117) Knowing and Doing

117) Knowing and Doing. 

Which is more important?

Knowledge is very important. Knowing the Right Knowledge is even more important.
Doing something without the right knowledge can be dangerous.

For example, driving a car without knowing how to drive is very dangerous.

However, knowing something can only help to a certain level.

The power is in the doing.  

Many people know a lot of information and knowledge, but they are not doing anything about the knowledge. They do not use the knowledge to help themselves and others.

There are many reasons on why they do not use the knowledge, but the most common reason is FEAR.

The Fear of Failure. 

Focus your effort, time and money on the doing. Build up your TAPAH.

Take Appropriate Planned Action Habits.

View a short video on TAPAH here
https://www.youtube.com/watch?v=T8pYNZCEJ7c

When you have proper plans and taking action, your Success Rate is going to improve tremendously.
You must have heard the Saying,

116) Why Not Ask Why Not?

116) Why Not Ask Why Not?

Interesting Question, right?

Different tonality with different emphasis will give you different questions.

Many times when you face problems, you will ask questions on what is the problem. Why this problem exists?

Normally, you ask the WHY question to find out the reason to cause problem.

When you ask to know the problem, which question you ask?
a) Why is it Wrong?
b) Why is it NOT Correct?

When you use the Why NOT question, you are maintaining your objective to get the Correct answer.
a) Why is it Wrong? - you are looking for the NEGATIVE answer.
b) Why is it NOT Correct? - you are looking for the POSITIVE answer.

Let me post a scenario as an example.

You had gone to a gathering dinner. A friend wanted to go back early. You wanted him to stay longer. You want to know what is the reason that makes him leave the gathering early and not stay longer.

What question did you normally ask? Which is similar to your question?
Choose A or B.
A) Why do you want to go back early?
B) Why can't you stay longer? 

When you ask question A, you are asking him for the reason he wants to go back.
The emphasis is on his decision. You are looking for the answer to the cause of the problem.

When you ask question B, you are asking him for the reason why he could NOT stay longer.
The emphasis is on you want him to stay. You are looking for the solution to the end result.

Your main objective is actually wanted him to stay longer.  
You want to know WHY he can NOT stay.
Then, you CAN look for solutions for him to stay longer.

Stephen Covey's Habit 2: Begin With End In Mind.
Your Question B is asking for answers to the end result. That is you wanted him to stay longer.




When you ask, "Why NOT?", you are looking for solutions. 
When you ask, 'Why?", you are looking for the problems.

 Asking the Right questions will guide you to get the solutions faster.

115) What is the Real Opposite of Success?

115) What is the Real Opposite of Success? 

If you are already successful, what is the thing that stops you from becoming more successful?

It's called Complacent.

You are being satisfied with yourself or your past achievements.

You stopped at where you are. No more things to do. You are already satisfied with what you had achieved. It does not matter how big or small your success was. Once you are satisfied, you stop your progress to be more than what you can be.

Your Biggest Competitor is Your Previous Self.

If you fail, you will try again and again. Failure is the building blocks of success.

More failures will bring more skills and knowledge to achieve more success.

114) What is the Opposite of Success?

114) What is the Opposite of Success?

If someone were asked, "What is the Opposite of Bad?"

The normal answer you will hear is, "Good".

If someone were asked, "What is the Opposite of Success?"

The normal answer you will hear is, "Failure".

Let's really think about it.

Is Failure really the Opposite of Success?

Let's recall on your personal experiences. 

Remember the times you tried to swim? 

Remember the times you tried to ride a bicycle ?  

How many times you tried to do something and failed the first time?

How many times you tried to do something and failed many many times?

However, after the first try, you get better in the second try.

In fact, the more times you tried, the better you got.

So, what had happened!?? 

You had became better and better because you kept learning from the previous experiences.

If you follow the logic, you are:

building up the skill and knowledge to be successful.

So, every Failure is a Building Block to Success. 

You can't be successful without the failures.

Even if were successful in the first attempt, you know that it does not just happened. 

You had already built up the various skills and knowledge over your life time. Even before trying to do something the first time.

Failures are Not Opposite of Success. 
Failures are Building Blocks of Success.

You will never know of a successful person who had never failed before. 

If you ever find one, do let me know.

 

113) FEAR AND I became ...

113) FEAR AND I

Look what happens to the words "FEAR AND I"
became, when we rearranged them in an another way...

 

Many times, when you face something unknown or something new, you have a lot of fear. Your mind reverted to your natural instinct and try to make you Run and Save yourself.

However, if you are willing to face the FEAR, you will start to see different perspectives. 

Whether it is Positive or Negative depends on your choice. 

 

Facing the FEAR will only make you stronger for the next level. 

Running away may be good at certain dangerous times, but it does not help you if you keep running away.

There was a previous article I posted based on the movie "After Earth".

Danger is real, Fear is a choice.

https://highlevelrules.blogspot.my/2017/07/danger-is-real-fear-is-choice.html

So, choose your choice wisely.

112) How I Used the 5 Coaching Questions in the FinTech Problem

112) 5 Questions for FinTech Problem

Let's use our 5 QUESTIONS for the Fear of Financial Technology problem:

1) What's Up?
2) Why Not?

3) How To?

4) What Else?

5) Which One?

1) Start with "What's Up?" questions to understand the problem. Define the Problem.
It is very important to define what problem to solve. If you find out there are many problems, list them down. Be clear of the different problems that are normally lump into 1 general problem.


What is the Problem you want to solve?
Answer: UTC is not happy the technology is coming into Financial industry.

2) Keep asking "Why Not?" questions to find the root Cause of the Problem.

Why UTCs are NOT happy, NOT comfortable & DON'T feel secure with the Financial Technology? 

Why UTCs are NOT accepting the Financial Technology?

Answers: Insecure, Fear of losing relevance, Fear client invest directly.

3) Keep asking "How To?" questions to Look for Opportunities.

How to make UTCs happy, comfortable & feel secure with this Financial Technology?

How to make UTCs accept this Financial Technology?

Answer: Solution 1: Make UTCs understand that computers only do simple tasks, but very fast.

4) Keep asking "What Else?" to Provide more Solutions.

Answer: Solution 2: Computers are expensive to setup.
Answer: Solution 3: Computers can't make complex decisions. Financial planning is very complex.

Answer: Solution 4: Financial planning needs customization for each and every person.

Answer: Solution 5: Computers don't have the human feelings.

5) Ask "Which One?"to Choose Suitable Solutions.

Which solutions can we apply?
Which ones can use?
Which solutions to ignore?

Answer: Choice 1: Computers can't do complex tasks
Answer: Choice 2: Financial planning needs customization.
Answer: Choice 3: People need human touch

There can be many possible solutions arise during brain storming. 
Take the good solutions and ignore the bad solutions.
Arrange the choices on which ones to do first.
Also can assign the solution tasks to other team members.

The 5 Coaching Questions can be used for small and big problems. 
It can be used for an individual or used in a team.

Do share your experience in using the 5 Coaching Questions.

 

111) Should a UTC Fear the Financial Technology?

111) Should a UTC Fear the Financial Technology?

Many Unit Trust Consultants raised their concerns of the incoming financial technology.

Will the computers replace the Unit Trust Consultants? 

Let's agree that this is a problem raised by many UTCs.

Using one of our favorite phrase...

Every PROBLEM is an OPPORTUNITY for you to provide SOLUTIONS. 

There is fear that computers with the advance technology will replace the Consultants.

In a certain extend, it is true. Computers can and had easily replaced many human tasks.

Many years long, the calculators had already replace human for the task of addition, subtraction, multiplication and division of numbers.You no longer need to use pen, paper and brain power. Just key in the numbers and answers appear within a blink of an eye.

You will notice that the tasks replaced by computers are the tasks that are systematic, standard processes and only simple decisions required. The numbers can be complex, but the computer is super fast in doing its job.

One good example is that computers had replaced humans at ticket counters. It is easy to buy tickets online, using computers for movies, airlines and concerts. Paying bills had also been automated.

Computers had already replaced the simple tasks in many financial industries as well. Now you can already buy the travel insurance online by yourself.

Just fill up your:
a) personal details
b) coverage amount
c) travel dates and destination
d) payment details
You have done buying a travel insurance by yourself.

Take stock buying and selling. The investors are already directly using computers to trade stocks.
Just fill up your:
a) share name
b) share price
c) share quantity
d) wait for transaction confirmation
You have done buying a stock by yourself.

If you study the tasks required, it is easy to complete. There is no other decision to be made. Just decide and key in exactly what you want.

However, when the task is more complicated with many decisions to choose, then it is no longer easy to automate using a computer.

A problem looks very simple when we just look at it from far. However, you will soon realize the complexity once you look deeper. It is even more complex when you start to solve it.

If you have a little knowledge about financial planning, you will find out that it is not that easy to do a full financial plan. 

Investing is easy to be automated. Provided that you really know exactly what you want.

These are few considerations:
a) Investment goal or objective
b) Present value of the goal
c) Inflation rates for each goal
d) Time horizon to achieve the goal
e) Future value of the goal
f) Rate of Return for each investment
f) Amount to invest regularly
g) Is the amount increasing or same throughout
h) Do you wish to stop putting money after some years
i) When to review whether the investment plan is on track
j) How you plan to use the money to pay for the goal

Once you have the answers above, then you have to choose the investment types.
It is no longer just invest or not to invest. 

You will realize that there are many fund types to consider.

Which asset type to choose? Is it:

a) Equity

b) Bond

c) Money Market.

Even after you decide on an Equity fund, there are more sub types:

a) Equity

b) Balanced

c) Mixed Asset

d) Tactical Allocation

Equity funds normally have different percentage ranges of equity, bond and money market.

Next, you have to decide which area you want to invest in. Is it:
a) Local or Foreign
b) One or multiple countries
c) Same or different geographical regions or Global

Another question you need to ask and decide is if you need insurance coverage. Some funds will provide life insurance coverage. Else, you can buy life insurance separately.

With so many considerations to think about, most people will never be able to handle the questions without an Expert's help.

Just imagine that you have never been exposed to these questions before. How are you going to provide answers to the computer? You may not even understand what the computer is asking you.

Financial Planning is not an easy task to complete. 

It takes many years of learning and experience to do a good Financial Planning.

Furthermore, computers are not programmed to accept "what if" situations. The programmers will never to able to think of all possible scenarios combination.

Doing work on a computer also loses the human touch. There are no emotions, empathy, shared joy, understanding the kindness,  fear of the uncertainty, etc. Only another person will be able to relate.

Computers and Internet are already part of our lives. Getting angry and running away because of FEAR is not an option you can take. If you don't manage it, you will be left behind.

If you are a Financial Consultant, do not be fearful of the computer and technology. Embrace the technology to complete and automate the simple tasks.

You can now focus on the HIGH LEVEL Financial Planning tasks.

The simple tasks of fill and submit forms is of low value.
Asking the investor to choose either 1 of the 2 proposed funds is also very low value added.
A computer can easily replace you.

Your main tasks are to help others do their financial planning.
Do think of how much value you can add for your clients.

Use your skill, knowledge and experience to provide the best solutions to your clients' problems. 

More people will need your expertise to solve their more complex problems.
In fact, you should be happy to educate others on financial knowledge.

The more they know, they will realize that there are a lot more to find out from you. 

Then, you will be NEEDED MORE to help them.

110) Why You Should Attend Training?

110) Why You Should Attend Training?

You may sometimes wonder if attending training is required in your business.

You are already in the business for so many years. You know everything already.
There is nothing new to learn. You rather spend your time on something more useful.

Many people will not go to training because of NO TIME.

NO TIME is the ALL TIME EXCUSE.

Everyone of us have the same amount of time in a day. All are given 24 hours each day.

It is how you prioritize the activities and use the available time to complete them.

Let's look at Attending Training in another perspective. 

Attending Training is a Self Development Activity.

 

Just imagine that you are sick and looking for a doctor. 

Do you go to Doctor A that  never attended any training since graduation 20 years ago?

Or ....

You feel more confident to seek consultation from Doctor B who kept going for conferences and training?

Doctor B,  right?

Why?

Because you want to be treated by someone who is updated on the latest medical technology and latest medicines.

Same situation on reading books and magazines.  You will feel more confident when you see medical books and magazines in the doctor's room. You also feel glad to see so many certificates hanging on the walls. 

However, you will feel uncomfortable if you see books about sales and marketing in the doctor's room. Why? You may feel that the doctor is more interested in making sales than in treating you.

So, feel comfortable to let your clients know that you are not able to attend to their requests immediately as you are attending training.  Ask their permission to give you more time to attend to them. You can decide if you can delay the non critical and non urgent requests.

Let your clients know that you attend the training to improve your skills and knowledge.

When you have better skills and knowledge, you can service your clients better. 

The training you attended will indirectly benefit your clients.

However, you may consider NOT to mention about you attending Sales training. You may want to change the training description into something more relevant and beneficial to the client. 

People may don't like to know that you are attending a Sales Training to be able to SELL them more. 

Clients don't likes to be SOLD to. 

They want to be HELPED to SOLVE their PROBLEMS.

 Stephen Covey's Habit 7.

 

109) Need Based Portfolio Model

109) Need Based Portfolio Model.

Download the Excel file & Save As A New File
 
There had been many discussions on how to create a portfolio for your future financial goals.

Future goals examples include:
a) children education funds
b) retirement funds for self and spouse
c) down payment for a new house or condo
d) An exotic holiday
e) fund for pilgrimage or religious reasons
f) set up a charitable foundation
g) wealth build up

When you have the goals, you also need to know the time horizon on when the money is required. You basically need to know how many years left to prepare the money.

Different people have different goal and different time horizons.

If you just got a baby, the education fund required about 18 years more. However, if you child is already 10 years old, then your education fund time horizon is shorter. Most probably you need the money in 8 years' time. Same goal, buy very different time horizons.

You often hear about investments need time to grow. Also, you need more time to reduce the market risk. If you invest in Equity funds, you need a longer time horizon. Some Consultants will recommend to keep invested at least 5 years or longer. This is because Equity funds have higher Initial Service Charge. Let's say it is 5.5%. So, you need to invest longer to recover the 5.5%.

Click the link below for more write up about Why Some Investment Are For Longer Term.
http://highlevelrules.blogspot.my/2017/07/why-some-investments-are-for-longer-term.html

How about if you need to invest for a shorter period. Let's say for 9 months. Which fund types you should invest in? You can invest in funds that charge very low or no Initial Service Charge.

Some Money Market and Cash Deposit funds have Zero Initial Service Charge.
Some Bond funds have around 1% Initial Service Charge.

With the Zero Service charge, the fund starts to get returns almost immediately.
With the 1% service charge, the funds take a short time to recover the 1% charged.

With the knowledge of suitable funds for different time horizons, you can plan your asset allocation based on your future money needs.

If you put all your financial goals in a table and determine the time horizon, you can create a Need Based Portfolio Model.

Here's an idea on how you can create a portfolio of funds based on time horizons.
a) Less than 1 year: Money Market and Cash Deposit fund
b) 1 to 2 years: Bond fund
c) 3 to 5 years: Balanced fund
d) Above 5 years: Equity fund


The Cases below used the Consolidated Goals approach. It means all the goals are combined into one consolidated goal. You planned all the goals together and create a Consolidated Portfolio.

Another approach is to use the Separated Goals approach. It means you plan different goals one by one. Each goal has its own portfolio with different funds.

Here are 3 Case examples on how the Need Based Portfolio Model are created for the different goals and time horizons.

Case 1: Have $200,000
a) Sending son to University in 2 years' time.
b) Sending daughter to University in 4 years' time.
c) Holiday with spouse in 3 years' time.
d) Buying a new apartment in 4 years' time.
 .

Need Based Portfolio Model for Case 1:
Cash Deposit: $20,000
Bond: $180,000
Balanced: to accumulate
Equity: to accumulate


Case 2: Have $100,000
a) Sending son to University in 7 years' time.
b) Sending daughter to University in 9 years' time.
c) Buying a new car next year.

 

Need Based Portfolio Model for Case 2:
Cash Deposit: $24,000
Bond: $24,000
Balanced: $24,000
Equity: $28,000 & continue to accumulate

Case 3: Have $30,000
a) Sending son to University in 9 years' time.

Need Based Portfolio Model for Case 3:
Cash Deposit: $12,000
Bond: no need for now
Balanced: no need for now

Equity: $18,000 & continue to accumulate

You can invest into different funds based on the amount you have. You continue to accumulate investments until the first time horizon amount is fulfilled. Then you start to add into the next time horizon.

Continue to do so until all the shorter needs are prepared, then only fulfill the longer term needs.

As the years passed, the money required for the specific goal are getting nearer and nearer.
You switch the Equity funds into Balanced funds.
You switch the Balanced funds into Bond funds.
You switch the Bond funds into Cash Deposit funds.

Use the time horizon and amount required to determine how much to switch to lower risk funds. 
The main concept is to make sure your short term requirement is put into low risk funds.

Even if the stock market crash tomorrow, your short term (1 to 2 years) required money are already into a bond or money market instrument.  The stock market will recover from the crash and start to give positive returns again.


Always remember to diversify the funds allocation.

For Equity funds you can diversify further into:
a) different countries and regions
b) local and foreign funds
c) large caps and small caps

Do look around in the internet for the different models recommendation. There are many different models to choose and follow. The important thing to know is to diversify your investments into different asset types to spread your investment risk.

Another thing to note is that you have more fund choices if you have larger amount to invest. Investments using cash is also more flexible compared to using your Special Retirement Funds.  

Do consult professionals and understand your requirements.  

Download the Excel file & Save As A New File

https://drive.google.com/open?id=185Po_vRGWeGcYCp8bHyOA2eZ6h02pe0r

108) Invest & Expenses for Education Plan

108) Invest & Expenses for Education Plan

Here is an Excel file to track your Education Fund goals. You need to monitor whether your investment for the child's education is on track as per planned. Once you have the Education fund on target, then you monitor the expenses to be on track as well. This is to ensure the Education fund can last as according to your plan.

Remember to have one plan for each child. Do not combine few children education funds into one plan. The tendency will be for the money used for the first child and also use the money reserved for the other children.



The Excel file uses the projected future expenses with a given Inflation to University age. Once you have the future expenses amount, you can start saving as per plan to reach the Education fund required amount.

This is the explanation on the investment and expenses for your each Education Plan.

Age in University - Age when the child enters into the University.
Years in University - Number of years to study the course in the University.
Current Monthly Expenses - Expenses in University right now.
Inflation Rate to University - Inflation rate of University fees and expenses.
Return Rate to University - Rate of Return while saving for education fund.
Inflation Rate during University - Inflation rate of fees and expenses during studying in the University.
Return Rate during University - Rate of Return while studying in University.
Growth Rate to University - Yearly increment of invested amount while saving for education fund.

You can download the Excel file from this link. Download and Save As a new Excel file:

https://drive.google.com/open?id=1JRIeGFk0BxrGIjpOnA9xYIkYwgr0phNL

107) Invest & Expenses for Retirement Plan

107) Invest & Expenses for Retirement Plan

 

You can download the Excel file and Save As a new file:
 https://drive.google.com/open?id=1fy5nongFMmq9wSL5dJLyTJt57u9kDQkZ


Here is an Excel file to track your Retirement goals. You need to monitor whether your investment for retirement is on track as per planned. Once you have your retirement nest egg on target, then you monitor your expenses to be on track as well. This is to ensure your retirement fund can last as according to your plan.

 

The Excel file uses the projected future expenses with a given Inflation to Retirement rate. Once you have the future expenses amount, you can start saving as per plan to reach the Retirement fund required amount.

This is the explanation on the investment and expenses for your Retirement Plan.

Retirement Age - Age when you want to retire. Years in Retirement - How many years you want to retire before death. Current Monthly Expenses - Monthly expenses now. Inflation Rate to Retirement - Inflation rate of your expenses until you retire. Return Rate to Retirement - Expected Rate of Return while investing to retirement. Inflation Rate during Retirement - Inflation rate while you are in retirement. Return Rate during Retirement - Expected Rate of Return while you are in retirement. You can download the Excel file and Save As a new file:  https://drive.google.com/open?id=1fy5nongFMmq9wSL5dJLyTJt57u9kDQkZ