More millionaires nowadays; secret to success and riches

PETALING JAYA: There may be more millionaires in Malaysia now than before but they may not necessarily be feeling rich.

Besides the rising number of successful business owners, many high-salaried people are already millionaires based on the value of their assets and properties.

RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said the term could also apply to those in the middle-class who could have earned the amount but had spent it on necessities such as on costly children's education and high property prices.

He said although a millionaire was measured by his or her disposable income, those who have made their million would not have the same purchasing power compared to a decade ago, citing inflation as the main reason.

Dr Yeah said many in business had made their millions as a result of savvy investments and the growth of the industries that they were involved in, adding that overall, the rising affluence was due to sustained economic growth.

“We have seen a strong growth in certain sectors, including plantation, oil and gas and property, which have elevated entrepreneurs into the millionaire class,” he said.

Billionaires, however, remain rare. Malaysia now has 30 billionaires, just three more from the 27 on the list last year.

The Wall Street Journal (WSJ) reported last year that Malaysia's millionaires almost doubled over the previous 18 months.

Citing a report by international financial firm Credit Suisse Group, it said Malaysia added 19,000 new millionaires since early 2010, bringing the total to 39,000 as of October.

The WSJ report attributed the rise to the weakening US dollar and careful spending.

Dr Yeah said those who invested their money wisely had benefited the most.

“In a free market and capitalist economy like Malaysia, people who have capital can generate millions,” he said, noting that many in the upper-income bracket had accumulated wealth past the million-ringgit mark.

Personal financial consultant Carol Yip said the rising cost of living had lessened the feeling of being rich.
“Today, even a small apartment can cost half a million,” she said.

She said careful spending was not a factor for the increase in the numbers of millionaires.

“If we are spending less, we won't be seeing so many luxury cars on the road,” she said.

She said the rise in millionaires was also due to property prices which have shot up exponentially, adding that the definition should not include the value of the house that one was living in.

“If you still have a million in hand after you convert the value of your other properties, investments and have paid of all your debts, then you are a millionaire,” she added.

Financial adviser Fred Wong said making a million was not a problem these days as long as people were willing to work hard but being self-employed and investing wisely was the better route to riches.

By ISABELLE LAI and P. ARUNA newsdesk@thestar.com.my

Millionaires’ secret to success

PETALING JAYA: Ganesh Kumar Bangah made his first million at the age of 23.

The secret, he said, was as simple as knowing what people needed and delivering it to them.

“I knew what I was good at, which was IT. I used that to come up with something of value to the world.

“I also worked hard and persevered until I reached the goals I had set for myself,” said Ganesh, now 33 and the CEO of MOL Global Bhd, a company worth over RM1bil.

Young and rich: Ganesh (left) and Yap made their first million at the age of 23 and 26 respectively.

He said that even when he was only 15, he had been using his skills to make money, like repairing his teachers' computers for a fee.

At the age of 20, he started his own company, which made him a millionaire in three years.

“Be focused and set new goals for yourself to keep climbing higher. Real wealth is the satisfaction you get when you overcome a new challenge that brings rewards. Financial wealth should just be a by-product.”

Feng shui master and multi-millionaire Joey Yap said learning to make good use of time was a key ingredient to achieving financial success.

“In business, time is money, so make sure you use your time to acquire things of good value. Find out what your strengths are, work on your weaknesses and hone your talents,” said Yap, 35, who made his first million at age 26 by selling his first feng shui home study course.

However, having RM1mil does not necessarily make people feel rich, especially for those raising children in the city.

Carol Leong, 57, a mother of three, said it costs more than the amount for an average family to live in the city and raise a child to adulthood.

“There are medical bills, tuition fees, various expenses and their education to pay for. For our family, it has definitely come up to more than RM1mil per child,” she said.

Leong, a lawyer, said she and her businessman husband had placed their money in various investments, which in the long run had helped pay for tertiary education overseas for their three children.

“I would advise young parents living in the city and who are just starting a family to invest to secure some income for the future,” she added.

By YVONNE LIM yvonnelim@thestar.com.my

Financial Times hails Malaysia’s economic boom

KUALA LUMPUR: It is not always that emerging economies get favourable remarks from hard-boiled foreign media practitioners but Malaysia is getting more laudatory remarks from foreign journalists these days.

Take Jeremy Grant's article on Kuala Lumpur's soon-to-be-developed new financial centre, the Tun Razak Exchange, and the state of the Malaysian economy in the Financial Times Friday, for example.

He wrote: “With much of the world economy experiencing anaemic growth at best, it is hard to believe that any country would contemplate a project on this scale.

“Yet Malaysia's economy is enjoying a gravity-defying boom that is confounding sceptics. Second-quarter gross domestic product figures out this week showed the economy grew by 5.4%, way above consensus expectations of 4.6%, and the 4.9% recorded - after an upward revision - for the previous quarter.”

Grant attributed this development to big-ticket government spending, lending to business by well-capitalised banks, and robust consumer demand, fuelled by pay rises for civil servants and cash handouts that have even seen taxi drivers receive vouchers for free replacement tyres.

“Malaysia's stock market has been among the best performers in the world, buoyed by big flotations including Felda, a state-controlled palm oil producer, which was the second-largest initial public offering after Facebook when it raised over USD2bil last month. Bankers are cashing in with a parade of further IPOs expected within months,” he added.

“Much of the impetus behind the growth comes from the “economic transformation programme” initiated by Prime Minister Datuk Seri Najib Tun Razak when he came to power in 2009.

This involves dozens of government-backed projects designed to boost per capita income to USD15,500 by 2020, from USD9,600 last year and lift Malaysia out of its “middle-income trap”, Grant wrote.

Over spending: Analysts say one nagging concern for Malaysia is the rising household debt caused by the rapid growth in credit card usage.

The Financial Times also quoted Christian de Guzman, an analyst at Moody's, a rating agency, who admitted he was sceptical about the programme's ability to spur private sector development when it was launched. De Guzman is more convinced now, adding that “The proof of the pudding is in the eating but so far they are on track. In aggregate there are just so many things going on [in the economy].”

Grant wrote that “Not only has Malaysia experienced strong domestic demand offsetting its vulnerability to weakening demand for its exports - much of them electronics destined for Europe; it has also benefited from deeper ties with economies in Asia.

Moody's says that in 2006 the United States was Malaysia's largest trading partner, absorbing 18.8 per cent of its exports, while Asia Pacific accounted for 60 per cent. By last year the US share had dwindled to 8.3 per cent while Asia Pacific jumped to 69 per cent.

Malaysia's healthy economy - and the resulting “feel good” factor - stands in contrast to growing anxiety among Malaysia's neighbours in south-east Asia as the global downturn has tarnished their economies.

Analysts point out one nagging concern for Malaysia: rising household debt, caused by rapid growth in credit card usage.

As the transformation programme's projects take root, Grant wrote that Bank Negara Malaysia is forecasting full-year growth at the upper end of its 4-5 per cent.

Amidst this scenario, the Financial Times also quoted Rahul Bajoria, an anaylst at Barclays, as saying that: “We expect momentum to remain underpinned as the project-based nature of these investments means that it is unlikely to be halted abruptly.” - Bernama

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Malaysia's growth forecasts raised after the actual 5.4% in Q2, 2012

House price hike likely

Penang properties said to increase 5%-10% due to more costly cement

GEORGE TOWN: The selling price of properties in Penang will soon surge by 5%-10% following the recent move by Lafarge Malayan Cement to raise cement prices by about 6%, according to housing developers here.

Following Lafarge's announcement, a 50kg bag of cement is now priced at RM17.50, compared to RM16.50 before the hike.

Penang Master Builders & Building Materials Dealers Association president Lim Kai Seng said 60% to 80% of the materials used for a building comprised cement and cement-related materials.

“This is why an increase in cement price will have a significant impact on property prices.

Lim: ‘The price of sand is now RM40- RM43 per cu yard.’

“The other cement manufacturers in the country have sent signals that they will raise prices very soon,” Lim said.

There are six cement producers in Malaysia, namely YTL Cement Bhd, Tasek Corp Bhd, Cement Industries of Malaysia Bhd, Lafarge, CMS Cement Sdn Bhd, and Holcim (M) Sdn Bhd.

Only Sarawak-based CMS Cement has confirmed it would keep prices at the current level.

Lim said the price of other essential building materials such as sand and aggregate had also increased.

“The price of sand is now between RM40 and RM43 per cu yard, depending on the grade, compared to RM38-RM40 earlier this year.

“The price of aggregates is now at RM21 per tonne, compared to RM20 per tonne earlier this year,” he said.

House prices on the island are expected to rise by 10%, while in Seberang Prai, housing prices are expected rise by 5%, following the hike in cement price.

Kuala Lumpur-based developers such as Mah Sing Group Bhd and SP Setia Bhd with projects in Penang will continue to absorb the cost of the cement price increase.

Ideal Property Development Sdn Bhd managing director Datuk Alex Ooi said the company was now revising the selling prices of its new projects upwards, due to the hike in cement price.

Ooi: ‘There will be a 10% hike in the selling price of properties in Penang.’

“There will be at least a 10% hike in the selling price of properties on the island.

“A hike in cement price means the price of all cement-related products such as concrete and bricks will rise. Construction cost will go up by between 15% and 20%.

“We expect the rest of the cement manufacturers in the country to adjust the price of cement upwards in the next one to two months,” he said.

In addition to the rise in cement prices, the cost of labour and transportation charges have also increased this year.

Tambun Indah Land Bhd managing director K.S. Teh said the cost of labour had increased to RM45 per day this year, compared to RM35 a year ago.

Transportation charges for sand have increased to RM450 per truck load this year from RM400 a year ago.

“There is also a labour shortage, as many Indonesian workers have gone back to Indonesia, which is booming currently.

“The selling price of properties will be impacted by the hike in raw materials and labour costs.

“However, Tambun Indah will absorb the increase in the price of raw materials until year-end.

“We will revise our pricing next year,” he added.

Teh said the selling price of properties on the island would increase more because of the additional transportation charges to ferry the raw materials to the island.

“This is why the increase in property prices on the island will be around 10%, compared to about 5% in Seberang Prai,” he said.

Tambun Indah will be launching next month the Straits Garden@Jelutong on the island, the Pearl Residence@Pearl City and Pearl Indah@Pearl City projects in Simpang Ampat.

The Straits Garden is a high-rise project comprising 183 condominiums priced from RM688,000 onwards, while the Pearl Residence@Pearl City and Pearl Indah@Pearl City schemes comprise landed properties priced between RM353,000 and RM508,000.

Mah Sing managing director and chief executive Tan Sri Leong Hoy Kum said the cement price hike would have less than a 1% impact on construction cost.

“Most of our projects have been tendered out and the construction costs are already locked in,” he added.

SP Setia property (north) general manager Khoo Teck Chong said the group would absorb this impact for now to be competitive.

”If other raw material prices such as bricks, rebar and tiles were to increase drastically, we may then have to review and adjust our property selling price accordingly,” Khoo added.

Meanwhile, the Malaysian Competition Commission (MyCC) chief executive officer Shila Dorai Raj had said the price hike by cement manufacturers did not at this juncture warrant a formal investigation.

“Price increases are by themselves not anti-competitive in nature. However, if there is evidence of collusion among the competitors to increase prices, this would be of concern to MyCC and may merit an investigation,” she said.

By DAVID TAN davidtan@thestar.com.my

Malaysia's growth forecasts raised after the actual 5.4% in Q2, 2012

 Malaysia's economy up 5.4% in Q2, manufacturing, demand support growth 

KUALA LUMPUR: Malaysia's economic growth, as measured by gross domestic product (GDP), for the second quarter ended June 30 rose by an unexpected 5.4% year-on-year, underpinned by an expansion in manufacturing and robust domestic demand.

GDP growth for the first quarter was revised to 4.9% from 4.7%, while growth for the first half of the year stood at 5.1% compared with the same period a year ago. Compared with the first quarter, GDP expanded by 3%.

In the supply side of the economy, only the agricultural sector saw a contraction due to lower crude palm oil production. Manufacturing, services, construction and mining all posted growth. Domestic demand jumped 13.8% for the quarter and rose 11.8% for the first-half.

The country's second-quarter GDP numbers came as a surprise to many economists, whose median forecast was for a 4.6% expansion. Growth for the quarter even exceeded the most optimistic forecast of 5.2%.

Zeti (far right) attending the briefing. With her are other Bank Negara officials

Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said at a briefing following the release of the GDP data that the surge in private investment was the most encouraging aspect of the economy.

“Private investment has made a strong return because the investment climate has improved tremendously, with Malaysia moving up the rankings of various surveys in terms of competitiveness, costs and ease of doing business,” she said.

Zeti said the improvement was underscored by the higher implementation of investments by domestic and foreign investors. She added that civil engineering projects in the oil and gas, transport, utilities and services industries had helped spur growth in the construction sector.

By numbers, investments from the public and private sectors jumped 26.1% year-on-year for the quarter under review, with the first half rising 21.3%.


By sector, private investments rose 24.6% while public investments surged 28.9%. For the first half, private sector investments grew 22.4% while public sector investments expanded 19.5%.

Consumption rose 8.9% for the quarter and 11.8% in the first half. By sector, private consumption increased 8.8% for the quarter and 8.1% for the first half while public consumption expanded 9.4% for the quarter and 8.4% in the first half.

Zeti said monetary policy continued to be supportive of growth and that for the rest of the year, risks weighed on growth rather than on inflation with external headwinds still overshadowing the outlook.

She said it would take time for the global economy to recover and this would need action from various stakeholders.

“At this point, we're maintaining our forecast of 4% to 5% GDP growth for the year but this may change when the budget is announced (on Sept 28). This will come in at the upper range of the forecast if growth is robust,” Zeti added.

Alliance Investment Bank Bhd chief economist Manokaran Mottain has revised GDP growth for the year to 4.7% from 4.5% previously, with the second half to record growth of 4.5%.

He told StarBiz the third quarter would see expansion at its slowest.

Manokaran said despite the surprising growth figures, the global and domestic economy's outlook for the rest of the year would still be dampened by the eurozone debt crisis, slower expansion in China and tepid growth in the United States.

“We believe the eurozone crisis will continue to have an impact on trade and this will show itself in slower exports growth,” he said.

He added that with a drop in manufacturing activity, sentiments would be affected, leading to slower growth in the domestic-oriented services sector as consumption slowed.

Manokaran said Purchasing Managers Index (PMI) for July indicated that exports would slow as demand dropped in developed markets.

CIMB Investment Bank Bhd economic research head Lee Heng Guie said in a report that the leading index for June suggested that the economy could weaken in the second half.

“We caution that a sharply high base in the second half of last year poses a hurdle to year-on-year growth,” he said.

He pointed out that the global Organisation for Economic Co-operation and Development composite leading together with regional high-frequency indicators, including trade and PMI, were still under external pressures.

Meanwhile, the Statistics Department released data showing that July prices as measured by the Consumer Price Index gained 1.4% year-on-year to 104.8 and remained unchanged compared with the previous month.

By FINTAN NG fintan@thestar.com.my The Star/Asia News Network

Economists turn bullish following better-than-expected growth in Q2

 
PETALING JAYA: Several economists have raised their gross domestic product (GDP) forecasts for Malaysia following better-than-expected growth for the second quarter ended June 30.

Malaysia's economic growth for the second quarter rose by an unexpected 5.4% year-on-year underpinned by an expansion in manufacturing and robust domestic demand.

GDP growth for the first quarter was revised to 4.9% from 4.7%, while growth for the first half of the year stood at 5.1% compared with the same period a year ago.

Compared with the first quarter, GDP expanded by 3%.

Hong Leong Investment Bank's (HLIB) research unit said that following the strong-than-expected second quarter data, it had raised its full-year 2012 GDP forecast to 5% (previously: 4.5%).

For the second half of 2012, HLIB Research expected GDP growth to dip to 4.5% year-on-year in the third quarter (dragged by subdued trade and manufacturing and higher base in the third quarter of 2011) before improving to 5.1% year-on-year in the fourth quarter, yielding an average of 4.8% year-on-year (first half: 5.1% year-on-year).

“We are still positive that line-up of the Economic Transformation Programme projects for the second-half and 2013 could still provide a strong support to GDP growth despite external uncertainty,” said HLIB Research.

According to Bloomberg, Goldman Sachs also raised Malaysia's GDP growth predictions to 4.6% from 3.8% for 2012, and to 5.3% from 5.2% for 2013.

Meanwhile, CIMB Investment Bank Bhd economic research head Lee Heng Guie said given the steady performance in the first half, he had raised the 2012 growth estimate to 5%, from 3.8% previously.

“However, this still implies a slower growth of 4.5% to 5% in the second half versus 5.1% in the first half,” said Lee in a report.

Lee warned that external headwinds still warranted caution as they remained hurdles to Malaysia's export growth.

Meanwhile, Maybank Investment Bank (IB) Research said its 2012 and 2013 growth forecasts of 4.4% and 5.1% respectively were under review.

“Provisionally, we expect 2012 growth to be around 5%, which implies a slightly slower growth of 4.8% in the second half as the global purchasing managers index in July signals that the global economy hence external demand will remain soft in the third quarter.”

Maybank IB Research said domestic demand would continue to be well supported by initiatives to sustain consumer spending, policies and measures to spur investments, and the roll-out and progress of big ticket infrastructure projects and capital expenditures in industries like oil, gas and energy.

By THOMAS HUONG huong@thestar.com.my The Star/Asia News Network

Dangerous Older Drivers: A Car is a Lethal Weapon

“She only drives to the store”.

“He doesn’t drive at night, he just drives to the doctor and to church”.

Imagine the justifications people can invent to allow dangerous aging parents to stay behind the wheel. These are statements from family members whose elder is no longer safe to drive, but they’re still driving.  No one has the guts to ask Dad or Mom to stop.   Since most accidents happen within 3 miles of home, the “only to church” or “only to the store” is not safer than anywhere else.

The National Safety Council publishes a journal called Family Safety and Health, and in its Fall, 2012 issue, an article, “Time to Hand Over the Keys” appears.  I was interviewed for the article.  As a former personal injury lawyer, I represented hundreds of victims of car accidents, some caused by older drivers who never should have been on the road.  That dangerous driver could be your dad, your grandma or your aunt.  The next generation needs to see the problem and face the fear about confronting it.

Research indicates that most people, when approached respectfully, will voluntarily give up driving.  However, “ most people” does not include the very stubborn, those in denial, and those elders with the kind of cognitive impairment that prevents them from actually understanding how impaired they are.  With those folks, their families desperately need a strategy.

Here’s a sampling of parts from the strategy I advocate that you use.

First, recognize the problem.  A car is a lethal weapon whether your elder is driving it a block from home or across the city.  It is not a safer weapon because your elder is closer to home.  That’s a fanatasy. Give it up. I met an 84 year old who was behind the wheel when he accidentally hit and killed his best friend in the driveway of his own apartment building.

Next, be honest and respectful and talk to your aging loved one about his or her driving. If you’ve see grandma careen across the street cutting off other cars, unaware of their presence, it’s time to gently ask her to give up the keys.  Try a one-on -one conversation first.

Next, add allies to your approach if the one-on-one is not successful.  Bring in a trusted friend, other family, or anyone Dad likes best.  Bring up the subject kindly and with acknowledgement that giving up driving is huge and that it means losing independence.  Use an outside professional if this doesn’t work.

Make alternative transportation arrangements.  If your elder lives in an urban area, many resources may be available for elders, from community vans to carpools from senior centers.  Beware of putting cognitively impaired elders on buses. They may be confused and get lost.  Rural dwellers must usually rely on family and friends to transport them.  The burden on adult children may stop them from facing the issue of a parent’s dangerous driving.

If the elder is too dangerous to continue driving, get rid of the car if you can.  Sometimes a caregiver can do the driving and the aging person keeps the car. If there is no caregiver or someone else’s car is used to transport, the elder’s car is a sad reminder and a temptation you don’t want kept in the driveway.  It’s too easy for Dad to get a duplicate set of keys made.

Use the law as a last resort.  The primary care doctor may be of help if willing to report the danger or need for retesting to the department of motor vehicles.  Some states allow you to report a dangerous driver and ask for license retesting anonymously.  The courts can be used to protect elders who are a danger to themselves or others. Guardianship can be used in extreme cases to give family permission to take the car away.

Some older drivers are fine, like my mother in law, Alice, 90.  She limits her driving to daytime. She is still quite sharp, has a great memory and sense of direction and pays attention to what is on the road.  I wouldn’t classify her as dangerous, but she’s in the minority at her age.

Asking an aging loved one to give up driving takes courage. It can draw extreme resistance, anger and refusal.  Facing that possibility requires a plan and perhaps a family conference before approaching a particularly difficult elder.  I urge you to find your courage if your elder is scaring you when he or she gets behind the wheel.  Sometimes elders know it’s time and will give up driving willingly when asked.  You might be lucky.  In any event, it’s time to take your chances if this article reminds you of anyone close to you.


By Carolyn Rosenblatt, Forbes Contributor

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