Dividends of Unit Trust/Mutual Funds

I receive my dividends from my investment in unit trust or some call it mutual funds few days ago. I was delighted and very happy that my investment in unit trust really bear fruit after one year. The dividends I get from the investment is not a big sum of money. It is roughly RM150.00 to RM180.00 of my investment RM2000.00. I have calculated the return of my investment is roughly 7.8% to 7.9% per year.
I am quite happy with the performance of the fund I invested because 7.8% to 7.9% per year is quite good. If I invest my money in the bank in fixed deposit, then I would only get around 3.5% per year. So, the investment in unit trust has doubled my interest per year.
Actually, I do not get the money of the dividends. The dividends are auto-reinvested to help me buy more units of the fund. So, I am now having more units at hand and I will get even more dividends at the end of this year.
Basically, unit trust is quite good as a long term investment vehicles because the reinvestment of dividends will increase the number of units you have over a long period of time.

Examples of Calculation: You bought Fund AAA with RM1000 at RM0.25 per unit. So, you now have 4000 units of Fund AAA at hand.
After a year of investment, the Fund AAA finally pay you dividends. Let say it pays RM200.00 as dividends which will be 20% per year.
The dividends will be reinvested automatically to help you buy more units. If the price per unit at that time is RM0.30, so reinvestment of RM200 of your dividend will help you buy 666.67 units.
After 1 year, your total number of units will be: 4666.67 units. What if you hold the Fund AAA for 10 years? How many units you will have and how much dividend per year you will have? Assume the Fund AAA is paying 10% dividends per year for 10 years.

Look at the table below:

Year	Units at hand	Dividends (RM)
1	4000	200
2	4666.666667	233.3333333
3	5444.444444	272.2222222
4	6351.851852	317.5925926
5	7410.493827	370.5246914
6	8645.576132	432.2788066
7	10086.50549	504.3252743
8	11767.58973	588.3794867
9	13728.85469	686.4427345
10	16016.99714	800.849857

After a period of 10 years, the number of units you have is more than 16,000 units and it is helping you to generate more than RM800.00 dividends at the 10th year. You can see that your investment is increasing fast every year and you do not need to manage it at all. If the price of the Fund AAA is RM1.00 per unit, you can sell all your units at hand and all those units will turn into cash of more than RM16,000.00. Your initial investment is only RM1000.00.
Bear in mind that this example is only an initial investment of RM1000.00. What if you are investing RM10,000, RM50,000 or RM100,000 and you are investing for even longer period of time? The answer is simple, if you start with RM10,000, you will have over 130,000 units. If the price of Fund AAA is RM1.00 at 10th year, you sell all your units and you will get RM130,000.
If you plan to start with RM100,000, you will end up having 1375173 units and if you sell all units at RM1.00, YOU ARE A MILLIONAIRE RM1,375,173.00 after 10 years.
Notice: Not all funds perform at such a great rate of return. You need to consult your financial consultant or unit trust manager for help and advice.
You can visit the Public Mutual website to have a look at the current funds price. The price per unit, the higher return.
I am going to save more money and play focus investment for my unit trust investment.

The Moral of the Story: It Is the Best to Start Investing Early!!!

2 Ways to Make Money From Your Photos

I have been searching for ways to make money from my photos and I come to 2 sites that offer such services. Those 2 sites are Share A Pic and Skill Fights. Both sites are free to join and they are great sites that offers photographers to make money when people view on their photos. In the later part of this post, I will share some information about Share A Pic and Skill Fights. Both of the sites uses different idea to pay members money.
Share A Pic:
Share A Pic is a site that allow members to join for free and share their pictures with anyone. As a member, you can share your pictures on your blog, friendster, facebook, xanga and so on and so forth. The more views generated on your pictures in Share A Pic, then you will earn more money.
I think that making money from Share A Pic is quite easy because it pays based on the number of views generated on your pictures. Basically, it pays $0.22 per 1000 views. The earning will increase even though you do not reach 1000 views for your photos, it is real time earning.
Skill Fights:
Skill Fights is a site where members can join for free and upload photos. When your photos get votes and comments, you will earn points. You can comments on other photos to earn points too. You upload more photos and you earn more points. You can also join in tournaments and earn more points when you win.
This site is quite fun and challenging because you can compete with other photographers and earn points. The more points you earn, the more money you can earn from Skill Fights. It is quite simple and easy idea.
Both of the sites offer members to refer new users and earn extra income. You will earn 10% of your referrals earning using Share A Pic while you earn 250 points ($0.25) per referral using Skill Fights.
If you would like to join, you can join using the links in this post to help me make some extra money too.
If you are an enthusiasts photographers, then these sites are great to make money from your great shots.

Investor VS Trader

Are you an investor or trader of stock market? Do you know what is the difference between investor and trader? If you do not know, then it is very important to read about it and make your choice either you choose to be investor or trader of stock market. I am an investor yet, I am half-trader. It means that I am investing into stocks of great companies but if I have the chance to sell to gain profit, then I will sell. I am still an investor at core because I like to invest for long term rather than trading stocks.
Who is Warren Buffett? Is he investor or trader? Who is George Soros? Is he investor od trader?

Investors: Investors are people who buy stocks and invest for long term. It means that investors seldom buy and sell. Most of the time, investors buy and hold, and let stocks appreciate in the long term.

Warren Buffett is one of the investors of stock market. He is the ultimate investors of stocks. He is called the Oracle of Omaha. I read a lot of books about him and his investment strategies. It really takes time and hardworking researches on companies. Warren /Buffett is currently the world's richest person with total net worth of $67 billion.

Traders: Traders are people who trade stocks. They buy low and sell high. They will sell once they earn their targeted profit. Most of the time, traders never even care about what is the companies behind the stocks they buy. All they want is to make money by buying at low price and then sell at high price.
Trading is an old concept and it has been around for centuries. Trading is like playing buying and selling. Trader A buy AAA products and then sell to Trader B who offers higher price for the AAA product.

George Soros is considered as trader or speculator. He is quite famous because he is good at speculating. Currently, his total net worth is $9 billion.
So, are you an investor or trader of stock market? You need to make this clear because it is the basic mindset before you put any money into the stock market. If you are not sure whether you are an investor or trader of stock market and you are currently investing in stock market, then most probably you are gambling in the stock market.
So, please make your mind clear and set your mindset because mindset is extremely important to be successful in stock market.

What is P/E Ratio and How to Calculate P/E Ratio

If you are an investor in the stock market, I am sure you will know what is P/E Ratio. If you do not know about it, then it would be quite dangerous to go into stock market. In my opinion, P/E Ratio is the most basic that all investor should know before investing in stock market. So, if you do not know or have less idea about P/E Ratio, this post might be helpful for you to learn some knowledge about stock market.
What is P/E Ratio:
P/E Ratio is Price per Earning Ratio. It is one of the important ratios in fundamental analysis. Some people denote Price per Earning ratio as P/E ratio, PE ratio or PER. So, do not get confuse if other people are using different notation for Price per Earning ratio. In this post, I will use P/E ratio and I hope you will not get confuse.
P/E Ratio gives us quite a lot of information when we are analyzing a stock. By referring to P/E ratio, we can know how many times we are paying for a stock.

The formula of P/E Ratio: P/E = Price of stock in market/earning per share
**Price of stock in market: Can be obtained in newspaper or trading platform.
**Earning per Share: Can be obtained in financial report of the company. Some trading platform offers this information.

For example:
A stock which is selling at $5.00 have earning per share of $0.50.
The calculation will be: P/E = $5/$0.5 = 10.
From the example above, we can see that the P/E ratio is 10. This means that the price of $5.00 is 10 times larger than the current earning power of the company.
Therefore, if the earning per share of the company remains unchanged every year, investor will need to wait 10 years to get the earning of the company equal the buying price. It is noted that the P/E ratio is rising according to the stock price.
For example: If company is earning $0.50 every year, it would take 10 years for investor to get their investment back.
So, a lot of people are looking for company with low P/E ratio because lower P/E ratio means we get our investment back in shorter period of time.

Different People Have Different Interpretation on P/E Ratio: Please look at the example below:
Company A: Price of stock = $8.00 & Earing per share = $2.00.
Company B: Price of stock = $10.00 & Earning per share = $1.50.
From the detail above, we can calculate that Company A has P/E ratio of 4 while Company B has P/E ratio of 6.67.
Some people will buy stock of Company A because they think that buying at $8.00 with earning per share of $2 and P/E ratio of 4 is a great deal because investor can get their investment back faster.
Some people will go for Company B because they think that high P/E ratio is better because usually large company have larger P/E ratio and can generate more attractive returns.

So, high or low P/E ratio? It depends on your investment risk. If you can take higher risk, then go for low P/E ratio of smaller company. Bear in mind that when market crash, smaller company will have higher risk of financial problem. So, if you don't like risk, the go for larger P/E ratio, those larger company. I don't like risk, so I go for large company with acceptable P/E ratio.
My Personal Use on P/E ratio:
I use P/E ratio in the reverse manner. You can see the formula is:
P/E = Price of stock in market/earning per share
I just rearrange the formula and get the formula below:
Price of stock in market = P/E ratio * Earning per share
I will go to get the latest information for P/E ratio and earning per share and put values in the formula above.
Normally, the latest information can be obtained from websites or platform. By using these details, I can predict the value of stock for tomorrow.
For example:
The new P/E ratio is 10 and earning per share is $1.00. So, I know that the stock price will be $10.00. So, if the stock price of the company I analyze is selling lower than $10.00, it would be a great time to buy.
Of course, I do not based solely on P/E ratio. I will check other ratios such as ROE, profit margin, Earning Per Share growth rate, debt to equity ratio, MACD, RSI, Bollinger bands and so on. I will discuss about them in the coming posts.

The Power of Compound Interest

Do you have money in your fixed deposit account? Do you realize that the interest you earn every year in the same but the money you earn from your money in fixed deposit is increasing and becoming more and more every year? That is the power of compound interest. The higher the interest rate, the more powerful the compounding. In addition, the more money you invest, the compounding will be more powerful too. So, it is up to you to find higher interest investment vehicles or get more money and invest.
How Your Money is Compounded:
For example, you invested $1000.00 in year 2000 and at interest rate of 3.5% per year. Your earning from interest will be like the table below:

No. of Years	Your Investments and Carry Over from Previous Years	Interest Rate per year	Your Investment at the end of the year
1	$1000.00	3.5%	$1035
2	$1035	3.5%	$1071.23
3	$1071.23	3.5%	$1108.72
4	$1108.72	3.5%	$1147.52
5	$1147.52	3.5%	$1187.69
6	$1187.69	3.5%	$1229.26
7	$1229.26	3.5%	$1272.28
8	$1272.28	3.5%	$1316.81

If you do not have compounding, then your earning from your investment will be much more lesser. Your earning will look like the table below:

No. of Years	Your Investments and Carry Over from Previous Years	Interest Rate per year	Your Investment at the end of the year
1	$1000.00	3.5%	$1035
2	$1035	3.5%	$1070
3	$1070	3.5%	$1105
4	$1105	3.5%	$1140
5	$1140	3.5%	$1175
6	$1175	3.5%	$1210
7	$1210	3.5%	$1245
8	$1245	3.5%	$1280

From the table above, you can see that you are actually earning lesser if no compounding is done to your investment. You might be saying that it is only a small difference. You might be right but if your investment is large value, for example $100,000.00, how much money will you lose if no compounding? That will be a lot right?
So, make use of compound interest to make your money grow faster. You can use the formula of Future Value to calculate compound interest and predict your investment in the future.

How to Make Pound Sterling From Your Blog

I am a member of a site called Matched.co.uk which pays members pound sterlings to place Ads that looks like AdSense Ads on their blog. I am having great experince from the site and I made £25.00 easily within 2 months of joining. Making pounds sterling from blog is much faster than making money from USD because pounds sterling is larger in value compared to USD. I am going to make more money by the end of this month and I hope it could keep on increasing to help me reach my $10,000 goal.
Joining Matched.co.uk is Free and it is now in promotion. All new members get Free £5.00 for joining. I think that Matched.co.uk is a great site to make money. The Ads are displayed based on monthly basis not based on click. This means that you do not need to get clicks on the Ads to get paid, all you need is to wait for advertisers and place Ads on your blog/site and get paid pound sterling every month.
The money making process is easier than ever. So, I am using Matched.co.uk and make money from it quite easily.
Sign Up Matched.co.uk Now and Get £5.00 Sign Up Bonus!

Withdrawing PayPal Funds

I have some money in my PayPal account and I have withdrawn my money in PayPal account few minutes ago. Now, all I need to do is to wait 5 to 7 business days to get the money deposited into my Public VISA Electron Debit Card. After receiving the money in my Public VISA Electron Debit Card, then I can go to local banks which support VISA card to get my money in cash. You could read about my articles on how to get an Public VISA Electron Debit Card and how to add the card to PayPal account.
I have some money in my PayPal account for quite a long time and today, I feel that it is time for me to with draw my money and get the real cash instead of looking at the numbers in my PayPal account. \
Look at the process to withdraw funds below:

1. Click on the withdraw funds tab and then you will see the page above.

2. After following some steps on the page, you will reach a page to notify your success to withdraw funds. Your funds will be placed in "Pending" transaction. Wait for 5 to 7 business day to get the money.
Stay tuned for my news about my first experience withdrawing my PayPal funds. In the mean time, you could read some of my posts I mentioned above.