Posted by Champaklal Dajibhai Mistry on September 5, 2011



by his life-story as to how he became a financial consultant
who is published in leading world media.... 
.....As per Andrew Hallam
this how he got started in investing....
 "When I was in college, I met a 47 year old millionaire while I was working at a bus depot during the summer. He was a mechanic, raising two kids on his own, and he suggested that I should choose a job that I’d love doing—rather than choose a job simply because it paid well. Inspiring me, he said that if I learned about money, I could earn a middle class income and become a millionaire in my 40s, or earlier.

That was 20 years ago. I remember him trying to convince me to invest money in the markets, and when I said that I couldn’t afford the $100 a month he advised me to invest, he just laughed. He asked if I could afford to buy a couple of Cokes and a couple of chocolate bars out of a vending machine every day—if I really wanted them. I figured that I could. Then he did the math: $100 a month was $3.33 a day. If I could afford to buy a couple of Coke drinks and a couple of chocolate bars on a daily basis, then I could afford to invest $100 a month. It was just $3.33 a day.

So twenty years ago, I started investing a minimum of $100 a month. And every year I increased that. To this day, I still increase the monthly amount I invest, every year."
at PVAF website which was self-born for you
to learn and share worldwide
to make you and your fellow life-travelers
reach for the stars to be wealthy and prosperous with
of Life-Sciences
make your life happy
the way you wish
with your lifestyle choice based on
by clicking on the next line to read some fundamentals you can learn and adept in your own life from Andrew Hallam....where you would learn about the Chinese proverb:
"wealth doesn’t last more than three generations:
There’s a generation that builds wealth,
a generation that maintains wealth,
a generation that squanders it"


....to make your tomorrow more wealthier than today....
simply because you educated yourself about
some basics of mutual fund investing today...

Andrew Hallam
by Andrew Hallam is,  a Canadian who teaches English and personal finance at Singapore American School. He is the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School. This is the second in a series of columns based on his book Andrew is a highly respected investor currently living in Singapore and  writes freelance finance articles. Nominated a finalist for two Canadian National Publishing Awards, his writing has appeared in MoneySense Magazine, Reader’s Digest, and L’Actualite. He has also been quoted in three investment related articles for The Globe and Mail, and in The Wall Street Journal—with a quirky plea to Warren Buffett. Andrew was born in Nottingham, England, grew up in Kamloops, British Columbia, Canada. He loves traveling with his wife, Pele, and living in South East Asia gives them plenty of opportunities to see some amazing places.
 (From Interview with Andrew Hallam at
Invest It Wisely)

Could you pass this personal finance exam?

(From Canadian Globe and Mail: September 4, 2011: Andre Hallam)
 Over the next few months, I will be building a personal finance curriculum for high school students at an elite international school in Singapore. Most of my students’ parents are successful executives from Canada and the United States who yearn to see their children excel financially.

This success is by no means guaranteed. A Chinese proverb says wealth doesn’t last more than three generations: There’s a generation that builds wealth, a generation that maintains wealth, and a generation that squanders it.

Many of my students represent their families’ third generation of wealth. Part of my job is to ensure that my students learn the tools to build financial wealth, while avoiding the problems common among privileged kids.

Like most teachers, I design a course by working backward. I start by asking, “What do students truly need to learn?” Once I’ve identified the necessary skills, I construct a final exam to test those skills, then build lessons to ensure students can pass the test.

Let’s see how you would do on a few of the key questions I have in mind for the final exam.

Question: When selecting mutual funds, is it better to seek funds with low costs or ones with the best track records?

Answer: Choosing funds with low costs gives you a higher chance of success than picking funds with strong track records.

Most investors get this question wrong. They think that funds with the best returns in recent years are the ones that have the best chance of future success.

The evidence doesn’t bear that out. The fund-ranking company, Morningstar, rates mutual funds based on a five-star system – four or five stars for a fund with a great track record, and one to three stars for funds with less impressive histories. Roughly 95 per cent of mutual fund assets flow into Morningstar’s four- and five-star funds. But high performance in the mutual fund world is rarely sustainable and many of these funds go on to underperform the average.

Investors are better advised to seek funds with the lowest fees. Cheapness is a far stronger predictor of future performance than history – something even Morningstar admits. In a recent study, it found that using low management expense ratios as a way to pick funds was more effective than using high star rankings.

“If there’s anything in the world of mutual funds that you can take to the bank, it’s that expense ratios help you make a better decision. In every single time period and data point tested, low-cost funds beat high-cost funds,” says Russel Kinnel, the study’s author.

Question: On average, do mutual funds selected by financial advisers for their clients outperform mutual funds selected by do-it-yourself investors?

Answer: No. Experienced advisers may be able to add value to an investor’s financial plan by helping with advice on asset allocation, goal-setting, and taxable advice. On average, though, the mutual funds that advisers select for people underperform the results of funds selected by do-it-yourself investors. A Harvard Business school study found that funds sold to investors via brokers between 1996 and 2002 lagged behind funds selected by individual investors.

Are individual investors smarter than most brokers? Not necessarily. But many brokers select funds based on how well they’ll be compensated by the fund company. And those funds are often accompanied by higher costs, which hurt investment returns.

Question: Based on a recent study by Morningstar, what country has the world’s highest mutual fund costs?

Answer: Canada. In fact, this country was the only one of 22 nations in the Morningstar report to get an “F” on fees and expenses.

According to analysts John Rekenthaler and Benjamin Alpert, Canada had the highest management expense ratios for equity funds, the second-highest for bond funds, and was tied for the highest, with Italy, for money-market funds.

The median expense ratio for equity funds was 2.31 per cent, more than twice as high as the 0.94 per cent in the low-cost United States, Morningstar said. The median fee for fixed-income and money-market funds is more than 70-per-cent higher than in the U.S.
Paying an extra percentage point or so every year might look innocuous, but over an investment lifetime, it can decimate a portfolio’s potential.

If a 19-year-old invested $1,200 a year, making 9 per cent a year for 45 years, she would have $631,030 at age 64.

But if she was paying an extra percentage point a year, reducing her annual return to 8 per cent annually, she would have only $463,807.

Investment costs matter. If you understand that, you’re well on your way to getting an A on life’s personal finance exam.
More related to this story
.....just click on the names which are hyperlinked...

Investment has different meanings in finance and economics. In Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time. In contrast putting money into something with an expectation of gain without thorough analysis, without security of principal, and without security of return is speculation or gambling.

Investment is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance whether for households, firms, or governments.

To avoid speculation an investment must be either directly backed by the pledge of sufficient collateral or insured by sufficient assets pledged by a third party. A thoroughly analyzed loan of money backed by collateral with greater immediate value than the loan amount may be considered an investment. A financial instrument that is insured by the pledge of assets from a third party, such as a deposit in a financial institution insured by a government agency may be considered an investment. Examples of these agencies include, in the United States, the Securities Investor Protection Corporation, Federal Deposit Insurance Corporation, or National Credit Union Administration, or in Canada, the Canada Deposit Insurance Corporation.

Promoters of and news sources that report on speculative financial transactions such as stocks, mutual funds, real estate, oil and gas leases, commodities, and futures often inaccurately or misleadingly describe speculative schemes as investment.

Investment: thorough analysis and security Speculation: analysis and some risk Gambling: lack of analysis and lack of safety......

Mutual Funds: A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities........read on....

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