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Showing posts with label Belt and Road. Show all posts
Showing posts with label Belt and Road. Show all posts

Monday, January 11, 2016

How to allocate your money wisely: lessons from my father


WE will soon be celebrating Chinese New Year and most Chinese families would be busy making preparations for the same.

This is one of the yearly events that I look forward to. Apart from family bonding and catching up on latest family updates, these get-togethers often times allow us to reflect on our past.

When I reminisce about my childhood days, I fondly remembered the life of my late father which has had a big influence on my life.

At the age of 16, my father embarked on a long boat journey to Malaysia with barely anything in his pockets. This was during China’s economic depression. Due to hard work and frugality, he managed to save, starting with owning one taxi to two and the next thing you knew, he owned a bus company, the Kuala Selangor Omnibus Co.

How did he do it? What was his secret?

Unfortunately, my father did not manage to share with me his secrets of success. Nonetheless, I observed that for every dollar he earned, he only spent 30 cents. He was very frugal in his spending even though he had to feed a family of 15.

I recalled accompanying him to Kuala Lumpur on one of his business trips 70 years ago. Back then, the road from Klang to Kuala Lumpur was windy and hilly. To reduce fuel consumption, he would switch off his car engine and let the car slide down the road when the car was at the peak of the slope.

Today, it is not safe to do such a thing due to the increased number of cars on the road. Yet, to my surprise, cars like Mercedes and BMW have incorporated similar feature in their latest models. The point here is there are many creative ways to be frugal and my father would think of his own ways to save.

In the olden days, there were not many entertainment and luxury items up for grab. Being a bus company owner, my father would cycle between home and his workplace every day. My father could easily afford a brand new car, but he chose a second-hand Fiat because to him, a car was a luxury item.

I respected my father for his diligence in practising delayed gratification in his life which allowed him to finance 7 of his 8 sons overseas for tertiary education. He was able to resist the temptation for immediate reward in order to receive a more enduring reward later. I am grateful that I am one of the beneficiaries.

In my memory, I can’t recall my father borrowing money from the banks or friends. Basically, he had no liabilities. Of course, there were also no credit card, personal loan and fancy easy payment or installment plans to go with the purchase of luxury items which would eventually make the items even more expensive, compared to the original/initial price. Now that I think about it, if everyone was like him, many banks would be out of business.

Other than investing in his bus company, he would not invest his money elsewhere except in real estate. When he passed away, he left 4 plots of land in Klang and his company had 34 buses. Being a businessman, he was supportive of his children doing their own business and investing in real estate. Maybe, that was how I got myself involved in real estate and started my first architectural firm and later, a property development company in 1968.

In summary, what I learnt from my father was, money can be allocated for the following usage:

> Expenditure/spending
> Savings
> Investment

Be frugal and practise delayed gratification when it comes to expenditure/spending. Make saving a lifestyle as we may need the funds for rainy days. More importantly, make some investments which can come in many forms and combination. Commodities, properties, shares, trust funds and bonds are the main types of investment available. Bear in mind, investment is also a form of long-term savings. Hence, investing wisely will help you grow your wealth.

Nowadays, most parents invest early in order to fund their children’s higher education. I believe that one of my father’s biggest investment in life was sending his children overseas for further education. Though he has only completed his primary school in China, my father together with my late mother had the foresight to decide that all their eight boys would have to be educated in English.

Except for my eldest brother who stopped at the secondary level to work so he can help my father and the family financially, all the other seven sons were educated in English and eventually led a successful life and career.

By the way, do you know that there are investments which won’t cost you any money? One of them is spending quality time with your family and children. Take this festive season to spend time with them as part of your future investment instead of overindulging on things that may eat into your savings and investment.

For those celebrating, here’s wishing you a prosperous and harmonious Chinese New Year in advance. Gong Xi Fa Cai.

Datuk Alan Tong was the world president of FIABCI International for 2005/2006 and Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also group chairman of Bukit Kiara Properties. For feedback, email feedback@fiabci-asiapacific.com.


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Connected by mountains and waters

Relations between Asean and China are already strong, but expect them to draw even closer as they mark the 25th anniversary of dialogue relations.

THERE is a narrative in China that illustrates the interdependence of trade between Asean countries and China.

The little story, told in a programme produced by the state television broadcaster, goes like this: 36g of palm oil from Indonesia are needed to deep-fry three packets of instant noodles that would be consumed by Chinese customers.

The bio waste generated from producing the palm oil, meanwhile, can power 200 five-watt energy-saving light bulbs in Singapore for an hour.

To China, Asean is its “close neighbour connected by mountains and waters”. Collectively, the 10 nations in Asean are China’s third largest trading partner, while China is Asean’s largest trading partner.

In 2014, the two-way trade reached US$480bil (RM2 trillion) and investment was valued at US$130bil (RM558bil), with both sides aspiring to elevate the figures to US$1 trillion (RM4.3 trillion) and US$150bil (RM644bil) respectively by 2020.

To help realise this goal, China and Asean sealed a deal during the Asean summit in Kuala Lumpur to upgrade their Free Trade Area in November.

The geographical proximity makes Asean countries the first participants of China’s 21st century Maritime Silk Road (MSR), an initiative to foster connectivity and collaboration with countries along the route.

One of the flagship aspects of Belt and Road is railway connectivity. Last year, China embarked on rail projects with three Asean countries as part of Beijing’s ambition to connect China and Asean in order to facilitate the movements of goods and people.

In October, China won the bidding for the first high-speed rail (HSR) project in South-East Asia – the Jakarta-Bandung HSR in Indonesia.

A ground-breaking ceremony for the joint Lao-Chinese railway was held in December, followed by another ceremony to launch the Thai-Chinese railway project for two medium-speed lines.

Cooperation between ports is another key area of the MSR.

Malaysia, which is China’s largest trading partner in Asean, forged a port alliance with China during Chinese Premier Li Keqiang’s official visit to Malaysia in November.

China-Asean Business Council executive president Xu Ningning said Port Klang, which is the world’s 13th busiest port, can become an important locale for Chinese to “go out”, referring to China’s policy that encourages its enterprises to invest overseas.

“Malaysian investment in China is still higher than Chinese investment in Malaysia at the moment. I’d suggest Malaysia step up its promotional activities on investment opportunities to attract Chinese enterprises to Malaysia,” he commented on the sidelines of a China-Asean forum on the MSR in Beijing recently.

Former minister counsellor (economic affairs) in the Malaysian Embassy in China Datuk Ong Chong Yi pointed out that the two-way trade between Malaysia and China, which has reached US$ 102bil in 2014, accounted for one-fifth of the China-Asean trade.

Ong, who had just assumed the role as the CEO of China-Malaysia Qinzhou Industrial Park (Guangxi) Development Co Ltd, said once the Trans-Pacific Partnership deal and other multilateral or bilateral trade agreements are put in place, Malaysia would be an ideal destination to help China to enter other markets.

To provide capital support and drive infrastructure projects, China has set up the US$40bil (RM171.6bil) Silk Road Fund and a US$10bil (RM42.9bil) China-Asean Investment Cooperation Fund (CAF).

CAF CEO Li Wen said the fund, which focuses on investment opportunities in infrastructure, energy and natural resources in Asean, has invested in 10 projects in eight countries since its establishment five years ago.

Silk Road Fund Co Ltd managing director Luo Yang said the fund is interested in collaborating with Asean countries under the framework of connectivity.

A discussion of China-Asean relations will surely involve the South China Sea territorial row, which sees China and four Asean neighbours – Malaysia, Brunei, Vietnam and the Philippines – laying overlapping claims on the busy passageway.

While China has carried out extensive construction on the Spratly Islands (which it calls Nansha), it said it preferred direct consultation with other claimants to tackle the problem, and rejected the Philippines’ move to file claims with the International Tribunal for the Law of the Sea over the dispute.

“The dispute is only temporary. As long as China and countries along the MSR have enough goodwill, political wisdom and sincerity, it will be solved through friendly negotiation,” Bai Tian, the deputy director of Chinese Foreign Ministry’s Asian Affairs Department, said.

He added: “South China Sea will be a sea of peaceful cooperation and prosperity.”

It is important to note that despite the territorial disagreement, all parties are still engaging each other actively in economic cooperation. For example, Malaysia, Vietnam, Brunei and the Philippines have all joined the China-led Asian Infrastructure Investment Bank (AIIB) as founding members.
 
The Beijing-based multilateral lender aims to help Asia build roads, power grids and other essential infrastructure. It will hold the first meetings of its board and executive council on Jan. 16-18, 2016. The AIIB counts 57 founding members.

This year, China and Asean will mark the 25th anniversary of the establishment of dialogue relations.

A series of commemorative activities, including a summit, is expected to be held to mark the milestone and draw the region and China closer to each other.

By Tho Xin Yi Check-in China


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