Ky_khor,

You cannot do it but I can since I am an US PR. This is what I buy:

VSMGX
No load
Annual expense = 0.25%

It consists of 4 funds

1 Vanguard Total Stock Market Index Fund 35.1% -> Cover all US stock market

2 Vanguard Total Bond Market Index Fund 29.9% -> Cover whole US bonds

3 Vanguard Asset Allocation Fund 24.9% -> Move between total stock or total bond depending on adviser.

4 Vanguard Total International Stock Index Fund 10.1% -> MSCI EAFE Index -> Index of the rest of the world excluding USA.


Vanguard REIT Index Fund Investor Shares (VGSIX)
REIT of whole USA Real Estate
No Load
Annual expense = 0.21%


Compare to the options that I have in USA, only one stock is worth buying in Malaysia.

Dreamer

http://money.cnn.com/popups/2006/moneymag/...ules/index.html

Money Magazine 25 Rules to Grow Rich By

Dreamer

Pidah,

If his calculation is wrong, show your calculation and tell us where he did wrong.

Dreamer

David83,

Let me play devil advocate here and ask why?? Why I cannot buy an investment that pays me immediately and pay me every year?? It is my choice and if it is NOT a good deal, I do not have to buy!!! I can keep my money in the FD until I find a good deal. This is my strategy for my money in Malaysia.

In 2005, I buy the best managed Malaysian Bank stock at RM6.80 (including commission). It pays $0.55 commission last year. This give me yield of 8%. This year I get dividend of $0.40. This gives me yield of 5.9%. Looks like this will be the yield going forward. I am NOT even looking at appreciation.

What is the risk?? Yes, it is higher than FD. But, this bank survived the last recession and if this bank goes to hell, you can forget about the whole KLSE too. It is about the same risk as the KLSE index. Until foreign bank can come in, all local banks enjoy a margin of 3% to 4% ( difference between loan and FD rate). The banks will make a lot of money.

So, please tell me why am I buying unit trust?? Where I lose a few percents when I buy and a few percents every year?? For foreign exposure, why not buying mutual fund from US companies like Vanguard?? There is no load and annual maintenance of less than one percent??

ASB may make sense if I am a bumi. But, other than that why??

Dreamer

P.S.:

1) The lot size is 1,000 shares. I can save my money in FD until I have enough money. Since the dividend is around $0.40, I can wait until the share price is low enough and yield is attractive to me. I make money when I buy.

2) This is part of my portfolio of FD, real estate, and banking stock. I have enough cash for 2 years of expenses in FD. So, I have enough money for a normal recession.

This post has been edited by dreamer101: Nov 5 2006, 11:38 PM

<<it's dividends only while if there are capital appreciation you get more>>

Darkmage12,

You only get capital appreciation if you SELL the stock. The goal/strategy here is to buy stock that pay you good dividend every year. You make money every year without selling the stock. So, your statement of 30% per annum is ONLY REAL when you sell the stock. I only bought PB at 2005.

For some people that bought PB at RM3, their dividend yield is around 13%. Why should they ever sell the stock??

Dreamer

<<it's not easy to get some investment give you high return every year...>>

Leekk8,

Yes and no. You have a choice. You do not have to buy anything until it is a good deal aka on sale. You can keep your money on FD until you find a good deal. You can be patience and wait. Meanwhile, you need to learn how to calculate and spot a good deal. For example, PB is probably paying RM0.40 dividend for a while. You could wait until market panic and PB goes down to a level where it is a bargain before you buy. Market always goes in cycle. Ditto for real estate and so on.

But, you NEED to know how to calculate and spot a bargain. Know when something is a good deal or not.

Please comment and criticize my proposal.

Dreamer

P.S.: There are many things wrong in "Rich Dad, Poor Dad"'s books but this is something that I learnt from those books.

This post has been edited by dreamer101: Nov 7 2006, 01:31 AM

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From the research done over the USA stock market, high dividend paying stock has higher return than fast growing stock over long period of time.

Dreamer

As far as I know only a few stocks are in 100 shares lot. Majority is in 1,000 shares lot. I might be wrong.

Dreamer

Leekk8,

Let me repeat one more time, if you get high dividend every year, why would you ever sell the stock?? In the case of buying PB at $0.68, it pays $0.40 every year. Why would you want to sell??

You only sell a stock if and only if you get better ROI by investing it on something else.

<< if it does drop not many are willing to go into it>>

Darkmage,

That is why you get a low price aka on-sale.

You make money by NOT following the herd. People are cows and they follow the herd. So, they buy high and sell low.

For high dividend yielding stock, when the price drop and you get a high yield, you do not have to sell the stock to make money. So, you could collect dividend forever while waiting for the price to go up. You are making money every year.

To be separated from cows/herd, you need to KNOW how to calculate. You need to know when something is a good deal.

Let's take an extreme example, let's say stock A pay $0.40 per year of dividend and the the stock drop to $4. And, I buy the stock. The dividend yield is 10%. But, the stock drop to $2. So, what?? Did I lose money?? No, I still have a stock that yield 10% per year for me. In fact, I can hold on the stock and collect dividend until I can find a even better deal. I had made my money when I buy the stock.

Dreamer

Darkmage12,

1) Who cares about paper lost?? It is NOT real?? I am collecting $0.40 every year. With this kind of dividend yield, I can hold on the stock forever and never sell. If I never plan to sell the stock to begin with, why should I care about paper loss??

2) Seriously, how long do you think a stock will stay at $2 if it pays out $0.40 every year?? Eventually, the market panic is over and the stock price will come back up again.

As what Warren Buffet had said, do not invest unless you can invest on something that you can forget about it and do nothing for 10 years. You make money when you buy NOT when you sell.

Dreamer

<< You only sell a stock if and only if you get better ROI by investing it on something else.>>

Leekk8,

You are saying exactly the same thing that I am saying but with more words. Learn to say more with less.

Dreamer

You do not sell. You just buy more. You NEVER really know the share price will drop soon. You think you know that the share price will drop soon.

If anyone in the world know EXACTLY what will happen in any ONE share price, the person will be extremely rich.

Dreamer

P.S.: A few years ago, I made the mistake of believing that I know how a share price will move. It costs me 50% of my whole life's saving at that time. Hopefully, you will learn this lesson with much less money that I lost.

This post has been edited by dreamer101: Nov 8 2006, 11:02 AM

Cherroy,

Let's look at your reasons and compare with my reason of buying high dividend yielding bank stock.

1) Company profit going down to recession

Maybe the bank will make less money due to bad loan. But, I am sure that the bank will recover since it had done that for the last time. I may buy more if the share price goes down further.

2. Interest rate will go up, which is related to No.3 below.

Bank make a hell lot more money when interest rate goes up.

3. share price is unreasonable price

Why should I care?? I make money when I buy. Okay, if the P/E went up to 100, I may sell. Anything less than that, I collect dividend every year.

4. Poor prospect or management change (from good to bad)

Only if Malaysia allow foreign bank to open unlimited local branches, I may change my mind.

5. Also, dividen yield must be based on profit earned,

Bank's profit is based on 3% to 4% margin on their loan which is NOT open for competition. Unless the bank makes a lot of bad loan, you can pretty much know 80% to 90% how much money they will make.

Dreamer

<< if the management change, the performance might be poor, and dividend will be less or no more dividend. Just imagine, a good performance company change management then buy over some bad companies, sure the performance will become bad...>>

1) Which means at that time, you get better ROI by selling the stock and buy something else.

<<Thanks dreamer for your advice, I will remember what you've said and try not to predict how the share move in short term...>>

2) You can predict and gamble BUT do not be over-confident. Limit how much money that you will gamble with. Manage your risk.

Dreamer

Ky_khor,

You are wrong in your sequence of how things usually happens. Bank always raise BLR and credit card interest rate first. Then, wait for a few months before they raise FD and saving rate. So, bank always makes a lot of money first for a few months when interest rate goes up.

Dreamer

All,

1) "Trust but verify". Remember Enron.

Please noted that even in USA, you have accounting scandal. And, sometimes the numbers reported in quarterly and annual reports are lies. So, do not be so confident that the numbers you see in those reports are REAL.

2) Remember UEM.

Before anyone buy stock in Malaysia, they need to remember and study the whole affair about UEM reverse takeover of Renong. They need to ask themselves whether this can happen again. Please noted that 50+% of KLSE is owned by GLC and GLIC. Government is the majority share holders of most companies.

Dreamer

Until you have 3 to 6 months worth of expenses saved in FD, you do NOT invest in anything else. Those are your emergency fund.

Dreamer

Kennie.

1) First, a person needs to learn how write in English as opposed to SMS.

2) Amway has been around for a very long long time (hint: it is more than 30 years). Ditto for MLM. So, if you think this is NEW, you are naive and young.

3) In this thread, we are talking about investment. Aka, using money to make money. Go other thread to push your MLM. Or, you will be reported and perhaps ban.

Dreamer

Do not insult us by calling what you are writing is Manglish!! If you do not CARE to use a spelling checker or spell a word in full, DO NOT POST here (RWI).

Start your own thread. MLM stuff is NOT welcome here. Especially for someone that cannot even spells.

Dreamer

Kennie,

<< how they could sell nasi lemak and earn rm2k per week ? its because the nasi lemak is delicious rite ? so do you think how much effort they have put to make such delicious nasi lemak ?>>

Bingo. The same applies to your MLM business. Out of thousands and thousands people that do MLM, how many people are really rich. And, I mean really rich as opposed to ride expensive car and live in a big house but own nothing.

If you are really good in selling, you should sell life insurance. As a percentage, the likelihood that a person selling insurance to get rich is 10 to 20 times more likely than MLMer.

<<the main point for invest is to achieve true wealth, its means you are earning money while you doing nothing or may be enjoying ur life. such like buy property n rent it, the property is yours but income still coming everymonth.>>

This is what we actually discussing in this thread: how do you use money to earn money aka investment. Please do not lie to us and say that you do NOT have to do anything to maintain your MLM "business". Even if you are successful, you have to maintain your MLM network. You may do more or you may do less. But, it is NOT nothing.

Seriously, do you really know anybody that is truly rich?? Aka, Financially Independent Retired Early (FIRE). Do you have any first hand knowledge? Do you really know anyone with "true wealth"? Most of the really rich people that I know do not ride expensive car and live in a big house.

Dreamer

This post has been edited by dreamer101: Dec 5 2006, 10:53 PM