Monday, October 28, 2013

You can write your own wills!

Last Saturday I attended a Wills talk seminar. For those who have stocks, properties and other asset, it would be good for me to share here regarding the Wills matter according to Malaysia's law. As a famous quote, one will never know if the dead come first or tomorrow come first. It would be good to prepare the umbrella before it rain. I have group some of the important points:

Who can write the wills? Anyone above 18 years old, as long as your will is executable and you had name a beneficiary(s) and executor (can name up to 4 executors). What happen if you don't have a Will? If one demise without a will, the asset will be frozen, your family member will need to apply for Letter of Administration (LA, a court order vesting someone with right to administer the one who die without a will) The family member would have to cope some difficulties and finally the asset will be distributed as per Distribution Act 1958 (Amendment on 1997) as per below: 


Spouse Children Parents
1 All X X
2 ½ X ½
3 X All X
4 X X All
5 One third Two third X
6 X Two third One third
7 One forth ½ One forth
8 X X X

In situation (8), the asset will distribute to the following persons as per order:
a) siblings
b) grandparents
c) uncles and aunts
d) great grandparents
e) great grand uncles and aunts
f) government
Sample Wills
It's important to write a Wills so that you can decide whom to give, be it your spouse or your friends, if not, your asset might drop to someone whom not as per your intention.
Exception: for EPF and Insurance policy, the beneficiary will always follow the "name" which nominated in EPF and Insurance policy. Meaning, no point to include this in your will.

The advantage of having a wills, if one demise, it's faster, cheaper to extract Grand of Probate than LA and you don't need a guarantor. You may choose who is the administrator of estate, instead of someone whom you don't know.

Write down list of asset, including bank's account, properties, business, stocks and other investments and place all the supporting documents in one place, the better is put in a folder. Then choose someone you trust as a Executer(s), discuss with he/ she (you may choose up to 4 person) so that they are willing to do the job.

Then write down the Beneficiary(s), it can be your spouse, children or friend. Then, find a Witness to sign on will (one or two witness), the witness CAN NOT be the beneficiary or your spouse (or beneficiary's spouse).
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One can write as many wills as he wish in case he would like to change his mind, in this case, only the final version will take effect. Hence, it's good to include a clause to revoke all former wills. Last remember to sign the wills and don't leave any empty line. Any clause appear after the signature is consider invalid. Finally, keep the Will in the safe place and let your family member or beneficiary know about it.

Points to think of: Should you appoint professional to have a will writing service? If your asset is less than $10k, then Amanah Raya is find to consider if you don't want to DIY (which charge 2% of the asset). If the asset are a lot, then find a Lawyer or Will witting professional if you want to save all those problems.


Wednesday, October 16, 2013

If you still buy a stock base on news paper...

Many investors read the financial news paper and hope to make some profit from the news. How nice if one can read tomorrow's news paper today! However, base on my experience, it's not easy to make money in stock market by just look for this kind of tips. Sometime, it could be a trap! I had friend who bought a stock base on news paper's recommendation and hold the stock for more than 10 years... guess what's his return? It's a negative 50%, no joke, if he were to sell the stock today, then only get back half of money compare to original cost! To me, this is really a trap, as they never tell you when to sell, or in the worst case scenario, which point should the investor cut lost?
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The stock market basically is a game for trader! We can find very experience old bird and new bee without and knowledge. Beside, we have business owner and directors of company, all of them come to stock market with one purpose, making money! They may create different types of trick or pattern by involving the reporter to achieve this purpose. This is one of the way how the “old bird” distribute their stocks to retail investors. Since they had a lot of stocks on hand, they need someone to tell a story so that they can sell their stocks in big volume without causing the stock price to fall. This is one of the reason why they may push a stock price to go up!  (of course, we have small percentage of business owner, who is the good business man and they may not do this)
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Let see from the reporter point of view, they are thinking day in and day out, how to attract reader and increase the reading rate? Yes, find out what most people want to read and just write or sometime create a story. Since most people looking for market tip, they may just give one or two stock everyday. Some reporter will find out which stock on the move now and write something about it. Or may be, tell which company give the most dividend last year or who is the most potential company in next few years. Again, who doesn't know your mother is a women, most investors already know but may be they forgot?
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Of course, we do have some responsible reporter, who try their best interview the business owner and give the fare view on the company instead of the business owner ask them to write what they told. However, it's really hard to tell who is telling the truth and who is not.
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It's nothing wrong to read the financial news paper. However, we need to upgrade our level, equip ourselves with financial knowledge, knowing how smart people playing the stock market game. Then we may play the game according to the rules. Stock market, capital market or what ever market, there's always a supply and demand, who drive the price up and down. When the supply is equal to demand, the price will stable as buyer and seller are balance. If something happen, the price will move to one side. This imbalance will need to find some point where buyer and seller agreed with, then only we will see the balance situation again.
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Having the knowledge of knowing the trend of the market is the key to the millionaire road. Don't just buy or sell a stock base on news paper!
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