New Species for Local Scam

No doubt, I have shared with you quite a number of scam cases. We have heard of the Nigerian 419 scam, the AL-Globo lottery scam, but the Bukit Aman scam must surely be the mother of all scams.

A syndicate posing as police officers from Bukit Aman has been ripping off unsuspecting victims of hundreds of thousands of ringgit by claiming that they are being investigated for alleged money laundering. Their latest victim is an elderly woman who lost about RM260,000.

Relating the ordeal, the woman who only wanted to be known as Margeret, in her 60s, said she received a phone call on Aug 18 from a man claiming to be a police inspector from Bukit Aman. She said the “officer” told her that she was being investigated by the Hong Kong police over dealings with two drug dealers there. “The officer told me that if I did not cooperate fully with police investigations, I would be extradited to Hong Kong to face charges for the offence,” she told The Star yesterday.

Margeret said the officer then passed to her the number of a senior police investigator in Hong Kong to verify the matter. “I called the number given and a man claiming to be a police officer warned me that I was being investigated together with 28 other people for alleged dealings with drug dealers there,” she said, adding that the man told her to cooperate fully with the police here.

She said she then received another call from a senior police inspector in Bukit Aman who asked her to transfer all her money into an account provided by them. “They said this was to help them verify that the funds were not linked to drug dealers in Hong Kong,” she said, adding that she transferred a total of RM260,000 from five separate banks to the police here.

Margeret said the officer told her to transfer any additional funds she had to facilitate police investigations failing which she would be arrested. “I told them that I had an additional RM128,000 in a fixed deposit account in Temerloh, but I could not withdraw the money until the next day.”

Fearing something was amiss, she lodged a police report and the news came out.

From the passage, it sounds that Margeret is stupid and too ridiculous to just bank in her money to other people's account. Well, scam is catching human behavior, being greedy and scared. Perhaps the success rate is 1 out of 100 or 1,000, depends on the awareness or attitude. But still, the cost for them to try is very low. That's why this kind of scam is still exist. 

I don't want to laugh her, because I'm also very greedy and fallen in the trap of Forex scam twice before. But the amount of money I loss is very small compared to Margeret. Again, I hope this kind of post sharing can create awareness and make us away from scam.

Selamat Hari Raya to all Muslims and happy National Day, folks!

How Much Do You Need For Retirement?

FOR 30 years, Mazlan Ahmad worked as a technician in a factory. When he retired at 55, he had RM155,000 in EPF savings and about RM20,000 in the bank.

In the first year upon retiring, he spent about RM30,000 of that total. At the rate he was going, Mazlan, 57, knew the money would not last long. So he decided to go back to work for his former company last year.

“Luckily I don't have anything to pay off such as my house or car. Also, my children are all grown up,” says Mazlan, who feels that he can only retire if he has RM1mil in savings.

For the lower income group, RM1mil may seem beyond reach but to others, especially those living in the cities where cost of living is much higher, it may just be the minimum amount one would need to have in the kitty before thinking of retiring.

According to the Global Ageing Report by The Nielsen Company released in February this year, about 56% of Malaysians retire, or express their wish to retire, before turning 60. However, only 21% believe they are financially ready to retire. Another 44% are unsure while 35% are currently not financially set for retirement, according to the report.

For instance, many have yet to settle their housing loans or they live in rented accommodation. With prices of fuel and food spiralling, it is not an easy ride for retirees who also have to worry about medical expenses.

Given that the average life expectancy of a Malaysian is 74 years, retirees have about 20 years of living without income to “worry” about. This is after taking into account that they have settled their mortgages and car loans and do not have to worry about their children's education.

Rajen Devadason, a Securities Commission-licensed financial planner with MAAKL Mutual Bhd, estimates that between 80% and 90% of middle-aged urban Malaysians will need between RM500,000 and RM5mil to retire well in the next three decades.

“Most people will never succeed in building a retirement nest egg of that size because they are not pursuing it as a major life goal with dogged determination,” he opines.

Echoing Devadason, Yap Ming Hui, managing director of Whitman Independent Advisors Sdn Bhd, believes that those in urban settings such as Klang Valley would need at least RM1mil to retire.

He says if one spent about RM4,000 a month, a million ringgit could last about 20 years after taking into consideration inflation. “A million ringgit in 20 years won't be that much because of inflation,” he adds. Most Malaysians rely on their EPF savings to pull them through their golden years while pensioners survive on half their last drawn salary.

According to the 2010 EPF report, most Malaysians have an average RM146,000 in savings by the time they retire. More worryingly, a survey by the EPF showed that 70% of retirees use up all their EPF money within three years of retiring. And 99.9% of the contributors reportedly withdraw their EPF savings in a lump sum once they reach 55.

“Many Malaysians think their EPF savings are sufficient but they definitely need more than that. Quite a lot of people have to work again because they can't really afford not to,” says Credit Counselling and Debt Management Agency (AKPK) CEO Akwal Sultan.

Author Azizi Ali, who wrote the book Retire Rich, says the propensity to spend after retirement might even be more than when one is working.

“Do you spend more during weekdays or weekends? Most would say weekends. When you are retired, every day is like a weekend,” he says, adding that most people don't even have 50% of what they need for retirement. “This is scary, yet many people don't realise this. To be poor in old age is the ultimate prison. If you are young, at least you can work.”

It is for this reason that people have to start financial planning for retirement as early as possible, and Devadason believes those who manage to hit the million ringgit mark when they retire are those who began saving and investing in their 30s or 40s.

“Every person who is willing to sacrifice short-term thrills for long-term value can build up a savings and investment portfolio that eventually exceeds RM1mil,” he says.

Yap points out that most Malaysians tend to under-save or under-invest. “It won't matter how much you earn if you can't save money. One should always live within their means,” he advises, adding that salaried workers should save at least 30% of their gross income.

The second rule, says Yap, is investing so that money will grow higher than the rate of inflation. “If you put your money in a fixed deposit account, you are going to get about 3%. What if the inflation is 4%? “But if you put your money into something that grows by 8%, your money will grow 4% (after deducting 4% for inflation),” he elaborates.

There are many investments that grow faster than the rate of inflation; like property, the share market, unit trust funds and commodities such as gold. The golden rule of investing, of course, is not to put all your eggs in one basket, says Yap.

“For example, it would be dangerous to concentrate everything on property or the share market. What if property prices go down or the share market collapses?”

Both Devadason and Yap recommend investing EPF Account One savings in portfolios such as unit trust funds. Furthermore, Yap suggests investing this money in equity or balance funds.

(EPF guarantees at least 2.5% although in 2010, these returns were 5.8%.)

“More often than not, those with long-term investment time horizons exceeding seven years have succeeded in that goal of earning compounded returns above those of EPF,” says Devadason.

Financial advisor Cheong Mei Kay, who gives advice onwww.mckeycheong.com and deals mainly with clients from the ages of 19 to 35, finds that many in this age bracket don't think about retirement. “I believe they are aware but they don't take any action. They tend to think it's still too early for them to think about retirement,” she says.

Cheong, 24, usually tells her young clients to start allocating a certain portion of their income for retirement. “Young people usually know how to spend and don't save as early as they can. I would advise them to do so when they start earning.” Cheong says while many people accumulate wealth, it is more important to grow it.

Her advice to youngsters is to start with some low risk investment or savings like fixed deposit or a saving account in an insurance company before attempting medium-higher risk investments.

“It's like building a house. You must build up the base first.”

Airbag In Your Smart Phone, Anyone?

Many of us have experienced the problem: We get careless with our mobile phones, they slip out of our hands, and all of a sudden we’re back at the store replacing a shattered device.

Well, none other than Amazon CEO Jeff Bezos has a solution for us: Airbags for phones and other portable devices. Or springs, or a propulsion system.

No joke. And, of course, we know this because he wants a patent on the technology.

A patent application made public this morning lists Bezos and Amazon VP Greg Hart as the inventors of “a system and method for protecting devices from impact damage.”

It starts with a safety monitoring system that would use a gyroscope, camera, infrared beam, radar or other sensors to detect such things as motion, orientation and distance from other objects — then determine in a split second if the device is at risk of damage from impact.

One idea (shown in Fig. 2B above) is to embed one or more small airbags inside the phone, according to the filing. If the device is at risk of damage from a fall, the airbags would instantly inflate via an embedded cartridge of compressed air or carbon dioxide. The monitoring system could either detect which side of the phone will hit the ground, and deploy the airbag there, or pop airbags out of multiple sides of the device.

The patent application goes further, suggesting the possibility of reorienting the device in the air, by expelling gas, so that it lands on the side where an airbag is deployed.

But wait, it gets even nuttier. In another example cited in the application, springs would be deployed instead of an airbag (Fig. 4 above).

And finally, the patent filing outlines a “propulsion element” that would also expel gas to “cause a gentle or safe landing”.

The patent filing was originally submitted in February 2010, but just became public. Whether or not any of this ever becomes a reality remain to be seen. It seems like a reach to expect airbags in the next Kindle version, or in Amazon's rumored Android tablets, but who knows?

At the very least, it’s more evidence that Bezos & Co. are thinking a lot about mobile devices these days.