My Money is Rotting in the Bank!

The Government recently announced that the inflation rate for Malaysia in February 2009 was 3.2%. The current interest rate for my current account savings is 1.25%. This means that the money in my account is rotting at a rate of roughly:

1.25 - 3.2% = -1.95% per year

That kinda sucks. Well I have another foreign currency account holding New Zealand dollars that's giving me an interest rate of 4.99%. The inflation rate for New Zealand in January 2009 was 3.4%. Without taking into consideration exchange rate fluctuations / risk, my New Zealand dollars are doing fairly better growing at roughly 

4.99% - 3.4% = 1.59% per year

I chose to hold my savings in New Zealand Dollars for the following reasons:

1. New Zealand has the highest interest rates among all developed countries (I was getting 7.99% p.a. for my savings account before the credit crunch hit)
2. The Governor of the Reserve Bank of New Zealand practically has the target of keeping inflation between 0% to 3% written in his job description - so he will not give-in to pressure from businesses to lower interest rate for the sake of economic activity
3. New Zealand is politically stable and very much less corrupted
4. Bank savings are now guaranteed by the Government

The rule of 72 is used as a quick way to estimate how long it will take your money to double in years. Just divide 72 by the return on investment per year. So in the case of my NZ current account, it's:

72 / 4.99% = 14.4 years.

Damn... if I have $10 in my bank account, it will take me 14.4 years for it to grow to $20. And that's not even taking into account of inflation! If you take inflation into account, the time it takes my purchasing power to double becomes:

72 / 1.59% = 45.3 years. 

That's very sad... That's also the reason why I'm still studying businesses and investments because only these financial vehicles offer a higher annual return on investments, which decreases the time it takes for money to grow.

Business Review 2: Burger Times

There's one thing the local people do well... selling burgers. It's a convenient supper snack because there's one in every corner of town. Someone came up with the idea to modify Burger King's logo and make it their own, renaming it Burger Times. 

They are relatively safe from copyright infringement because Burger King doesn't open a restaurant here. The burger is nothing special and is priced higher than others. I hardly ever buy from them because there are better burgers out there. I am reviewing this business not because I like the product, but I think there is some great thinking behind the idea.

There are roughly 6 of these burger stalls in various foodcourts around town. They have the same standard menu. The beef cheese burger that usually cost me rm 2.20 elsewhere cost rm 3 here. The business ideas I like from this business are:

1. No direct competition - By selling at foodcourts, there are no other burger stalls that operate there for a simple reason; rent. Many are not willing to sacrifice profitability for this expense which makes Burger Times the only operator selling burgers. In business terminology, this is called "competition barriers to entry"
2. Captured audience - Once customers sit down at the foodcourt, they usually do not change venue to dine. If a customer feels like eating a burger, they do not have an alternative. And most people do not dine alone; they have friends or family members with them. This is unlike the customer base from regular burger stalls that can drive on by.
3. Social networking - By employing youths that fall into the target market of this product, the boss is indirectly taking advantage of his employees' social circle and turning them into customers.
4. Economies of scale - By purchasing and preparing ingredients from the main station for the other branch stalls, they are more efficient in terms of man power and cost. 
5. Time leverage - By having standardised menus and ingredients, the boss doesn't need to spend his time cooking for each of his customers. He multiplied his productive time by the amount of stalls he has out there i.e. time is now not a limitation to his income. Where others slave to make say 40 burgers a night, he can make 6 times that amount (taking 6 stalls as an example) and is only limited to how many more stalls he can open.

The Burger Times van being loaded with supplies at the main station for branch stalls at the start of the business day

I do not like the burger, but I admire the business. This is the concept behind how Ray Kroc turned Mc Donalds into the giant franchise it is today, starting by selling burgers... Many can cook a better burger than Mc Donalds, but they are conveniently located everywhere around the world with standardised recipes. If you're able to sell a sub-standard, over-priced product like Burger Times and still make money, you're not a good chef, but a marketing genius. Who cares about your ability to cook a good burger when you have money in the bank?

Business Concept 3: Helping Others Make Money First

Robert Kiyosaki mentions in one of his books: to learn how to make money from business, first learn how to make money for others. Quite a confusing concept for me until I thought about it more. 

A self -running business requires an operational framework or system that enables employees to run and operate without the business owned being directly involved. He would have to think about the operations, how to control standards, monitor performance, etc., just to name a few things. If you read my previous post on "How to Make Money", the 2 examples of self-running businesses were a franchise  and multi level marketing (MLM). Both of these require you to teach others how to make money first before they make money for you.

It is for this very concept that has made my dad into the successful businessman he is today. In a time where quality products were hard to find locally, he pushed a quality branded product into the market as a distributor by selling them off to retailers. Of course, when customers could buy a quality product that they want, they were happy and the retailers made money. They more money the retailers made, the more they ordered from the distributor. Selling a branded product also elevated their status from just "Trader XYZ" to "Trader XYZ, authorised agent of ABC Branded products". The better their image was, the better it was for their business. 

The whole advertising industry is also based on this simple concept. Help the client promote their products, they pay you for your service. So in short, this concept is about "if you give people a rice bowl, they will share their harvest with you" - a philosophical saying I just thought up...

Best Beef Noodles in Kuching

There area few types of beef noodles around - Taiwanese Beef Noodles, Chinese Style Beef Noodles, and Malay Style Beef Noodles. The one I found the most tasty is the Malay Style Beef Noodles, also known as Mee Sapi, at Kafe Selera Nusantara. The name of the cafe is a bit confusing because the signboard has a comic with the words "Jom Berambih Makan" which means "let's eat together", so it can be mistaken for the name of the cafe (or maybe it is).

The noodles are sprinkled with spring onions and fragrant fried onion flakes. There's also a bowl of stewed beef soup with marinated beef and bean sprouts. The reason that this is the best beef noodles in my opinion is because both the noodles and soup are very tasty and full of flavour. I usually don't bother finishing the soup that comes with most beef noodles because it is clear and light in taste, but it's not the case with this one here. Marinated pieces of beef taste good, but can be tough to chew at times. Th noodles used to be black in colour, but the chef has  changed the recipe to make it colourless. The new recipe still tastes the same, but I request for the old recipe when I order because I think the black noodles has more character (see picture below).

The cafe has a B rating (out of A, B and C) for cleanliness. Other things on the menu include roti canai, fried noodles, toasted sandwich and satay. Drinks are good too, as with most Malay eateries, they do not skimp on sugar and taste. So good, in fact, that traffic police officers are frequently seen to have their daily dose of "Kopi-O" here (pun intended). 5 points if you can spot the 2 officers who should be out and about issuing traffic summonses in the picture below.

Kafe Nusantara a.k.a. Jom Berambih Makan is located here

How to Live Happily Part 2

"Having Lots of Money" was not mentioned in the earlier post on how to live happily. So here's financial advice brilliantly written from the greatest wealth creator of our time, Warren Buffet. (Copied off a forwarded email too - thanks to Mike Ho):

We begin this New Year with dampened enthusiasm and dented optimism. Our happiness is diluted and our peace is threatened by the financial illness that has infected our families, organizations and nations. Everyone is desperate to find a remedy that will cure their financial illness and help them recover their financial health. They expect the financial experts to provide them with remedies, forgetting the fact that it is these experts who created this financial mess.

Every new year, I adopt a couple of old maxims as my beacons to guide my future. This self-prescribed therapy has ensured that with each passing year, I grow wiser and not older. This year, I invite you to tap into the financial wisdom of our elders along with me, and become financially wiser.

Hard work: 

All hard work bring a profit, but mere talk leads only to poverty.

Laziness: 

A sleeping lobster is carried away by the water current.

Earnings: 

Never depend on a single source of income. (At least make your Investments get you second earning)

Spending: 

If you buy things you don't need, you'll soon sell things you need.

Savings: 

Don't save what is left after spending; Spend what is left after

saving.

Borrowings: 

The borrower becomes the lender's slave.

Accounting: 

It's no use carrying an umbrella, if your shoes are leaking.

Auditing: 

Beware of little expenses; A small leak can sink a large ship.

Risk-taking: 

Never test the depth of the river with both feet. (Have an alternate plan ready)

Investment: 

Don't put all your eggs in one basket.

I'm certain that those who have already been practicing these principles remain financially healthy. I'm equally confident that those who resolve to start practicing these principles will quickly regain their financial health. Let us become wiser and lead a happy, healthy, prosperous and peaceful life.

How to Live Happily

Something copied off a forwarded email:

Ten Keys to Happiness

What makes people truly happy? There are probably many answers, but here are some common themes. If you use these keys, you can let happiness fill your life!

1) Take Responsibility
Take full ownership of your actions, moods and feelings. If you can take responsibility for your life, you can change it. Blaming others for your circumstances only keeps you stuck.

2) Feel Your Feelings
Don't stuff your feelings until they become toxic or leak out. There are no wrong feelings. Acknowledge them, let yourself fully feel them when you are in private, and then you will be able to move on.

3) Practice Gratitude
Make a daily practice of asking yourself, "What am I grateful for?" Keep a gratitude journal and write down 10 things that are good in your life. Do this at bedtime and you will enjoy better sleep. Being grateful for what you have creates space for new energy to come into your life.

4) Live in the Now
Don't drag your past into your present. Don't try to live in the future. Be here now, this moment. When you fully engage in the present, there is no room for baggage from the past or fear of the future.

5) Control Your Gremlins
Gremlins are those nasty voices in your head that tear you down. You know, the ones that say, "You're not good enough" or "You'll never amount to anything". You wouldn't even say those things to your best friend. So find those gremlins and zap them. How? Ask yourself if you really want them to control you, and then change them into positive affirmations instead.

6) Practice Forgiveness
Forgive everyone even if it's just as a mental exercise. Otherwise those people and situations gain power over you and live in your head, rent free. And, of course, forgive yourself - you did the best you knew how at the time. Today is a new day. Letting go of anger and resentment will set you free.

7) Connect with Others
Let the negative, whining people in your life find someone else to complain with. You don't have time for it. Surround yourself with supportive and positive people. Don't know any people like that? Put a smile on your face and go find them!

8) Manage Your Energy
Learn to say no to tasks and people who drain your energy. Learning to say no can be difficult, but once you do it, you will experience a new level of personal power and well-being. Say yes to activities that give you energy. Make a list of these activities and plan to do a few of them daily.

9) Give Back
Feel good by volunteering to help, mentor or spend time with others who don't enjoy your level of abundance. Give out positive energy and it will come back to you many times.

10) Change!
Change is good. Be flexible. Life is always throwing new stuff at you. Go with the flow and shape your life the way you want it to be. Keep learning, adapting and embracing the new and wonderful things that will show up in your life!


By Gretchen Sunderland

Business Concept 2: The Mindset

One of the most interesting concepts I've read from Anthony Robin's book is this little idea:

Beliefs > Decisions > Actions > Results

Your beliefs influence the decisions you make, which in turn, influences the actions you take, producing the results of your actions.

Simple idea, almost common sense, but what implications does it have? Before dissing this concept as useless, ask yourself, are you satisfied in a situation where you are NOW?

Most people in this world are not. They complain that life isn't as good as it should be and do nothing about it. Rather than complaining about the government, your family background, economy, etc, have a moment and reflect on yourself...

Where you are today is the result of your actions, decisions and beliefs made in the past. For example, if you're not happy with your job at the moment, it's because you acted and applied for it in the first place. What made you make that decision to commit to that job is influenced by your own beliefs. Maybe at that point in time, you thought you were not good enough to apply for that dream job of yours or there are no jobs that suit you?

It all starts from your beliefs. If you're not where you want to be now, maybe it's time to change your beliefs because doing the same thing and expecting a different result is called insanity. The reason I can still remember this concept by heart from Robin's book is because I think it is such a simple, yet powerful tool to better your own life. If doesn't cover just your financial goals, but your health, social and general aspects of your life.

For example, if you're not at the health level you want to be at, reflect on yourself why is that so? Maybe you're not healthy because you have not exercised (action), because you have a nap as soon as you go home (decision), and there is no time to exercise (belief). To change the situation you are now, you have to start by changing you belief that "there is no time to exercise".

Same goes if you're not happy in life, or if business is not doing well...

Favourite Dim Sum - Har Gau

Dim Sum is a type of Chinese cuisine associated with a variety of steamed dumplings in bamboo baskets, fried dumplings and baked pastries. A proper Dim Sum restaurant can have up to 80+ mind boggling varieties to choose from. Dim Sum is often referred to as Yum Cha, which means drink tea, because it is a breakfast meal usually accompanied by Chinese tea.

This post is called favourite Dim Sum in a singular sense because I only order 1 out of the very limited choices of around 5. It's not the best dim restaurant, but my favourite nonetheless because proper Dim Sum cafes / restaurants are few and hard to come by in Kuching. So the one thing I eat at this coffee shop is the prawn dumpling - Har Gau

The interesting thing about people in my hometown is that they like to modify centuries-old tried-and-tested recipes and suit it to local tastes. The har gau here tastes nothing like the ones you get in major cities or the home of Dim Tum, Hong Kong. Even the sweet brown sauce that they serve tastes different. I've had Dim Sum from Sydney, Auckland, Kuala Lumpur, Singapore and Hong Kong. They all seem to stick to their standard original recipe, which is already good, so my favourite one here must be a different breed or a distant cousin in the har gau family. This is how the standard har gau should look like:

Here is a comparison of the standard har gau (top) and the distant cousin (bottom)

You can actually see the pinkish prawn meat in top picture, but the one on the bottom is more like a pork dumpling with a hint of prawn. Being different is what makes it special and my favourite prawn dumpling :) The rest of the offerings in the Dim Sum cafe is nothing to shout about...

The Har Gau sells out fast, so it's best to be there before 9.30am. My favourite Har Gau is located at the long-established Fock Hai Tim Sam Cafe:

Here's where you meet the real Fockers: (location map)