STE's story: The Millionaire Next Door.

Thanks to a reader, Sun, who reminded me of the fact that STE is a "millionaire next door", I remember that there is a very good book that shows us how common people can become millionaires.







Generally, there are two types of people:

1. "Under-accumulators of wealth (UAWs)": This type of people spend everything they earn as soon as they get it.

2. "Prodigious accumulators of wealth (PAWs)": This type of people are frugal. They save and invest. They become millionaires.





People sometimes think that high income earners are wealthy people. This might not be true. In fact, in the book, it is revealed that most high income earners are not wealthy. They make a lot of money but they don't keep much of it.

To become wealthy, we have to own income generating assets which will appreciate in value over time.

STE's story shows us, once again, how common people can become millionaires. He has done it and so can you! (You must be tired of hearing "If AK71 can do it, so can you!". So this is a change.)






I have found some bargains for anyone who doesn't mind pre-owned books:


Paperback:
15 copies in Very Good condition at US$ 6.48 each.



Hardcover:
US$8.98 each.



Free shipping worldwide.

Related posts:
1. STE's story: Personal finance.
2. STE's story: Investment strategy.

STE's story: Investment strategy.

In this second instalment of STE's story, he shares his investment strategy. Here, we see how he frankly admits that luck plays a part in the grand scheme of things.

Like I found out the hard way, never trust anyone who says that his success is due to foresight and that luck has nothing to do with it.

Someone who is humble and admits that he was lucky as well is the more credible investor.

..................................................

My investment philosophy is simple. We only need to know two things:

1) Margin of safety
2) Mean Reversion

In the long run, the stock market trends upwards and, of course, it is hard to catch the bottom. However, one should try to avoid hype and enter the stock market when things are hot. If we had invested in tech stocks when their share prices were chased sky high, I think we might not have recovered even now.

Most of time, the stock market is stable and doesn't move much. Although stock prices will fluctuate, big fluctuations are rare and maybe happen on less than 5% of days.

"Mean reversion is a mathematical concept sometimes used for stock investing, but it can be applied to other assets. In general terms, the essence of the concept is the assumption that both a stock's high and low prices are temporary and that a stock's price will tend to move to the average price over time."
Source: Wikipedia.

I suggest that we study and understand the market by reading some books on behavioural finance and economics. This, I believe, is more important than any books on investment. They help us to understand market psychology.

I was lucky to buy some shares during the 1998 Asian Financial Crisis. I bough a lot of Malaysian banking stocks back then. I skipped the dot com bubble. I also bought stocks of many blue chip companies like IOI, Perlis Plantation and Genting, making a few hundred thousand dollars soon after.

As we decided to switch citizenship in 2007, we disposed of all our assets in Malaysia, including our house in JB. On hindsight, we were really lucky because the sub-prime crisis erupted at the end of 2008 and we had the cash to take advantage of the situation.

At that time, I wondered what to invest in. Since the property market was badly hit, I thought it must be a good bet and since I needed some margin of safety, I decided to invest in REITs which generate stable income. Most REITs were giving double digits distribution yields then. I bought into Suntec REIT, K-REIT, Mapletree Logistics Trust, Cambridge Industrial Trust etc. I am still holding on to some of them now.

Another reason why I invested in REITs was because of "price stickiness".  Rents might be adjusted downwards but I believe they will not go to zero especially in Singapore which is such a small country with high population density. Although interest rates might increase in the next few years, inflation will still be a problem.

I would usually try to maintain 10 to 20% in cash BUT this time round I bet BIG and invested all, including my CPF money. I might be wrong but who knows for sure?  Anyway, every 2 to 3 quarters, we will have more than $100K collected from dividends. Since we are both still working, we can save all the dividends collected.

We plan to retire by age 50 and that is 7 years away. Using the magic of compounding, our investment portfolio should have added another $2 million by then without any fresh injection of capital. I believe that we will be able to retire comfortably if we are not extravagant, keeping our life simple. We are happy and contented with what we have.

I hope to inspire others with my story that we could achieve financial freedom through our own efforts even without anything in the beginning.

Read the other blog post on STE:
STE's story: Personal finance.

Related posts:
1. To be richer, be comfortable with being invested.
2. REITs: For those who have paid higher prices.

AK71 is watching Fairy Tail!

My all time favourite anime is Naruto. Now, I am still watching Naruto Shippuden which is ongoing.

Recently, I started watching Fairy Tail! I really like the music:







Very Celtic and at the same time, it has some Oriental tones. Fusion!

Like it?

STE's story: Personal finance.

There are many savvy investors in Singapore and the majority of them are not in the public eye. They could be our neighbours, our colleagues or even our relatives and we might not even know that they are actually millionaires from their investment efforts.

Recently, a reader, STE, contacted me to share his story to show how common working people could become millionaires without being entrepreneurs. His story shows how hard work, frugality, investment savvy, patience and luck are the ingredients to financial freedom.

He sent me a lot of information and I am thankful for his trust in me. However, I have exercised much discretion as to what is to be published. I think it will be more than enough to inspire.

Don't ever say that common people cannot achieve financial freedom. It is simply not true.

-------------------------------------

My wife and I came from Malaysia. My family is quite big and I have 7 siblings. I am the youngest. We were poor and most of my siblings didn't even have a chance to complete primary school education. I was lucky as I had the opportunity to go to the university on a Malaysian government scholarship.

My wife came to Singapore after her "O" levels and I joined her in Singapore 5 years later. When we first came to Singapore, we worked very hard and even held part time jobs although we had full time jobs in the day. We worked on Sundays and even public holidays.

We keep our money separate but most of the investment decisions are made by me. She is a good wife, very hardworking and takes good care of our family. We have two daughters.

As we were not born with silver spoons, we had to work hard in order to have money for investments. Saving money is very important as how much we save is more important than how much we earn. If we earn $10k a month but spend $11k, we are in the negative.

We were very frugal and, for example, a few years ago, a friend laughed at us because we still did not have a flat screen TV although it was already a common thing. I thought that as my TV, then 9 years old, was still good, there was no reason to change. At that time, I was also still using "dial-up" for internet access while most of my friends had broadband.

Only very recently, we decided to enjoy the fruits of our labour and our family went on a holiday to Alaska two months ago. Although I take the MRT daily to work, I do have a car but a weekend car. This is for the convenience of going back to Malaysia for social visits.

Read part 2 of the story in:
STE's story: Investment strategy.

Related post:
The very first step to becoming richer.

Where to go for this long weekend?

This is not just a LWE, it is a super LWE!

Many have taken the opportunity to go on a short holiday while many more are staying in Singapore because we are patriotic and want to celebrate National Day. No, this is not the reason why you are staying in Singapore? Oops.

Well, if you are thinking of where to go, there is a new ‘one-stop’ food enclave in Singapore! Yes, eating is one of Singapore's national pastimes, isn't it?

The Dining Edition boasts an impressive 50,000 sq ft of dining area!

Where is this place? At Marina Square!

I think most of my blog's readers are Singaporeans but just in case a foreigner is reading this, Marina Square is accessible by both City Hall and Esplanade MRT stations.

You might also get lucky:

Find out more about The Dining Edition at:
http://sg.sharings.cc/AK71SG/share/TheDiningEdition

Another Day In Paradise.

I had such a moment last week when, walking to look at the progress made on the construction of my new home, a man asked me if I had $1.60 because he didn't have the money to take the bus back to his hostel. 

I paused, thought about it for a second and gave him the money.

How likely was it that he was a fraudster? I don't know but I guess giving him the money was erring in the direction of kindness. 

$1.60 was an amount I could afford and it could have meant the world to him.

Related post:
Kindness of strangers.

Tea with AK71: The kindness of strangers.

There is a small part of an email a reader sent to me very recently which I feel like sharing but at the same time, a little corner of my mind tells me that maybe I shouldn't.

The reason why I feel like sharing is because it is something that the boy scout in me has always believed in. I feel that if we can make a positive difference in the lives of others, why not? 

If we can show some consideration to others and make the world a better place, isn't that a good thing? 

In our pursuit of wealth, we should not forget to extend a helping hand to those in need if we can.

The reason why I think I shouldn't be sharing is because I am afraid that I might be accused of self-promotion once again.

Then, I remember something a fellow blogger, SMOL, told me: "Be the mountain!"

Photo taken on a trip to Japan.

Here it is:

"We live in a dog eat dog world these days, and every where I look I see the ugliness of the human spirit. People 你争我夺。People 笑里藏刀。 So it's quite rare and heartening to see that there are people around - willing to share knowledge and help readers. And because of this, I don't just see a rotting world anymore-  I retain a bit of optimism for the future, a bit of belief in the human spirit, a bit of love for the world."

I am not ashamed to say that, reading this, I was almost moved to tears, especially in the state that I was in.

It is easy to become hard and cynical as we grow older in today's world. We lose our youthful optimism and trusting nature. 

It is hard to believe in the kindness of strangers and for some reason it is more so in Singapore and places like Singapore (example, Hong Kong).

Well, if we find it hard to accept the kindness of strangers, perhaps, we can be kind strangers to others instead. I dream of the day when the kindness of strangers will stop being a strange thing.

How should I end this blog post? Let me borrow from a quotation another reader sent to me and that is we should all "err in the direction of kindness."

Yongnam: A chance to accumulate cheaper.

If anyone is still wondering why Yongnam's share price plunged today, it is due to a 28.6% drop in quarterly net profit, year on year. The weakness in share price now has a reason.

The question to ask is whether this drop in net profit is because of an enduring change in Yongnam's businesses or is it a one off event?

Yongnam posted a quarterly net profit of S$ 8.6 million attributable to shareholders which is lower than the S$ 12.1 million a year ago. This is after a S$ 5.1 million provision for doubtful debt because Alpine Bau GmbH, the main contractor for the Downtown Line 2 MRT project, went bust.

Now, if this had not happened, Yongnam would actually have seen a 13.2% growth in quarterly net profit, year on year, instead. This tells me that Yongnam's underlying businesses are probably still doing well and that this provision, as long as it does not become a regular occurrence, does not have any long term impact.

There are three other points which I want to highlight:

1. Gearing has gone up a notch to 0.45x. This is not a bad thing if the borrowings are able to generate greater returns but we should always keep an eye on gearing.

2. Gross margin in the last quarter went under 20% to 19.4%. Ignoring the provision for doubtful debt, net margin is 11.9% which is still pretty good for a construction company but it tells us of the existence of rather significant cost pressure.

3. First half EPS now stands at 1.59c. Unless the second half results are so abysmal as to be a loss of more than 0.59c, Yongnam is fully capable of paying a dividend this year and going by what happened in the last two years, it would probably happen.

I put in a buy order at 28c last night and the stock also hit a low of 28c a share today. A total of 17 lots changed hands at 28c but, fortunately or unfortunately, my order was not filled.

If Mr. Market should continue to feel rather depressed about Yongnam in the coming sessions, I will make use of the opportunity to accumulate.

See Yongnam's presentation: here.

Related post:
Yongnam: Buy since price is more reasonable now?

China Minzhong: Increased long position at $1.065.

The last time I sold shares of China Minzhong's was at $1.185 a share.  Since then, I added to my long position twice at $0.97 and $1.025. Today, I added to my long position again at $1.065.

Technically, even though there is some volatility in the share price, the MACD is supportive as a higher low was formed even as a lower low in price was seen. Another higher low in the MACD would mean that momentum is relatively strong.

$1.055 seems to be the immediate support which is being reinforced by the rising 50d MA. The 100d MA seems to be flattening at $1.065. Of course, there exists a chance that the 200d MA might once again be tested and it now approximates $0.995. I am willing to hazard a guess that it would bring out the buyers if it should happen.

Apart from the technical picture, why am I willing to buy at $1.065 today? Well, quite simply, I believe that China Minzhong's share price is relatively cheap. Its stock is undervalued even at $1.065. With a NAV/share of RMB7.00 or S$1.47, the stock is currently trading at a 27.5% discount to its book value. At $1.065 a share, if we could simply repeat the last quarter's EPS, we are looking at a PER of some 3.44x for 2013. This is hardly expensive even after taking into account that the PERs of companies in the business of farming seem to be rather low.

On 13 May 2013, I said that China Minzhong reported what I thought to be a good set of numbers. Both revenue and net profit were up. What was also really impressive was the 260.5% increase in cash flow from operation for the first 9 months, year on year. The company is now effectively in a net cash position.

What is the free cash flow? This is what many value investors would say is generally more important than earnings. It is harder to fake cash flow but easier to fake earnings.

For the first 9 months, China Minzhong generated a free cash flow of some RMB 299.9 million. This is about S$ 62.98 million. We will have to wait for its 4Q results to see if this goes up or reduces. As there are about 653 million shares in issue, it means that there is already a FCF of about S$ 0.096 per share.

There is intention to pay a dividend in 2013 and with FCF positive, there is a good chance of this happening. The practice of paying an annual dividend could also become a standard because of Indofood which has an almost 30% stake in China Minzhong. Indofood pays out 40% of its earnings as dividends consistently, according to sources.

With China Minzhong's full year earnings possibly at S$ 0.30 per share, a 40% pay out is equivalent to S$ 0.12. Even if FCF bumps up proportionally in the 4Q, this is unlikely to happen as China Minzhong still needs to fund growth initiatives.

I would be quite happy if China Minzhong is able to provide a 5% dividend yield which will move the investment from the growth category to the income and growth category in my portfolio. Based on today's price of $1.065, it would require a DPS of $0.053. Possible?

Well, this could be wishful thinking. I will just have to wait and see.

Related posts:
1. China Minzhong: Good results and long black candle.
2. Tea with Mark Mobius: Focus on long term goals.

Yongnam: Buy since price is more reasonable now?

Yongnam's share price has been declining and in the last session, it closed at 31c. Now, this got my attention.

I initiated a large long position in Yongnam at 24.5c and have collected two rounds of dividends. I have also divested three quarters of my investment in the company by now as its share price rose. As I started divesting a bit too soon, I estimate that only two third of my remaining long position is free of cost.

Including dividends collected, however, close to 90% of my long position is free of cost. Remaining long position still shows a 26% paper gain even after the decline in the last session. All in all, this has been a pretty good investment for me.

So, why do I like Yongnam?

Yongnam is a natural beneficiary of the planned expansion of the MRT network in Singapore. It is a leader in the provision of structural steelworks, specialist civil engineering and mechanical engineering services. It has a proven track record even in Hong Kong, having clinched many contracts in the territory's MTR network expansion, the latest of which was announced on 25 June 2013. Why won't its businesses be chugging along nicely?

Yongnam's competitive advantage is to a large extent due to its massive investment in reusable steel struts. To have such assets and in such quantity like they have at today's price is not easily achievable and this presents a high barrier to any potential competitor. That was also a reason why I thought paying a price slightly above its NAV was acceptable when I got in at 24.5c.

The updated NAV/share on 31 March 2013 for Yongnam was 26.5c. So, my buy price is now at a discount to its NAV. This is a positive development.

I also like how Yongnam has plans for a recurring income base although this will take many more years to bear fruits. An example of this is a joint venture for the construction and management of an international airport in Myanmar. Result of that tender exercise has yet to be released, I believe.

When this news was made known, many people chased the share price of Yongnam and it hit a high of 38.5c not too long ago. This was all based on speculation. There was no certainty that Yongnam would get the contract and even if the consortium it is a part of should get the contract, it would not see immediate benefits. With share price at 31c now, probably, many got burnt.

Isn't Yongnam a good stock? Yes, qualitatively and quantitatively, I believe so. So, why did this happen? Well, even with a good stock, the more prudent thing to do is to wait for a pull back to what is a more reasonable valuation before buying.

Is the valuation more reasonable now at 31c a share since I said it got my attention. Well, it is definitely more reasonable now than at 38.5c! That is a safe answer to give. OK, end of blog post. Kidding!

Let us look at earnings? 1Q EPS was 0.91c. If we annualise this, we get 3.64c which gives us a PER of 8.52x with a share price of 31c. At 38.5c, the PER was 10.58x. Remember that all these calculations do not take in probable improvement in EPS in future quarters.

If we are conservative, buying at NAV is probably a good idea. However, I would say that paying a small premium to its NAV is acceptable. I liken it to paying a higher price for a powerful weapon in a fantasy RPG game that will give me an unfair advantage over others. Evil grin!

As usual, I am corrupted by TA and if we look at the chart, the longer term uptrend is still intact if we take reference from the 200d MA which is still rising. It now approximates 29c. This is a long term MA and is expected to provide stronger support although it does not mean that price might not whipsaw which could see 27.5c as a possible target.

So, I should rush to put a buy order at 27.5c? Remember, TA is about probability and not certainty. A smallish hedge at the 200d MA might not be a bad idea.

Reminder: I am talking to myself.

Results announced on 15 May 2013: here.

Related posts:
1. Yongnam: Investing in infrastructural developments.
2. Yongnam: 1c dividend per share.

Response from AK71 (to accusations) regarding "the" seminar.

I really didn't want to talk about this anymore. Unfortunately, it has come to my attention that I am being accused of withholding information regarding my fee for helping to promote "the" seminar due to some ulterior motive.

I don't see why this should be material at all as what should be material was already revealed in this paragraph in an earlier blog post here:

"To be fair to myself and other advertisers in my blog, I told him that I can help him spread the word but there would be a one time advertising fee. He said that he was only helping the organiser of the event and had to check with the organiser. He came back to say that the organiser offered to pay me for every ticket I sold in my blog and to make it more attractive, my readers will get a discount off the official price of $64 per ticket. A "discount code" or "promotion code" was created for this purpose."

Now, did I hide the fact that I was going to be compensated for my efforts? Anyway, since how much I was going to be paid for helping to promote the event seems to be important although the reason escapes me why it should be, I will reveal it as there is no reason to hide (as much as there was no reason to reveal).

Here are the emails, starting from the first email I received from SC, after I replied to his comment in a blog post that I cannot allow free advertisement in my blog. This was when a seminar ticket was advised to be at $57.00 a piece:

Dear AK,

 

I've checked with the organizer and they are definitely paying you a fee for helping them to advertise.

 

Ticket is at $57 per pax.

For every referral from you that sign up for the seminar, you get $6 (more than 10%) if they pay via internet banking.

If the referral pay via EventBrite, then it is $4, as admin cost like eventbrite and paypal takes up a significant portion.

 

So basically, all the cost of paying eventbrite and paypal, goes directly to you as well.

 

Is this ok with you?

 

Event is held at:

 

Nexus Auditorium
5 Koek Road #05-07 S(228796)
Cuppage Plaza (near Somerset MRT Exit B)
Singapore 228796

 

Monday, 19Aug 2013

Time: 7-10pm

 

Let me know.

 

Thanks,

Swee Chye

As I preferred the simplicity of having a one time fee, I replied:

Hi Swee Chye,

Thanks for this. :)

I would like to propose a more straightforward method.

For Value Investing Summit, the organisers told me my blog referred almost 70 participants in January 2013. Of course, since then, I think my blog's readership has grown if you saw my most recent blog stats which I blogged about.

So, I would like to offer a big rectangle banner space (300x250) on the top of my right sidebar for S$400.00. This will run to 18 August.

If the organisers accept this, please deposit the money into my POSB savings account 093-44286-5. They will have to provide me with the HTML code for the banner ad which links to their website too, of course.

As a bonus, I will also compose a short advertorial on the event. This will usually enhance the effectiveness of the campaign.

I hope to hear from you again soon. :)

Best wishes,
AK

A counter proposal was made by the organiser where the commission offered was raised from S$4.00 - $6.00 to $27.00 a ticket! Mind boggling:

Dear AK,

 

Thanks for the quick response.

 

I've checked with the organizer, and they are counter proposing to create a special link for the payment just for you, if you can promote for them, with the number of tickets shown online for that link.

 

The link will have the number of tickets at the start, and it will decrease as tickets are bought in order for you to know how many tickets are sold from your referral.

 

For every tickets sold, you will get $27, so selling only $15 (sic) tickets will net you $405.

So the more tickets that are sold via your referral link, the more you get paid.

 

Is this a fair deal for you?

 

Let me know, so that the organizer can do the necessary link for you.

 

Cheers,

Swee Chye

 

PS: On a personal note, do continue writing your interesting articles in your blog, as from time to time, I do visit it when I am able to have some time. :D

I thought this over for quite a while because it was quite an attractive offer and I was also somewhat surprised at their generosity but I still preferred the simplicity of a one time fee. So, I wrote:

Hi Swee Chye,

Advertising income is nice to have as pocket money but being the fastidious person I am, I know I will be checking on the ticket sales daily. Yikes. I want to avoid that. This is why I proposed a straightforward upfront one time payment. My blog could end up selling 100 tickets and it wouldn't matter to me. :)

I got to know someone who blogs for a living in the USA and he told me that with the traffic I have now, I should charge US$150 a month for a 125x125 button. Example: "TheFinance" in my left sidebar. So, I believe that S$400 for the proposed 300x250 banner is inexpensive.

Please tell the organiser that I appreciate their offer which is very generous. It is more than fair because I am sure I will end up making more money with their method but this would be important to me if my primary motivation for blogging is for money. ;p

Well, if they don't need me to write an advertorial in support of the banner ad, I could lower the price, I guess. However, I can say from experience that an advertorial helps. :)

Best wishes,
AK

Then, I received a reply from SC which I guess shows that he is more knowledgeable about internet marketing than I am:

Dear AK,

 

I've spoken to the organizer, and they are more interested in actual ticket sales, and that is why they made that proposal to you.

 

Of course, any advertorial in support of the banner ad is most welcome, but they cannot track nor have any means to know the actual conversion rate simply from putting up a banner and a blog post.

 

Getting lots of traffic is definitely good and no doubt about it, but it is the actual conversion and sales that is what any advertisers are most interested in.

 

I believe Bloggers and Internet Marketers wants lots of traffic, but their source of income comes from actual sales, ppc, ppv etc 

 

Let me know if you are willing to help the organizer on the actual sales.

 

Cheers,

Swee Chye 

OK, at that point, I really should have just ended it and I would have avoided this entire nightmare. Unfortunately, much to my regret, I gave in:

Hi Swee Chye,

Yes, I quite understand their concerns. Must make sure that their advertising dollar is well spent.

I have given this more thought and have decided to accept the organiser's proposed special arrangement just for me. I could end up making more money. ;p

I will wait for the HTML code and instructions. Thanks. :)

Best wishes,
AK

This was followed by an email from SC in which the official price of a ticket, for the first time, was stated as $64.00:

Hi AK,

 

Here are the details for you to promote the event.

 

The event link:

ttp://www.eventbrite.sg/event/7661797643/

 

You are free to write as creatively as you can, and can use the link information for your write up.

You will notice there are 200 tickets for sale for this special link, and it is displayed visibly.

So every sale for this link will decrease the count by one, so the tracking of each ticket is visible to all.

 

You have a promotional code for all your referrals and subscribers to pay for the event if they are interested.

 

The promotional code is AK71-MSOI

This gives those interested to sign up at least 10% discount from the official price of $64.

 

Some pictures and banner you can use:

 --- (AK71 deleted the link)

 --- (AK71 deleted the link)
 

A picture for your banner in your website as attached.

 

Let me know if you have any other questions or need any other information for your promotion of the event.

 

I thank you on behalf of the organizer and hopefully it will be a successful campaign.

 

Cheers,

Swee Chye 

I took a screen capture to show that I did not make this up:

Click to enlarge.

Then, there were a few more emails on how to set up the ads which I am pretty sure there is no need to reveal, well, just like the above emails really.

Is the fee negotiation process an important part of the revelations? I don't think so. What was material was how certain details were left out in the negotiation process which led me to making a badly informed decision. These details which were left out were pointed out to me by readers of my blog! (You know who you are. Thank you.)

I would have insisted on early bird prices of $30.00 a ticket and $57.00 for three tickets if I was told they existed when they first approached me. Of course, with the publication of my blog posts on the matter, the organisers have stopped the early bird prices. The price is now $57.00 a ticket.

I would have insisted that the official price be stated as $57.00 if I had known that it was being marketed as such in another local finance blog. Instead, I was made to think that the official price was $64.00 and that to buy at $57.00, my readers must use a "discount code". The regular price of $57.00 over at kiasuparents.com's forum now supports my point that $64.00 is not and was never the "official" price.

Have I knowingly left out any details which might skew readers' perception of the organisers of the event? No and I have no need to lie.

One only has to think logically as to what AK71 has to gain from lying about anything. Why would I put in work to promote an event just to tear it down? I gain nothing from it. As another blogger, SMOL, said, I could have simply shrugged it off and put it down to "willing buyer, willing seller". I could have been absolutely nonchalant.

Everything I know, my readers know. Anything else that people say I should know and that I chose not to share with my readers now, well, they are entitled to their beliefs. I don't need to fabricate anything. I don't go around making baseless accusations as a pastime. Regular readers will know that is definitely not in my character. I say it as it is.

If people have been totally honest and fair from the onset, laying down all their cards on the table for me to see, would this have happened? Would there be any need for damage control? No, there wouldn't be any damage in the first instance!

For people who still think that I am blogging because of the money I get out of it, well, I can say with confidence that I won't miss the income but I WILL miss blogging.

In a reply to SC above, I said:

"Please tell the organiser that I appreciate their offer which is very generous. It is more than fair because I am sure I will end up making more money with their method but this would be important to me if my primary motivation for blogging is for money. ;p"

In another reply to SC which I shared in an earlier blog post, I said as much:

"You might know this but the organiser might not: I am not a blogger who is blogging for money. I care about my blog's reputation more than anything else."

I will stop here or else some people might accuse me of having ulterior motives (again).

Related posts:
1. I will not attend Multiple Streams of Income Seminar.
2. Multiple Streams of Income closed early bird prices.

How to be "One Up On Wall Street"? (Hardcover)

All 12 copies of the paperback at US$6.98 have been purchased! Wow, in less than a day! Fast hands, fast legs! You people are fast!

For those who missed out on this deal, I have done a search to see if there are any good deals left and I found a secret path you can follow.

If you click on the image of the book in my last blog post, you will either see a message saying that the book is sold out or you could get a pre-owned copy at US$17.46. Both messages are rather disappointing.

Now, go to the top of the website where we find the search button. Search "One Up On Wall Street". We will get to another page with a listing of all the books available!

Number 5 on the list (without an image of the book) says US$9.98. If we click on this option, we discover that it is a hardcover version of the book!

11 copies left in Good condition.

Sheesh! I would have gotten this if I had known. I like hardcovers.

Anyway, to make it more convenient, I am reproducing the image of the book here:




One Up on Wall Street: How to Use What You Already Know to Make Money in the Market
Free shipping worldwide.

Another value for money deal. Hope you are fast enough to get a copy this time! :)

Related post:
How to be "One Up On Wall Street"?

How to be "One Up On Wall Street"?

Reading this book in its entirety has been on my list of things to do for quite a while. I have been introduced to parts of it before but I never did own a copy of the book. Well, I finally ordered a copy and it arrived today.


Peter Lynch on stocks to buy!
"Stocks are not lottery tickets!"

Peter Lynch liked Dunkin Donuts and AK likes Old Chang Kee.

The back of the book.

I couldn't wait and made use of my tea break and lunch hour to flip through the book very quickly. What do I think? It is very readable and totally absorbing! I felt like taking leave for the rest of the day to finish the book.

Instructional Chapter 8.

Sobering Chapter 9.

I feel that this is probably a book that will become a classic for investors, if it is not already one. If you have not read this book, go get it. It is a gem.

No prizes for guessing which book I am reading this weekend. ;)



One Up on Wall Street: How to Use What You Already Know to Make Money in the Market
12 copies left at US$6.98 each.
Free shipping worldwide.

Another book by Peter Lynch:
"Beating the Street" with value deals.

Small tokens of appreciation for readers.

I said I will be sending small tokens of appreciation to readers who bought tickets to a seminar from my blog recently. So far, three readers have contacted me by email but only one has provided me with a mailing address so that I could send out the token by snail mail.

What are these small tokens I am talking about? These:

I took a photo to share the message with everyone reading my blog because I find the message inspirational.

Sometimes, when things look all uphill, remember this. If we believe that we can achieve, we are halfway there. :)

P.S. I am also making a personal offer to pay the readers who bought the 6 tickets through clicking the links in my blog to the ticketing site. Affected readers, please contact me by email.

LMIR: 2Q 2013 DPU 0.93c.

LMIR has delivered stellar results! I am very pleased that its DPU has improved to 0.93c in 2Q 2013. This is 4.5% higher, quarter on quarter. An annualised yield of 3.72c gives us a distribution yield of 7.44% which beats what is offered by retail S-REITs in Singapore including the recently listed SPH REIT.

If I were to invest in a REIT, it should offer me a distribution yield like this. If it should offer me a distribution yield similar to the dividend yield SPH could give me, I won't feel compelled to invest in the REIT.

I also like the fact that the REIT is trading at below its NAV of 57c and that it has a relatively low gearing level of 24.2%.

Can we expect a higher DPU in future? With a new CEO at the helm, the REIT seems to be doing better, achieving  about 15% in rental reversions for expiring leases. Having 8% more leases in its portfolio expiring this year, I certainly hope to see more positive rental reversions. This will marginally bump up DPU by at least 1%, assuming a 15% rental reversion.

There is also a vacancy rate of almost 5%. So, there is space to fill and, proportionally, if we could make a simplistic assumption, we could see a 5% increase in DPU if full occupancy can be achieved with new tenants paying the average rate psf.

Then, there is the matter of debt maturity. Roughly a third of LMIR's debt is due next year in June. I can only hope that they will be able to borrow at a lower rate. If they are able to do this, of course, this should result in higher distributable income.

All in all, rather pleased.

Related posts:
1. LMIR: DPU improved 20%
2. SPH or SPH REIT?

See 2Q 2013 results presentation: here.

Multiple Streams of Income Seminar closed early bird prices.

"However, when a reader showed me that the forum at kiasuparents.com is selling the tickets at only $30.00 each and that $57.00 could get three tickets, I was really upset."

I should have done a screen capture of the kiasuparents.com ticketing site at eventbee last night. It now looks like this:

Click to enlarge.

Anyway, I have enough readers and bloggers who clicked on the link yesterday to confirm that the early bird offer was still on then.

This was the last entry made by SC in the forum at kiasuparents.com on 27 July 2013:

Click to enlarge.

When I was approached by SC on 29 July 2013, the early bird offer was, without question, still available but he didn't tell me. When I published my blog post on 30 July 2013, the early bird offer was still available but he didn't tell me.

On 31 July, the early bird offer was still available when a reader alerted me to the site and I even clicked on the eventbee link to see for myself. I sent an email (amongst others) on that very night to SC regarding this matter and got no reply.

The early bird offer was stated as "Available from Jun 11 to Aug 19..." just like what we see for the VVIP ticket. Now, it is suddenly gone after my blog post this morning. Yes, the early bird offer has closed. What is the ticket price now?

S$57.00. No discount code required.

There is no denying that the early bird offer was still available when SC approached me. There is no denying that the early bird offer was still available when my first blog post on the seminar was published. I even corresponded with SC about the blog post that night.

By not providing this vital information to me, I made a terribly flawed decision.

Related post:
I will not attend Multiple Streams of Income seminar.

I will not attend Multiple Streams of Income Seminar.

After sending out multiple emails, I have not received any reply from the organisers of Multiple Streams of Income seminar by Robert G. Allen. I have, therefore, concluded that they are ignoring me and are not going to do the right thing as per my suggestion.

So, I am proceeding to blog about the whole matter here in my blog for all to see and for readers to decide for themselves if the people organising the event are fair and honest. If they are not fair and honest, then, can we logically question if a product or service offered by them has any hidden agenda?

I was first introduced to Robert G. Allen's books by a reader of my blog. He goes by the initials "SC". Then, recently, he asked if I would like to help promote an upcoming seminar by Robert G. Allen.

To be fair to myself and other advertisers in my blog, I told him that I can help him spread the word but there would be a one time advertising fee. He said that he was only helping the organiser of the event and had to check with the organiser. He came back to say that the organiser offered to pay me for every ticket I sold in my blog and to make it more attractive, my readers will get a discount off the official price of $64 per ticket. A "discount code" or "promotion code" was created for this purpose.

Now, Robert G. Allen's books are interesting and while not revolutionary, I believe that they will benefit people who are thinking of creating more income streams on their journey to financial freedom. So, there was no reason not to accept an advertorial offer to promote a seminar by the same person.

The nightmare started after a reader told me that another blog is selling the ticket at $57.00 without having to apply any discount code. So, I wrote an email to SC regarding this. His name is Swee Chye, by the way:

Hi Swee Chye,

Something just came to my attention and I am not too happy.

A reader just told me that he saw the tickets going for sale in a another blog for only $57 and I am saying in my blog that the regular price is $64 and that my readers get a special price if they use the discount code I have provided in my blog.

I clicked on the link provided by the reader and it really says $57.00. This is in Greatsage's blog. This is on Facebook too.

You have put me in a very difficult position.

My blog has a reputation which I put on the line when I do this. If I do not get a satisfactory answer, I will have to blog about this to clarify the matter and salvage the situation.

I look forward to your prompt reply as to how to remedy the situation.

Best wishes,
AK

I got a rather prompt reply from SC:

Dear AK,

 

I've checked with the organizer and he came back and clarify that the other blog link was at the net discounted price as it has already factor in the discount. This was a tie up with the other blogger.

 

I went to check myself and yes there is no promotional code area to enter for the other link, and it is at net $57.

 

So maybe you can explain to the reader that the official price is at $64, and that is why you manage to get a special price if they use the discount code, which can't be used in another link or page.

 

Hope this helps to explain the discrepancies.

 

Let me know if there are any other clarification to be made.

 

Regards,

Swee Chye

To which I replied:

Hi Swee Chye,

This is not a satisfactory answer.

If readers can buy the tickets at S$57 elsewhere without applying any discount code, why do they have to do it in my blog?

It gives the impression that my blog raised the price and then provide a discount to give an impression that it I am offering a better deal!

I get the feeling that you are also a business professional. How would you feel?

This is not just a matter of 1 reader raising the issue. How many more will there be? How many more will talk about this without telling me? It is my blog's reputation which is at stake here.

I suggest that the discount for my readers be raised to 15% to remedy the situation. For those readers who already bought their tickets and I last counted the number to be 3, you guys could give them some token for the additional 5% discount at the venue.

The current arrangement puts me in an awkward position and I am sure you can appreciate this. I cannot accept it.

I hope that the organiser agrees to my suggestion. Failing this, I will have to take matters into my own hands.

Best wishes,
AK

And this was the remedy they offered:

Dear AK,

 

I've convey your message to the organizer.

 

This is what he came back with.

 

As a special appreciation and token for your readers, those who have signed up, and those intending to sign up will get a complementary ticket to "The_Secret_Of_Success" seminar on 18Aug itself.

 

This complementary ticket is value at $57 as well.

 

The session will be in Mandarin, focusing on the "Secret to Success".

 

Maybe, you can include some add on in the blog post on the special gift only for your readers, but not the poster.

 

For those who have signed up, they will be informed and given the special complementary ticket.

 

This is subjected to the first 100 sign ups only.

 

So for those already sign up or intend to sign up for Robert's session on Monday - the tickets will be complimentary,   i.e. you buy one ticket, and get to attend both sessions, subjected to the first 100 sign ups only..

 

All guests attending this event are encourage to meet Ben Lai and Jane for discussions.

This is a special arrangement just for your reader and clarification to the discrepancy, which the other blogger will not get.

 

Is this ok for you?

 

Let me know.

 

Regards,

Swee Chye

Of course, this missed the point I was making totally and I told SC so:

Hi Swee Chye,

Please tell the organiser that I am promoting Robert G Allen's seminar and not some other seminar. This is in part due to your prior good recommendation to read his books which are interesting.

I don't even know who are the people conducting "The Secret of Success" seminar. Furthermore, it is in Mandarin! My blog is in English! How many of my readers are like me and have difficulty with Chinese?

A bundle offer is not the original intention of our agreement. A special price for my readers is supposedly the offer. This special price is now discovered to be not special at all.

So, I am asking the organiser to deliver on the promise of a special price for Robert G Allen's seminar for my readers and nothing else. A 15% discount should do it.

If the organisers cannot agree to an extra 5% discount, I will simply state my views on the matter in my blog matter of factly and let readers form their own conclusion. I will still fulfil my end of the agreement but I will have to do so giving readers full knowledge.

You might know this but the organiser might not: I am not a blogger who is blogging for money. I care about my blog's reputation more than anything else.

I look forward to your prompt response. Thank you.

Best wishes,
AK

SC did not send a reply to the above email and I followed up with another email at night after publishing a Part 2 to the advertorial in my blog:

Hi Swee Chye,

I have not received any reply regarding the proposed 15% discount for my readers. So, I assume that the answer is "no".

Anyway, I have updated my readers regarding the situation in my blog and if they still want to buy tickets to the event from my blog, they are now doing so knowing fully well that the tickets are available in another blog for $57.00 each without having to apply any discount code.

I am always above board with my readers. That is the reason why they trust me and why they keep coming back.

Readers who buy tickets from my blog, I will send them tokens of appreciation at my own cost.

I have to say that I am disappointed with how this has turned out but I know you are just the middle man and you don't have a say in how things work.

Thank you for helping me pass the messages. :)

Best wishes,
AK

As anyone can see, I was still very cordial, believing that SC, a reader of my blog, was just helping out the organiser and that he was not in the know.

However, when a reader showed me that the forum at kiasuparents.com is selling the tickets at only $30.00 each and that $57.00 could get three tickets, I was really upset:

Hi Swee Chye,

A reader just told me that the forum at kiasuparents.com is selling the tickets for $30 each and $57 for 3 tickets! What is going on?

I clicked on the link provided and it brought me to:http://www.eventbee.com/event?eid=102104202

Please find out from the organiser what is going on. This is just getting worse! It is terrible!

How well do you know these people?

Best wishes,
AK

As you can see, I still believed SC! Then, I looked at the nickname of the person posting in kiasuparents.com. It says "scang". I put two and two together.  SC's email address says anselmang@gmail.com:

Swee Chye,

The person posting in kiasuparents.com has the nickname "scang". That is you, isn't it? You knew all along about the special prices and you didn't tell me?

I entered into this arrangement in good faith! How is this fair to me and my readers! I hope you are going to tell me "scang" is not you.

If I do not hear from you by 8am tomorrow, I am going to publish our correspondence on my blog for all to see.

I DO NOT APPRECIATE BEING TREATED THIS WAY!

I want you to offer a FULL REFUND to all my readers who have bought tickets to the event through my blog if they wish it.

There is a total lack of fairness on your part in this entire exercise! You have omitted important information which could have influenced my decision on whether to promote the event! This is MISREPRESENTATION BY OMISSION!

TREAT THIS AS VERY SERIOUS!

AK

Now, not many people have seen me furious but I was SO furious and still am.

Then, something struck me. I went to the three ticketing sites and everyone had this in the header:

What or who is ARIIX? I did an online search and I think this is an MLM company. If the seminar is just a front to promote some MLM effort, then, the organiser has truly been dishonest with me. If I knew it was an MLM effort, I would never have agreed to this. My fury went up a level because it makes me an unknowing partner to a possible deception.

I did an online search on Ang Swee Chye. He has a linkedin account: http://sg.linkedin.com/in/scang

The last piece of the puzzle has fallen into place.

In my life, I have come across many dishonest and unfair people. People would sometimes withhold vital information, putting others at a disadvantage while promoting their own agenda.

I have been a victim before and I have developed a defence mechanism over time but not to the point of being cynical or overly suspicious. I still like to believe in the goodness of people. I still believe in fair play.

A total of 6 tickets were sold through my blog. Of course, I can say that I am lucky that I discovered the shenanigans quite quickly. However, to the people who bought the 6 tickets, I am truly sorry.

I went and bought inspirational bookmarks last night to send to them as a token of appreciation because they could have bought tickets at $57 each from the other blog instead of my blog. Now, these bookmarks seem grossly inadequate.

I don't know what else to say and for someone who talks a lot, this is saying something. I am very sorry.

Related post:
Create multiple income streams with Robert G. Allen.

Create multiple income streams with Robert G. Allen (Part 2).

I have just sent a very stern email to the organiser. I will strongly suggest that readers do not buy tickets to the event at any price. Tell everyone you know about this. I am very upset now and I have not been so upset in a LONG time.  (11.30PM, 31 July 2013)

Read this: I will not attend the seminar.
....................
Just last evening, I blogged about a seminar by Robert G. Allen which is happening on 19 August 2013. This afternoon, I updated the blog post asking readers not to buy the tickets from my blog yet, pending an announcement. At that point in time, 3 tickets were already sold.

I just got home a while ago and checked. The tally is now 6 tickets sold despite my afternoon update.

Anyway, if you have bought your tickets and are feeling worried, wondering why did I update the blog the way I did this afternoon, don't worry.

The reason for the afternoon update was because I received reliable information that the tickets are being sold in another blog for only S$57.00 without having to apply any discount code. So, I sought clarification from the organiser and was also trying hard to negotiate for a higher discount for readers of ASSI. I was pushing for a 15% discount instead of the original 10%.

Although several emails were exchanged, unfortunately, I have not received any agreement from the organiser regarding the proposed 15% discount.

I feel bad about the whole thing because I was under the impression that S$64.00 is the official price and readers of ASSI will get a special price by applying the discount code I was given. The special price has turned out to be a non-event.

I want to apologise to readers who, given the same impression, have bought tickets from my blog and I want to let other readers who might be thinking of buying the tickets from my blog to have full knowledge before making their decision.

If you have bought tickets to the seminar from my blog, please send me your first name and address by email and I will send you a little token of appreciation by snail mail.

Thank you all for believing in AK71. This, I value more than anything else.

Please note that this blog post is not a statement about the seminar. Its core purpose is to provide disclosure of my discovery and what I tried to negotiate with the organiser for my readers.

Related post:
Create multiple income streams with Robert G. Allen.

Create multiple income streams with Robert G. Allen.

PLEASE READ THIS BLOG POST FIRST:
Follow this link: Create multiple income streams with Robert G. Allen (Part 2).

I have just sent a very stern email to the organiser. I will strongly suggest that readers do not buy tickets to the event at any price. Tell everyone you know about this. I am very upset now and I have not been so upset in a LONG time. (11.30PM, 31 July 2013)

UPDATE (1.54pm, 31 July 2013):
I know 3 readers have bought their tickets to the event. For those who are thinking of buying tickets, pending an announcement, please do not purchase the tickets through my blog yet.

...........................................................

“Never depend on single income. Make investment to create a second source.”

Who said this? Warren Buffett, of course. Does anyone disagree with him? I don't think so. This is good advice.

Then, can we create multiple income streams?

A reader, SC, recommended that we pay attention to Robert G. Allen if we are interested in creating multiple income streams.

That was when I blogged about Robert G. Allen and how he charges US$10k to US$25k for personalised coaching. That is a lot of money and I recommended that we buy his books for much, much less instead.

However, there is now an amazing opportunity for anyone who is interested in listening to the man himself because Robert G. Allen is coming to Singapore to conduct a seminar!

It is not going to cost thousands or even hundreds of dollars to attend the seminar. It will cost only S$64.00 per person!

People know that AK71 likes to find good deals for his readers. So, the organisers are offering limited number of tickets at a 10% discount to readers of ASSI!

Simply enter the promotional code: AK71-MSOI when you buy your tickets at: ttp://www.eventbrite.sg/event/7661797643

The seminar is taking place on 19 August 2013 (Monday) in the evening from 7pm to 10pm at:

Nexus Auditorium
5 Koek Road, #05-07,
Cuppage Plaza (near Somerset MRT Exit B),
Singapore 228796.

 

I always try to keep an open mind and decide for myself what suits me. It was also with that philosophy that I attended Value Investing Summit 2013 earlier this year. Some readers might remember that.

So, if you have the time and if a ticket is not going to blow your monthly budget, why not keep an open mind and attend Robert G. Allen's seminar?

We could, of course, choose to get his books instead. Free shipping worldwide, as usual.

In his book, Multiple Streams of Income, Robert explains how to achieve financial independence in three phases:

1. Control personal cash flow with good habits.

2. Develop and grow a portfolio of income streams from various sources.

3. Apply strategies to retain wealth and pass it on as a legacy.

See it here at: Multiple Streams of Income.

If you decide to attend the seminar, remember to get your 10% discount with the promotional code. AK71-MSOI.
Tickets are sold at: ttp://www.eventbrite.sg/event/7661797643

Tea with AK71: Mind your language.

Once upon a time, I was a teacher but I had never seen anything like these:



Click to enlarge image.

So, which one tickled you the most?

Inflation: What to do?

Know anyone who stayed 100% in cash?

"For the individual, staying in cash has proven to be painful even if he is spared market volatility. Thanks to inflation, $1 million in 2008 would have shrunk to $854,000 in 2013." Patrick Brenner, Schroder.

Staying 100% in cash today is still a bad idea. Inflation is not going to let up and this is something I blog about quite a bit. See: Inflation is not going away.

If you are a squirrel and save a lot, good for you but don't stop there. See: Double whammy.

So, what do we have to do to protect our wealth from being eroded by inflation? Quite simply, invest for returns higher than the inflation rate.

Don't dump money into bonds. See: Beating the Street with value deals.

Don't dump money into fancy (and misleading) products. See: Inflation adjusted retirement income plan.

Saving money is crucial, of course, but a necessary second step is investing and these might provide food for thought:

1. Grow your wealth and beat inflation.
2. Motivations and methods in investing.
3. Warren Buffett, the greatest money maker.