Personal Finance, Loans & Insurance

How true is the saying “no pain, no gain”? Very true indeed, if you’re Prapas Tonpibulsak.

The chief investment officer of Ayudhya Fund Management says he learned his fair share at the schools he attended, but none offered him the sorts of lessons _ not all of them pleasant _ that the Stock Exchange of Thailand has given him.

As a teenager in Chumphon, the Southern Province in Thailand, he was like many of his peers, with limited awareness of events happening around him. Even when he first arrived in Bangkok to study finance and banking at the University of the Thai Chamber of Commerce, he found life fairly convenient; his goals were indeterminate.

That soon changed. As a senior student, he started to become curious about what he’d been reading about the stock market. He started to get ideas. Just two weeks before the 1987 Black Monday, he borrowed his parents’ money and put it all in the stock market. The outcome: he kissed all the money goodbye.

“Well, if you ask how much money I lost back then, I would say the value equal to four Mercedes-Benzes, guidemoney.info/Mercedes-Benzes.htm ” he says with a grin.

Though the experience was unbearably painful for a 20-year-old, in retrospect he says it was a priceless lesson.

“I suddenly realised how volatile and unstable the stock market was. And how much and how deeply one needs to study it to eliminate _ or at least manage the risks. That’s the hardest thing one has to do,” says Mr Prapas, now 40.

The personal crisis strengthened his resolve to recover his losses. This later led him to the new, and real, world of investment. He started to read everything in the field, and he found a hero in author Benjamin Graham.

After completing a bachelor’s degree, he pursued an MBA, http://guidemoney.info/MBA.htm , in finance from Wagner College in New York, where he spent most of his days in classes, his nights watching financial and investment news on television, and his weekends at Barnes & Noble bookstores looking for securities analysis books. Before long, he had a clear goal in mind.

“I’d like to be financially independent at the age of 60 with 200 million Baht, approximately 5 millions US Dollar, in savings,” he says hesitantly, and then he smiles.

Returning to Thailand, he started as a stock analyst at Securities One for two years and another two years at One Asset Management as a fund manager.

Following the 1997 crisis, he headed home to help solve problems facing his family’s business. A few years later, he was back in Bangkok as a financial consultant specialising in debt restructuring at several key companies before stepping into Ayudhya Fund Management.

Asked about a view on personal finance, he says, “It’s something that’s related to commitment and responsibilities in life, which change through an individual’s life cycle. It’s a matter of setting goals and setting an action plan to get there. It’s the same thing as doing business.”

Hence, his goals have changed in relation to the changes in his life. Today, his ambition to be financially independent must also include the needs of his wife and three children.

For those setting a goal for savings after a retirement, he advises working back from the future to today, by taking monthly or yearly expenses, inflation and interest rates, into account.

“They need to do the mathematics to find out how much they need to save each month or invest in order to get the amount or returns they wish to have when they retire.”

Currently, 10% of his investment portfolio is in equity and fixed-income funds including long-term equity and retirement mutual funds, while the majority of 80% to 90% is in real estate.

To accomplish his goal, his portfolio needs to generate a return of at least 12% a year.

“The key, and the most important thing, is that investors need to be able to know what the risks are and manage them well,” he concludes.

Before sharing these recommendations, I suggest that you have a way of tracking your expenses. This will give you a clear picture of what you spend daily, weekly and/or monthly and aid you in reducing expenses where needed.

1) Accept the fact you are in debt and forgive yourself. If you are in denial, you are more likely to repeat the pattern.

2) Reduce monthly expenditures. For example, once the price of gas increased, our monthly gas costs went from roughly $200 to approximately $450- 500.00. In an effort to reduce our gas costs, I stopped taking miniature trips every day. Also, my husband would drive my car on the weekends because it costs less in gas.

3) If you’re a person that makes several trips to the grocery store during the month, reduce the number of trips to once a month except for fresh vegetables. This will reduce the number of times you have to put gas in the car. Today, it costs more just to leave the house to get groceries as well as going to work.

4) With the increasing utility bill, begin making repairs to your home now such as getting a programmable thermostat and set it to a certain temperature so that it will automatically come on.

5) As an option, temporarily get a second job for supplemental income. If married, this should be the person that has the ability to generate the most income. I do not recommend any Multi-level Marketing opportunities.

6) For a single person in debt – if you are off on weekends, temporarily get a weekend job and put those funds towards the bills along with your regular income.

7) If you have a cell phone and a regular phone that both have long distance, re-evaluate having both phones. It can get expensive to have both with long distance. Maybe you can remove the regular phone and just use your cell phone if most people call you on that number.

If you are a stay at home mom, in my opinion the kids should not be going to daycare. This is an unnecessary expense.

9) Be sensible about your expenditures when it comes to your children. For example, a six month old baby does not need name brand clothing. They need to be clothed. Suggest getting into ‘mommy group’ where you and your friends can swap clothing based on gender and age. I have a couple of moms that I swap clothes with and this saves all of us from having to shop at the store.

10) Grooming expenses for adults: do you really need to get your nails done every week? Could you put that money towards a bill? If you are getting your hair done whether it is a weave, perm, braids or tinting every week – do you need to go to a high end salon or could you go Great Clips for the same thing? I am not saying do not pamper yourself; however, as times get tougher what is the necessity?

11) Maintaining your vehicle is a necessity, but going to a car wash every week is not. You can wash your car at home. Re-evaluate how you are spending your money.

12) If you are a person that likes to go out to eat, reduce the amount of times per month you go out to eat. Begin cooking at home since you are buying groceries for the month.

13) Entertainment – whether it is going to the movies, bars or happy hour – these expenses add up. For example going to a matinee is $7.50 a person (for the two of us is $15.00 before we even get food, which would cost us another $15.00) do you really need to see the movie now or could you wait three months and see it on DVD. Netflix is an option.

14) Add up how much you spend at a vending machine per week when you are at work if you work outside the home. Consider taking snacks from home.

15) Health insurance – if you had a job and are using COBRA for health insurance until you have secured another job, seek an alternative health insurance to the COBRA payments. I remember when I first stopped working at the law firm, we utilized COBRA for almost eighteen months and the price increased two times. Prior to the second increase, I located a shared insurance plan and saved us lots of money.

** There has to be some structure during these difficult economical times. However, these times do not have to be so hard that you cannot enjoy life.

Credit card fraud is a fast increasing crime in the world. International Credit Card holders are mostly the victims of this unauthorized access to their accounts. Let’s take a closer look of the problems faced by international credit cards.

1. Repetitive use of credit card numbers. After a credit card number has been used and disregarded, say cancelled, credit card companies would reissue the same number to other cardholders. The personal identification numbers (PIN) is changed as well as the credit cardholder’s personal information. But it still bears the same credit card number.

2. Low standards when it comes to the use of cards by the participating merchants. This is a common problem encountered by international credit cardholders. Employees of the participating merchants have the full access to the account number as well as the security number of the card.

3. Account Statements given out by credit card companies contains less information about the participating merchant. It does not include relevant information about the vendor that charged any transaction on the credit card.

4. Unreliable blocking functions. Once a card loss is reported, it will still take months for the credit card companies to block the transactions being made through the stolen or lost credit card.

5. Lack of validation software. Participating vendors should have better validation software installed on their computer system.

6. Consumer unfriendly policies on fraud management. The policies on the present fraud management take the blame on the cardholders though not directly stipulated. This means that the policies on the fraud management of international credit card companies protect not the consumers but the company.

7. Lax standards on investigation about fraudulent transactions. This is the sad part for the victims of fraud through their credit cards. Getting the suspects charged though proven guilty of fraud seems to take on slowly.

8. Credit card fraud is usually committed through online transactions. This means that credit cardholders are not protected with the authorized or unauthorized use of their cards on purchases or services paid online.

9. Most of the companies that typically appear on charges are those associated with pornography industry. These companies are the ones that accept transactions even without verifying the cardholder’s information.

10. Most of the banks’ system is not compatible with other international credit card companies for the e-commerce. This is a potential weakness that would mean loss of clients so they would prefer to keep quiet about it.

People usually apply for a second mortgage or home equity loan when they need money for debt consolidation, to pay large expenses or for home remodeling and home improvement. Second mortgages are generally categorized as fixed interest rate home equity installment loans (HELOANS) and adjustable mortgage rate home equity lines of credit (HELOCs). Which you choose depends on your needs, but the application and approval process is similar for both. These nine tips will help your loan process be as hitch-free as possible:

1. Compare options like mortgage refinancing and other loan options to determine if a second mortgage is the best choice.

2. Make sure you can tell lender what the purpose of the loan is. Your answer will help determine whether or not you are approved.

3. Check your credit report for errors and get your FICO scores (myfico.com/12) because lenders will review your FICO score to determine your loan rates. Check “How to Improve Your Credit Score” for more information on cleaning up your credit.

4. Compare several home equity loan options. Discuss the loan programs with your broker or lender and find the best loan for your situation. Getting a good interest rates isn’t a bad idea either.

5. When applying for a loan, you will get a mortgage checklist from your lender containing the list of paperwork you need to close the loan, including:
• Copy of deed to property.
• Recent tax appraisal.
• Last two years’ W-2’s, tax returns and current pay stub, or two years’ tax returns if self-employed. Be sure to include all schedules.
• Proof of income from alimony, child support, disability payments, lawsuit settlement, inheritance or other income source.
• Copies of your last 3-6 bank statements.
• List of all open credit accounts (account numbers, payment amounts, and balances).
• Your current mortgage statement.
• Homeowners insurance information (name, account number and phone number of agent).

6. Faxing documentation from the checklist will expedite the loan process more than mailing it.

7. Fill out your loan application thoroughly, or it may delay approval and loan closing.

8. Beware of bad loans. The Federal Trade Commission (FTC) warns that you may be signing into trouble if the lender encourages you to falsify your application to get the loan, urges you to borrow more than you need, pushes you into unrealistic payment terms, shows up at closing with a different loan product than you agreed to, asks you to sign blank forms, or denies you copies of documents you signed.

9. Has your mortgage application been rejected by a lender? Ask why it was rejected to find out what you need to do to secure mortgage loan approval in the future. Sometimes paying down some credit cards can increase your credit score just enough to qualify.