Thursday, March 3, 2011

We Have Moved

NickG Financial Designer has migrated to a new home. Follow us at the new site below:

NickG Financial Designer - Our New Home

Saturday, February 5, 2011

Retirement Planning Malaysia

Do you spend more money during holidays or on workdays?

To majority of people, Retirement is holiday. It is a holiday everyday and therefore will spend more money while having reduced or no income.

Will you be ready for this holiday? This holiday may last on average of 20 years or more.

Facts/statistics quoted by industry players on retirement planning in Malaysia:
Retirement Facts in Malaysia

  • 34% Malaysians put aside money regularly for their retirement funds (may or may not include EPF contributors)
  • 99.9% of EPF contributors withdraw their savings in one lump sum
  • 70% of these would use up their EPF savings within 3 years
  • 72% Malaysians claim that they save for retirement
  • 41% do not have concrete plans to build their retirement fund
  • Of those who save for retirement, 77% put their money in low-yielding savings vehicle
  • Most do not segregate their retirement savings from other savings
  • Those who do, 83% would use the money should other needs arise
  • 73% do not seek advice from financial professionals
  • 39% intend to work beyond retirement age to boost income
What have you done? What have you not yet do? Will your Retirement Holidays be a golden holidays or miserable?

Friday, January 28, 2011

Children & Money

Logic tells us that children are immature and therefore may not be the best idea to let them manage money.
Do you agree?
I am in absolute disagreement over this belief. My belief stems from the following reasons/observations:
  • Children in this age are so much more intelligent and mature
  • Children will prosper and blossom if given the opportunity and guidance
  • Children may not be the immature party with money. Adults can be as immature
  • Sow a seed in their life so that they can be good stewards with the money
Personally I grew up being very careful with my money. Am not being a stinge but because am taught to manage my money carefully. I did not come from a rich family and therefore it is essential for me to learn to save. In the event of me needing money (for studies per say), then at least I am prepared to some extent.
The only setback was I was not taught or shown how to grow my money. My parents being from the old school only practises work hard and save your money. The rest of it is another story.
Teaching children about managing money though is not as simple ABC, it is not rocket science either. The best way to teach children about money is being a good testimony/example ourselves. Piggy banks and children can become best friends, a good tool for parents to use to being to teach the basic money management principles of getting, saving, spending and sharing money. As children are not born with "money sense.", they learn by what they see, hear and experience.
Blindly giving children money without educating them on the value and importance of managing them is not helping them. It’s like giving someone fish but not teaching them to fish. Involve your children when you draft your budget, make payment for bills, analyze your investments, etc.
Financial education and Financial awareness is one of the best gifts or legacy you can give to your children.

Tuesday, January 25, 2011

Expense Management

Expense Management may be a familiar word to many but also an alien word to many.

Do you manage your money? It is perhaps not the most important thing how much you earn but rather how do you manage your money. In terms of money there is only Income and Expense.

Do you manage your Expense? How do you do it? Budgeting is a good way to do it. There are many ways to manage your expenses thru the various tools, i.e. excel, independent softwares/applications.

Compare Mr. A that earns RM10000 per month but without expense management spends 80% of his income with Mr. B that earns RM5000 per month with expenditure of only 40% of his income. Who do you think will end up with more money in the bank in 10 years time?

Do not ignore the importance of time and compound interest. This is where expense management is important. It will decide if you have surplus or deficit.

Few suggested expense management tools available on the internet:
If none of the above suits your cup of tea, you can always rely on Excel. Have a go at it. It is powerful, fun and flexible.

Tip: Expense Management is a habitual thingy. It requires discipline to do it. You need to make an effort to cultivate the habit. In the beginning, it is difficult (sometimes irritating) but once it is a habit, you cannot NOT do it.

Monday, January 24, 2011

Gold *bling bling*

Have you heard? Everyone is talking about Gold. Do you or have you invested in Gold?

There are 2 approaches to investing in Gold - physical gold or gold-account related.

If you are to invest in Gold, the recommendation is to invest in physical gold (999.9). There are many banks offering gold-account related. These are but "paper gold". There is no guarantee that the bank has the physical gold. Even guru "Robert Kiyosaki" says invest only in physical gold.

Between the time I invested in gold in 2008/9 to now, price has appreciated between 15-20%. The world economy is so volatile that whatever currency we are holding is subject to risk. If anything severe happens, "currency" is then nothing more than paper money without any value. Then again, buying gold is also a form of investment and as we are well infomed, there are no "Guarantees" in investments.

Since the early ages, gold has always and still is the true currency. Has gold prices gone up? Yes it has. Will it come down? Yes it may. As Robert puts, it, we never buy anything to keep forever. We always "buy to sell". Just like commodities or stocks, we identify the "low" prices to buy and then sell at "high prices".

There are numerous sites available on the internet for information, especially charts. For your benefits, below are some charts for your preliminary analysis...

Please be careful when buying gold as there are con-artists out in the market. Also, prices are always negotiable. Of course, storing your gold in a safe place is essential.

Anyone interested in investing in gold, please contact us at We have well connected reliable and trusted suppliers at competitive rates.

Friday, January 21, 2011

Inflation - Stranger or Foe?

I suppose many of you are able to define or explain the word "Inflation". If you lookup this word in the internet or books, you will be blown away by the many creative definitions.

In my opinion, the simplest definition of Inflation is "time taken for the value of your money to halve", i.e. time required for your RM10 (example) to halve or the time required for prices to double (example - a bowl of RM5 noodle to double in price)

What is your inflation?

Yeah, I supppose the numbers you plucked from the papers are not exactly incorrect but neither are they correct (depends whether you believe the reports). There are however more than one category of inflation:
  1. Country's Inflation
  2. Personal/Individual Inflation
One common formula of calculating inflation is Rule of 72. For instance, if we assume the inflation rate to be 4%, then 72/4 is 18 - it will take 18 years for the value of your money to halve or 18 years for price of items to double.

However as wise consumers, we are all aware that this is not true. How much was a bowl of noodles 5 years ago? 3 years ago? 1 year ago? So can our country's inflation possibly be 4% and below?

Personal Inflation

There is another inflation that many of us are not aware of - Personal Inflation.  Do you budget or itemize your expenses? If you do, try analysing it. How much did you spend (in general) in 2008? How much in 2009? From there you will be able to ascertain your inflation rate. Of course, if you wish, you can proceed into details - expenses by categories. You can then have an inflation rate for every category of expense. 

What this means is that your personal inflation rate is as important if not more important than our country's inflation. Thus, it is vital that you need to keep an eye on your expenses and income.
Did you just give me a number? Where did you get the number from? Did you get it from the papers or reports?

Friday, January 14, 2011

Who's More Important - Parents or Children?

Children are a gift from above and there is no value to associate the joy and blessing they bring to a couple.

With the arrival of a child, parents tend to divert all their attention to the little ones.

The question is "Who is more important? Parents or Children?"

Consider this analogy:
  1. You make reservations for a Presidential Suite in an exclusive resort. This suite costs a bomb and you really look forward to enjoying it.
  2. You then make plans for transportation to the resort.
  3. Upon confirming your transportation plans, you begin your journey
  4. As you are travelling, you have a puncture or meet an accident. What next?
  • Are you prepared for this circumstance?
  • Will you ever reach the destination?
  • If you do not reach the destination, you would have wasted all the money spent on reservations for the Presidential Suite right?
Is this not the same for planning for parents & children? While it is good that you have created a huge $$$ for your children's education, what about their daily needs from now till their University days? Do they have enough for their daily needs (food, clothing, shelter) - maintaining their lifestyle?

Have you calculated the daily expenses of your children?
No. of children  * daily expenses per child
Total expenses * 365 days * no. of years
(above calculation does not include inflation)

Do you realize that this amount to quite a significant amount? Parents need to first take care of themselves before their children. This will ensure they have enough to complete their journey when they enter University (for instance).

Even the airlines recognise the importance of caring for the parents before children. Shouldn't you?

NickG Financial Designer provides specialized & customized advice/planning for parents