The mindset of a property millionaire

Report from The Star/Asia News Network dated Tue, Jun 29, 2010

The mindset of a property millionaire By Sherry Koh 19 properties in Malaysia. 1 property in Singapore. Properties worth more than RM22 million (S$9.4 million). Five-figure positive cash flow. Those figures belong to Milan Doshi, a property and stock investment guru who have made his millions over a course of more than 20 years. In his recent Property Intensive workshop, Doshi posted an interesting question, "Which would you rather be? A debt-free beggar or a financially free billionaire?" For most people, the answer would be the latter but they might be doing the opposite, which is to earn as much as possible to pay off debts. Doshi highlighted that the old school of thinking is to not borrow money or borrow as little as possible and return it soonest possible. His thinking is, "The more you borrow, the richer you get." He also advises investors to analyse the advisor before analysing the advice. For example, one might make the mistake of taking financial advice from people who sell investment products rather from successful investors. He also said that it is likened to getting advice from university professors who might not have personally put the theories they teach to the test in the real life situations. He also said not to be deceived by looks as some people who are poorly dressed are rich and vice versa, which explains why Doshi was simply dressed in a t-shirt and pants. These are some highlights from a handout that Doshi shared in his property intensive preview.

5 steps to make your property a hot rental

Report from Reuters dated Wed, Apr 27, 2011

5 steps to make your property a hot rental

If you have a second home that you're considering renting out for extra income, there's no time to waste.

But as the old cliche goes, you only have one chance to make a first impression:

"Once your home is passed up, most people won't go back to view it again," says Christine Karpinski, author and rental property expert.

"You need to catch people's attention the first time."

Here are five ways to make your property a hot rental:

Don't ignore the details.

Sure, you think your cottage or second home is "charming" - but what will complete strangers think? One of the biggest no-nos in property rental is forgetting that small things matter.

• Go out and buy new sheets and towels.
• Equip the space. Put dish detergent under the sink, make a mop and broom available, stock up on dishsoap. Make the space liveable and convenient.
• Splurge on the TV. A flat-screen television is good, but spend the extra $10 a month on an HD box, Karpinski urges. It's a small investment that makes your rental space all the more attractive.
• Be pet-friendly. Being open to pets can add value to your rental without costing you a thing, says Karpinski.
• Update your space. A fresh coat of paint and some updated stainless steel appliances go a long way. "It's amazing what $1,500 worth of interior decoration can do," says Tom Bissmeyer, founder of iTrip.net. Although an updated space doesn't necessarily increase your per-rental income, it can drastically increase your occupancy rate, he adds.
• Get a king-sized bed. A king-sized bed is a luxury for those who don't have one and a must-have for people who do.
• But don't go overboard.
  Think twice before making a giant investment, Karpinski warns.
  The same goes for pricey renovations: a $35,000 gourmet kitchen is great if you plan to sell your property, but it will take years to recoup that investment through rental income alone.
  

Beware the "L" word.

Everyone thinks their rental space is "luxurious" - but don't say it, prove it: When advertising your space, use terms like "Egyptian cotton sheets" and "Ilia coffeemaker" to describe the amenities and let people draw their own conclusions, Karpinski advises.

Keep in mind that the word "luxury" could actually be a deterrent to some, she adds. "If I have toddlers, I don't want to tip toe around a fancy property all the time," she says.

Get online.

Advertising online is one of the fastest, most effective way to get your property noticed. Major listing sites are far better lead generators and less expensive than their print counterparts, says Tony Drost, 2011 president of the National Association of Residential Property Management.

"What's great about these sites is that you are not limited in space like you are with a classified. Additionally, these online listings allow a tenant to apply online. You definitely get more bang for your buck," he says.

"The key is to be specific," Bissmeyer adds. Provide details about its proximity to attractions and public transportation, amenities, waterfront views (if applicable), number of bathrooms and any other key features.

And don't forget the importance of visuals: online advertising opens the door to photos and virtual tours, which are key in advertising online.

Make sure the price is right.
Competitive pricing is key when placing your property on the rental market. While the number of rooms you can offer and the proximity to attractions will play a role in what you can charge, ultimately the market will decide: look at similar listings in your area and be flexible.
"Reducing the rental price by only $75 a week can be extremely effective in getting more bookings," says Bissmeyer.

Three biggest errors people make when investing in properties

Report from The Star/Asia News Network dated Mon, May 30, 2011

Three biggest errors people make when investing in properties

By Michael Tan

"You cannot make money buying properties in Malaysia!" exclaimed a relatively disgruntled investor from Singapore. It was a statement made when we made a visit to our neighboring country. We were in Singapore in collaboration with Malaysian Property Incorporated (MPI) to promote real estate investment in Malaysia.

We ended up having a meal with the gentleman and listening to his experience of investing in properties in Malaysia. To my surprise, he was an extremely well informed person with amicable knowledge of investments and had invested in other countries as well.

However, his ventures have had somewhat mixed results. Some turned out mediocre results, some incurred losses and some were profitable ventures. He concluded saying: "Nothing beats investing in your own country".

His story is not uncommon. I have had similar encounters with many foreign investors - both in Malaysia and abroad. After some research, I realised there were some fundamental errors that most investors made when they ventured into unknown territories or countries.

I would like to share three of the most common errors made by foreign (and even some local) investors.

1st common error: To FLIP or to KEEP?

The first common mistake most investors committed is to invest without figuring out who their target market is.

First things first. Are you investing to FLIP or to KEEP? What's flipping or keeping? Well, flipping is buying with the intention to sell with profit. Keeping is buying with the intention of profiting from renting the property out.

Properties for flipping are usually the ones with has the highest capital appreciation in the shortest amount of time. These are usually the landed properties.

Here's a simple formula to calculate capital returns:



The returns will be the total returns you would get. Assuming you achieved 30% returns in 3 years, the next thing you need to do is to divide that to determine your simple returns per year (as compared to compounded returns)



Properties for keeping are the ones that fetch rental returns higher than 6%. These are usually high-rise in nature.

Here's the formula for rental returns:



It is key that you decide what strategy to adopt before deciding what type of property to invest into. Also, it's crucial to estimate the returns of investment you desire and the timeline of which to exit. Having exit strategies prior to starting is critical to your success.

Knowing your strategy before investing is crucial. Assuming you are planning to flip, next question is, who is your target market?

2nd common error: Not getting to know the area well.

"I bought into an apartment in the city center (worth RM1.8mil (S$735,300) three years back and I couldn't sell it out till today!" claimed the Singaporean investor.

"Who were you planning to sell it to?" I asked then.

"Anyone la!" he replied.

If you go around with a strategy like that, you might end up including the super natural market as well! Look, if you don't know who you are going to sell or rent your properties out to, why buy it in the first place?

You should know your target market very well before even investing into real estate in the area. Understand what the market needs, and what it is lack of.

What I see most investors do is to trust the developer or the agents to do the research for them. Why would you trust someone else with hundreds of thousands of ringgit (if not millions) of your own money?! Even if they were right, you still need to verify it. Remember, regardless of whether the developer or agent is right or wrong, they make their money when they sell their properties to you, and their liability stops there!

My advice for both locals and foreigners investing in Malaysia is to make the effort to visit the places of interest for you over and over again. Study the market and get to know the locals before you finally make the decision to invest.

3rd common error: Not understanding the locals

How many of you would invest into a RM14.5mil condominium near the city center with the intention to rent? How many of you would invest RM10.5mil for 1,250 sq ft of retail space in a new retail mall in Dengkil?

While there may be some sane reasons to do so, majority would agree that you wouldn't do either one of the deals. Although the examples are extreme, the common errors people do in investment are obvious here.

Some investors lose money because of this error - not understanding the lifestyle of the locals. You should always study the lifestyle of the locals.

Allow me to give a couple of examples:

I once met an investor who focused only into FLIPPING properties. I asked him how he's able to consistently make returns of 50% to 70% in the market, regardless of whether it was an up market or a down market.

He shared with me that he only invests in properties of RM500k to RM700k. He focuses on the trends of the people buying in the area. In other words, he focuses on the lifestyle of homeowners and what they were seeking. He further shared: "I usually ask my working colleagues, around the age group of 30 to 40, where they would buy to stay. I take note of the areas and the type of properties they would buy, should they be able to afford properties within my investment range."

"I also keep track on the latest types of properties the developers are rolling out into the market. They usually have done their research before investing millions into marketing and developing such properties. Then I look into the areas and types and buy the best deal."

"I never guess. I always make sure that whatever I invest into, I am 99% sure that its going to give me at least 30% returns or more, before I even bother to go it. It's all in the research and it's all in the network. If you want to make money, must consistently be in the market la. There's no such thing as a good time, only a good buy!" he added with a smile.

So, if you want to make money investing to FLIP or to KEEP, does he's advice make good investment sense? Again, most of us fail to do any sort of research prior to investing into the properties. The key to successful investment is to gather enough good information from the marketplace and make the money in the difference.

In many of my talks that I give these days, I mention to people that while it can be a good time to make money in the market, invest wisely. Keep yourself grounded and stick to the fundamentals. The best way of losing money is when you start speculating in the market.

Last advise, always remember to focus on the bottom line. Define your entry and exit points, keep to your strategies and always focus on making money.

Take cover from retirement risks

Report from The Straits Times (Singapore) dated Sat, Jun 19, 2010

Take cover from retirement risks

By Lorna Tan, Senior Correspondent

Japan, the world's most aged society, is preparing for a surge in retirees in 2012, when its first batch of official baby boomers turns 65.

Singapore, like many other advanced nations, is facing similar challenges.

The Republic is expected to approach 'aged society' status, according to a United Nations benchmark, at the end of this decade. Singapore is currently considered an 'ageing' society as more than 7 per cent of its population are 65 or older.

A society becomes 'aged', according to the UN, when the number of people 65 and over tops 14 per cent. Japan has already been accorded 'super aged' status, with over 20 per cent who are 65 and over.

Nearly 23 per cent of Japan's 126 million people will reportedly be 65 and older this year, the highest proportion in the world.

In a recent interview, Mr Satoshi Nojiri, US fund manager Fidelity International's director of Fidelity Investor Education Institute in Japan, said Singapore will soon encounter the same retirement issues facing Japan now.

For instance, Fidelity's latest survey of 10,000 Japan workers indicated that the majority recognised that health-care costs are the largest expense in retirement. About 44 per cent of respondents had not started saving for retirement and those who had, had saved only one-sixth of the retirement income needed.

Mr Roy Varghese, foundation adviser and director at Ipac Financial Planning Singapore, said that unless one is flush with cash, one should delay retirement for as long as possible.

Retirees should also be mentally prepared to return to the workforce if the need arises and to consider downgrading or selling their homes to raise funds.

We highlight some retirement risks worth considering.

Longevity risks
With advances in medicine and technology, there is a greater probability of outliving your savings and assets
'So don't underestimate your life expectancy,' cautioned Mr Nojiri.

This was the main reason that the Singapore Government initiated the national annuity scheme Central Provident Fund (CPF) Life, which provides a regular payout for as long as you live. The payouts are funded by the CPF Minimum Sum (MS), which will be raised to $123,000 next month.

But other sources of retirement income are necessary to ensure a comfortable retirement.

Health-care costs risk
This is expected to be the biggest cost in retirement. Studies have shown that for a person above 65, medical expenses are substantially higher in his last year of life.

However, most healthy people underestimate health-care or nursing care costs, pointed out Mr Nojiri.

One solution is to pass on some of the risk to insurers. It is worth your while to shop for a suitable hospitalisation and surgical insurance plan. It is a no-brainer to opt for one that provides a lifetime cover, guarantees yearly renewability and comes with an 'as-charged' feature that does away with benefit limits.

Premature retirement risk
Leaving the workforce before you have accumulated enough for your nest egg is another risk, said Mr Varghese.

You would not want to be caught in a situation where you realise, too late, that there is a substantial gap between how much you have saved and how much you need during retirement.

'Some people quit their careers too early, thinking they have saved enough for their 30-year 'vacation'.

For some, it may be impractical to consider re-entering the workforce after a five- to 10-year break when reality sets in,' said Mr Varghese.

If you plan to retire at 60 - after leading an economically active life for nearly four decades - and expect to live till 90, that is an incredibly long period without a regular pay cheque. To sustain a meaningful retirement, it is prudent to calculate your retirement income seriously instead of relying on rough estimates.

When arriving at a suitable target retirement sum to be accumulated before quitting full-time work, a fixed payout rule may be helpful. So if the annual fixed payout rate is 4 per cent, it means that you expect a slow drawdown of a lump sum based on 4 per cent of your investments.

Let's assume a couple require a monthly retirement income of $3,000 from age 60, which means an annual lump sum of $36,000. To achieve this, the target retirement fund is worked out to be $900,000 which is assumed to be eventually used up or drawn down by the couple over the next 30 years. This is assuming that the sum is invested in a low risk portfolio with an expected annual return of 4 per cent which takes into account an inflation rate of 3 per cent.

Ipac worked out that if the couple require higher monthly retirement incomes of $5,000 and $10,000, the target retirement funds at 60 would be $1.5 million and $2.4 million, respectively.

Withdrawal risk
Even the best laid plans may be derailed owing to bad planning or unforeseen circumstances. One example is excessive spending in the early years of retirement.

Mr Varghese noted, for instance, that some folks may be tempted to go on a round-the-world trip or splurge on an expensive car shortly after retirement. This is not prudent as the indulgence may result in reducing the number of years that your retirement fund can last. When this happens, you may be forced to sell the family home to make up the shortfall.

Let's say a couple expect that they require a monthly income of $3,000 to meet their retirement needs but they spend $5,000 in the first year instead, with subsequent increases of 3 per cent a year.

In this scenario, they decided to cut spending only from the sixth year. Mr Varghese worked out that because of the overspending in the initial five years, their total retirement fund of $900,000 could last only till 84 years of age instead of 90. In other words, they face the possibility of struggling for cash for six years.

'Be disciplined in the first two years of retirement in terms of discretionary spending. If the desired lifestyle expenses were underestimated, part-time work must be considered to beef up the nest egg,' he advised.

Asset allocation risk
For all investors, diversification is key as it is unwise to put all your eggs in one basket. But this factor is even more critical for older investors and retirees as they do not have the advantage of a long-term investment horizon.

Mr Albert Lam, investment director at IPP Financial Advisers, recalled the experience of a distant relative who had retired but had made the mistake of investing only in blue chips, believing that nothing could go wrong.

'In his first year of buying 'safe' blue- chips, he was up $1.5 million, but in the second and third year, he lost $700,000 and $1.5 million, respectively. He has had to downgrade from his comfortable retirement home and find part-time work so as to provide for his spouse and himself.'

Mr Lam suggested that a more suitable portfolio for a retiree would be one comprising mainly fixed income assets. This will ensure a lower range of volatility and at the same time provide some returns to offset the inflation effect.

Mr Varghese recommended the following asset allocation: cash (25 per cent), global fixed income (40 per cent), global real estate investment trusts (10 per cent) and global equities (25 per cent).

He added that it is prudent for retirees above 80 to have their retirement funds mostly in cash so as to mitigate market risks.

Wherever possible, try to balance withdrawal with the investment performance of the retirement portfolio so as to ensure that the funds last longer, said Mr Nojiri. This is because the returns of the portfolio are not guaranteed and are subject to market risks and economic factors.

Inflation risk
The rate of inflation is an important factor when planning your retirement funds as it will erode the value of your funds over time.

'You may not realise how big the impact of inflation is in 10 years even if it is a small increase each year,' said Mr Nojiri.

For instance, based on an average inflation rate of 3 per cent, $1,000 today will be worth only $642 - in terms of today's spending power - in 15 years' time.

This year, Singapore's inflation is projected to come in at 2.8 per cent.

To illustrate the impact of inflation, let's use the above example of the 60-year- old couple who require a monthly retirement income of $3,000 and have accumulated $900,000 to last them 30 years.

If we assume three five-year periods during the 30-year timeframe, where the future inflation rate is a higher 5 per cent a year, the couple's expenditure will also rise by 5 per cent a year, as they will require more money owing to inflation.

Mr Varghese worked out that the impact of higher inflation to the portfolio will be a reduction of the drawdown period to age 84 instead of the original 90.

'Do not underestimate the possibility of higher than normal inflation rates in old age,' he warned.

Liability risk
Currently, most banks here do not extend housing loan repayments beyond the age of 70. However, there are other liabilities that you may be saddled with in your golden years, such as personal loans, car loans and insurance premiums.

'This could put a heavy burden on you if you have no income coming in,' said Mr Lam.

As such, he advises that should such loans be taken, the interest repayments should be offset by income sources from employment, businesses or investments.

Extended bear markets
An example of an external factor that will have an impact on your retirement portfolio is an extended bear market where prices of equities fall over months or years. If you are caught in such a scenario and are over-invested in equities, you might be forced to sell out at the worst time - when prices are at an all-time low.

Instead of timing the market, Mr Varghese's advice is to stay invested after a market decline to benefit from the subsequent recovery.

This article was first published in The Straits Times.

Retirement math: How much you really need

Report from Reuters dated Fri, Aug 06, 2010
Retirement math: How much you really need

Those scary studies keep on coming: The latest one from the Employee Benefit Research Institute drives home the same message as many others: Americans won't have enough money for retirement.

The EBRI study said that nearly half of older baby boomers approaching retirement risk running out of money in their golden years.

But is that really true?

Are people actually running out of cash when they retire?

Are those findings a cause for panic, or can small adjustments around the edges fix the problem?

Like most other retirement studies of the frightening genre, the EBRI report did make a few calculating short cuts that might have made the situation look worse than it is.

For example, EBRI weighed only retirement accounts and home equity, ignoring any other savings that families might have accumulated.

It also assumed that all workers would retire at 65.

I am not picking on EBRI. In general, its methodologies are sound, and more measured than the typical "OMG, it's a retirement disaster!" studies put out by some insurance and investment companies.

But, in general, it isn't the methodology of these studies that is troubling, but the ideas behind them.

They assume, for example, that people will blithely spend their nest eggs at a fixed rate until the day they wake up at 87 or 92 with no money left. And they suggest that retirement is an all-or-nothing proposition: You either can afford to bring your lifestyle into retirement, or you can't.

They don't focus -- or often, even acknowledge -- that retirement is a series of budgetary trade-offs, just like the first 2/3 or 3/4 of life.

So sure, stash away as much as you can -- the more cash you can spend in the last third of life, the better.

But instead of panicking and worrying about retirement, take a more logical approach.

The basic math of official retirement planning goes like this: Take your current monthly spending, subtract your expected Social Security payment, and the remainder is what you need to pull out of your retirement fund every month in your first year of retirement.

Multiply that figure by 12, to get the amount you'd need to withdraw in a year.

Multiply that by 25, and that's the size of the nest egg you need to leave work with, to insure that your money never runs out.

Yikes! No wonder everyone's scared.

Here are some mitigating points.

You'll spend more than you think for a while, but not forever.
Retirement planners make much of the first few years of retirement, when you spend on everything from leisure clothes to long-deferred cruises to all those household projects you didn't have time to do when you were working.

But by mid-retirement, many of those expenses disappear.

By the time a person passes 75 years of age, his spending is almost half of what it was for the years between 55 and 64, according to figures from the Bureau of Labor Statistics.

Older retirees spend about 76 percent of what people between 65 and 74 spend. So you can aim to take more out in earlier years and take less out in later years.

You won't want to stay in your house forever.
You may, but not many people do. So at some point in mid or late retirement, you can sell your home, downsize, and add your accumulated equity to the pot of money you have to spend (lowering your expenses along the way.)

Even if you do want to stay in your home forever, new and improved reverse mortgage products will allow you to tap that equity at some point along the road.

You can make little adjustments that will stretch your money further.
You can increase your annual retirement income by about 7 percent for every year that you defer retiring, says research from T. Rowe Price.

Just working a small part-time job and delaying the start of your Social Security benefits for one year will raise the size of your benefit check by about 8 percent for life.

If you keep a little bit more of your portfolio in the stock market over long periods of time (even after you retire), that will help it to last longer.

You can protect yourself against actually running out of money with a few well-chosen products.
A small, low-fee, immediate annuity bought with part of your savings once you are retired will insure that some money comes in every month.

A solid long-term care policy will insure that if you do need extensive care in your later years, you won't have to demolish your family nest egg to get it. It will be protected for your spouse or your kids.

You can live a good retirement life on a budget.
You can do everything from downsize to one car to cut back on restaurant meals.

You can grocery shop with coupons, wait for sales to buy clothes and housewares, and do your own mending, lawn mowing (at least in early retirement) and more -- you know, the kinds of things you already do.

You can take in a roommate, move in with the same kid who moved in with you after college, eat more popcorn and less meat.

You can camp and fish on vacation or couch surf at the homes of all of your old friends, instead of flying to Europe or cruising the Caribbean.

None of those alternatives will ruin your life, or even diminish your fun.

Remember that you have reasonable options that will help your money last far longer than the spreadsheets say it will.

5 ways to avoid travel hassles

Report from Asia News Network  dated Thu, Mar 17 2011

 

5 ways to avoid travel hassles

 

By Jofelle P. Tesorio

For any traveller, ample preparation helps to avoid some hassles.

Summer is already beckoning in most parts of tropical Asia. The travel bug in you now starts to rummage through old travel books, the Internet and asking people around where and how to spend the much awaited summer vacation.

You have saved half of your salary for the last six months and you are ready to take the plunge, try new experiences, learn new cultures and meet people. But wait... don't go just yet. There are a few things a traveller must do before, during and after vacation. An ample preparation helps ease travelling to avoid some hassles.

For some people, preparing for a much needed vacation, whether it is just within one's country or outside, is a must. Others would take at least six months to prep themselves up. For a single woman, it's like preparing for her wedding with details down to the last two-piece bikini in check.

1. Pick your destination

First things first. Decide which places you want to visit according to your budget and time-frame. You can list down the countries you haven't been to or want to visit again. After writing them down you can narrow the list according to your preference. You don't want to visit a place that really doesn't catch your fancy or imagination. If you have really set your eyes on going to Bali or the exotic Sri Lanka, then by all means go. Don't go to a place just because there is a cheap flight going there.  

2. Find your flight

After doing the list, check the Internet for flight information. If you are travelling within Asia, look for budget airlines that have direct flights and more connectivity. AirAsia (airasia.com), Cebu Pacific (cebupacificair.com), Tiger Airways (tigerairways.com) and Jet Airways (jetairways.com) are among budget airlines that fly regularly to major Asian destinations.

AirAsia is based in Kuala Lumpur and have subsidiaries in Thailand and Indonesia. Cebu Pacific is Philippine-based while Tiger Airways is based in Singapore and Jet Airways in India. Knowing the hubs of these airlines will give you an idea where you can start or end your journey. Major airlines like Thai Airways (thaiairways.com), Philippine Airlines (philippineairlines.com), Malaysia Airlines (malaysiaairlines.com) and Singapore Airlines (singaporeair.com) sometimes throw away cheap promotional flights.

When you check the budget airlines, also compare their prices with regular airlines. With a few dollars difference, you may want to opt for comfort, food and entertainment onboard. It is another thing if you want to hop from one city to another. That probably means taking different modes of transportation.

Say, for example, you want to do the Mekong trail-Thailand, Viet Nam Cambodia and Laos. Your ideal first stop would be Bangkok then you continue your travel by train or bus to Laos, to Viet Nam and then to Cambodia. You may reenter Thailand using land borders from Laos or Cambodia.

There are hundreds of sites on the Internet on how to do a combined trip, with expert tips from seasoned travellers.

You can also join travel forums to get updated tips.

3. Book your accomodation

The next thing to do is check hotels. Do you want a low-key accommodation or something high-end? A quick check at sites like agoda.com or asiarooms.com would give you an idea of the price range and location of different hotels. Check hostelworld.com for a listing of hostels in different cities. Of late, hostels have reinvented themselves into flashy enclaves for travellers who want affordable and clean rooms but who don't mind sharing the room with others. Hostels are actually manna from heaven to those who cannot stand (but have no choice) cheap, cockroach infested, grimy rooms.

4. Decide on your itinerary

Now you have a destination, plane ticket and hotel. Another thing to worry about is what kind of activities you want to do. Do you want to be laid-back or you want some adrenalin rush? Do you want to party all night or you want some quiet moment practicing yoga or meditation? The choice is all yours. Most of the countries in Asia have diverse activities and interests that suit every Jane and Joe.

5. Pack the essentials, travel light

On your final preparation, there's an issue of things to bring. Summer is perfect to pack light. There is really no need to bring two pairs of jeans as you would be wearing a lot of shorts. You also have to leave some space in your luggage for souvenirs and gifts for loved ones back home.

Here are some of the bare necessities that a wise traveller should carry around:

1. Light clothing that easily dries up.
Bring jeans that can also double as shorts. Remember the ones with zipper just over the knees? For women, light skirts are ideal. Sarong is a must-have too because you can use it as blanket on the beach, wrap-around and towel. If you need to bring a towel, get the one that is light and easy to dry. For women, it's now a must to pack one little black dress in case you want to hit the nightlife without looking too shabby in shorts.

2. IDs other than passport.

Bring your driver's licence or a standard ID that indicates your age, blood type and emergency numbers. Most of the time you won't need to carry your passport around so just have a copy in your bag and keep it safe somewhere. In lieu of the passport, carry your other IDs when you go out.

3. Minimal bathroom amenities.

Don't bring the whole bathroom. Many groceries now have a travel section that sells everything in small sizes. The small bottles of shampoo, lotion and conditioner you get from hotels in your past travels are ideal to bring. Or buy the ones in sachet. You don't have to check-in these because they are below 100ml.

4. Medicines.

A pack of emergency health kit is a traveller's best friend. Having a stock of medicines for different unforeseen ailments such as a bout with diarrhoea during an 8-hour bus ride to Laos will really do wonders. Bring enough for headache, insect bites, motion sickness and dysmenorrhea (for women of course).

 

5. Plastic bags or zip locks.
You will need them for your bathroom amenities, wet clothes and other things you don't want mixed with the rest of your stuff. They also protect your precious gadgets from water, sand and dust.

6. Extra light bag.

When your luggage is already filled, you can use this as hand carry. This also serves as your shopping bag when you buy souvenirs. Refuse plastic bag as much as possible. You can still be environment friendly while having a vacation.

7. Padlocks and nylon safe locks.

Buy the kind with number combination and not the ones with keys. There's always a tendency to lose the keys and you will end up breaking the bag. Just always remember the combination. Safe nylon locks can be found in hardware shops. They are used to keep people from poking in the pockets of your bag.

8. Fully charged batteries, chargers, additional memory cards.
These days, the only place you can't find a shop selling memory cards are in very remote areas. But they're twice as expensive. So better stack some with you. Buy memory cards with a maximum capacity of 2 gigabytes. Having three to four 2-gig memory cards distributes your pictures evenly and lessens the risk of your cards to get corrupted.

9. Travel book with pictures.
Bookstores have a wide variety of travel ideas. One of my favourites is a wordless travel book. All you have to do is point at the pictures to communicate. This is very handy in places where English is not widely spoken.

10. Sense of adventure and fun.
Travelling is all about trying new things, broadening horizons and having tonnes of fun so you go home rejuvenated and recharged.