Tip 253: Thinking about Investing

I previously blogged about investing by coining 2 different acronyms: R.I.C.H. (relates to the general principles in making successful decisions)

and I.N.V.E.S.T (relates to the investment concepts we should be aware when deciding on various options)

.The above covers both a guiding compass and a technical manual which is sufficient for me to start investing. But each of us are different and maybe many others do not jump into investing as easily as me (which can be good sometimes).

A friend on Facebook asked me about my thoughts on investing and how I go about deciding on investments. Yes, there is a gap between where you are at now, and when you finally hold a compass and use a manual in your treks at the investment jungle.

Yet, it is not very different from a decision to start a fitness exercise plan for example, or even the decision to look for a job rather than stay at home to watch TV. It seems hard when we have little information, or feel less confident since we assume a difficult hurdle lies ahead of

us, or assume it takes too much time getting involved and decided to have the easy way out, of not doing anything.

Like keeping fit, investments are necessary. I want to urge you to think deeper about the value of your savings in the next 15 years. Investment does not entail taking huge risks. It merely requires investing time in thinking about your future. As you have asked that question and wondered if you have done enough in investing, the next step is to sit down one weekend or one quiet evening to draw up a fitness plan for your money and earnings.

Ask yourself if you are saving enough? Are you

you diversifying some of that savings into more risky yet higher returns? Would you want to start building up savings to purchase a property and how much percentage of your investment portfolio ought to be in property?

Do you need money for the next 5-15 years and if that savings can be put aside for more risky investment plans that invest in equity?

You are the master of your own future. Even if you are married, you need to set aside an individual plan that TAKES CARE OF YOU. It is best you gather some thoughts even before meeting a financial planner, so you can be sure of what suits you best. Be sure not to be

lured into making large investments that are not diversified.

You may want to consider both a rabbit hunt and an elephant hunt. A rabbit hunt is a regular, daily, weekly or monthly affair where you bring food to the table. This can be interest gained from local or foreign deposits, rent, dividends from stable equities or short term trading profit. You get investment returns regularly to know your money is working for you. Even if your other investments fail, you have a steady plan that would not make you rich, but sufficient for the next few years.

An elephant hunt is a once a year or once every 5-15 years occasion where you celebrate in a feast for the successful sale of a property, a business, a long term regular savings plan or equities you bought at very cheap prices as you know their hidden potential in reaping a large gain such as holding on to Apple stocks at USD12 for 20 years till it holds an exorbitant value of USD490. You should plan for both a tactical short term fitness regime for your savings, as well as a long term strategic plan.

Next, reflect and keep a diary. Do not make impulsive decisions. Make investing a beautiful experience like any other activity that you pursue. By attributing more meaning and thoughts to each action, you appreciate the activity more. When you enjoy learning and participating in your investment decisions, you begin to get better at it. Write down what you purchased, why you purchased it or even take a photo of your initial investment plan or equity purchased. Make it a personal and meaningful activity rather than a click of a mouse of an investment transaction. Like all things, when you give it some thought, you put your heart, soul and mind into it, you gain fruits from the toil of your labor.

This may seem common sense principles, but the first step is to think and then act. Then, you begin to get more experience and begin appreciating the use of your own compass and manuals that you begin to discover along the way. Happy investing! Happy dragon year 2012 to all my friends and loyal blog readers!

(Photos show me being the top 5 participants in a ballroom of more than 1000 Singaporeans who won an autographed book from New Yorker Dr. Alexander Elder in his investment seminar. Also photos of my daughters in Tokyo, at their previous favorite playgroup at Kagurazaka and at Shinjuku Isetan and a Japanese bookstore. Also Sayaka's 1 year old birthday at Pizzeria Mozza. Also a video featuring Sayaka's joy in learning to enter a block.).

Tip 207: Save first, enjoy later

The story of capitalism has seen many enjoy great material comfort and luxury, only to lose it within a day.















I watched The Oprah Winfrey Show which showcased a TV anchorman who lived a celebrity life only to suddenly lose his job after 26 years when his TV station closed down abruptly. The next month, the anchorman had 0 income, but 2 mortgages to pay off and a lot of other installment plans such as holiday hotel timeshare plans, 24 month fitness gym subscription, kids' university fees, insurance plans, regular savings investment plans and many others. From a life of cocktail parties every other night, he had to resort to search for a job instantly and decided to take a 80% pay cut to be a part timer at a pet shop.















He had to surrender many of his investment plans and incur losses, sell off assets at a loss and resort to rent a home and car instead. All the years of hard work to build his wealth results to nothing when he incurs great loss when selling his assets and investments abruptly.















Unlike Asians, many do not keep large savings for rainy days. The solution: save 1 year of income before committing to any new mortgage or large ticket expense.















As I look back, I can understand the temptations to enjoy or over invest beyond our means. The sales person who want get you to spend on gym expenses, will sell you a 24 month plan and share with you the discounts you may enjoy. Yet, you may later find yourself moving to another city or country and not utilizing the membership after all. Similarly, insurance agents or investment brokers may give various incentives that may tempt customers to invest beyond their means.















What is the optimum path to manage money to live a good life? God first, people second, then money, then things. Delay our craving on things till we manage money well for a good sustainable future in today's volatile fast changing world. After a while, we may realize things can matter very little.














(Photos show Haruka a little unhappy to pose with a Black Pete (Zwarte Piet, Sinterklaas's helper) during the Dutch Christmas event Sinterklaas feast at the Hollandse Club, at a playground at the Harbour Front mall, along the Christmas lights at Orchard Road and a Christmas party at a home of a Japanese Christian of the church we are joining now in Singapore).

Tip 114: Remain vigilant A.L.E.R.T. as recession bites

Vigilant is not such a common word and I looked it up and it means to be watchful, alert, observant and attentive for danger or trouble. It was a good advice by Allister Heath in his article entitled, "A tough year looms as recession bites', 23/12/2008 in City A.M., a free daily I got each morning at Canary Wharf. Allister, the editor said, "We must remain vigilant and not assume that the government will make the economy better. It is just as likely to make it even worse." Allister said that governments could be saddled with lots of bad debts, forcing them to print more money and cause inflation even in the midst of a recession, leading banks to charge high rates for lending, causing the whole credit system to crumble and the government to step in to regulate currency and credit in socialist style. He did admit that many of his views could be too pessimistic, but there is much need for vigilance and to expect 2009 to be a tough year and not to underestimate the severity of the recession. I did not want to highlight this earlier, so that this blog post now will gain more acceptance, together with the other posts I blogged before the full blown nature of the recession about the need to S.A.V.E. (17/9/2008) and to be cautiously optimistic (7/10/2008). Even when things look up slightly, one should ensure that the right principles govern our actions such that we do not fall into any trap that we should regret. Such traps such as stock market rebounds, purchasing properties without sufficient savings, making large investments in business without adequate capital or studying the market well, making large financial commitments such as moving to a new country by spending a fortune in children education and accomodations without subsidy from the company. The bottom line is do not be greedy and excessively ambitious without sufficient savings. But, what are practical steps to be vigilant to ensure we are safe? They are actually the same advice that Jesus and the apostles gives to Christians to be vigilant against the enemy Satan, against temptations and against false teachings which is to have sufficient knowledge, be always prayerful and guard against our excessiveness and sinful nature, knowing ourselves well, be contented and not chase after the unnecessary and knowing dangers to avoid. I have coined another acronym A.L.E.R.T. (Acquire knowledge, Learn about ourselves, be at Ease with what we have, Reflect and act slowly, stay clear from the Tempters).

I am not an expert in religion, nor business. Though, I believe we learn more and receive more when we strive to give the little we have, hence this humble attempt to provide tips I find helpful as I reflect. In times of recession, the decisions that we make are especially important since a wrong move causes a greater fall, a slight mistake incurs a larger loss, a bad business strategy would not invite any small profits as would in a boom economy. Hence the need to Acquire knowledge and not trust a single source or from what people say (including my blog). Spend time to read about economics, your work industry, global business, how interest rates and currency would affect your financial decisions, why its important to check on rental yields before buying a property. This will ensure you make decision based on good principles and sound research and not just by following the herd or by your own emotions. It is equally important that we Learn about ourselves and remember how we perform in good times and bad times and be confident about our roles and identity. This will help us to prioritize on what is important taking account of our strengths and weaknesses, understand that we are not the same as others and should not necessarily follow the example of others if we are not ready. The Christian would remember that there is only one example to emulate which is Christ Jesus and that we are sufficiently loved by God that we need not be worried and be making any decisions to receive love through other means. It is hence important to be contented and be at Ease with the things that we have. In fact, we should always be thankful and count our blessings and not chase after unnecessary pleasures. This will ensure our decisions are made without greed or a desire to have more, but on an objective basis. We should instead be slow in making decisions but to spend more time to Reflect on the outcome of the decision so that we may not fall into any excessiveness. Dangerous times are certainly not times to make rash decisions, to gamble in currencies and stocks or any financial instrument without first assessing the options carefully. Last but not least, the need to be in the right crowd of people with a careful outlook of life and to steer away from those who could or would Tempt us to make incorrect decisions or vices. For the Christian, it is certainly times to be praying more, to read the bible and adhere to the teachings to avoid all kinds of vices and sinful habits, to be contented with God and seek to discover the purpose He has for us which is to be a blessing to others. Difficult times are meant for us to consolidate ourselves to reflect, trim away excessiveness and question the need for them, reprioritise based on a better understanding of ourselves and if possible seek after the right path that we may reap blessings when the time is right. It may be a time to think about being a good daddy and husband and how to lay good foundations so we can move forward even in better times. It may seem like a strong message, but the bible says, "Be sober, be vigilant; because your adversary the devil walks about like a roaring lion, seeking whom he may devour." (1 Peter 5:8) There is a time for extra vigilance against temptations and the time is probably now, though ideally we should of course be on guard at all times.

Don't you think each of us need to put extra efforts to be vigilant? In this age of excessiveness, vigilance is less exercised than the instinct to consume lavishly and act quickly. My faithful readers, what do you think?

(Photos show Buckingham Palace, Royal Exchange, the Gherkin and Bank of England, symbols of power, wealth and financial strength of England. Soli Deo Honor Et Gloria, the coat of arms at a gate to St Helen's Place meaning All glory and Honor to God alone, used by a 16th century Spanish mystic and poet St John of the Cross).

Tip 103: Take gains in a volatile market

I have written a little about the current economic climate, investing and a little on currency trading. My readers of course need to judge by themselves what suits their investment needs. As investments are risky, its important to invest with amounts we are prepared to set aside for a long period. Also, its necessary that we know what we are investing in. Some investments could reap high gains when the economic climate is positive, but at times like now are very risky. Its therefore important to understand our investment objectives, our risk appetite and how we would respond in times of volatility when making investment decisions. Also, there are times when we may consider taking opportunities to reap early gains instead of keeping the investment for a long period of time during times of volatility. Of course, we can only take gains when such investment cost is less than the gains we could make as some investment products have high management or surrender fees meant to encourage investors to be long term investors. If we have been monitoring the volatile markets, it may be a good strategy to seize those opportunities to take gains of part of our investments.















Since I have quite a large portion of my savings in Japanese Yen as I am still paying off my home mortgage, I decided to make a few foreign currency deposits whenever the yen is strong instead of earning the almost zero interest from the japanese bank deposits. I would be converting the Japanese yen in stages and not doing them at one lump sum. I monitor the rates regularly and record them down so I would be aware of how much it has risen or dropped against other currencies. This is by no means a way to time markets, but rather as a means to understand the reasons for the ups and downs of a currency by comparing comments of investment or currency analyst. For instance, at every drop of the Australian dollar by a large percentage points, I would have converted my yen and so far I have accumulated quite a big portion of Australian term deposits. As the market is quite volatile, I have made only 2 weeks, 1 month and 3 months terms so I could easily sell the currencies on maturity of those terms. One such opportunity presented itself on November 10 when I made 14,000 yen over a 2 week period on a deposit of 100,000 yen or a yield of 14%. I converted a few of my term deposits but still have quite a few others that I kept to earn interest else, I would realize a loss if I would convert them now. Yet, this strategy is different from a previous one where I kept the deposit for 6 months when the
AUD currency was on a consistent upsurge in beginning 2008. But, I do not think its the right approach not to take quick gains in such volatile markets. It requires more time and concentration to be more vigilant in times of volatility and I think this not only applies to investments. Whenever there are times of volatility and big change, the society rewards those who are constantly on the look out and keep tabs on change. For instance, investors are investing in countries where central banks are more actively changing rates than those who prefer to keep a steady rate. To some extent, we need to be changing with the times as there are times we need to be steady and times we need to evaluate the necessity to make constant changes. And when necessary, take gains when possible. No hard rules - it really depends on our own assessment of volatility and risk tolerance. But definitely, only make such decisions that you can afford making.














(Photos show dau fu fa sold at HKD6.50 (USD0.80), porridge with pork intestines and stomach that are the most smooth I have eaten at HKD24 (USD3) and prawn noodles which are almost similar quality or not as good as those in Malaysia at HKD26(USD3.3)).

Tip 88: Be cautiously optimistic and contented

Since my last post comparing the current credit crunch in USA to the Great Depression, pessimism has risen to new levels not seen before in a long time. It was a shock to many that it would take USD1 trillion to bail out all the debt ridden American firms and this number may still be growing. The pessimism is not confined within USA as more and more greedy financial giants across the world are coming out of the closet to claim defeat. The American dream the world has shared in the past 2-3 decades is at stack. Wikipedia defined it as one's material wealth which is dependent upon one's abilities and work ethic, and not a rigid class structure. Yes, this is praise worthy, yet we seem to have gotten greedy to think that each human on this earth with sufficient education deserves to live as a king. Do we? I liked this article entitled Dr. Frankenstein's Wall Street on Chicago Tribune that mentioned that historically nearly 4 in 10 of us aren't ever ready, or able to sacrifice for a mortgage downpayment and home maintenance bills and should rent instead. Its time we drive home the message to our children that despite what this capitalistic system and consumerist society tell us, we need to be contented unless we are willing to work hard to get the things we want. Even then, we need to be cautious and rethink on big investments.

Working in Japan, I have been exposed to Japanese mindsets new to me, namely the need to be excessively pessimistic of one's abilities since everyone else is comparing against the mark of excellence. I would not say that this is a good approach to live by since we humans can never be perfect, yet being optimistic without building strong foundations can lead to huge losses and even endanger the lives of people around us. This can be likened to Jesus' parable of the wise men who built his house upon the rock and the foolish men who built his house on sand and suffered great loss in a storm. Jesus was of course, referring to the need to actively build spiritual foundations and live a Godly life, but the lesson can also be applied that we need to plan carefully when making financial decisions. Yet, very often we peer at our neighbours and dream a life where we live like kings and queens, holidaying around the world, driving posh cars and having homes with marble and granite furnishings. Its tempting when its all available on credit. In fact, kids these days do not even need to consider too much of financial responsibility since credit is freely given by their parents without worry of the items being repossessed. A splash on the latest restaurants or the latest gadget. Yet, at some point we need to learn contentment. Probably not an easy task to drill down to our kids that belong to the new generation, unless the current financial crisis alters society drastically. Though, I do give thanks that my parents rode through their storms when we were young, and though my dad experienced a few lay offs, my parents managed to stick to paying off all the mortgages. Mortgages to a certain extent defines parenting and the discipline of finance management. Paying a mortgage myself, I appreciate my parents more for their commitment and sacrifices.

How about you? As a parent, have you gotten excited about acquiring more and more and taking extra commitments? I had many times wanted to acquire additional larger properties ... phew, glad I did not. Do share. One thing I commit to do on this blog is to make Tip/blog post 100 a contest with freebies sent to you from Japan. Every contestant gets one. So stay tuned. My commitment to put a smile on every reader here. Hope you can be contented with that.

Tip 85: Steps to I.N.V.E.S.T.

Previously, I blogged about accumulating in times of recession and investing long term around 15-20 years for your children's education or your retirement. Investment simply is the decision to get higher returns than simply putting your hard earned money in a bank savings account. Over time, with rising cost of living, the value of your savings would drop, hence the need to protect against the risk of inflation. But, more importantly, in your eagerness to invest, be more cautious on the risk of loss and the risk of investing in the wrong type of investments that does not suit your needs. I reflected on the key considerations before investing and coined up I.N.V.E.S.T. (Investment broker, Needless amount, Variable Returns, Management Expenses, Surrender options, Time horizon).

There are various companies, banks and Investment Brokers who could provide information on various investment options that could provide higher yields. If you are looking at a company to manage your money, you need someone with integrity, ability to provide objective and complete information, expertise, good past investment track record, sound financial reserves and international accessibility where ever you go should you need to relocate. Next, decide on what is your Needless amount or spare cash. In your financial budgeting, put into account the possibility of loss of job of 3-6 months or financial needs in the future. Then, decide if you are looking at high Variable Returns that are accompanied with the risk of high volatility, or medium rate of returns with lower volatility as you survey the different investment options. Each person has a different risk appetite and the ability to withstand volatility. If we hold on to the belief that in the long run, economic growth increases with higher populations, higher technology and better education to facilitate stronger productivity, investments generally will grow over time even if they would go through up and down cycles. But, our returns will also depend on the Management Expense or fees imposed for managing the investments. If we decide to be more involved in managing the investments, you would pay less fees when you select your own stocks, bonds and ETFs (exchange traded funds that track stock indexes). If you pay higher fees, you expect higher returns by experts who understand investments better than you. Next, the need to find out if there are options to bail out from your investments, called Surrender Options. Sometimes, you would need to pay a surrender penalty especially if you withdraw from the investments too early. Hence, the need to read the fine print carefully or insist that your financial advisor share the risks carefully with you. This is pretty much tied to your Investment Time horizon. Sometimes, daddy needs to instill discipline and perseverance and decide on a long term plan. If times are tough, it means being more innovative in searching for jobs and not neglect investing/saving. The hardwork will certainly bear fruit one day when you taste your fruits of labor. Sometimes sticking to a rigid regular savings plan that comes with a penalty for quiting, gives daddies more stress, yet stress builds maturity and creativity.

Any investment principles I missed? Of course, the more precious treasures are the people around us and having sufficient time to be thankful to God always. Being good responsible daddies, we can be good guardians of the wealth God blesses us with, so we can manage it well and bless others.

Tip 83: Surviving a recession S.A.V.E.

Alan Greenspan said that the current financial credit crunch in the USA is a "once in a a half century, probably once in a century type of event — the worst by far" in his lifetime. In my opinion, due to the greed of men (through corporate organization's goals of profit maximizing and done in the interest of demanding shareholders), large wealth was created and often through high leverage (or excessive borrowing through issuing of debts globally!). So these causes a domino effect of many banks around the world losing their money when many large corporations fail due to the sharp drop of property prices. It may however be less dramatic than the Great Depression in 1929 that lasted 10 years. The wealth of the world today is more diversified along different asset classes. Many among the wealthy have portfolios of gold should the world's currencies and properties decline, thus preserving their wealth. There is also more mobility to greener pastures should a terrible drought hit USA again such as during the Great Depression. Central banks have large reserves and better diplomacy than half a century ago, as they can now depend on other countries to issue emergency financing should a disastrous financial crisis threaten the rest of the world to sink in a Great Depression. But nevertheless, there are several steps to prepare for a recession before its too late. Especially when one is a daddy and have huge family commitments. Of course, financial decisions are personal choices but I found some articles that could be relevant to most people at here and here.

Just as I shared principles of R.I.C.H., here is another acronym I coined up myself. To survive a recession is the best time for S.A.V.E. (Spendless, Accumulate, Vocation, Emergency fund). A recession is certainly a time to control spending through effective budgeting. This site has many ideas but it boils down to sitting down, evaluating your spending habits and making decisions to save on the unnecessary until the storm has cleared and the rainbow is in sight. For instance, I do make it a point to only go out for dinners on special occasions as its much cheaper at restaurants during lunch time, but I am recently contemplating packing lunch from home once a week. It just feels uncomfortable making that change in habit and I will blog more about this resolution. Accumulating assets only during recessions is certainly another good financial wisdom that require lots of patience. If one has saved a lifetime to buy low, recessions are the time when you can negotiate a good deal, and often times, you make the best decisions as you are not following the herd, but taking a contrarian stand, exercising extra caution. But, another area requiring caution is the workplace or business (if you are self employed). Recession is certainly a time to be working hard to maintain one's position to ensure constant income flow. For me, I took one step further to saying yes for extra projects outside work. Currently, I am actively engaged with free lance research for companies entering the Japanese market and these projects provide an additional USD$1500-8000 per project. Of course, the need to sacrifice weekends and rest. Other opportunities exist in teaching, blogging or other means of introducing services to others. Besides extra jobs is the need to be linked with the right recruiters. Finally, this site shares the need to grow your emergency fund that can last you for 1 year without job and with rising prices. With this in mind, I have recently separated my fixed term deposits into various terms maturing at different dates so I have the option of cashing some of them quickly. I got into a few new fixed term AUD deposits at attractive exchange rates when AUD$ sank to 83/yen, though these are somewhat illiquid with current market volatility and hence the need to exercise more caution. Above all, recessions are best times to take stock of your life, be thankful to God, seek ways to offer help to others and seek clearer directions as the busyness subsides. The earth needs to rest after all the massive overdevelopment and so do we.

What do you think of the above principles? Any other tips to weather the storm? Whats your outlook and would it be the meltdown of the century?

Tip 61: Gain from AUD deposits (Forex)

In one of my previous tips, I mentioned about setting up a multi currency account at your bank to make deposits in currencies other than your home currency especially when deposit interest rate yields are not attractive in your country. Recently in one of my term deposits, I made 16,500 yen (USD$154) on a 5 month deposit placed in Australian dollars on a capital of AUD$2000. Thats a handsome yield of around 9% on my capital for just a period of less than half a year. The gains would have been much higher on term deposits of much higher amounts and if I selected financial institutions that offered better exchange rates and term deposit interest rates with no administration fees. I started the deposit around January 2008 when the AUD/JPY exchange rate was 89 dropping from a high of 112 in July 2007 and from a low of 85 in March 2007. Its amazing that currency fluctuations are so high these days and even if one do not take trading opportunities, one can just keep various currencies that offer good deposit interest yields for safe keeping especially if one plans to use those currencies one day. I took a 3 month term deposit then, which matures in March 2008 and later renewed for 1 monthly deposits 2 times. It would have been more worthwhile to have made a longer term deposit of 6 months to 1 year if one feels the exchange rate has dropped to very attractive levels. Recently when the AUD/JPY exchange rate rose to 103, I decided to just lock in on the profits when the Australian central bank mentioned that the Australian economy may be cooling down. My yield of 20% per annum is mainly due to the AUD strengthening, as my deposit interest was just 7% on the 3 month term and 5% on the 1 month term. It surely is better than putting my deposits in the Japanese banks that offer around 0.2% deposit interest rates. This tip mainly emphasizes the point of surveying financial markets to get the most out of your hard earned money else inflation will ensure your savings gets depleted faster than you would have realized.

Many daddies would frown at the risk of forex trading. I was talking to a daddy who was very excited on his new hobby of trading currencies regularly in amounts of thousands and sometimes even on margin. He was already pretty confident since he made very huge profits which now acts as his capital and he would lose nothing should he faced the risk of huge losses. Also, he has already understood how to make stop losses in trading to minimise the risk of losing too much. This can be too stressful for many daddies. I on the other hand was mainly interested to increase my experience in foreign currency and my financial literacy to ensure I got higher deposit yields for my money and also keep some AUD since I plan to make a move there. With rising prices of almost everything, your money today will buy less things in the future. Many may be confident of their good saving habits, but that amount in the bank may not increase too much if the interest rate yield in your country is low or if your currency value is depreciating. Saving and managing expenses well is not enough for a daddy to maintain financial stability these days. One needs to manage yields on your savings and invest wisely and manage risk so that your money grows, yet has little risk of losing them by knowing various alternatives and actions. Reading about financial news is necessary to know the daily happenings such as whether the central bank is doing a good job in maintaining competitive interest rates and whether your home currency would be rising or falling due to the currencies of different countries affected by their different economic growth and inflation situations. I read bloomberg news daily and its actually not too heavy with many difficult terms provided with definitions. I think one needs to be in the know of the financial markets as the coming years will be very turbulent with rising price of oil and the possibility of a new alternative energy replacing oil and turning the current global economy upside down till we find a balance again. Daddies, hold on tight and ride the waves of a financial storm. But thats what daddies do - be it fishing in rough storms or fighting the wild beasts outside the caves. The way to excel and not be harmed by the storms is by learning how to do it better everytime. Japanese have a term called kaizen - continuous improvement.

Tip 58: Just do your best R.I.C.H.

I have been tremendously busy and have been lately taking big strides to improve myself by taking up quite impossible challenges. I feel fulfilled that I am learning lots of new things and making big improvements in acquiring new skillsets and even new qualities and methods of working and dealing with people. Though, I also felt too stressed out, challenged and worry that these challenges comes with too huge risk of failing. But, I knew that if I fail, I can try again some place else and would have already acquired those valuable lessons everyone has been telling me previously that I should have improved on. Such is life. Change is hard. Of course, it is fine if one is content in not seeking after ambitions that may look distant and difficult, but if one wants to try to work hard to make improvements to be closer to the ambitions, then daddy just needs to take the risk and undergo stress to learn how to change. Its important though that daddy contains and manages that stress well, be resourceful to look for alternative modes of action should failure be encountered and not make mummy worry too much. Also mummy needs to be supportive that there could be more challenges and some uncertainty if daddy fails. I have realised that many of life's challenges and doing our best to improve ourselves, sums up well in this acronymn R.I.C.H. that I coined up. R.I.C.H = Research, Intercede, Consult, Honestly. Just doing this well and know that you have done your best is enough.

We are all imperfect human beings and have many weaknesses that we can try to overcome and reduce gaps in skillsets and knowledge that we can acquire to improve ourselves. But, the path to improvement may not be as easy as in the school days when one just reads from books, memorizes or understands well the lessons taught. Many tangible knowledge can be learnt by just reading, but many other knowledge that involves soft skills or technical skills requires lots of practice and lots of doing in order to see improvement in conduct and performance. One way to first approach the need to change is to research the area well by self study and checking out resources available in bookshops, libraries and the Internet. The world has changed that you can read a book or use the computer and learn from others be it wanting to improve your speech, your dressing, how you write documents or do a certain kind of lab experiment. There are tonnes of resources and one only needs to manage time well to search the suitable resources that can assist in quick knowledge transfer. As a Christian, I believe in prayer and faith in God guiding us through our life journey if we seek Him. Intercession by oneself and better if accompanied by many others who care for us can move the Hand of God to steer us through our path and sharpen our senses to do what is right. Surely, God do not usually intervene miraculously in everyone's life and surely God wants us to learn many lessons the hard way through trials and hardship, but we can be conscious of our intentions and be sincere to God that we want to change for the better to be a better person for oneself and for others. This noble ambition will be honored by God if it is moving towards a path of less selfishness. I realized God can hold our hand and sharpen our 5 senses to learn better or be more careful in making certain decisions. Next, it is a blessing to be able to consult from people who are kind, mature and intelligent and who have higher skills, experience and knowledge in matters we wish to improve on. Meeting such people are a blessing that we should be thankful for and cherish always. Of course, it will then be our turn to seek to be these kind of people to someone else even in simple matters that we are good at which we ought to share to others. Last but not least, as a daddy, I am realizing the importance of sustainability and the need to be honest. In all dealings, maintain a high level of integrity to keep a good reputation with the people we deal with. Usually we think we can do something dishonest when no one is looking, but the more we do it, the more it becomes a bad habit that eats into our character and attitude. Its important to change the mindset that all dealings need to be carried out honestly for success to follow one day.

Tip 41: Liabilities a necessity for dad?

Its in the bible that we should owe no man anything and debt is viewed negatively. However, in today's world of money as a collateral, everyone else is owing something to somebody. You buy a coke for $1 dollar and that dollar comes from either your previous day's work or your future day's work. Besides the function of money as a standard of deferred payment, a dad would also need to buy life insurance for himself to secure his income and maybe take out a home mortgage from the bank so he need not pay a monthly rental expense. A life insurance premium we pay every month or every year is a liability that we have committed to for X number of years and so is the monthly home mortgage. So, is debt good? In my opinion, yes if you are sure of not owing anybody anything and work an honest days job to support your family. In fact, a certain amount of liability can be saving the family a lot of money and making dad commit to providing well for the family. This post is a follow up to tip 27 and tip 30 on purchasing properties and investing and covers the liabilities portion that follows such as mortgages and insurance.

When starting my first job after graduation at age 23, I first bought a life insurance for my mum and for myself. I figured that since I was earning the most in my family, I should ensure my income is secured to provide for my mum and dad should something happen to me and I should also buy an insurance for my mum who had no life/medical insurance to ensure any medical bills she would incur in the future would be paid for. And since our family did not had a car, I also later took out a car loan so we can have a leisurely drive to the supermarket instead of carrying goods in a train or a bus. I ensured I had sufficient income every month for savings besides paying off all these loans and since I was staying together with my parents, there were no other substantial expenses. Then when I came to Tokyo to work, I disciplined myself to save my salary substantially. After 2 years, I got married and my savings was huge enough to earn the conservative Japanese bank's trust that I could pay off the loan. I did my figures and calculated that taking a loan mortgage actually brings more savings each month. A monthly rental expense would be around USD1300 and my loan mortgage for 15 years was only around USD900 every month. That allows me to save an extra USD400 every month besides having to own the property I live in. Since the bank loan rate was only 2% (BLR in Japan is the lowest of all developed countries at 0.5%), it was a good liability to own. I negotiated with the bank to have a shorter loan term of only 15 years to save on interest rate cost and asked my company to write a letter to confirm my years of service to them. In Japan, its hard to get the Japanese to trust foreigners and few foreigners who live in Japan less than 5 years can get a home mortgage. Thank God I did and I can surely introduce others in Tokyo who want to be introduced to the Japanese bank officer who is open to lending to foreigners a yen based mortgage. Of course, that officer also considered the fact that I am half Japanese, having married a Japanese who could bridge the communication and mindset gap. My commitments now to such liabilities has made me committed to be a provider to both my new family - Tomomi and Haruka and my parents back in Malaysia. There surely is less freedom to do whatever I want and go backpacking around the world but I am glad to be able to give to the people I love very much. In my opinion, if a daddy would evaluate his future income and if he can afford to pay a loan off and secure that with a life insurance policy should illness deter him from getting earnings to pay off those loans, liabilities can provide a more comfortable life for the family. Of course, one needs to be mindful of taking good care of ones health as thats the most important asset a daddy has from God.

Tip 33: Opening a multi money currency deposit

I believe long gone are the days where a daddy just ploughs the fields and bring home daily wages for the family and save them for the future. We live in a world where financial literacy continues to be a necessary survival kit for a volatile and bumpy economic ride till at last the world taste a one world currency regime to bolster optimal globalization. And this further paths the way for the prophecy in the bible of a one world government to be fulfilled. Needless to say, life and medical insurance are an important tool to secure daddy's income as well as unexpected medical costs. But, these days the economies are less stable - thanks to the central banks of large economies who think they are smart enough to give an illusion of a good economy to its citizens. With big disparities in interest rates between countries, big disparities in growth rates between countries with an ever strong ambition to propel growth further in every country, we are seeing a perfect storm building up in the financial markets. Hence, a daddy needs to at least be aware of currency fluctuations and interest rate yields for his savings deposits. More so, when you are living in Japan with a 0.5% savings deposit yield and hence this tip may be more applicable in Japan - but never too early to be prepared for more volatility in your own country.

In Japan, due to an excessive savings culture and a slower growth due to it being a developed country (yet having the third largest GDP in the world - where even a small growth rate results in big income), the central bank kept reducing interest rates to encourage people to lend and now there are stuck in a situation where they can not reduce rates further. Yet, if they increase rates, it threatens to stop growth. So, many Japanese look outside Japan for better yields. This is what is termed as carry trade. Many experts would advise of the situation of the end of carry trades and the yen is indeed increasing in value but not its interest rates. Hence, there is still a need for Japanese to be depositing their savings elsewhere, where the interest rate yields are higher such as 6-8%. To do this, one needs to open a savings account that is linked to foreign currencies. This comes with risk as foreign currencies are very volatile but if you carefully evaluate rates, you will be able to secure yourself against the risk. Not doing anything at all puts you at risk as well, since the currency you are saving at has a chance of reduction in value too. And if the interest rate yields are very low - you end up having low savings when you leave the country. Hence, I have been following the trends of the AUD Australian dollar. It has strong fundamentals with Australia being an exporter of commodities, metals and minerals and the interest rate yields are one of the highest in the developed world. Its true that the carry trade may end some day but for now, there is still a strong reason to be putting your deposits at countries offering good interest rate yields and for now its Australia. Of course, I observe the exchange rates daily and only renew my AUD term deposits at good exchange rates and if the AUD strengthens too much, I begin to make shorter term deposits with a likelihood of redeeming the deposits back to yen at the right time. Else, I will just use the Aussie dollars when I do move over to Australia since their homes have bigger land than small crampy Tokyo. What do we have next? A hedge against oil prices?

Tip 30: Buying houses/properties

I once read a Malaysian investment article to encourage families to consider buying a house/property with every 1 child they have or plan to have. That article commends the investment value of properties to be inflation proof and a good long term income generation (rental income) until you need the funds for children's education. The article further proposes families to consider hedging foreign currencies by buying a property overseas when a particular foreign currency value is fair for a particular country that you think you would want your children to be studying at. For instance, if you think Australian or British education is of good quality, you buy a property in those countries when you see a bargain and rent it out till you need the funds for your children's education in UK Pounds or AUD, then sell it or use it as a home for your child during their education to save rental expense. These are certainly huge commitments and many of us do not have such huge savings or the guts to bear such huge risk or the ability to strain our bodies to afford such huge commitments. There are certainly other investment tools out there shared briefly at tip 27, but lets talk briefly about buying properties and the factors to consider.

Gone are the days when property or land prices are of little value at the initial stages of capitalism after WWII. Since then, land prices have steadily climbed including the cost of materials and the labour cost for property construction as well as higher expectation of property construction quality and even the state of security and facilities in or around the property. Also, with availability of loan from banks, the growing affluence of the working class and entrepreneurs, the increasing number of property investment companies acquiring properties, the demand for property is ever increasing that daddy faces the pressure to own 1 or more properties to maintain his self esteem and his role as breadwinner of the family. Should daddy then succumb to pressure to increase his commitments for property ownership? This is a financial question that daddy needs to ask and carefully evaluate long term viability of maintaining a family. Daddy no longer is a single bachelor with short term goals but need to think over a longer term plateau of income and cost management. This question becomes poignant especially when daddies and mummies stay in their own homes and not under one roof with many relatives like in centuries past. In retrospection, I think the question to buy a property ultimately rest in 3 factors - the affordability and ability to consistently pay the cost of borrowing for the property, the ability to withhold selling the property unless its value rises or till rental cost/income of that property would have covered the cost of purchasing the property, and the consideration of how long you are commited to manage and maintain that property? Surely seems like a lot of work. And that is just the feasibility question to start the buying process. The next question arises on which property is a good investment boils down to 4 factors - location, price versus rental income to be received/rental expense saved, quality of building, and neighbours. Daddy's job is sure not easy.

After considering the options above, I decided to buy a small apartment in Tokyo mainly to save on rental expense and have a property in central Tokyo should my children want to stay in Japan in the future. While some actually say that Japan has the cheapest properties in the world by definition cheapest quality buildings, I am happy that it's cheaper than the rental expense I would have to pay and I can make profits when I rent it out if I do not stay in the property. I considered a central location in Tokyo to ensure I would get rental income easily should I leave Japan and decide to rent out the apartment. Also, as I was unsure how long I would be in Japan, I decided my family would make do with a small space albeit a very safe place for children with a nice classy neighbourhood around. It turned out the monthly mortgage I pay every month for 15 years to the bank is less than a rental expense I would pay for the same abode, so I get to save a little each month for further investments. This is also due to the very low interest rates in Japan of 2% (BLR 0.5%). Now, I am facing the difficult question of whether to buy a second bigger place in Tokyo and rent the current one out, but is deciding this very slowly as it really depends on how long I stay in Japan. Should such heavy commitments be made anyway? Whats the balance between contentment and getting a better lifestyle? Tough question. But indeed, I felt that before I bought my first home, yet now daddy is tougher in the inside and wiser in his management of things to get done and the necessary relationships to enable such transactions.

Tip 27: Start investing early for 15 years

Mummies spend a lot of time thinking about the home and the children and daddies usually can not beat the maternal instincts blessed to them naturally. Traditionally, daddies are given the task to ensure finances are in order, though often times now, this is a collaborative decision making especially if both mummy and daddy contribute towards saving for the future. Investment is most of the time, a subjective matter as its viewed differently based on the personality make up of a person and his/her preferences. Yet, its important to ask certain crucial questions early on as a daddy or even before - on how much do I want to invest for my children's education, my retirement and how much risk can I handle to feel happy about investments. Risk seems like not a good word to use, but realities are that even bank saving deposits contain a certain amount of risk, if not the risk of having its value deflated by inflation. Since a larger sum of money is only needed when the children grow up from age 15 onwards, it may be a good idea to set aside money every month and plan for a long term investment.

Ever since I started working in Japan, I have been very conscious about my saving habits since I need to set up my own retirement savings plan if I will be working abroad in different countries. After having a considerable amount in my savings account that I can do without, I spoke to a financial advisor about an offshore regular savings plan where I contribute every month and invest in various growth, commodity and foreign index linked funds that would have good returns. Of course, good returns comes with higher risks, but over a long span period of 15 years or even longer (if for my retirement), then the risk will be less as the growth theory stipulates that with an earning population growing coupled with technology growth, most economies will grow over the long term period. But, the key questions to evaluate when choosing such managed investment options sold by various financial institutions are what is the surrender value should you have problems continuing savings contributions, what are the fees involved, what are the risk profiles of the investment and what type of service would you get should you emigrate to another country? These questions will help you focus on deciding the right amount of money to set aside each month that you would be comfortable with continuing your day to day life as well as deciding what type of investment options are suitable for you to ensure you have a good sleep every night. The choice of the financial investment advisory company should also be a factor to consider and a financial advisor who has good connections with other offices abroad will ensure you get good support throughout your lifetime. Insurance plans that are suitable for you is another key question since we live in a global world these days and increasingly, working abroad is not such a distant option as companies will begin to increase more joint ventures or foreign business developments and sometimes even coerce their staff to move to a foreign subsidiary. A house/property can also be considered an investment since it saves on rental expense yet produces a tangible property title you can sell should you leave that property, but it would be good to have an additional savings plan on top of commitments for housing even if it is only a small savings amount as it will grow large after 15 years. Its surely a heavy burden for daddy to evaluate such options, but starting early is always a good tip.