Free Giveaway: Milan Doshi 22 Advices to Investment

Milan Doshi is a millionaire property investor as well as stock investor. He has written several books and he is one of the best selling authors. If you have done some research on investments then you might know who is Milan Doshi and how he become successful in investment.

Today, I want to give all readers free download of Milan Doshi 22 advices on investment. Personally, I have bought and read Milan's books and his books are simple and easy to understand. Thanks to Milan Doshi for sharing such a great ebook with 22 investment advices. It would be very helpful for investors to be successful in investment. You can download it for free. Please visit read more to find the download link.

Download Milan Doshi 22 Advices on Investment:

Download here

Enjoy the reading and remember the advices throughout your investment journey.

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What are Mutual Funds or Unit Trusts

If you are really new to investment, you might not know what unit trusts or mutual funds are. So, this post will explain about mutual fund or unit trusts. Mutual funds is a great investment vehicle for investors to get started. It is a great way to diversified your investment and have professional fund managers to manage your investment.

If you are getting started to invest your money, you can try to use mutual funds to learn about the world of investment. Personally, I think that mutual fund investment is a good way to get started and it is a good way to learn the basic. Anyway, if you would like to learn the basic and learn more advance knowledge in investment, then I would suggest you buy some investment books and start reading. Finally, start applying what you learn and invest.

What is Mutual Funds or Unit Trusts?

Mutual funds are also known as unit trusts. Mutual funds are collective of large pool of money from a lot of investors to be invested in stocks that are relevant to the objectives of the funds.

In simple words, there are a lot of people or investors are investing their money to the funds, therefore, that fund are having large amount of money (a pool of money) and mutual funds managers will use their professional investing techniques to invest the money in stocks. Investors can save time because they have professionals helping them to invest and most of the time, the return of investment can be higher than the normal fixed deposit (FD) rate. [ Find out more: The Story of My Friend Become Rich Using Mutual Funds in His 30s! ]

Mutual funds investment is offered by most banks. You can try to ask about mutual funds investment in different banks such as Maybank, Public Bank and Public Mutual, Ambank, CIMB and so on and so forth. Personally, I invest my money in Public Bank and Public Mutual. I am not saying that Public Mutual and Public Bank is the best place to invest but I have experienced great return so far and it gains several awards over the past few years due to excellence in mutual funds investment.

Anyway, you can try to search for better banks that provides better investment opportunities. Mutual funds investment normally will incur high charges as the management fees. So, this would be a fee that every investor must pay to invest in mutual funds.

From my observation and experience, I know that there are banks that offer free of charge to invest in mutual funds of their banks. So, you do not need to pay any fees to get professional to help you invest but bear in mind that these types of funds normally will not have high performance if compared to funds that charges fees.

In short, it is up to you o choose the funds that suit your investment. Start invest early in life and make your money grow faster. I hope that this post will help you to understand mutual funds better. If you would like to look for other investment vehicles, you can try stock investment. [ Find out more: Mutual Funds VS Stock Market ]

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The Story of My Friend Become Rich using Mutual Funds

As mentioned in the previous post "Mutual Funds VS Stock Investment", I mentioned that I have a friend becoming rich using Mutual Funds (Unit trust) investment. Today, I am going to share his story but I will not disclose his name in this post. So, I use a random name instead. Throughout this post I will use Alan as my friend's name.

I learn from him and I found that becoming rich using mutual funds or some like to call it unit trust is really possible. It depends on the strategy you use and how persistent you are in the mutual funds investment.

So, I hope that you can continue to read to know some of the ideas of becoming rich using mutual funds.

My friend, Alan is a normal people just like all of us, having full time job, get paid every month and lead a simple life. Personally, I think that his salary is in the range of RM3000 to RM4000 but I do not know the exact amount because it is confidential.

Just like most of us, Alan does not own any businesses and he does not have large amount of inheritance from his parents. He is like anyone of us, simple life, simple income, like to save his hard earned money and hardworking. He was introduced to mutual funds few years ago and he does consistent investment over the years.

Ok, that is enough for his simplistic life. Now, let us get into the real stuff.

How he become rich using Mutual Funds?

He save quite a lot of money from his 10 to 15 years of working life. And, his investment in mutual funds reaches the peak at the beginning of year 2008. He had reached his investment goal and he sold all his units in the mutual funds he invested in.

That was his first success in the mutual funds investment

He used the money he earned from mutual funds and buy 2 properties (2 houses). The houses he bought are ranging from RM150,000 to RM250,000. Since he has a lot of cash at hand, so it is not a problem for him to pay large amount of down payment and take small amount of loans for the 2 houses.

Later, the stock market crashed in the middle of year 2008. He saw the opportunity and he invested part of his saving into the funds that he like most. At that time, market is getting worse and he kept on buying and he bought a lot of units at cheap price. In other words, he bought unit trust at large discount.

Two months ago,he sold all his units and he made a large profit again. Again, he used the profit he gained to buy another property.

Now, Alan is in the beginning of his 30s and he already owned 3 houses. He is almost reaching his goal to become a millionaire and he is now close to million in his property and saving.

Personally, I think that he really has the courage to buy mutual funds when all people are afraid of buying.

There's a famous saying, 'Buy at the peak of pessimism'. That is the faith Alan has in his investment.

Personal Analysis on His Investment Technique:

1. Is it a good thing to invest in economic downturn?
He did the right move, buy at the economic downturn and sell when economic recover. Economic downturn is the MEGA SALES for investment vehicles such as mutual funds, stocks as well as properties.

2. Is it too ricky?
Not at all, because mutual funds or unit trust is a large pool of money investing in businesses within the country and foreign countries. So, mutual funds will not disappear unless the all businesses the fund invested in gone bankrupt. (That case would hardly happen.)

3. What are the rules and regulations mutual funds companies to sell funds?
In our country, Malaysia, mutual funds companies have to proposed their new funds to a government bodies to get approval. Only after that government bodies approved the funds, then the bank or mutual funds companies can sell the funds to the public. In other words, unit trust funds that are currently available is approved by government bodies and it is considered as safe investment. (I forgot what is the name of that bodies. Will update about it soon.)

So, buy when the economic is bad and buy a lot. Mutual fund will not disappear (it is a rare case to happen) in economic downturn. Economic downturn is the time to buy at discount.

And so, Alan did it. I am sure that he will do it again when the next chance come.

You might want to read about "Dividends of Unit Trust/Mutual Funds" and learn how it can help you make money.

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Mutual Funds VS Stock Investment

A lot of people prefer to invest in mutual funds over stock investment while some claim that stock investment is providing much better return than mutual funds. It cannot be denied that both investment vehicles are providing good investment opportunities for investors but investors should always look for the better ones that could give the required return over the long term.

So, in this post, I am going to share with you the Advantage and Disadvantages of Mutual Funds and Stock Investments.

Mutual funds and stock investments are known to be the popular investment vehicles for investors all over the world. There are people becoming very rich using mutual funds while there are people become very rich through stock investments, to name one - Warren Buffett.

One of my friends is becoming very rich and wealthy through mutual funds investment. You can read The Story of My Friend Becoming Rich using Mutual Funds. So, who say mutual funds cannot make you rich?

Anyway, investing is all about discipline and strategy. No matter it is mutual funds or stocks, you can be very rich, if and only if you are disciplined and have a proper strategy in your investment plan, nothing will go wrong.

So, let us go into the advantages and disadvantages of Mutual Funds and Stocks Investment.

Mutual Funds	Stocks Investment
ADVANTAGES
·         Managed by professionals fund managers and fund managers always get the financial news faster than any people out there because managing funds is their full time job.	·         You have all the control in your hand and you make decision yourself based on your own analysis on the stock you want to buy. Investing is not your full time job.
·         Fund managers are well trained professionals. They have the tools, software, the knowledge and skills to manage funds.	·         You know what you are investing in. You can set your investment style such as dividend style or trading style.
·         Proper portfolio diversification.	·         Diversification based on your own strategy.
DISADVANTAGES
·         Professionals will also make wrong decisions.	·         You have to learn stock investment from the basic.
·         The financial goal of fund manager might be different from yours. Most of the time you don not know what they are investing in. You will only know when you get the report.	·         You are not well trained in the field of investment. You might be lacked of knowledge and software to help you analysis your investment.
·         The return is not up to your expectation.	·         Learning and analyzing will take a lot of time and efforts.
·         Only perform well in bull market.	·         Performance is based on your investment strategy.

It should be noted that Mutual Funds is charging very high fees as the management fees. So, make sure you consult your mutual fund agent before making any investment. As for stock investment, the fees are very low, it is around 10 times lower than the fees charged by mutual funds. (The fees differ from bank to bank, so please consult the agent about it.)

From the table above, you can see that both of the investment vehicles have the good and bad. It depends on your investment style. If you believe in professional, then make sure you find the really good professional fund managers for your investment.

If you believe more on your own ability to invest, then you can try to learn the basic and start invest in the stock market. Do not jump directly into stock investment if you are not sure what you are doing.

Time is an important factor for successful investment. So, do not hesitate to invest your money. Let your money work hard for you to earn more money.

Either way, investing in mutual funds is actually investing in stock market because fund managers will help you invest your money in stock market. You can read my "What is Mutual Funds or unit Trust" in the post to come.

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What is Right Issue?

Some people might be confused with the term "Right Issue" by some of the company in the market. Personally, I was confused with "Right Issue" too and after reading books and asking my broker about "What is Stock Right?" and "How Stock Rights Works?", I finally understand "Right" and its usage.

If you are unsure about Right Issue of stock, then this post would be very helpful to help you understand it.I hope my explanation will be clear and easy to understand. Right Issue is where a company offer shareholders a special price to buy the stock (mother share) at much lower price than the market price. An issue of right is a great way to cost average the stock shareholders are holding.

Example:
Stock AAA issues right to the shareholders of 1:1 at RM1.00. This means that shareholders get 1 right for 1 share he/she is holding.

Let say:
Mr. A has 1000 units of stock of company AAA which he bought at RM2.00 per share. [RM2000 for 1000 units of shares]
After right issue, Mr will have 1000 unit of rights.

Now, it is up to Mr. A whether he wants to buy or sell the 1000 rights.

If he want to buy, so he has to pay:
RM1000 plus Fees [1000 units of rights x RM 1.00]

So, now Mr. A will have 2000 units of share of company AAA.

Cost average
= (initial cost + cost of right)/Total Units
= (RM2000 + RM1000)/2000
= RM1.50 per share

So,this will reduce the price of the initial investment cost of RM 2.00 per share. Now,the price per share becomes RM 1.50 per share.

If Mr. A wants to sell:
1000 units will be sold according to the price of the right in the market. Normally, the name of right in the market will have "-OR".So, right of stock AAA will be AAA-OR.

If the price of the AAA-OR in the market is RM1.20 per unit and Mr. A sell 1000 units. He will earn RM1200.00.

So, right issue is a good thing for shareholders because shareholders can cost average their stock or get cash by selling off their rights. Either way, the right issue benefit the shareholders.

Notice: Remember that right issue means the company is creating more shares in the market. So, normally after right issue, the price of the share will drop.

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Personal Finance: The 4 Do's You Should Have

Personal finance is all about preparing a better life for your retirement as well as having proper planning for the money you earn. Managing money properly is important no matter what job you are having - employees, employers, business owner, self-employed, freelance worker and so on. You need to have a proper plan to care for your money and the plan should be helping you to achieve a better financial position when you retire.

There are 4 important Do's you should follow to make your personal financial plan work inline with your life. I am sure that you surely do not want a personal financial plan that you do not like or a plan that force you into an extremely tight lifestyle.

So, there are the 4 Do's you should consider to build up your personal financial plan.

DO KEEP AT LEAST 10% OF YOUR INCOME FOR SAVING
It is important to keep a part of your income into your saving account. Normally, you should save 10% of your income as saving. If you are earning RM3000.00 per month, saving 10% of it will be RM300.00 per month. After one year, it would be a total of RM3600.00.

You can use the money for investment to make it grow even faster. Remember to compound your money. If you are not sure what is compounding and why compounding, then you can read my previous post "The Power of Compounding".

For me, it is no point to save money in fixed deposit account because the interest is way too low around 2% to 3% per annum. There are a lot more better investment vehicle out there, providing much better return per annum. Take for example, unit trust or mutual fund, some of the funds are giving around 9% to 10% per annum.Read "How Unit Trust Transform RM100,000 into RM1,375,173.00 after 10 years" for more details about unit trust.

DO HAVE EXTRA CASH AT HAND

You should not invest all your money without having cash at hand. With no cash at hand, you are in big risk. This is because you might not have money in case of emergency. Life is full of unexpected events, so you will need to have cash at hand to prepare for the sudden events in life.

Since you have 10% of your income go for your saving and investment. Then, you can have another 5% go into bank account for daily purposes. By having 5% of your income going into your bank account, you can prepare yourself for the worse. At least, you can withdraw your money from ATM when problems occur.

DO CONSIDER STOCK MARKET AS AN INVESTMENT
Stock market is a good investment vehicle. Personally, I haven invested RM7000.00 only into the stock market. Now, after half year, my return is around 14%. That is a great return right? I am expecting even higher return by the end of this year.

Stock market is a good long term investment vehicle. For most people, stock market is risky but if you know how, you do not have to be a risky investor in the stock market. You can read "How Stock Market Works?" to learn more about stock market.

Investing in stock market is just like driving a car. Driving a car is risky because you are risking your life to reach your destination. But, you do not have to be a risky driver. Buckle your sit belt, drive carefully and slowly.

Investing in stock market is one of the way to reach your financial goal. You can go slowly by earning yearly dividend from the company you invested in or you can do it the risky way by trading stock market.

Personally, I am investing to get the dividend every year. Dividend is providing a very good return if you get the good company that pays high dividend. Normally, it can range from 10% to 15% per year depending on the price of the stock you get and depend on the company payment.

Stock market is an investment vehicle, it can be viewed as your vehicle such as car, boat, aeroplane, jet, F1 or any other. You do not have to be a risky investor, you can do it safely to reach your financial goal.

DO HAVE AN INSURANCE PLAN
Insurance is another important investment vehicle to help you reach your financial goal. Insurance is important because it helps you when have trouble especially large medical bills.

As mentioned earlier, "Life is full of unexpected events". Who knows something bad happens such as illness, accident, unable to work and so on. With proper investment in insurance, you can protect yourself in case any bad situation happens to your life. Insurance will help you cover all the expenses and help you to get along with your life if you no longer able to work due to some reasons.

So, choose an insurance plan properly and carefully. Make sure the insurance plan meets your need. Normally, one insurance plan is required. You do not need to have too many insurance plans. Instead, channel your money for other investment purposes.

In short, personal financial planning covers all the aspects from cash and investment to insurance plan. So, do it properly and slowly. Follow your plan carefully and you will reach your financial goal in the time you set.

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What is Share Buy Back and The Benefits

If you are already investing in the stock market or you are reading financial news from newspaper, you might have came across news about Share Buy Back. So, what actually Share Buy Back means? What are the benefits of Share Buy Back?

In this post, I am going to discuss about Share Buy Back and the effect of Share Buy Back towards the stock price of a company. Basically, from the words itself, "Share Buy Back", you can easily guess that it means buying back share. But, who will be buying back the shares? Let's make it simple. Share Buy Back means a company declare that it is going to buy back their company's outstanding shares in the market. (In case you do not understand what is outstanding shares, it means shares in the market.)

Company will buy back their outstanding shares in the market with large sum of money and the share buy back is normally large quantity of shares. In other terms, Share Buy Back also means repurchase of outstanding shares.

Company will buys back their share due to some reasons:
1. Buying back their outstanding shares can increase the price of share [Why share price will increase?]
2. Buying back their outstanding shares in order to eliminate threat of being controlled or eliminate shareholders who might be trying to take control of the company.
3. Reducing the number of shares in the market.

Share Buy Back can be beneficial to shareholders. Share Buy Back reduces the number of outstanding shares in the market and thus this reduce the supply of certain stocks in the market.

For example:
Comapny A has 100,000 outstanding shares. Now, the company is declaring Share Buy Back of 20,000 outstanding shares.

The Number of Outstanding Shares after Share Buy Back
= 100,000 - 20,000 = 80,000 outstanding shares.

Thus, we can see that the outstanding shares have been reduced to 80,000 shares. If we have less share of Company A in the market, this means that the share of Company A we are holding now worth more than before, right?

How Does it Affects the Price of the Stock? [Why Share Price will Increase?]
Ok, here we need to do some simple calculation.

Let say that the share price of Company A is RM1.00 with 100,000 outstanding shares. This means that if all the 100,000 shares are being sold to shareholders, then Company A will get RM100,000 to invest in their business.

Now, that Company A, Buy Back 20,000 shares from the market and only 80,000 shares are left in the market. What do you think the price of the shares will be?

Originally: RM 1.00 per share 100,000 outstanding shares
After Share Buy Back: 80,000 outstanding shares

So, now, in order to get RM 100,000 from 80,000 outstanding shares, the price of share should be increased.Right?

The price per share after Share Buy Back = RM 100,000/80,000 = RM 1.25 per share.

The new price of the share would become = RM 1.25 per share.

So, if you have bought share of Company A at RM 1.00 per share, you would have profited with gain of RM 0.25 per share.

From the calculation, we can see an increase of share price of Company A. Bear in mind that, this calculation is basically theoretical idea. The price of the share will have high tendency of moving up but other factors will also affect the price change.

Other Benefit of Share Buy Back:
Share Buy Back also affects Earning Per Share. This part will be further discussed in another post because I do not want to confuse you with too many calculations and theories. Read this post again if you do not understand at first read.Try to do some calculation using your calculator. You would find it interesting to know about Share Buy Back.

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