Meshio.com

While I was emphasizing on why a bank reconciliation is a good way to ensure that your money in the bank is in safe hands, we have people happily sharing their PINs with perfect strangers, hoping to win cash prizes.

Referring to recent reports in the local media on unauthorised withdrawals from individual bank accounts, a total of 165 complaints on unauthorised withdrawals were received by Bank Negara Malaysia in 2008. Based on investigations, all of these cases were due to customers knowingly or unknowingly divulging their personal information such as personal identification numbers (PIN) and passwords to third parties or fraudulent parties.

In most cases, victims of unauthorised withdrawals had received an unidentified sms (from fraudster) to inform them that they have won a cash prize. To claim the promised cash prize, the victim is informed that they have to open an internet banking account. The victim then contacts the fraudster and the fraudster will provide a step-by-step guide on how to register and activate their internet banking account using the ATM terminal. At point of registration at the ATM terminal, the victim will be given an internet banking personal identification number (PIN). The fraudster will ask the victim for this PIN and use it to create an internet banking account for the victim. The fraudster will then ask the victim to register the fraudster’s mobile phone number in order to obtain an Authorisation Code to enable transfer of funds via internet banking. This will result in the Authorisation Code being sent via sms directly to the fraudster’s mobile phone. The victim has now unknowingly provided the fraudster with full access to their banking account.

More from Bank Negara’s Press Statements…

As much as I would like to sympathize with these victims, I think the best lesson is to let them be gulled once, or maybe twice.

I am much more concerned about the less technology-savvy fraudsters where they hold a parang behind your back while you are making withdrawals.

This is an improvised version of the Cash Flow Management System I designed earlier in 2008.

Inspired by PocketSmith.com’s calendar-based cash flow projection system, this improved Excel-based template allows you to project your cash flow months in advanced. Instead of calendar based, this spreadsheet is based on categories. Just download it and give it a go. You should personalize the spreadsheet according to your needs. I have tried to make it as self-explanatory as possible but do drop me a question here if you have problem understanding the spreadsheet.

Download the Cash Flow Projector (34.5 KB)

The spreadsheet begins with a few default figures I’ve keyed in, just as an example. Once January is over, you should key in the actual figures as per your banking transaction statements. This act is also called ‘reconciliation’. Reconciliation is an act of synchronizing your personal transaction records with the bank’s. You normally perform a reconciliation to ensure that there’s no discrepancies in the bank’s transaction, for example, to spot any unauthorized withdrawals.

If you are not careful enough, you might just be the next victim of the One-Cent Thief. I wouldn’t mind any unauthorized deposits though. A friend who previously worked in HP (Malaysia) was shocked to find an extra RM10,000 in his bank deposited by his employer.

In the past, I focused more on tracking the transactions and the historical data. Again, I have to thank Jason of PocketSmith.com for showing me the ‘power of projection’. By projecting your cash flow at least 6 months down the road gives you a good sense of direction of where you are heading in the cash flow game. It’s not precise, but that’s not the point. The whole projection exercise is to ensure that you are doing the right things to avoid potential ‘financial accidents’. An extrapolated cash flow projection also to help you achieving your financial goals by providing you an obvious benchmark.

In a few more days, 2008 will be history.

Meshio.com will be 7 years old in 2009. To wrap up the year, I’ve selected one article for each month of 2008.

In January, I started writing on how much insurance should one buy. One article leads to another, and before the year ends, I found myself completing the first edition for ‘Guide to Smart Insurance Planning’. My publisher just told me this morning that the second typesetting is complete. It’s going to take at least another 2 weeks before you will see it in the bookstores.

In February, few years after I stopped subscribing to The Star’s deadwood edition, I completely stopped my RSS subscription to The Stars Online. I am still unsubscribed to this day.

In March, I wrote about Hell Bank Notes and the story that could have started the ‘burning’ tradition.

In April, I gave up with the empty promises given by my previous hosting company Exabytes and moved on to a new hosting partner. I’m glad I switched.

In May, I started a Poster Design Series, featuring creative illustrations from Malaysia’s Ah Longs (loan sharks). If you’ve snapped a few good ones, do give me a tinker!

In June, I wrote a guide on how to withdraw money from PayPal using an al-Rajhi Debit ATM card. It’s still being contributed by other readers with new information in the comment section.

In July, I shared my thoughts on why I think it’s important to get the nitty-gritty details ironed out before venturing out on a partnership. I still stand firm on the issues I pointed out in the article.

In August, I exposed cash rich individuals who cunningly camouflages their wealth by literally riding around town in motorbikes.

In September, I posted a few interesting articles, but the winner had to go to the article about my complaint to Maxis. Not only is the matter not settled yet, but also partly because the article resonated with many other ex-Maxis wireless broadband users in Malaysia.

In October, I started my first virtual bookstore. Approximately 550 downloads so far.

In November, Meshio.com readers helped contribute to my section on ‘How to Earn More’.

In December (this month), I wrote about Ah Chong and Muthu and their entrepreneurial spirit. In the article, I attempted to illustrate the difference between a liquidity crisis and a solvency crisis.

Well, that’s about it - the 12 selected 2008 articles on Meshio.com! I hope you’ve enjoyed 2008 and it’s alright if you don’t, since it’s less than 72 hours to 2009.

Stocktube has a nice piece on how MLM is NOT the Holy Grail to solve your household economy issues…

It can be argue that there’re Ponzi characteristics in MLM systems as well. If you can think logically of how the members derive their extraordinary income then you should know how the game is being played. Money does not fall from the sky so someone has to pay for it. Of course there’re groups of “Old Birds” within MLM sectors who somehow command huge followers and these God-Fathers make the most money because they’re the early birds who after joined a MLM company will instruct their close buddies to build the lines (happens to be the same members from the previous MLM systems). These God-Fathers will jump from one MLM company to another and sometimes they would have arranged the “positions” beforehand so that a nice flawless pyramid structure was built before they joined a new MLM company. Instantly they make tens or even hundreds of thousands of profit and become the top earners *applause* and this serve like a magnet and attracts the newbies. When the game saturated, it’s time to migrate to another game.

More…

Enjoy the long year-end break, and most importantly, stay safe!

You meet a client who needs your help. However, he prefers that you do it his way, and he’s only happy if you do it his way.

You tell him there’s obviously a better way to do it, and it should be done your way. However, the client insisted that he preferred it to be done his way, even though what you said makes a lot of sense. He just want it to be done his way.

What do you do?

Approach 1 (the hard way): Tell him right in the face that he’s going to regret it doing it his way. It’s going to cost more money, waste lots of time and it’s not going to work out as good as what you’ve proposed. The client usually gets angry at such approaches due to the simple fact that you’ve insulted his intelligence. You’re basically telling him he is not as smart as you and he doesn’t know what’s good for his business. Both of you walk out the meeting room, with the client feeling angry about your holier-than-thou attitude while you’re left confused at what the heck is wrong with him anyway.

Approach 2 (the soft way): You understand that the client’s paying you based on how satisfied he is with your service, and he certainly did not hire you to tell him whether he is right or wrong. More often than not, he’s more satisfied if you tell him he’s right most of the time. You decided that you can only educate this client with your experience when he believes in you first, and the fact that he did not accept the idea right now means that he just don’t trust you enough. Going ahead with ‘his way’ of doing things might not be the best strategy, but in the long run, it gives you the opportunity to educate him and build up that trust in you.

Which strategy do you think would suit you when your client disagrees with you?

I’d an unexpected appointment with a stranger from New Zealand. I have never met nor heard of him. In fact, I only knew him after he shot me an email a few days back about wanting to show me something called ‘PocketSmith’. If he hadn’t hinted in his email that ‘PocketSmith’ is a financial application, I would have dismissed it as a Tamagotchi game device. And the website www.PocketSmith.com doesn’t actually have a direct sign-up feature. You need to get a ‘beta invite’ before you can actually find out what’s behind the fancy web designs. And what better ways than to meet up with the co-founder himself and get an official ‘beta invite’ from him.

And that’s how I ended up in Taipan’s Old Town that Friday afternoon. I was unusually punctual, arriving there 10 minutes before 3 pm. The PocketSmith co-founder arrived a few minutes later. He introduced himself as Jason Leong. Without further deliberation, Jason quickly get down to business and reveals his magic within his Macbook.

He began to show me one of the most powerful thing you can do with PocketSmith - forecasting your cashflow!

You begin the process by inserting a ‘Starting Balance’. Sort of like the remaining funds you have in the bank. Then, a graph will be generated to show you how it’s going to look like 12 months down the road.

The next step is where the fun begins. You then populate the calendar with entries such as Petrol, Home Loan, Car Loan, Groceries, Salary and many other ‘Incomes’ and ‘Expenses’ items that you would normally have. You can set the frequency of an entry, either as a one-off, daily or a fortnightly one.

After you’re done keying all the major items, PocketSmith will then recalculate the new figures you’ve just inserted into the calendar and will show you a forecast. Here’s an example of how the entries would look like in the calendar.

The resulting graph would look something like the following:

The graph above shows a downward trend. Not a very pretty sight, but the important cue here is how the graph are forecasting your situation 12 months ahead from today and how you are warned about the downward trend way ahead beforehand. Notice there’s also a label ‘Actual’ on the graph above? This feature plots a graph that uses actual transaction datas from your bank statements. At this stage, you are required to upload the data manually. It would be great if there’s a way to connect directly to the banks.

Unfortunately, most bank statements in Malaysia do not offer usable file formats. My Standard Chartered account only allows for exporting to comma-separated values (CSV) format, and it can only retrieve transaction for the past 30 days. Well, I guess one of the more profitable channels for banks in Malaysia is extorting for money when you need to print a bank statement.

With the actual cash flow from your bank statement plotted on the graph, you can then find out how close your forecast is to the actual figures. This will be helpful when you are setting up your financial goals later.

A financial goal can be a vacation that you have been dreaming of or a Zegna suit that you’ve always been wanting to get your hands on. You can easily setup a goal using PocketSmith by specifying how much you would like to spend on that vacation, and how much remaining fund you would like to still have after coming back from the vacation.

The forecasting ability of PocketSmith allows you to keep yourself away from cash flow problems. You can make various adjustments to the spending habits or work hard on increasing your income levels to ensure that the graph is tilted upwards, or at least maintained at a fixed level.

Small businesses and young start-ups can also benefit a lot from PocketSmith’s forecasting wizardry. Spending too much, according to Paul Graham, is one way a start-up can kill itself. So, with PocketSmith helping you to extrapolate your company’s financial standing, you could make better hiring and spending decisions. Yes, there’s no longer excuse for young entrepreneurs to blame their dismay cash flow management on their lack of financial backgrounds. This tool is simple enough to use, even simpler than using a spreadsheet, and there’s no dull accounting jargons to make our life miserable.

That’s the short preview of PocketSmith (beta), and it’s still undergoing development. This is a promising personal finance tool and it would be great if any of the banks in Malaysia can offer this together with their online banking products.

Besides developing PocketSmith, Jason also does a great deal of work organizing efforts to support entrepreneurs. With only 3 people in the team, they’ve demonstrated how you don’t have to be large conglomerate to deliver remarkable results. Jason runs PocketSmith from Dunedin, New Zealand and is currently expanding his cash flow wizardry in other countries, including his homeland Malaysia.

If you would like to give PocketSmith a try, just drop me an email!

10 interestingly straightforward ideas to accumulate wealth from the investment guru himself…

About the Credit Bureau

The Credit Bureau in Malaysia is established under the Central Bank of Malaysia Act 1958. It has been in operation since 1982. Like all other credit bureau in the world, the Credit Bureau essentially collects credit information on borrowers from lending institutions and furnishes the credit information collected back to the institutions in the form of credit report via an on-line system known as Central Credit Reference Information System (CCRIS).

What’s the role of the Credit Bureau?

The Credit Bureau plays an important role in the area of credit risk management and the promotion of a sound credit culture in the financial system of the country. It is recognised globally that a matured and developed financial sector must have effective and efficient systems to manage credit risks in order to sustain the financial needs of the government, industry and consumers.

The existence of a credit bureau makes it easier for financial institutions to make informed and responsible lending decisions in a more timely manner. Checking with the credit bureau would also help the financial institutions to mitigate any possibility of serious problems such as fraud cases.

Who could request for the Credit Rating Report?

According to BNM, here are the list of entities:

* Financial institutions upon any credit facility application;
* Any individual for his own credit report; and
* Any company for its own credit report.

Application for credit report for individual and company could only be made once in 12 months from the last date of request.

What is the Credit Report being used for?

The credit report is used by the financial institutions as one of the ways to make assessment on the credit facility application. The financial institution is required to inform the applicant, in writing that a credit check is to be conducted under the applicant’s name and the credit facility application will be reported to the Credit Bureau. Reference to the Credit Bureau will be made by the financial institutions periodically to obtain updates on an existing borrower.

The information contained in the credit report is entirely factual and historical. The Credit Bureau does not express any opinion about the information it supplies in the credit report. Different financial institutions employ different lending policies and attach varying degrees of importance to the details given in the credit report. Lending decisions depend on the risk evaluation by the financial institutions. Using the same information from the credit report and other sources, one lender may approve an application while another may not.

How to obtain your Credit Report?

The credit report can be obtained from Bank Negara Malaysia at no cost by following the steps below:

Request by individual

1) If you are from the Klang Valley, you may obtain the credit report from the Customer Service Centre, Laman Informasi Nasihat dan Khidmat (LINK) of Bank Negara Malaysia, Head Office at the following address:

LINK
Jabatan Komunikasi Korporat
Tingkat Bawah, Blok D
Bank Negara Malaysia
Jalan Dato’ Onn
50480 Kuala Lumpur

LINK operates daily from Monday to Friday, 9.00 am - 5.00 pm (including lunch time ) except for public holidays .

Please bring along your MyKad and any other supporting documents that can verify your identity such as your driving licence or passport. The credit report will be given to you during the visit.

2) If you are from outside of Klang Valley, you may apply for the credit report by completing and sending us the following:

Please complete and send us the following:

* Credit Report Request Form (CRR);
* Loan Declaration Form;
* A clear photocopy of your MyKad (both sides); and
* Any combination of two other documents (with your name and address stated clearly on each copy) from the following:
* Driving licence;
* Passport;
* Water bill;
* Electricity bill; or
* Telephone bill.

However, if the above documents are not available, you may provide alternative documents such as:

* Bank account statement;
* Credit card statement; or
* EPF statement.

The Credit Report Request Form and Loan Declaration Form are available either by:-

* Click here to download the form [PDF, 26K]; or
* by requesting it from any of the Bank Negara Malaysia branches (Johor Bahru, Kuala Terengganu, Pulau Pinang, Kota Kinabalu and Kuching). Click here [PDF, 10K] for list of branches.

Please mail or fax the completed forms and supporting documents to BNMTELELINK, Bank Negara Malaysia at:

BNMTELELINK
Jabatan Komunikasi Korporat
Bank Negara Malaysia
Jalan Dato’ Onn
P.O Box 10922
50929 Kuala Lumpur
Fax No: +603 2174 1515

For more options, visit this link: Obtaining Your Credit Report

How to dispute your Credit Report information?

If you have a reason to believe that a copy of the credit report from Bank Negara Malaysia is inaccurate, you are advised to liaise directly first with the respective financial institution for clarification and update. The financial institution must immediately rectify any inaccurate or incomplete information by sending the amendment(s) to the Credit Bureau to reflect the latest credit position of the borrower.

In the event that you are not satisfied with the explanation given by the financial institution, you may request for data review from Bank Negara Malaysia.

Request for Data Review (RDR) form can be downloaded here [PDF, 23K]. Please identify disputed items in the credit report and explain why the information is disputed.

* For personal collection, please complete and submit the RDR form at LINK;
* If you are from outside of Klang Valley, you can submit the completed RDR form to the following:

BNMTELELINK
Jabatan Komunikasi Korporat
Bank Negara Malaysia
P.O Box 10922
50929 Kuala Lumpur
Fax No: 03-21741515

The Credit Bureau will investigate and notify the financial institution that had provided the disputed information together with all relevant data. The investigation and remedial process will normally take about a month to be completed. You will be notified of the outcome of the investigation. In the event that the disputed information is confirmed accurate, you are advised to refer the matter to the respective financial institution.

Source: Bank Negara Malaysia

I’ve just finished reading KC Lau’s first published book- Top Money Tips for Malaysians.

In this book, KC shares with his readers on the following main ideas:

1) Smart Money Tips
In this section, KC shared quite a few good debt management concepts which is somewhat similar to Robert Kiyosaki’s Rich Dad Poor Dad. In one of the chapters, he also mentioned on how you should be conscious about the way you spend your time and whether if you should considering outsourcing your toilet cleaning chores. The section also gets rather technical when he begins explaining on how ‘Felix Corollary’ works when estimating your return on investment.

2) Money-making Tips
This section starts off with KC explaining what he does best- monetizing online. A Squidoo lensmaster himself, he also showed his readers how anyone can also make some extra income from creating Squidoo ‘lenses’. While I’ve always dislike the way credit card companies focuses on increasing their subscription base but never spare a single sen on educating their customers on prudent spending, KC spends a chapter on how you can turn your plastics into friends.

3) Money-Saving Tips
This section starts off with KC Lau explaining how you should compare the interest paid for a brand new car and the maintenance paid for a used-car before deciding on which method will suit your situation best. I am a firm believer that a brand new car is 20 to 30 percent more expensive than their used counterparts because all that premiums are paid for the advertising expenses. There’s also a chapter dedicated on ‘fine-tuning’ your mortgage so that you can enjoy greater savings while financing your home loans.

4) Money-Protection Tips
Saving the best for last, this final section is where I believe KC excelled with his vast experience in the insurance industry. He offered many ‘hacks’ and ‘unconventional wisdom’ on how you can maximize your insurance premium allocation. He has also introduced readers to the term ‘insurance switching’, where he explained about how a policy holder can perform switching from investment-linked to non-investment linked policies and vice versa.

If you have been following KC Lau’s blog, where he shares his thoughts on prudent personal financial planning with his web audience, there is still a good reason to get this book for there are many gems in the printed version that I’ve not read about on his website.

Local cartoonist Comic Tan also contributed to the book with his hilarious depiction of various financial-related scenarios. I think KC and Comic Tan has got very good ‘team work’ going on as I find the cartoons are highly relevant with the terminologies explained. Unfortunately, the cartoons are only in black and white.

In his first book, KC has managed to cover many issues and shared many ideas. Contextually relevant to fellow Malaysians, this book can give you some insights on how you can maximize your financial productivity and efficiency.

You can also read about other readers’ reviews here.

The book is priced at RM29.90. You can get it from major bookstores or you can get it direct from KClau.com.