Things You Need to Know When Going to Investment Seminars

investment seminar

Have you ever been to an investment seminar?

I like going to those free investment seminars and gatherings because I get to know many different products offered by various banks and financial institutions. If you are interested in learning more about financial products, you can come to these events with some cautions.

Although it is often called a seminar, more often it is more about selling investment products. Even if it is a financial institution’s consumer gathering about economic outlook, at the end, we are often told about some new product offerings.

Sometimes we get emotional when hearing the special offer available that day.

For example, for the first 7 people who open an investment account with a minimum balance of Rp 100,000,000 will get a cashback of Rp 300,000. You can use the money to trade, but you are not allowed to withdraw for the first three months. We feel like we are getting some free easy money, but when you really calculate it, it is not really worth it.

If you are loaded with lots of money, that amount may be a spare change for you and it does not matter where you put it. However if you are not, you need to think about the opportunity cost of putting that money there. You need to think whether there are better alternatives for you. 

What do you need to do if you come to these seminars?

  1. Come with a clear goal in mind – is it just to learn about an investment product? Then come to learn and do not buy anything.
  2. Ask a lot of questions. If you do not understand the product, do not invest in it.
  3. Get a second opinion from someone outside the seminar, preferably those with financial knowledge and unrelated to the financial institutions that are offering the products. If you have a trusted certified financial planner, you can ask him or her.ziggy second opinion
  4. Be skeptical, especially if they are offering something that is too good to be true because it often is. If they are saying that it is a no-risk, high return investment, then run away as fast as possible because nothing is without risk. The higher the return, the higher the risk.
  5. Do not get pressured by the account officers or sales people, especially if they say that if you do not take action now, you will miss out on the profit. Let it go! There will be other opportunities to make profit!

Just like reading books, financial blogs, going to investment seminars can help you to be more knowledgeable about financial products. Use the opportunity to learn and may what you learn take you closer to your financial goals.

Learn and Grow

Inge Santoso, B Com, CFP®

Interest – Part 1 Simple Interest

1

When we talk about investment or borrowing money, we need to understand interest.

For most of us, we had learned how to calculate interest when we were at school, but we might not put much attention to it because we were too young to understand its implication. We only learn the mathematical aspect of it without understanding how important it will be when we grow up and start saving, investing or borrowing. 

Today we will learn about SIMPLE INTEREST. Interest is how much you pay for the use of money. If you borrow money, then you pay interest. If you lend or invest money, then you earn interest.

Example 1: If you invest Rp 1,000,000 and the interest rate is 12% a year. How much interest will you get in 3 year?

You will get an interest of = Rp 1,000,000 x 12% x 3 = Rp 360,000                            

The amount of money you will have after three years is

Rp 1,000,000+ Rp 360,000 = Rp 1,360,000.

 

Example 2: If you borrow Rp 5,000,000 and the interest rate is 10% a year. How much you will have to pay if you borrow for 3 years?

You will have to pay back  = Rp 5,000,000 + ( Rp 5,000,000 x 10% x 3)

                                         = Rp 5,000,000 + Rp 1,500,000

                                         = Rp 6,500,000

 

Tomorrow, we will learn about COMPOUND INTEREST.

Learn and Grow

Inge Santoso, B Com, CFP®

Credit Card Fraud Incident

Last month when I checked my credit card statement, I was quite surprised to see an unrecognized transaction. It was a purchase in Jakarta by the amount of Rp. 500,000. I was sure that it was a fraudulent purchase because of several reasons:

  • I was in Jogja on that particular day. I was having coffee in Starbucks Jogja and the credit card statement clearly stated that I had two transactions in Jogja that day.
  • I always keep track of all my expenses, no matter how small or trivial it is.
  • I rarely used that particular card because it was an additional card issued by the bank. I only used the card once when I bought something from the bank catalogue the month before. At first I suspected that they double billed me on that transaction because the amount was the same, but the bank said that it wasn’t.
  • The card was brand new because my sister just brought it home from Jakarta that weekend.

I called the bank’s customer service and I was advised to block the card and got it replaced, costing me Rp. 50,000. Then they also said that I could get the detail of the transaction so that I could be sure that it was not my transaction, costing me another Rp. 30,000. Since I was convinced that it was not my transaction I followed their advice. I thought if it was really a fraudulent transaction then I could save Rp.420,000 (Rp.500,000 minus Rp 80,000).

I also decided to pay the credit card bill in full because I did not want them charging me interest if it turned out to be a valid transaction. I’d rather have the bank credited the amount back to me if it turned out to be legitimate.

Last week, I received a copy of the transaction slip. When I saw the signature, it surely was not mine but it looked familiar. Finally I recognized the signature, it was my sister’s!

Before lodging the complain to the bank, I’ve already asked my sister whether she ever used my credit card and she said she would never have used mine. I also asked her whether she recognized the name of the store and she said that she didn’t recognized the name. When I showed her the transaction slip, she also recognized her signature. Finally after asking her secretary to search through all her credit card receipts, she found the original slip. It turned out she mistakenly used my credit card because she put my new credit card in her wallet because she was afraid of losing it if she put it in her bag. She took out the wrong credit card when she paid a deposit for her gown.

Yesterday I called the bank to inform them that I wanted to withdraw the complain about that transaction because I already knew what happened. They said that they’d charge me Rp. 80,000 for the cost of card replacement and detail enquiry.

How did I feel about this? First, I was slightly embarrassed because I was so convinced that it was the bank’s fault, yet at the end it turned out to me our own mistake. Second, I was quite annoyed with my sister because she didn’t keep a good record her transactions, otherwise she would’ve known when I asked her the first time. Third, I was upset because I had to pay Rp.80,000 to find out.

Lessons:

  1. Keep a complete record of all your transactions, especially credit card transactions because it will be very helpful in case your credit card is used by other people.
  2. Make sure that you check the name on the card before using it to avoid mistakenly using your sibling’s card.

Learn and Grow!

Inge Santoso