Another scam: Aquilaria Tree Scheme

The Aquilaria Tree Scheme

I read Straits Times today and saw this news:

Link: http://www.straitstimes.com/business/investors-cry-foul-over-tree-investments-gone-wrong

The "deal" in summary:
Pay $230 per sapling or $550 per semi-mature tree
Tenure: 6-7 years when tree matures
Returns: 6-7 times when Agarwood is harvested from each tree
What does this mean: 100% returns averaged out in 1 yr.

In 2013, my friend proudly told me her investment in this Aquilaria Tree. She said that she bought a few trees and when these trees matures, it produces Agarwood which can be sold. She can sell at $400-$600 for each tola of Agarwood oil harvested.

I told her then that this was very likely a scam. How can there be such a good deal? $400 return after 6 yrs when the investment is only $500?

SURE ANOT? 100% return?

She told me that she was very sure. The investors even told her they could bring her to see the actual trees planted. Furthermore, it was a Singapore based company.

Hai.. so now this Singapore company has folded and gone MIA. Hard earned money of my friend all gone..

Previously, I have written a post about Pre-IPO Scams, link here.

How to identify potential investment scams:

1. It promises high returns with a very low risk.
What is high return?

Returns through various investments:
0.025%  savings account
1.3%  1-year FD
3.25% OCBC 360 Account
7.8%  S&P 500
15% Warren Buffet
Warren Buffet, one of the richest person on Earth, returns from the stock market is about 15%.  Do you honestly think that you can get an investment that yields a higher return than Buffet consistently and at a low risk?

2. You are enticed through telemarketing
A good investment will be secretly kept in wraps and for traders/big investors to earn. Heck, if I can earn via arbitrage or if I know a very good investment, I will keep it a secret and profit hugely myself.

If a good investment has to be promoted through telemarketing, it is just desperate.

Lastly, some lessons to learn:

1. 'Alternative Investments' such as venture capital, private equity, hedge funds, real estate investment trusts, commodities as,precious metals, rare coins, wine, and art are normally directly sold to people with high net worth. You may  a private banker from a known bank helping you to invest in such things.
Such a creative idea... Aquilaria Tree and agarwood lol.

2. Read more and understand better before investing.  You should be sure of what you are buying, please read more and please read from expert reports. If you do not know anything, at least GOOGLE.

3. If you cannot resist the temptation to make money quickly and easily, you are bound to lose money.  I have written a post here . There is no easy and quick money in the world la alamak. Warren buffet reads 8 hours a day and is innately talented, and his returns are 15%.

Ok, that's all from me in this matter. :)

Sold off Ascendas-Reit

Sold Ascendas-Reit at $2.42, when it hit a high this week. My return from this stock is about 10%.

I don't have the time to write an essay to explain why I am selling A-Reit.

So.. this is becoming like Twitter, just a few sentences to say why.

1. When I buy Reits, I analyze its FFO (Free cash flow from operations) per share & NAV.

2. A-Reit honestly, is doing WELL in terms of these two matrices . Coupled with its high DPU, it is really quite a good stock to buy.

3. However, sentiments from the market seems to show that given the current volatile economy, this price is overvalued at the moment.

4. I am rather confident that I can enter at a lower price in a few months to come.

5. Economy is not doing well- US is headed for a recession (after reading so many expert reports). Sg export market has dropped, also heading to a technical recession. China is losing its steam.

6. Oh Well.. I am cashing out to build up a war chest first. Will purchase when the recession is confirmed ;)

It is here.. Robots replacing humans for jobs.

Last weekend, I went to MacDonald's to buy an ice cream. Wow.. when I stepped in, instead of the usual cashiers and tables in the usual lay out, I saw this:

SELF SERVICE KIOSK.

Now, instead of queuing, all I had to do is to press a touchscreen, make some selections, pay on the spot, and Tada! I get a queue no. and I wait for my ice cream, all done in less than 10 minutes.

JOBS REPLACED BY SOFTWARE BOTS-BILL GATES

In 2014, Business Insider wrote an article where Bill Gates states that "People don't realize how many jobs will soon be replaced by Software Bots"

This what he said:

“Software substitution, whether it’s for drivers or waiters or nurses … it’s progressing. …  Technology over time will reduce demand for jobs, particularly at the lower end of skill set. …  20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.”

 

I digress a little. I am hugely interested in what experts say about future developments, especially when people like Bill Gates had been very spot on on their predictions decades ago.

Bill gates, in 1999, predicted about Social Media/Home monitoring/Internet payments/ mobile devices/ price comparison sites ..etc.

It was scarily accurate.

Now, I have to sit up and seriously look into what he says lah!

Instead of jobs being replaced by foreign talents, I think the real danger is software bots -_-

WHAT DOES THIS IMPLY?

In 20  years time, these jobs will become irrelevant:

In 20 years time, I will be in my 40s-50s and my job falls nowhere near the 'safe zone' :(

In 20 years time, our children will be the ones facing the brunt and unless they have high skill sets, it's going to be difficult for them.

Lastly, CANNOT BEAT SOFTWARE BOTS? JOIN THEM.

Become a software developer.

Unfortunately, it is really 'easier said than done'. A coder needs to possess really innate logical thinking and clearly, not anyone can do it.

Why I will not top up my CPF SA voluntarily

Personal financial planning is a topic which I seldom talk about, but I do have my own plan and I would like to share it here.

About topping up my CPF SA account voluntarily.

The good:

4% interest.
I find that topping up the CPF SA account is very good viable option as it earns you a 4% interest and when compounded over the years, the amount of money can be substantial. The earlier you start, the better the effects of compounding is seen.

Tax benefits
Up to $14k. If you do that for 10 years, you would have saved $140k!!

BUT BUT BUT..This is not my plan.

My plan is this:

To invest in stocks/ liquid assets and get my 2nd property/3rd property in years to come.

If I were to put my money into SA account, the move is IRREVERSIBLE. So how can I get to buy my 2nd property ?

Investment in Real Estate
I want to invest in real estate, at least this is what I believe works in Singapore. Many people say that Singapore is heading a property crash, but the real estate, like stocks, goes through cycles too.
In Year 2003, some condos are for sale at $300k. Right now, in Year 2016, these condos have doubled or even tripled in value.

If you are investing for a long term 10-20 years horizon, houses, due to increase of prices in land/construction/manpower (inflation) , will likely appreciate decently too.

And yes, Do not think of buying properties in Malaysia/Cambodia/Vietnam, I am not referring to investment in these countries, not for properties please.

What i like about real estate is I can utilize leverage (mortgage) to get some passive rental income, enjoy some capital appreciation, and if all things goes badly, at least I can stay in it!

Lastly, plan early.

Do what you are comfortable with, but at least plan ahead and stick to it. The worse is not planning anything and making haphazard investment decisions!