Popular Advice You Shouldn't Take

WallStreet Journal
Sunday July 1, 3:30 am ET
By Jonathan Clements


If you're in your 20s, the world may not throw money at you -- but you'll get plenty of free financial advice.
For instance, you have no doubt been told to save diligently, fully fund your employer's 401(k) plan and avoid credit-card debt. And those are all good suggestions.


But there are other suggestions that aren't quite so good -- including these four popular pieces of advice.

1. AMASS CASH

If you are just out of school, you probably have all kinds of financial ambitions, including buying a car, purchasing a home and trying your hand at stock-market investing. But according to some financial experts, your top financial priority should be amassing an emergency reserve equal to six months of living expenses, with this cash tucked away in conservative investments like money-market funds and certificates of deposit.

Let's be honest: This is dull, unrealistic and -- I would argue -- not all that sensible. Even if you regularly sock away 10% of your after-tax income, it might take four years or so to amass six months of living expenses. At that juncture, you are supposed to leave this money in low-risk investments, where it will earn modest returns for the rest of your life.

Sound bad? It gets worse. While you were building up your emergency reserve, you were likely neglecting important goals like funding your 401(k) plan, which might earn you a matching employer contribution, and saving for a house down payment.

My advice: Forget the emergency reserve. Instead, stick at least enough in your 401(k) to get the full company match. Next, fund a Roth individual retirement account. If you still have extra money to save each year, by all means stash it in conservative investments in a regular taxable account.

If you get hit with a financial emergency, tap the money in your regular taxable account first. But you could also borrow from your 401(k). In addition, at any time, you can pull out your Roth contributions -- but not the account's investment earnings -- without paying taxes or penalties.

You could also use your taxable account and Roth for a house down payment. Once you have bought the house, set up a home-equity line of credit, which you can then use as an emergency reserve.

2. BUY BIG

That brings me to another piece of conventional wisdom that's often doled out to folks in their 20s: Buy the biggest house possible.

I have some sympathy with this suggestion. If you are early in your career and you expect sizable pay increases in the years ahead, you may want to stretch to buy a somewhat larger house.

After all, if you purchase a place that you quickly become dissatisfied with, you could soon find yourself trading up to a better home. That will mean forking over a 5% or 6% selling commission, mortgage-application costs, lawyer's fees, moving expenses and more.

Don't, however, misconstrue what I am saying. I am not endorsing the contention that real estate is the best investment you can make, that you should buy the largest house possible or that you should take out the largest mortgage possible.

Borrowing a huge sum to purchase an unnecessarily large house is financial foolishness. You will saddle yourself with hefty monthly mortgage payments and a lifetime of large utility bills, maintenance costs, property-tax payments and home-insurance premiums. Rather, when buying that first home, you should strive to purchase a place that's the right size for you and your family -- and that you can see living in for a good long time.

3. GET A LIFE

Insurance agents often push folks in their 20s to buy cash-value life insurance, arguing that it's far cheaper to purchase these policies when you are young.

Don't do it. To be sure, under the right circumstances and with the right policy from the right company, cash-value life insurance can be a decent investment. But for those in their 20s, these policies are unlikely to make sense.

Remember, the principal reason to buy life insurance is to protect your family -- and you may not even have a spouse, let alone kids. And if you are married with young kids, you no doubt need a heap of coverage. The cheapest way to get that coverage is with term life insurance, which offers a death benefit and nothing more.

Cash-value life insurance, by contrast, combines a death benefit with an investment account. Because the premiums on these policies are so high, you will likely skimp on coverage, which means your young family won't be fully protected. Moreover, if you buy a cash-value policy, you probably won't have the spare cash for other, better investment opportunities, such as funding a Roth IRA and your employer's 401(k).

4. GO FOR GROWTH

Those in their 20s are encouraged to invest heavily in stocks, because they have decades until retirement and thus plenty of time to ride out market declines. This is good advice -- in theory.

In practice, I would be a little cautious. You don't want to invest heavily in stocks and then panic and sell during the next market plunge. Yet that's a real danger if you are new to the market and you have never lived through a market decline.

My suggestion: Start with 60% stocks and 40% bonds. If you find yourself unperturbed by market swings, move your stock allocation up to 85% or 90% after a year or two.

Younger investors are often also told to favor highflying growth stocks. Growth stocks can be wild short-term performers -- but the hope is that they will deliver superior long-run returns.

Unfortunately, there's a good chance this hope won't be fulfilled. Academic studies suggest the highest returns are earned not by growth companies, but by prosaic bargain-priced value stocks.

I am not, however, suggesting you load up on value. Instead, start by building a well-diversified portfolio that includes both growth and value stocks, as well as offering exposure to the broad U.S. market and to foreign markets. If you later want to add a tilt toward value stocks, be my guest. But your top priority should be broad diversification.

jonathan.clements@wsj.com

Chinese in Malaysia part 2 - GENTING Group & IOI Group

鉅富祖籍耍本色（第四篇） ＊福建幫＊

1天內拿到賭牌, 林梧桐白手起家


“Uncle Lim”，是大家對今年4月剛歡慶90大壽的丹斯里林梧桐的暱稱。
新一代賭王的光環，則慢慢在丹斯里林國泰身上成形。

油棕園及蒲種區產業發展，卻是丹斯里李深靜的代表作之一。

雖然三者看似風馬牛不相及，但難掩蓋福建人低調行事的謙卑作風。


林梧桐
祖籍：安溪

從身無分文到富甲一方，林梧桐一手將荒蕪的雲頂高原打造成聞名國內外的避署、旅遊兼娛樂勝地，並與雲頂（GENTING，3182，主板貿易）劃上等號。

這位白手起家的經典傳奇人物，1918年在中國福建省安溪出世，16歲喪父后獨挑母親與7名弟妹的生活重擔，1941年從中國南下大馬，在叔父手下做個每日工資只有80仙的學徒。

日軍侵佔馬來亞期間，他當過小販，戰后轉行賣廢鐵，從而成立建發實業公司，承包建築工程，並在採礦業務賺取不少錢。

60年代初期，林梧桐承建金馬崙高原水力發電廠，觸發他想在吉隆坡附近高原，發展旅遊休閒業的意念，開發賭場就成為致力追求的目標。


林國泰
30多年前，他在已故國父兼首任首相東姑阿都拉曼協助下，一天內申請到經營賭場的執照，被譽為“全世界最快取得賭場執照的人”。

冀全球排第3

早在70年代后期，雲頂便已朝向業務多元化發展，以旅遊休閒業紮根，進而開發種植業、產業發展、能源、造紙、石油及天然氣及海上郵輪業務。

2004年，林梧桐宣佈退休，正式把雲頂集團掌管大權交給次子林國泰，自己則退居幕后。


林國泰青出於藍

林梧桐為雲頂奠下強穩根基后，再由林國泰擴大版圖至世界多個角落。
林梧桐曾表示，很滿意林國泰這位接班人，並形容他是個有自己行事風格、幹練且聰敏的企業家。

除了將雲頂業務版圖，透過麗星郵輪（Star Cruise）擴至公海，林國泰更將賭業投資拓展至美國、英國、盧森堡、澳洲和菲律賓等地，成為亞洲最大賭業上市公司。

成功取得英國最大賭場營運業者，史丹利休閒（Stanley Leisure）的控制股權后，在林國泰領軍下，雲頂贏得新加坡第2張賭場營運執照，一年內雙喜臨門。

雄心壯志的林國泰甚至放眼，雲頂10年內成為全球第3大休閒娛樂兼博奕集團，並積極透過麗星郵輪進軍澳門博彩業。

雖然林國泰表現青出于藍，新一代賭王風彩逐漸成形，他卻像父親一樣，待人謙卑，行事低調，不愛出風頭，雖然掌控龐大集團及身兼許多要職，卻一直避免成為鎂光燈焦點。


購園坵賺第1桶金．李深靜親力親為

李深靜
祖籍：永春
李深靜是位在油棕園長大的貧苦人家孩子，年少時曾沿戶兜售冰淇淋養家，最終憑著苦幹及不斷掌握機會，崛起為擁有萬頃土地的企業鉅子。

年輕時，他做過園坵管理員，能操一口流利的淡米爾語，較后曾管理位于巴生附近的油棕園，自己還經營一家汽油站。

據稱，李深靜聯合數位巴生商家，向丹斯里李萊生購買柔佛數千英畝園坵，從中得利上百萬令吉，賺得人生第一桶金。

后來，他從事房業發展，首個計劃即是加影附近的南順發花園，但真正讓他開始嶄露頭角的，卻是獨力收購氣體製造業者工業氧氣（Industrial Oxygen）一役。

成為IOI集團（IOICORP，1961，主板種植）前身的工業氧氣大股東及管理人后，李深靜1985年開始通過一系列企業及土地收購活動，進軍油棕種植及產業發展領域。

1989年，甘文丁機構（Kamunting）旗下南洛園坵待價而沽，當時逐鹿者眾多，李深靜在最后期限前才接獲獻議。

4.7億購南洛

但他在短短一天內，決定通過工業氧氣出價5億令吉（過后改為4.7億令吉），高價收購南洛園坵和其它資產（包括棕油廠、樹膠及可可加工廠），震驚大馬商界。

工業氧氣原已擁有1萬5556公頃油棕、樹膠及可可園，加上南洛園坵資產，頓時躋身為當時五大種植股之一。

李深靜深懂週期性的種植業無法常保盈利，所以高價出售部份地段作為其它用途（包括房地產、休閒勝地及高爾夫球場），從中賺取厚利。


蒲種產業先鋒

蒲種今日朝氣蓬勃的發展，歸功于李深靜的獨到眼光。
1989年杪，李深靜購買蒲種406英畝土地，全面推行價值達10億令吉的混合房屋發展計劃，成為蒲種區產業發展先驅。

蒲種當時僅是一片遼闊無垠的園坵地，在別人眼里或是毫無希望的土地，在李深靜眼中，卻是黃金地。

他深信，有朝一日蒲種將發展成比八打靈再也還要現代化的城鎮。

蒲種今日朝氣蓬勃的發展，就應驗了李深靜的獨到眼光。

如今，除了身兼IOI集團及IOI產業（IOIPROP，1635，主板產業）執行主席，李深靜也積極為多家公司、協會及社會組織，提供諮詢及引導。

值得一提的是，翻查過往資料時，赫然發現，李深靜多年來保持低調作風，特別是以個人為主的報導竟屈指可數。