Friday 30 March 2012

THREE SIMPLE SCENARIOS TO ILLUSTRATE THE WEALTH CREATION


Ladies and gentlemen,
In my previous speech on ABC's Wealth Creation, I have given you some understanding on the true meaning of wealth and the three simple processes of wealth creation.

Today, I am going to give three scenarios to illustrate my point further so that you can have more in-depth understanding of this hot and popular financial topic.

Scenario I

Assume that you receive monthly income of 5k and you spend all your income to acquire the lifestyle you want. Hence, you do not leave any residual income at the end of month. As such, your personal wealth will stay status quo forever over times.



In Scenario II



You are in the similar situation as the Scenario number I, with exception that you spare 2k per month for your savings and of course with a less luxurious lifestyle. In this case, your monthly residual income will grow over times. Assuming that you place all of your savings in the Fixed Deposit with Financial Institution earning interest of 3% per annum. Ultimately, your monthly residual income will give you net worth of 2k plus the interest earned.



Bear in mind that we are living in higher inflation regime, let say the real rate is 6% per annum, despite the official rate of around 3%. By saving solely in the form of Fixed Deposit, the inflation will eat into your saving as the interest earned from the savings does not adequately cover the inflation rate. In the real sense, you lose out 3% per annum. In short, the Saver is a loser in this sense.



However, your Wealth/ Net worth is still growing over times, i.e. the residual income and interest will multiply with times in absolute term and not in the real term because of the inflation factor.





Scenario III



Everything is the same as in Scenario II, but instead of saving in the form of FD, you decided to invest your monthly residual income of 2k which earn you an average return of 10% per annum.



Hence, even with the real inflation rate of 6%, you still grow your wealth by 4% per annum in the real sense. By doing so, you are growing your wealth both in absolute amount and in its intrinsic value.



Now, you can see why you need to take positive action to hedge your money against inflation no matter what. No doubt, investment does not guarantee you that you will enhance your wealth. By not doing so, you are surely not doing yourself a good favour of letting your money to work hard for you.



In summary, therefore you need to acquire the skills and know how on how to invest your money wisely so as to generate the return that far exceeds or at least is sufficient cover the inflation rate the country you are living in.



Stay tune and I will share with you more of wealth management in my next few speeches.










Skype me at james.oh18

Thursday 22 March 2012

SECRETS TO SUCCESS REVEALED


CLARITY OF YOUR PLAN IN YOUR MIND AND HEART IS A SURE WAY TO SUCCESS. OF COURSE, FOLLOW BY THE ABOVE RECOMMENDATION STEPS, THE RESULT WILL BE ULTIMATELY BE YOURS.

BY NOW, TRUST YOU HAVE GRABBED THE GIST OF IT. PRACTICE, PRACTICE AND PRACTIVE WILL IT PERFECT.

WISHING YOU SUCCESS,

JAMES OH

Tuesday 20 March 2012

IS GST RECEIVABLE AN ASSET


IS GST RECEIVABLE AN ASSET?



Recently, my son, an Australian non-Accounting undergraduate approached me and asked me whether GST receivable is an asset or a liability. On the surface, I noticed that his question invite discussion as to why it should be treated in that manner, that is more important than the right answer.



Because of my exposure to the Singapore environment and I am fully aware of their compliance with the International Accounting Practices where the GST receivable is allowed to be net off from GST payable. Therefore it should be regarded as an asset, as explained below :

Why is GST receivable an asset?

Generally, GST receivable is regarded as an Asset because it will later be received from the Tax authority in the form of cash. As such, GST receivable is being debited as current asset when a business purchases taxable merchandise. By subtracting GST receivable from GST payable (received as a result of providing taxable merchandise/services to a customer), we will get the amount that is owed by the Inland Revenue.

However, sales revenue normally are greater than purchases, thus the GST Payable will be much larger than the GST Receivable, therefore the net result will be a GST Payable. Only the net GST Payable or net GST Receivable will be reflected on a balance sheet accordingly.

It is interesting to note that it is not applicable in Malaysian context. This is because GST Receivable is not applicable here as there will not be any GST Receivable arising in the first place. Why I say so?. This is because GST imposed on taxable merchandise purchases are NOT allowed to net off from the GST payable in according to its Statutory Legislation. It is its peculiar treatment which is not in harmony with GAAP practices in other parts of the World. As a result, it is Not an asset, but to expense out in its Profit and Loss Accounts.

Perhaps, it is the time Now for our Malaysian regulatory authorities to revisit this piece of legislation and amend it accordingly so as to harmonise with the International Accounting Practices so as to avoid any confusion in this aspect. At the same time it will not add any additional burden to its consumers who are already suffering with high inflation.

In summary, it is safe for me to conclude that the answer to the above question depends very much on its Statutory Legislation and Practices in that particular country.

With the above, I trust I have answered the question with clarity. Please do let us know which other countries have adopted and practised similar procedures as Malaysia in the comments below.

Thanks and look forward to seeing you again,








Sunday 18 March 2012

IT IS IMPORTANT TO HAVE A DREAM



TO ACHIEVE SUCCESS, YOU NEED TO HAVE A DREAM. NO DOUBTS, HAVING A DREAM DOES NOT GUARANTEE YOU SUCCESS. BUT, I AM SAFELY SAID YOU CAN'T ACHIEVE IT WITH A DREAM.

SO, I AM SURE YOU ARE SMART ENOUGH TO MAKE YOUR CHOICE. THE CHOICE YOU MADE WILL EITHER MOVING YOU TO THE DIRECTION YOU HAVE CHOSEN IN YOUR HEART.

WE LOVE YOUR FEEDBACK AND FEEL FREE TO DROP US YOUR THOUGHTS, OPINIONS, FEEDBACK AT THE COLUMN PROVIDED BELOW.

THANKS AND LOOK FORWARD TO HEARING FROM YOU,

JAMES

Saturday 17 March 2012

Tea Art Blog - Enriching Life: TEA IN MANDARIN CHARACTER

Tea Art Blog - Enriching Life: TEA IN MANDARIN CHARACTER: Very warm welcome to this LIFE ENRICHING BLOG, I hope you too like the lovely photo, which I obtained it from one of persons I engage...

Friday 16 March 2012

NO WORRIES



LATELY, I CAME ACROSS THE ABOVE PHOTO AND DECIDED TO POST IT IN MY POST TO REMIND YOU, AS MY BLOG READERS AND VISITORS NOT TO AGREE WITH EXPLICITLY OR IMPLIEDLY AS BOTH WILL BRING HARMS TO YOUR MIND.

NO MATTER WHAT SITUATION, YOU ARE THE CAPTAIN OF YOUR MIND AND BODY, SO TO SPEAK TO STAY IN CONTROL OF THE SITUATION YOU ARE IN. THIS IS BECAUSE YOU CAN TURN THE OPPORTUNITIES AND CAHLLENGES IN FAVOUR OF YOU IF YOU BELIEVE SO.

SIMILARLY, YOU WILL MAKE YOUR SITUATION WORSE IF YOU THINK OTHERWISE. AS SUCH, I BELIEVE YOU KNOW WHICH CHOICE YOU MAKE WILL BRING YOU GOOD.

THANKS AND STAY TUNE FOR MORE EXCITING AND REWARDING POSTS IN THE NEAR FUTURE.

CHEERS AND WISHING YOU SUCCESS,

JAMES OH

Thursday 8 March 2012

KNOWLEDGE = WEALTH



Do you agree with the above statement? Please share with us your view of the above statement.


Thanks and look froward to hearing from you.

Trust this will form a good platform for us to share our knowledge and grow our wealth together.

Cheers and thanks,


James Oh