The Importance of Wasiat Under Malaysian Law

Muslim have always been encouraged to write their Wasiat.

As the prophet s.a.w said : "it is not permissible for any Muslim who has something to will to stay for two nights without having his last Will and Testament written and kept ready with him. (Sahih Al-Bukhari vol IV p.1).

Wasiat lets the person to choose a trusted person as an Executor. A male testator is empowered by Muslim law to appoint a guardian a person whom he trusts the most. The assets and liabilities of the deceased fall under the generic term "estate". If a Muslim dies intestate (without a wasiat), a beneficiary must take several steps before he can benefit from the inheritance.

Distribution of the proceeds of an intestate estate may take one to two years or longer. If there are obstacles, such as the failure of beneficiaries to agree on the choice of administrators, or the inability of the administrator to provide adequate sureties. Until all these legal requirements are met, the estate of the deceased remains frozen.

The existence of Faraid does not mean that a benefiaciary can obtain his entitlement immediately after the death of a person. Faraid exists in harmony with wasiat. The rights of heirs are protected under faraid and yet a testator may still make provisions to benefit loved ones who do not fall within the category of heirs in Islam such as adopted children or non-Muslim parents or any charitable body and the like. With a wasiat, he can still divide his assets according to Faraid.

Source: Smart Investor Magazine, January 2006 by Amna Fazillah Ismail of As-Salihin Trustee Berhad

Long Term vs Short Term

This has always been a subject of discussion when I talk to people about building their long term wealth or the "Golden Goose".

The main idea is to have your money work as hard for you as you do for it. Our mission should be to save and invest rather than to spend it all. And this is a skill which we have to choose to develop, the rich skill and the poverty skill. It's may sound like a funny way of describing it, nevertheless it holds a lot of truth.

Rich skill is to have a lot of money and spend a little, while the poverty skill is having a little and spend a lot.

So long-term versus short-term, lets put it in simple terms: Poverty skill: people work to earn money to live today.
Rich skill: work to earn money to pay for investments, which will pay for the future.

Financial Freedom

The great debate!

In his book "Secrets of the Millionaire Mind" T.Harv Eker said when it's comes to the money game, most people don't have a clue to what it takes to win. That got me thinking and I read on to discover a unique blueprint that can easily be understood and applied.

His definition of financial freedom is simple: it's the ability to live the lifestyle you desire without having to work or rely on anyone else for money.

The desired lifestyle would cost money! Therefore to be "free" you will need to earn money without working. To win the money game, the goal is to earn enough passive income.

Two primary sources of passive income.

1. Money working for you.
This includes investment income from your stocks, unit trust, ASB as well as owning properties or other assets that appreciate in value and can be liquidated for cash.

2. Business working for you.
This means generating an ongoing income from a business where you do not need to be personally involved. WOW...that means the business must have it's systems in place. Of course, you need to build it up first...but once that is done...passive income comes in.

So by choosing business opportunities that immediately or eventually produce passive income, you'll have the best of both worlds - working income for now and passive income later.

Now, go have fun building up your investments and that business...just make sure that it's got the passive income structure. Good or good?

Buy America. I Am.

This is an extract from the text of an opinion piece written by Warren Buffett and published in the New York Times on Friday, October 17, 2008:

In his opening remarks this is what he said.

The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary. So ... I’ve been buying American stocks.



This is some of the points, in summary of his reasons why.

1. A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.

2. Fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

3. I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up.

4. Bad news is an investor’s best friend.

5. Equities will almost certainly outperform cash over the next decade, probably by a substantial degree.

So there we have it, Mr Buffett's strategy. He's buying America. Question ... who are you buying?

You can read the full article at New York Times.

If you want further elaboration, you can also see what our team member, Mr Techno Lim has to say. Just click here to go to his blog.

A day in history

Look at the picture closely. Do you see any resemblance? Is it the same building? What differences do you notice?