INSURANCE REPORTING PROCEDURE? (Malaysia)

Disclaimer : This brief article represents solely my personal research findings. I do not act as a representative of any mentioned party. The views expressed are strictly my own and do not represent those of the parties referenced herein. Additionally, I may not be updated with the latest insurance reporting procedures. Your input to rectify any inaccuracies in my research is greatly appreciated.

The Anti-Money Laundering, Anti-Terrorism and Proceeds of Unlawful Activities Act 2001 (“the Act”) came into force on 15.1.2001 is aimed at thwarting money laundering, terrorism financing, and the utilization of illicit funds. Reporting entities are mandated to disclose any dubious circumstances, as outlined in the Act, along with sector-specific directives or rules set forth by the Bank Negara Malaysia.

I am more interested to touch on Insurance Sector and how reporting is done.

Insurance fraud entails engaging in deceptive actions to achieve illegitimate gains within an insurance procedure. It happens when either the insurer or the claimant seeks to acquire benefits they are not rightfully entitled to, or when an insurer deliberately withholds benefits rightfully owed. 

Fraud like these adversely affects policyholders, resulting in millions of ringgits lost through elevated premiums and inflated prices for goods and services. Pinpointing the precise cost of insurance fraud proves challenging as a significant portion of instances remain undisclosed.

Examples of insurance fraud that may involve the claimant and/or be known to insurer officials include:

a. Fabricating Claims - Orchestrating staged accidents, such as fake "oil spillage" incidents or chain collisions, to gain possession of the vehicle(s) for repairs.

b. Exaggerating Loss Amounts - Submitting inflated claims where the severity of damage or injuries sustained in a legitimate accident is overstated.

c. Providing False Information for Compensation - Presenting inflated or "padded" claims where the extent of damage or injuries sustained in a genuine accident is misrepresented.

Quoting 14A. (1) of Anti-Money Laundering, Anti-Terrorism, Financing and Proceeds of Unlawful Activities Act (AMLATFPUA) 2001 :

Any person who knows or has reason to suspect that a reporting institution is proposing to report, is reporting or has lodged a report under section 14 or is proposing to provide, is providing or has provided any other related information to the competent authority and discloses such knowledge, suspicion or information to any other person commits an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or to both.

In this context :

•            Any person        : claimant/insurer officials,

•            Reporting Institution: Insurance Company,

•            Competent Authority: Persatuan Insurans Am Malaysia (PIAM)

The competent authority duly authorized by BNM for reporting fraud is Persatuan Insurans Am Malaysia (PIAM).

However, I noticed some limitations:

Possible ambiguity regarding whether compliance officials (or a member of general public) can utilize the same form (FRCF) to report against another officials - if so, will it reach BNM or any other authority (will such insurance compliance official be protected under the Witness Protection Act 2009 (Act 696),

The general reporting period allocated is six (6) months but clarity is potentially lacking on other types of cases,

Unresolved issues can be reported to either the Ombudsman for Financial Services (OFS) or BNM. 

Nevertheless, there appear to be limitations on BNM side in handling complaints of misconduct, which may not be consistent with Section 14 (A) of AMLATFPUA.

The reporting procedure by other institutions such as Banking and Financial Institutions are generally clear, but there appear to be "some exceptions" regarding reporting insurance incidents, which I consider vague, especially concerning officials reporting misconduct against another official.

If these are valid concerns - there's a need for improvement to ensure that there are no restrictions on disclosing reports directly to Bank Negara Malaysia, aside from PIAM or OFS.

Nik Zafri says :

I like the following article...very honest and very transparent analysis...

Although the article may be the thing of the past (so it seems) but I wish all bankers, investors, newly listed companies, speculators and analysts, economists etc. etc. to read the following article...

Be alert for some strong words but back up with solid facts.

We may take certain reminders so that we shouldn't be over excited of the current market performance but in fact, start working harder to continually improve them (stop sitting in the comfortable zone (not yet)

Also my reminder to all, stop playing the old record by saying that the high quantity of listing/IPOs indicates that the economy is going to be fine...it's the quality that we're talking here NOT quantity.

I think 'designation' of certain stocks by authorities should come in handy - perhaps the right time....but designating stocks should be packaged with clear regulations

Recession-struck Asia to face IPO shortage in 2009

Depressed equity prices, a spreading global recession and increasing risk-aversion among investors are likely to kill the motivation for Asia Pacific companies to be audacious enough to launch IPOs in 2009. The IPO pipeline, which had dried towards the end of 2008, will probably completely shut in the first half of 2009 and the most optimistic are now only hoping that stability will return to stock prices and that a few listings will follow in the second half of the year.

There have been several jumbo IPOs in the Asia Pacific over the past few years through to the first half of 2008. The drivers of this supply were Indian and Chinese companies taking advantage of continued economic growth and investor enthusiasm for exposure in the rising fortunes of the developing world.

This gung-ho mentality was sadly short-lived as these companies’ post-listing performances were disastrous, inflation touched new highs with the advent of recession and the financial sector collapsed under the weight of sub-prime problems.

The pain was particularly felt in the second half of 2008 and IPOs were postponed or completely culled as stock prices and indices plummeted and the probability of raising new money through issuing shares at reasonable valuations completely bit the dust.

A continuation of this surrender to the gloom in global markets is likely to ensure that companies keen on deleveraging will focus on raising equity via secondary placements or private stake sales rather than venture out with IPOs, said bankers.

The outlook for IPOs at least for the first half of 2009 is bleak,” said Simon Cox, head of syndicate at UBS Australia. “Most investors who have cash see enough opportunities in secondary markets every day and are not willing to be tempted to take risk in unknown companies by participating in an IPO unless they are priced very attractively. As a result, companies hardly have any motive to sell into this kind of environment which will kill supply in 2009.”

Signs of a prolonged slowdown in IPO activity are already evident. The Chinese IPO market, the region’s busiest for several years, had a slow start in 2009. The China Securities Regulatory Commission (CSRC) has still kept the domestic A-share market shut and only two tiny companies have listed on the Hong Kong Stock Exchange – the HK$250m (US$32.2m) IPO of mainland oil, petroleum and petrochemical trader Strong Petrochemical and the HK$63m float of China Singyes Solar Technologies.

There is one deal, though, that holds the hopes of all the companies looking to raise new equity. Chinese gold miner Real Gold Mining is braving the market with a US$150m deal and, though the defensive nature of gold could spur some demand, not many are willing to bet on the deal’s success.

Even if it is a success, bankers expect the Chinese IPO market to remain quiet in the first half and to show signs of recovery at best in the second half because of uncertainty about the direction of the global economy. “By that time (mid-year), people should be able to get a more solid view on the global economy and the mere hope of recovery could push up the stock markets and invigorate the IPO market,” said a banker.

When that happens, the infrastructure sector and companies in the retail business segment could be favoured as likely anti-recessionary candidates. “Investors remain picky and they would be only willing to put their money in India or China’s infrastructure and retail which are still considered growth sectors given possibilities demands of their huge populations will continue,” said another banker.

The Chinese government is set to invest Rmb4trn (US$584.4bn) in the country’s infrastructure sector in the next few years and is determined to maintain an 8% GDP growth by supporting domestic demand. India has similar plans to augment its infrastructure and support GDP growth.

The deals that may hit the market, however, would be modestly sized and the super jumbos are likely to be few and far between.

The only known candidate for a jumbo IPO is Agricultural Bank of China, which has plans for a US$20bn–$30bn A/H IPO in 2010. In October last year, Agricultural Bank of China received a US$19bn cash injection from the Chinese government to remove bad debts from its balance sheet and strengthen its capital base before going public. The bank transformed itself into a shareholding company in mid-January and is said to be looking at a Hong Kong and Shanghai IPO.

The Indian market is expected to remain somnolent during the first half as India gears up for its 2009 general elections. The elections are expected in May 2009. Prior to that, the Indian government is unlikely to push forward with any of its privatisations.

What little activity there is now is focused on CB buybacks with Reliance Communications and Jubilant Organosys among those quietly buying back CBs.

“In the Indian context, the market is bound to be turbulent pre-elections. It’s going to be difficult to do any deals. Post elections around June or July, hopefully, the markets will stabilise a bit and we could start seeing companies desperate to raise cash tapping the market in the fourth quarter,” said one Indian ECM banker.

And that is likely to be the trend in the rest of the region. Within South-East Asia, ECM activity will be driven primarily by recapitalisations, particularly within the FIG and real estate sectors, largely through rights issues. South-East Asian issuers tend to be family or major shareholder dominated, and rights issues backed by promoters will continue to be the prevailing trend.

“We are waiting for more rights issues out of Singapore. People are looking at issuers like CapitaLand, CapitaCommercial Trust and CapitaMall Trust to tap the market and we expect more fundraising within the REIT space. Our visibility for IPOs in SEA is minimal, so I definitely think it will be secondary fund raising and recapitalisations,” said another banker.

Although the past few months have been desolate for ECM bankers, there could be a pick-up in equity issuance towards the second half of 2009 as issuers find themselves faced with no funding alternatives.

“The IPO market is dead…The rescue rights or rescue placements in Europe will probably follow through to Asia, but Asian issuers have to swallow their pride first and take the decision to issue equity. If debt markets remain closed, they will have no choice, at some point the penny will drop,” said one Hong Kong-based Southeast Asian banker.

In Korea, the healthy IPO pipeline has imploded with first life insurers and then construction firms falling off the map. A market plunge, where the Kospi drifted below 1,000 for the first time in three years, and a subsequent liquidity squeeze has set a bleak tone for 2009 and bankers are struggling to find candidates to come to the market.

If markets were to improve, bankers think it will be the life insurers that will return first with Tongyang Life Insurance regarded as the most likely candidate. Tongyang Life came close to listing last summer but was forced to pull the deal at the last moment and has since renewed its listing filing twice with the latest deadline extended to August.

Bankers are not confident that Tongyang Life can meet that timetable but they suggested that if the deal could get done this year then other life insurers like Kumho Life and Mirae Asset Life would follow.

Also on bankers’ radars are a string of deals from Hyundai-related companies with Hyundai Motor rumoured to be considering spinning off Hyundai Card and Hyundai Capital while Hyundai Group considers a listing of Hyundai Logistics and Hyundai Home Shopping.

Bankers said that although the Hyundai deals inflated their pipeline, the execution of such deals would depend on whether the Hyundai Group was willing to use its cash piles to support the businesses and avoid a listing.

“The problem with a lot of the listing candidates is that they are backed by Korea’s industry giants and conglomerates. There is no real urgency to get these firms to the market,” one banker noted.

That argument can probably be best applied to the listing plans of Korea’s construction firms, including Posco Engineering and Construction and Lotte Engineering and Construction and Hyundai Engineering and Construction, which were all expected to list in 2008/2009 but have recently reversed those plans. Bankers blamed the cancellation of their listing plans on a strategic decision to lean more heavily on their chaebol relationships than the public markets.

And in Australia it will be difficult to see any IPOs being done in 2009, especially after the few that got done in 2008 were disastrous for investors. BrisConnections which did a huge IPO in 2008 saw its partially paid A$1 shares falling to a record low of A$0.001 post-listing. IvanHoe Mines also did one that was the year’s second largest IPO but are trading way below their issue price.

Against that background, reviving investor confidence for IPOs will be difficult.

“There could be opportunities of IPOs by diversified companies demerging to realise value in specific units or even venture capital/private equity selling off stakes but those deals in this depressed environment will have to be priced relatively cheap. . .we are not recommending our clients to go ahead and do IPOs in this environment,” said one banker.

Shankar Ramakrishnan, Fiona Lau, Denise Wee, Govinda Finn

The Star Global Malaysians Forum

nikzafri-11 January 2006 at 9:48pm wrote:

Someone very wise** once told me (in 1998) - during my 'downfall' (** - Ybhg Tuan Haji Ahmad bin Che Din of Taman Merdeka, Selama, Perak - my mentor) 1. Invest in Gold 2. Invest in Agricultural Products Not long after that, the Honourable Tun Dr. Mahathir started to talk about prospects of 'Dinar Emas and Gold Coins'. In 2005, YAB Prime Minister, Dato Seri Abdullah Ahmad Badawi gave further and stronger emphasis on expanding the prospects of Biotechnology (focus : agricultural). It's not something to be too serious about or 'hitting the panic button' scenario but it's something worth pondering. ----------------------------- Today, as reported in the Star : http://thestar.com.my/news/story.asp?file=/2006/1/11/nation/13075088&sec=nation Rising value of gold makes it a good investment By EDWARD RAJENDRA edward@thestar.com.my KLANG: Step aside, athletes. Businessmen are going for gold these days. Federal and Selangor Indian Goldsmith Association adviser N.P. Raman believe that businessmen and cash-rich people were purchasing gold for investment. “It is business logic to include gold in a diversified investment portfolio. Gold can act as a hedge against inflation. Keeping your assets in gold is sound economic sense,” he said. Yesterday, the gold price stood at RM2,090 an ounce, compared with RM1,617 on June 5 last year. Raman said that for those with cash, gold was a good buy as long-term savings, and added that gold coins would be a better choice. “A person who buys gold coins now would get the market price of the day when he decides to sell it,” he said. Going by the market trend now, Raman said, the price of gold was expected to escalate. “Right now, it is about RM70 a gram, and is expected to hit RM100 per gram in two to three months,” he said. Raman operates from Jalan Tengku Kelana, where scores of goldsmiths are located. Most of them are worried that middle-income people, who form the bulk of their customers, will not be able to afford gold now. “For Indians, the period between mid-January and March 15 is an auspicious time for weddings. It is a time for a roaring business but now couples are resorting to simple three-pound gold chains instead of nine pounds. Their buying power has weakened,” he said. Nik It's not something to be too serious about or 'hitting the panic button' scenario but it's something worth pondering.

-----------------------------------
Here it comes again :

http://biz.thestar.com.my/news/story.asp?file=/2006/2/3/business/13290549&sec=business

Gold hits 25-year high in London

LONDON: Gold rose to a 25-year high in London as gains in crude oil prices increased speculation that inflation will accelerate, eroding the value of assets such as stocks and bonds.

Gold rose 18% last year in London as investors bought the metal as a hedge against record oil prices stoking inflation.

Oil rose before the United Nations' atomic watchdog meets today to consider referring Iran's nuclear programme to the Security Council, which may impose sanctions the second largest exporter in the Organisation of Petroleum Exporting Countries (Opec).

nikzafri - 02 January 2006 at 5:41pm wrote:
http://www.globalmalaysians.com/forum/forum_posts.asp?TID=465&PN=1
3) ...Have a 'cushion to fall on' in the case of inflation...

“Rising oil prices will continue to keep gold prices buoyant this year, as it's likely to lead to inflation,” Ross Norman, an analyst at TheBullionDesk.com, said in an interview yesterday.

Gold for immediate delivery rose as much as US$3.85, or 0.7%, to US$573.20 an ounce, the highest since January 1981. It traded at US$572.99 at 10:09am London time.

The situation in Iran was a “double whammy” for the gold market, Norman said.

“It increases geopolitical tension as well as oil prices, both of which are good for gold,” he added.

Crude oil for March delivery rose as much as 63 US cents, or 1%, to US$67.19 a barrel in electronic trading on the New York Mercantile Exchange.

World gold prices are likely to rise to US$610 an ounce by March/April, but this is unlikely to deter Indians from importing the same amount of the precious metal in 2006 as last year, according to the head of the country's leading bullion trade body.

Mukul Sonawala, president of the Bombay Bullion Association, said on Wednesday that gold could see a small correction before it rose again.

He said a price of US$540 per ounce would provide a buying opportunity.

“There is inherent strength in the market,” Sonawala told Reuters. “All the fundamental factors are pointing to that.” – Agencies
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Posted: 24 February 2007 at 3:34pm

My Gold Fact Sheet

Gold price indicates:

a) inherent value
b) quoted currency relative strength

On Supply/Demand

- the price will always be stable and doesn't seem to be much effected by even reduction in supply or in net selling by the bank,

- demand - be it raw material or investment) still going high - (you can simply based on sales of jewellery - ask my wife)

- supply - production results, hedging by mining companies, scrap/net sales by bank -all still going steady

Investment

As Portfolio diversifier. All over the world, calculation is based on standard
returns correlation/volatility.

And of course - Gold is a Reserve Asset.

What? There's more?

- inflation seem to have not much effect on Gold as well,
- Gold is all time purchasing power indicator,
- Gold's liquidity power is guaranteed,
- in case anything happen (even market crash), gold will come to the rescue
- provide confidence, insurance, assurance and security (try keeping them, or perhaps buy a genuine Rolex at least, you'll know)

END OF LINE....

Agriculture

(Search the NET..you'll know)

The Star Global Malaysians Forum - Posted: 06 August 2006 at 7:37pm

I read a report by OECD/Economic Intelligence Unit/Cisco Systems sent to me by a friend. The paper themed 'Foresight 2020' - Economic, Industry & Corporate trends' The principal findings from the research are (among others):

Globalisation - Asia - There will be a redistribution of economic power esp. China & India. Non-OECD markets will account for a higher share of revenue growth between now and 2020 than OECD economies.

Demographics - Population shifts will have a significant impact on economies, companies and customers. The favourable demographic profile of the US will help to spur growth; ageing populations in Europe will inhibit it. Industries will target more products and services at ageing populations, from investment advice to low-cost, functional cars.

Atomisation - Network technologies and globalisation will enable firms to better use the world as their supply base for talent and materials. Processes, firms, customers and supply chains will fragment as companies expand overseas. As a result, effective collaboration will become more important. The boundaries between different functions, organisations and even industries will blur.

The BEST part of all is a survey (1650 participants - analysts, policy makers, senior executives) determine the areas of activity that will likely to offer the greatest potential for productivity gains in 2020.

In accordance to priority...

Priority No. 1 - KNOWLEDGE MANAGEMENT
" " 2. Customer Service & Support
" " 3. Operation & Production Process
" " 4. Strategy & Business Development
" " 5. Marketing & Sales
" " 6. HRM & Training
" " 7. Corporate Performance Management
" " 8. Product Development
" " 9. Financial Management & Reporting
" "10. Supply Chain Management
" "11. Risk Management & Compliance
" "12. Procurement

So guys...study hard and please contribute to this topic...KNOWLEDGE MANAGEMENT is gonna be your future.
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Response by Almerica - Posted: 06 August 2006 at 10:01pm

Great reference points my friend. Truly spot on. Allow me to add something extra based on my own analysis of the market changes around us. The key towards progress or growth today no longer depends on just knowledge management on a particular subject / trade or skill.

Specialization in a specific skill or area of expertise will only be applicable for those professionals like medical surgeons, etc... Today, I personally feel that should one be able to move forward, knowledge management in only one or two areas will not ensure that the person or the company will do well. Gone were the days where people used to mock the phrase "Jack of all trades, master of none", today the more you know the more rounded you become, the wider your scope the higher your chances are of survival.

What I feel is going to be the decisive factor for success in the days ahead will be the ability of one to be a human sponge and absorb as much info as possible from all trades. The winners will be those that could tweak the age old phrase into a new one "Jack of all trades and master of all".

Robert Kiyosaki based his teachings on Paradigm Shifts but I believe that it is not completely correct. I have coined myself the tagline "Expanding Paradigms" (and also used it as my corporate tagline, hehe) because shifting means leaving something that you have been doing to do something else. I feel that we should expand our paradigm and not merely shift to another because from what we are currently doing or have done in the past, there will always be good things to learn from it and of course bad stuffs too for us to learn from and not to repeat them.

I feel that what we have to do is extend our reach for knowledge into many other areas and include them into our existing paradigm. Worried about mental overload? Well what we should do is to filter away whatever negatives we encountered from our current or old paradigm and maintain the good positive ones. Now imagine if we add on or fill the space of our mental capacity with more positive knowledge from other so called paradigms into our own existing one? What we have done is expanded our own paradigm by including positives from other paradigms to make us more formidable market players. Hmmm hope Koyasaki won't take offence of this but this is basically what I have been constantly instilling into our team.

Specialization into just one thing is very very risky today as a valuable know how may be reduced to shreads if it is suddenly easily replaced (technology does that with the blink of an eye sometimes). Knowledge Management in Multiple Areas actually does these :

- helps one to be quick to react to certain situations as many trades are interdependent with one another (even though on the surface it does not look so). Solid knowledge on another industry besides your own will act like the beacon or alarm button for you to decide on the direction that you would want to take if some indicators beep in that other industry. It will be a real pity if you know so much about your own thing only and then try to react when a "wave" hits your shores. Yes it would also be good to know something about the wind and not just the tides because they are interdependent
- helps you become flexible. With the market conditions being so violatile, ups and downs of a certain commodity or service are getting harder to predict. What may constitute to be a huge booming potential may just fade away with the market demands swaying its attention to other areas of focus. You need flexibility to survive in such scenarios and to be flexible you need to be well rounded. In short, a great swimmer needs to learn how to crawl, or fly pretty well too as you will never know when you need to do it. We just got to crawl when we are put in the desert, swim when placed in water and fly when dropped from the sky.
- allows you to adopt applications or solutions from other industries and apply them to yours. You'd be surprise how well that works sometimes because what is commonly carried out in one industry has frequently never been done in others before. Why reinvent the shape of the wheel when we can put it to good use in other aspects and yet be seen as a great idea that works in your own industry?
- gives you the competitive edge. You could also gain more as you are able to provide packaged services that covers various scopes of requirement from the client if you are a "Master of All". Clients prefer to deal with one who can solve or handle various scopes effectively for them as they would be able to have a better service support when needed. They need not have to encounter the hassle of having multiple vendor sources to track the root of any problems.
- opens your door to your future product / service lines. You could easily introduce new products or services to your existing client when you are ready as the barrier of having to undergo the "get to know" session no longer applies as you already have an existing business relationship with your client from a previous product or service that you have provided.

A closing phrase which I believe everyone would agree. Inspite of all efforts to gain knowledge and manage it well, knowledge only works best when it is applied.
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Nik Zafri's Response - Posted: 07 August 2006 at 1:38pm

Yes of course…exactly what we're doing now…’unleashing all the potentials’ in this forum – all the competencies – all the knowledge – all the experience – all the data and learn & learn & learn new things - networking. You see..I can’t be running around doing the usual things that I’m doing…I got to ‘diversify’ (my version of your expanding paradigms – by the way…Mr. Kiyosaki is a good author but he tends to make us ‘guessing’ what he means in every line of his book…thus, I read Kiyosaki for fun…)

Eric, you're right about not sticking to one thing only. When you close your mind to something new, it means you are heading for BIG pitfalls. I know that most of them wanna keep/maintain their ‘branding’ (perhaps influenced by some ‘success stories’ of some billionaires) but being a fanatic in the ‘branding’ won’t bring you anywhere. I am still sticking to my 'branding' but I still do other things. Those billionaires out there, they also adopted similar approaches…they really love what they are good at, but for the sake of sustainability, they will resort to other things first and having succeeded, they will make a comeback to the things that they really like. (look at Donald Trump - even Bill Gates)

Knowledge Application - Yeap, do what you say, say what you do
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Response from Almerica - Posted: 09 August 2006 at 1:07am

Yeah, my friend, in one of the episodes of The Apprentice, Trump hit the nail on the head. Quote "Most people have great ideas and knowledge which could make millions but if they fail to apply them or use them, they are still labelled as failures!" - how true.

Of course many people talk about needing huge capital to kick start something (not surprisingly I was one of them) but sometimes if we expand from our ideas and we are hungry enough, you'd be surprise how another idea may pop up to help you get what you need to start the engines running. So we just gotta crack our brains and make it work overtime to find the perfect solution rather than wallow in desperation reminiscing over how close we were with the brilliant idea that couldn't take off. Ah and the funny thing is that I am sure many of us shared the idea with others but since we couldnt take it off, others did with great results and impact. (Boy, did I have loads of those.)

Some of the "what could have been" stories of mine were ideas that were thought of with great self satisfaction and pride then, complimenting myself for coming up with such brilliant ideas (only to be brought down to earth when I didnt pursue it hard enough and let it just slowly slip away AND to find out that they have been thought out much later and carried out with extremely great successes by companies like Citibank, Std Chartered, and public listed development companies - mind you, they were 3 totally different ideas that were adopted by 3 giants!)hahaha but those were great lessons in life.

So for those with "know hows" and great ideas PUT IT TO GOOD USE! Find a way, there is always some funny "unthought of" solution hiding in the back of your mind.
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Nik Zafri's Response :Posted: 09 August 2006 at 3:49pm

Thanks Eric (that's why I like this guy - they didn't make him the CEO for nothing..heheheh)

Here's some related excerpts from my 'old' collection of comments here in GMN and elsewhere. You will notice my 'consistency' in encouraging people on how to run business by 'going back to basics', the 'branding', 'diversification' and 'networking'. My only hope that our readers here can benefit from our experience...

No. 1 - Robert T. Kiyosaki - Rich Dad Poor Dad

I can say a little bit on Robert T. Kiyosaki Rich Dad/Poor Dad Series. If you read carefully Robert's view on 'let the money work for you', you will discover that he is also talking about another phrase that goes something like 'a business is something that do not require my presence and if I have to work there, it's not a business anymore, it becomes my job'. Many have been said about these two popular phrases - some relate them to Multi-Level-Marketing, Insurance, Stock/Shares, Properties etc. Some even lead to the famous Donald Trump of Trump International.

While these assumptions maybe true, but I think Robert is also talking about how you can spend and budget your money effectively. (At least I felt this is how it applies to me but to others it may apply differently)

In the Malaysian environment point of view, I may have not reached 100% on 'a business that do not require my presence' but I think I have achieved 'let the money work for you' by both working hard and smart.

e.g. I have 3 consultancy assignments to complete in a manyear. I've 'sub-contracted' the first 2 jobs to another 2 guys as I am not a superman to take all 3. Although I will eventually be paid for all 3 jobs, I still have to 'sacrifice' one job payment to cover my overheads (house, car, others) which leaves me with another 2 jobs. The 2nd job, I have to again 'sacrifice' for my 'capital' to run future jobs including to cover my office overheads and perhaps for marketing/training etc. The last job is the one that solely belong to me after taxation. In a way, I do not have to worry about my overheads, it has been 'paid'. I have to assume my 3rd job is my take home pay (nett). If I found out that one of the jobs is coming towards an end (contract completion), a month ahead, I will either reconvince the same client for reorder or start to find new prospects.

The simple scenarios above are something quite common to most of us but require only one thing in mind - Discipline! In my case, I think Robert is talking about Discipline and Proper Planning.

I also welcome those who feels that R.T.Kiyosaki has a different effect on them cos' as I said earlier, it's the way you see it and how you apply/customize it according to your nature of competency or industry.