SilverMalaysia

Thursday, March 31, 2011

Capital Gain Issue. Investor vs Seller. Which one is better?


Week 8.3 Capital Gain Issue. Investor vs Seller. Which one is better?
 I have spoken to an accountant recently he told me there is no tax for capital gain since it is an investment. For example UOB gold, you brought at RM3000/- now sold at RM4300/- you have made a gain of RM1300/- and this gain is not taxable. There is no capital gain tax in Malaysia other than Real Estate. Since you are buying and selling through via a company e.g
Buy and sell gold /silver bar via Public Gold
Buy and sell gold physical or paper gold via Maybank, UOB, Kuwait Finance House etc.
This has clearly distinguished you that you are an investor thus the gain should not be taxable.
However, the story is different in the case of silver, you need to buy from someone like silvermalaysia who is selling in ebay.  To make a profit you have to sell off your silver right. Thus, you are indirectly involved in buying and selling. How do you convince LHDN (inland revenue department) that you are investing and not involved in buying and selling.
Here are a few suggestions to assist you on this matter.
1.      Your recorded transaction amount should not exceed your annual salary lah. Otherwise it is buy and sell already. For example your salary only RM5000.00 per month but monthly bank statement show an activity of RM25,000 or monthly bank wire exceed RM25000/- month.
2.      You should keep your goods maybe for 1 – 2 year before you sell it off. Just like a collector selling off his old coin collection for years. Is it taxable?
Mathematic calculation
Investor
Assume you are an investor, you invested in RM10,000.00 of silver. After paying the 15% tax RM1500, you then keep the goods for 3 years. The price of silver gone up 4x, the goods can now be sold at RM40,000.00. You have made a nett gain of RM30,000 – RM1500 = RM28,500.
Seller
Assume you are an seller, you invested in RM10,000.00 of silver. After paying the 15% tax RM1500, you then keep the goods for 3 years as a backup inventory. These inventories are used whenever you run out of goods for sales. The tax is negligible for you since you can always treat it as an expense nevertheless you can include in this calculation.  The price of silver gone up 4x, the goods can now be sold at RM40,000. You have made a pre-tax gain of RM28,500. However, since you are a trader, you need to pay the capital gain tax of 26% of RM28500 which amounted to RM7410. Your actual nett gain is RM21,090. The RM7410 hopefully can be off-set by other business expenses. Why 26% and not 10% or 15%? It is because precious metal are high capital business, thus those who involved are in higher income bracket.
Thus if your business is just making a slight profit, you may need to make a distinction at the first place when you purchase your goods on whether it is for buy and sell or for investing.
You decide what you want! So that is not need to clear the mesh when the times come. I already screw up long time back. That’s part and parcel of learning.

Monday, March 28, 2011

Meaning of LBMA Good Delivery


Week 8.2 
Bars accepted by LBMA(London Bullion Market Association) as Good Delivery.
Here is the list of 400 oz gold bar and 1000oz silver bar accepted by LBMA as Good Delivery.
What does it mean when the Precious Metal brand you brought is good for LBMA Delivery?
Here is the summary of the procedure that refiner must go through in order to be certified as LBMA Good Delivery.
1. Application for listing
Company must be in existence for 5 years and involved in metal refining operation not less than 3 years.
Company’s annual refining production of not less than 10 tonnes of gold or 30 tonnes of silver.
Company’s with net tangible asset more than $10 million pounds sterling.
The application fee is £1400 + VAT (17.5%).
LBMA reserve the right to arrange a short inspection visit before accepting the application. Cost of inspection visit, including business class flights, local subsistence and travel must be paid by applicant.
2.  Technical Assessment Procedure
LBMA will check the applicant assaying capability (stage 1) fee
LBMA will exam the applicant and test it bars. (stage 2) fee
Stage 1
LBMA will send a reference samples (cross checked by multiple referees) to applicant
Gold: 24 samples of 10 gram each with 995.0 to 999.9 parts per thousand
Silver: 10 samples 999.0 to 999.9 parts per thousand
Applicant must be able to determine correctly the exact gold or silver content on each sample within a small margin of error.
Stage 2
Applicant must send 10 bars to LBMA for testing.
Each bar is 395 to 405 oz for gold and 900 to 1050 troy oz for silver.
Applicant have to bear the freight and insurance cost to LBMA.
The bar will be sent to referee examiner and extensively tested. Some of the test includes Visual inspection, weighting, assaying of cut, drilling samples taken from each bar.  Full melt assays on 4 to 5 bars.


Fees Payable by Good Delivery Applicants (in £ sterling – subject to VAT where indicated) Fees (all fees are payable to the LBMA)
Gold
Silver
On Application (plus VAT at the applicable rate)
1,400
1,400
Stage 1: Assay Test (not normally subject to VAT)
11,500
4,500
Stage 2: Testing of Applicant‟s bars (not normally subject to VAT)
13,100
13,100
Total
26,000
19,000

Result
Upon passing all tests, the applicant details will be included on the Good Delivery list.
3. Proactive monitoring
Applicant may be required to send in a dip sample of their normal production melt. The sample will meet the stringent criteria within a small margin of error.
Annual monitoring fee of £1000/
Membership fee = £6000/- per year, Associate Member is £2500/- per year. Subjected to UK VAT. 17%
Upon reading this article, you realize that the cost of getting a LBMA good delivery certified is very high and not many refiners has the capabilities and annual capacity to do it. That explains that only countries with Precious Metal mining or deals with high volume of precious metal have refiners that are accepted as LBMA Good Delivery.  That why you need to pay for premium on gold and silver with brand names listed in LBMA Good Delivery List.
Thus, buy Engelhard, Johnson Matthey, PAMP, Perth Mint, Canada Mint, etc. It’s worth the money.

Sunday, March 27, 2011

Safe Deposit Box Break-in Cases

Week 8.1 Safe deposit Box. Break in Cases


Maybank Finance Taman Cheras. 2nd March 1995 till 6th March 1995
Court Cases. Susan Cheah Vs Maybank Finance
If you have time, do read the article. Here is the summary,
The alarm from the strong room did ring on March 3, but the CMS security people and police unable to go inside the bank because the two key holders of the bank premises cannot be contacted (none of the officer are available).
The defendant did not take steps to reinforce the floor of the safe deposit box room. The defendant was also not advised to connect the room floor to the alarm system.
There is no infra-red motion detector on the floor of the strong room. No evidence that a security expert was employed to ensure the safety of the plaintiffs’ valuable.
http://findarticles.com/p/articles/mi_8016/is_20061026/ai_n44338593/
Banks. (taken from Newspaper archive)

MBF Jalan Tukang, Kajang.
On June 21, 1993, burglars entered the MBf branch in Jalan Tukang, Kajang, by making a hole in the wall.
In the incident, which occurred during the Maal Hijrah holidays, the burglars used oxy-acetylene torches to cut through the vault and enter the strongroom. They emptied 130 of the 1,017 safe deposit boxes and took about RM200,000 kept in the room.
Although the exact amount of losses incurred by the customers was never disclosed, it was reported to have run into millions of ringgit.
Following a public outcry, the customers were offered compensation, but the total payout was not made public.
Public Bank. Sri Kembangan Oct 24. 2006
After gaining entry by drilling through the ceiling, the gang emptied 92 of the 708 safe deposit boxes of the Public Bank branch.
Selangor police chief DCP Datuk Ismail Omar said this took place at the five-storey MCA building. Public Bank occupies the ground floor and the first and second floors.
"The burglars entered the building through the back door about 5am and made their way up the staircase to the third floor," Ismail said.
It is understood that on the third floor, which is leased by a solicitor, the burglars broke the grill and made their way in.
They drilled a hole, measuring 0.3m in diameter, on the floor and one of them lowered himself with a rope to the second floor where the strong-room is located.
It is learnt that there were no closed-circuit television cameras in the bank.
At Press time, the losses suffered by depositors had not been estimated as the bank tried to ascertain which boxes had been broken into and what they contained.
The break-in was discovered when an alarm signal was detected by an officer on duty at the Public Bank headquarters in Jalan Ampang.
The officer called the police as well as despatched a security guard to the branch.
It was discovered that safe deposit boxes had been prised open and the room was in a mess with documents strewn on the floor.
"The bank has not been able to make a calculation of the losses and they are still working on the matter," Ismail told newsmen at the district police headquarters here yesterday.
Police are investigating why the Central Monitoring System in the building failed to detect the entry of the burglars when they went through the back door.

Police seized several tools, including an electric drill.

Other Cases.
In April 1995, burglars bored their way into a Tenaga Nasional branch office and carted away a safe containing RM70,000 in cash and cheques in Taman Midah, Cheras.
During the Hari Raya holidays last year, burglars broke into the Perwira Habib Bank branch in Subang Jaya after disconnecting the alarm system and took RM64,220 from the ATM.
>> 
This article is taken from The Star Online (Wednesday December 20, 2006)     
KAJANG: Burglars drilled a hole through the wall of a goldsmith's shop in Taman Taming Jaya here and carted away RM1mil worth of jewellery during the early hours of Monday.
The break-in appears similar to the Oct 24 theft at the Seri Kembangan Public Bank branch, where thieves escaped with more than RM500,000 in jewellery and other valuables. In the latest case, the burglars drilled a hole measuring 1.5m by 1m wide through the rubbish chute behind the shop, which led into the washroom of the premises.
Once in, the burglars disabled the alarm, telephone and CCTV before drilling at least 18 holes measuring as small as 4.5cm each through the concrete wall of the vault located next to the washroom. They used their hands to scoop out jewellery worth RM1mil and only left behind some worth about RM600.
Five workers, who were staying on the second floor of the three-storey building, slept through the burglary.
Kajang OCPD Asst Comm Rusli Mohd Nizam said police believed that at least three to four people, including one who had stood guard near the rubbish chute, were involved in the burglary that was believed to have occurred between midnight on Sunday and early Monday morning.
He said the workers only discovered the burglary when they opened for business at about 9.30am. “Our investigations show that the CCTV had not recorded any image of the burglary while the security alarm did not go off as the burglars had cut off the wires.
“However, we have lifted at least five fingerprints from the premises,” he said in a press conference here yesterday. It was learnt that police also found tools, believed to have been used by the thieves, in the shop.

Saturday, March 26, 2011

Safe Box Action Plan.

Week 7.4 Safe Deposit Box Action Plan.

Let have an action plan on

Things that we can do without assistance of others

1. If a private safe operator has a major break in then their business is finished. Thus, they will make sure it will never happen. If a bank safe deposit box is broken into, the bank will still in business. So better put it private operator lah.

2. Private operator operation hour is longer than bank operation hour. Thus, the time required to break-in much lesser so it may be safer. According to statistic, most of the break-in happened during long holiday break.

3. Insurance and court case settlement take years. E.g. Susan Cheah vs Maybank Finance, The incident happen in 1995, the compensation is not still settled in 3rd March 2003 (high-court case). If you want earlier settlement can but it’s RM10,000.00 only wow. So, if your box is lost due to break in considered it is lost forever. You should hedge your bet by putting your items in few separate safe deposit box preferably from different operator. Just factor in the storage fee depending on your budget. For example, UOB Singapore silver account charges 0.375% per annum for silver account. Thus, it should be ok to factor in a storage fee of 0.5% of the stored value.

4. Do you think it with a RM100,000.00 insurance protection, you will get paid RM100,000.00 compensation? You need to prove it beyond any doubt. That also depends on what’s stated in the fine print of the insurance policy you signed. Insurance on antique old coin, notes may be difficult to assess. Just look at the compensation paid-out given in most insurance cases then you have a better idea. In the end, insurance is still an issue.

5. If it is tax deductable for sole proprietor or company, why safe? Just insured it lah, get few more boxes.

6. Many banks in KL are located near the Klang and Gombak river. Some of the vault is underground and may be prone to major flood. Just don’t store anything than can get wet. If this happens, it ‘ll comes and hentam U just like that. You won’t realize it, if you about to realize it let say raining non-stop for 2 days, then KL may be traffic jam, LRT crowded etc. E.g. Cars in underground parking dataran merdeka was fully submerged with water. You never know which building water pump is working or not. They also will never tell you. Preventation is better then cure.

http://thestar.com.my/news/story.asp?file=/2007/6/11/nation/17990137&sec=nation


Things that we can’t do without assistance of others

I think it may take few more safe deposit box break-ins then only something is done. After the Sri Kembangan cases, Public bank offered Lon Pac insurance for all safe deposit box hirer. I’m not sure what was the case before the incident?

Authority 

If you happen to be someone in power or in a position to influence someone in power then the following are my recommendations

1. Information on Insurance option for safe deposit box must be widely to safe deposit box hirer. I have to spend so much time checking which bank got insurance, which bank don’t have. Apparently most banks don’t have it.

2. What is RM10,000 insurance today consider the inflation? The minimum insurance rate should be raised at least to RM50,000/-. Then there is an incentive for people to use the safe deposit box.

3. There should be an independent audit on each safe deposit facilities deployed by bank nation wide. Those facilities which found to be unsafe should be closed down.

4. Insurance coverage should be best provided by third party independent from the safe deposit box operator.

Banks and Safe Deposit Operator

During the bird flu incident in Thailand in 2004, Prime Minister Thaksin urged people not to scare and eat the chicken. He then ate the chicken himself. Thus, the bank can also do the same thing. Introduce a self-confident program. All senior staff will get a free safe deposit box in the branch where they are working. There will be a periodic check on the safe deposit box in order to qualify for next year free rental, they must show that there is something worth RM50,000 stored in their box. If there is a break-in, they also will kena because their box inside is there also mah.

Auction

Some location the safe deposit boxes are always full and the waiting list is very long. I don’t understand why the operator doesn’t want to auction it out. You can get a better deal.

Wednesday, March 23, 2011

Bank with Additional Safe Deposit Box Insurance

Week 7.3 Bank with safe Deposit Box Insurance

Most of the bank has a standard insurance of RM10,000.00 per safe deposit box.
From my survey, there are only 2 banks with additional insurance protection.

Public Bank
Safe Deposit Box under coverage by www.lonpac.com a subsidiary of Public Bank Group, you can add additional insurance protection up to RM200,000.00
The problem is most of the safe deposit box is full in most branches especially the strategically located one. You need to call each one of them one by one to find out. I just done have the time to do that.

RHB Bank
Safe Deposit Box under Underwritten by RHB Insurance Berhad a subsidiary of RHB Group, you can add additional insurance protection up to RM40,000.00 with a fee of RM90.00 per year. All the info is below here, you can do your own home-worklah. I’ve done most of the work already.

http://www.rhb.com.my/insurance/bancassurance/mysafe_deposit_box.html
http://www.rhb.com.my/rate_charges/service-charges/sc_others_sdbr.html
http://www.rhb.com.my/rate_charges/service-charges/sc_others_sdbr_tier1.html

http://www.rhb.com.my/rate_charges/service-charges/sc_others_sdbr.html

CIMB Bank

CIMB has a new building in Jalan Raja Laut, since it’s a new building it must have a safe deposit box facilities and perhaps it may be quite secure. New building, new technology perhaps!. Visit them some time back, they ask me “Are you a CIMB preferred member?” I asked how to qualify to become one. Just maintain RM200K balance with us. Wow! I guest silver need to be RM2000/- oz then I will qualify. The person is kind enough to give me details on other branches.

Tips now! CIMB Jalan P Ramlee still got safe deposit box available. Go go go!
But only RM10,000/- insurance only

Third Party Insurance
I think there are some third party insurance available for safe deposit box. You just need to put more effort in finding it.

Tuesday, March 22, 2011

Private Safe deposit Box Operator

Week 7.2. Private Safe deposit Box Operator

There are three private safe deposit operators in Malaysia. Please do spend some time by visiting their website or go for site visit.

a) http://www.safedepositbox.com.my/


USJ summit (shopping complex)
Damansara (4 storey shop lot).
Insurance coverage by Lonpac insurance
Min is RM10K coverage
Max RM80K coverage.

Wisma MPC, Jalan Raja Chulan is closed down on 15th March 2011.

Apparently, the Wisma MPC location is not good enough. There are 16,000 boxes there yet there are not many takers. If not why closed it down. It heard many of the banks are not helpful in promoting the safe deposit box services. I think the facilities there is quite OK, considering it is a high rise building and not shop lot.

If you want good location e.g Time Square, then rental going to be expensive then customer won’t want to pay. If location no good, no customer. Catch 22. I think later, customer going to pay for their ignorance. You go and find which bank in KL still have empty safe box for rental, let us know. How many phones call you have to make? How many deposit you have to pay before they allow you to rent the safe box?
It’s the cheapest among all the 3 operators.

b) Royal safe cum Public Safe
http://www.rsdb.com.my/ or http://www.publicsafe.com.my


Min coverage is RM100K /box.
Max coverage RM400K /box
Insurance Coverage by Kurnia insurance and ACE Synergy Insurance Bhd
Spend some time visit their website or go for a site visit.
Only 6000 boxes per site to prevent congestion.

All side of the walls, top and bottom are steel reinforced. Only one customer and his co-hirer can enters the facility at one time. However, there is only one small space for customer to access their belonging. Thus, you may need to wait if there is lot of customers. At the time of my visit, saw one guard and one operator in the facilities. The guard can accompany you to your car. Reserve parking for customer. There is a lot of empty parking space there. Public Gold Office is just on top of the royal safe. Thus, you may expect that most of the hirer are Public Gold Agent.

I was told that safe boxes are heavy stuff thus it should be located in the ground floor. However, I have seen many safe box facilities located not in ground floor. Thus, I need to get some verification from a structural engineer.

To go there is quite jam unless non-peak hours. It located near Sunway pyramid. Price wise it is 2nd most expensive.

c) http://www.mysafebox.com.my/

24 hours.
Sri Kembangan
Insurance per box RM10,000 to RM20,000/-
Max coverage per box RM$150,000/= by Kurnia Insurance.

I went and visit them some time back. The box is not located at ground floor, I was told that if robber/pencuri get in they must climb to the upper floor to access the safe. Sound logical. There won’t be any burglar since it is a 24 hour facilities. There is some steel beams reinforcement at the ground floor to support the weight of the boxes in upper floor. They show me the video on how to access the box, I was impressed with the procedure. There are ample spaces and few private rooms for customer to spend some time with their precious belonging. I saw 2-3 guards. This is the most guarded facilities. Their price is the most expensive. I think they cater more for Sri Kembangan people.

Drawback:
The traffic congestion is very bad at Sri Kembangan especially at South City Plaza area and near the race course at Mines.

Price wise and other info: I didn’t put it here even though I have it, operators may not like it. If you want just give them a call they will be more than happy to entertain a potential customer. Do your own due diligent before you engage their services. It not so much about the charges, it is more to protection of your assets.

Point to consider.
1. Maximum insurance amount is an indirect indication of how secure the safe deposit box facility.

2. Location of the safe box where it is convenient for you to access it. Petrol is going to be very expensive in 2012, 2013.

3. Adequate parking space for the hirer to get in the safe facilities and make a quick exit

4. Opportunity to Hide in the masses
The place must have many people walking around so that you cannot be identified. Unless the robber targeted you then that is another story. If it is a shopping complex, then it’s difficult for people to tell where you are heading to whether to the safe box or elsewhere.

5. Expansion. No movement is the best movement
Some safe facilities are in the process of expansion where there are some vacant spaces for new safe boxes to be added in. At the meantime, the old boxes are already rented out. Thus, this may pose some security threat during the process of adding new boxes.

See you on the next few articles on Safe Deposit Box.

Sunday, March 20, 2011

Safe deposit Box. Video Taking.

Week 7.1 Safe deposit Box. Video Taking.

Some time ago, I made a call to an insurance provider with regards to Insurance matter. Here are some pointers for you.
a) Keep the receipts separate from the stuff you put inside the box.
b) Make copies of the receipts
They don’t want to know what you keep inside your box at the same time you must be able to prove that the stuff is inside there. Isn’t it odd.
c) Best way is to take a video (not even photo)

Have you try to take a video before, if no then give it a try it‘s not as easy as you think. Only the hirer or co-hirer is allowed to go inside the safe box room. Thus, you must get assistance from your co-hirer. Ops, somebody will know what you have.

Before you visit the site, buy today newspaper. Ask for assistance from your co-hirer to take the video cam. Tell the safe operator that it’s going to be long session because you intend to take a video for insurance purposes.

The whole video session should not be disrupted from the point you enter the safe room until you leave the safe box room. Then there is no dispute on what you own inside the box. Take a photo of today newspaper along with the time and date in the safe box room. So that no dispute on dates. & time. The safe deposit operator should have a record on customer access.

The video must not have any blanks in between because the insurance company can dispute that you may slip in few gold bars inside your pocket during the blank period. Thus you need an assistant. The video taken must be in high definition should that can clearly show what you own.
Video should be taken on your last visit. After that don’t visit the safe box anymore unless you are willing to take the whole video session again.

I ‘m not sure about any court case with regards to dispute on total compensation of loss safe deposit box due to hirer’s inability to prove the content inside the stolen box. As far as I know most of the cases, the hirer are only compensated a maximum of RM10,000/- per box.

If you think that by showing your receipts and photo is not sufficient for you and you want a less hassle free settlement with the insurance provider then take the video. When comes to payment there will always be a lot of issues, doubt etc raised. However, these are not told when you took up the insurance policy.

Related Questions
1. Audit on Safe box, does the safe box operators keeps a record on who enters the safe box room and for how long the record is kept. What is the regulatory requirement on this? Suppose you have taken the video 3 years ago and never touch your safe since then.

Tuesday, March 15, 2011

Recent Communication

Week 6.2 Recent Communication

Just bump up with an old customer of mine. He used to buy a lot from me previously then stop for 1.5 years. Just want to find out what happen to him.
He told me he sold off most of the item he brought from me. Wow! Just keep some of it only. He told me “Silver is very heavy, very difficult to bring few kilos around”. I now focus on mining stock. He said “ Naik cepat, turn pun cepat. ”. I think most of it is done online.

Wow! U R more advanced than silvermalaysia now. Wish you best of luck. For me I will follow Jason Hommel approaches. He previously started with mining stock and has a newsletter business but now focuses on his silver store. I think I will focuses on selling silver instead.

Nevertheless, in case you decide to buy foreign mining stock you can do it via Hong Leong Bank or Maybank and other various banks.

http://www.hlb.com.my/eb/ebroking/foreign_trading_cost.pdf


http://www.maybank2u.com.my/mbb_info/m2u/public/promoDetail.do?channelId=INV-Investment&cntTypeId=0&cntKey=INV01.08&programId=INV01-ShareTrading&chCatId=/mbb/Personal/INV-Investment

Sunday, March 13, 2011

Unwritten Rules

Week 6.1 Unwritten Rules

Rule No 1


PM is money. You cannot ask for installment payment. It must be paid in full first prior to delivery. You cannot order now and pay 2 weeks later. Quick payment is required. Your word is your destiny. If you said I will sell at this price by this deadline, you will commit to it no matter what happen even at your loss. I never cancel my order before.

Rule No 2
It high volume low margin business. It is not numismatic product where you buy from pak cik at RM50/- and sell to uncle at RM100/- after negotiation a deal is strike at RM88/=.

Rule No 3
Highly trusting business. You see many gold smiths in each town in Malaysia. Many of them are quite old with more than 10 years in business. Yet there are still in this business. Why? Because it based on trust. There is a lot of trust between seller and buyer because the money involved is huge.

Rule No 4.
As I always seen, friendship won’t buy you any business. Lowest cost will win most of the time. After all bullion is bullion, there is little or no value added services in it.

Rule No 5.
Business is business. Personal is Personal.

Rule No 6.
It is a business with very few leng lui. Leng Lui don’t need PM mah cause lot of kaya man support. Throughout my sales experience no leng lui yet. Mostly guys. If you want to meet leng lui then go into comestic or clothing business. Erh, don’t play play huh,

http://myprettycurve.blogspot.com/
www.myprettycurve.com
also started out from ebay. She won the ebay award for Malaysia for best sales.

Check it out at
http://sea.ebay.com/interimhp/interim_spotlight_04.html

Goodlah, can get free nice clothes for herself and get to sell it as well.
For additional success story, check it out at
http://sea.ebay.com/sellingsuccess2010/award/outstanding-sales-award-lim.html

Additional Rule
Well, not experience enough to comment it. Need more experience mah.

Thursday, March 10, 2011

Virgin Sale


Week 5.4 Virgin Sale
What, I meant is the 1st few sales.  Once you got your bullion, you decided to sell it off and make a slight profit. The main intention is always to dispose your bullion for cash.
So, you list it online anywhere, facebook, ebay, mudah and anyway you could find. You’ll check your listing and email everyday. Once the phone ring you will answer enthusiastically, COD anywhere also you will agree. Who are you anyway? No network reputation such as ebay feedback point, who want to pay you first. COD solve the problemlah.
Come to think of it, on the first few deal, I didn’t really make any money. It is more for the excitement of getting something sold. If you calculate the time, money and effort spend it may not worth the trouble.
On one occasion, I did make some profit on the sales. But after deducting the free drink I sponsored my customer in the end I just merely break-even. But we have a nice talk with that fellow. He keeps telling me he is interested but not buying because he doesn’t know how to dispose it.
On another occasion, I have to deliver the goods in mid-valley which is famous for its traffic jam and lack of strategic parking place during peak hours. So I decided to take a train there. I just finished parking my car, then suddenly I saw the KTM train arrived, I run like hell to catch the train cause I know if I miss it, it will be another ½ hour gone. Got into the train, then my whole body was sweating.  Then in mid-valley, that fellow picked only 3 oz out of 20 oz I given him to choose from. What a tough business back then. 
After a while when all the excitement settled down, you begin to set a realistic expectation on how you conduct your business. It may not sound friendly, but it‘s realistic.
No COD if order is less than RMXXX only postal services. COD only for certain area only. Sometime wait 1 hour at post office just to have the good posted.
I talked to one fellow who sells some stuff online. The customer promised to meet up with him at 6 pm. So he came early at 5:30 pm. Then the customer ring and said he will be late, the deal was finalized at 7:15 pm. He said he has to wait for 1 hour for his customer. Why do U have to do that? U should get into PM business where the customers wait for you. Hahaha!!! When I begin to dig into the real source of the problem, it seems that he has lot of surplus inventory and can’t wait to dispose his stuff at cost. Thus, next time don’t overstock your goods otherwise you will be pressured to do cheap sale.

Wednesday, March 9, 2011

Value Added Services

Week 5.3 Value Added Services



What kind of value added services do you think local precious metal dealer can provide? By definition local PM dealer will get there stuff from oversea and resell it to local customer. Buy in bulk and sell in smaller quantities. Some of the Customer benefits are

a) Free the customer from other risk and hassle.
b) No need to worry about custom clearance
c) No need to worry about seller run away with your money
d) No need to worry about item getting lost, stolen etc. Distressing paypal dispute.
e) No need to worry about long delivery time frame
f) Enable one to purchase in small quantities of different variety and save on the freight charges

Pay cash now and get your bullion within 1 week.

If seller ran away with your money you make a police report lah. Just make sure the seller is someone who will not run away, has a permanent job and contactable locally. Thus, seller must honor their commitment.

Come to think of it, these value added services may be trivial to some customer especially big buyer. After sometime, as they progress better and better, they will not buy from local PM dealer anymore. The only thing they need is to know the buying source. Once the source is known business is finished and PM dealer has to engage in a new ball game to survive. Don’t be chicken, come and compete. Let see how the competition goes as time passes by.

If you compare this with roti canai seller, even if I give you one full year, you still cannot complete with the road side mamak selling roti canai. They have a skill which takes years to acquire. The Value added service is their skill.

Monday, March 7, 2011

Silver Cleaning Tip

Week 5.2 Silver Cleaning Tip.

Easiest way. Silver cleaning cloth.

Go to any of the silver jewelry store in shopping complex. Most of them are 3x6 feet store with leng lui selling silver ring, necklaces etc. Ask them for silver cleaning cloth. It is yellow in color and normally sold at RM5.00 per piece for a size of 2x2 inch. The cloth is a microfiber cloth soaked with some chemical to clean your silver.
If you have 5-10 coins, you can clean using the cloth lah. If you have few hundred silver bar then you need other solution.

You can use the cloth to wipe the silver dirt in any silverware. Just gently wipe your coin with the cloth, it should be able to remove the minor stain. However, after some time it will still come back one. Silver is silver. U have to leave with it. Even some slabbed coin will also stain after some time. It is good for cleaning silver horn, white spot on maple leaf. You should clean it when the spot is small, once it spread, susah to clean already.


Silver Cleaning Cloth Silver



Cleaning Cloth after cleaning


2. AutoSol

You can buy this some hardware store. You can use this to clean up mainly silver bar. This was recommended by my customer. Please use a microfiber cloth. It is good in cleaning old silver bar like JM, Engelhard.


AutoSol
3. Silver Tone

I brought from Maju Junction at RM38/-. You need to soak your coin with the silvertone solution, after 3 -10 minutes, clean the coin with ZIP white color dish washing soap. Clean it properly. Dry it with a cotton cloth. However, this method you may scratch your coin. You will see some scratches after the process but the coin will look very clean.


Silvertone

Cif Detergent

4. Not working Way
Well, if you plan to clean your nice BU or UNC silver coin, please don’t try the baking powder etc shown in many internet article or forum. It will only get worst especially for silver Maple. You get even more staining. I also brought some TarnX silver cleaning solution, it didn’t work either. The above one is working one, I personally tried it before so you don’t have to worry, just do it. Hopes it save U a lot of time and $$$$$$$$$.

Tarn-X



Conclusion


Prevention is better than cure. Cleaning is time consuming process. Time is money thus when the coin comes in tube then just seal the tube. If in loose form put it inside an airtite ok. At least U won’t headache when you see the coin is staining. It will still get stain after a longer time. If you don’t want staining coin then buy only Perth Mint product, triple seal it lah.
If U got staining coin and sick of it, sell to me. I will buy from you if the price is right. If price is almost the same as what I sold then I just forward it to my customer list lah. If no reply that means that the price is unreasonable lah. As simple as that. After you know these please don’t hassle me if you get some staining ok. Go and clean it yourself.

Predictions and Plans. How about you

Week 5.1 Predictions and Plans. How about you?

My plan is
      a) Settle some of my personal issues
      b) Planning on how to move away from Precious Metal. What item should I buy? What business model    should I venture into? FYI, it is 10 – 20x more difficult than buying precious metal. Buying metal is easy, just go to UOB pay cash and put your stuff in safe box and forget about it until you need some money.
      c) Invest in education. Attend some 1-3 courses/seminar.
      d) Enjoy life while the system is still in place.
      e) Secret thing. Can’t tell one.

My prediction for this year 30th Dec 2011
       a) Oil price USD120 by year end
       b) USD to RM exchange :- 2.8 to 2.9
       c) Silver USD40/oz
       d) Gold USD1500/oz

If recession I don’t think silver will go down to USD20/oz or gold USD1000/oz.
Property in Malaysia will maintain their prices this year.

Time-line for Precious Metal (PM). Not if but when
      a) Long delivery time for PM starting March 2011
      b) Postal services started to break down starting with USPS. Some article has stated US Postal Service   may run out of $ by Oct/Nov 2011
      c) Frequent lost/thief of postal item especially those who sends PM via normal postal service
      d) Vendor did not commit to their trade due to rapid price movement (everywhere)
      e) Vendor ran away with customer money after bank wire (oversea purchase)
      f) Fake bullion especially silver will start to emerge. Easy to manufacture but difficult to detect.
     g) Enormous freight charges for shipping due to oil price hike.
     h) Australia to be the PM seller of last resort. (The only few countries which can still maintain some growth due to their vast natural resources).

OK since you have been reading for quite sometimes, do you mind letting sharing your plan and predictions for this year with us.

Friday, March 4, 2011

Type of Chicken

Week 4.5 Type of Chicken

Gold Chicken
Buy gold from UOB. Wow! Buy sell got different one arh! I rugi lah. Then where to put my gold. I preferred not to hold it. Safe deposit cost $. The list goes on. In the end, they buy nothing.

Silver Chicken
Buy silver arh! How to dispose it lah? Got buyer or not? Silver will stain one wow! It ‘s use to be USD4.00/oz only.

Postal Chicken
Wow! What happen if post is lost? But I don’t want to COD wow! Afterward the seller run away ler!

Ebay Chicken
Wow! Ebay arh! No physical store one? Secure or not. Sure or not things won’t lost. they sells lousy item.

Paypal Chicken
Erh! I heard paypal got some problem one ler. Etc etc.

So, which type of chicken you are. ! I ‘m sure by now you have eaten quite a lot by now. FYI, I have quit eating chicken for some time already.

If there are so many chickens then there won’t be so many online businesses. If you don’t try how to be successful ler. Little bit already chicken out.

No Chicken
But buy expensive car and house + Play stock no chicken lah! Only beef, mutton and pork (for non Muslim only).

Thursday, March 3, 2011

Silver panda Coin

Week 4.4 Silver Panda Coin

One of the highest premium silver coin is silver panda. For big order, a monster box comes in 600 oz/box containing 20 x 30 coins pad. When it is minted, major reseller in USA will sells them at around USD6-7 above the silver spot price. Price for old silver panda goes up like mad over these past few years.

Selling Strategy

The strategy is buy a bit and hold for 2-3 years before reselling it higher price. Your customer will be new collector coming into the coin market.

ROI calculated base on nominal interest rate (ROI) is probably around 15% to 30%/ year compounded. If you have few grains in FD, you may want to consider getting silver panda as investment. You should get them while there are still minted, otherwise it will be a bit too late and your return may not be that high. In 2009, you can get a 2009 panda for USD23.00. You can check the prices in ebay today.
There are two appreciations in price. The first is the appreciation of silver value in the coin. The second is the appreciation in the numismatic value of the coin.

The following silver panda coin which has the highest appreciation from year 2000
a) Panda 2000
b) Panda 2003
c) Panda 2004
You can check out the price yourself.

Real Panda Identification

1. For silver panda 2002 and above, the coin reeling should be ///// slanted. This makes the counterfeiting process more difficult.
2. Weight should be 31.1 + 0.2 grams. Some real coin only weight 30.9 grams. Thus you must have a weighting scale before becoming a collector.
3. Has a face value of 10 yuan.
These 3 mains things enable you to distinguish most real panda from fake panda starting from year 2002. Off course you can see lot of fake panda article on the web, I find these few points very straight forward and are served as a good guide. The rest are just too technical for me.

Fake Panda coin. Picture below.





You can see that the weight is not 31.1 gram plus minus 0.2 gram. this coin has a close weight with the real coin. However you can see the reeling is straight and not slanted.




Real Panda coin. Picture below.




You can see the weight is 31.1 gram and the coin reeling is slanted.

For year 2001 and below, I don’t know how to differentiate them other than

1. Weight should be 31.1 + 0.2. Some authentic coin only weight 30.9. Most of the time, the coin is underweight.

2. Has a face value of 10 yuan.
I was also told that if you use light to shine the coin in darkness. You can actually see the panda in black and white. Certain portion of the coin has a different angle of reflection to light to cause this effect. Thus it is a high tech coin. I guess.

Seal Panda coin

Personally, I think the sealing is done by the seller. I don’t think it’s done by the mint. I could be wrong. FYI, coins from the monster box is not sealed.

Other Type of Silver Coin


Week 4.3 Other Type of Silver

There are four groups of common silver which you may want to consider buying due to their silver content. You may not want to buy them in quantity now but buy at least one or two pieces each so that you get to own it yourself. By owning the actual coin you get the feel off it. Hopefully, it can become a reference for your future purchase.

1. US 90% silver.
All US coin 1964 and prior are made of 90% silver, dime (10 cents) , quarter (25 cents), half (50 cents) and dollar. Rule of thumb each one dollar US coin has 0.773 oz of silver.

2. Canada 80% silver 1967 and prior.
Rule of thumb CAN$1 coinage has 0.6 oz of silver.

3. Australia 1966 50cents. 80% silver 0.32 oz of silver content

4. Straits Settlement silver coin.

You can find the coin melt value at the URL below.

http://www.coinflation.com/silver_coin_values.html

At this moment of time, it is quite difficult to sell these types of coins compared to pure .999 silver round and bar. Thus for large quantities some of them is sold at silver spot price. One of the reason is not many people can recognized that a particular coin is a silver coin. Those who can recognized can hardly remember the silver content and composition. Is it 80% silver, 90% silver? What is the Actual Silver Weight (ASW)? There are too many things to remember. Lot of education is needed.

There is a book and e-book on coin encyclopedia. The book name is “2011 Standard Catalog of World Coins 1901-2000”. Most silver coin in the world has been phased out in 1930s, 1940s, 1950s, 1960s. It’s region specific.

In Malaysia, the straits settlement coin silver coin was downgraded to 60% silver after the World War 1 due to rises in silver prices ( I can’t confirmed this cause I just casually read it somewhere). In 1940s, many silver coins were melted during WW2 Japanese invasion. Then, after WW2, it became apparent that silver coin is no longer used as currency.

Situation may be different in USA, Australia and Canada as there are silver mines in these countries.

Investment Options 1

Stick to US 90%, Canada 80%, Australia 80% and Strait Settlement coin, as it is easy for anyone to know the silver content of each coin.
For Strait Settlements Coin, you need to get hold of KN Boon Book. http://www.3833.com/
Inside the book, the coin weight, actual gold weight (AGW) and actual silver content (ASW), gold and silver composition is described.

Investment Options 2

Try to get hold of the “2011 Standard Catalog of World Coins 1901-2000”. Most silver coin in the world in good conditions is in 19xx. From the book, you can start shopping and looking for bargain at ebay.com. The ASW and AGW of silver and gold coin are described. The estimated value of each coin is also described.

Soon you find out that it is not a bargain because most of them are overpriced due its’ numismatic value. Nevertheless, it is an opportunity for you to amass something that will not drop in value due one simple reason it got some silver in it. Some of the coins can be South African Silver Krugerand, German Nazi Coin (rise in prices quite fast), German Mark, Mexico Silver Coin, Bahamas, Russia Olympic etc. So many countries, I find it hard to catch up with all of them.

If you want just buy 1-2 pcs enough, don’t buy 10 – 20 pcs unless you are super rich. Suka sendiri cukuplah. You will find out that there are not many specific collectors like you especially in Malaysia. You will find hard time in disposing some of it. Just look at ebay, year after year, the same foreign coin is listed there for so long with no buyer. The only way to dispose is via ebay auction bid at .99 no reserve.

Lesson Learned

You : Wow! What a great deal 50year plus old coin in EF condition selling at silver spot price? OK, let do my calculation, within 5 years I will be rich. Let buy 100 pcs now.

Customer : What the hell is these Canada dollar 1960 selling at RM60/each? I only want to pay at most RM4/- because the exchange rate is 3.x mah.
Lot of education needed.

Tips


People will sell slightly higher then their cost. They’ll sell cheap if they brought it cheap. Some Ah Chong, mamak or pak cik in some remote town who has been selling for many years, yet they may not know the silver content on each of these coins. You happen to read this silvermalaysia article, hopefully when silver is USD100/oz, they will still sell you KGV 50cents at RM50/-. The hunting begins. What a bargain? Knowledge is power. Enjoys.!