Monday, August 02, 2021

Cashflow Board Game

We can learn a lot about important financial basics, investing and making financial decisions playing Robert Kiyosaki's CashFlow 101 Board Game. 

This board game is played in two parts, i.e. The Rat Race and The Fast Track. I love to play this board game so much that I compiled the The Rat Race part of the board game into Excel file to speed up the game.

The Rat Race part of the Cashflow Board Game requires the players to update income statement and assets and liabilities list. The process allows players to learn the relationship of assets, borrowings and passive income. Once you are familiar with the operation of filling up the statements, you may find that the process is rather mundane. Playing the game on Excel allows you to skip the mundane part of the game and focus on making financial decision buying and selling assets, etc. 

You can download the Zip file and play the CashFlow Board game in Excel.

Watch the video below to see how the Excel file works.

You learn financial statements by filling up the Game Card.

Thursday, February 18, 2021

Blockchain & Bitcoin et al - Making Sense of Cryptocurrency (2)

 It is quite easy to understand Blockchain. 

Blockchain, essentially is an accounting ledger that records currency transactions. More specifically it is a cashbook, for a specific currency like Bitcoin, that records who pay how much to who. 

However, this cashbook called blockchain, works in a computer network and uses a different method to record payment transactions:


Anyone who participates in the currency transactions can choose to keep a copy of this cashbook in a computer or server connected to the network. All copies kept by various participants are 100% identical containing full records of transactions since the first day of the creation of this currency until the latest payment. When one person initiates a new transfer, this payment record will be updated to everyone’s copy of the cashbook.

This means we don’t need a trusted accountant to record payment transactions. Since everyone has an 100% identical copy of the full cashbook, no one can perform fraud by changing just his own copy of the cashbook.  


To prevent people from amending recorded payment transactions (and to prevent the same amendment made to everyone else copies), the payment transactions are recorded in an encrypted way. The encrypted payment records are a series of jumbled up meaningless alphanumeric characters, encrypted text. Multiple payments are grouped into one BLOCK and be encrypted into encrypted text. The first block of payments and second block of payments will be encrypted into one series of encrypted text. The second block of payments and third block of payments will be encrypted into second series of encrypted text, etc. This structure is like a…CHAIN. This is how the name Blockchain came from. 


When one initiates a payment, it records the payment amount transferred from an address controlled by him to another address controlled by the recipient. This payment record (grouped and encrypted with other payments into an encrypted text) needs to be verified before it can be updated to everyone else cashbook copies. This verifying processing is called mining. The person who initiates the payment will have a fraction of the payment be deducted as transaction fee, and the miner, the first person who managed to verify the transaction, will earn the transaction fee. 


With an encrypted cashbook with thousands of identical copies owned by everyone, Blockchain is a payment system or currency records that can be trusted by everyone.  

Do you realise you don’t need a bank to keep your currency anymore? You just need to logon to the network to have access to your currency address (which is called wallet or account). 

Do you realise we don’t need Central Bank to control money circulation anymore? The rules on quantity of the currency has long been established when the currency is being created (programming development). Currency with bad quantity rules will not survive.

Blockchain enables a community to self-manage and govern money without authority figure to manage the authenticity of the money supplied to the community. Therefore it is such a revolutionary and brilliant invention. 

When we look at today numbers of cryptocurrency, i.e. Bitcoin, Dogecoim, Ethereum, etc. not all will survive. But blockchain, the cashbook recording technology that enables these coins, will become an essential part of our economy.

1. Bitcoin et al - Making Sense of Cryptocurrency
2. Blockchain & Bitcoin et al - Making Sense of Cryptocurrency (2)

Saturday, December 15, 2018

Hire Purchase (and Lease) Calculator


This useful hire purchase (and lease) calculator generate effective interest rate (and not just the flat rate quoted by the banks that is useless for comparison of loan offers)

  • You can use effective interest rate to compare various hire purchase/ lease offer. It can even compare loan with same quoted flat rate but with variation of making final instalments upfront.
  • You can use effective interest to compare with other interest rates like housing loan interest rates or fixed deposit rates, etc.

You can download this Hire Purchase Calculator here.


Should you get a hire purchase loan or use the extra money you kept in your flexi-housing loan to pay for your new car? It can be confusing.

It is difficult to know the true interest cost of your hire purchase (or lease) because the interest rate is quoted in flat rate. This flat rate is not comparable with the interest rate we usually use for fixed deposit or housing loan.

For instance, a flat rate of 3.5% for a 5-year hire purchase is equivalent to effective interest rate of 7.56%. We cannot use the flat rate 3.5% to do any comparison. However, can use this 7.56% interest rate to compare with housing loan rate of 4.25% or fixed deposit rate of 3.25%.

A 3.5% flat rate of car hire purchase loan is MORE expensive than your 4.25% housing loan rate.

This useful hire purchase calculator helps you to calculate the effective interest rate based on flat interest rate quoted in hire purchase or lease.

Enter value to the grey color cells.
This calculator calculate total interest cost, installment amount, total repayment amount, and effective interest rate. It allows you to compare various HP or lease offers and even with housing loan.

This calculator generate repayment timetable with specific dates.

Repayment schedule.

With repayment schedule you can know the amount of early repayment and the last instalment.

This calculator can be used to calculate leasing or hire purchase loan of your business equipment too.

Some leasing companies offer lease agreements that require you to pay your final instalment(s) upfront. Such arrangement increases your actual effective interest rate despite that the quoted flat rate remain the same. This calculator includes such factor to generate accurate effective interest rate.

You may download this Hire Purchase Calculator here.

Wednesday, November 21, 2018

How to Actually Save Money?

How to actually save money? It is not about packing your own lunch.

This article and video from Motley Fool stated that we simply need to focus on our three biggest expenses in our life, i.e. house, car and education. While I agree with the author, there are variations for Malaysians.

Here is the article from Motley Fool on How to Actually Save Money Below is the video from the same article.

In the context of Malaysians:

  1. Clear understanding of what is a good enough house for your family. Make careful decision based on affordability of house/ apartment, size, amenities and location, and its potential to increase in value over the years. 
  2. Finding an affordable house that will increase in value over time is important. It will help to fund your next bigger house. When you retire your children left home and you can sell the house and move to a smaller condominium. The extra money funds your retirement.
  3. Always compare your home loan interest rate with the market rate. Negotiate with your bank periodically. 
  4. Use Flexi Home Loan, so that when you have extra money you can pay down extra loan amount to reduce interest cost or shorten loan tenure. When you need money, you can also withdraw the extra loan payments you made to the Flexi Home Loan account. So instead of keeping fixed deposit which gives you 2%-3% interest income, keep this money in your Flexi Home Loan account to reduce your interest expenses which is at around 4.4%-5.5%.
  1. Second hand simple model (e.g. MYR60,000 or less) vs brand new luxurious model (above MYR300,000)
  2. Use your extra payments made to Flexi Home Loan, instead of car loan, to fund your second hand car. (Home loan interest, as at today, is much lower than car loan. Note: Interest rate used for home loan is effective rate, interest rate used for car loan is flat rate. 3% flat rate of a 3-year car loan has effective rate of around 5.7%. The effective rate for home loan on the date of this post is around 4.4%.)

Student loan was almost unheard of during 1980's. It is a ridiculous loan that exists only because the university's fees has gone extortionately high. Here are a few comparisons:
  1. Quality public school fee (FREE) vs private school fee (MYR19,000 - MYR85,000 per annum)
  2. Local public or semi government funded universities (around MYR50,000 for entire 4 year course) vs overseas universities (minimum MYR400,000 to study 3 year in UK). For courses like accountancy, students can even study and take the overseas professional exam in Malaysia.
  3. Low education fees means you can free yourself from the financial slavery of student loan or save your parents' retirement fund. 
Choose your lifestyle

Sunday, December 31, 2017

Bitcoin et al - Making Sense of Cryptocurrency

Like every economy bubble in human history, i.e. Tulip mania in 1600s, silver bubble in 1980s, Dotcom bubble in late 1990s, housing bubble that led to subprime crisis in 2008, etc,  this cryptocurrency mania will also end badly. However, it doesn’t mean that we should avoid it entirely.

From investment point of view, there are 3 things we need to be very clear about bitcoin and its sort of altcoins like Ethereum, Litecoin, Ripple (XRP), etc.:

  1. FIRST: Speculative. It is highly speculative for now. You really should not say you invest in bitcoin or any other cryptocurrency (altcoins). You can only say you put a bet on bitcoin or altcoins.
  2. SECOND: But it is REAL. The technology, i.e. blockchain, behind cryptocurrency is revolutionary and is REAL. It will change the world entirely and significantly. It will especially change the global financial and banking system in probably a decade or two. Not now. There are also real and practical economy usage for these cryptocurrency especially on the international trade and settlement front (on top of the black markets for drugs, guns and sorts., smuggling, tax evasion, money laundering, etc.). It will eliminate inefficiency in international trade and payment settlement. 
  3. THIRD: Scams in the name of cryptocurrency. In this unregulated wild wild west of cryptocurrency world, there are a lot of scams. There are many pyramid schemes and outright scams disguise as ICO, cryptocurrency and even as exchange. They use the name of cryptocurrency to con investors. Be very very careful.

We must know clearly that cryptocurrency at this point of time is like internet company before dotcom bubble. Some will survive the definitely inevitable crash, but MOST will fail, will lose all its value and will never be seen again.

We cannot ignore crytocurrency. They will change our world for sure. But we must know, at this point, any digital coins we bought are akin to venture investment. It is a BET on new start-ups (refer to the teams who created digital coins.) with highly speculative valuation. It is not a safe value investment.

In another word to common persons like you and me, for simplicity, buying coins is a bet, not an investment.

Lesson from History (Before we BET)

Let’s us refresh our memory of a not so distant history. There were only a handful of websites like Amazon and ebay survived the burst of dotcom bubble in year 2000. They proceeded to revolutionize the world entirely, bringing the original vision of internet to our life. But numerous websites like Pets dot com, etoys, etc. failed and disappeared forever. Their investors lost all their money. Some dotcome companies like AOL, Yahoo, dragged on for years into obscurity.

IPO price of Amazon was US$17. At its height before the dotcom crash, the price was $100. Right after the dotcom crash the price fell below $10. Today, Amazon share price is above $1,100 per share. IPO price was $11. The price fell to mere $0.19 before the announcement of liquidation. US$300 million of investors’ money were wiped off to zero.

You just have to pick the right horses. (and yes, again, it is a BET. Not investing.)

For cryptocurrency now, at the end of year 2017, it is like the dotcom companies at probably 1998 of the build-up of internet dotcom bubble. The CRASH is inevitable. The questions are, when? And which coin(s) will survive subsequently and prosper into greatness to change the world?

Buy only with the money that you are ready to lose all. Don’t bet your life savings for sure, and don’t even bet with an amount that you will feel painful to lose. Cryptocurrency is a highly speculative play for now.

1. Bitcoin et al - Making Sense of Cryptocurrency

Tuesday, June 25, 2013

Koperasi Loan – The Personal Loan for Employees of the Government, Statutory Bodies, Selected Government-Linked Companies and Municipal Councils

KOPERASI LOAN – The Personal Loan for Employees of the Government, Statutory Bodies, Selected Government-Linked Companies and Municipal Councils

Are you an employee working in a government department, a statutory body, a government-linked company (“GLC”) or a municipal council?  If you are, you could be one of the lucky Malaysians who qualify for Koperasi Loan – an easy-approval, low-interest loan with an ultra-convenient loan-repayment mechanism.

What is a Koperasi Loan?

A Koperasi Loan (or Credit Cooperative Loan) is a type of loan that is reserved specifically for workforce of government departments, statutory bodies, selected GLCs and municipal councils of Malaysia.  The amount that can be borrowed from a typical Koperasi Loan starts from as low as RM1,000 all the way up to RM300,000.  Loan periods range from one year to 25 years.

As a financial product, a Koperasi Loan resembles a personal bank loan in almost every way.  It involves the lending of a sum of money from an institution to a borrower, at terms which are agreed upon by both parties.  And just like any personal loan, a Koperasi Loan can be taken for any purpose: from settling a debt, starting a business, getting married, buying a home or a car, financing your children’s education to taking a holiday, just to name a few.

Ultimately, the greatest difference between a Koperasi Loan and a conventional bank loan lies in the fact that the terms of a Koperasi Loan are usually much more flexible and “borrower-friendly” for those who are eligible to apply.

Key Difference between a Koperasi Loan and a Conventional Personal Loan

Interest Rate: Generally speaking, the interest rate of a Koperasi Loans is almost certainly much, much lower than that of a conventional bank loan.  As at June 2013, the lowest prevailing interest rate for a Koperasi Loan is 3.99%, compared to 7.6% for a consumer bank.

More Flexible Criteria:  Koperasi Loans are, on the whole, more lenient in the approval process compared to conventional bank loans.  In fact, Koperasi Loans can even be approved for borrowers with bankruptcy status, as well as those who could not get loans from banks due to less-than-desirable track records in the Central Credit Reference Information System (CCRIS) and the Credit Tip-Off System (CTOS).

Repayment Method: Repayment for a conventional bank loan is done at a bank branch, via an ATM or through some form of direct-debit arrangement from a bank account. Repayment for a Koperasi Loan is much simpler – it is conducted via direct deduction from one’s salary.

Loan Payout: An important thing to take note about Koperasi Loan is that it does not disburse 100% of the loan amount to the borrower.  Usually, a percentage of the loan amount is retained, which can be interpreted as “one-time charge” incurred by the borrower.  The percentage retained can be up to 10% of the loan amount, or more.

Where do I get a Koperasi Loan?

There are many different types of Koperasi Loans all managed by different cooperative entities.  To apply for one, you could either approach such entities or go through an authorized agent.  An easier alternative is to use a Koperasi Loan comparison table, where you can compare the rates and apply for one online at no charge.

This article is brought to you by – Malaysia’s biggest comparison site providing free information about home loans, personal loans, credit cards and investments.

Wednesday, May 02, 2007

Prosper for life

It bothers me when I read a financial blog "frugal for life". It is a blog dedicated entirely to living a frugal and simple life.

I agree living frugally. I always believe we don't need to spend (or spend only minimal) to live to the fullest. However, I disagree to make frugal an objective of life. For instance, I will not disagree a statement like this "Live to the fullest without spending much". It is still about being frugal, but only as a means to the objective of living to the fullest.

There is a major difference between "buy cheap things" and "buying quality things cheap".

I agree with the blogger's message, though not her emphasis on FRUGAL instead of satisfaction of life (frugally).

It will be better if it is about prosper for life without waste.