The fuel price hike on Sept 3 came as a surprise to many Malaysians (RON95 petrol went up by 20 sen a litre, and RON97 rose 15 sen a litre two days later). Here are eight things you can do to keep your fuel costs down.
1.Keep your tyres inflated
Properly inflated tyres have less contact with the road, which helps reduce friction, and hence petrol consumption. That also helps preserve the integrity of your tyres, and give you a safer drive.
2.Swipe a credit card
Many banks offer fuel incentives. For example, CIMB’s Petronas MasterCard and Citibank’s Shell Gold Visa Credit Card offer up to 8% in fuel rebates. Loyalty programmes such as the Petronas Mesra Card, offer points for fuel redemption.
3.Drive smoothly
Instead of accelerating and braking harshly when driving, slow down before coming to a complete stop. With momentum driving, you will be saving petrol. And don’t rev your vehicle.
4.Eliminate excess weight
Unnecessary weight makes your engine work harder.
5.Consider carpooling
Say goodbye to lonely drives home. Enjoy the company of others and shave your petrol budget.
6.Avoid idling
If you’re waiting more than a minute, switch off the engine.
7.Avoid peak-hour driving
The higher the gear you drive in, the lower your engine speed (number of revolutions at which the crankshaft turns). A lower engine speed can improve fuel efficiency, so avoid peak-hour driving.
8.Give public transport a chance
Is your workplace close to an LRT station? Park and ride.
theedge
Saturday, November 9, 2013
Wednesday, October 30, 2013
8 Ways Of Controlling Your Personal Debt
Learn how to control your personal debt and accomplish your financial goals, by making your personal debt work for you.
1. Some debt is good.
Borrowing for a home or college usually makes good sense. Just make sure you don't borrow more than you can afford to pay back, and shop around for the best rates.
2. Some debt is bad.
Don't use a credit card to pay for things you consume quickly, such as meals and vacations, if you can't afford to pay off your monthly bill in full in a month or two. There's no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay the bill in full. If there's something you really want, but it's expensive, save for it over a period of weeks or months before charging it so that you can pay the balance when it's due and avoid interest charges.
3. Get a handle on your spending.
Most people spend thousands of dollars without much thought to what they're buying. Write down everything you spend for a month, cut back on things you don't need, and start saving the money left over or use it to reduce your debt more quickly.
4. Pay off your highest-rate debts first.
The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on.
5. Don't fall into the minimum trap.
If you just pay the minimum due on credit-card bills, you'll barely cover the interest you owe, to say nothing of the principal. It will take you years to pay off your balance, and potentially you'll end up spending thousands of dollars more than the original amount you charged.
6. Expect the unexpected.
Build a cash cushion worth three months to six months of living expenses in case of an emergency. If you don't have an emergency fund, a broken or damaged car can seriously upset your finances.
7. Don't be so quick to pay down your mortgage.
Don't pour all your cash into paying off a mortgage if you have other debt. Mortgages tend to have lower interest rates than other debt, and you may deduct the interest you pay on the first $1 million of a mortgage loan. (If your mortgage has a high rate and you want to lower your monthly payments, consider refinancing.)
8. Get help as soon as you need it.
If you have more debt than you can manage, get help before your debt breaks your back. There are reputable debt counseling agencies that may be able to consolidate your debt and assist you in better managing your finances. But there are also a lot of disreputable agencies out there.
1. Some debt is good.
Borrowing for a home or college usually makes good sense. Just make sure you don't borrow more than you can afford to pay back, and shop around for the best rates.
2. Some debt is bad.
Don't use a credit card to pay for things you consume quickly, such as meals and vacations, if you can't afford to pay off your monthly bill in full in a month or two. There's no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay the bill in full. If there's something you really want, but it's expensive, save for it over a period of weeks or months before charging it so that you can pay the balance when it's due and avoid interest charges.
3. Get a handle on your spending.
Most people spend thousands of dollars without much thought to what they're buying. Write down everything you spend for a month, cut back on things you don't need, and start saving the money left over or use it to reduce your debt more quickly.
4. Pay off your highest-rate debts first.
The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on.
5. Don't fall into the minimum trap.
If you just pay the minimum due on credit-card bills, you'll barely cover the interest you owe, to say nothing of the principal. It will take you years to pay off your balance, and potentially you'll end up spending thousands of dollars more than the original amount you charged.
6. Expect the unexpected.
Build a cash cushion worth three months to six months of living expenses in case of an emergency. If you don't have an emergency fund, a broken or damaged car can seriously upset your finances.
7. Don't be so quick to pay down your mortgage.
Don't pour all your cash into paying off a mortgage if you have other debt. Mortgages tend to have lower interest rates than other debt, and you may deduct the interest you pay on the first $1 million of a mortgage loan. (If your mortgage has a high rate and you want to lower your monthly payments, consider refinancing.)
8. Get help as soon as you need it.
If you have more debt than you can manage, get help before your debt breaks your back. There are reputable debt counseling agencies that may be able to consolidate your debt and assist you in better managing your finances. But there are also a lot of disreputable agencies out there.
10 steps to making a financial budget
1. Budgets are a necessary evil.
They're the only practical way to get a grip on your spending - and to make sure your money is being used the way you want it to be used.
2. Creating a budget generally requires three steps.
- Identify how you're spending money now.
- Evaluate your current spending and set goals that take into account your long-term financial objectives.
- Track your spending to make sure it stays within those guidelines.
3. Use software to save grief.
If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you.
4. Don't drive yourself nuts.
One drawback of monitoring your spending by computer is that it encourages overzealous attention to detail. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.
5. Watch out for cash leakage.
If withdrawals from the ATM machine evaporate from your pocket without apparent explanation, it's time to keep better records. In general, if you find yourself returning to the ATM more than once a week or so, you need to examine where that cash is going.
6. Spending beyond your limits is dangerous.
But if you do, you've got plenty of company. Government figures show that many households with total income of $50,000 or less are spending more than they bring in. This doesn't make you an automatic candidate for bankruptcy - but it's definitely a sign you need to make some serious spending cuts.
7. Beware of luxuries dressed up as necessities.
If your income doesn't cover your costs, then some of your spending is probably for luxuries - even if you've been considering them to be filling a real need.
8. Tithe yourself.
Aim to spend no more than 90% of your income. That way, you'll have the other 10% left to save for your big-picture items.
9. Don't count on windfalls.
When projecting the amount of money you can live on, don't include dollars that you can't be sure you'll receive, such as year-end bonuses, tax refunds or investment gains.
10. Beware of spending creep.
As your annual income climbs from raises, promotions and smart investing, don't start spending for luxuries until you're sure that you're staying ahead of inflation. It's better to use those income increases as an excuse to save more.
They're the only practical way to get a grip on your spending - and to make sure your money is being used the way you want it to be used.
2. Creating a budget generally requires three steps.
- Identify how you're spending money now.
- Evaluate your current spending and set goals that take into account your long-term financial objectives.
- Track your spending to make sure it stays within those guidelines.
3. Use software to save grief.
If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you.
4. Don't drive yourself nuts.
One drawback of monitoring your spending by computer is that it encourages overzealous attention to detail. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.
5. Watch out for cash leakage.
If withdrawals from the ATM machine evaporate from your pocket without apparent explanation, it's time to keep better records. In general, if you find yourself returning to the ATM more than once a week or so, you need to examine where that cash is going.
6. Spending beyond your limits is dangerous.
But if you do, you've got plenty of company. Government figures show that many households with total income of $50,000 or less are spending more than they bring in. This doesn't make you an automatic candidate for bankruptcy - but it's definitely a sign you need to make some serious spending cuts.
7. Beware of luxuries dressed up as necessities.
If your income doesn't cover your costs, then some of your spending is probably for luxuries - even if you've been considering them to be filling a real need.
8. Tithe yourself.
Aim to spend no more than 90% of your income. That way, you'll have the other 10% left to save for your big-picture items.
9. Don't count on windfalls.
When projecting the amount of money you can live on, don't include dollars that you can't be sure you'll receive, such as year-end bonuses, tax refunds or investment gains.
10. Beware of spending creep.
As your annual income climbs from raises, promotions and smart investing, don't start spending for luxuries until you're sure that you're staying ahead of inflation. It's better to use those income increases as an excuse to save more.
Sunday, October 27, 2013
Five Financial Must-Haves for First Time Home Buyer (in Malaysia)
Here are five financial prerequisites that are musts before you sign on the Sales and Purchase Agreement (SPA).
1. Have adequate Down Payment
Whether you are buying directly from developer or from seller at the subsale market, you must have the down payment of 5-15%. The first step of buying after you’ve identify your desired house, is to sign the booking form and pay 1-2% earnest deposit, or the booking fees. This will allow 14 days for you to arrange for SPA signing.
Upon signing the SPA, you will be required to pay the remaining down payment that adds up to the total of 10%. After that, you’ll need to finance the rest of the purchase price with a bank loan, assuming that you don’t have the ready cash to pay in full. In some cases, depending on the type of the property and your credibility, you may get lower or higher financing margin compared to the industry standard of 90% financing.
If the banks only lend you 85% of the purchase price, you will need to fork out another 5% for the difference. Of course, there are cases with literally no money down. But you will still be required to fork out the down payment and get it back in short term period due to some smart negotiations, special discount or rebate from developer, or creative financing. So the first financial must is to have 5-15% of the down payment accumulated.
2. Estimate How Much Can you Borrow
After you’ve got your down payment ready, the next thing you want to find out is how much installment you can afford to fork out every month. This will determine how big the loan amount you can take. Nowadays, banks are getting more stringent.Your loan servicing affordability is assessed by calculating your personal Debt Service Ratio (DSR).
DSR is equal to your total monthly debt repayment obligation, divided by monthly take-home income (that’s after tax and EPF contribution). Bank Negara requires the bank not to lend borrower more than 60% DSR. In other words, if your take home pay is RM5000/month, you will be able to serve a loan payment of RM3000.
However, it is really not recommended to go for the limit. I would recommend that you keep your DSR under 30%. And this 30% should also include your car loan. Depending on the loan tenure, the younger you are, the longer term you can take, probably up to 30-40 years to completely pay up the mortgage.
At the current interest rate of about 4.3%, and 30 years loan tenure, a monthly payment of RM1000 can serve a loan amount up to RM200,000. After knowing how much you can borrow, the next financial must have is to understand how much you can really afford to pay every month.
3. Understand How much Can you Afford
When you have your own home, there are other related expenses that comes with it, other than the monthly mortgage installment. First, is the maintenance fee if your property is in a gated and guarded community, or a high rise building.
Secondly, you will also need to pay yearly fire insurance premium, quit rent and assessment. Thirdly, there are also regular expenses such as Indah Water Konsortium, water and electricity bill, not mentioning the initial deposit for all these utilities.
Therefore, you’ll need to understand that your expenses will increase when you are staying at your own house, comparing to staying with your parents or renting a place. So how much exactly can you afford? A thorough calculation is recommended.
4 Transaction cost
When making a home purchase, there are also other one time fees that can’t be neglected. You may need to pay real estate broker commission who helps you hunt for houses. There are also legal fees involved to prepare the SPA and also the loan agreement.
Besides that, the biggest amount of all is the stamp duty payable to the government.
SPA Stamp Duty Rates:
First RM 100,000.00 = 1%
Next RM 100,000.01 – RM 500,000.00 = 2%
Next RM 500,000.01 – RM 2,0100,000.00 = 3%
Above RM 2,000,000.00 = 4%
Meanwhile, the loan agreement stamp duty rate is 0.5% for any amount. So all these transaction expenses can add up to a total of about 5% of the purchase price, easily.
5. Get ready with Renovation and Furnishing Cost
After the house keys are handed to you as the proud new homeowner, you will get to do more alteration and enhancement, which will definitely incur some renovation and furnishing. You can always decide the enhancement that suits your budget.
No matter how frugal you are, there will be some basic furnishing required before you can stay comfortably in your new home. So get ready with a minimum fund to cover this inevitable expense. Buying your own home is probably one of the biggest and most important financial decision in your life.
Some people depleted all their accumulated savings after the purchase. Some even incur more consumer debts when they swipe credit cards and opt for installment payback to furnish their home. However, at the end of the day, it is a different feeling, which is more towards satisfaction and fulfilment when you are able to stay in a property that has your name in the ownership title.
kclau.com
1. Have adequate Down Payment
Whether you are buying directly from developer or from seller at the subsale market, you must have the down payment of 5-15%. The first step of buying after you’ve identify your desired house, is to sign the booking form and pay 1-2% earnest deposit, or the booking fees. This will allow 14 days for you to arrange for SPA signing.
Upon signing the SPA, you will be required to pay the remaining down payment that adds up to the total of 10%. After that, you’ll need to finance the rest of the purchase price with a bank loan, assuming that you don’t have the ready cash to pay in full. In some cases, depending on the type of the property and your credibility, you may get lower or higher financing margin compared to the industry standard of 90% financing.
If the banks only lend you 85% of the purchase price, you will need to fork out another 5% for the difference. Of course, there are cases with literally no money down. But you will still be required to fork out the down payment and get it back in short term period due to some smart negotiations, special discount or rebate from developer, or creative financing. So the first financial must is to have 5-15% of the down payment accumulated.
2. Estimate How Much Can you Borrow
After you’ve got your down payment ready, the next thing you want to find out is how much installment you can afford to fork out every month. This will determine how big the loan amount you can take. Nowadays, banks are getting more stringent.Your loan servicing affordability is assessed by calculating your personal Debt Service Ratio (DSR).
DSR is equal to your total monthly debt repayment obligation, divided by monthly take-home income (that’s after tax and EPF contribution). Bank Negara requires the bank not to lend borrower more than 60% DSR. In other words, if your take home pay is RM5000/month, you will be able to serve a loan payment of RM3000.
However, it is really not recommended to go for the limit. I would recommend that you keep your DSR under 30%. And this 30% should also include your car loan. Depending on the loan tenure, the younger you are, the longer term you can take, probably up to 30-40 years to completely pay up the mortgage.
At the current interest rate of about 4.3%, and 30 years loan tenure, a monthly payment of RM1000 can serve a loan amount up to RM200,000. After knowing how much you can borrow, the next financial must have is to understand how much you can really afford to pay every month.
3. Understand How much Can you Afford
When you have your own home, there are other related expenses that comes with it, other than the monthly mortgage installment. First, is the maintenance fee if your property is in a gated and guarded community, or a high rise building.
Secondly, you will also need to pay yearly fire insurance premium, quit rent and assessment. Thirdly, there are also regular expenses such as Indah Water Konsortium, water and electricity bill, not mentioning the initial deposit for all these utilities.
Therefore, you’ll need to understand that your expenses will increase when you are staying at your own house, comparing to staying with your parents or renting a place. So how much exactly can you afford? A thorough calculation is recommended.
4 Transaction cost
When making a home purchase, there are also other one time fees that can’t be neglected. You may need to pay real estate broker commission who helps you hunt for houses. There are also legal fees involved to prepare the SPA and also the loan agreement.
Besides that, the biggest amount of all is the stamp duty payable to the government.
SPA Stamp Duty Rates:
First RM 100,000.00 = 1%
Next RM 100,000.01 – RM 500,000.00 = 2%
Next RM 500,000.01 – RM 2,0100,000.00 = 3%
Above RM 2,000,000.00 = 4%
Meanwhile, the loan agreement stamp duty rate is 0.5% for any amount. So all these transaction expenses can add up to a total of about 5% of the purchase price, easily.
5. Get ready with Renovation and Furnishing Cost
After the house keys are handed to you as the proud new homeowner, you will get to do more alteration and enhancement, which will definitely incur some renovation and furnishing. You can always decide the enhancement that suits your budget.
No matter how frugal you are, there will be some basic furnishing required before you can stay comfortably in your new home. So get ready with a minimum fund to cover this inevitable expense. Buying your own home is probably one of the biggest and most important financial decision in your life.
Some people depleted all their accumulated savings after the purchase. Some even incur more consumer debts when they swipe credit cards and opt for installment payback to furnish their home. However, at the end of the day, it is a different feeling, which is more towards satisfaction and fulfilment when you are able to stay in a property that has your name in the ownership title.
kclau.com
Saturday, October 26, 2013
5 Moments You're Most Likely to Overspend
When You're Avoiding the Crowds
You may be tempted to tackle your shopping list during the morning on a weekday, when the stores is practically guaranteed to be blessedly empty. But shopping at crowded stores could help your wallet: We're less likely to buy unnecessary items when we're surrounded by swarms of people.It's like we go into survival mode, where we immediately think of what we need to get in and get out (and emerge relatively unscathed)
When You've Opened Another Bank Account
Study found that people tend to save more when they have just one place to deposit money. That's because they have a better knowledge of how much is there—and how much they're spending, researchers say. When our income is spread across a few places, we can easily justify a purchase by thinking, "Oh, but I have money in that other account, too."
When You're Buying Something Embarrassing
If you've ever bought some candy, a magazine or a collector's edition DVD box set to deflect from what you really need to pick up (ahem, antifungal foot cream), you're not alone: almost 80 percent of people spend money on unnecessary extras to divert the cashier's and other shoppers' attention
If the thought of buying just the item you really need makes you anxious, search for a distraction purchase you'll use, like paper towels or toothpaste.
When You Could Use a Little Support
It's no surprise that we're likely to splurge when we're feeling down, but 75 percent of women say they're shopping to treat someone else, finds University of Hertfordshire research. Sadness can make us crave others' support.Buying gifts for those we care about can help us feel more connected to them when money is tight, it's easier to justify spending on someone other than ourselves.
When You're Reminded of the Time
The clock can rule our schedules, our thoughts and, as it turns out, our bank accounts. When a sign encouraged people to "spend a little time, enjoy C&D's lemonade," they were more likely to stop and buy a drink—and pay 51 percent more for it (compared to a those who saw a sign that asked them to "spend a little money"). Why? In the 2008 study from Stanford University, researchers found that 'spending time' makes us feel more like we're buying an experience, not parting with our hard-earned cash.
The subtle shift is enough to make us feel like we're investing in something to do—which most other research states will make us happier than material possessions—but in essence, it's just stuff masquerading as an experience.
You may be tempted to tackle your shopping list during the morning on a weekday, when the stores is practically guaranteed to be blessedly empty. But shopping at crowded stores could help your wallet: We're less likely to buy unnecessary items when we're surrounded by swarms of people.It's like we go into survival mode, where we immediately think of what we need to get in and get out (and emerge relatively unscathed)
When You've Opened Another Bank Account
Study found that people tend to save more when they have just one place to deposit money. That's because they have a better knowledge of how much is there—and how much they're spending, researchers say. When our income is spread across a few places, we can easily justify a purchase by thinking, "Oh, but I have money in that other account, too."
When You're Buying Something Embarrassing
If you've ever bought some candy, a magazine or a collector's edition DVD box set to deflect from what you really need to pick up (ahem, antifungal foot cream), you're not alone: almost 80 percent of people spend money on unnecessary extras to divert the cashier's and other shoppers' attention
If the thought of buying just the item you really need makes you anxious, search for a distraction purchase you'll use, like paper towels or toothpaste.
When You Could Use a Little Support
It's no surprise that we're likely to splurge when we're feeling down, but 75 percent of women say they're shopping to treat someone else, finds University of Hertfordshire research. Sadness can make us crave others' support.Buying gifts for those we care about can help us feel more connected to them when money is tight, it's easier to justify spending on someone other than ourselves.
When You're Reminded of the Time
The clock can rule our schedules, our thoughts and, as it turns out, our bank accounts. When a sign encouraged people to "spend a little time, enjoy C&D's lemonade," they were more likely to stop and buy a drink—and pay 51 percent more for it (compared to a those who saw a sign that asked them to "spend a little money"). Why? In the 2008 study from Stanford University, researchers found that 'spending time' makes us feel more like we're buying an experience, not parting with our hard-earned cash.
The subtle shift is enough to make us feel like we're investing in something to do—which most other research states will make us happier than material possessions—but in essence, it's just stuff masquerading as an experience.
Wednesday, October 23, 2013
Smarter Option - PRS
PRS is a voluntary long-term investment scheme designed to help individuals accumulate savings for retirement. PRS seek to enhance choices available for all Malaysians, whether employed or self-employed, to voluntarily supplement their retirement savings under a well-structured and regulated environment.
Each PRS offers a choice of retirement funds from which individuals may choose to invest in based on their own retirement needs, goals and risk appetite. The fund options under a PRS are intended to enhance long-term returns for members within a regulated framework. Assets of each PRS are segregated from the PRS Provider and held by independent Scheme Trustee under a trust.
REGULATORY FRAMEWORK
The Capital Markets and Services Act 2007 (CMSA) empowers the SC to regulate and supervise the PRS industry.
Summary of Roles and Responsibilities
-Securities Commission (SC) Malaysia
-empowered by law to be the regulator of the PRS industry
-provide a regulatory environment
-development of PRS industry
PRS Providers
-exercise the PRS Provider’s powers for a proper purpose and in good faith, in the best interest of the members as a whole
-exercise the degree of care and diligence
-keep complete and accurate records of all information
-not make investments in which it could have a financial interest or derive a benefit without -approval of the Scheme Trustee
-provide interim reports, annual reports and account statements
-exercise the PRS Provider’s powers for a proper purpose and in good faith, in the best interest of the members as a whole
-exercise the degree of care and diligence
-keep complete and accurate records of all information
-not make investments in which it could have a financial interest or derive a benefit without -approval of the Scheme Trustee
-provide interim reports, annual reports and account statements
SCHEME TRUSTEE
Each PRS scheme is required to appoint an approved PRS scheme trustee to actively monitor the operation and management of the fund under the scheme by the PRS Provider to safeguard the interests of members.
The scheme trustees has a fiduciary duty to ensure that the PRS Provider comply with the scheme’s deed and disclosure document. In addition, the PRS scheme trustee provides custodianship of the PRS fund’s assets.
PRS PROVIDERS
- AIA Pension And Asset Management Sdn Bhd
-AmInvestment Management Sdn Bhd
-CIMB- Principal Asset Management Berhad
-Hwang Investment Management Berhad
-Kenanga Investors Berhad
-Manulife Asset Management Services Berhad
-Public Mutual Berhad
-RHB Investment Management Sdn Bhd.
PRS PROVIDERS & FUND OPTIONS
You may choose to contribute to one or more PRS Provider. Under each PRS Provider, you can further choose to invest into one or more funds by either contributing based on the default option (age-based selection) or select a fund based on your preferred choice.
What you Need to Know!
PRS Providers Funds & Performance
PRS Fund selection
a. Growth, Growth & Income & Income Funds
b. Default Option Funds or Self Selected Funds
PRS Fund Risks
Fees & Charges
a. Funds Sales Charge
b. Annual Management Fees
Transaction Fees
PRS Funds Selection Option
You can decide to choose a fund or not to choose a fund and invest based on the default option where contributions are allocated to the core funds based on your age. Each PRS Provider must offer the 3 core funds as a default option in their PRS.
If you choose the default option you will be allocated to the following core funds based on your age grouping:Core Funds Age Asset Allocation
Growth fund Age below 40 years Maximum 70% in equity; 30% in debentures/fixed income and money market instruments
Moderate fund Age 40 years and above but have not yet reached 50 years Maximum of 60% in equity; 40% in debentures/fixed income and money market instruments
Conservative fund Age 50 years and above 80% in debentures/fixed income instruments of which a minimum of 20% must be in money market instruments and a maximum of 20% in equity
Alternatively, you may choose any of the core funds which does not correspond with your age or any of the non-core funds offered by the PRS Provider.
The PRS Provider may offer a range of up to 7 non-core funds under their PRS scheme. You may choose to invest in one or more of these non-core funds based on the fund’s asset allocation and asset classes as well as whether the fund is a conventional, shariah-based, local or offshore fund.
What you Need to Know!
PRS Providers Funds & Performance
PRS Fund selection
a. Growth, Growth & Income & Income Funds
b. Default Option Funds or Self Selected Funds
PRS Fund Risks
Fees & Charges
a. Funds Sales Charge
b. Annual Management Fees
Transaction Fees
PRS Funds Selection Option
You can decide to choose a fund or not to choose a fund and invest based on the default option where contributions are allocated to the core funds based on your age. Each PRS Provider must offer the 3 core funds as a default option in their PRS.
If you choose the default option you will be allocated to the following core funds based on your age grouping:Core Funds Age Asset Allocation
Growth fund Age below 40 years Maximum 70% in equity; 30% in debentures/fixed income and money market instruments
Moderate fund Age 40 years and above but have not yet reached 50 years Maximum of 60% in equity; 40% in debentures/fixed income and money market instruments
Conservative fund Age 50 years and above 80% in debentures/fixed income instruments of which a minimum of 20% must be in money market instruments and a maximum of 20% in equity
Alternatively, you may choose any of the core funds which does not correspond with your age or any of the non-core funds offered by the PRS Provider.
The PRS Provider may offer a range of up to 7 non-core funds under their PRS scheme. You may choose to invest in one or more of these non-core funds based on the fund’s asset allocation and asset classes as well as whether the fund is a conventional, shariah-based, local or offshore fund.
PRS SCHEME FEATURES
Contributions
Individuals
Any individual who has attained the age of 18 years as of the date of the account opening of a private pension account may make a contribution to any fund under the PRS. The PRS is offered to Malaysians and non-Malaysians as well.
Contributions to any fund under the PRS will be maintained in two separate sub-accounts by the PRS Providers as follows:
Individuals
Any individual who has attained the age of 18 years as of the date of the account opening of a private pension account may make a contribution to any fund under the PRS. The PRS is offered to Malaysians and non-Malaysians as well.
Contributions to any fund under the PRS will be maintained in two separate sub-accounts by the PRS Providers as follows:
70% in Sub-account A which must not be made available for pre-retirement withdrawal; and
30% in Sub-account B which would be available for pre-retirement withdrawal subject to payment of an 8% tax penalty on the withdrawal sum.
Individuals have the option to contribute to more than one fund under a PRS Scheme or to contribute to more than one PRS Scheme, offered by different PRS Providers.
Being a voluntary scheme, there are no fixed amounts or fixed intervals for making contributions. Individuals can contribute to the PRS as often as they like and are encouraged to consistently save up to achieve their intended retirement goals.
Individual Tax Relief
The individual tax relief is applicable on gross contribution, i.e. inclusive of upfront charges.
For example, if an individual invested RM3,000 with a Provider and that Provider deducted RM10 for account opening fee, and RM50 for sales charge, the full RM3,000 is eligible for tax relief, and not RM2,940.
Tax relief of up to RM3,000 per annum will be applied on taxable income, for individual contributions made to the PRS for the first 10 years from assessment year 2012. Individuals may claim their individual tax relief for the PRS under Section F-F18 of the BE Form, which can be located at the Lembaga Hasil Dalam Negeri Malaysia (LHDNM) website at www.hasil.gov.my
Contribution statements to support the claim for tax relief may be obtained from the Provider as proof of investment made for the year of assessment.
Employers
Where an employer seeks to contribute to the PRS on behalf of its employees, the employer may enter into an arrangement with one or more PRS Providers of their choice. The amount and frequency of contribution is determined by the employer while employees choose the type of fund(s) under the Scheme offered by the PRS Provider. Where employees do not make a fund selection, the employer contributions would be channelled to the default option of the chosen PRS Provider.
Employer Tax Relief
Employers contributing to PRS on behalf of their employees are eligible for a tax deduction on their contributions above the EPF statutory rate, up to 19% of the contribution. Please note that the employer tax relief is only applicable on the company as an entity.
Switching / Transfer
Switching occurs when a Member requests for a transfer of the existing PRS fund invested in to another PRS fund in the PRS Scheme of the same PRS Provider.
Transfer occurs when a Member requests for a transfer of the existing PRS fund invested in to another PRS fund in the PRS Scheme of another PRS Provider.
Members are allowed to switch between funds in the scheme or transfer the accrued benefits to another PRS of another PRS Provider, subject to the terms and conditions as specified in the scheme’s disclosure document. Please read the scheme’s disclosure document before deciding to make a contribution. If you do not have a copy, please contact the PRS Provider to ask for one.
Transfers can only be instructed between Providers after the first year of subscription to the PRS from the date of first contribution. A transfer request can only be conducted once per calendar year and Members are only allowed to transfer to one fund.
For fees and charges on switching and transfer, please refer to the Providers page of this website under Fees and Charges.
Withdrawals
Request for withdrawals may be made in the following circumstances and as follows:
After the day the member reaches the retirement age (or at any other age as the SC may specify from time to time), withdrawals may be made in part or in full;
Following the death of a member, only full withdrawals may be made;
Prior to the member reaching the retirement age, withdrawals from sub-account B may be made in part or in full; or
Permanent departure of a member from Malaysia, only full withdrawals may be made.
The following are not considered a withdrawal from a Scheme:
Exercise of cooling-off rights;
Withdrawal / Redemption for the purpose of transfer to a scheme by another PRS Provider;
Switching of units of a fund to the units of any other fund of the Scheme.
(Note: Members would be informed if any changes are made to the current specified age.)
With respect to pre-retirement withdrawals, members may only withdraw the amount in sub-account B from each PRS Provider once a year. The first pre-retirement withdrawal can only be requested by a member one year after making the first contribution to any fund under the Scheme (whether the contribution is by an employer or member). While pre-retirement withdrawal may be made for any reason, a tax penalty of 8% on the withdrawal amount will be deducted by the PRS Providers before the balance is credited to the member’s account.
There is no tax penalty for withdrawal upon reaching retirement age of 55 years. Although employees above 55 years of age are still under employment, they are considered as having reached retirement age. As such, retirement withdrawals are allowed with no tax penalty involved.
Although lump sum withdrawals are permitted, members are encouraged to retain their savings for continuous investment under the respective Schemes.
Documentation for Withdrawal
Other than withdrawal due to death and permanent departure, no documents and reasons are required to make a pre-retirement withdrawal.
For pre-retirement withdrawals due to death or permanent departure from Malaysia, the following information and a copy of the following supporting documents must be sent to the PRS Provider as soon as reasonably possible for prior authorisation by the PPA:
Permanent Departure (surrendering of Malaysian work permit or citizenship)
Full Name, NRIC/ identification number and PPA account number; and
Letter of renounciation of Malaysian Citizenship (Form K/ Form Y); or
Letter to confirm surrender of identity card from the National Registration Department (NRD); or
Letter to confirm surrender of identity card from Malaysian Embassy/ High Commission of Malaysia/ Malaysian Consulate in foreign country
Expatriate and Foreign Worker withdrawal
Proof of termination of work
Full Name, passport number and PPA account number; and
Letter of resignation/ termination of contact of service by employer; or
Income tax clearance statement; or
Cancellation of work permit
Non-Working (unemployed) Foreigner withdrawal
Full Name, passport number and PPA account number; and
Proof of cancellation of long term social visit pass
Death
Full Name, NRIC/ identification number (Malaysian) or passport number (Foreigner) and PPA account number; and
Death certificate; and
Letter of Administration / Grant of Probate / Sijil Faraid; and
Copy of Claimant’s NRIC
(Note: In the event of death, the PRS monies will return to the estate of the deceased member to be distributed in accordance to the instruction of the court.)
30% in Sub-account B which would be available for pre-retirement withdrawal subject to payment of an 8% tax penalty on the withdrawal sum.
Individuals have the option to contribute to more than one fund under a PRS Scheme or to contribute to more than one PRS Scheme, offered by different PRS Providers.
Being a voluntary scheme, there are no fixed amounts or fixed intervals for making contributions. Individuals can contribute to the PRS as often as they like and are encouraged to consistently save up to achieve their intended retirement goals.
Individual Tax Relief
The individual tax relief is applicable on gross contribution, i.e. inclusive of upfront charges.
For example, if an individual invested RM3,000 with a Provider and that Provider deducted RM10 for account opening fee, and RM50 for sales charge, the full RM3,000 is eligible for tax relief, and not RM2,940.
Tax relief of up to RM3,000 per annum will be applied on taxable income, for individual contributions made to the PRS for the first 10 years from assessment year 2012. Individuals may claim their individual tax relief for the PRS under Section F-F18 of the BE Form, which can be located at the Lembaga Hasil Dalam Negeri Malaysia (LHDNM) website at www.hasil.gov.my
Contribution statements to support the claim for tax relief may be obtained from the Provider as proof of investment made for the year of assessment.
Employers
Where an employer seeks to contribute to the PRS on behalf of its employees, the employer may enter into an arrangement with one or more PRS Providers of their choice. The amount and frequency of contribution is determined by the employer while employees choose the type of fund(s) under the Scheme offered by the PRS Provider. Where employees do not make a fund selection, the employer contributions would be channelled to the default option of the chosen PRS Provider.
Employer Tax Relief
Employers contributing to PRS on behalf of their employees are eligible for a tax deduction on their contributions above the EPF statutory rate, up to 19% of the contribution. Please note that the employer tax relief is only applicable on the company as an entity.
Switching / Transfer
Switching occurs when a Member requests for a transfer of the existing PRS fund invested in to another PRS fund in the PRS Scheme of the same PRS Provider.
Transfer occurs when a Member requests for a transfer of the existing PRS fund invested in to another PRS fund in the PRS Scheme of another PRS Provider.
Members are allowed to switch between funds in the scheme or transfer the accrued benefits to another PRS of another PRS Provider, subject to the terms and conditions as specified in the scheme’s disclosure document. Please read the scheme’s disclosure document before deciding to make a contribution. If you do not have a copy, please contact the PRS Provider to ask for one.
Transfers can only be instructed between Providers after the first year of subscription to the PRS from the date of first contribution. A transfer request can only be conducted once per calendar year and Members are only allowed to transfer to one fund.
For fees and charges on switching and transfer, please refer to the Providers page of this website under Fees and Charges.
Withdrawals
Request for withdrawals may be made in the following circumstances and as follows:
After the day the member reaches the retirement age (or at any other age as the SC may specify from time to time), withdrawals may be made in part or in full;
Following the death of a member, only full withdrawals may be made;
Prior to the member reaching the retirement age, withdrawals from sub-account B may be made in part or in full; or
Permanent departure of a member from Malaysia, only full withdrawals may be made.
The following are not considered a withdrawal from a Scheme:
Exercise of cooling-off rights;
Withdrawal / Redemption for the purpose of transfer to a scheme by another PRS Provider;
Switching of units of a fund to the units of any other fund of the Scheme.
(Note: Members would be informed if any changes are made to the current specified age.)
With respect to pre-retirement withdrawals, members may only withdraw the amount in sub-account B from each PRS Provider once a year. The first pre-retirement withdrawal can only be requested by a member one year after making the first contribution to any fund under the Scheme (whether the contribution is by an employer or member). While pre-retirement withdrawal may be made for any reason, a tax penalty of 8% on the withdrawal amount will be deducted by the PRS Providers before the balance is credited to the member’s account.
There is no tax penalty for withdrawal upon reaching retirement age of 55 years. Although employees above 55 years of age are still under employment, they are considered as having reached retirement age. As such, retirement withdrawals are allowed with no tax penalty involved.
Although lump sum withdrawals are permitted, members are encouraged to retain their savings for continuous investment under the respective Schemes.
Documentation for Withdrawal
Other than withdrawal due to death and permanent departure, no documents and reasons are required to make a pre-retirement withdrawal.
For pre-retirement withdrawals due to death or permanent departure from Malaysia, the following information and a copy of the following supporting documents must be sent to the PRS Provider as soon as reasonably possible for prior authorisation by the PPA:
Permanent Departure (surrendering of Malaysian work permit or citizenship)
Full Name, NRIC/ identification number and PPA account number; and
Letter of renounciation of Malaysian Citizenship (Form K/ Form Y); or
Letter to confirm surrender of identity card from the National Registration Department (NRD); or
Letter to confirm surrender of identity card from Malaysian Embassy/ High Commission of Malaysia/ Malaysian Consulate in foreign country
Expatriate and Foreign Worker withdrawal
Proof of termination of work
Full Name, passport number and PPA account number; and
Letter of resignation/ termination of contact of service by employer; or
Income tax clearance statement; or
Cancellation of work permit
Non-Working (unemployed) Foreigner withdrawal
Full Name, passport number and PPA account number; and
Proof of cancellation of long term social visit pass
Death
Full Name, NRIC/ identification number (Malaysian) or passport number (Foreigner) and PPA account number; and
Death certificate; and
Letter of Administration / Grant of Probate / Sijil Faraid; and
Copy of Claimant’s NRIC
(Note: In the event of death, the PRS monies will return to the estate of the deceased member to be distributed in accordance to the instruction of the court.)
Members of the public should only deal with licensed PRS Distributors and PRS Consultants.
source:ppa.com
Tuesday, September 24, 2013
2 Types of Bank Loans to Renovate Your Home
To most people, renovation is part and parcel of the whole home buying
process. Whether you’re buying brand new or second-hand, chances are,
you’re going to spend quite a bit to make the home, well, you.
Unfortunately, home renovation is also expensive. Depending on your
taste and preference, the process of turning your house into a dream
home could easily go up to five figures, or more.
Personal Loans
Personal
loan is probably the first and most obvious choice if you need cash to
renovate your home. In Malaysia, all major banks offer some form of
personal loan, albeit with different terms and conditions; so getting
one that fits your requirement may prove to be quite a challenge.
A
good simple approach in using personal loan to finance your home
renovation is to first decide on the amount you need, then make the
necessary comparison to find a bank that offers you the lowest interest
rate for that specific amount. To find the best personal loan rate,
refer to any reliable online loan comparison table, so you don’t need to personally visit each and every bank.
For
those who intend to apply for personal loans, take note that starting 5
July 2013, Malaysian banks can no longer grant you personal loans with
repayment periods of more than 10 years, due to this new loan regulations imposed by Bank Negara Malaysia.
) Renovation Loans
A
renovation loan is a loan product offered by banks for the specific
purpose of renovating a property. In Malaysia, renovations loans do
exist, though they are usually offered only to home loan borrowers of
the same bank or bundled together with a home loan package.
At current, these are some of the notable renovation loans* you may wish to consider:
- OCBC Bank: offers a Renovation & Refurbishment Loan that comes with no monthly maintenance fees, flexible repayment period of up to 10 years or 70 years old (whichever is earlier) and the option to start repaying instalments up to one year after loan disbursement. It is exclusive to OCBC Bank customers.
- Alliance Bank: offers a Home Complete Personal Loan which is termed as “a personal loan bundled with mortgage financing” (i.e. to put it simply, this is not a standalone loan product but rather an additional facility of a home loan package). This loan offers up to RM150,000 for renovation / contingency purposes and has a maximum repayment period of 10 years.
- Maybank: the MaxiHome-i home loan package offers additional financing for personal investment needs, any contingencies and home improvement.
*based on information provided on websites of banks in Malaysia as at September 2013
imoney.
Tuesday, July 2, 2013
Comparing personal loan & credit card!
When in need of urgent cash many people resort to taking cash advance from their credit cards. It is interesting to note that unless the outstanding amount is settled in time the credit cards charge substantial interest on annual basis on the unpaid amount till such time the dues are cleared. This is clearly a huge interest to pay in the current scenario. Additionally when there are outstanding dues any further expenditure made is also charged at the hiked up penalty rates of interest. In many cases people take personal loans to settle the outstanding dues of their credit cards. There are differing views on this kind of financial management as the losses in terms of interest paid are high in both cases.
In favor of the Credit Card cash Advance
There are a few definite advantage of taking cash advance through the credit card which is the reason why so many people use it in the first place. Some these benefits are:
There is absolutely no delay in sanction as one can just walk up to an ATM and withdraw the money.
One has the option of drawing exactly the amount that is needed and not more.
There is no requirement to approach any bank and the money is accessible from remote locations in case of emergencies.
Repayment schedule of the cash advance is as per choice of the burrower and not as per the banks fixed schedule.
There are no prepayment penalty charges for credit card cash advance.
In case one is able to clear off the dues within the interest free period then this option works out to be the cheapest.
In favor of the Personal Loan
Since one avails such facility during period of urgent cash requirements the chances that one will be able to pay off immediately afterwards are less. In case of a credit card if one cannot pay back in time the costs are prohibitive. However in the case of personal loans:
The repayment period is suitably long to give the burrower some breathing space while repaying.
The interest rate of a personal loan though higher than other loans is still less than half of the penal interest that is charged on outstanding amount of credit card dues.
The amount that one can withdraw through a credit card cash advance is limited while in case of personal loans the amount is much more which can make a significant difference to needs of the burrower.
While both the means of raising instant funds have their own pros and cons it is for the customer to decide as per his own financial status.
Tuesday, June 25, 2013
How to Find a Personal Loan with the Lowest Interest Rate.
When it comes to personal loan, getting one with the lowest interest rate is undoubtedly the top priority for most people. After all, money is hard to come by and there’s no worse feeling than paying unnecessary extras when you know you could be doing otherwise.
So how does one go about getting a personal loan with the best interest rate? You could, of course, take a few days off, go visit every bank you know and talk to all the loan officers out there – a task that is not only time-consuming, but tedious and tiring all at the same time.
Alternatively, you could simply leverage on the power of the Internet and use an online personal loan comparison table to analyse the interest rates by all major banks of Malaysia for the amount you have in mind; then go directly to your bank-of-choice.
4 Simple Steps to Finding the Personal Loan with the Lowest Interest Rate
Go to an online personal loan comparison table.
Key in the loan figure and your envisaged repayment period. If required, key in your current salary.
Go through the list of identified banks – focus your attention on the interest rates as well as any special clauses and terms that might affect your decision to use that bank.
Finally, visit your chosen bank personally to begin the application process. If you wish, you may also opt to apply for your loan online.
And that’s really it! For those of you who were expecting some complex process or formula, know that a personal loan is one of the simplest banking products in the market and hence, finding the right one with the lowest interest rate should be relatively straightforward.
So the next time you’re looking for a personal loan with the best interest rate, just follow the simple steps above and you should be able to get the loan package you’re looking for in no time!
Why Most People are Not Saving Enough for Retirement
To retire or not to retire? I believe that is really not an option for most people. Retiring is only the privileged few, like, the 5% of the population who can really retire financially independent.
The majority of the people not only do not have the option to retire with financial independence, but they do not even have the option to retire at all. So, why is that the case?
We have to take a look at the problem. Assuming you start working at 25,most of us may start slightly earlier – and assuming you would retire from work at 55.
According to our Malaysian latest mortality rate, meaning how long Malaysians live, it has been said that we live to about 75 years old. We are not talking about now, so let’s take it further, about 20 to 30 years later although Malaysians will certainly live longer. Let’s say we retire from life at 85.
We can separate our life phases in to these two distinct phases called:
Accumulation phase – This is from when you are 25-55, or your working years.
Consumption phase, which is from 55-85 years old.
Do you see the problem? We have thirty years of working and thirty years of not working, meaning we will be consuming our savings. It simply means that each year of our working life, we will be actually saving for each year of our retirement years. At this point you cannot afford not to miss a years of savings because for each year of saving that you miss, you may not have enough for your retirement.
There’s another problem: How much do we save while we are working? Assuming all of us employees and you have EPF. If we have EPF we put aside 11% while our employer tops up another 12%. So, we get 23% going in to our EPF every month.
However, when we retire, we would need, a minimum of 50% of your last drawn salary. However your last drawn salary may be our highest income, assuming RM10,000. So, we would need about 50% of that, which would be RM5,000. Imagine why this is a problem. We need 50% but we are only putting 23% while we are working. That means there is a shortfall of 27% or more than a quarter.
EPF statistics(2011) say 50% of retirees spend their entire EPF savings within 5 years. This is the problem.
courtesy KCL
How the Poor, the Middle Class, and the Rich Think about Investment
How the Poor, the Middle Class, and the Rich Think about Investment
The poor don’t invest because they don’t have money to invest. They spend all their money and forget about investments. The funny thing is though, although they have no money to invest, they have money to gamble. They have money to buy lottery, they have money to buy 4D and 3D, go to Genting and gamble a few thousand Ringgit, travel with Star Cruise, drink alcohol and smoke.
For all these money-burning activities, the poor have money. When it comes to investing, they have no money.
Now, the middle class is actually where most people you see or meet are. The middle class say, “Investing is Risky.” Every time people say investing is risky, they actually mean that speculating or gambling is risky. Most people cannot differentiate between speculating and investing.
Understanding about the difference between investing and speculating is very important. If you still cannot differentiate, then just follow this simple definition. -anything that can make money and can lose money is gambling or speculating.
Investing, if you do it the right way, you cannot lose money. This doesn’t mean that you never lose money, but as a whole you cannot lose money. Just like in a casino. If you are a casino owner, you may lose at individual rounds, but as a whole if you combine all the tables and bets, you cannot lose.
As for the rich, instead of saying, “Investing is risky,” the rich will say, “Not investing is risky.” Why do you think the rich would say so?
Inflation eats our money away. If you don’t invest, your money will be eaten by inflation.
So, why is not investing risky? Because if you don’t invest, your money will be in your savings account, or FD, or EPF where you look for all the guaranteed things and so forth, plus all your money will be eaten by inflation.
Secondly, you face another risk which is “you don’t have enough money” risk – the risk of having not enough money. You don’t have enough money for your kids’ education, not enough for your retirement, maybe not enough for your parents’ hospital bills in the future and maybe your own hospital bills in the future as well.
If you talk about insurance, the insurance might be so costly that you could barely afford to pay for it unless you plan to work for life. Even if you plan to work for life, you still face another risk: Whether people will still hire you when you’re old, and whether you can still work or not when you’re old. In that sense, even if you don’t invest you are facing many risks, which is why, to the rich, not investing is also a risk.
Another risk of not investing is that your money will grow too slowly. What if got you into an illness and cannot work anymore? When you cannot work anymore, all your financial goals are not met, and you have financial liabilities.
So, investing actually expedites financial security if you do it the right way. Not speculating or gambling – but Investing.
courtesy KCL
The poor don’t invest because they don’t have money to invest. They spend all their money and forget about investments. The funny thing is though, although they have no money to invest, they have money to gamble. They have money to buy lottery, they have money to buy 4D and 3D, go to Genting and gamble a few thousand Ringgit, travel with Star Cruise, drink alcohol and smoke.
For all these money-burning activities, the poor have money. When it comes to investing, they have no money.
Now, the middle class is actually where most people you see or meet are. The middle class say, “Investing is Risky.” Every time people say investing is risky, they actually mean that speculating or gambling is risky. Most people cannot differentiate between speculating and investing.
Understanding about the difference between investing and speculating is very important. If you still cannot differentiate, then just follow this simple definition. -anything that can make money and can lose money is gambling or speculating.
Investing, if you do it the right way, you cannot lose money. This doesn’t mean that you never lose money, but as a whole you cannot lose money. Just like in a casino. If you are a casino owner, you may lose at individual rounds, but as a whole if you combine all the tables and bets, you cannot lose.
As for the rich, instead of saying, “Investing is risky,” the rich will say, “Not investing is risky.” Why do you think the rich would say so?
Inflation eats our money away. If you don’t invest, your money will be eaten by inflation.
So, why is not investing risky? Because if you don’t invest, your money will be in your savings account, or FD, or EPF where you look for all the guaranteed things and so forth, plus all your money will be eaten by inflation.
Secondly, you face another risk which is “you don’t have enough money” risk – the risk of having not enough money. You don’t have enough money for your kids’ education, not enough for your retirement, maybe not enough for your parents’ hospital bills in the future and maybe your own hospital bills in the future as well.
If you talk about insurance, the insurance might be so costly that you could barely afford to pay for it unless you plan to work for life. Even if you plan to work for life, you still face another risk: Whether people will still hire you when you’re old, and whether you can still work or not when you’re old. In that sense, even if you don’t invest you are facing many risks, which is why, to the rich, not investing is also a risk.
Another risk of not investing is that your money will grow too slowly. What if got you into an illness and cannot work anymore? When you cannot work anymore, all your financial goals are not met, and you have financial liabilities.
So, investing actually expedites financial security if you do it the right way. Not speculating or gambling – but Investing.
courtesy KCL
The Biggest Challenge to Increase Your Income This Year
Every beginning of the year, most of us have a common activity, that is to make your new year’s resolution. When you are still studying in school, the normal resolution would be to study harder, get more ‘A’s in the exams. As we grow older and into adulthood, the common resolution would be to make more money.
Think about it. If you are in the sales department, or a business owner or a self-employed salesperson, the very first goal you would set for the year is how much increment you want on the sales revenue.
If you are under employment, your boss will give you a new set of higher key performance indicator (KPI). You would probably commit to perform better and try to get a raise, if not a promotion on the coming round of performance review. Most likely, most new year resolution has something to do with money and earning more income.
Setting a Higher Goal
When it comes to personal financial matter, I normally urge people to set a higher target of savings and investments. It is easier to achieve if you can make a higher income this year compared to last year. Of course, bigger goal comes with bigger challenges. I’ll talk about the biggest challenge of all in this article. Just a hint – it is not about the lack of discipline, lack of strategies, lack of time…You can make a guess now but keep on reading.
What’s your New Year Resolution?
Okay, enough about money. What about other types of resolutions you set for the new year? If you want a better relationship with your family, you might commit to spend extra time with your kids, or date your spouse more, like at least once in a week. When you spend that extra time with your kid, you want to really get into their world, and not just letting your son to play on the iPad while you watch the latest TV shows.
If you have a new year resolution to have a healthier body, you might have committed to eat more vegetables and cut down your fat intake. You might subscribed to a gym in order to work out more frequently. Extra effort needed if you really want to look good and young.
Some people also have a resolution to travel to certain places. For example, I have a friend who blocks out the vacation dates on his calendar. He knows exactly where he will be visiting for the whole year. Air tickets are booked early and he will simply reject all other events including wedding invitation that falls within his vacation period.
All these different resolution is believed to be able to contribute to your overall happiness. More or less, each one of those commitment is going to make your life better. Assuming that you successfully make it all, you are supposed to live happier, healthier and wealthier at the end of the year.
Making a new year’s resolution is easy. The big problem now is how to do it all. All these stuff require not just money, but also a lot of your time commitment and effort. These two resources is what majority of us lack of.
For example, if you spend more time to make money, you are left with not much time to spend on building a better relationship. You don’t have much energy to exercise and build a healthier body. Under stressful working environment, some people even tends to eat more just to relieve the pressure.
Here is the biggest challenge
Let’s dig deeper to the crux of the matter. What I think is the biggest challenge of all is that most people start with zero on 1st of January.
If you are a salesperson, you start with zero order until you close the first case. Last year’s production is considered done and it is counted for last year’s, not this year’s production. If you are an employee, your performance is reset whenever your boss is replaced. Your pay is of course starting from zero every day since you are paid as long as you work for your employer. If you are in those kind of business that relies on new sales every day, you basically start from zero at the beginning of the year.
So to make more money this year, you got to repeat the effort you put in last year, and plus some more effort to secure an income increment. I can say most of the people who are earning an active income are facing this problem. To make more money this year, you have no choice but to work even harder, if not smarter this year compared to the years before.
Not to start with ZERO
What can you do about this? In fact, there are some important elements that when done right, you don’t have to start with zero every year. I’ll give some examples of how this concept work.
First example, I subscribe to some services that I use on a regular basis on my business. These include the mailing list application which I pay several hundred ringgits a month, the website hosting service which I pay a few thousands ringgits a year, and the several magazine and membership subscription I renew regularly. These service providers I just mentioned don’t start with zero sales. They have a ready subscribed customers who will continue to use their service as long as the service is good and updated.
Another example is the unit trust consultant. These consultants not just get paid when clients deposit new fund to invest. They are also paid a certain fee on the asset under their management. So they starts with a basic amount of pay. The effort they put in this new year is going to contribute to the bottom line, increasing their commission paid on the total fund under their management.
Take a look at the household items at your home. Do you subscribe to Internet, Astro, water filtering system? More and more businesses are moving into providing subscription based service or products. This is how they can scale bigger and take in more business on top of the existing subscribers.
Start with a base
The whole picture is different when you start with a base. So the effort you put in these year to grow your income will be built on top of your last year’s revenue. If you structure your career or business this way, you will have the luxury of having more time to commit to your other non-money-related resolutions. You’ll have more time to improve your relationship, your health, your look and ultimately your happiness.
It is important to increase your income every year, so that your other non-money related resolutions can be met too. So that’s why I said that the biggest challenge to increase your income this year is the reality that you start with zero on 1st of January.
Now, I want you to think hard about how you make money. How your business is structured? How your career is allowing you to leverage on what you’ve done on previous year? What is important to do this year that will still have an impact next year and the future? If you can arrange your business model in such a way that you start with a subscribed clients, repeat customers, renewal income etc. Congratulation.
courtesy KCL.
Think about it. If you are in the sales department, or a business owner or a self-employed salesperson, the very first goal you would set for the year is how much increment you want on the sales revenue.
If you are under employment, your boss will give you a new set of higher key performance indicator (KPI). You would probably commit to perform better and try to get a raise, if not a promotion on the coming round of performance review. Most likely, most new year resolution has something to do with money and earning more income.
Setting a Higher Goal
When it comes to personal financial matter, I normally urge people to set a higher target of savings and investments. It is easier to achieve if you can make a higher income this year compared to last year. Of course, bigger goal comes with bigger challenges. I’ll talk about the biggest challenge of all in this article. Just a hint – it is not about the lack of discipline, lack of strategies, lack of time…You can make a guess now but keep on reading.
What’s your New Year Resolution?
Okay, enough about money. What about other types of resolutions you set for the new year? If you want a better relationship with your family, you might commit to spend extra time with your kids, or date your spouse more, like at least once in a week. When you spend that extra time with your kid, you want to really get into their world, and not just letting your son to play on the iPad while you watch the latest TV shows.
If you have a new year resolution to have a healthier body, you might have committed to eat more vegetables and cut down your fat intake. You might subscribed to a gym in order to work out more frequently. Extra effort needed if you really want to look good and young.
Some people also have a resolution to travel to certain places. For example, I have a friend who blocks out the vacation dates on his calendar. He knows exactly where he will be visiting for the whole year. Air tickets are booked early and he will simply reject all other events including wedding invitation that falls within his vacation period.
All these different resolution is believed to be able to contribute to your overall happiness. More or less, each one of those commitment is going to make your life better. Assuming that you successfully make it all, you are supposed to live happier, healthier and wealthier at the end of the year.
Making a new year’s resolution is easy. The big problem now is how to do it all. All these stuff require not just money, but also a lot of your time commitment and effort. These two resources is what majority of us lack of.
For example, if you spend more time to make money, you are left with not much time to spend on building a better relationship. You don’t have much energy to exercise and build a healthier body. Under stressful working environment, some people even tends to eat more just to relieve the pressure.
Here is the biggest challenge
Let’s dig deeper to the crux of the matter. What I think is the biggest challenge of all is that most people start with zero on 1st of January.
If you are a salesperson, you start with zero order until you close the first case. Last year’s production is considered done and it is counted for last year’s, not this year’s production. If you are an employee, your performance is reset whenever your boss is replaced. Your pay is of course starting from zero every day since you are paid as long as you work for your employer. If you are in those kind of business that relies on new sales every day, you basically start from zero at the beginning of the year.
So to make more money this year, you got to repeat the effort you put in last year, and plus some more effort to secure an income increment. I can say most of the people who are earning an active income are facing this problem. To make more money this year, you have no choice but to work even harder, if not smarter this year compared to the years before.
Not to start with ZERO
What can you do about this? In fact, there are some important elements that when done right, you don’t have to start with zero every year. I’ll give some examples of how this concept work.
First example, I subscribe to some services that I use on a regular basis on my business. These include the mailing list application which I pay several hundred ringgits a month, the website hosting service which I pay a few thousands ringgits a year, and the several magazine and membership subscription I renew regularly. These service providers I just mentioned don’t start with zero sales. They have a ready subscribed customers who will continue to use their service as long as the service is good and updated.
Another example is the unit trust consultant. These consultants not just get paid when clients deposit new fund to invest. They are also paid a certain fee on the asset under their management. So they starts with a basic amount of pay. The effort they put in this new year is going to contribute to the bottom line, increasing their commission paid on the total fund under their management.
Take a look at the household items at your home. Do you subscribe to Internet, Astro, water filtering system? More and more businesses are moving into providing subscription based service or products. This is how they can scale bigger and take in more business on top of the existing subscribers.
Start with a base
The whole picture is different when you start with a base. So the effort you put in these year to grow your income will be built on top of your last year’s revenue. If you structure your career or business this way, you will have the luxury of having more time to commit to your other non-money-related resolutions. You’ll have more time to improve your relationship, your health, your look and ultimately your happiness.
It is important to increase your income every year, so that your other non-money related resolutions can be met too. So that’s why I said that the biggest challenge to increase your income this year is the reality that you start with zero on 1st of January.
Now, I want you to think hard about how you make money. How your business is structured? How your career is allowing you to leverage on what you’ve done on previous year? What is important to do this year that will still have an impact next year and the future? If you can arrange your business model in such a way that you start with a subscribed clients, repeat customers, renewal income etc. Congratulation.
courtesy KCL.
Tuesday, June 18, 2013
Shopping Online 101
Frugal fashionistas of the world, unite! If you care about the embossed exterior of your Coach purse as much as the money nestled in it (and you should!), this guide to online shopping is for you. Think of the wonderful world of online shopping as a shopper’s paradise, where the clothes you covet are artfully arranged in pixels. Everything is housed in a colossal mall with no physical barriers; there are no shopping hours, no overzealous sales assistants, and no noisy (or nosy) shoppers. Your shopping experience is entirely sedentary, conducted while you sip on green tea and ponder over life’s imponderables. With a few clicks of your mouse, a new page is opened up and a row of baju karungs springs to pixelated life. You feel that familiar tug. Should I buy, should I wait? What if it doesn’t fit? Is that pink really as bright as it looks? Can I trust this merchant? It’s so expensive, will I get a refund if there are defects?
Need answers? Read on to discover the safe and budget-friendly way to shop online!
Why Shop Online?
That’s the most pertinent question to ask before you begin your shopping odyssey. Online shopaholics can no doubt attest to the sheer existential joy of shopping online (“With every virtual swipe of my card, it’s like I affirm my existence!”), but for those of you who are undecided, we’ll take you through the list of whys we’ve compiled.
Convenience
Simply put, it’s convenient! All you need to shop online is an internet connection and the means to transfer money electronically. Instead of setting aside an afternoon to wander around Mid Valley, you can cut down on petrol and parking costs by simply clicking “add to cart”.
Diversity
Shopping online affords consumers more variety. In a brick-and-mortar store, there’s only so much shelf space available to showcase the latest stock. In the virtual world, there are no such spatial constraints. The merchant can sell all available stock online. Importantly, smaller businesses that can’t afford the rental payments of a physical store can easily set up a virtual shop. This translates to an endless variety of apparel to choose from!
Price Comparison
You can quickly and conveniently compare prices online. Instead of driving or walking to different stores to compare prices, online accessibility allows for swift comparison. If you want to know whether Forever 21 is selling that peplum skirt for the best price on the market, you can either Google it or go to the websites of rival competitors. This is recommended, of course, and is a no-fuss way to budget and bargain-hunt.
Customer Feedback
If you want to know the reliability of a merchant or seller, you can go to consumer review sites to find out. This is informed shopping at its best, given the vast forum for consumer criticism/critique the Internet provides. Unlike shopping at a brick-and-mortar store, shopping online reduces the difference between a knowledgeable and not-as-informed consumer to (literally) a mouse-click. In order to get the best bang for your buck, always ensure that you read customer reviews to find out about product quality and merchant trustworthiness.
Low Cost
Now this is a contentious point, because shopping online can sometimes cost you more than going for a warehouse sale in Puchong. On the other hand, Internet retailers (especially blogshops) can offer far cheaper prices than a Bangsar boutique (they have to pay rental fees, etc., which are then factored into the retail price). In order to encourage shopping online, some established chain stores also offer more discounts for goods purchased over the Internet.
Is it Safe?
Similar to merrily making your way around a shopping mall, buying clothes online can be a perilous process. As in the real world, security and trust issues figure prominently. There are, however, several steps that you can take to minimise the risks involved, outlined and explained below. Always remember that your safety and security are paramount. After all, you’re giving your personal information, including shipping address and credit card details (where applicable), to a faceless stranger(s). Proceed with caution and trust your shopper’s instincts!
Use Credit Cards Equipped for Shopping Online
Whenever possible, use credit cards equipped for shopping online: they offer added protection against fraud or theft. For instance, RHB allows its credit card users to register their cards with 3D Secure, which uses MasterCard SecureCode and Verified by VISA to ensure the security and safety of internet transactions. Similarly, Maybank offers Maybankard Secure Online Shopping (MSOS), a feature which provides an extra layer of security online when you use your American Express, MasterCard, or VISA cards.
Shop with Retailers or Blogshops That Use Secure Payment Gateways
Payment gateways are the online equivalent of a physical Point of Sale (i.e. checkout counter where the financial transaction between customer and retailer is conducted). In order to accept credit cards from customers (or really any number of online payment options), Internet merchants use payment gateways. iPay88 is arguably the most used and secure payment gateway in Malaysia. It is supervised by Bank Negara Malaysia, regulated under Malaysia’s Payment Systems Act (2003), and is PCI DSS (Payment Card Industry Data Security Standard) compliant. The more secure and regulated the payment gateway, the more protected your financial details are during transactions and under the law. Online merchants often state on their website what payment gateway they use; if you are uncertain, never hesitate to ask the retailer.
Use Third-Party Payment Services
Using a third-party payment service is one of the safest ways to shop. The most popular third-party payment service is PayPal , which also allows merchants to use it as a payment gateway. To use PayPal to pay for online purchases, you must first sign-up for a PayPal account. PayPal acts as an intermediary between you and the Internet merchant, ensuring that they will never see your credit card details or bank information. Money is simply transferred from your PayPal account to the merchant’s PayPal account. Provided you remain a buyer and not a seller, PayPal is a free service, since transaction fees are charged to the sellers. However, while PayPal enjoys a commendable security record, remember that your PayPal account is linked to either your credit card or bank account, so PayPal does have your financial information.
Look Out for Security Seals, Privacy Policies, and SSL
Another way to ensure your safety online is to keep an eye out for safety and security seals on websites. These are small, logo-like badges located on the top, bottom, or corner of the retailer’s website (e.g. Norton Secured, PCI DSS approved, Positive SSL, VeriSign Secured, etc.). These seals are a good indication that the merchant abides by security standards and has a degree of accountability to you. Privacy policies (the more detailed the better) are also another good indicator of merchant trustworthiness; be sure to always read them before you make a purchase. Also look out for whether a website is SSL-enabled. SSL (Secure Socket layer) is a security protocol which is used to protect valuable data transmitted to and from a website. While some sites declare that they are SSL-enabled, you can always check yourself by looking at your browser address bar. You can check for https:// (the extra ‘s’ is for secure), a padlock beside the website address, or if any part of the address bar turns green. Before you enter any personal and financial data into a webpage, always ensure that either one of the three is present.
Don’t Get Phished
Phishing is an online crime that is unfortunately quite rampant these days. ‘Phishermen’ bait victims by sending out e-mails that appear as though they’re from a credit card company or bank you have dealings with. The e-mails may urge you to update your personal information – passwords or financial details – or re-direct you to a fake website (it appears legitimate) to log in. Once they have your credit card numbers and personal information, they can of course use them for fraudulent purposes. To stay safe, don’t send your bank account details or credit card numbers through e-mail. Log in to bank websites by keying in the website address on your browser’s address bar.
How to Save
The truly stylish never break the bank to maintain their look, so you shouldn’t have to either! After all, if there’s no moolah in the bank, it’s either debtors’ prison or stop shopping altogether. Now those aren’t fashionable alternatives, but don’t fret, we’ve put together several tips to shop in SaveMoney fashion!
Use Credit and Debit Card Promotions
The first tip is to make full use of online shopping promotions for your credit or debit card(s). For instance, RHB Now has a promotion where every month the first 200 customers who spend a minimum of RM150 (with participating online merchants) get RM50 cash back. Apart from cash back, there are also other exclusive deals available with merchants selected by your bank(s). So if you frequent ZALORA daily, there could be discounts on items if you use a particular credit card. Thus we suggest, devoted shoppers, that you monitor the promotions section on your bank’s website.
Use Vouchers and Coupons
Your favourite online retailer is bound to offer vouchers and coupons every now and again, especially to encourage new shoppers to buy. There are also vouchers for signing-up and subscribing to newsletters, so be sure to make use of those too.
Click Facebook ‘Like’
In order to promote their facebook pages and increase their popularity, online retailers and blogshops often give out vouchers to customers who ‘like’ their pages. Hardcore Facebooker or not, these deals are too easy to pass up, so hit “like” and don’t miss out!
Compare, Compare, Compare!
Even though it can get tedious, the savvy shopper always compares prices before she commits. Although that kimono top with the gosselin-thin butterfly sleeves screams at you to buy it, SaveMoney heads must prevail before clicking “add to cart”. Check with other online stores and even brick-and-mortar stores. Visit forums like lowyat.net to check and compare different prices for items you want. This is a good place to keep abreast of the latest discounts and promotions, along with any customer feedback other users leave. More importantly, bond with your fellow shopaholics shoppers and swap priceless info. You could even start your own Online Shopping Consumers group and demand more discounts! (“Give us discounts, promotions, deals, or death!”)
Save on Delivery
Save on shipping costs by buying from merchants who offer free delivery. Sometimes there is a minimum amount you have to spend, though, so don’t deviate from your budget just to receive free delivery! Be aware that online merchants can use free delivery as a marketing ploy, since they could already have included the shipping cost into the item price.
Loyalty Programs
Sign up for loyalty programs with online retailers you buy from often. You can get store credit for items you purchase, which can then be deducted from the total amount of your next order. Sometimes stores may even offer cash rebates, although this is relatively rare.
Refund or Return Policy
Before you buy, read the online retailer’s policy on refunds and returns. Some are generous and allow exchanges within a certain period (usually a week or 30 days). In our experience, cash refunds are pretty uncommon, with merchants preferring to reimburse you with store credit instead. Items must always be returned in mint condition, so take care to do so.
Need answers? Read on to discover the safe and budget-friendly way to shop online!
Why Shop Online?
That’s the most pertinent question to ask before you begin your shopping odyssey. Online shopaholics can no doubt attest to the sheer existential joy of shopping online (“With every virtual swipe of my card, it’s like I affirm my existence!”), but for those of you who are undecided, we’ll take you through the list of whys we’ve compiled.
Convenience
Simply put, it’s convenient! All you need to shop online is an internet connection and the means to transfer money electronically. Instead of setting aside an afternoon to wander around Mid Valley, you can cut down on petrol and parking costs by simply clicking “add to cart”.
Diversity
Shopping online affords consumers more variety. In a brick-and-mortar store, there’s only so much shelf space available to showcase the latest stock. In the virtual world, there are no such spatial constraints. The merchant can sell all available stock online. Importantly, smaller businesses that can’t afford the rental payments of a physical store can easily set up a virtual shop. This translates to an endless variety of apparel to choose from!
Price Comparison
You can quickly and conveniently compare prices online. Instead of driving or walking to different stores to compare prices, online accessibility allows for swift comparison. If you want to know whether Forever 21 is selling that peplum skirt for the best price on the market, you can either Google it or go to the websites of rival competitors. This is recommended, of course, and is a no-fuss way to budget and bargain-hunt.
Customer Feedback
If you want to know the reliability of a merchant or seller, you can go to consumer review sites to find out. This is informed shopping at its best, given the vast forum for consumer criticism/critique the Internet provides. Unlike shopping at a brick-and-mortar store, shopping online reduces the difference between a knowledgeable and not-as-informed consumer to (literally) a mouse-click. In order to get the best bang for your buck, always ensure that you read customer reviews to find out about product quality and merchant trustworthiness.
Low Cost
Now this is a contentious point, because shopping online can sometimes cost you more than going for a warehouse sale in Puchong. On the other hand, Internet retailers (especially blogshops) can offer far cheaper prices than a Bangsar boutique (they have to pay rental fees, etc., which are then factored into the retail price). In order to encourage shopping online, some established chain stores also offer more discounts for goods purchased over the Internet.
Is it Safe?
Similar to merrily making your way around a shopping mall, buying clothes online can be a perilous process. As in the real world, security and trust issues figure prominently. There are, however, several steps that you can take to minimise the risks involved, outlined and explained below. Always remember that your safety and security are paramount. After all, you’re giving your personal information, including shipping address and credit card details (where applicable), to a faceless stranger(s). Proceed with caution and trust your shopper’s instincts!
Use Credit Cards Equipped for Shopping Online
Whenever possible, use credit cards equipped for shopping online: they offer added protection against fraud or theft. For instance, RHB allows its credit card users to register their cards with 3D Secure, which uses MasterCard SecureCode and Verified by VISA to ensure the security and safety of internet transactions. Similarly, Maybank offers Maybankard Secure Online Shopping (MSOS), a feature which provides an extra layer of security online when you use your American Express, MasterCard, or VISA cards.
Shop with Retailers or Blogshops That Use Secure Payment Gateways
Payment gateways are the online equivalent of a physical Point of Sale (i.e. checkout counter where the financial transaction between customer and retailer is conducted). In order to accept credit cards from customers (or really any number of online payment options), Internet merchants use payment gateways. iPay88 is arguably the most used and secure payment gateway in Malaysia. It is supervised by Bank Negara Malaysia, regulated under Malaysia’s Payment Systems Act (2003), and is PCI DSS (Payment Card Industry Data Security Standard) compliant. The more secure and regulated the payment gateway, the more protected your financial details are during transactions and under the law. Online merchants often state on their website what payment gateway they use; if you are uncertain, never hesitate to ask the retailer.
Use Third-Party Payment Services
Using a third-party payment service is one of the safest ways to shop. The most popular third-party payment service is PayPal , which also allows merchants to use it as a payment gateway. To use PayPal to pay for online purchases, you must first sign-up for a PayPal account. PayPal acts as an intermediary between you and the Internet merchant, ensuring that they will never see your credit card details or bank information. Money is simply transferred from your PayPal account to the merchant’s PayPal account. Provided you remain a buyer and not a seller, PayPal is a free service, since transaction fees are charged to the sellers. However, while PayPal enjoys a commendable security record, remember that your PayPal account is linked to either your credit card or bank account, so PayPal does have your financial information.
Look Out for Security Seals, Privacy Policies, and SSL
Another way to ensure your safety online is to keep an eye out for safety and security seals on websites. These are small, logo-like badges located on the top, bottom, or corner of the retailer’s website (e.g. Norton Secured, PCI DSS approved, Positive SSL, VeriSign Secured, etc.). These seals are a good indication that the merchant abides by security standards and has a degree of accountability to you. Privacy policies (the more detailed the better) are also another good indicator of merchant trustworthiness; be sure to always read them before you make a purchase. Also look out for whether a website is SSL-enabled. SSL (Secure Socket layer) is a security protocol which is used to protect valuable data transmitted to and from a website. While some sites declare that they are SSL-enabled, you can always check yourself by looking at your browser address bar. You can check for https:// (the extra ‘s’ is for secure), a padlock beside the website address, or if any part of the address bar turns green. Before you enter any personal and financial data into a webpage, always ensure that either one of the three is present.
Don’t Get Phished
Phishing is an online crime that is unfortunately quite rampant these days. ‘Phishermen’ bait victims by sending out e-mails that appear as though they’re from a credit card company or bank you have dealings with. The e-mails may urge you to update your personal information – passwords or financial details – or re-direct you to a fake website (it appears legitimate) to log in. Once they have your credit card numbers and personal information, they can of course use them for fraudulent purposes. To stay safe, don’t send your bank account details or credit card numbers through e-mail. Log in to bank websites by keying in the website address on your browser’s address bar.
How to Save
The truly stylish never break the bank to maintain their look, so you shouldn’t have to either! After all, if there’s no moolah in the bank, it’s either debtors’ prison or stop shopping altogether. Now those aren’t fashionable alternatives, but don’t fret, we’ve put together several tips to shop in SaveMoney fashion!
Use Credit and Debit Card Promotions
The first tip is to make full use of online shopping promotions for your credit or debit card(s). For instance, RHB Now has a promotion where every month the first 200 customers who spend a minimum of RM150 (with participating online merchants) get RM50 cash back. Apart from cash back, there are also other exclusive deals available with merchants selected by your bank(s). So if you frequent ZALORA daily, there could be discounts on items if you use a particular credit card. Thus we suggest, devoted shoppers, that you monitor the promotions section on your bank’s website.
Use Vouchers and Coupons
Your favourite online retailer is bound to offer vouchers and coupons every now and again, especially to encourage new shoppers to buy. There are also vouchers for signing-up and subscribing to newsletters, so be sure to make use of those too.
Click Facebook ‘Like’
In order to promote their facebook pages and increase their popularity, online retailers and blogshops often give out vouchers to customers who ‘like’ their pages. Hardcore Facebooker or not, these deals are too easy to pass up, so hit “like” and don’t miss out!
Compare, Compare, Compare!
Even though it can get tedious, the savvy shopper always compares prices before she commits. Although that kimono top with the gosselin-thin butterfly sleeves screams at you to buy it, SaveMoney heads must prevail before clicking “add to cart”. Check with other online stores and even brick-and-mortar stores. Visit forums like lowyat.net to check and compare different prices for items you want. This is a good place to keep abreast of the latest discounts and promotions, along with any customer feedback other users leave. More importantly, bond with your fellow shopaholics shoppers and swap priceless info. You could even start your own Online Shopping Consumers group and demand more discounts! (“Give us discounts, promotions, deals, or death!”)
Save on Delivery
Save on shipping costs by buying from merchants who offer free delivery. Sometimes there is a minimum amount you have to spend, though, so don’t deviate from your budget just to receive free delivery! Be aware that online merchants can use free delivery as a marketing ploy, since they could already have included the shipping cost into the item price.
Loyalty Programs
Sign up for loyalty programs with online retailers you buy from often. You can get store credit for items you purchase, which can then be deducted from the total amount of your next order. Sometimes stores may even offer cash rebates, although this is relatively rare.
Refund or Return Policy
Before you buy, read the online retailer’s policy on refunds and returns. Some are generous and allow exchanges within a certain period (usually a week or 30 days). In our experience, cash refunds are pretty uncommon, with merchants preferring to reimburse you with store credit instead. Items must always be returned in mint condition, so take care to do so.
Private Retirement Scheme (PRS) – A Guide to Malaysia’s Voluntary Private Retirement Scheme
What is the Private Retirement Scheme (PRS)?
In short, the PRS is a defined contribution pension scheme which allows people (or their employers) to voluntarily contribute into an investment vehicle for the purposes of building up their retirement income.
In a Malaysian retirement framework, it is to be complemented with (and not a substitute for) the mandatory contributions made by both employee and employers to the EPF scheme.
Having a voluntary scheme in addition to the EPF also allows private company employees and self-employed persons to voluntarily contribute towards their retirement in a systematic way.
Similarities of PRS with the EPF:
1. Retirement Purpose: Both the EPF and PRS schemes are for building up a person’s retirement assets and income.
2. Tax Benefit: Tax relief is given for contributions to both schemes (up to RM6,000 a year for EPF, RM3,000 for PRS)
PRS vs EPF: A SummaryFeature Differences PRS EPF
PRS Providers
The PRS Providers are fund management firms which are approved by the PRS administrators to manage the investment vehicles that contributions get paid into.
The eight PRS Providers approved (as at 5 April 2012) are:
CIMB-Principal Asset Management Bhd;
AmInvestment Management Sdn Bhd;
American International Assurance Bhd;
Hwang Investment Management Berhad;
ING Funds Bhd;
Manulife Unit Trust Bhd;
Public Mutual Bhd; and
RHB Investment Management Sdn Bhd.
In short, the PRS is a defined contribution pension scheme which allows people (or their employers) to voluntarily contribute into an investment vehicle for the purposes of building up their retirement income.
In a Malaysian retirement framework, it is to be complemented with (and not a substitute for) the mandatory contributions made by both employee and employers to the EPF scheme.
Having a voluntary scheme in addition to the EPF also allows private company employees and self-employed persons to voluntarily contribute towards their retirement in a systematic way.
Similarities of PRS with the EPF:
1. Retirement Purpose: Both the EPF and PRS schemes are for building up a person’s retirement assets and income.
2. Tax Benefit: Tax relief is given for contributions to both schemes (up to RM6,000 a year for EPF, RM3,000 for PRS)
PRS vs EPF: A SummaryFeature Differences PRS EPF
| Feature Differences | PRS | EPF |
| Contribution Type | Voluntary | Mandatory |
| Contribution Amount | No statutory minimum or maximum | Statutory minimum (11% Employee, 12-13% Employer) |
| Contribution Frequency | No statutory interval | Statutory Monthly Contribution |
| Contribution Paid to | Individual PRS Providers | EPF Directly |
| Yearly Personal Tax Relief | RM3,000 | RM6,000 |
| Partial Withdrawal | From Sub-Account B only, and 8% Tax Penalty | Account 2 only, specific reasons no penalty |
| Selection of Fund Investments | Freedom of Selection (among PRS Providers) | Freedom only on Partial Amount (EPF-MIS) |
| Dividend Policy | No statutory minimum (depends on Fund performance) | Minimum 2.5% p.a. |
PRS Providers
The PRS Providers are fund management firms which are approved by the PRS administrators to manage the investment vehicles that contributions get paid into.
The eight PRS Providers approved (as at 5 April 2012) are:
CIMB-Principal Asset Management Bhd;
AmInvestment Management Sdn Bhd;
American International Assurance Bhd;
Hwang Investment Management Berhad;
ING Funds Bhd;
Manulife Unit Trust Bhd;
Public Mutual Bhd; and
RHB Investment Management Sdn Bhd.
4 of Dad's Best Money Tips
This month we’re celebrating dads and all they do for us. They taught us how to throw a ball, they fixed the chain on our bicycle, and they imparted their wisdom – often it was wisdom that they got from their dads.
However, times have changed and maybe the advice they once gave us about money and credit and debt is no longer 100% accurate. No disrespect intended (and we’ll ALWAYS assure dad that he was totally right) but in this article I want to update some classic money tips from Dad for the modern era.
Tip #1: Your reputation matters. Get to know the bank manager before you get a mortgage.
This might have worked 50 years ago, but it won’t now. Today, most financial institutions rely on credit scores to assess your creditworthiness. Dad would still be proud, though, if you kept a nice, respectable reputation anyway.
Tip #2: Don’t owe anyone anything.
There was a time when you could save up your money and pay cash for a house or car, but today it’s almost necessary for anyone living in America to get a loan of some kind at some point in their life. Besides, having a couple of credit accounts (on which you make your payments in full and on time) is a great way to help you achieve a healthier credit score. Sorry, Dad; owing someone can actually be a good thing.
Tip #3: Pay cash for everything.
Paying cash for everything was Dad’s advice to ensure that we didn’t get a credit card and then fund a wild, high-roller trip to Vegas with 10 of our closest friends. But the careful use of credit cards can help your credit score by demonstrating your responsible use of credit and building a good credit history.
Dad was partly right – you shouldn’t buy anything you can’t afford. But that is very different from paying cash for everything. Smart credit users make purchases on their credit knowing that they have the money available to pay it off. And even if you could afford that trip to Vegas, Dad would probably not approve.
Tip #4: Get a college education, then get a good job.
For the most part, this is pretty good advice. But it’s no longer complete. In Dad’s day, a college education pretty much guaranteed a “good job” upon graduation and you stuck at that job until you retired. Today, a college education is just the beginning. And with record-high unemployment, you need a lot more to get and keep that job.
A good credit history is one of the ways you can get an edge, since some employers are pulling credit reports to help them evaluate job candidates. Keeping an eye on your credit can help you keep on top of things.
This month, we think of our dads and all that they’ve done for us. And dads do a lot, but we need to update their advice for the modern age.
Happy Fathers Day, Dad!
However, times have changed and maybe the advice they once gave us about money and credit and debt is no longer 100% accurate. No disrespect intended (and we’ll ALWAYS assure dad that he was totally right) but in this article I want to update some classic money tips from Dad for the modern era.
Tip #1: Your reputation matters. Get to know the bank manager before you get a mortgage.
This might have worked 50 years ago, but it won’t now. Today, most financial institutions rely on credit scores to assess your creditworthiness. Dad would still be proud, though, if you kept a nice, respectable reputation anyway.
Tip #2: Don’t owe anyone anything.
There was a time when you could save up your money and pay cash for a house or car, but today it’s almost necessary for anyone living in America to get a loan of some kind at some point in their life. Besides, having a couple of credit accounts (on which you make your payments in full and on time) is a great way to help you achieve a healthier credit score. Sorry, Dad; owing someone can actually be a good thing.
Tip #3: Pay cash for everything.
Paying cash for everything was Dad’s advice to ensure that we didn’t get a credit card and then fund a wild, high-roller trip to Vegas with 10 of our closest friends. But the careful use of credit cards can help your credit score by demonstrating your responsible use of credit and building a good credit history.
Dad was partly right – you shouldn’t buy anything you can’t afford. But that is very different from paying cash for everything. Smart credit users make purchases on their credit knowing that they have the money available to pay it off. And even if you could afford that trip to Vegas, Dad would probably not approve.
Tip #4: Get a college education, then get a good job.
For the most part, this is pretty good advice. But it’s no longer complete. In Dad’s day, a college education pretty much guaranteed a “good job” upon graduation and you stuck at that job until you retired. Today, a college education is just the beginning. And with record-high unemployment, you need a lot more to get and keep that job.
A good credit history is one of the ways you can get an edge, since some employers are pulling credit reports to help them evaluate job candidates. Keeping an eye on your credit can help you keep on top of things.
This month, we think of our dads and all that they’ve done for us. And dads do a lot, but we need to update their advice for the modern age.
Happy Fathers Day, Dad!
Monday, June 17, 2013
How to Prioritize Your Budget
Tracking expenses and placing limits on your spending are basic financial rules that can benefit everyone, and yet many Americans still don’t make a budget. But it’s time for them to start — a budget forces you to prioritize, make better decisions and keeps you on track.
When it comes to a monthly budget, no one size fits all. That’s why it’s important to identify what expenses are most important to you and base your budget around your own priorities. Follow these tips for prioritizing a budget that will help you more easily achieve your financial goals.
Determine essential expenses.
The first step in creating any good budget is to figure out what is a non-negotiable expense. For example, unless you’re fortunate enough to be living somewhere rent-free, you probably have to make either a rent or mortgage payment each month. If that’s the case, then you may also have to pay utilities. These are non-negotiable expenses, meaning you have to pay them and they’re not going away anytime soon. Other expenses in this category? Your wireless bill, perhaps medical expenses, and loan payments. You can also choose to put things like gas and groceries in this category, if that makes sense for you. Or, you can do it this way: Add up all of the necessary expenses and subtract the total from your monthly income. The difference is what you have leftover to put toward everything else, such as groceries, gas, a gym membership, entertainment, shopping and dining out.
Plan to minimize debt.
Consumers in the United States have collectively racked up $82 billion in new credit card debt over the last two years alone, according to a 2012 study by credit card comparison and resource site CardHub.com. The biggest cause of it is habitual overspending, says John Kiernan, CardHub editor and senior analyst. Paying down your debts should be a top priority when determining your budget, and your payments should go right up there with your other non-negotiable expenses. The best way to pay off amounts owed, Kiernan says, is to strategically eliminate the balances with the highest interest rates first. Once those are paid off, repeat with the next most expensive balance, and so on. Whatever you do, always continue to at least make the minimum payments (on time), and pay even more if you can.
Another important aspect of getting out of debt is to stop accruing more, Wahl said. “Be vigilant about not taking out new credit cards or loans unless it is going to help you achieve your goal of paying down your debt,” Wahl said.
Remember that paying you’re your debts is a process, so don’t overthink it. “People often react to debt like deer in headlights,” Kiernan said. “We get paralyzed thinking about all of the potential ramifications and don’t take action. But we also can’t lose sight of the fact that debt reduction is a process. It takes time, diligence, and sacrifice. In short, having the right mindset pays off when it comes to getting out of debt.”
Identify your savings goals.
What are you saving for? Figure it out and then incorporate it into your budget. For starters, you should always have an emergency fund, which is a savings account that you don’t touch unless you absolutely need it. Putting even just a small amount away each month will be extremely useful in emergencies down the road. The idea is that you have the money and hope you never have to use it.
Next, think about what you want to save for long term. A child’s college fund? A house that you’ll buy in 10 years? Think about how much you’ll need and when, divide it by the number of years you’ll be saving it, divide that by 12, and that’s how much you need to save each month. (Example: If you want to save $60,000 for a down payment on a house, and you’re saving for 10 years, the formula is: $60,000 / 10 = $6,000 / 12 = $500 / month)
Finally, think about your short-term savings goals. Maybe it’s a vacation in the next six months, or a new car in the next year. Use the same formula as above to figure out how much you need to put away and how frequently.
Give yourself some space to mess up.
Though it may be hard to accept, no one is perfect. You’re going to make mistakes, and every once in a while, you’re going to overspend or stray from your budget just a bit. When creating your budget, give yourself enough wiggle room so that in the rare event that you do go over, you won’t be really hurting yourself financially.
from: yahoo.finance.
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