Malaysia's Weekly Personal Finance Summary - March 6 2019

cshaw (52)in #teammalaysia • 5 years ago

Intro

It's been awhile. Sorry about that! I'm currently backpacking around New Zealand and will be here for another 2 weeks. It's been a blast but now that I've done most of the overnight activities, hopefully the summaries go back to becoming weekly.

Money in Daily Life

Saving regret - and how to avoid it

The researchers found that two-thirds of those surveyed said they should have saved more when they were working: "66.6 percent said they would save more if they could re-do their earlier life."

It seems like most people don't run into a saving regret until something negative has happened. This could be a major bear market in the world, to losing a job, to running into some sort of medical condition (which is why we believe in getting insurance to make this medical condition less problematic.)

Besides that, you can reduce the chances of regret in the future by doing the following

Forecast the future (that is, plan for the future)
Plan for the problem - though you can't guess the problem, having an emergency saving fund is always beneficial
Be proactive
Master your money (you can start by taking our free program Money 101)
Save more

Should Women Be Investing Differently Than Men?

The notion that one's gender might factor into their investment strategy is based on various realities women face, including that, on average, women live longer than men, make less money, and typically spend fewer years in the workforce (which results in lower Social Security income). Women also have higher healthcare costs due to their longevity.

According to this blog, women tend to live longer than men (81.3 years vs 76.3years) and women are typically paid only 82% of what men are paid. This makes their investment plan needs to be slightly different.

According to this blog, the suggestions are:

Don't leave so much in savings - it needs to be invested
Look at your stock to bond ratio - it most likely needs to have more stocks
Maximize the power of compounding returns - since in general women live longer, there's more chances for them to take advantage of compounding returns
Diversify with International Exposure - in the long term, emerging markets will do better and women more time to see that happen with the investments

I personally think that there is something to be said about women needing to have a different investment plan than men especially because they tend to live longer. But it's not only that. Because women are also the ones to have to go through child birth. This is actually why we're also huge fans of this female specific insurance plan that also acts as a savings account.

How to Calculate Your Net Worth: A Complete Guide
Understanding your net worth is the key to understanding where you are financially so that you can properly plan for the life that you want to live. Here are the steps required to find your net worth:

Step One: Set up a spreadsheet
Step Two: List your assets
Step Three: List your debts
Step Four: Get accurate numbers
Step Five: Track on a regular basis

Although there aren't a lot of steps, some of these steps require digging through a lot of information. If you're finding this whole process daunting, try working with a financial planner that you can trust (or work with the one that we trust).

The Biggest Money Saving App in Malaysia

Saving money is something we all aspire to do. New Year Resolutions, birthday wishes, a wake-up call in the form of bills - all sorts of realizations, but it never works. The urge to spend is constant. Who, after all, could pass up the chance to dine at that Italian restaurant?

This blog talks about the Entertainer app which essentially gives you a bunch of deals on food, activities, and holidays. The deals are typically buy one get one free.

That said, I have never used this app before but I do caution people who are interested. Remember, it's one thing to be planning to go eat out and then using this to save money. It's a completely different thing to decide to make a purchase when you originally had no intention to do so simply because of the "savings".

By the way, it seems like you will need to pay some sort of fee to unlock the discounts.

15 lessons on money and marriage from couples who have been married 10+ years
The 15 lessons are:

Make sure you have chemistry when it comes to money
Don't try to change the other person
Talk openly with each other about where you're starting from financially
Understand one another's money mindset
Talk about money - A LOT
Have frequent money dates to stay on the same page
Make big financial decisions TOGETHER
Find a financial division of labor that feels right to you
Make sure you both know the important stuff
Don't micromanage one another's spending habits
Maintain separate Passion Funds for your personal interests
Set ground rules for what gets discussed, and what's Guilt-Free Money
DO NOT hide your spending from your spouse
Lean on each other when times get rough
Make sure you have the money fundamentals mastered

On the last point - if you want a place to start mastering the fundamentals, try our FREE Money 101 program.

5 Things to Consider When Managing Money in a Relationship

Combining finances with your partner is a game changer. By pooling your resources and sharing expenses, you can end up with stronger growth potential and a larger safety net.

Divide Discretionary Funds Equally
Recognize Each Person's Priorities
Meet with a Financial Planner (we have partnered with a financial planner after vetting through their process)
Check in Regularly
Address Problems Early

Want To Have Your Money Accelerate Your Goals?

Grow Your Wealth

[What Is Your Credit Score?}(https://mypf.my/2019/02/21/what-is-your-credit-score/)

You may have heard the term "credit score" thrown about often enough whenever there is talk about loans and lending. Here we go through 5 common questions about your credit score.

The questions (as well as a summarised answer) are:

What is a Credit Score?
A credit score is a three digit numerical amount representing your creditworthiness.
What is a credit reporting agency?
A credit reporting agency gathers and searches information on individuals' and businesses' credit. They are provided with reports from lenders and various other sources and then they compile a credit report that includes a credit score.
How is the CTOS' credit score is determined?
payment history (45%) - the longer and making minimum payments, the better
current debt level (20%) - the lower the better
types of credit used (14%) - the more types the better
Length of credit history (7%) - the longer the better
New credit accounts (14%) - the more in a short amount of time, the worse the score
What is CTOS credit score ranges and what it meant to the lenders
the key is to get your score between 744 - 850 as that will give you the best rate for interest when borrowing money
Where to get your credit report (whether free or paid)?
eCCRIS
MyCTOS online portal

'Flesh and blood robots for Amazon': These people raid clearance aisles and resell it all online for a profit

Subtracting some taxes and fees, they'd clear US$6.16 in profit. All told, the Herbert's 10-minute Target run earned them US$198.

Although this is news from the US, it gives you an idea as to what you can do as a side hustle. This blog talks about how people would go around finding really cheap deals in person and then sell those things online at a higher price, making them money right away.

This could also be something done in Malaysia using shopee and lazada.

If you're thinking of trying it out, please let us know so we can document your journey!

Real talk about passive income: What it actually means to make money while you sleep

Real talk #1: Making money while you sleep takes A LOT of work while you're awake

Passive income is something we all dream of. Making money without having to do anything. But honestly, there are a lot myths that simply aren't true. This blog covers a few:

Real talk #1: Making money while you sleep takes A LOT of work while you're awake
Real talk #2: Making money while you sleep doesn't happen overnight
Real talk #3: Passive income is not the only way to build a successful business
Real talk #4: Just because you're making money while you sleep doesn't mean you'll want to quit your business
Real talk #5: Making passive income requires some very active choices

Even though I do make passive income right now (primarily from my one real estate), I spent a lot of time making that property give me enough money for it to become passive. And even then, it's not enough for me to live off the money.

FYI

Knowing When to Hire a Personal Financial Advisor

People who are concerned over something will inherently seek out the advice of experts for a solution. The sick seek out doctors, those with car troubles seek out mechanic. What about those who have concerns regarding managing their finances? Let us introduce to you what a Financial Advisor does and when is the time to hire them.

According to this blog, the times when you need a financial advisor are:

You are young and have little or no knowledge of managing your finances
You have no inclination/desire or time to do financial planning on your own
You want an objective and unbiased professional opinion.
You had a major event/change in your life
A personal financial advisor is useful for everyone

Not a fan of the last bullet, but I am a big fan of the first 3. Financial advisors can really help you create a game plan for you finances in order for you to live the life you've been dreaming of. However, the key with finding the right advisor is finding someone who actually knows what they're talking about and one who you can trust.

That's why we've spent so much time finding a company that has advisors we trust - in order to make your life easier.

Best Personal Finance Books You Need to Read in 2019
I haven't read any of these books yet, so I can't really have a stand. However, here they are:

Happy Go Money: Spend Smart, Save Right and Enjoy Life by Melissa Leong
The Financial Diet by Chelsea Fagan and Lauren Ver Hage
Big Mistakes: The Best Investors and Their Worst Investments by Michael Batnick
Work Optional: Retire Early the Non-Penny-Pinching Way bt Tanja Hester
Why Didn't They Teach Me This in School? by Cary Siegel
End Financial Stress Now by Emily Guy Birken
Reducing the Risk of Black Swans: Using the Science of Investing to Capture Returns with Less Volatility by Larry Swedroe and Kevin Grogan

If any of you have read any of these, please let us know what you think in our facebook group!

Cool Opportunities

BigPay - The Best Travel Credit Card for Malaysians?
If you ever travel out of Malaysia and use your credit card, then this is BIG (pun intended). AirAsia has released BigPay, a prepaid mastercard that you can easily top up through the BigPay app and be able to use instantly.

But more importantly, BigPay charges you at the real exchange rate (which means they charge no fees). This is something you won't get if you were to go to your bank or some exchange counter.

In fact, I plan on only using this when I go to Toronto in December.

Anyway, if you don't have one yet, you can sign up for free and get RM10 free when you use referral code B7D3YNZPGO.

Talking to an Independent Financial Adviser
A big issue when you work with someone who calls themself a financial advisor is you do not know if they really have your best interest at heart. That's one of the main reasons why I never work with any (the other one is that most of them get trained to say what the company wants and thus, do not know of all the other cool opportunities out there).

However, I've been talking to an independent financial adviser the last few months and I do believe that not only is she knowledgeable, but also super open to sharing her knowledge.

If you're interested in talking to her, join our facebook group and ask your questions. She will definitely find time to pop by and answer them.

#steemiteducation #education #money #finance