The second day I enter the seminar for financial management and private financial before management, I heard a lot of funny story from the speaker - Mr. Shamsudin Kadir. Well, he is quite knowledgeable in finance and good at communication.
Back to the topic, the rule of 72 is a simple formula applied for the time used for the money invested to be double. There is a lot more formula and app for calculating the time value money. This is just one of the simplest one.
Years to double = 72 / interest rates
For example, a stock dividend is 6% and you invested RM 10000, the time used for the money invested to be double is 12 years. After 12 years, you will have *RM 20000 (RM 10000 from your original cash and RM 10000 for the cash you will get from the dividend). * Provided you invest back your dividend*
Of course, every investment comes with a risk. As long as you can bear the risk, then it will be ok for you. For example, invest in property will let you have capital gain. Rent it out can lessen your burden in expense and become your asset. ( Asset = money that pay you or put money in your wallet). Since property price in Malaysia will go up, so invest in property will let you grow your wealth but some precautions must be made. The property you buy must be the area near the public transport, has school, restaurant and shopping malls. If there is property no need to pay down payment, it will be better as you don't need to find money for that period of time. Also, don't spend money on kitchen and ceiling renovation as this will cost you. Everyone has different tastes of living styles. So, let the rental person do it for themselves.
Besides property, there is unit trust that earn you more than 100% within 3 years, like invest in small cap unit trust. However, only high risk taker can bear this risk. Just google to search for it, whether it is conventional or Islamic.
There is a don't in investing money in low interest rate like ASB (Amanah Saham Bumiputra) as this need a very long time to get back your money. If it is for lucky draw, then invest a minimum amount for you to qualify. For example, 2% return every year, for the RM10000 invested to be doubled, you need 36 years to get RM20000. If you are only 20 years old, you can get it during 56 years old. Even the rate of inflation will get higher than this, the value of your money will get lesser.
Another choice of investment which is considered safe for public but not for the future is the fixed deposit. Although the rate may different from bank to bank, but the normal rate is based on Bank Negara Malaysia. If it is more than the rate offered by Bank Negara Malaysia, then you should ask the details of it. Certain percentage may invested in Unit Trust or another investment tool.
Also, for student or children, SSPN/SSPN-i can be applied this link. It may be a small percentage of return but in the long term, it may be good for the children when they grown up.
If you want to gain more capital, you can open a business. In the business world, you must know your position, which include where should you get your starting money, your competitor, risk and the type of business you wanted to do. You can do it by four word- SWOT. S-Strength, Weakness, O-Opportunity and T-Threat. Once you know your position, you can start it. (It is easy to start business in Malaysia but it is simple as you think.)
The last things that the speaker talk is your 'estate'. Well, everyone will die someday, you have to handle this matter regardless you are a man or a woman. No 'pantang'. The estate I mean is your accumulated wealth during your life of working or doing business or investment. This is include money in your bank account, your house, your car, your company (if you are doing businees) and your investment. In Malaysia, if your accumulated wealth is more than RM 2,000,000 or 2 millions, you must write a will. If there is no will, once you die, your money will be "frozen", mean your closest relative cannot take your money out and freeze in the bank. If this happen, you have to hire a lawyer with two (2) guarantors, which have the same total value estate as yours. For example, your estate is RM 3 millions, each guarantor must have at least RM 1.5 million. Wow, so you must get a will to settle this problem. On the contrary, your insurance or takaful will not be frozen, so your wife or children can take it out after 15 days.
If you want to write a will, there is a cost, which depend on the Will company. Rockwills, Trustee like AmanahRaya Trustees, Public Mutual or lawyer are your choice in Malaysia. The time to settle estate wealth also depend on whether you have will or not. Therefore, don't hesitate to ask people and get information from them. [If yourself is deem to be professional, then you can write your own will and get people (lawyer) you trust to verify.]
Don't put all your egg in one basket, you can diversified your investment to fit your portfolio.
#financial intelligent
#investment
#will
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