I have been thinking a lot about my post of a couple of days ago. Perhaps the thoughts have been tinged with a sense of regret. Regret that I was not always around during the very formative years as my elder two girls were growing up. Regret that some of the life and pf lessons that I am trying to shove down their throats now, could have been taught and practiced much earlier in their lives. And at a much more relaxed pace.

I spent some time going through my computer files where I had saved emails to my daughters. And I found something.

A pledge that the girls signed, way back on the 26th May 2005 and promised to hang in their hostel rooms as they left home for their University. I reproduce it below.


I, ——————————–, hereby solemnly pledge that I will seek and attain Financial Independence diligently and conscientiously. This, I shall achieve by :- 

a)         Consistently and diligently paying myself first with 10% of everything I earn,  whether it is an allowance from my family or income from any part time job or full time employment. I shall increase this percentage as my earnings rise.  

b)         Daily  I shall keep track of all my expenses so that I can cancel all the unwanted impulse money wasters. 

c)         Over and above paying myself this 10%, I shall save separately for a reserve fund for “rainy days.” 

d)         I will invest this 10% in long term compounding financial instruments that will continue to work hard for me. 

e)         I will read widely on personal financial management and practice the recommended ideas diligently. I will also seek and obtain advice on personal financial matters from people who are financially independent. This will help me in making the money that I have paid myself work harder to earn me more. 

f)          I will never lend any money to anybody. Rather I will donate and contribute to charity as required under the rules of my religion, Islam. 

g)         As soon as possible, I shall seek and obtain sales training. 

h)         I shall learn about insurance and obtain the required level of insurance as soon as possible. I shall also learn about trusts and wills and provide for my loved ones as soon as possible. 

i)          I shall pass on these rules to my younger siblings as soon as they are old enough to understand. I shall also be a good example for them.  

I pray to Allah SWT to give me the strength, wisdom and discipline to consistently and diligently implement the above rules. Irrespective of the many friends who will tell me to do otherwise.  Ameen 

Signed by:                                                                   Witnessed by: 





Reading this brought back memories of how the two girls promised to read and to follow this pledge.

I have not asked my girls specifically if they have followed anything of the pledge they signed with my wife and me as witnesses. Maybe I should.

One thing for sure, I strongly believe my daughters would not be among those of whom, Money, Smart Life is so incredulous about.

Maybe the pledge had something to do with it.

Posted by: fathersez | February 6, 2008

A critical review of my loans

Though I keep track of my loan balances in my year end net worth computations, I have never really sliced and diced them to look at them from different perspectives.

Today I did just that.

The breakdown of my loans (by percentages) is as follows:

         2005      2006      2007
Investment Loans      26.00      14.00             
Overdraft                     6.00        7.00
Car Loans      14.00      25.00      33.00
Mortgages      60.00      55.00      60.00
Total     100.00     100.00     100.00
Loan increase     100.00      58.65     (16.95)
Months left on minimum payments: 90
Months left on present payments: 76

This is not good. The number of months left assumes that I’ll have the same earning power over the next 6 years or so may not be realistic. Though I have a couple of irons in the fire, they are still a little long shots at the moment.

More confirmation that my debt levels are not good is shown when I apply Moolanomy’s DTI ratio calculation.

The present payment is a whopping 39% of gross income.

My wife and I have decided to put up on our houses for sale. The rental returns we are getting is far inferior to the savings that we’ll make if the sales proceeds were to be applied to loan settlement. (We are lucky to have a truly wonderful and responsible family as tenants, so at least there have been zero headaches. My wife and I are also probably rated by them as great landlords as we have maintained the same rent for the past 6 years.)

If the property were to be sold and the net proceeds used to repay loans, our loan profile will change as follows :

Loans become: As % of 2007 total 29.39
Months left if I continue present payment: 23

The DTI now becomes a much more manageable 7.40%.

This will lessen the financial pressure for me as I yearn for a much better life / work balance.

We put up the house for sale about a couple of months ago. Perhaps we are making what “FMF calls the No: 1 reason why houses are not being sold” mistake.

My wife tells me that her instinct is that we would not sell the house and something else would happen that would change our financial plans for the better.

I don’t know. This is something that I also have to discuss with my two elder girls. The house has many good memories. This was our first home, all the houses before were rented. (The 3 younger kids were also born here).

What do you think? Am I doing the right thing? Your advice and views will be most appreciated.

Posted by: fathersez | February 5, 2008

Counting my blessings again and again

I am just rounding up my trip to Mali, West Africa and am preparing to go home. For geography and statistics buffs, a summary of the country is listed here. (by no less than the CIA).

It is a very poor country, with a GDP per capita of USD1,200 per annum. As with most statistics, this is an average.

Much like if you put your legs in boiling water and cover your head with ice, statistically you would be warm all over. So you see a large number of Mercs on the road, except that the owners probably represent less than 1% of the population.

The population breakdown shows almost 50% between 0 -14 years of age, a really young population.

Fortunately for me, I did not have a whirlwind schedule like what Brip Blap described recently. We had a chance to visit two towns away from the capital. (Though I really wanted to, I could not visit famed Timbuctoo, about a 1,000 km from the capital.)

The lessons I am bringing home for myself is deep, unbridled gratitude.

Gratitude for the unexplained events of chance that resulted in me being brought up in my country, where I had a much better education and hence a better chance at life.

Gratitude that I am better off than perhaps 95% of Mali’s population of 12 million people.

Gratitude that whatever my debt levels may be, I still have a very decent roof over my head, food on the table, electricity at the flick of a switch and clean fresh water at the turn of a tap.

Gratitude that my children have a much better life than those little boys and girls who, burnt black by the sun, run after cars and try to sell tissues, toothbrushes and other assorted items.  

My wife continualy advises me that we should always look downwards, so that we look at the so many people who do not have what we have and feel grateful. Rather than upwards at all those Richie Rich people and envy them.

I slip up on this quite often.

The trip has nailed this lesson to me once again.

MMND has mentioned a memorable quote in her article on the proven power of gratitude.

“In our daily lives, we must see that it is not happiness that makes us grateful, but the gratefulness that makes us happy.”

Albert Clarke

May my gratefulness today and everyday make me happy!

Posted by: fathersez | February 4, 2008

Giving my elder girls a firmer life foundation

Recently Madison at the Dollar Plan and some of her blogging friends got together and came out with an excellent series of articles chronicling the financial strategies that should be put into place as we fall into various age bands.

This has made me review my own plans for helping my children lay a better foundation in their own personal finances and lives.

The two eldest girls are now in their final year of undergraduate studies, both of them on Pa & Ma scholarships. Sadly I was seldom around when they were growing up as I was working overseas. Thankfully some foundations have been laid by my wife and I want to see how it can be taken to the next level. Right now, the girls are on course for forming / mixing around with a peer group that takes pf seriously.

I have read and digested Mrs. Micah’s College Money Matters, Cash Money Life’s  Money Tips for the Twenty Something Crowd and Remodeling this Life’s Financial Advice for Your Twenties.

Having these resources have been a great advantage, thanks guys!

What should I focus on now?

a) Further studies

Along wants to do her Masters in Educational or Child Psychology, whilst Azah wants to do her CFP in Islamic Finance.

Should they do these part-time, or should they seek study loans, scholarships or employer paid tuition to pursue these?I have to give some thought to this.

b) Career Plan

This is an area where I have personally failed badly. So I have no intention of not guiding my children. I have to discuss with them and explore their preferred careers, identifying the companies or organisations where they want to work, preparing their killer resume, going the extra mile to secure the interview, preparing for it and then doing well at the interview are all matters that have to be addressed.Then there would be the matter of discussing how to manage their colleagues and bosses. c) Finance The first would be budgeting with the paying yourself first element firmly entrenched.  This may be based on the envelope system to start with. I would also like to suggest the “James Plan” of savings with a virtual employer.Then a major discussion on the power of compounding and how it can be made to work for us or if we are not careful, against us.  

They also have to be introduced to checking accounts and how to balance their books. 

Then on creating the emergency fund, basic investing knowledge like mutual funds, index funds and ETF’s.  Some background on insurance, mortgages and loans should round it up.

Emily made a telling statement.

To quote her, 

This is the best age to be frugal because living frugally early on is the foundation for the rest of your life and will give you the opportunity to live well while also living below your means.


And Trent over at the Simple Dollar reminds us that the age between late childhood to settling down with a family is the best age for entrepreneurship.

This is in line with what my wife and I would prefer. Still it’s the girls’ lives, so they would have to make the final calls. So far they have not indicated any signs of the Donald in them yet.

I have to now think carefully about crafting a series of lessons or posts (as my daughters and their friends read my blog) on how best to achieve this. Lessons that they find acceptable.

After all, the most memorable quote on advising children I have read is (I am sorry, I can’t remember the source now, but it must be from a blog), that the best way to advice children is “To find out what they want to do, then advice them to do it.”

Posted by: fathersez | February 3, 2008

A review of goals set for 2008 – Educating my children

I have been inspired by some of the pf bloggers doing a review of their 2008 goals, now that about 8% of the year has passed us by now.

And the goal under review is “Imparting to my children the two most important  PF lessons that I have learnt“.

a) Goal 1


To get my elder girls to join a peer group that has pf as a core subject.


My idea was for them to start reading the pf blogs. Over time, hopefully the useful advice given(especially since they are mainly real life experiences) will have some effect on them.


The good thing is that the two elder girls are reading my blog and also the links that are being provided. The both of them have occasionaly commented on my blog.


They have also told me that Mrs. Micah‘s mom is cool. The eldest once sent me a text message saying that she had read and commented on “Millionaire Mommy sumthing sumthing”


I have also forwarded them some of the oustanding career tips that can be found in Free Money Finance


Some of their friends are also reading my blog. This is a very promising step.  


I think this goal is being on its way of being achieved.

b) Goal 2

Teaching the younger children to “pay themselves first”.

In late November 2007, the two younger children signed allowance agreements with their mother. (I signed as a witness). They would both receive weekly allowances, they had to save at least 10%, and maintain accounts of their allowance.

This has gone on well for the past 2 months. Somethings to note:

 –  the boy just had two entries in his accounts ledger everyweek, the receipt of the allowance and the out to his piggy back. Basically he spent zero. It seems that he had stashed away the cash gifts received during our festive holidays and was spending them.  His mother and he have agreed to bank in this stash and we should now be better able to track his spending.

– Nana, (our fourth girl), is a little more lavish. She maintains the 10% (in fact, it is a lot more that 10% savings), but she also spends on stationery etc. I have talked to her about her seemingly lavish ways. I have to see how this develops. Nana also had her stash and this has also been banked in.

The weekly ritual of them presenting their accounts books for inspection and getting their allowance has had an effect on our youngest girl. She gets her allowance daily. I think she is also a little more careful with her spending, because my wife says that I am not giving her enough.

Anyway, she has also asked for a bank account and this has also been done.

In conclusion, I think this goal is progressing well. 

I like the way, D4L has weaved a story around the pf lessons to his children. I must do the same. Perhaps something from the “Richest Man in Babylon”.

Our “little girls” are adults now. Along, our eldest will be 22 in April while Azah, our second will be 21 in May. 

They are now both busy planning their careers. My wife and I shall do our best to help by guiding them not to make the mistakes that we had made.  

There is however, one issue that the children would have to decide on by themselves.  

Choosing their spouses. 

Early Retirement Extreme wrote a post on “How to be happy in the long run”, which included a section on choosing a spouse. My understanding is that he has suggested “stress testing” the potential spouse to ensure that we end up marrying “a survivor” as he puts it. I am not so sure if I can suggest this advice to my children.  

I am truly blessed that in the so very important decision of choosing a spouse, I have made or have been guided in making the right decision. My wife and I have gone through many ups and downs and whilst we have differences, the net is very, very positive and good. 

How would I react if my children were to ask my advice on how to choose a spouse?  

Well, I have thought about this and these are my thoughts.  

It is impossible for us to predict the future and try to do a comprehensive spreadsheet evaluation on how to choose a spouse. So many events will happen in our married life, during which each partner may behave or react in a manner that may surprise the other.  

These are my suggestions. 

a)  Choose someone who believes in and fears God. 

This is putting the “Big Brother” mechanism in place. That someone is always watching you. Knowing that doing good is good and doing bad is bad and that all our deeds are being counted up.  

This part should also take care of good behavior and respect for the wife, the elders and others in the community. Above all this rule will make the person respect the sanctity of marriage.  

I don’t know how and don’t want to comment on the many fine people who do not believe in any particular religion.    

b)  That someone must believe in having goals for himself 

This would help in weeding out the directionless drifters who somehow with silver tongues manage to sweet talk their way into many a lady’s heart. I am sure that during their conversations, my daughters would be able to gauge this.  

A person with goals, no matter where he may be now, will have an advantage in improving his position as opposed someone who does not have goals. 

If they have written goals, so much the better! 

c) And finally, that someone must be able to make you laugh. 

Make you laugh loudly and happily. Whether it is by doing something silly, or by telling a good joke or whatever other way people are made to laugh. I think humor is a great adhesive in sorting out the many little differences that will crop up as people live as husband and wife.  

Well, these are my thoughts.  My wife also agrees with these suggestions. My daughters read my blog (don’t you, Along and Azah?), and I hope they understand what I am saying here.  

All my 4 brothers and sister were married off by parental matchmaking. I was the first one to break this chain, by choosing my wife myself. In addition my wife and I come from different cultures, which was also a first for both our families.

Our marriage has endured and has gone from strength to strength. Whilst my wife and I will never be able to guarantee “good spouses” for our children, we can help pay it forward by treating everyone as we would want our children to be treated. 

I went to school without attending preschool. In fact, I did not know there was such a thing as preschool. Hence when I entered Standard One, I could not read or write a word of English. 

The first year was quite miserable. My father could not afford any tuition for me, and I just made do. Slowly I started understanding words and learnt to spell. By the end of Standard Two, I could read and write English reasonably.  

My classmates in school, WYK, AL and OHT came from better backgrounds and their parents bought them story books. And WYK, AL and OHT were very generous in lending me their books to read. 

And, boy, did I read. I loved the stories and read them voraciously. I think even in these early years, I started speed reading just because I had to return the books the next day.  

(My “finding” of libraries came later. In fact the first library I remember visiting is the USIS library in Penang).  

I have never really learnt English. Till today I have no idea about the rules of the language like what past or present participles or antonyms etc. are. And I am quite happy not finding out. My English is controlled by the “it sounds right” theory.  

I just read. Moving from Enid Blyton to James Hadely Chase to Robert Ludlum then to PG Wodehouse and so on. Just fiction at first. Books that may now in our adult age be classified as trashy novels.  

I also found comics. Superman, Spiderman, the Silver Surfer, Fantastic Four, Conan the Barbarian…. I went through them all.  

Then it was history, which was so much like the story books I loved. The Crusades, the travels of Ferdinand Magellan, World War I and II etc.

The self improvement and productivity books came much later in life.  

This love for reading + my early adaptation to speed reading is one of the two things I credit most in my doing well in my studies. (The other was finding my “switch”). 

And doing well in my studies turned out to be the cornerstone of my progress in life. 

I owe it all to my classmates, WYK, AL and OHT. WYK is now a doctor in Penang, AL is the Chief Investment Officer in one of Malaysia’s leading Fund Management companies and I have lost complete touch with OHT. 

I have yet to thank them properly. This I must do.  

In the meantime, I want to record my heartfelt tribute to them for having given me this tremendous helping hand of getting me to “love to read”.  

I have written about our goat farm. The land is being developed now and our target date for “opening” the farm is 5th April 08. 

In some lesser developed countries like India, people with extra funds would buy goats and hand them to goatherds to tend. The goatherd would take care of the herd, feed them, give them medicine if needed etc. The offspring were shared 50:50. 

It was a win-win situation for both the investor and the goatherd. The difficulty was in matching goatherds with investors. This was done by word of mouth as trust was a very important factor in this equation. 

In Malaysia, a group of people have brought technology to this age old practice. 

They have set up a website, offering matchmaking services for the investors and the goat farms. (The website is in Bahasa Malaysia.) They have prepared a “prospectus” showing the indicated rate of returns on investment, risks involved, minimum investment required etc. 

This is a great idea, as it takes away the nitty gritties of running the farm for the investors interested in goat rearing and provides capital for others who are keen to physically embark on goat rearing. 

As in any other investment, there are risks. The returns quoted  of almost 1300% per annum over 6.75 years appears to place the risk level at a high level. 

This is a great example of creating a business opportunity. Using technology to improve or facilitate an age old business practice.  

My wife and I will be registering our farm with e-pawah.com.my and offer to act the role of the traditional goatherd for the investor. Let’s see how this works out.

It would be interesting to hear the views of readers on this investment.


Posted by: fathersez | January 29, 2008

Thank you, a little less belated than the last time

When I grandly (over grandly in fact) announced my Most Audacious Goal for 2008, I promised to follow the advise given by the more established bloggers that I should be polite and thank bloggers who give me a link that results in a large flow of traffic.  

Well, it happened again. 

This time, Free Money Finance, made a mention of my financial blunders in his roundup for the week of 21 January 08, and there was a spike in traffic. 

Thank you, FMF!  

And a warm welcome to all FMF readers, who are dropping by for the first time.  Please look around and make yourself at home. 

I’ll appreciate your views and comments. 

The five mistakes we have talked about so far are:- 

         Not paying myself first  

         Not forming or joining a correct peer group

         Not having a written budget  

         Not managing my career properly and

         Not getting the best deals on my mortgages 

There is more.

The next one is “foolishly selling my long term investments without proper evaluation and soul searching”. 

Ever since I realized that I should start savings for retirement and for our children’s education, I have made monthly contributions to a unit trust or mutual fund as some people call them. My wife and I chose the UT reasonably carefully. We did not delve into diversification and asset allocations and such. 

In Malaysia, we have something called the Employee Provident Fund, where all employees and employers are required by law to contribute 11% and 12% respectively of gross salaries. This EPF is administered by a body set up under the Ministry of Finance and the Fund pays yearly dividends. 

You are allowed to withdraw a part of your EPF savings and invest them in approved UT’s. I also withdrew from my EPF account and invested in UT’s. (When we sell these UT’s then the money has to be reinvested back with the EPF). 

So over the years we had built up a reasonable nest egg.  

The mistake I made 

We had what can only be called a mind blowing bull-run in equities in 1992/1993 which as per text book rules ended in a spectacular collapse. The market then drifted slowly upwards and downwards.  

In 1997/1998 there was another equally mind blowing collapse due to internal political uncertainties followed by the famous Asian currency crisis. 

Against this backdrop, you may have guessed that my UT did not perform particularly well. There were years when no returns were paid and there were also years of losses. 

In 2003, I did something that I still regret. I sold off the bulk of the UT’s. 

The balance UT’s that I still held have performed as follows:-

As at:-

31 December 04        Taken as base 

31 December 05         Increased by 21%

31 December 06         Increased by 40%

31 December 07        Increased by 54%

The above returns include my monthly contributions (which I continued, thankfully). I am still astonished at the returns after even accounting for my contributions. Even though the last few years have been spectacularly good years for equities, the returns are nothing to be ashamed of.

What I should have done

Equities have their cycles of ups and downs. I was well aware of this, having been through a number of them. I also knew that these cycles could take years but just like clockwork, sooner or later the markets would move up again. And the time to turn around was not too far off.

UT’s offered a great way to diversify amongst a number of stocks.

In addition the UT company managing the fund we had selected was one of the better operated ones.

Since we were using the “dollar averaging method”, we had been bulking up on cheaper units as the markets languished.

I should have weighed all these factors and made an unemotional decision on whether to stay invested or to sell out.

Instead, I got influenced by the fact that there were no returns, without objectively analyzing the reasons why. I also never revisited the reasons why I had invested in UT’s in the first place.

Don’t repeat my mistake, please

Long term investments are just that….long term. They should not be influenced by the market fluctuations that happen daily, monthly or even the bigger swings (like what we are going through now) every once in a while. 

Investments in UT’s have the advantage of professional management and diversification amongst a wide array of stocks. Dollar cost averaging does give us an advantage in down markets, as we end up buying more units.  

Had we maintained our investments, my wife and I would be very, very much further ahead in our quest for retirement savings.  

Though I am not losing any sleep over it now, this selling off decision is something that I have regretted and will regret for a long time.  

And it is something I’ll keep repeating to my children never to make! 

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