We all know the negative impact, so let’s look at the positive impact, and of course the great opportunities that lies a head  in this time of certain uncertainties ….

Putting a side the arguement of whether we have a government of integrity or not, let’s look at the matter constructively. In my opinion, Malaysia should have reduced the subsidy a long time ago, because the high fuel cost will enable many important factors to happen, such as:

1) cost of goods sold will reflect the actual cost, not at subsidised cost, this will spurr producers to be more efficient in the usage of fuel and transportation,

2) housing and commercial buildings development, town planning will seriously take into account the transportation and energy cost factor.

3) indivuduals will be more concious of fuel price and will choose more economical cars, or ways to reduce such costs.

4) more local companies will produce energy efficient goods, logistics and distribution will be improved

The list can go on, and this will help Malaysians to get ‘real’. The cost of fuel is so high out there and yet other countries can still be competitive, Malaysian companies will have to face the challenge without the fuel subsidy. We can’t have an economy that is on painkiller for too long can we? Suggestions for the people and the government ? Well I have a few..

1) zero import duties on any vehicles that does not require fossil fuel and nominal tax on hybrid cars for a start

2) tax holidays and interest free loan to companies investing in the production of green renewable energy, such as solar, wind, tidal, even fusion energy.

3) encourage intelligent townships without cars; one idea is to provide public transport in the form of energy efficient one/two person buggies. The buggies can be powered by NGV, electric or petrol.

4) intelligent township such as mix development projects with large residential-retail-office-SOHO-recreation concept will help save a lot of moving around

4) improve broadband service to enable virtual conferencing, shopping, so that people can reduce the need to travel.

The very first step in order to start the above, is probably what we are not used to; i.e. to get real, remove the subsidy and let the market forces to guide us to a better future. And what the governement should do? My two cents worth is, stop being in the way and stop putting toll gates….. if you get what I mean…cheers!

Too much have been written about the bad effect on us, so much so I decided to think. In these sort of circumstances, the doomsayers will add onto other doomsayers and create a downward spiral, and in the end, people may just very well say the end of the world is tomorrow. 

Time and time again, people have forgotten the key to human success as a race is our very own ingenuity and will to survive. I believe if oil prices were to maintain at current level of USD140/barrel or more, the positive impact will be, alternative and greener fuel will be commercially viable much sooner. Remember Thomas Malthus, in 1796 this English bloke wrote a book talking about the world will eventually run out of land to produce food for the growing population. People need to eat and also to have sex resulting in more babies and more mouth to feed. People grow in geometric progession and food grow in arthimatical progression (remember our add-math? ). Anyway he has been proven wrong, the world population probably have grown 10 times more but the land for food cultivation has grown much lesser. It is understandable that he made such an assumption because he was born 100 years before the industrial revolution. The productivity per hectare of land has grown so much since then, with better farming equipment, irrigation, breed, pest control etc.

The high oil prices have motivated businesses and government to build and experiment on solar, wind, tidal or even fusion energy. Most of these projects requires huge investments because they are new and not in mass production yet. It is now commercially viable. Coupled with the gloabl fear started by Al Gore’s famous ‘An Inconvenient Truth’ I guess it all will come to a happy ending.

Burning fossil fuel actually has a very high cost if we were to include the price of cleaning up the environment caused by the pollution. We are just deferring such expenses to our future generation. I think it is up to us now to do something about it, and the high oil price could just be a blessing in disguise.

Its about time….

Out of the blue an existing client of mine called me and told me he has a 6 months old baby boy. I first congratulated him and told him how surprise I was. I did not know about his wedding and obviously I did not know that he had become a father. Some may say what kind of agent I am for not keeping in touch and in the know of what has happened to my clients’ life. Ah! ..Well… all I can say is I am this kind of agent. Only know when people want to let me know kind of agent. In fact most people appreciate my stance. I am no busy body. I tend to keep a certain degree of distance when comes to people’s private life. Even if they told me their private things, I tend to forget. Who knows he might have had a ’shot gun’ marriage, and still unable to be open enough to admit it.

 Anyway the reason he called me was to ask me to give him an education plan. So I went to his apartment with my lap top. The moment I took out my tools of trade, he was surprise by the sight of it. He told me “I just want an education plan, and you don’t have to be so serious to bring a lap top to show me”. I said ” I am a tailor, I tailor-make financial plans and I am no hypermarket ..he….he..”

Through questioning, he found out himself that medical insurance to him is not a priority as his employer has already given a very good cover for his family. Though he sees the necessity in the future but it was not his priority at the moment. He also states that there is no point getting a death/disability insurance cover on his son and thinks it is preposterous to do so. He believes he is more important as he is the breadwinner in the family. He also thinks education premium relief of Rm3,000 is too little to excite him, as his tax bracket of about 20% and the annual RM600 discount on the RM3,000 premium is no big deal, as it is one off relief. He prefers unit trusts, especially those capital guaranteed fund, as over the 15-20 years, the funds could easily make back the one off 20%.

I asked him, since he does not think he needs most of the benefits from an education plan, why would he ask me to do an education plan to show him? He said everybody buy one for their children, so I wanted to get one also.

He told me, actually he thinks he should upgrade his own life coverage. He finally settled with a wholelife non-participating policy for himself. A wholelife non-par plan is a plan that covers up to 99 years old and it is relatively much cheaper in terms of premium as compared to a participating wholelife policy. The idea is that the policyholder believe that he has better avenue to invest the money than the insurance company. Therefore the premium saved will be invested elsewhere. Wholelife non-par has a big advantage over term policy, because term policy coverage stops at a certain age and no cash value upon expiry of the term. The answer you have for the question ” will I still need insurance coverage after age 60, will I still have the ability to pay for the premium” will determine whether wholelife par, non-par or term is more suitable.

I hope I have sent out the correct message, that is , every plan has its usefulness. It is the matching of the client’s intention, profile and circumstances that counts. A typical education plan helps to ensure an education fund is ready when the child reaches the college-entry age. There are of course certain costs associating with an education plan, they are there to ensure the benefits of covering the payor’s ability to continuously save the money, to provide a systematic and discipline way of saving money, to protect the money saved from medical emergency expenses etc. Past decades , many children have gone to college/university to realise their dreams, certainly it has proven its usefulness, time and time again.

On the last note, if you can save money, you would already have save some by now. Else, better get an education or a savings plan from an insurance company.