Credit Card - leverage it!

There are nine million credit card holders nationwide and this figure is counting. The most recent report about bankcruptcy in Malaysia reveals that 40% of them resulted from failure of paying back their credit card loans. Should you get a credit card ?

I must admit, back in year 2000, getting a credit card is a joy for me. A significant milestone for me as an income earner. Business world is always realistic, you don't want to buy your customer lunch with your seem-to-be unimpressive classic card (don't mean to insult any classic card holders here but sharing what business world perceives). This drives me a quick move to change from Classic to Gold and to Platinum. The joy of upgrading is always there but i only realise the true usage of credit card as a financial leveraging tool a few years back.

Let's talk about the bad points of credit card first. Credit card drives you to spend more. This is a known fact. The moment you swipe your card , you won't feel the pain until the payment dues. The adrenaline rush to get discounted deals always overcomes your calculation logic. Therefore, you have to be very discipline(financially) with a credit card. Besides that, credit card charges annual fees. Yes, i will talk about ways to get waiver later, :).

The good points now. You can leverage credit card as a cash flow tool. As we know, we have so many 0 % interest payment plans available now. How do you make use of them wisely? These perks are meant to drive you to spent on unnecessary stuffs(a.k.a luxury stuffs) . But , it would help you to save on interest if you know how to leverage on them. I will take a simple scenario, such as travelling. My wife & I had planned to go for honeymoon in New Zealand quite sometime ago before we got married. And, you need to save a lot of money for that, :). The trip costs about RM12K for two person. When I was making the payment through credit card, I was offered a 0 % interest payment plan by Standard Charted Bank. Guess how can I save money through this plan? I took their their plan for 12 months repayment and injected the 12K I have as a capital repayment for my house loan.(which charges me 7.03% per annum) . I have effectively saved RM 843.6 not taking in the interest compounding factor. You can actually practice this for necccesities that you needed. Direct Access credit card is also offering 0 % interest payment for 9 months for any purchases above RM500. You can always play around with the figures but just make sure you are discipline enough to repay the payments.

If you know about credit card well, they give you a 20 days interest free period. For any large payment you need to make through credit card, (eg. buying expensive furniture or electrical appliances ) you can choose to pay 1 day after the effective monthly cut-off date.(if you have a choice of when to make the payment). You can earn one month of interest from there. Let's say , your monthly credit card bill cut -off date falls on 17th of every month (all transactions after 17th will appear only on next months bill), your payment due date will be 20 days after 17th(which normally falls on 6th of next month). If you made a transaction on 18th, you will only need to make the payment 2 months later. This effectively gives you 50 days of interest for free. 50 days is almost 1/7 th of a calendar year. If your transaction amount is large, the effective interest you gain is quite substantial.

You might ask, what about annual fees ? The credit card industry is so competitive now that they will give you a waiver whenever you requested one.( I haven't been paying any annual fees since 2002) Or, simply just choose a card without annual fees. ( EON Bank, Direct Access, Ambank, Citibank)

Income Generation: Get paid up to USD75/hour by signing up with Google as beta tester

In my past <101>, I did mentioned about generation income from online surveys. I have some good news to share with you, the 8th world most admired company ranked by Fortune, GOOGLE, is offering up to USD 75/ hour as a product beta tester for their company. Details are published on their website in this LINK.

Too good to be true ? Read their FAQ then. :p.

Another website i found out to offer cash and rewards for participating in online survey is DataIntelligence. If you like to play computer games, do follow up with my next posting on how to be a game tester and get more income! I will post a few more postings on Income generation before moving on to the topic on how to control your expenses.

Income Generation: 101 Ways to increase your income

After some brief introduction on Creating Income Balance Fund, we are back to the fundamentals again, income generation (or money making lah to be direct).

I guess after you started working, there is surely some long-lost-friend or some merely -acquiantance friends will call you up to ask you out for a cup of coffee. Well, they might be selling you MLM money making solutions, insurance, unit trust... , you name it. Since you have gotten enough of all these, i will not talk about all these here anymore. Let me give you some altenatives.

1. Participate in Surveys
Do you know that by just participating in surveys, you can earn about Rm100-150 per survey ?
These survey are normally held by market research companies for FMCG (fast moving consumer goods) and normally held on weekends. Altenatively, you can google for online participation website to make extra income. One of the website I have encountered is GlobalTest

2. Brokering
There are several types of industries which requires a lot of brokers. Generally, some industries needs licenses for broker while some doesn't. I will list down several which doesn't require any licenses.

a. Cars & Vehicles
Selling cars can be really easy and commisions are good. All you need to do is bring your friend to the car showroom and give him some good and HONEST recommendation about cars. Of course, you might need to have some knowledge on cars. Commision can range from Rm500 - RM3000 per car. If you want to know how to registe as a broker, please email me for details and contacts.

b. High Margin Accessories
Introduce your friend to tint his car for income ranging Rm100-RM500. Alternatively, high margin accessories includes curtain fitting, window tinting(for home furnishing) and a lot other more.

c. Credit Cards
I will talk more about credit card, which is a double edge sword in future. Do you know that you can actually introduce your friends to sign up for credit card and make RM50-RM100? Check out Alliance & CIMB cards for this offer.

d. Other's
You can also constantly look out for opportunities to broker high margin goods to generate more income. Some examples are Premium goods(sourvenirs), service contracts, head hunting(helping people to find jobs), vacations and so on .

3. Online Trading
If you are a reclusive person, don't worry. You can generate income by just sitting at home. You can try to purchase and sell goods in Ebay or Lelong.com . However, you might come accross some questions, such as, "I don't having anything to sell, how ?" . Good point, this is the reason i named the sub -title as online TRADING, not online SELLING. Some tips for you to make yourself a potential online trader.

a. Check out goods offered
Find out goods offered in Ebay.com or Alibaba.com which is new and cheap. Try to call and contact the seller and see whether they are genuine.

b. Ask Around
Survey the item among your friends and see whether they interested. Lately, I managed to import an automatic vacumm robot from US, which only cost USD299 (which is about RM1050). I surveyed around and found out that Malaysia is selling the unit for RM 1900. The best part is, most of my friends who just started their family doesn't mind to pay Rm1500 one-off to get a robotic maid. Well, if you can import 10 units of them, you will pocket
in a nifty profit of about RM3000.

c. Contact seller
Make sure you contact seller and ask for a good price. If you manage to convince him/her to give you exclusive right to sell the item in your country, that's even better! Make sure you have legal document if you plan to be a local authorised distributor.

4. Free Lancing
I mentioned about skills and the importance of mastering some skills. With skills, you can offer all sorts of services to others such as financial consulting, accounting services, web designing, interior designing, revonation contracting, translating, programming, proof-reading and even game-testing(gamers are offered money to test games before the launching). Where to get business ? Elance is just one of the website that you can find out, I am planning to launch one called Workcubes , look out for www.workcubes.com.my or simply press the link.

5. Publishing
Probably, this is one of the best motivation for me to start this blog, besides trying to help youngsters to survive in cities . (hey, i am genuine okie? ) . Many people are constantly looking for contents to entertain themselves. (this is reflected by the declining readership of Reader's Digest and the reason why you keep receiving some lottery-like-lucky-draw brochures from Reader's Digest). More and more people are reading blogs daily and ebooks when they are bored or during travelling in trains or busses to work. Think about one topic you can share the best with your friends. Start a blog ! or write an ebook. You can earn from Adsense and a lot more other source of advertising revenue.

6. Coaching
Many people will think of giving tuition as a source of income. In my personal opinion, giving tuition actually locks up your time and the income generated probably is not worthwhile to some of us. (this is very subjective to different group of people) Here, I am encouraging special interest coaching as a source of good income. Special interest is normally niche and specialise. This is the reason why people are willing to pay more for your time. For a start, you can offer money back gurantee coaching to attract people to sign up with you. You have nothing to lose , right ? Just some time. Besides that , you need to have some knowledge to coach, (you don't expect people pay for nothing right?) . Some ideas for coaching are cooking lessons, baking lessons, tennis lessons, forex trading lessons, DIY lessons, language lessons, dancing lessons and so much more ...

to be continued ........

Creating your own income balance fund: Part 2- Expenses & Taxes

I think I will ask myself once a while during end of the month: where has my money gone to ? Wow, guess all of you have this experience before (even you are making RM10K a month) . Well, indeed, expenses and taxes is part and parcel of our life, you will have to know how to manage it.

Of course, many people will suggest to you the-old-boring-way of managing your expenses daily and monthly- have an Excel sheet or use a notebook to record your expenses. Well, this is one of the ways, but since it is an old and boring method, I won't go into it in detail.

My focus here would be, where your money has gone to ? I generally catagorized a few major expenses that eats up our income.

1. EPF & Taxes - Comprises about at least 15 % of your income (might go up depending on your salary)

2. Transportation

3. Food

4. Entertainment

5. Luxury

Believe me or not, most of the city folks actually spent the most for the fifth ietm, Luxury. This is where my focus will be on here. Luxury, bu the word itself is very subjective. Dictionary.com defines luxury as a material object, service, etc., conducive to sumptuous living, usually a delicacy, elegance, or refinement of living rather than a necessity. Many people might say, having KFC or Mc Donald's isn't a luxury at all; but is fast food a necessity? If it is not, I would consider that as a luxury. Some of the examples of luxury:

a. Having a good lunch especially on Friday
(I don't know why this is a trend for city people, but probably they might want to celebrate for the upcoming weekends). A lunch like this might easily cost a young working guy Rm 30, 4 Fridays in a month could easily costs Rm120, probably 8 % of the income already ( assuming income is RM2000 a month, same for all below)! But, don't go for lunch with colleagues makes you looks like an unsociable gig, how ? I will talk more about solutions to this in the next post.

b. DVDs
Have you ever calculated how much you have spent on DVDs? (pirated ones la of course) Each cost you RM10, and imagine you buy one copy every week. Yah , you have effectively spent 2 % of your income.

c. Indulgence
During one of the Merdeka day a few years ago, I had a shocked when i was driving around Subang Taipan. Guess what, it is 31st of the month, the Baskin's day. (Well, I have to admit, me too was once badly indulged in ice-creams before) People are pushing and queing for ice-creams. And, it's not free ! You still have to pay 69% of the usual price for the premium ice cream, and people are pushing here and there as if the ice-cream is given out for free. Most of the people are in their 20s, and i gues they just started to work not long ago. Indulgence is definitely one of the big bug that is eating up your big bucks. What do you think ?

d. Gadgets

How often you changed your handphones? Do you have a Bluetooth headset? Do you have an iPod or MP3 player ? Do you have a digital camera, when you bought that? I find that city folks like to keep themselves up to date with trendy gadgets. Do you think it is a neccesity ? I have a friend who actually took up a IPP(Interest-free Payment Plan) for her digital camera which cost Rm2000 2 years ago. That was a 3.2 megapixel model and guess how much it costs now ? How often you use your digital camera and yet you have to pay about Rm170 every month (which is about 10 % of income) for a year and yet grumble about not having enough money every month?

e. Cafe

Many youngsters like to hang out in cafes like Starbucks and Coffee bean, no wonder these cafes are mushrooming at an exponential rate in KL. Do you know that Starbucks have just revised their price by more than 10 % since 2007, or probably , you never really care about the price when you step in to those cafe? We like to feel the luxury(yes, that is the word) of sitting in a comfee cafe for a chat . Don't you think so ?

There are many more things about luxury and unneccesary spending. More will be discussed in the upcoming posts. The next few posts will still be focusing on solutions to cut down your expenses wihout depriving your lifestyle. Do give some comments if you have any.

Creating your own income balance fund: Part 1- Income Generation

Selecting a good job is one of the key to success. Many may ask how I define a good job, I would say, a good job provides you survival skill sets and molds you into a domain expert. You can be just a sales executive, probably getting about RM2000 a month. But, what you have is more than that, a skill set to sell and product knowledge. If you can make use of these, you will be able to generate extra income. Let me show you some example. What can a sales executive selling air-conditoner parts do ?

1. Do your job well: Selling Air-Con parts
Yah, this is his main job , so he work hard to archive his target. A lot of people are eager in making quick money but they do not know that it is hard to get to anywhere without proper skill set. Days of primary-six-educated-tycoon making tons of money are over, you need proper skills and these skills are accumulated where you spent most of your time at , your daily job.

2. Use your mouth: Brokering for Air-Con Contractors
After selling parts for a while, he has gain good knowledge on air-con and must have known several customers well. He can thus broker and introduce business for his customer, getting extra income. He might help his customer to broker air-con deals, or even brokering other related deals.

3. Bring it online: Advertise your skills
Tell your friends about your skills or sales leads, and let them know you can help them or their friends with that. You can even advertise in blogs or online forums.

4. Squeeze your brain: Learn an alternative skill
We always like to refer skills as sword, the more swords you carry , the more protection you have. I am sure we have better things to do than just watching the 7 pm drama or downloading Bit Torrent movies to watch at home during our spare time. Spending some time for new knowledge is always helpful in generating future income. Spend some time on niche knowledge, which you are interested in. For example, you can learn about share market, tea, finance, raring pets, loan management, cake baking, programming, design, composing... so much new things to pick up out there. The important thing is , remember to just MASTER in one or two area, or you will be jack of all trades. This will eventually lead you probably to become a amatuer tea trader, loan management consultant, designer; or , you might just get a few thousand bucks for selling off your new born Chiwawa puppies.

Excited about income generation? I will feature more income genaration opportunities from time to time for different industries under Income Generation label.

Creating your own income balance fund

Everybody is grudging over the increase cost of living especially in cities. Many people ask, I just make RM2500, how to survive in KL ? Well, many people survived with a fixed income of RM1500. You might ask: how these people can ever do it ? Some tips for you here.

1. Income generation
Fighting for increment is always hard. Fight with your boss for your own or for your staff until your face gets flushing red might probably get you a 10 % increment over your salary. Of course, your main income is always inportant, and yes, you still have to fight for your increment, :P. But, have you ever thought of how to generate better cash flow income during the start of your career life ?

2. Expenses & Taxes
Yes, you will definitely agree with me that city folks always tend to spend more than what they can afford, or probably always spend on what they can afford the best. Learn to spend what you can afford the least without depriving your daily lifestyle.

3. The Cash Flow balance
Learn to balance your monthly cashflow to prepare for investment opportunities. Probably you will tell me that you have read Kiyosaki's Rich Dad book. But, let me tell you , learn the Asian way, :) .

Survival Guide: Table of Contents

1. The Monetary Guide
Well, many people come to the city for a single purpose: making more money and lead a better living. Most of the people make much more money in the city, vice versa, they spend more too. City people likes to live on future money, and this is a risk as well as opportunity. This guide will show you how to create opportunities using future money. Some of the interesting issues to be discussed

• Income Balance Guide
• Future Money Guide: Prepaid, Credit Cards etc
  
• Investments Guide: Properties, Stocks, Unit Trust, Bonds etc
  
• Savings Guide

2. The Basic Needs
Learn about accomodation guides, food & transport here.

3. The Career Guide
Wondering what to do in your career ? I guess 90 % of the people who read this blog are not satisfied with their job. What can you do about it ? We will talk about headhunters, entreprenuer development, part time, freelance and more..

4. The Lifestyle Guide
Guess most of the city folks have a much more complicated lifestyle as compared to village ah pek. Staying in apartments while driving a brand new BMW is common in cities. Learn some fast and cheap ways to the lifestyle you want here.

5. The Spiritual Guide
Many people are lost in cities. They feel empty and lonely after years of stereotype life cycle in city. Eventually, depression and other negative effects developed rapidly in cities. Learn how not to be one of them....

The City Survival Guide: Abstract

Have been thinking a while lately to write an ebook, though my English is only Malaysian standard. After giving some thoughts, I finally settle down with this title, which I hope to help younger generation to survive and create the life that they wanted in vibrant cities such as Kuala Lumpur.

It's always a dream for Kampung(village) boy to work in the city. We can all see that from LOST, Jin(a korean village boy) was eager to find a job in Seoul, and eventually got a job as a bell boy in a wellknown hotel. However , many came to the city but eventually find it hard to survive in this highly competitive environment. Some experienced culture shock while many find it hard to even feed themselves. Eventually , many went back to their hometown in the end.

I hope I can share some of my thoughts on the 10th year of my survival in the capital of Malaysia.
And , I hope you enjoy reading the articles.

Cheers,
Charles