Insurance? Or... Any Investment Vehicles?

it's actually depends on our current economic condition, job, family background and mind setting. insurance shall not be adopted as an 'investment' even if it's formed under the same class - money appreciation.

one should has to understand the purpose of insurance or any form of investment before making decision to buy either one or both.

insurance is for protection. in case of any accident, we may face with 2 situations : survive or dead. and if survive, we also face 2 situations : normal (including non-serious injuries) or disable i.e. paralyse. i list down the consequences here:-

1. survive + normal = pay hospital bills, losses.
2. survive + disable = pay hospital bills, losses and lost job.
3. dead + alone = safe.
4. dead + family = family lost a breadwinner.
or
5. chronic disease + money = pay hospital bill, nothing to worry.
6. chronic disease - money = charity?

if we fall under 1,2 & 4, it is very crucial to us to plan about what kind of protection we need. if we are a man on the street, and our daddies are not a wealthy guys, i recommend insurance is the best. unit trust is good if you're not facing any bad incident or chronic disease for the whole life, but hospital bill is very high. remember, hospital bill is very high. if you wanna wait for any charity body to help... it's not very promising.

make a right decision to ensure that nobody will suffer if something happen to us someday.

Things to Consider Before Applying Credit Cards

using credit card sometimes similar with borrowing with 'along' or 'ceti', it involves charges. before you agree to open a credit card account (via agent or at bank), don't neglect its terms and conditions. carefully read to avoid hidden charges. don't simply believe in 'no fees' or 'free annual fees' or any 'free' terms. you have to read the terms and conditions. the following are some important terms to consider that generally must be disclosed in credit card applications or in solicitations that require no application.

1. Annual Percentage Rate
- it is a measure of the cost of credit, expressed as a yearly rate. make sure it is disclosed before you become obligated on the account and on your account statements. the issuer also must disclose the "periodic rate" - the rate applied to your outstanding balance to figure the finance charge for each billing period.

however there's some plans called variable rate. and you have to ensure that the rate may change and how it is determined - which index is used and what additional amount to determine your new rate.

2. Grace Period
- a free period you have before the due date that allow you to avoid finance charge by not doing the fully payment. example, as the bill reaches, you still have 10 days before the due date.

3. Annual Fees
- if it says it's free, read again to make sure it's really free. it must be disclosed after all.

4. Transaction Fees & Other Fees
- some charge you a fee if you use the card to get a cash advance, late payment, or exceed credit limit. some charge a monthly fee whether or not you use the card.

in a nutshell, don't throw away the terms & conditions, even if the agent gives you a prompt briefing that makes you happy to use the card. my own experience, they said no annual fees, instead they charged me on monthly fees...

Wealth is Health - 2

wealth management is depend on these factors:

1- NIAT
"innamal a`malu binniat" - famous hadith of 40.
every Muslim should knows that we are rewarded on our daily activities, which make right intention to please Allah.

2. how does it earned & grow
definitely from what syariah allowed. if we invest, should it be in the right way of investing: not in gambling or commission-based.

3. how does it spent
everywealth is not to be kept. nor spending to show off wealth or in vain. wealth has its share that is dedicated to Allah, as in Rukun Islam itself mention that paying zakat is one of the Muslims' obligation. a wealthy Muslim should and could help the other Muslim needy.

poor is miserable. look, how if we can't afford anything necessary in life, we would get it from anyone else. then, if our Muslim friends also don't have it, where should we go? think about it.

Wealth is Health - 1

there's many responsibilities a Muslim should take. but not every Muslim aware about one of the biggest responsibilities in life : managing wealth.

wealth is alike any other thing in life, either being beneficial or detrimental. however, Islam encourage us to seek wealth and power because they are necessary for decent living of human kind.

[17:70] We have honored the children of Adam, and provided them with rides on land and in the sea. We provided for them good provisions, and we gave them greater advantages than many of our creatures.

[14:31] Exhort My servants who believed to observe the Contact Prayers (Salat), and to give (to charity) from our provisions to them, secretly and publicly, before a day comes where there is neither trade, nor nepotism.

why does wealth is so important? because of these:

[2:83] We made a covenant with the Children of Israel: "You shall not worship except GOD. You shall honor your parents and regard the relatives, the orphans, and the poor.

[30:38] Therefore, you shall give the relatives their rightful share (of charity), as well as the poor, and the traveling alien. This is better for those who sincerely seek GOD's pleasure; they are the winners.

if we, Muslims don't ever afford to accommodate those, who would? let the Rotary Club again?

however, Islam is not about seeking wealth. Islam is about management of wealth. that's why, if it is mismanaged, it would become detrimental. as it is a test, said in Holy Quran:

[21:35] Every person will taste death, after we put you to the test through adversity and prosperity, then to us you ultimately return.

[20:131] And do not covet what we bestowed upon any other people. Such are temporary ornaments of this life, whereby we put them to the test What your Lord provides for you is far better, and everlasting.

how to manage our wealth in Islamic way? let's check in PART 2.

Invest Ringgit is Under Construction!

We're moved!!

we are now moved to a new house! visit InvestRinggit.Com

Unit Trust? What The...?

what is unit trust?

when it comes to unit trust investment, most of our people begin asking, is it risky? is it a kind of MLM? is it a quick-rich scheme? and many more.

for me, the key word is simple. it's a kind of saving.

there's many kind of savings. savings is a fund of money put by as a reserve and protecting it from any source of danger. in this case, we define reserve as, something kept back or saved for future use or a special purpose, and danger as the causes of loss.

more than that, we should be wanting for more! it is because of inflation! each year, inflation rate averaged 4%. just imagine our monies' value would reduce 4% each year. if we save a buck today under our pillows, imagine how much the values in 30years time!

unit trust is not a quick-rich scheme, nor MLM or any kinda nonsense. it is a government-guaranteed activity. the very first private unit trust fund was launched in 1967. it became aggressive in the 1980s where bank-backed unit trust companies began to emerge. thus where Public Mutual began (that time known as KL Mutual). from 1990s onwards, many more unit trust companies emerged including PNB (where ASB, ASN, etc reside). na... get the clearer picture? unit trust and ASB (most visible one) are similar, in fact ASB is a kinda unit trust.

to double your money in 5-10 years in unit trust or to keep it safe and sound under your pillow or in the common bank, the choice is yours.

Unit Trust for Beginner

unit trust, mutual fund, amanah saham, whatever the term is, it's refer to the same thing. in UK, it's unit trust; in US, it's mutual fund; in Malaysia, it's amanah saham and unit trust is widely used in this country as well.

the unit trust concept is like this, it is a kind of investment by means of pooling funds from many individual and corporate, to be invested into various investment opportunities, in other words, in the different companies. unit trusts raise the money by selling shares of the fund to the public, much like any other company can sell stock in itself to the public.

there's might be confusion between unit trust and share market investment. here i highlight the different and similarities between those two.

Investment Portfolio
1. unit trust invests in various companies.
2. share invests in one exclusive company.

Investment Risk
1. unit trust risks are medium and diversified. example, if company A goes bankrupt, the other companies can back up the NAV price.
2. share market risks are very high and exclusive. if something happen to the company (rugi, tutup, bankrupt) you'll dragged into the same dilemma.

Investment Style
1. unit trust is for long-term investment since the NAV is stable upon time (depend on what type of fund you're invested in).
2. share market gives high return in relatively short period of time.

Investment Strategy
1. unit trust investor has to know the type of fund and the fund's portfolio prior to investing. he can invest at anytime.
2. share market investor needs sufficient information, experience and know the right time to invest.

Investment Trend
1. unit trust's price fluctuation is not slightly significant. e.g. if the price decrease dramatically, it won't raise as dramatic as it went down. remember, the trend is slow but stable.
2. share's price is very significant in price fluctuating. it may has a stable price for months but in a day, it can goes up to 150% or goes down to 70%.

for a layman like us, investing in unit trust is a smart way to doubles or triples our money provided we have enough infos about investing in unit trust especially in choosing the right unit trust management company. we have lots of unit trust companies in Malaysia and there goes the choice to make the right decision so that our monies will be save and actively compounded.

Teach those Kiddies

to teach a kid about money, the sooner the better. money is a natural thingy that will come to any kids, before they learn about maths, they would initially learn about money. it might not a knowledge but they may know that their parents go to work, get money and buy them something.

generally, once the kids know they can buy things with money, they will spend any cents they have to get their favorite candies, magazine, robots, etc. so, it's very important for parents to aware about this. kids should be taught about the various functions of money, not only for buying stuffs.

1. tell them that money is for...
- buying things
- saving
- donating
these basics is enough for a young kid. you don't have to explain about world's economic or investment or any adult's thingy. enough by telling them the 3 basic functions of the money. so that each time they have their pocket money, they'd know where should they put their money in. definitely not all into the grocer's pocket.

2. tell them that money has to be earned
don't simply give money to your kids everytime they ask. ask them back, how crucial they need the money, and give them lesson that money is not simply come into their parents' pocket. so as the parents have to go out for work to get the money, so does the kids have to. e.g. doing dishes and earn money. maybe little kids can't understand. then, they might be told to be good then only they get the money.

3. give them reward
each time they make good deeds or gain a good result, give them reward. tell them that money is not an easy thing to get, so they have to know the effort.

4. help!
help them so save, not to help them to spend! don't help them buying expensive thingy like toys, etc. instead, help them buying the economic ones.

maybe someday you may 'borrow' your kids money during emergency.

Start Saving

sometimes, we failed to define the word SAVE. in sport, the word save means to prevent the opposition from scoring. in finance, it's not so much different with the sport term for save.

in finance management, we have opposition. the opposition is our spending habit. fail to handle it will make it win and our saving will be not so much, or even likely to be not at all. here's some tips to control the habit than winning meanwhile decrease our monthly saving.

1. spend for yourself.
ah ah ah... don't get excited. spending for yourself is not spending on new clothes, new handphone, eateries, etc. it's paying yourself. save your money first! allocate a certain percentage of your monthly earning and let it be in your saving. whether you like it to sleep in your saving account or invest in unit trust.

2. necessities not accessories.
know your priority. spend on your clothes rather than your extravagance dress or shoes.

3. reserve for emergency
again, malang tidak berbau. it shouldn't be very much, maybe a hundred buck is good enough.

4. set your style
sometimes we can go into a deep debt or with zero saving just to get ourselves up-to-date. why should we jeopardize our own money for the changing lifestyle? next year, the style changes, and we should change to be in line with it. overcome the world's style. pick up your new, evergreen style.

5. remember the tomorrow
where does the malay proverb 'kerana guruh di langit, air di tempayan dicurahkan' came from if it's not from us? don't be too sure that your increasing salaries, your bonuses, etc. might cover your tomorrow if you don't have any saving plan today.

6. start now!
don't wait until the next salary to start saving. procrastination is the worst enemy in planning. start, even if it's only 2% of it.

with a proper plan, you shouldn't have to cut your eateries. believe me.

Money Makes Money?

the idea of let money makes money starts to penetrate into our society. our people starts to get use to a term called investment. in all definition of the word INVESTMENT, i like this term 'the use of money through various vehicles, or an individual's time and effort, to make more income or increase capital, or both'. look at the underlined words.

investment needs vehicles. to invest, you have to know investment vehicle that can bring you to your destination. prior to it, you have to know your destination. what is you target? why do you invest?

in physical life, if you wanna travel, first you have to know your destination, isn't it? then, why do you need to arrive at the destination. let say you wanna travel from KB to KL. you have many choices of transports. you may drive your car, ride your motorcycle, or bus, or plane, or even lorry, if you want. that's why you have to know your motive of traveling. if you wanna have a nice sightseeing, you may use car. if you wanna rest, you may choose bus. if you're in rush, plane is the best choice for you.

so goes with investment. you have to set your target before investing. for retirement? or for children's education? or to buy a car by next year? those target have to go through different investment vehicles.

the next point is your time and effort. of course you don't have to knock everydoor to collect your earnings but the effort here includes your studies, your knowledge, and what you do to provide you with knowledge to invest.

knowledge=simple. where does the money come from? what is the concept? and the most important is the CONCEPT OF INVESTMENT ITSELF!

if someone comes and offers you an 'investment' scheme that will guarantee return of 300% in a year, what would you do? and he shows the evident that many people became rich via the scheme. would you? i believe that 45% will say yes. this is totally ridiculous.

even if the evident is there but please.. please.. please.. if you don't know where the money comes, find another thing lah. it's like you wanna go to KL from KB by bas ulat.

Wed and Wit

only if you have unlimited fund, you still have to carefully plan for your wedding financial. even though your parents might pay, but you still have a financial ceiling on what you can afford. the danger of carelessly look at the overall picture is, you can very easily overextend yourself.

to start budgeting for your wedding is simple. first, identify who would pay for your wedding, parents or yourself or combination. whoever does (unless you're sponsoring by cari menantu) you need to create your ceiling where your expenditure could be expanded. budgeting means you have to put everysingle item in your list including tit-bits thingy to ensure you'll end up putting yourself under unwelcome financial pressure. meanwhile, by listing item by item, you'll find any unimportant thing so that you can eliminate and cut your budget.

example:
1. bride's wedding ring
2. groom's wedding ring
3. wedding dress including accessories
4. bouquet
5. transportation
6. photography
7. videography
8. wedding cake
9. wedding reception
10. entertainment
11. wedding card printing
12. bunting
13. etc. etc.

to do this elimination, you have to know your priority. you may not cutting your wedding reception, don't you?

another thing is plan early. when your engagement is done and your wedding date is decided, it's time for you to plan! list down things you should but especially for the gifts. you may grab many items during discount. it's save, right? when you plan early, you have a wide choice of wedding planner who offers cheaper price.

then, don't be too excited of having a lavish wedding. remember that life after that one-whole day fiesta is more costly. and not to forget, don't put yourself in debt!

happy wedding!

Credit Card is Good

we've been through a society that saying credit card is bad. it will lead you into deep debt. yeah i have to agree with this. credit card is not for those who doesn't know the value of money.

credit card itself is putting you in debt. everytime you use it, you have to pay it later. it you are not smart, you'll end up cash out more than your cash in and make you deeply in debt. this is where the skill of 'valuing' money is very vital.

i list down some benefit by paying using credit card:-

1. you can keep your cash for any emergency.
2. you can collect points and redeem in the end, some banks offers goods to exchange with your points, some offer cash rebate, etc.
3. you may defer your current expenditure into your next month's salary. so you're gonna have a better projection on your next cash-out.
4. you don't need to bring cash on your wallet.
5. you can pay your car's fuel at the pump.
6. you can plan wisely for shopping by buying a bundle of goods since credit card has its minimum pay.
7. you can educate your children by controlling their money-out (kids don't use credit card).

provided...

1. you have knowledge about 'valuing' your money.
2. you are at least in the middle-class group.
3. you are sane.
4. you will pay the full bill.
5. you got money.
6. you got money.
7. you got money.

well, anyway it will work only if you know the value of money...

Where Are We at the Age of 64?

today's NST reported that according to S. Thechinamoorthy, a financial planner from monetmatters corp sdn bhd, in 2026, the rm1.4M is equal to rm639K today. a 35-year-old should have a sum of 1.5M at his 55 to ensure he can continue living comfortably. while according to u chen hock of hsbc, a 35-year-olgd today with rm4K earning per month will have rm500K in his EPF upon retirement, which he need a million more to support his life later!

like it or not, we still have another 2oyears plus to live after retirement (according to latest statistic). thus, we have to consider not only the day to day activities after retirement, but also the vital thing is health issues. as we grow old, our bodies become more porous and more absorbent to disease. as this happen that time, treatment at hospital can be very expensive. furthermore, that time we are not going to have a 'one month high fever then recover' but our disease might be continuous and need as frequent as monthly basis of medication.

according to financial planners, to face this, we have to save as early as today. we might start at a small amount but after 25 years, the accumulation would make us surprise. however, in this world with increasing inflation rate, we should be wise to park our money so that it would grow according to inflation.

the suggested way is to save in equity fund, fund that invested into equity market. and if we are smart enough, real property is a good investment for the old days. however, nothing is easy to have easier life. everything must be followed by discipline and target of how we are gonna live after retirement.

nowadays life is no more enjoyable unless if your salary is rm100K per month. according to the oldschool parents, they would put their hope on their kids to take care of them later. but now this is no more reliable since those kids also have to run in their rat race. now we have to live frugally with enough saving to protect us later.

more HYIP guidelines

1. knowledge!
it is very important for you to get knowledge about HYIP industry before you make decision to invest. get the key point of HYIP! if you don't even know what the acronym is, you better do something else. jual goreng pisang ke...

2. ask yourself WHY!
why do you need to invest in HYIP? financial problem? or just wanna get more? you just have 2 possibilities : get richer or loss all your money. so ask yourself why. if you wanna gamble, so you go...

3. check the rule!
always read the term & condition for withdrawal. could it be... 'you are not able to withdraw if your money is not reaching USD$12million'?

4. diversify!
invest in many. if one program is closed, you still have another back-up.

5. think about your financial situation!
never invest if you don't have any other money. don't gamble!

6. research! research! research!
don't just simply believe in what others say... do your research. you know, make sure the admin is truly exist..

7. are you a gambler?
sometimes it is. in 100 HYIPs, 99 are scams. if you able to find the only 1, you MAYBE safe. but with the other 99 you know, it's about luck.

if someone comes to borrow your money for HYIP investment, BETTER BE STINGY! than gambling your hard-earned money...

Investing in Islamic Way

investing is not new in Islamic world. since the uprising of Islamic civilisation, Rasulullah and the Muslimin migrated to Madinah during Hijrah, they instituted co-operative investment arrangements, partnerships that held potential for a return on the money invested. The purpose of these and subsequent arrangements within the community have allowed Muslims to support each other and the community's businesses.

in fact, the Qur'an encourages believers to engage in beneficial trade and to invest. further Islamic teachings clarify how Muslims should invest and point toward equity partnerships. modern scholars note that the stocks Muslims buy should reflect Islamic beliefs as well as prudent financial choices.

Islamic law promotes investment through equity partnerships, in which investors own a share of net assets and share risk equitably with other investors. thus, investing in stocks is acceptable according to Islamic teachings. however, to invest in accord with religious beliefs, Muslims must evaluate the business activities of each company prior to investing.

easy, if the company's core business (or even side-business) involves gambling, alcohol, porn, pork or interest-based activities (riba'), the company shouldn't be considered to be an investment venue.because of the Islamic prohibition of paying or charging interest, companies whose interest-based profits or holdings exceed certain limits are forbidden.even when the interest-based activities are found to be within tolerable limits, investors must purify the earnings through donations to charity.

how to identify riba' or interest-based activity?

when we invest in certain company, the return shall not be guaranteed e.g. 50% per year. it might be predicted but it is not guaranteed. say, last year the return was 23% and this year it is up to 28% but nobody can say it is, until it is stated a day after. when comes to riba', the return is guaranteed, example, 2% per day, 120% per year.

according to fatwa, any investment with a guaranteed return is considered as riba'. and riba' is illegal in Islam.

as stated in al-Baqarah, Allah allows trading but prohibits riba'. as Muslims, do we want to let us and our family involve in this kind of investment and grow up with 'kabur' money?

there's many legal investment scheme. choose smartly.

HYIP : a basic guideline

High Yield Investment Program. can be offline or online. but now online one is having its boom. everyone's talking about online investment. name it, you'll get hundred pages of website offers this kind of investment. 90% or more or them are ponzi scheme that call themselves HYIPs.

ponzi scheme's founder, charles k ponzi claimed it as an investment opportunity which relies on new investments to pay off the older ones. those whom invest first are thus paid their returns from those who invest after them, leaving the last investors the ones who lose out. many HYIPs who claim to be trading, investing, etc are really only running a ponzi scheme.

how to consider a HYIP is a real HYIP or a scam?
i just give you some basic ideas which only you could think about.

1. check the admin's personal data
can be checked thru 'whois'. if you find something fishy, could you just believe the scheme? should an honest admin hide his personal data? if the information sounds correct (complete with address & phone number) make a call to ensure it is really his or maybe somewhere else, an asylum maybe? or you may just check whether the phone number is belong to that particular place. office in US, but the phone number is UK? isn't that funny?

2. contact!
it is important to ensure that the admin is really exist and responsive. hey, what you're gonna invest is not a small buck, are you a gambler or an investor???

3. legal copy of script
if the admin is really serious about the business, they should pay some amount to develop the homepage rather and downloading free/cheap script from kazaa or morpheus or etc.

4. check graphic and language
graphic must looks 'expensive' and no spelling/phrase mistakes in its term and condition, etc. hey, if he is really serious he should able to pay some for the language check!

5. the program's age
HYIP lifecycle is not long. if you are among the first investor ('joining' at the first year of launching), there is probability for you to stay longer in the program.

HYIP really works. many people make profit from HYIP. but please, follow the guideline before you listen to your friend even if he is now a HYIP millionaire.

Choosing the Best Unit Trust - 2

unit trust performance doesn't like share market even if they're correlates. when considering share market, ones has to look art the history, performance, record, etc. of the particular company. when considering unit trust, it is important to get to know the unit trust company and the funds' performance instead of considering the companies they invested in.

unit trust's performance is slightly different than stock market. stock market graph is very obvious ups-and-downs because the objective is to get income in short term (unless the company is very2 stable so you can hold it longer). for unit trust, the graph's trend of ups-and-down is not obvious, but for long term it should go up and up. see the graph below:
the upper graph is stock market's trend (in general) where the below one is unit trust trend (in general). see the trend? for a short-term investment, buying at a really low price and sell at a really high price will be significantly relevant in a very short time. for a long-term, buying at lower price it relevant as well but ones has to consider the company's ability to retain the higher price in short time. remember unit trust is slightly different than stock market. it's not as aggressive as stock market as it is a diversified investment policy.

another thing to keep in mind is that, unit trust is not totally depend on where does it invests in but who manage the investment. even if you invest in a very good company but if you're not a good investor, you'll end up in deep debt. except you're lucky. so goes with an investor who invests in a-not-so-good company, if he is good and smart enough, he would be able to gain big money.

this starting new year a good time to look for the best unit trust company. the edge-lipper and standard's & poor rating is in the store to be checked.

happy investing!

Choosing the Best Unit Trust

simple rule : go for the company, then look for the product.

easy, when you want to buy a simple thing like shampoo, which much attract you, buying from a shopping mall or a small kedai runcit, for the same brand of shampoo? i bet you'll go to supermarket or even watson for a tube of toothpaste.

why you would go to those places rather than kedai runcit? attraction. in financial, you might not see the physical attraction as what exhibits by a supermarket. the attraction shown by the company performance and the fund managers. how to see all this?

check for the tips in the next entries.

Buy? or Rent?

when someone tells me about buying houses, i just throw a smile. but inside my head i keep on asking, why should buy, instead of rent? maybe because of the feeling of having something that's all yours. or maybe because of its appreciating value in nature over time.

either from old folks or the youths, the common advice is buy a house as soon as you can, renting is just a throwing-money device. i don't really agree with the suggestion and here's why:-

1. renting is flexible.
you can move out anytime with little penalty (if available). when you own a house, selling out can take a very long time. it's maybe suitable if you're 55year-old but if you are 25year-old, career might require mobility. isn't it? so why put your root down at a place you just stay for temporary; 5yrs? or most of 25yrs?

2. owning a house is more expensive.
renting a house will throw your money and you'd never gain the ownership of it. but, owning a house is also throwing your money in taxes, fee, etc- those would not go towards the equity of your home. even if you're no longer staying in the house, you still have to pay. if you rent out your house, you still have to pay the loan which is significantly higher than rental price if you owned landed properties; esp. true for landed properties.

3. you'll stranded for about 30 years.
when you buy a house (let say you take full loan), you have to commit your monthly salary for an additional of RM300-RM500/month compared to rental for the next 25-30 yrs . if extra rm500 been invested with return more than 10% p.a., you'll easily claim rm8724 by end of 30th yr.

4. someone else do the repairs
when you own a house, if something breaks down (-paip pecah la, toilet sumbat la, atap bocor la, etc), you have to fix it by yourself. but if you rent, hopefully your landlord will do all the repairs, no charge to u!!! again, you can use your money to invest in something else...

5. treat housing market as other markets.
housing price will also depreciate in value, just like any other market.

owning a house is not like investing in EPF, it is a life changing decision with 30yrs commitment. it may change your life significantly, but not now. you may think owning a house is a fun thing but when you come across financial planning concept, soon enough you'll reveal the true myth about buying or renting.

Budgeting

do you ever count with your current income, your current salary, your current saving, your current property, how long it takes for you to be a millionaire? or at least you'll retire without jeopardizing your current lifestyle?

we might have EPF for retirement. in 2006, EPF declares 5.15% dividend rate distribution. minus 4% inflation rate, the nett is only 1.15%. in 2004, it was reported 4.75% and 2005 increased to 5%. with this, EPF may not be enough to maintain your standard of living in 30 years from now. uh, i have only 31 years to retire!

how to overcome this? would you move to any countryside to avoid high living rate?

the words are financial intelligent. financial wisdom will not come naturally. it is a lifelong process. one has to know his goal and plan before setting up a financial plan.

the very first step in financial planning is understanding how to set your budget. budgeting is not listing down your income and expenses then leave it to be filled again tomorrow without any expulsion.

watching out your expenses is not highly necessary. the thing is, watch out your saving. when you keep your saving strictly, your expenses could be controlled.

simple steps to start budgeting are:
1- write down all your source of income. you may want to do it per month. eventually you'll know how much you earn per month.

2- make a list of things you have to spend at per month and how much you spend. it may be you house, car, land, insurance, parents, etc.

3- set how much do you wanna save permanently. half of your salary? quarter? or rm100? decide and stick it in your brain that you won't use the money unless you may die if you don't use it.

4- set how much do you wanna save for emergency. car breakdown? you may need the money one of those days but not everyday.

5- list down your daily expenses. food? clothes? gas? oil? chocolate? magazine?

6- optional fund!. you maybe wanna go somewhere for vacation. you may use all your money residue to be kept in this very personal fund.

to have a comfortable living, extra work or side income is not really necessary. it might give you extra money but without proper financial plan i.e. good saving plan, it is merely nothing. millionaires are not only have vast of income but also being frugal. it means strictly save your money and let your money makes money.

it's where you should put your permanent saving. choose a venue that could increase your money. use Rule of 72 to decide where should you invest your money so that i would doubled in a certain time.

project your money using Rule of 72:
easy, just use your calculator. if you want to know how long it will take to double your money at 7.5 % return, divide 72 by 7.5 and you'll get 9.6. you need 9.6 years to double your money with 7.5% return.

but this is not considered inflation rate. however, you'll get the picture how your money works passively.

easy, choose a medium that offers more return and you money will doubled shortly.

Asset? or Liability?

it is understandable that asset is a useful or valuable quality thingy. something that has appreciate value in the future. while, liability is something that hold your back.

when i was a teen, i used to have a funny definition about asset (which i was confidently 'right' that time). easy, asset is something you own, something big and valuable for you. such as, your house or your land or even your car.

as i left my teen age, i came across that my definition about asset was totally wrong. it came from my discussion with my hubby, my father in-law and asset-collector-guru, azizi ali. it's not your house, or your land, or any big thing you own. asset is something that brings money into your pocket.

it made me realize that my house won't fill my pocket with money, even it takes money from my pocket. or even my land. i have to get my money out everymonth, for billing, taxes, and so on. how can i accept that my house would be my asset? maybe that's the answer why i don't buy any house.

it's not about having lots of houses but where the houses are. robert kiyosaki didn't simply buy any property without knowing the location and the potential of it. i won't buy any house in miri, neither buying a house at KL/KB while i am at miri. simple, no value added. if i buy a house at KL, i have to pay the price monthly (i don't have cash to pay it fully) and still have to pay the rent here. easy way, rent it out, but i don't believe it is that easy. i saw many in my very family, rent out houses, in KL, JB, etc. end up with unpaid rent for months and the tenants disappear. if i buy i house here, when i wanna move out then what? rent out? sell out? in this very city, where the development is still not very rapid (yet), i don't think i could sell at higher price. many and many new housing areas developed, if i was them, i would buy a new one rather than get other's house. again, will i sell at lower price? so what i'm gonna get?

maybe i am not really get into real estate yet. but there is rule of thumb, do something with value added. i don't buy any land or any house, because it will make me committed to and my monthly salary have to go to there first. meanwhile, i can do many things with my money. i can save it or invest in unit trust to get more return. yeah, it is no doubt that property investment would bring more into you pocket but as a layman like me, i don't have knowledge about property. i don't read much books and i don't even have money to buy land!

easy, with not much money, not much saving and not much knowledge about investment, find another vehicle to rig your asset up. your asset is your brain. equip the brain with financial knowledge, would make it smart enough to decide. the best investment in to invest in ourselves.

since i don't have much knowledge and experience in stock market, i just go for unit trust. easy, find a company that would provide return more than inflation rate per annum. easy and convenience, diversified investment reduces risks of losing money.

buying land/house for others (like what azizi ali did) makes your properties your asset. but buying land/house for your own usage won't be your asset. unless you sell it someday. if want to have a property to be sold/lease, study the location. nobody won't rent your shop/house if you have it at a swamp area. and always believe that rumors is always rumors. my FIL's friend was confidently bought a property at a place which was popped to be a potentially growth new-satellite town. but until now, nothing happen and he is filthy paying for the price, which my FIL & i believe that he would get better if he bought someplace else.

maybe someday, when i have enough money, i'll buy a terrace house at Damansara, renovate and sell it at exponentially higher price as what donald trump did. hopefully an-unrenovated house still available that time.