Lions Don't Need to Roar...

A successful leader is very focused and is not easily rattled.....
Arsenal manager Arsene Wenger has hit back at Chelsea counterpart Jose Mourinho with a retort that "plenty of managers have won the Champions League who will not be considered great".

Portuguese Mourinho, who won it in 2004 with Porto, had a dig at the Frenchman for never having won Europe's premier competition ahead of the sides' meeting in the League Cup final on Sunday.

"Whether I am big or small is not so important, it is not my obsession," Wenger countered.

"Plenty of managers have won the Champions League who will not be considered as great managers. "What is important is that you look at the careers of ten, 15 or 20 years."The importance of the manager is over a longer distance. It is the continuity in his career."

Wenger, in charge of the Gunners since 1996, came within a whisker of seeing his team crowned champions of Europe when they lost last season's final to Barcelona in Paris."It will not change my life if I do not win the Champions League," he continued.

Arsenal did not lose a match in the Premiership in the 2003-2004 season, going 49 matches unbeaten in total in the league. "We played a whole season unbeaten but you did not see me every week jumping on the tables," Wenger said pointedly.

"If you would like to compare every manager, give each one the same amount of resources. After five years you can see who has done the most."
~ source: Eurosport
~ profile: Arsene Wenger

80:20 Rule

The 80:20 Rule is also known as Pareto Principal.
It is a handy "guide" for projects, businesses and organisations:

~ The Pareto Principle

~ 80:20 in business management

~ Prinsip 80:20 (dalam BM)

"Skali Lagi"

My friend Tengku Farith launched his book titled "SKALI Lagi" or "one more time". The book is in English and Bahasa Malaysia.

You can download the book from the and can buy the book from MPH bookstores and PTS online. For comments from other readers, click here.

I neither reviewed the draft nor discussed the content with TF before the book was published (I left SKALI's operation in year 2006 to spend more time in other areas).

From what I read, the book is like J.K Rowling's first book on Harry Porter. Just the tip of the iceberg. There should (would?) be follow-up volumes because we learned so many valuable lessons, strategies and techniques that they do not teach in business schools.

I thank everyone who supported SKALI.

Really Mad

Real Madrid's strategy is "Really Mad"! The football club:
  • sacked its coach Jupp Heynckes in 1998 ~ after winning the Champions League.
  • sacked coach Vicente Bosque in 2004 ~ after guiding the club to 2 Champions League titles, 2 Spanish League titles, 1 Spanish Cup, 1 European Cup and 1 Intercontinental Cup!
  • just sacked coach Fabio Capello (in 2007) ~ right after winning the Spanish League.
Real Madrid keep sacking its successful coach,
but then Real Madrid is the richest football club in the world!!!

Is it possible to explain the logic of that strategy?

Wish to Be An Independent Director?

Under the Companies Act and other legislations, Board of Directors is personally and jointly accountable for many aspects related to its company. If you think becoming an Independent or Non-Executive Director is easy money and risk-free, think again.

My suggestion, do not become a director unless you are in the loop and know what is going on in the company. As a sleeping director, you may get a surprise..... in court:

Ex-directors charged over misleading info
KUALA LUMPUR: Two former directors of Transmile Group Bhd were charged in the Sessions Court here with authorising a misleading statement to Bursa Malaysia.
Chin Keem Feung, 42, and Shukri Sheikh Abdul Tawab, 43, were charged individually with “knowingly authorising the furnishing of a misleading statement” in relation to the affairs of the express air cargo operator.
They are accused of committing the offence at Bursa Malaysia Securities Bhd in Bukit Kewangan here on Feb 15. According to the charge, the misleading information was contained in Transmile Group’s quarterly report on unaudited consolidated results for the financial year ending on Dec 31 last year.
Both men claimed trial. The offence is punishable with a maximum fine of RM3mil or imprisonment of up to 10 years or both upon conviction. Securities Commission prosecuting officer Rezy Izwan Ramly proposed a bail of RM500,000 on condition that both accused surrender their passports to the court.
Counsel Ranjit Singh, who appeared with Mohd Firuz Jaffril and Robert Low, asked for the amount to be reduced to RM50,000, saying the amount proposed was extremely high and unwarranted.
The lawyer said Chin, from Petaling Jaya, had been called to the bar as an advocate and solicitor in 1992 and was a partner of an established firm. “He has to support his wife, his widowed mother who is frail, and pay for the mortgage on his property. The risk of him absconding is nil,” he said.
Ranjit Singh maintained that Chin was only an independent director who was not involved in the day-to-day operations of the company and had cooperated fully with the authorities. “He has since resigned from his directorship,” he said.
The lawyer said Shukri, from Alor Star, was also a non-executive director at the time of the alleged offence and is now unemployed. “He is married with two children and is applying for a government grant to start a small business,” he said.
Judge Rozana Ali Yusoff allowed the accused to be released on a RM100,000 bail each and ordered the surrender of their passports. She fixed June 2 to 4 for a joint trial. Both Chin and Shukri posted bail.
Source: The Star

Don't Be Rushed Into Deals...

In business dealings, do not allow the other party to pressure you to make major decisions simply because of time constraints. Decide only when you have completed your analysis and when the major issues have been mutually resolved (and put in written agreement).

Don't worry, others will wait a bit longer if you bring value to the transaction.
If you do not add value to the deal, then its not meant for you anyway.

It is smart to be speedy, it is dangerous to be hasty.

Take the Malaysia-US FTA as example:
~ FMM said it is good for Malaysia
~ SM Idris of CAP tells FMM to get real
~ JUST World also have something to say
~ DPM said Malaysia will not be presurred into signing
~ Others around the world also think US FTA is harmful


Ah Kau

Got this from my eGroup. I believe at least it is based on true story:

Ah Kau is a guy who sells newspaper every morning next to your apartment, and you are one of his daily regular customers. Before dashing off to your office every day, you will go to his small stall and buy The Star newspaper. Wearing a newly pressed shirt, a tie, and a pair of Clarks shoes, you grab a copy of The Star, pay RM1.20 and exchange smiles with Ah Kau and greet him.

"Apa macam Ah Kau ini hari? Bisnes ada baik?"

The normal greeting like you do every day. Yes, Ah Kau doesn't speak English. He speaks Chinese and knows a little bit of Malay. He speaks a little bit of Malay but with a very thick Chinese accent.

"Biasa saja! ini bisnes aa, kadang kadang baik, kadang kadang tada untung."

"Biasalah hidup. Kadang kadang ok, kadang kadang tak ok." You give Ah Kau a pat on the back. You smile and walk away and get into your car. You start the engine and start driving to your office, a multinational semiconductor company located in a premier industrial area. You are a young and promising finance executive and the future looks bright for you.

A year goes by and things look pretty good on the track. You decide to marry your fiance and have your new wife moves in to your place. Both of you feel happy because you can save more money as the two of you will be sharing one apartment and can live as one. Ah Kau is still selling the newspaper as usual. Sometimes in the morning your wife gets the newspaper from Ah Kau instead of you.

A year later a child comes along, and you decide to buy and move into a newly developed condominium just across the street. This place is bigger so it will be perfectly fit for the 3 of you. But since both of you are working, you decide to get a maid to take of the household and your kid.

By this time you're offered a managerial job from another multinational; the remuneration package offered is much better in terms of the pay, contractual bonus, medical benefits, ESOS scheme and a few others which make it impossible for you to decline. So you join this company happily.

You get busier. You realize that you spend less and less time with your family. When your department is busy preparing for the next audit, your working hours become more and more ridiculous. Any internal issues arising in the office means you'll be stuck in the office until 8 or 9 pm. Sometimes, during the weekend, you'll spend your time in your office, buried under paper works and documentation' s, instead of taking your family for a walk in the park.

One morning, on your way to get your copy of The Star, you realized that Ah Kau is no longer in his stall. So is his rundown motorbike. Instead, there's another young Chinese guy at the stall.

"What happen to Ah Kau?" You ask out of curiosity.

"Oh, he is still around, but he is no longer taking care of this stall as he has opened up a new grocery shop down town. I am running this newspaper stall for him."

"Ok." you smile. You feel happy for Ah Kau. At last he manages to improve his life.

Your normal life continues. A year passes by and at the end of your company's fiscal year, you're rewarded for your effort with a 5 months bonus pay-out by your employer. Wow. Now that is a very handsome reward. You feel your effort has been equally compensated. To celebrate, you decide that it's time to trade your 5-year old Proton Wira to the latest Honda Civic model. It won't be much a problem to you to get a loan scheme from the bank as your pay slip will provide you an easy gateway to access financial help from any bank.

One day, the hardest reality of life hits you right on the face. The company that you've been working for years announces that they're moving their business to China for cost and competitive reason and has asked you to find a job somewhere else. "What?" You scream out cold. "I got a lot of liabilities on the card! Who's gonna pay for my mortgage? My car? My credit card? My gym fees? My bills?" You yell like there's no way out.

This is the first time you feel let down by your own employer. All your hard work seem to go up on the smoke. You feel sick. You now hate your company. On the way home, you stopped by at a mamak restaurant for a cup of teh tarik while pondering about your future.


Suddenly you saw this new, shiny BMW 3 series being parked nearby. And to your surprise, it was Ah Kau. Yes, Ah Kau who used to sell newspapers nearby your old apartment. "What happened to old Ah Kau?" You whisper to your self.

Ah Kau still recognizes you, and sit next to you, and shared his story.

To make it short, Ah Kau had accumulated his money from selling newspapers to open more stalls, one after another. Every new stall is run by his workers so that he focused on opening more and more stalls, which in turn give him more and more money. Over the years, he had accumulated enough cash to open up new grocery store while at the same time buying more assets to grow his wealth. And his current wealth and success is achieved without any loan or financial help from banks and other financial institutions. There you go. That's the story. While Ah Kau is set to become financially free, you're back to where you're started before. Ground zero .

Before leaving, Ah Kau gives you a familiar quote,

"Biasalah hidup. Kadang kadang ok, kadang kadang tak ok."

He gives you a pat on the back and walks away.

In reality, if you're observant enough, there are a lot of Ah Kaus out there, that you will see every day and every where you go. The names are different, but inside them is every character of Ah Kau. They might be Uncle Dorai, Ah Chong, Pak Abu, Makcik Gemuk, Pak Man nasi lemak or others.

They look to be struggling on the surface, but if you look carefully and compare with you life, many of them are living with little or no liabilities. They ride an old kapcai bike. They live in an old rundown house. They don't have credit card to swipe. They wear a 10-year old shirt and short. No new, shiny Toyota Harrier. In short, their living means are far below than yours. But what you don't realize is that many of them can save more money than yours, and over the years generate enough money to expand their business, or invest in properties. Their asset columns are much thicker than that of yours.

So the next time you see Ah Kaus, never look down on them, and never underestimate them. Or else you're up for a harsh reality lesson.

Hyperlinks Financial Agencies

~ Bursa Malaysia: announcements
~ SIDC: Malaysian Investors
~ Securities Commission
~ Companies Commission
~ Bank Negara Malaysia
~ Institut Integriti Malaysia
~ Malaysian Institute of Accountants
~ Malaysian Institute of Corporate Governance
~ Minority Shareholder Watchdog Group, Malaysia

10 Main Mistakes in Small Businesses

PUNB advises entrepreneurs to avoid these mistakes:
  1. Overconfident and obsessed with a single idea.
  2. No marketing plans.
  3. Not knowing the customers.
  4. Not paying attention to cashflow position.
  5. Ignore the human resource development.
  6. Mixed-up between possibility and reality.
  7. No sales plans.
  8. No teamwork.
  9. No mentor.
  10. Give up.

Social Entrepreneurship

Definition by Wikipedia:
Social entrepreneurship is the work of a social entrepreneur. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change.
Definition by Ashoka:
Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change.

Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.

Social entrepreneurs often seem to be possessed by their ideas, committing their lives to changing the direction of their field. They are both visionaries and ultimate realists, concerned with the practical implementation of their vision above all else.
We need more social entrepreneurs. Action-oriented individuals and groups who work on solutions, not problems. It can be done......

Business of Innovation

"The Business of Innovation" is an interesting programme on CNBC.

The guest speakers share their experience and ideas on innovation throughout a business (not just technology and product innovation).

Go to to watch the past programmes and to download its transcripts.

Leadership :)

copyright Demotivators

First, break all the rules

A research by Gallup Organisation found that if employees answer "yes" to these 12 questions, then they are motivated in a great environment:

What do I get?
1. Do I know what is expected of me at work?
2. Do I have the materials and equipment I need to do my work right?

What do I give?
3. At work, do I have the opportunity to do what I do best every day?
4. In the last seven days, have I received recognition or praise for good work?
5. Does my supervisor, or someone at work, seem to care about me as a person?
6. Is there someone at work who encourages my development?

Do I belong here?
7. At work, do my opinions seem to count?
8. Does the mission/purpose of my company make me feel that my work is important?
9. Are my co-workers committed to doing quality work?
10. Do I have a best friend at work?

How can we all grow?
11. In the last six months, has someone talked to me about my progress?
12. This last year, have I had opportunities at work to learn and grow?

More details in the book "First, Break All the Rules: What the World's Greatest Managers Do Differently".

3 Ws for Success

Business men and women must keep asking these 3 Ws:

1. What am I selling?

2. Why will people buy what I am selling?

3. Why shall they buy from me and not others?

Answers to those questions can predict the future of a business. Be very objective. Avoid sentimental attachment towards any ideas or projects. Most of all, do not allow personal ego to cloud objective judgement. Please test this crystal ball :)

Now and then, it is worthwhile going back to basics. Apply basic fundamentals, before going for the flavour of the month frameworks and techniques.

Tough Times: thank you all

SKALI, my friends and I came very close to bankruptcy during the asian economic crisis. The meltdown started in August 1997 - which was just two months after we launched the AltaVista Mirror Site (our first service). We had plans for wired business, online media etc. But all plans went down the drain with the crisis and problems started snowballing.

We can write a novel as thick, twisting and exhilarating as "Barbarians at the Gate". The blood, sweat and tears. The begging for help. The character building. The spritual strength. The lessons learned. The camaraderie, laughter and satisfaction. The best and worst in human being. The love of family and friends.

Praise to Allah, we turned around SKALI. It grew from 11 people at the end of 1999 to more than 100 people in 2005. SKALI is now in good hands of Farith, Aimi, Ayi, Basri together with the experienced specialists. Challenges continue..... normal lah in business world.

On this WorldWideWeb, I want to engrave my infinite gratitude to every person who directly and indirectly contributed in turning around SKALI and taking it to greater heights.

Setiap hari saya doakan kesejahteraan, keselamatan dan kebaikan tuan-puan skalian.

Azmi Ahmad

co-founder and x-director


Tough Times: words of wisdoms

Work on solutions, not problems.

Other than death, every problem has a solution.

When you find yourself in a hole, first thing to do is stop digging.

Stand for something or you will fall for anything.

If not dead, you will be stronger.

Tough Times: recommended readings

Life is a cycle of ups and downs.
When you are high and mighty, remain humble.
When you stumble, get up, dust-off and move on:

Achieving Success in Tough Times
Dato' Dr Mohamad Hashim, 2006, KasehDia

Don't Sweat the Small Stuff at Work
Richard Carlson, 1998, Hyperion

How to Stop Worrying and Start Living
Dale Carnagie, First printed 1944, Pocket Books

Tough Times Never Last, But Tough People Do!
Robert H. Schuller, 1983, Bantam Books

The 7 Habits of Higly Effective People
Stephen Covey, 1989, Franklin Covey

La Tahzan, Don't Be Sad
Dr Aidh Abdullah Al-Qarni

God Al-Mighty

Tough Times: dato' dr mohamad hashim

Dato' Dr Mohamad and his company (Global Carrier) were also affected by the asian economic crisis. The good thing is he has gone ahead and chronicled his experience and lessons learned.

'Achieving Success in Tough Times' is a must read for all entrepreneurs and business students. It is straight to the point without dramatizing the problems. And, it is real.

We can be certain that the 79 tips in 121 pages are merely tip of the iceberg for Dato' Mohamad. But it is a good start. We look forward to more knowledge sharing from other entrepreneurs and professionals.

Achieving Success in Tough Times available at MPH.

Launch of the book by YB Dato' Mohamed Khaled Nordin.

Dewan Ekonomi April 2006

p/s - all proceeds from the book will be donated to
MERCY, Malaysia. It will be great if Dato' Dr Mohamad and/or KasehDia can allow students to download a softcopy.

Own Hard-Knock-School

1996 ~ Alam Teknokrat Sdn Bhd

1997 ~ ALTEK

1997 ~ AltaVista Asiawide

1998 ~

1999 ~ Skali Multimedia Application Centre = SMAC

1999 ~ mySMAC
2000 ~ Skali Group
2001 ~ Skali.Net
2002 ~ finally......
Pronounced as 'Ska_Lee'. Not pronounced as 'Ska_Lai' or 'S_K_A_L_I' or 'Se_Ka_Lee'.

It malay it means "together" as in ~ duduk skali, makan skali, pergi skali, balik skali and so on.

In other languages it does not mean anything :)

Well... those early days, not easy to find knowledge.... Internet still slow, strategic books not that many in Malaysia and only a few people with the required know-how. So its trial-and-error via hard-knock-school.
Please don't repeat the same mistake.... do some other mistakes so we can learn :) .

Choosing Brand Name(s)

My back of envelope hyphotesis:
Think Big! Believe that your business will grow.

Think Global! Believe that your business will be international.

Should be less than three syllables (eg. Coke_1, Pepsi_2, KFC_3). Maximum of four syllables. Food company seems to defy this trend and still succeed like 'Mamak Nasi Kandar' or 'Secret Recipe'. In general, shorter is better for brand names!

The word can be totally meaningless.

Must be easy to spell and easy to pronounce.

Must 'sound pleasant' to the target group's mind.

Various races can pronounce it. For example, avoid "R".

Must not have any negative meaning in any languages.

Must be able to secure all the domain extensions ~ .com;; .net, .biz, .info etc.

Avoid names which sounds familiar with the existing brand.

Avoid names with possible negative connotation. For example MaxCon looks good at first glance but can be made a joke as "Maximum Con". Thanks Apai for this lesson :)

Nice if Brand Name is the same as Company Name. But still okay if the two not the same.

Nice if the pronounciation represent something about the business. For example, 'Kent Ridge Digital Lab' is known as 'KRDL', which is pronounced as 'Cradle', which fits nicely with this technology research and development centre. But okay if meaningless.

Use the Words as logo. Avoid icons such as globes, birds etc for logo.... unless you are Ferrari.

Observing Brand Names

The following are merely layman observations without scientific empirical study. Take them with a handful of salt!! Add in the 'comments' below if you have other examples to note:

'Kentucky Fried Chicken' is better known as 'KFC'. 'Mc Donald' is now calling itself 'McD'.

Airlines = 'SIA' vs 'Air Asia' vs 'Malaysia Airlines'. Many years back, Malaysia Airlines was known as 'MAS'. Shorter name better performance or just co-incident?

First Coca-Cola came to the market, followed by Pepsi Cola. Later, 'Pepsi Cola' switched to 'Pepsi', then 'Coca-Cola' switched to 'Coke'..... after Pepsi eroded its market share worldwide.

There are NASDAQ, SESDAQ, MESDAQ etc in the stockmarket bourses. 'FTSE' is pronounced as 'Footsie'. There was 'Kuala Lumpur Stock Exchange' known as 'KLSE', and the composite index was known as 'KLCI'. The bourse name was changed to 'Bursa Malaysia' and is called by its full name or sometimes as 'Bursa'. It cannot be called 'BM' because that is Bahasa Malaysia. So the composite index is still KLCI and not BMCI. But Reuters still use 'KLSE' and 'KLSE Composite Index' anyway.

National Computer Board (NCB) and Telecommunications Authority of Singapore (TAS) were merged to form 'Infocomm Development Authority of Singapore', which is known as 'IDA' and pronounced as 'Idea'. That fits its its role as the promoter and developer for knowledge-based economy.

It was established as 'Pertanian Baring Sanwa' because it was a joint-venture between Bank Pertanian, Barings Bank and Sanwa Bank. It changed name to 'Commerce International Merchant Bankers Berhad'. Now it is well known as 'CIMB' which is pronounced as 'C_I_M_B'. But occasionally, you will meet someone who pronouced it as 'Sim' or worst 'Chim'. Remember... it is C_I_M_B with four syllables.

'Hewlett Packard' changed to a much simpler 'HP'. Then I got confused when they added plus sign in their logo to promote 'HP +'. Now the logo is 'HP invent'.

'Multimedia Development Corporation' was known as 'MDC' and now rebranded as 'MDeC'. By the way, many years ago there was 'Digital Equipment Corporation' which was known as 'DEC'. Later it was rebranded to 'Digital'. Compaq then absorbed Digital. HP then acquired Compaq.

'Multimedia Super Corridor' was known as 'MSC' and now rebranded to 'MSC Malaysia'.

A trivia: 'London Interbank Offer Rate' is known as 'LIBOR'; for Singapore it is 'SIBOR'; for Hong Kong it is 'HIBOR'. Why for Malaysia it is KLIBOR and not MIBOR ......

Maybe I'll add other observations later. More resources online:

But everlasting success comes from substance in benefits, quality and reliability. Marketing and branding exercises will support that but cannot create them.

9th Malaysia Plan..

The five thrusts of 9th Malaysia Plan:
  • 1 = Increase value-add to the national economy.
  • 2 = Increase the ability of knowledge, creativity and innovation as well as inculcate a first class mind.
  • 3 = Address socio-economic equality in a constructive and productive manner.
  • 4 = Increase and strengthen the quality of life.
  • 5 = Strengthen national institutional and implementation ability.
Related Links:

What's in a URL?

Test your URLs before using them. Check the spelling, check the sound. "" did cause some confusion in its early days.... "mail" and "male" sounds so similar.

Not properly checked, URLs can create unintentional effects, like these:

1. A site called ‘Who Represents’ where you can find the name of the agent that represents a celebrity. Their domain name… wait for it… is

2. Experts Exchange, knowledge base where programmers can exchange advice and views

3. Looking for a pen? Look no further than Pen Island at

4. Need a therapist? Try Therapist Finder at

5. Then of course, there’s the Italian Power Generator company…

6. And now, we have the Mole Station Native Nursery, based in New South Wales (update: they have changed their URL to much better)

7. If you’re looking for computer software, there’s always

8. Then, of course, there’s these brainless art designers, and their whacky website:

thanks GreenRubberBall ...... why that name man????

Amazing Arsenal

The Gunners scored 2 goals against the number one club in the Serie A League i.e. Juventus. Thiery Henry set-up the first goal for Fabergas and scored the second goal himself.

It is ironic that Juventus had Henry for about 8 months during his youth. He felt they did not treat him fairly. Arsene Wanger brought him to Arsenal and coached him to be a top world-class player. He works as hard as others and is not distracted by extra-curricular activities. Lesson? Talent Management and Human Capital Development are key success factors.

Arsenal played as one coherent team without anyone trying to be a primadonna. We can see that all Arsenal players were so intensely focused on the objectives to score goal and to defend own goal. They work very hard to the last whistle (there were no delay tactics). Lesson? Must have Intense desire, Hardwork and Teamwork to win.
Juventus lost their patience, persistence and perseverance. Their players let emotions control their body, instead of mind over body and emotion. 2 players got red card and Patrick Viera will miss the next game against Arsenal. They commited fouls which may make them feel great for a few seconds, but they will feel rotten for a long time. Lesson? Don't get emotional.
Go Gunners >>>

Living on Credit

all copyright: The Star @ 9 July 2008

Living on credit
LINDA (not her real name) is only 22, yet she is already drowning in debt. The young girl, who moved to Kuala Lumpur for her studies several years ago, is a fresh graduate who has been working for eight months in a major corporation. Since she left her parents’ home in Perak, she has been spending beyond her means.
The former straight-As student who was active in school activities and sports never thought her life would take such a violent twist, and in such a short time. Due to her extravagant lifestyle, she has accumulated debts amounting to almost RM8,000, which is growing, with interest.
Apart from this, she purchased a RM50,000 car last year and has a student loan of RM9,000 from her university days which she has yet to pay off.
She earns about RM2,300 monthly, which is not a bad amount for a fresh graduate. However, each month, she must pay RM600 for her car, RM300 for rent of a room she shares with another girl, an estimated RM200 for petrol and RM200 for a study loan.
“After paying off the necessary, I’m left with RM1,000 to survive on. This goes for mostly food and necessities for the house,” says Linda.
Still, believe it or not, she manages to spend at least an extra RM1,000 a month on clothes, shoes, clubbing and meals in expensive restaurants.
Linda is just one of the many people falling into the trap of credit cards.
Check and balance: Credit cards do help ease the financial burden, but you still need to be aware of how much you spend each month. Spending more than you can pay off in a month is not advisable. If you don’t think you can control your spending, cut your credit cards.
Perhaps it can be seen as misfortune that Linda happens to work with people who come from well-to-do families. Call it peer pressure, but you can’t really blame a young girl for wanting to keep up.
“I see these people every day,” she laments. “They come in with different clothes every week, talking about the great weekend they just had on the town, drinking, dancing and having fun. I get along with people well, so eventually I started hanging out with them.”
“At first I tried to be thrifty. I would meet up with them and pretend I had already eaten, and just have a drink. I couldn’t fool them for very long though. We started meeting for clubbing every week, and like everyone else, I was expected to put in money for our enjoyment.”
Linda believes her troubles really began when she got a credit card.
“It’s so easy. It’s money you don’t have, but you spend it anyway, telling yourself you will pay back,” she says. “Eventually I was maxing out the first card, and now I can’t keep up payments for the second one.”
Eventhough she was feeling the pinch, Linda was determined to maintain her current lifestyle and eventually resorted to digging into her lifetime savings. Within months, however, her account was drained.
“I’m still in denial, I guess,” she says with a nervous chuckle, surprising for someone in such deep trouble. “I really don’t want to give up my lifestyle, but every time I reach for my credit card I feel sick to my stomach. I have no idea how I’m going to repay everything.”
It may be easy to judge Linda and call her superficial and materialistic, but the fact of the matter is that her predicament is not at all uncommon.
Seventy-seven percent of the people who enrolled into Credit Counseling and Debt Management Agency (AKPK)’s debt management programme have credit card-related problems. While the “plastic money” has plenty of advantages, when used wisely that is, it is also the number one reason why many people run into debt. This is followed by poor financial planning and high medical expenses.
Many young people, even those who are not yet working and relying on supplementary cards from their parents, are tempted to own one due to the befenits such cards offer. The convenience, powerful advertising and the pursuit of instant gratification are not making it easier for youths and young adults to spend within their means.
The highest number of people in AKPK’s Debt Management Programme (DMP) are people in their 30s (45.7%) while the lowest are those in the 20s (13.9%).
“We found out that even though they come to us in their 30s, the spending habits started earlier, in their 20s,” AKPK’s CEO Mohamed Akwal Sultan says.
He adds that it is possible that those in their 20s relied on their parents to help pay the credit card bills while they were still studying or just starting out at work.
Once in their 30s, their parents may have retired and thus not be able to help bail them out anymore.
That is why besides providing financial counselling and running the DMP, financial education is one of AKPK’s core businesses, what Akwal calls “preventing fire”.
All services provided by AKPK, a wholly owned subsidiary of Bank Negara, are free of charge and confidential. Among others services, AKP organises talks in corporate settings, at National Service camps, and will be launching a book at the end of this month. The book will be used to teach financial prudence in at least eight public universities starting this year.
Although only two years into its operation, some 50,000 people have sought help from AKPK at its nine branches across Malaysia. Of these, 14,000 have enrolled in the DMP, which helps the clients with their budgeting and how to settle the debts.
The seemingly down side of it, however, is that all the banks will be notified of your enrolment into the programme. You have to reveal all your credit information to AKPK and will have to surrender all your credit cards.
On the other hand, the good thing is that AKPK now acts as the go-between between the client and the relevant financial institutions. All legal action will be stopped and the debt collectors will stop calling.
Akwal says that most people who sign up for DMP usually have to deal with seven institutions but now they only have to pay an amount they are comfortable to AKPK, which will then make the necessary payments to the banks. AKPK does not provide loans or financing.
Unlike other credit management organisations, the agency is able to stretch the usual six months repayment period up to 10 years. When your debt is settled, your debt information will be removed from Bank Negara’s Central Credit Reference Information System (CCRIS).
Those who need financial advice but do not want any records made or sign up for the DMP can still make appointment for counselling or check out the talks on AKPK services at its outlets held on weekdays.
A major pitfall for young people below the age of 30, Akwal says, is the way they use credit cards.
“Ask yourself, do you need or want the item? If you need it, fine. Then the second question is, can you afford it? You may need the item but you cannot afford it.
“Then the next question is, when the bill comes, can you pay in full? If you can’t, you’re treading on very dangerous waters,” Akwal cautions.
The lure of luxury goods: Don’t make the mistake of buying something you really can’t afford and certainly don’t need, just to show off.
In efforts to encourage prudent spending, Bank Negara last week announced that those who do not settle the bills in full will not enjoy the 20-day interest free period for new retail transactions. While some banks have alerted their customers since a year ago by asking them to settle their bills promptly, consumer groups have criticised Bank Negara when the move was finally announced, saying that it will drive people into bigger debts.
It is expected to affect two thirds of the 2.7 million credit card holders in the country who only settle their bills at the minimum or partially. However, Akwal says the interest incurred will not make a big difference to those who make new retail purchases of small amounts.
With or without the new policy, though, the philosophy is simple. If you are already in debt, it’s time to stop using the credit cards.
“The first thing to do is lock your card at home. Stop using it.
“If the outstanding amount is quite large, you have to seriously change your lifestyle — make less trips to gourmet coffee outlets and clubs, for example. Strive to pay off as much as you can. There is no point paying off the minimum and keep on charging on your card,” Akwal adds.
So, the next time you see your friend driving a new flashy car, buying the latest gadget or wearing a gorgeous but really expensive dress, and you really want to get something similar, ask your self the three questions Akwal suggested earlier before you swipe your card.
“If you can afford it, fine. But don’t do it to impress your friends,” Akwal concludes.
Getting help
CREDIT Counselling and Debt Management Agency (AKPK) chief executive officer Mohamed Akwal Sultan says that many Malaysians are not good with saving up for a rainy day.
“A lot of Malaysians rely on their EPF (for when they retire); that’s one of the biggest pitfalls. You should save at least 10% of your gross salary each month,” says Akwal.
Here to guide you: Credit Counseling and Debt Management Agency chief executive officer Mohamed Akwal Sultan says that those who have difficulty managing their finances in their 30s usually started facing such problems in their 20s.
Savings come in handy when unexpected situations arise, such as when your car window needs to be fixed, you have an illness that is not covered by the insurance, or during a family emergency.
Without savings, you may decide to max out your card, borrow from a friend or worse, turn to loansharks when in dire need. That is why it is very important to have a budget and follow it closely, unless you always have leftover money at the end of the month.
AKPK has some advice to help people like Linda, who admits to being in denial about her dire financial situation, to identify the signs that they need help:

  • You find that you are not in control of your money.
  • You have more debts than you can manage.

  • You are only able to pay the minimum 5% on your credit card bill.

  • You are living from paycheck to paycheck.
  • You are withdrawing cash advances from your credit card to meet your expenses.
  • You do not have any savings for emergencies.
  • Debt collectors call you regularly.
  • You are being served legal notices of demand.

  • Call AKPK for free counselling at 1-800-88-2575 or log on to