what I mentioned above. Otherwise it will be years before your find out and decided to switch out.

Been there, done that. Don’t do what I did.

Original article from Personal Money Tips

Buying and selling on Craigslist, a 14 year old saves enough money to buy a house. She do up the house and now get’s US$ 700 per month from rental. This is an truly an inspiring story. Watch the video below and read my notes below.

Notes:

1. Possibility thinking – many people don’t think it can be done and as a result, you closed yourself to the potential opportunity. Granted that you have to be careful about what opportunity. Well things that don’t involve recruiting others.
2. Saving money – you may get money from selling stuff on craigslist but what do you do with the profits? Are you saving and reinvesting? Or do you buy stuff that don’t help you money snowball eg electronic gadgets etc?
3. Continue doing what works – when you get successful or make some money, do you continue to hone it? There’s nothing wrong about moving up the ladder and having a go at something bigger. Don’t abandon what works until you have a firm grasp of new investment
4. It pays to get on TV

The moral of the story. You can do something about your financial situation to make it better. If you have to pick up things that people throw away, why not. If a 14 year old can do it, so can you. Read about other side income ideas here.

Original article from Personal Money Tips

It’s been a while since I added a new article on side income ideas. I think it is about time to add what I’ve written in 5 parts, here, here, here and here. I came across other ideas and no doubt, some of the ideas are great. There are also some strange ideas like selling body parts and fluids, think blood, plasma, egg and even sperm donating, there are limits. I’ve also realized that some ideas are not possible nor practical depending on which part of the planet you live on. One thing I totally disagree on is selling a kidney. That is just too much not to mention a one time deal.

I’ve been selling flyers and brochures that come to our house. We don’t much selling them but it is better than not selling them. I see that many people collect metal cans for sale. To me, I think that is too much work for too little return. It may work for you where you are living.

Recently, my wife’s niece announced that she made some money selling bead jewelry. Not a lot and considering that bead jewelry requires time to do but it is a good start for someone who don’t need the money yet since she’s still in school.

Selling bead jewelry it is not passive income but it made me realized one thing. If you really want to, you can sell almost anything online as long as it is not too big or heavy in relation to the value to ship. This is to ensure that shipping cost is not too high. Also, you may not want to ship something that is too high value that increases the risk to both buyer and seller.

Now, I’ve people who visit my site from places like India, Pakistan or South America where things like mowing a lawn or donating bodily fluids may not be available. You still can sell something. For places like that, think along the lines of traditional crafts that is not available elsewhere.

Perhaps it is a national costume or your national flag. Now that football (soccer) season is heading towards Euro Cup 2012, I’m guessing things like jerseys and flags may get people interested. If you are from that country, I bet you can get flags easily.

Many countries will probably release stamps as well. So again, you can trade stamps. Small and light, just the thing for selling online. Here are all the teams playing in Euro Cup to give you an idea of the opportunity.

You may not even need to set up a blog. If you need to start a site you are dead broke, blogspot will do. Your Facebook account and a facebook page will be enough to get started.

One other thing to remember. Just because other people are selling something, doesn’t mean you can’t sell similar things. The word is similar. Not the exact same thing. Even for exactly the same thing, you still can do so if you have different sizes, colors, faster shipping or closer to the buyer. Don’t let this stop you.

Original article from Personal Money Tips

We all know that a car is the next largest purchase after a home for most people around the world. The car or automobile is also the most common thing a person buys, that requires a significant portion of income to own. The cost includes purchase price, financing or interest, fuel, insurance, road tax, toll, parking, maintenance (tires, batteries, engine oil, filters etc) and depreciation. I don’t think there is anything else you can own that sucks up so much resources. Even a house does not cost that much to maintain and in usual cases, do not depreciate.

Pound for pound, a car is one of the most inefficient way (energy wise) to move a person around. A small car weighs around 1,000 kgs and probably carries a person of around 75 to 80 kgs. A bicycle by comparison weighs around 12 to 15 kgs and carries a heavier weight that itself. So most of the energy is used to move the person rather than the vehicle! Pound for pound, there is nothing more efficient than a bicycle.

Besides the actual dollar cost that you pay, many people in the cities spend a significant amount of time stuck in traffic getting to and from work everyday. If you include you hourly wages into the equation, you are paying for lost time in traffic.

While most people are smart and generally make logical financial decisions, I think the advantages of a car outweighs the cost of owning a car. That is why many people choose to own a car. Owning a car means mobility, freedom and more choices to travel. Due to the availability of cars and relatively cheap fuel in the past, people can stay further away from their workplace. However, this too is changing in some countries. As more people work at home or choose to stay closer to their workplace to save of travelling expenses, i.e the cost of getting to work.

There are detailed cost analysis between biking and driving. You can see the calculations here. I won’t go into the calculations but suffice to say, it cost a fraction travelling on a bicycle compared to a car. Does that mean cars are out? Not at all. For longer distances especially out of the city centers, in bad weather and taking multiple persons eg your family and kids, a car is still the best practical option.

I took a look around several bicycle shops. It seems that many bicycles cater to the rich. Imagine the paradox. When you have little money, you started out by walking, then get a bicycles, a motorbike and then a car. Now it seems that those who have cash to spare and after getting expensive cars, some for for motorbikes and/or bicycles. Off course this is for leisure rather than for commuting.

Mixed mode commuting i.e. utilizing several types of vehicles for 1 journey has seen the rise of folding bicycles. This too is getting popular. In fact, several companies have gotten big with this trend.

Financial wise, it seems a little crazy to dump such a large percentage of income for the status (and convenience) of a car. Perhaps you may want to think of having 1 car for the family and using a bicycle for shorter journeys. It will do your health a lot of good too.

Anyway, I’m looking at some folding bicycles and a few has piqued my interest. Who know, I may yet be a convert soon.

Original article from Personal Money Tips

Today is Valentine’s Day. Happy Valentine. I’ve been receiving multiple short messages about offers here and there.

In fact on Sunday, a restaurant started a promotion with some smart marketing. If you are not yet steady but want to take a gal out, you can eat there on Saturday or Sunday for a slightly lower price. If you are steady, then you can go Money. If you are confirmed a couple and want to do the whole Valentine’s things off course is the most expensive of the 3 options.

This restaurant allows more people to go rather than just on one particular day where everyone wants to eat and there’s a limited space available. Good for patrons too because since depending on what stage the relationship is at and also how much you want to spend, you do get to options.

Anyway, I think the way Valentine’s Day is celebrated cost too much. I heard roses have to be imported with a surcharge of almost 40% for this one day. In neighboring Singapore, apparently the people there prefers other flowers. I can’t remember exactly what flowers they were since I read it a few days ago.

Anyway, I always thought roses was the way to go. I think that Valentine’s Day is a good reminder to show love to your loved ones. However, out of 365 days in a year, 1 in 365 don’t cut it for me. I reckon you should do it at least tell your significant other once a day. For families members maybe once a month. So, I’m Asian and we are more reserved. I tell my significant other several times a day but other family members less so. Off all the things that are not good in Western culture, I think telling and showing people you love them (in a more open manner) is a good thing Asians could do more off.

I don’t have roses but here are some orchids. You don’t have to get what everyone else is getting you know. That’s one way to save some extra cash. Do the similar thing on a different day or do something different on the same day.

Happy Valentine’s Day. Enjoy yourself and go easy on your budget so that you won’t regret the day after.

Original article from Personal Money Tips

We are in the midst of celebrating Chinese New Year. Actually Chinese New Year is was a week ago however for 14 days, some Chinese actually go out to eat, drink and celebrate. There are those that gamble during this same period of time. I’m Chinese with some Western point of view so I can say this.

Both my SO and I can’t understand why the need to spend, spend, spend during festive season. Traditionally the purpose of Chinese New Year is to celebrate the family “making it” over from the past year. Life was tough during certain times and sometimes family members don’t make it through the year. Some families don’t have enough food or don’t get to eat meat during significant portion of the year so come the new year, eating well is like a bonus.

In modern times, most of us have all the food we want. Even today, instead of not having enough to eat, the problem is the opposite. Most of us are eating way too much. So I don’t see the need to feast during Chinese New Year. Having meals together and spending time with close family members are great. Especially when families are far and it is a good tradition.

What I can’t understand is when people really spend a lot of money to get new clothes (most already buy too much during sales), get special food (Chinese retailers sometimes raise prices and make a killing) and least of all the gambling.

Many Chinese gamble when the generally do not. Many years back, Chinese colleagues gambled during lunch break by flipping pages through a phone book just to see who can get a larger number.

Another point the Chinese are good at is fireworks. So we (some of us anyway who still worship multiple gods) create a warzone like environment by burning fire crackers for several hours. Usually not one family burning fire crackers but a township with different people taking turns to do so. My take? So you want to create some noise. But does it have to be non stop for several hours? That is money going up in smoke literally.

The point I want to make is, many of us do things that are cultural without thinking why we are doing it anymore. Just because it have been done in the past does not mean you still have to do so. I’m not saying we should cut off everything from our culture but I am saying think about them and not simply follow things that don’t make sense.

I’m saying this since I’m Chinese. However, whatever culture or celebration that you do, I’m sure they apply to you. Take Christmas which my family also celebrates.

While the practice of being generous and giving others a gift is great, I think if we “have” to give someone something, then it defeats the purpose. And we all know of the gift that is recycled all round because nobody has a use for it. Perhaps I’m at a point in my life that is no longer define by the things I own and do not really need or want more stuff. But look around. Most children have too much toys, clothes and whatever else.

What we need to learn is to enjoy what we have and not have more things to enjoy life. Think creatively and do something different that don’t require us to own more things. Too many things bogged our lives down rather than make us happy.

Original article from Personal Money Tips

In 2007, I wrote a post about buying a new laptop. In that post, I weighed the pros and cons of getting a cheaper home user type laptop versus a more expensive heavier duty business laptop. Well it is over 4 years now and the laptop is still functioning well.

A few things to note:-

• The laptop had a malfunctioning CD/DVD combo writer. It could read and write to a DVD but not write to a CD Rom. That was taken care of under warranty but I had to reinstall everything. I discovered the problem 2 months into ownership. I have not used the DVD or CD much
• I changed the battery after about 3 years of use. It cost around US$125 for an original battery.
• I upgraded the hard drive that cost around US$60

Two of my relative also bought 2 different Benq laptops at different times but faced problems with graphic and sound cards. Guess I was lucky.

So at 4 years going into the 5th year, the laptop is still quite snappy. I don’t need to upgrade since it can handle most of the things I do regularly. Except of a bit of (half) HD video editing I’m editing on the rare occasion, it does my work pretty well.

A few things I learned with this laptop:-

• Lithium batteries should not be kept fully charged
• Prices of laptop and other electronic gadgets really dip fast
• Be gentle with your gear

I found out rechargeable lithium ion battery age whether you use it or not. It ages fastest when fully charged and temperatures are high. That is what probably kill my first battery.

I can now get a pretty decent laptop for around US$800. The present laptop cost me US$1,140.

About 2 months ago,I got my self a smart phone for US$400. A Galaxy S Plus. It is one of my more expensive expenditure on gadgets lately. You’ll notice I don’t get the top of the range gadgets.

I could afford it and wanted an Android experience. The smart phone is great. It functions as my mobile phone (naturally), a copier (I use it to make copy of documents), a handy video cam (I’m experimenting with video to promote my work), an ebook reader (not too good for the eyes), a mp3 player, plus several other things. I can get my email, go on Twitter and Facebook with the phone as well.

For almost exactly the the same amount of money, I got a pda without the phone functions 4 years back!

Though I sort of broke my own rule of not paying over US$300 for a phone, I really enjoyed owning the phone thus far. The Nokia it replaces was with me for 3 years, cost US$240.

In 2009, I got my first digital camera and used it for over a year. Then I sort of eyed some dslr, those big cameras that are a potential black hole for your money. Yes, photography is an expensive hobby both financially as well as time wise. The thing with photography is that if you cross a certain thresh hold, it can earn some money out of it too.

Anyway, my brother passed me his under utilized dslr to use and a few months after that, I sold my camera, for half of what I paid for it. The reason was two fold. First my eyes are getting old and a small view finder doesn’t do it for me anymore.

Second, since I’m not using it all that much, rather than have it sit in the drawer, I sold it with the intention of getting a tripod or a lens for the dslr.

Finally, from the experience with my laptop battery, I knew that the battery in the camera will have a certain lifespan. These proprietary battery can be expensive to replace.

I haven’t spent any money on the dslr yet except for a second set of rechargeable AA batteries. That’s because the dlsr uses older type of batteries that functions best with full charge-discharge cycle. I missed some photo opportunity because of that.

Like I said, photography can be an expensive hobby especially if you like the gear more than the output.

What about you? Do you spend too much on your gadgets?

Original article from Personal Money Tips

There is no magic in managing money. No magic to get out of debt, to pay off any small or large loans. You may think a business or a new venture will be the answer but I doubt that. Business is also grown one customer at a time, one email sign up at at time or call at a time.

You don’t expect a tree to fruit overnight when you just planted the seed yesterday, so why do you have such expectations with regards to money?

If you have children, you know they will take several decades of hard work, discipline, effort, time and money investment that they grow up to be responsible, balanced and productive adults.

So too with money. Want to invest? Start small and keep doing it. The magic, if there is such a thing, is in the Doing and being regular at it.

There will be times when it seems you are not making any headway. In fact, you might feel you are going backwards. That is okay. Everyone has their moments.

Celebrate small victories, don’t be too hard on yourself on small failures. Keep moving on forward.

You may feel overwhelmed. The problem is too huge. Like chipping at an iceberg with a pick axe. That is normal too. Don’t give up. Take a rest if you have to but not too long.

See what you need to focus on and focus on that for the next 3 to 6 months or even a year. Do something and keep doing that something.

Eventually, you’ll get there, I promise.

Original article from Personal Money Tips