Today, I have attend a two-day seminar. It is about your personal financial management and your preparation before retirement. The speaker is quite humble, intelligent in financial (especially Islamic) and funny.
He didn't show all the module at the beginning, but start chatting about pray to God for giving us the opportunity to attend this free seminar and hope to help us to improve our moral culture and financial management. Then, he also having joke with people who attend there. Of course, rule and regulation about the seminar also given. (Well, for you I think you should concentrate what I will writing next. )
First of all, the speaker let us list (dissect) all the expenses we spend each month. For example, your debt including PTPTN, home loan, personal loan etc, petrol, bills for phone, internet, money giving to parent, food and other unavoidable expense like friend's birthday event. Wow... that a lot. But this is just for one month, what if I change spectacles, shoes, or tyres per year. Simple, just divide it by 12. Or, if you regularly buy a newspaper or magazine per month. This must count too. The purpose of this listing is to know where your money has gone.
Then, the speaker ask us to use our income to minus all the expense we spend each month [income include all the salary you got after deducting your KWSP, PERKESO and /or pension fund (if the company provided)]. In Kuala Lumpur, the expense for most people who are worker may exceed their income. But, if you are otherwise, you may use the money for investment.
After that, you may wonder what the emergency fund for and how many do you need to prepare for it. Well, this is just a guideline. It depend on person. Well, the emergency fund is used for anything (eg. accident) that happened to you or your families and you need that money for payment to the hospital or related person. This is unpredictable. How much do I need then? 3 to 6 months of your salary. If your salary is RM2000, then you need to prepare RM6,000 (3 months) to RM12,000 (6 months).
You may ask why not use the insurance for the accident. Remember this, insurance is for protection and it cannot pay you first until you pay certain amount for deposit or if you have the medical card. Investment-linked also for protection. Also, if your family didn't buy any insurance, this emergency fund is to backup you.
Furthermore, the speaker also talk about quick rich scheme. The quick rich scheme is viralling all around the world. The people who believe it will get rich fast and lose money fast. Why said so? Let the following example explain to you. One day, Ms. Jess who stay in KL get involved in quick rich scheme. The people introduce to him said that the investment can get 10% back every month, risk-free and is located in Subang. She wanted to rich get rich fast but didn't have enough money, so she just buy a lot with RM50,000. After a month, she get the 10% return, but she still have a bit worry, so she go to Subang to look for the company. Well, it look very nice and she is satisfied with the company performance. Another day, Mr. Jeffrey also encounter this quick rich scheme. He is interested with it, so he buy two lot with RM100, 000. He get the 10% return as Ms. Jess. That's good, right. Another guy, named Zaki also encounter this quick rich scheme. Well, he is quite rich, so he buy four lot with RM200,000. The third month, Ms. Jess, Mr. Jeffrey and Zaki got the 10% return as a usual. However, the company is too good to be true, so where the 10% return come from? The money come from the 90% of the payee. Nobody reliase it until someone report it and eventually they know this is a trap. However, they lose money after that. Be aware!
Where should I invest to earn more for spending? What is your objective to invest? You must know about it clearly. For retirement or to beat inflation. You can invest in ASB, Unit trust, Tabung Haji (for muslim), fixed deposit or other legal financial institutions.
In addition, there is only 6 types of organisation that can officially said the word "investment" and take money from us for investment in Malaysia. The banks being declared by Bank Negara Malaysia (BNM), the financial institutions declared by the BNM, its subsidiaries, insurance and takaful company, unit trust (government, state government or private), coperative, and IPO share (http://www.investopedia.com/terms/i/ipo.asp). You can check all organisations or unknown company via www.bnm.gov.my.
That's for today.
Thank you for reading.
See you.
#financialintelligent
#emergencyfund
#quickrichscheme
#investment
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