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Tuesday, June 14, 2016

Financial Precautions You Should Take In An Uncertain Economy

During uncertain economic times, you can soothe your fear by taking some financial precautions to protect yourself and your money. Fear is about uncertainty. It's about not being able to predict what will happen next. This unpredictability breeds anxiety. And in the midst of uncertainty, fearless people react very differently than fearful ones do. 



So here are the financial precautions that fearless people take.

100% Principal Protection
Losing your hard earned money is horrible. The last thing you want would be having to worry that your hard earned money are all gone over the night. So during market uncertain, keeping the principal safe with no downside risk is the number one priority. 

Diversification to Worldwide
Never put all your eggs in one basket. It is common sense that you do not want to put all your money into only one investment vehicle and solely relying on it to make more money for you. That's like walking on a thin rope! Hence, diversified to all the world's major stock market indices would be the best bet during uncertain economy.   

Potential for Growth
Being safe is the bottom line, but the upside gain would be desired as well. The return of the investment should have 100% participation in the growth performance. Advanced investors usually will seek out for those company shares with what they deem good growth potential. Otherwise, you may just pick on a broader investment such as MSCI Emerging Market, S&P 500 and so on, that you think they may grow tremendously in the future.

Expose to Foreign Currency 
It has been a bumpy ride for Malaysian Ringgit, especially in the past one year. MYR per 1 USD went from 3.708 in June 2015 to as high as 4.458 in Sept 2015, and now back to 4.089 as of June 2016. So it would be wise if you are able to take advantage on investment that expose to foreign currency.



Online Accessibility
Online accessibility makes life so much faster and easier! You would want to have the control in your hand and all the information of your investment available to you at your fingertips. Be it your personal information, investment transactions and also performance, they should be all available on the internet! 

Beneficiaries
Plan ahead in case of unfortunate events. You would want to be able to nominate the beneficiaries that will receive the proceeds of your investment with hassle free, especially if one is without will or trust written. Just like your EPF or insurance policy, nomination is needed to ease the whole process of knowing who to transfer the proceeds of the investment to.



All in all, if you don't apply what you learn then learning loses most of its value. So now all you have to do is to reflect upon and take action now! Comment below if you have any ideas to contribute as well! Happy investing! 


Tuesday, May 17, 2016

Look Up From Your Phone, Live Life The Real Way!



I came across this video, Look Up by Gary Turk, and I knew I had to share it out! It is just pure inspiring! Even though the video was published in 2014 but I believe the society we lived in today is still the same or even worse! So here's the beautiful script of the video.


Look Up by Gary Turk

I have 422 friends yet I am lonely.
I speak to all of them everyday yet none of them really know me.

The problem I have sits in the space in-between
looking into their eyes or at a name on a screen.
I took a step back and opened my eyes
I looked around and realized
This media we call social is anything but
when we open our computers and it’s our doors we shut.

All this technology we have it’s just an illusion
Community, companionship, a sense of inclusion
Yet when you step away from this device of delusion
You awaken to see a world of confusion
A world where we’re slaves to the technology we mastered
Where information gets sold by some rich, greedy bastard
A world of self-interest, self-image, self-promotion
Where we all share our best bits but leave out the emotion

We’re at our most happy with an experience we share
But is it the same if no one is there?
Be there for your friends and they’ll be there too
But no one will be if a group message will do

We edit and exaggerate, crave adulation
We pretend not to notice the social isolation
We put our words into order till our lives are glistening
We don’t even know if anyone is listening


Being alone isn’t the problem let me just emphasize
If you read a book, paint a picture, or do some exercise
You’re being productive and present, not reserved and reclused
You’re being awake and attentive and putting your time to good use
So when you’re in public and you start to feel alone
Put your hands behind your head, step away from the phone
You don’t need to stare at your menu or at your contact list
Just talk to one another, learn to co-exist

I can’t stand to hear the silence of a busy commuter train
When no one wants to talk for the fear of looking insane
We’re becoming unsocial, it no longer satisfies
To engage with one another and look into someone’s eyes.

We’re surrounded by children who since they were born
Have watched us living like robots and think it’s the norm
It’s not very likely you’ll make world’s greatest Dad
If you can’t entertain a child without using an iPad

When I was a child I’d never be home
I’d be out with my friends, on our bikes we’d roam
I’d wear holes in my trainers and graze up my knees
Or build our own clubhouse high up in the trees

Now the park is so quiet it gives me a chill
See no children outside and the swings hanging still
There’s no skipping, no hopscotch, no church and no steeple
We’re a generation of idiots, smart phones and dumb people


So look up from your phone, shut down the display
Take in your surroundings, make the most of today
Just one real connection is all it can take
To show you the difference that being there can make


Be there in the moment as she gives you the look
That you remember forever as when love overtook
The time she first held your hand or first kissed your lips
The time you first disagreed but still loved her to bits
The time you don’t have to tell hundreds of what you’ve just done
Because you want to share this moment with just this one.

The time you sell your computer so you can buy a ring
For the girl of your dreams who is now the real thing
The time you want to start a family and the moment when
You first hold your little girl and get to fall in love again

The time she keeps you up at nights and all you want is rest
And the time you wipe away the tears as your baby flees the nest
The time your baby girl returns with a boy for you to hold
And the time he calls you grand dad and makes you feel real old

The time you take in all you’ve made when you’re giving life attention
And how you’re real glad you didn’t waste it by looking down at some invention
The time you hold your wife’s hand, sit down beside her bed.
You tell her that you love her, lay a kiss upon her head.
She then whispers to you quietly as her heart gives a final beat
That she’s lucky she got stopped by that lost boy in the street


But none of these times ever happened. 
You never had any of this.
When you’re too busy looking down, 
you don’t see the chances you miss!


So look up from your phones, shut down those displays
We have a finite existence, a set number of days
Don’t waste your life getting caught in the net
because when the end comes, nothing’s worse than regret
I am guilty too of being part of this machine
this digital world we are heard but not seen
where we type as we talk and read as we chat
where we spend hours together without making eye-contact

So don’t give in to a life where you follow the hype
Give people your love, don’t give them your “like”
Disconnect from the need to be heard and defined
Go out into the world, leave distractions behind


Look up from your phone, shut down the display
Stop watching this video, live life the real way.

Live life the real way!



Monday, May 16, 2016

Get FREE RM500 From Government Thru PRS Youth Incentive!

Private Retirement Scheme (PRS) Youth Incentive is a youth incentive of RM500 to contributors who participate in the PRS scheme. The RM500 is a one-off contribution by the Government to young PRS members to encourage youth to start investing in their retirement through the PRS. 



Government has budgeted a total of RM210million in Budget 2014, which, will contribute RM500 per qualified person to be used to purchase units of PRS funds in the PRS account of youths, whom have accumulated a minimum gross contribution amount of RM1,000 within a year. This incentive will be made available for a period of 5 years from 2014 to 2018. But up to date there are only ~8% that has been payout from the RM210million! 

Malaysian Youth are not aware or it is not attractive?

So if you are aged 20 and above but yet to reach the age of 31, read on! 

Are you qualified?
- Must be Malaysian
- Must be aged 20 and above but have not yet reached the age of 31
- Gross contributions within the calendar year reaches RM1,000

How to start?
- Lump sum of RM1,000 into any PRS fund
- Regular monthly contribution (Invest in PRS as low as RM100)
- Parent contributing to Youth


How to apply for incentive?
You do not have to apply for the incentive. PPA will monitor the eligible accounts and compile a listing of those qualified and notify the Government of the individuals eligible for the incentive. A report is compiled by PPA bi-annually, in order for the pay-out to be made to the qualified individuals automatically.

When will I received the incentive?
The once-off RM500 will be automatically credited into the sub-account A of your qualified PRS Fund once you have met the necessary requirements. PPA will notify you once the Incentive pay-out has been made into your qualified PRS Fund in the form of units.

Can I withdraw the incentive?
As the full RM500 will be utilized to purchase units which will then be created in sub-account A, this incentive is therefore not available for pre-retirement withdrawal.

Is the RM500 incentive eligible for tax relief?
The one-off incentive of RM500 from the Government to qualified contributors is not eligible for the annual RM3,000 tax relief claim as the contribution was not made by the PRS Member in his individual capacity.

I am interested, what should I do now?
Comment below and #YourFinanceDoctor will contact you right away! 




Earn, Save, Invest, Repeat!
Happy Investing!

Friday, May 6, 2016

3 Reasons to Maximize Your EPF Savings

One of the questions that people always asked #YourFinanceDoctor if they should opt to take out their EPF to invest in Unit Trust Fund. (In case you have no idea about this, read here) My answer will always be YES. Here are 3 reasons why you should totally do that!

1. EPF wants you to do so! 
If you visit to EPF website (click here), there's a list of different types of withdrawals. "Members' Savings Investment Withdrawal" is one of it whereby the purpose is to allows members to transfer a portion of their savings from Account 1 for investments in order to maximize retirement savings


2. EPF is not stupid too!
As always, EPF put your best interests in heart! In order to safeguard the members' retirement savings, EPF only allows members to invest not more than 20% from the savings in excess of the Basic Savings amount in Account 1 through the appointed Fund Management Institutions approved by the Ministry of Finance. So that is just a small portion of your EPF savings! FYI, there are a total of 234 trust funds qualified and approved by EPF effective 31st April 2016. (EPF will carry out fund evaluation, funds will be suspended from time to time if fail to meet the strict specified selection criteria)


3. You deserve BETTER! 
Take 2 of the EPF approved funds as comparison. A starting withdrawal of RM100,000 for investment with no additional contribution, after 8 years, the return could almost double the figure of those do absolutely nothing about it! Check out the chart below! 

EPF - 100,000 => 158,761
KGF - 100,000 => 302,104
EISC - 100,000 => 304,373!


Conclusion
Don't get me wrong, EPF is one of the most efficient fund manager. Given such a huge amount of members' savings that EPF gotta handles, it is not easy at all! But there must be a reason why EPF allows us to withdraw for investment right? Well, simply because EPF believes we could do better if given a small portion! So bottom line, always invest in funds that generate higher return than EPF (2015 = 6.4%), otherwise what's the point of withdrawal right? Trust me, #YourFinanceDoctor have seen those that putting in those lower return ones! But do take into consideration on your time horizon as well! So now the question is... can you do better? 



Retire Earlier, Wealthier, and Happier
It's never too late to start maximize your EPF savings and you can get a head start by contacting #YourFinanceDoctor for the latest EPF approved fund tips, retirement planning advice, and the tools you need to make the most of your retirement savings! (click here now)

Wednesday, February 24, 2016

FinFair 2016 @ E&O Hotel Penang

FinFair 2016, the first ever financial planning fair is coming big in E&O Hotel Penang! Unlike any typical investment fair or any others that only focus in particular aspect, FinFair 2016 will be all about comprehensive financial planning as a whole! It is with pleasure that YB Dato. Haji Mohd. Rashid will be officiating FinFair 2016


FinFair 2016 is a good opportunity for the northern region of Malaysian, particularly Penangite, to learn about financial planning thru visiting the booth of various financial vendors as well as thru attending the talks available through out the session.  


Here with the schedule of the talks:
1:10pm - 1:30pm Manulife Asset Management Services Berhad
1:35pm - 1:55pm Affin Hwang
2:00pm - 2:15pm Opening ceremony by Penang State Government
2:15pm - 2:20pm Opening speech for the organizer
2:25pm - 2:40pm AKPK
2:40pm - 3:00pm PIDM
3:05pm - 3:25pm FinFreedom 
3:30pm - 3:50pm Zurich Insurance Malaysia Berhad
3:55pm - 4:15pm PA Group
4:20pm - 4:40pm iFAST Capital Sdn Bhd
4:40pm - 5:00pm Kenanga Investment Bank Berhad
**subject to change**


Best of all, the layout of FinFair 2016 will walk you through the 3D Time Tunnel that consists of various remarkable lifetime memories. Participants will get the chance to take photos with the 3D walls and even complete missions to win exclusive giftsFinFair 2016 presents it in a way that all the major financial decisions that come along through out the life can be crucial and hence, the increase the awareness on the importance of proper financial planning, which is as a whole.  


Good News for You!

Thanks to Naughty Nuri's
we are giving away RM50 Cash Voucher to 5 lucky winners!
All you need to do is to follow the instruction here:


Exclusive free gifts worth RM100, lots of fun and laughter awaiting you! It will definitely be a remarkable weekend for you and your beloved family.
Pre-register here:
http://goo.gl/forms/ptHmWXNZdU


Don't miss this golden opportunity! See you there!
Say Hi to #YourFinanceDoctor if you are there! :D

Saturday, January 30, 2016

EPF Employee Contribution : 11% or 8%?

As you may know in the recent Budget 2016 re-calibration, our Prime Minister has announced the reduction of Employee Provident Fund (EPF) Employee Contribution from 11% to 8%. However, members are given the option to remain their contribution at 11% by filling in form and submit to their employers. So here comes the golden question....

EPF Employee Contribution : 11% or 8%?


First, let's take a look on what's the difference. 
For instance, a person with RM3,000 monthly gross salary, he would have RM90 more every month for his take home salary. So it's quite straightforward to calculate how much exactly you will get to bring home more instead of going into EPF!


So what are the Good Things about it?  
1. You got extra money to spend!
YES! There's nothing better than having more money to spend! There are so many things you could do with that extra 3%! Especially with the advancing of technology, this is the era where the world is full of temptation! 


2. You can be a really good citizen! 
You could help to spur the growth of Malaysia by being part of the estimated RM8 billion increase in private sector spending! By spending on items that subjected to GST, you will also contribute to the government revenue too!


3. You can be a REALLY-REALLY good citizen!
Apart from all the above, you could also further contribute to the government thru the extra income tax that you have to pay. Logically, tax relief on EPF part would be reduced (if there's no sufficient life insurance to cover) and hence, higher chargeable income to be taxed. Take a look at the following table. 

Assuming only Individual relief (RM9,000) and EPF & Life Insurance relief (RM6,000) are taken into calculation with no other tax relief:


As you may see from above, if you opt for the 8% EPF contribution, your payable income tax will be increased too, but this is only applicable for those annual income within the affected range which is roughly above RM36,000 to below RM75,000. Above that, your income tax makes no difference with or without the 3% reduction as your tax relief for EPF portion has reached maximum of RM6,000. 

***Do take note***
As highlighted yellow in the table, if your chargeable income to be taxed is around RM35,000, then congratulation, you are the TOP CONTRIBUTOR as the tax difference can be as much as RM400 and above! This is due to the fact that, after the drop in claimable tax relief for EPF, you are not entitled to the Tax Rebate of RM400 (chargeable income lesser than RM35,000) . 


What about the bad thing?
1. You will have lesser retirement fund in your EPF!
Since this will only be started from March 2016 to December 2017 which is 22 months, the 3% reduction in EPF will turn into a value of around RM2,800 in 2018 and almost RM16,000 after 30 years! The estimated value is calculated based on the assumption of average 6% annual dividend throughout the years. 


Conclusion
I believe after reading all the above, you should sense the sarcasm of #YourFinanceDoctor. But, back to the question again, 11% or 8%? But honestly, if you asked #YourFinanceDoctor, the answer is really depending on each individual. But here are the option for different types of people:

For Employees with no self-control but is concern about it :
Beginning Feb 2, download the form from EPF Website (Bookmark it!), fill it up and submit to your employers. Once your money is in EPF, you won't be able to take it out to spend until you are retired.

For Employees with self-control :
You may opt to: 
1. Pay down your debt (starting with high interest ones!)
2. Pile up your emergency fund (at least 3 months of expense)
3. Invest it with target return that higher than EPF dividend (Invest as low as RM100 here)! 
4. Buy Life Insurance to max out on tax relief for EPF/Life Insurance (up to RM6,000). 
Whatever it is, seriously, don't bother to put it in bank, as that will be the most stupid-est thing to do!

For Employees who don't give a shit :
Just take it and spend it! Malaysia is proud of you! We are proud of you! :D
(Probably you won't be reading in here too.)

For Self-Employed without EPF (just like #YourFinanceDoctor) :
There's nothing you need to do! Unless if you would like to contribute in EPF-1MRSS!

Earn, Save, Invest, Repeat!
Happy Saving!
#YourFinanceDoctor

Monday, December 7, 2015

1Malaysia Retirement Savings Scheme - EPF for Self Employed

After #YourFinanceDoctor quit from engineering to become #YourFinanceDoctor, one of the biggest concern is to save for retirement on our own. Being self-employed, it is not compulsory to contribute in EPF. Worst of all, self-employed is not getting the contribution from employer as well. So if you self-employed or individual without fixed income, you should read on!  

1MRSS - Specially for Self-Employed!




As you may know, employer contributes at least 13% on top of your own 11% contribution, so that sums up to 24%. So for self-employed like #YourFinanceDoctor, you gotta always remember to save at least 24% on your own as you would not have EPF to cover you at retirement! But thankfully, I came across this 1Malaysia Retirement Savings Scheme (1MRSS) from EPF!

What is 1Malaysia Retirement Savings Scheme (1MRSS)?
I know what you might be thinking, 1Malaysia huh? Is it reliable? Well, 1MRSS is a retirement savings just like EPF to ensure that the self-employed and individuals without fixed income have their own savings plan upon reaching retirement age. It is designed to encourage them to contribute voluntarily based on what they can afford.

Why should I enroll in 1Malaysia Retirement Savings Scheme (1MRSS)?
The only reason #YourFinanceDoctor would apply because of the contribution from the government! In other words, instead of employer contribution, now government become the contributor as well. So apart from the yearly dividend, government will contribute 10% or maximum amount of RM120 effective from 2014 to 2017. The other reason would be the tax relief on EPF portion which up to RM6,000.

How much should I save into 1Malaysia Retirement Savings Scheme (1MRSS)?
The minimum contribution amount is RM50 up to the maximum limit of RM60,000 annually. But if you asked #YourFinanceDoctor, the right amount would only be RM1,200 annually. The sole purpose of RM1,200 into 1MRSS is to earn the contribution of RM120 (10%) from government.

P/S: Of course, if one does not have a proper financial planning, then you should put more in 1MRSS or typical EPF account as it would be more efficient than putting in bank savings account.

Can I see an example of 1Malaysia Retirement Savings Scheme (1MRSS)?
#YourFinanceDoctor invested RM1,200 into 1MRSS in the beginning of 2014. So thru 1MRSS, #YourFinanceDoctor will be entitled for RM120 from government contribution. On top of that, the yearly dividend for EPF in 2014 is 6.75%, so total amount at the end of 2014 will be RM1409.10! That's roughly 17.425% of return! Check out the break down table below!



Am I eligible to apply for 1Malaysia Retirement Savings Scheme (1MRSS)?
You are eligible if you fulfilled ALL the following:
1. Malaysian citizen
2. 'Self-employed' refers to any individuals who are working with income and not an employee
3. Member of the EPF
4. Has registered to contribute in the 1Malaysia Retirement Savings Scheme
5. Minimum contribution payment amount is RM50

(If not yet a member, registration at the EPF counter is required by using MyKad or via mail by submitting the Form KWSP 3 and a copy of MyKad) (Click here to download Form KWSP 3)

AWESOME! I'm interested! How do I apply?
1. Register and submit the Application Form for the 1Malaysia Retirement Savings Scheme (KWSP 16G(1M)) at the EPF counter or via mail. (Click here to download form KWSP 16G(1M))

2. Submit the 1Malaysia Retirement Savings Scheme Payment Form – KWSP 6A(2) form together with the cash/cheque at the EPF counter/mail at the appointed bank agent counters, i.e. RHB, MBB, PBB and BSN. (Click here to download form KWSP 6A(2))


Act fast as 1MRSS only effective from 2014 to 2017! 
3 Years left to earn RM120 per annual from Government!

Earn, Save, Invest, Repeat!
Happy Saving!
#YourFinanceDoctor

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