Lesson three to five

Caution: I just draft the stuffs that I remember in the lesson which are not included in the handout of the instructor, so hopefully I do not interpret and remember something incorrectly

The things have stuck in my mind for a few weeks but I didn't have time to roughly draft them down. Actually I just type the stuffs which are not in the note but are mentioned in the lecture. Somehow I can't remember all of them very clearly...

- insurance companies now prefer insurance with investing nature(e.g.funds) to purely insurance since it is more expensive and thus can be a larger proportion of commission

- in order to prevent company from using the money for employee for tax exclusion, e.g. trip expense cannot be exempted. However, trust/ fund of scholarship can be exempted

- employee makes good use of the reimbursement of rent, since the remainings are taxed

- the value of the unemployed people from the company's perspective - tax deduction >>>pretends to employ the unemployed and gives them some salaries and tries some methods to get parts of them back... mutual benefits for both unemployed ( receive some money)and company ( tax escape as it is treated as an expense)

- married allowance : one works, one doesn't work

- basic allowance: both work ( better for tax deduction)

- the meaning of negative asset ( liability> asset) since the price of the property decreases and actually one borrows money to get the property

- A has different jobs with the same salary with B (who has one job), A needs to contribute more to MPF

- child allowance> for either mother or father but not both

- parent allowance> for one relative only

- trust> a large amount money, operated when the person is still alive

- Will> suitable for a smaller amount of money, executed when the person dies

- for standard rate, we use net total income (less contirbution to mpf ,donation, allowable expense but no deducation of allowance)

- for progressive rate > using net chargeable income ( after deducting all allowance)

-the owner of the property prefers not to include any management fee in the rent contract since it is involved in tax calculation, so he wants tenant to pay the fee directly to the property management office

- useful websites for reference: www.ird.gov.hk, www.legislation.gov.hk etc..go to the respective websites to study the certain topics

- dollar cost averaging - work best in volatile market situation but the stock price should go up in long run

-an employee may want to have income deferral ( less income for tax calculation) > can be done before the fiscal year?? ( oh, I just remember the theory. Actually I have asked him once directly but now still unclear about how it works!! ask in the next lesson!)

- the weird method of tax escape ( A's salary is much higher than than B( maybe he is even unemployed), A and B then claims to be in the partnership and owns a company, when the company makes a profit. B gets a larger part of this profit. A gets a lot less than B theoretically. This practice is used to take advantage of the tax system as A falls in standard tax rate and he doesn't want to pay at 17% of the profit he has earned from the company. A and B may probably make a deal secretly.)

There are really a lot of books which have been stocked in my home already...I just wonder when I can finish the book he recommended: Build to Last, Good to Great, 15 axioms of personal finance, books written by 余叔韶,清洪

I am always wondering when I can be as knowledgeable as my instructor. I always trace his articles

http://hk.apple.nextmedia.com/template/apple/catkeycol.php?iss_id=20091016&showcat=10100430&sec_id=15307

I really want to throw away the boring textbooks from the school