Saturday, October 24, 2009

Financial Budget Malaysia 2010 Highlights

Our Prime Minister just read out the highlights of the 2010 Budget, themed "1Malaysia, Together We Prosper", as follows:

1. An allocation of RM191.5 billion, consisting of RM138.3 billion or 72.2 per cent (operating expenditure) and RM53.2 billion or 27.8 per cent (development expenditure).
Comment: I thought it should be 50%-50% for a developing country?

2. Special payment of RM500 in December 2009 to civil servants from Grade 41 to Grade 54 or its equivalent as well as those on mandatory retirement.
Comment: Consider as an increment for them?

3. Enhancement of tax incentives for healthcare service providers who offer services to foreign health tourists. Income tax exemption of 50 per cent on the value of increased exports will be increased to 100 per cent.
Comment: Good idea, it can create more competition in this industry.

4. Individual taxpayers will be given tax relief on broadband subscription fee up to RM500 a year from 2010 to 2012.
Comment: I love to hear this. I hope there is no term and condition apply.

5. Civil servants are eligible to apply for computer loans once in every three years as compared to once in every five years now.
Comment: So now civil servant will has more loan to pay monthly by changing the computer every 3 years?

6. Subsidies, incentives and assistance amounting to almost RM2 billions to safeguard the interest of farmers and fishermen.
Comment: I hope this budget won't end up become RM2 millions.

7. An allocation of RM9 billion to finance infrastructure projects, including construction of roads and bridges, water supply, sewerage services, rail facilities, ports and sea services as well as airport projects.
Comment: Can't we just focus on less things at one time with the limited budget?

Budget announcement is an important event to stimulate the country economy including stock market.

8. An additional allocation of RM20 million for small-scale Malaysian-Indian entrepreneurs under the Tabung Kumpulan Usaha Niaga (Tekun), on top of the existing RM15-million allocation.
Comment: Government trying to buy Indian's heart? I hope this will makes more Indian upgrade their standard of living.

9. Establishing a RM200-million Creative Industry Fund to finance activities, such as film and drama productions, music, animation, advertisements and local content development. Establishing "Tabung Kebajikan Penggiat Seni" to ensure the welfare of artistes.
Comment: Hmmm...will see.

10. An allocation of RM20 million for 20 schools to be identified as High Performance Schools (SBT) in 2010.
Comment: They will be the same in the end of the day. Why don't spend the budget to build more schools?

11. Awarding national scholarships to 30 "creme de la creme" students strictly based on merit. These scholarship recipients will further their education in world-renowned universities.
Comment: Why 30 only? What's the story behind? Will these top 30 students will be bond from working in the country after graduation?

12. Converting the National Higher Education Fund Corporation (PTPTN) loans to scholarships for students who graduate with first class honours degrees or equivalent beginning 2010.
Comment: Hmmm, this is a brilliant move.

13. Providing a 50 per cent discount on fares for long-distance services of Keretapi Tanah Melayu Berhad (KTMB) to students aged 13 and above beginning Jan 1, 2010.
Comment: I don't get it. To encourage student to go for traveling? Visit other places?

14. Offering a netbook package, including free broadband service, to 100,000 local university students for a start for RM50 per month for two years, effective Jan 1, 2010.
Comment: Hmm, attractive offer. How do our government select these 100,000 students? Based on races or result?

When it comes to budget year, why most citizens only focus on tax cut?

15. An allocation of RM100 million for the PERMATA Programme to implement various programmes which emphasize early childcare and education in an integrated and organised manner.
Comment: Okay, taking care of our future masters.

16. Micro insurance and Takaful coverage for small-scale businessmen which will benefit from coverage ranging from RM10,000 to RM20,000 with premium as low as RM20 per month.
Comment: More protection for SMB businessmen.

17. Establishment of 14 Special Corruption Sessions Courts and four Special Corruption Appeal High Courts.
Comment: Hope it will works out.

18. Imposing RM50 service tax on each principal credit card and charge card, including those issued free of charge, and a service tax of RM25 a year on each supplementary card effective Jan 1, 2010.
Comment: I think I will need to cancel my credit cardS and drill down to 1 card.

19. All ministries and government departments are required to provide day care and education centres for children. For this, an allocation of RNM200,000 will be made available for every ministry and government department to establish day care centres.
Comment: Okay, taking care of our future masters.

20. Reduction of the maximum individual income tax rate from 27 percent to 26 percent, effective from the year of assessment 2010.
Comment: Why set it at 27% at first? Are they deserve to pay less?

Apart from child and senior citizen care, government also pay attention to citizen's technology update.

21. Personal relief for individual tax payers to increase from RM8,000 to RM9,000 effective from the year of assessment 2010. This means that each individual tax payer will enjoy an increase of RM1,000 in disposable income.
Comment: What a good move.

22. About 50,000 hardcore poor households registered with eKasih and 4,000 Orang Asli households will be given assistance to achieve the target of zero hardcore poverty in 2010. An allocation of RM41 million will be provided to improve the income and quality of life of the Orang Asli community.
Comment: Okay, protection for the original residents.

23. An allocation of RM48 million to implement urban poverty eradication programmes, including welfare assistance and house rental payments. The Ministry of Federal Territories shall now be known as the Ministry of Federal Territories and Urban Wellbeing.
Comment: Hmmm, it might takes many years to work out.

24. The National Housing Department to provide 74,000 low-cost houses to be rented in 2010.
Comment: Okay, good news for low income earners.

25. EPF to launch a scheme that enables contributors to utilise current and future savings in Account 2 to enable them to obtain higher financing to buy higher value or additional houses.
Comment: Okay, more cash flow option for property investors.

26. An allocation of RM224 million to the disabled for the implementation of the Rehabilitation In The Community Programme and an allocation of RM174 million for senior citizens, including assistance as well as the construction and upgrading of two Rumah Seri Kenangan.
Comment: Okay, taking care of the senior residents.

27. Increasing the allowance rate from RM50 to RM150 a month for every disabled child enrolled in NGO-organised special schools effective Jan 1, 2010.
Comment: Okay, taking care of disabled people.

How about yourself? Have you done your personal financial budget 2010?

28. Establishment of 1Malaysia Retirement Scheme for the self-employed, such as taxi drivers, hawkers, farmers and fishermen, to be administered by the EPF.
Comment: Good for them.

29. Effective immediately, employees' EPF contribution will revert to 11 per cent on a voluntary basis.
Comment: Okay, just don't keep changing every year. It will be a mess.

30. Construction of 510 km of rural roads and 316 km of village roads with an allocation of RM857 million, including roads to be constructed in Kapit, Lawas and Simunjan in Sarawak as well as Kinabatangan, Kota Belud and Keningau in Sabah.
Comment: This has been announced earlier on. Please build quality roads, not the roads just look like a road.

Well, nothing surprise about our financial budget 2010, I'm not sure about other developing countries, but we will work hard together to implement our national target.

What do you think?

Sunday, October 18, 2009

Something about Property Investment

Have you buy a house or starting to involve in property investment? From what I look at it in details, I really have to change my mind about property investment.

Previously, I thought I've to think like an abnormal people. If everyone going for property and the price keep increasing until sky high, I should keep away from it. I learned this theory from stock market. This is very true, because stock is affordable and easily can buy and sell perhaps within minutes, and you can do it alone. Unlike property, it takes time for us to do the transaction of buying and selling, and you also need some team members such as realtor, lawyer and banker.

Property investment gives a steady income and low risk profile for most investors.

Further more, stock market investment require high rational thinking, and it's risky. Property investment is a lot simpler. Imagine when there is economy recession, which investment will be more sensitive? Why we need to opt for the difficult one? In conclusion, my analysis was wrong, I shouldn't treat all investments the same. The property is already sky high, and it keeps rising. City land is getting less and lessor, pricing will be getting high and higher definitely. I'm so regret that I don't invest it when I was younger.

From historical analysis, property will only slump when there is recession. Oh yes, we just have a global recession, didn't we? But unfortunately, despite the materials cost dropped over 100%, the housing price remain unchanged, and it begins to rise like a rocket. The only benefit is the lower loan rate. It's a different situation in our country here. So I don't anticipate the property price will drop in a reasonable way in short or mid-term.

Stock market return can be higher, but it's volatile and require high rational thinking.

Anyway, let me just share with you a few tips I learned from experts, and perhaps we can take them as advice to do property investment.
(1) Start early. The younger you start, the earlier you benefits from the market value promotion. None of the investment channel is as stable, high return and low risk as than property.
(2) Cut your spending and turn it into installment. The old says, work hard now and enjoy later.
(3) Don't go for luxury property like a bungalow, it's more difficult to find a rich tenant and the rental won't be high as well.
(4) Don't go for low-cost property like very small apartment. Your tenant might not afford to pay the rental most of the time, more risk for you.
(5) New housing perhaps has better quality of materials and structure, but not all of them suitable for your/tenant living.
(6) If you have steady income and you are affordable, suggest to look for a suitable property for investment.

If you want to learn more about property investment, do read up experts recommendation.

If you are free, kindly visit a local blogger, CK Wong who blogging about local property investment. His analysis for local property is interesting. Do check it out.

Happy investing.

Sunday, October 11, 2009

The 10-Days MBA

I believe most of you heard about MBA, or even some of you are already an MBA! Let me just briefly explain what is it. MBA stands for Masters of Business Administration. It is an essential post graduate degree in business communication and also one of the most sought after degrees in the world because of its value to people in business and administration. I totally agreed on this.

Normally, an MBA degree can benefit the positions in business and management, especially those in executive and managerial positions, especially in corporation and listed company, business educated people is always highly required. Thus, an MBA degree has great value not only to find an executive and managerial post, but also gain advantage in your business knowledge, leadership ability and networking.

It's MBA is really that important to climb corporate ladder?

Well, I always dream to go further study and become an MBA, preferably to study MBA course in the top business school in US. Unfortunately, I'm not afford to do so for the moment, I believe jackpot might help me round the dream, but I just reluctant to waste money anymore on gambling. So what's the alternative?

Yes, when I visited a unique bookstore 2 months ago in Singapore, I discovered a book named "The 10-Days MBA". I was curious and have a read on the table of content and summary of that thick book. Basically, it stated that the book is a step-by-step guide to mastering the skills taught in top business schools. With this book, everyone can know whats being taught in MBA course of top business schools within days. It sounds very interesting, I decided to buy the book after 1 month time (due to I've quite a few unread books).

The 10-Days MBA

For now, I've finished up the book, and I discover it is not that easy and interested as what I thought earlier. There are 10 topics and almost every topics required to memory tough formula and calculations. The topics including operation, accounting, marketing, finance, organizational behavior, etc, with simple English written. Those are essential topics in business. Without understand the term and formula, you are just flipping the papers only apart from theory. Overall, I'm still enjoyed reading it as now I know how MBA works for the analysis, budget, prediction, judgment based on those theory and formula.

Perhaps due to my age is growing big and bigger, my learning speed is not as what I thought, but it doesn't affecting myself to go for my dream. I have a ex-schoolmate, who is at my age, working as an accountant and doing her MBA part-time study now. She told me it is a little bit tough as she needs to spend efforts and time to do the assignments and projects, while she needs to cover her job works. Well, since we give and take, I believe it worth the effort and time. Keep it up, my friend!

So folks, before you go for MBA study, make sure you have a 'preview' on The 10-Days MBA book first. :)

Sunday, October 4, 2009

The Strategy of AirAsia

I believe almost every Asian traveler heard about Air Asia, not because of it's service or quality, but it's lowest fare airline. Well, most of the time cheap doesn't mean good or quality, there is risk we have to bear. In this case, we talk about depart on time.

Just last month alone, I've been traveled with Air Asia for 4 times, with 2 times delayed of more than 1.5 hours. The delay rate was 50%! You can imagine how bad it is. They just don't want to make the delay more than 2 hours in order to compensate me some money. Well, this is the risk we all familiar with Air Asia, but we pay a lot lesser. Fine. I'm not talking about this common issue today, as I've a post comment about their services before. I just want to express my unfortunate on last month.

Complaint is no longer a fresh news for Air Asia

When we talk about Air Asia, we talk about low fares. In order for Air Asia to continue to offer us low air fares, it must keeps its cost as low as possible while making profit. Okay, from what I observed, below's are how they keep their costs "low".

1) Higher volume
When they offer low fares to the consumers, especially when everyone, including business people and family are trying to save money due to economy situation, their businesses will getting better and better. And this can also be advantage to the occupancy rates of the flight, with the same destination.

2) Early Bird Promotion
You must have noticed how often Air Asia promotes their lowest fares ticket from time to time. Even though it's really cheap, but when there is a volume, they can collect your money first and make use of it for other investment or pay debts for greater return. Great.

RM9.99 & pretty stewardess are no longer a fresh advertisement from Air Asia.

3) Build low cost terminal
They build low cost terminal nearby those busy terminal for their advantages. Not only they can save the sum of airport tax, they can dominate the shoplots rental in the airports, as well as transportation from airport the customers destination. Since they have so many airplanes and flights for the same destination per day, it's a wise decision.

4) Lower pay
From what I know from my friend working in Air Asia. The staffs, even pilots and aircraft engineers pay are not as high as other luxury airlines such as Malaysia or Singapore Airline. They also hired most of the locals to do the works, as they can absorb the lower pay work. Well, this is logic as they are running low fares business. Yes, all this is logic, except the management pay.

One thing amazed me is that, they cut the cost of having aircraft engineers station in non-Air Asia airport. How? For short route, one aircraft engineer has to follow the airplane to every destination, and service the airplane at every destination. I can only shake my head for that aircraft engineer.

Since it's low cost terminal, you will be in deep shit if it is raining heavily.

5) Other charges
Well, depends on the low air fare itself might not sufficient to make more profit. They launched a lot of charges related to traveling, such as meals and beverage serving with charges, souvenirs, hot seats with charges, travel insurances, luggage charges and so on. These can be bringing good profit to them too. If you insist that you want to save up your bulks, you can forget about all of them, except the luggage charges.

One thing I wonder, since Air Asia objective is to keep everything low cost, but why, why the meals and beverages are so expensive? They are even more expensive than the airports! To boost up the sales of meals and beverages, I think Air Asia really need to revise about this!

6) Other profit-driven businesses
I think their strategy is playing well. They are not only focusing on airline business now, they also attacking transportation and accommodation, which also related to traveling and tourism. I believe you have heard about Tune Hotel and Tune bus. And they come with one goal, low price. Great. Tune hotel starting with RM9.99, which I haven't try before. I believe more Tune to come. Good job.

This is a embarrassing for the stewardess, she might be too tired. What a naughty shooter.

That's all about my observation. One thing worth to mention is that, many of Air Asia stewardesses look great. That's mean Air Asia also control over the quality of their customer services as well. What a company, keep it up please!
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