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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?

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.

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:

• Expensify >> http://www.expensify.com
• Moneystrands >> http://money.strands.com
• MyFinanceX >> http://www.myfinancex.com
• Expense Register >> http://www.expenseregister.com

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.

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 gloriouscash@live.com. We have well connected reliable and trusted suppliers at competitive rates.

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?

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
Email: gloriouscash@live.com
Facebook: http://www.facebook.com/nickg.advisory

Financial Planning in a Nutshell

Financial Planning. A name so commonly associated with products in Malaysia.

What is Financial Planning? It is not a product directly or indirectly. It is more than that. It is a process.

Calculating EPF

The Malaysian EPF was founded after the enactment of Employees Provident Fund Act 1991 (Act 452). EPF was created to help employees from both private and non-pensionable public sector save a portion of their salary.

EPF primarily applies to retirement, sickness, disabilities or unemployment. It is unfortunate that EPF is now accessible for many other reasons too. How much do you think one will have @ age 55 if the fund is used all the time?

Do you know how much you will have in your EPF by age 55?

Click on this link to find out --> EPF Calculator

Do you have any Unclaimed Money?

It will be really nice to suddenly find out that you have money to you, won't it? Maybe it belongs to a passed away loved one?

Have you searched the Registrar of Unclaimed Moneys?

Unclaimed money can be in various forms:

1. Life insurance policies
2. Share dividends
3. Dormant bank accounts
4. Unclaimed wages
5. EPF contributions
6. etc.

I believe we share the sentiment that to go to the Registrar to find out can be tedious due to the traffic, time constraint, efficiency of the staff there, etc.

Well, there is a company that offers such services now - UMA Compliance and Administration Sdn Bhd (Umaca).

Of course being a private entity, they may charge you some fee subject to their terms and conditions. 

Check out their website: UMACA 

Limitations of Insurance Nomination

No Substitute Nominees

• You cannot appoint substitute nominee
• Only joint nominees are allowed

Pop Quiz --> If your nominee(s) dies before you, what happens to your nomination?

For clarification/assistance, please contact us via gloriouscash@live.com 

Limitations of Insurance Nomination

Minor Children Nominees

Questions for your consideration :-

1. How to safeguard the proceeds for the minor beneficiary if parent is financially irresponsible?
2. What happens if parent receives the money but later passes away or is declared a bankrupt?
3. Will Amanah Raya Berhad distribute the money for the minor children's maintenance? If yes, how fast?

For further assistance, contact us at gloriouscash@live.com

Cashing in on your Youth

Experts always urge the youth to start saving early, but most young working adults argue that it’s hard to save and enjoy life with what they earn.

Is this true? If you are a youth, do you subscribe to this belief? I was once a youth and found this to be baseless. It is a matter of :

Setting Expectations

Setting Goals

Deciding on a long term benefit than short term pleasure

Having an Action Plan

Perhaps nobody pointed out ot the youth that setting savings as priority does not mean starving yourself of life's pleasures or having to be a hermit and staying home all the times enjoying bread every meal.

Are you a Billionaire?

If you are not, I will need to recommend you a friend. This friend is critical to your financial health in the future. His name is TIME. Time will help your finances grow with the power of compound interest.

From my experiences speaking to youth, those who subscribe to the belief that it is hard to save and enjoy life, they spend on average more than half of their income on entertainment, clothes, etc. collectively. If we were to dissect the expenses, we will find that we could easily make-do without more than half of the "doodads" as Robert Kiyosaki would call them.

Of course there is no right or wrong. Every individual has freedom of choice. It is the individual and his/her future family that will have to live with the consequences of those choices.

I am pleased to say that due to my

Setting Expectations

Setting Goals

Deciding on a long term benefit than short term pleasure

Having an Action Plan

I was never deprieved of life's pleasures but I did save and no waste my money on unnecessary expenses. All these have contributed to my ability to have the Greatest Wedding one can have + self-fund my own property. The most valuable reward I gained is the Discipline & Wisdom gained from doing the above.

Youth of today, think about it. Time and Youth is something that once is past is history. It can never be regained or found again.

Have the wisdom and focus. Have the right peers (friends). Know why you save. The Best Time is NOW

For assistance/advice, please contact us at gloriouscash@live.com

Types of Nomination

1. Do you know the types of nomination available?
2. Who can be your nominees?
3. What are the implications of different categories of nominees?
4. Can a nomination be revoked?

If you wish to understand more, contact us at gloriouscash@live.com

CONGRATULATIONS on your INCOME

Our Heartiest Congratulations to all Investors whom have started receiving your Guaranteed Lifetime NonTaxable Income.

It felt like it was only yesterday that I was approached to help you create this Income and it has been my privilege and honor to be able to contribute to the financial being of yourself and family.

Along the way, few of you were distracted and felt that the money would've been better left in your pockets. Of course it was not easy as temptations surrounded you everyday. Yet, you should be proud as you persevered "a little while" more for a lifetime of benefits.

Now that you have started receiving this Income, I see many of you beaming with joy and satisfaction. I am also privileged to hear of the many wonderful things that you wish to do with the availability of this Income.


I look forward to be of service to you and family again in the near future.

I wish to sign-off with the following thoughts:

Wealth can give us wrong attitude about material things. "Be on your guard against all kinds of greed; a man's life does not consist in the abundance of his possessions."

Insurance Nomination

Nomination is a right given to the life insurance policyholder to appoint a person or persons to receive the benefit under the policy in case it becomes a death claim.


Tell Me More...

1. Anyone of age 18 and above can make a nomination
2. Nominee is the person who is nominated to receive the insurance proceeds
3. The relationship between Nominee and policy owner is important
4. Nomination is part of life insurance proposal
5. Nomination can be changed as many times as policy owner wants

So, is Insurance Nomination sufficent to provide for you and your loved ones in your time of need?


For further assistance please contact us at gloriouscash@live.com

Retirement - Baby's Thoughts

I repeat my question -

1. When is the Best time to plan for your retirement?
2. Do you have all the time in the world?
3. Do you know that time and compound interest is an ally?

 
 
 
 
 

For asisstance, contact us at gloriouscash@live.com

Investment - What Are You?

Are you involved with any form of investment, particularly stocks/shares, options, etc?

If yes, then which of the following are you?

1. Investor
2. Trader
3. Speculator

Some people ask me if it is important to know which are we. Of course it is. It very much drives the way you make decisions, thoughts process, emotions and executions.

For more information, please contact us at gloriouscash@live.com

Medical BOMB

If you or have family that have been to hospital to seek treatment, you will know the cost of treatment is anything but CHEAP.

Recently due to my wife's fractured ankle, we have been to medical center a few times. Fractured ankle is not a critical matter medically but the bill has been "High" nonetheless. I confess that I am grateful that we are medically insured else I will be crying....

So what is the meaning of "insured"? To me it basically means transfering my financial risk to a 3rd party. To most people, insurance is an expense that is unnecessary. I cannot understand how people can be so foolish. Do they not realize that if this is an "expense", this will be the only expense that will pay for all the other Expenses?





I have lost count of the number of people who came to me to seek help on their insurance. Because they had no proper & adequate contingency financial plan, some have had to:

• Opt for cheaper treatment though it is not the proper treatment
• Spouse returning to workforce to finance family needs
• Selling assets, i.e. house, car
• etc.

As I pay the bills, I cannot help but think of the poor folks that isn't financially prepared for this. They may be literally poor or mentally poor (due to their choice in assuming nothing bad will ever happen to them).

Remember this folks. Not being prepared is like jumping out of a plane without a parachute or a working parachute. Rest assured you will never need it again!

Make the wise decision. The impact & consequences is limited not only to you but your loved ones too.

Planning

In NickG, we Plan for the Best & Plan for the Worst. It is better, don't you think?



For assistance contact us at gloriouscash@live.com