PFA ASIA - WISE MONEY PLANNING

MILESTONE 5: Caring For Your Aging Parents

2012-02-26T23:54:00.000+08:00

MILESTONE 5: CARING FOR YOUR AGING PARENTS

Many of us who are in our 30's, 40's are live as Sandwich Generation. While we need to take care the financial need of ourselves, we need to fend for the children, and not forgetting taking care of our aging parents...

How to care for elderly parents is a major concern of many families. Our concerns are mainly in the form of financial assistance, personal care or both. Some might also invite parents to move in with them. However time will come when we have to start looking after our parents. As this decision will greatly affect everyone’s lives contingency planning is essential.

RECOMMENDED FINANCIAL MOVES:

1. Have that ‘talk’

Talking with our elderly parents about their living situations and the possible need for change is not always easy. To the extent possible, talk with your elderly parents gently and honestly about their wishes, their abilities and their options. Most of us know very little about our parents’ finances. This subject will be very uncomfortable and furthermore most parents’ may be unwilling to give the details. During the conversations, discuss about their debt, insurance policies and retirement funds, assured them that you are not taking control about their finances.

2. Live within your means

The major expense for elderly person is medical expenses. We advise to take a medical plan for your parents. Those who take care of their parents normally stinge on themselves and giving all financial needs to their family while ignoring their retirement planning. It is important try not to upgrade your lifestyle even though your salary has increased. It is important to have savings for either emergency or future retirement fund.

3. Seek Support from family members

The effect of globalization has separated siblings geographically and emotionally. For those siblings who can’t afford to take care their aging parents by themselves should come together and decide on issues as to where their parents to live and who should pay for what expenses.

"You don't really understand human nature unless you know why

a child on a merry-go-round will wave at his parents every time

around - and why his parents will always wave back. "

~William D. Tammeus

MILESTONE 4: Having A Baby

2012-02-19T17:41:00.000+08:00

MILESTONE 4: HAVING A BABY

HAVING a baby is the happiest experience you're ever likely to enjoy - but it's also likely to be the biggest responsibility it can be daunting for many, especially when looking at the raising costs to raise a baby and then paying for their tertiary education. Whether you’re just thinking about having a baby or if you already have a baby on the way, it’s never too early to start making a “baby budget.” Having a baby would involve significant costs, from a stroller, toiletries, baby cot, diapers, toys, education, medicine and immunization. It’s not cheap to have a baby these days – and there are more expenses than you might realize – but if you plan ahead, you can make smart budget choices for your baby and your family.

RECOMMENDED FINANCIAL MOVES:

1. List your priorities

Having a baby is going to affect your family’s expenses. It is vital and wise to determine whether it makes financial sense for either one parent to quit his or her job to take care of the baby at home or continue to bringing home two salaries. Some might look into planning for baby education and also considering buying a bigger house. The expert advise to look at which is more urgently needs, it is advisable to have children once financially ready and it is much better to have 2 or 3 years apart between each child as this will help to spread out the tertiary education costs.

2. Having a post-baby financial plan

Aside from the one-time costs of getting ready for your little one, you’ll need to plan for ongoing costs throughout the year. Many new parents are surviving on credit-card balances as they make the mistake of changing their spending habits. We advise to consider doing a financial plan for all your goals in life and follow the steps on how and when you plan to achieve them.

3. Building and protect your emergency savings

We advised to have at least 6 months of your last drawn salary for emergency fund. It can be used as unforeseen medical expenses or should you be temporarily out of job or switch between jobs.

4. Buy a comprehensive insurance

As the responsibility increases owning insurance is crucial at this point of life. If something happens to either parent, there are deeper consequences once you have kids than there was before. The surviving parent will be saddened with not only grief, but immediately the need to pay for baby’s ongoing care, additional childcare expenses, in addition to the big mortgage and lifestyle you designed for two people to fund. Although you might plan to adjust your lifestyle accordingly, this won’t be an immediate process, and life insurance can help ease the transition and prevent a total financial meltdown. You can always get a term insurance which will give you maximum protection with minimum premium if your budget is thin.

5. Write a will

Have a proper will is important once you have a family especially with little ones. Should any unforeseen happened this piece of paper together with your insurance will help your family to maintain a same standard of living without you.

It's true; a baby can cost a lot of money. But once your little one become a member of the family, you will hardly even remember what it was like without them. So plan carefully, and then prepare to enjoy your new little person. Happy Parenting!!!

"A baby will make love stronger, days shorter, nights longer,
bank balance smaller, home happier,clothes dirty, the past forgotten,
and the future worth living for."

Do I need MORTAGE INSURANCE ?

2012-02-11T11:34:00.000+08:00

MILESTONE 3: BUYING YOUR FIRST HOME

MORTAGE INSURANCE: Unnecessary cost?

Some additional information:

Buying a house is probably the largest investment you will ever make in your life. Mortgage insurance may seem to be an unnecessary cost to many homebuyers. However many homebuyers just simply ignore how this little cost can help to secure a “HOME” for their love one if any unforeseen happened.

So What Is It?

Technically, Mortgage Insurance is to provide coverage and protection for borrowers who take up mortgage loans. It covers the borrowers against Death and Total Permanent Disability (TPD) due to Natural or Accidental causes or Critical Illnesses on the outstanding mortgage loan.

Do I Need it?

Obviously, mortgage protection insurance is a waste of money if you own your home outright. However, if you are taking a mortgage loan it is advisable to have yourself insured to prevent serious financial liability from falling on your family should something happen on you such as death, total permanent disability or critical illness. With mortgage insurance, you will be able rest assured that your ongoing loan repayments will not financially “burden” your loved ones.

MRTA vs Mortgage Saving Account ?

Commonly two types of mortgage life insurance are available in the market.

1st type : Term insurance come in the form of Mortgage Reducing Term Assurance (MRTA) ; or Mortgage Level Term Assurance (MLTA).

2nd type : Mortgage Saving account

The table explained the differences.

	MRTA	Mortgage Save
Purpose	Loan cancellation.	Loan cancellation & savings.
Protection	Protection value is reduced.	Protection is leveled or value is higher and increase interest.
Transferability	Non-transferable either new purchases or refinance.	Transferable and can be attached to any loan either new purchases or refinance.
Cash Value	Drop to RM0 at the end of loan tenure.	Fixed Cash Value (Guaranteed) or increasing throughout the loan tenure.
Nomination	Beneficiary is bank	Beneficiary is loved ones.
Payment	Lump Sum Payment or financed into Mortgage Loan.	Payment Mode can be Annually, Semi Annually, Quarterly or Monthly.
Premium	For new protection, premium will increase according to age.	Age is locked at current age.
Payment Method	Cheque or Cash only.	Cash, cheque or credit card.
If there is no death or TPD*	At the end of tenure owner will received RM0.	At the end of tenure, owner will received the cash surrender values.
*If death or TPD happened**	Insurance company will pay the loan outstanding balance to the bank & beneficiary will received the property.	Insurance company will pay the money to beneficiary. The beneficiary can either choose to settle the loan or continue instalment of the property.
If there is Critical Illnesses strike	Usually not included. Owner continues the loan repayments.	Optional coverage. If purchased, Insurance company pay the money to the borrower. The borrower either can settle the loan or continue as instalments.

Notes: TPD* - Total Permanent Disability

"What insurance is doing?

Nothing but makes your dreams true in which you have uncertainty."

MILESTONE 3: Buying Your First Home

2012-02-01T22:59:00.010+08:00

MILESTONE 3: BUYING YOUR FIRST HOME

We understand that buying a house is one of the most important financial decisions that you will make in your lifetime. Even those who choose to live with family are likely to invest in property. According to the Malaysia House Price Index, in 2010, the average house price rose to RM 199,636 from Q42009's RM 188,542, in 4Q2010, Kuala Lumpur record the highest average price level at RM 430,163 followed by Selangor at RM 301,443 and Sarawak at RM 253, 391. Read on and you will see that realizing your dream of having your own house is easier than what you perhaps imagine.

RECOMMENDED FINANCIAL MOVES:

1. Do Not Over-leverage

Property is probably the most important financial decisions that you will make in your lifetime and usually will be the most expensive purchase you would make.

Preparing Yourself for the Buy. It is important to develop a financial plan so that you not only save money for the down payment, but also for other costs that will come along later like the credit check, the mortgage application and the closing (legal fee, valuation fee and stamp duty).

A down payment is generally the money you pay up front toward your new house. Typically, the more cash you pay as a down payment, the less you will have to pay each month on the mortgage, and the lower the interest costs will be over the life of the mortgage. Many people make a down payment of 5, 10 or 20% of the sales price of the house, but the right percentage for you depends on many factors. We advise to borrow up to 80% of your property’s value. There also are certain loans available for down payments of below 5%. One thing that is certain is that saving the money for the down payment can be a challenge.

Once you know the amount of money the bank will lend you, you will need to determine how much will be your monthly pre-payment. Bear in mind that your monthly costs not only consist of mortgage payments, but will also include at a minimum maintenance costs, house owner's insurance and utilities.

2. Be Cash Smart

Having an established credit history is an important step in a smooth house buying process if you plan to do the purchase by mortgage. Pay your loan on time, limit your debt, reduce the amount of credit cards you have and use them responsibly. It is also important to review your credit report - a record of past and current debt that states when, how and if you paid.

The best approach in buying a house is to gain an understanding of how a house is financed, the process of obtaining financial assistance toward your house ownership dream and the costs that you should be prepared for. There are crucial elements to be aware of: (1) Mortgage Pre-approval, (2) the Down Payment, (3) Mortgage Options and (4) Closing Costs (legal fee, valuation fee and stamp duty) . Financial Planners usually advised to put aside 30% to 40% of the property’s current value to be fully prepared for these cost.

Consider staggering your purchases if you are planning to furnish your new home. Begin by buying the necessities then slowly working towards furnishing the entire place. Some suggestions are to accumulate credit-card rewards points to redeem for household items. Shop at warehouse clearance or perhaps used furniture shop.

"A HOUSE is made of WALLS and BEAMS;
a HOME is built with LOVE and DREAMS.”

MILESTONE 2: Getting Married...

2012-01-16T00:11:00.000+08:00

MILESTONE 2: GETTING MARRIED

The wedding is the most expensive yet is the most enjoyable event....The total cost is very much depends on the type of wedding and your willingness to spend on the memorable special day. It include clothing for the couple, flowers, décor, printing, photography and rental of the ceremony venue.

RECOMMENDED FINANCIAL MOVES :

1. Keep an eye on cost

Wedding expenses are usually subsidised or fully paid by parents of couple however some may opt to pay for the occasion themselves. Saving up for the big day might take a while so couples usually have an extended engagement period. Stick to a strict budget and where possible, scale back on luxuries. Also, one can lookout for promotion offered during wedding fair.

2. Avoid incurring a debt

Our past article on money eating machine - credit card have elaborate how this piece of plastic able to erode your wealth. Making the minimum payments each month will not help to make a dent in the amount owned. The debt as well will affect your ability to obtain other loans (MILESTONE 3: Buying your first home). According to financial planner, if you have incurred "unhealthy" debts, list all your debts from credit cards, unsecured loans and other sources in descending interest-rate order. Then work towards settling the first debt which is usually outstanding credit card balances. If you have few types of debt, you can consider consolidating all of them into one that charges a lower rate.

Some additional information:

DIVORCE: NASTY BUT AFFORDABLE

While many couple live happily ever after, there are those who split up. The national Registration Department registered 2,706 divorces among non-Muslims in 2002, a figure which climbed to 5,647 in 2009. The Department of Islamic Development says 27,116 Muslim divorces were recorded in 2009, almost double the 13,937 cases registered in 2002. Most of the divorce petitions were files by young couples in their 20s and 30s.

The biggest expenses involving divorce most likely is the legal fees, if incurred. The fees range form RM 3,000 to RM 6,000 if the proceeding is amicable and one lawyer represents both party. However the cost can jump more then RM 10,000 if one party decided to contest and hires his or her own lawyer. Option are available for both party to bare their own legal expenses. If one party does not earn an income then it is possible for the representing lawyer to request for one party to be responsible for all or a portion of the fees.

Beside legal fees, the couple will need to consider on alimony, if applicable and one party will have start to looking for and paying for a new place to stay.

"a SUCCESSFUL marriage requires falling in LOVE many times,

always with the SAME person."

10 Life Major Milestones

2011-12-31T18:11:00.020+08:00

We decided to share this after reading it in one of the local magazine...

Along with the satisfaction and joy that come with each milestones, there is a COST to pay. The right preparation will leave you better off while lack of planning might have even abandon your goals. There is a wise saying - people never plan to fail, but just many fail to plan explain it all. Many of us could under-estimate the cost of major life events, such as buying the first car, owning the first house, getting married, having children and subsequently retiring?

It's not surprised that we have heard of people who have to postpone some of these key milestones due to financial constraint. In this series, we share 10 major milestones of a typical person: Getting your first job, getting married, having baby, buying your first home, caring for your parents, starting your own business, paying for your child's education, go through a mid-life crisis like divorce, preparing for retirement and finally enjoying your golden years. We have abstract some of the best practices and advice from financial planners and milestones achievers on preparing for each major life-changing event. Let's the journey begin...

MILESTONE 1
GETTING YOUR FIRST JOB

Finally you have graduated and landed your first job in the city. Average salaries for graduates currently ranging from RM 1,800 to RM 3,000 monthly. While Monthly expenditure including rent could range from RM 2,500 to RM 2,800. Is this sufficient?

RECOMMENDED FINACIAL MOVES:
1. Start saving ASAP
According to financial planners, saving is a practice that must be inculcated your entire life. For a fresh graduate who stay in the city there isn't much left to save, you really have to trim your expenses. Generally you will already contributed 11% of your salary to the Employee Provident Fund (EPF) and another 12% by your employer. In addition to that it is advisable to put aside another 10%-15% of your income each month. Don't forget to reward yourself even though you are on tight budget, this apply on every stage of your life. Spend on or invest in something that you love to without compromising your long-term goals.

2. Protect your Income
You need to protect your income earning power immediately. While most employer have provided some form of insurance. It is crucial to look at financial protection with insurance. Those on low budget can start with the basic medical insurance and/or term insurance. If you travel a lot get a personal accident policy as well. There are many option available in the market today for fresh graduate which offered comprehensive protection for as low as RM 3 a day.

Follow us on our MILESTONE 2: Getting Married...

Stanford Who's Who - Edmund Tai Kin Mun - Finance - Prajna Advisors (Asia) Sdn Bhd

2011-12-28T18:38:00.000+08:00

Stanford Who's Who - Edmund Tai Kin Mun - Finance - Prajna Advisors (Asia) Sdn Bhd

Credit Cards for Anyone ?

2011-12-27T00:51:00.003+08:00

Want to Get Credit Cards? Wait!!!

Is credit card a necessity, a luxury, or merely a tool?

How do you decide if you should have one? Or more? And which ones?

Disclaimer: This image (Citibank) is only chosen for graphical illustration purpose.
We do not advocate or discriminate against any bank.

Let's have a brief overview of the Merits and Demerits of owning a credit card,
and then the ultimate list of credit card fees and charges you should be aware of.

Merits of Owning A Credit Card:
1.To increase your Purchasing Power.
2. Efficient Payment Solution especially for Online Purchases.
3. Less Cash to carry around. Convenient Option for Frequent Travelers.
4 .Discounts, Rebates, and Reward System.

Demerits of Owning A Credit Card:
1. Unbudgetted purchasing freedom, resulting to overspending unconsciously.
2.Credit card security issues.
3.The interest rates, applicable fees and hidden charges.

Ultimately, we have compiled for you a list of the Credit Card charges and fees you might want to ask your bankers the next time you are about to swipe your card.

1.Universal default: rate hikes just because you inquire about car loans or open a new
credit card account.
2.Teaser rates: low introductory rate that can hike up by 30%!
3. Minimum payment: you'll end up paying for way more than you are charged.
4. Change of Terms: read the fine print disclosure terms,

“We reserve the right to change the terms (including the APRs) at any time for any reason.” A fixed rate is fixed until the bank gives you at least 15 days notice that it isn’t.

5.Cash advance/ convenience cheques : Higher interest rates than your credit card rates!
6.Penalty Interests and Fees: can be from 7% to 27%! In addition to a Fee for exceeding
credit limit!
7.On Time payment: the systematic statement mailing system that gives you less
turnaround time to pay your bills on time if you rely on statements to remind our bills.
8. Balance transfer : multiple balance transfers hurt your Credit Scores!
9. Fees, fees and more fees!
10.Exchange rates for overseas credit card purchase.
11.Surcharge from Issuing Banks for overseas credit card purchase.
12.Currency exchange fees from VISA, MASTERCARD or AMERICAN EXPRESS for overseas
credit card purchases.
13.National Banks' charges on usage of overseas ATM.

Your Credit Score determines your Interest Rates.
In case you are not aware, Debit Cards can be a good alternative when it comes to online payments or convenience of payment methods. The only obvious set back is that Debit Cards do not give you credit advances, thus no increase in purchasing power.

Before we end, we would like to wrap up this post with a friendly note,

Credit Card is a tool to ease purchasing transactions in today's modern world.
It is a double edge sword, if you use it wisely, you are enjoying a interest free period with the purchase you made. On the otherhand, if your credit card debts are not settled on time, the evil effect of interest compounding will definitely burn a BIG hole in your pocket. The costs to it can be phenomenal if uncontrolled spending behavior is practiced.
Use it wisely.

Links recommended for further study:
1.The Ultimate List of Credit Card Charges and Fees
2.Hidden Fees on Traveling Credit Card Charges
3. How To Manage Your Credits?
4.How To Get Lower Credit Card Rates?
5.The Pros and Cons of Having A Credit Card
6.The Real Costs of Owning A Credit Card

Sources from:
http://www.consumersunion.org/pub/core_financial_services/004040.html http://www.bankrate.com/brm/news/cc/20010416a.asp http://moneyfor20s.about.com/od/yourcredit/tp/managecredit.htm http://moneyfor20s.about.com/od/creditcards/ht/lowerccinterest.htm http://www.solveyourproblem.com/debt-free/pros_cons_of_credit_cards.shtml http://ownthedollar.com/2010/03/real-cost-owning-credit-card-year/

Labels: Financial Wisdom

Having kids late?

2011-10-13T12:27:00.000+08:00

In today challenging environment, where many are busy climbing the career ladder while some are struggling supporting themselves due to the high cost of living. It is very common nowadays where couple getting married at a later age and only having children in their mid-30s. Usually having children becomes less of a priority. Majority are facing resources strained from having to juggle between their children education costs and retirement plans. How then you should balance this commitments? Here are some tips to keep you ahead.

So how much exactly that we need for both?

It is crucial to know exactly how much you goals are. Sit down and discuss with your spouse. Here are some question to ponder upon? Where do you want to sent your children to their tertiary education? How do you want your retirement lifestyles? How about family expenses? Are your spouse will continue working after having children? If there are many needs and resources limitation who and what is going to compromise?

If you have not been saving, you probably have to make up for the lost time by saving larger amount compare to others. For example if you have your child when you are 36, bear in mind that when he or she heads off to college, you will be 54, which is very close to your official retirement age.So you need to be very specific of the amount that you wanted to save. Break it down into a smaller portions to have a better idea of how much you need to save or invest on monthly basis. Another factor to consider is the inflation rate, if you unsure of how it will erode your purchasing power consult your Financial Consultant for a more accurate & details planning.

Retirement ? or Children Education?

Although both are important and most likely both will due almost at the same time. We advice that retirement fund is the priority as Employees Provident Fund might not be enough and in a worst case scenario the children always can study locally which are relatively cheaper then overseas. Further more, there are many corporation that offered education funds aid and they always can pay back after they graduate.

How about estate planning?

There might be instances where you and your spouse might pass on before your children reaches adulthood. So it is important to appoint a guardian, usually it is better to have same set of guardians in their wills. Take note on the children's monthly maintenance, education and medical expenses until a certain age, after that the balance can be distributed to them in installments or lump sum.

How much to save or invest?

The key is to stay focused and be disciplined. Put aside 40% of your gross income, this should include the EPF contribution of 11% and additional of 10% for insurance and retirements with additional of 10% for children education. However if you have not start saving then the amount putting aside will be relatively higher as you have shorter time.

What is the foundation?

Insurance is important as the tool to transfer risk. It is important to cover yourself adequately but affordably. Insurance will provide the fund to the family's living expenses and children education fund if any unforeseen happened to you. Any balance should be used for investment and contingency saving.

All days are not same. Save for a rainy day. When you don't work, savings will work for you. ~ M.K. Soni

Why Insurer Reject Your H&S Claims?

2011-10-04T00:28:00.002+08:00

Take a look at these reasons to ensure that you are well-protected by your hospital and surgical policy.

Horror stories form friends and relative about hospital and surgical (H&S) claims being declined or only partially reimbursed by their insurers is common. The first thought in mind is insurers are "liar" but did anyone ever consider is the claim genuine?

Are this the true story? Good reputation is very vital to insurance company, as they want to be in the business for long term and to establish they need a good reputation among the others.

Here are some reasons why an HS claim may be denied.

1) You have exceeded the coverage limit

While some policies may come with inner limit or annual limit many policyholders are not aware about this. For instance, a policy with lifetime limit of RM 300,000 but limit the amount of claim to RM 60,000 a year. If the hospital bill is RM 100,000 the claimant then have to pay the different of RM 30,000 and on top of that the policy holder will not allowed to make any further claim until the next policy year.

This will be more complicated for policy that issued decade ago and it is more specify an inner limit amount. The policy schedule will list down all the approved procedure and limit amount. For instance, if the surgical fees stated is RM 10,000 you will be reimbursed up to RM 10,000 only even if the actual cost is RM 20,000. Even the inner limit policy are rarely issued by insurer for personal insurance but it is commonly used for Group Medical Coverage.

Most insurers have a clause stating the co-insurance fees and some insurer will imposed a higher Co-insurance fees if the room and board is more expensive than the one specific in your contract. It is important to know what your benefits.

2) The claim is not covered

This is usually related to exclusion clause that stated in the policy contract during issuing of the policy. Some exclusion are general exclusion for example diagnostic test fees and staying overseas for more then 90 consecutive days while others exclusion are due to the policy holder health risk during inception of the policy.

3) Non-disclosure of pre-existing illness

It is very important to declare your health condition to insurer while applying for a policy. Failure to do so claims while be declined once the insurer found out it is a pre-existing illness. Usually this is the most common reason why the claim declined by insurer.

4) Coverage have yet to commerce

Most health insurance have waiting period, any claims arise during the waiting period will not be covered as the clause spell very clearly in the policy contract. 120day waiting period for are illnesses are very common practice locally.

5) Failure to pay premiums

You will not be covered if you do not pay the premiums on time. Policy will lapsed once premiums are not received by the insurer on times. Insurer usually will re-evaluate the contract if reinstatement of policy received after 90 days. While HS policy which attached to unit link policy will have added advantage as the coverage will ceased only when the underlying value are exhausted.

So, it is very crucial to know exactly what your HS benefits, if you are still in doubt contact your consultant today!

The first step to getting the things you want out of

life is this: Decide what you want. - Ben Stein

4 Basic Types of Insurance Protection you MUST have

2011-08-10T23:44:00.000+08:00

Nobody cares about insurance protection until unfortunate events happened to them. Which by then could often times be too late. Why? Because Insurance Companies are not charity organizations, just like any business organizations, they do not underwrite sure losses.

If today you are diagnosed with diabetes or heart problem by your medical practitioner, chances are you will not be covered by your preferred insurer even if you are willing to pay higher than what is required.

For today's topic, we share on the Types of personal insurance protection and Rule of Thumb of the coverage. They are:

Death and Total Permanent Disability(TPD) Benefit
Critical Illness
Hospitalization and Surgical Benefits
Personal Accident

Death and TPD Benefits are the very basic of insurance, which is payable if a insured suffered from total permanent disability or death either result of old age, illness, or accident.

Rule of thumb of coverage : min 10x annual income

Hospitalization and Surgical Benefits covers most or all of the necessary hospitalization bills you incur. However please do note that the treatments have to be genuine and NECESSARY before deem claimable. A minimum of 6 hours hospitalization or more is required before any amount is payable to claimants. So reports from the medical practitioner is a must to preclude the claims.

Rule of thumb of coverage : min Room & Board rate of 150/day

Critical Illness is one of the most crucial insurance protection a person must have in view of the rising trend of illness, like strokes, cancers etc. It is the lump sum benefit payable to the policy holder when critical illness is diagnosed. This is to relieve the person for his or her health and financial distress that follow suit the trauma caused by the bad health news.

Rule of thumb of coverage : min 3x annual income
or 200K whichever higher

Personal Accident insurance protection is the cheapest of all the insurance protection but the sum assured is only paid out when accidents happen. However the proximate cause has to be none other than accidents. The good news is, even food poisoning medical treatment bills can be claimed under personal accident coverage.

Rule of thumb of coverage :min 3x annual income
or 200K whichever higher

Question of the day : Does your love for them stop when you stop breathing?

Can You Survive Rising Medical Bills Without Medical Insurance?

2011-07-13T23:29:00.000+08:00

It might surprise you that we suggest ways for you to survive medical inflation without medical insurance, but as a matter of fact, this can be done, with proper guidance from Gregory Allan's "How to Survive Hospital Costs Without Insurance".

It is in fact quite a controversial finding we learned about how Medical Businesses and Insurers cooperate to prosper arguably at the public's expenses and welfare. But who is it to blame? The question is, can the government absorb the escalating medical expenses with your taxes alone? And how much taxes are you willing to pay? And ultimately, who is willing to operate a sustainable medical business if not for profit?

Facts that you might need to know:
Medical Providers and Insurers do have contracts. As to how those contracts affect you or me, we'll let you figure out yourself or read from Gregory Allan's "How to Survive Hospital Costs Without Insurance".

You might be able to opt not to pay the full amount of your medical bills because as a matter of fact, your insurers do get substantial discounts from your medical providers, BUT provided you have the attorney's knowledge to deal with contracts the medical providers enter with you upon your first signature and disclosure of information with them. So wise steps are to be taken.

For example, do not enter into unfair agreement which oblige you to pay and receive any treatments they deem fit for your conditions. Especially on consents to hospital care and financial agreements.

Do you know that the medical insurance does not cover the cost of organs but only the operation or treatment cost?

Question of the day: You could pay for a pair of bluejeans at a departmental store with a credit card.
How much line of credit you like to charge to your credit card for your medical bills?

Many of us believe we can choose to die when we are in dire conditions.
But few lived to tell the story of the pain suffered sitting on the fence of death
and far lesser to convey the pain suffered by the loved ones.

How is the feeling of a person recover from illness and being physically alive but
financially pronounced DEAD?

Sources to study:

1. http://www.lawfulpath.com/ref/shc_rev2-0eval.pdf

2. http://www.articlecell.com/Article/Can-your-household-insurance-survive-the-storms-/949864

3. http://www.insurancefreefaq.com/insurance/27482-insurancefreefaq.html

8 Golden Rules of Investment

2011-06-28T23:32:00.000+08:00

You wish to invest. But you are not a professional remisier or fund manager, what are the simple time-tested rules to follow to ensure your investments are safe guarded?

8 Golden Rules of Investment:

DO NOT borrow to invest.
DO NOT invest all your money.
DO NOT invest money you need soon.
DO NOT get emotional and panic.
DO keep investing and stay invested.
DO diversify.
DO take professional advice.
DO give your investment some time to grow.

Don’t Panic, Stay Invested.

Unit Trust is a good way of investing for medium to long term as the fund managers generally invest for long term growth and not speculative funds. Concept of Dollar Cost Averaging is practiced in Unit Trust (UK) or Mutual Fund (US) investment.

Investment-linked or Unit-linked Investments is another comparable option to investment.

Then which option is suitable for me ?
To answer this, you must first understand the concept of unit trust or unit-linked investments.

Unit Trust

Unit Trust, normally marketed by Unit Trust Management Companies, can starts from RM1000 and
you can opt to top up or switch funds as and when you wish to by subject to upfront administration fees, ranging from 2-5%.

Some good unit trust investment can potentially yield impressive returns during market bull run, even though the element of investment risk has to be taken into consideration.

As unit trust is mainly a investment vehicle, the self-completing mechanism in the event of a investor suffer prolonged illness, disability is not available. It means, the final objective of accumulating a certain sum of
money can be disrupted by the unplanned happenings.

Another factor worth considering is that the unit trust investment, just like any other investments of properties, commodities, share market, currency etc, will be all classified under the estate of a
deceased investor and subject to estate distribution law or the instruction in the Will.

Unit Linked Investments

Unit-linked Investments are generally marketed by insurance companies, which is a form of life policies with investment element that offer you accumulated investment account value and death benefit/ sum assured. Essentially a disciplined savings and investment with insurance protection.

The potential upside return of the investment is comparable with those in unit trust, except the investor
will need to pay for the insurance cost, which is usually deducted from the accumulated cash values.

Since it has the element of protection, the self completing mechanism that is absent in unit trust
investment can be incorporated to ensure the investor final investment objective is met irregardless
of the possible disruptions in life.

With the built-in beneficiary provision in the unit-linked investment, the deceased family members
are relieved of the money needs or cash crunch as the investment are not fall into the category of
estate and the money can be distributed within a short span of 10-15 days.

Now you got the answer of the differences and similiarities of these 2 type of investments.

So, what are the above advices worth if there is no action plan?

What can you do today to be in control of your financial future?

Seek an independent financial advisor or consultant for a proposal. A need analysis should be conducted before any meaningful suggestions can be offered to you.

Stay in control of your life and your financial future; let your money work for you!

How Can I fund education for my children ?

2011-06-10T14:15:00.000+08:00

“Education is the birth right of every child and

it is the key to the character

building of a noble person ”

A well-known proverb goes,”Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime." There can be no greater gift than leaving your kids with the best university education you can afford.

The Chinese have a compelling way of describing this phenomenon:”Learning is a treasure that will follow its owner everywhere."

Education costs have been escalating faster than the overall cost of living in most countries, including Malaysia. That's why so many people feel that saving or generating enough money to pay for their kids' tertiary education seems as unattainable to them as a tantalizing piece of cheddar dangling out of reach is to a lab rat.

Most parents still think that university education is too far away to be worried right now. There is plenty of time to plan, and child education can wait while money are spent on other things such as travel, new furniture, the car, golf, and a host of desirable items to enjoy. Sad to say, all these do not contribute to accumulating wealth or funds for child education.

When should you start planning for a child's education? Ideally, as soon as the child is born. Don't become alarmed if you haven't started planning for your child's college education. No matter what the child's age, strategies are available to help you come up with the necessary funds. So what financial aid is available in the market?

1) Government Loan

Perbadanan Tabungan Pendidikan Tinggi Nasional (PTPTN) which are very familiar name when speak about study loan. Courses qualified under this scheme are mostly undergraduate courses offered by local colleges and university while Master and PhD courses are limited at time being. The advantage of the scheme is that the interest is relatively low at about 2%.

2) Study Loan

Usually offered by financial institutions. As the loans usually are unsecured which have contribute in increasing of non-payment by the borrowers. Most likely are people who borrowed to study abroad and did not return back to home country after finding a job there. This have make it hard to find a study loan from Financial Institutions.

3) Insurance policy loan

This loan require no collateral and no pay back required. The loan amount usually are up to 80% of the cash value of the policy and the loan amount are usually off-set during the policy maturity. Interest charge between 8% per annum.

4) Your property

Those home owner that has property which appreciate in value can consider to refinance their property which higher mortgage fund. Financial Institution usually will allowed financing up to 90% of the property value. Bank offering package from BLR-1.4% to BLR-2.4% which current BLR at 6.6%. Opt for flexible home loan which allowed to pay down loan and have withdrawal facilities, this will help to shorten the loan tenure and save on some interest.

5) Personal Loan

The last resort... as the interest charge is quite hefty between 8% to 24% which are calculated on flat rate. . Personal loan offer financing up to 5 times of monthly income without collateral.

“If you think education is expensive

try ignorance! ”

Plastic trap?

2011-06-03T18:49:00.000+08:00

According to Bank Negara Malaysia(Central Bank of Malaysia)'s Statistics, loans in the banking sector totalled RM 893.3 billion at end-January 2011, with household debt accounting for RM 494.87 billion or 55.4% of the total. Of the household debt portion, mortgage loans formed the bulk (48.6%) at RM240.387 billion.This was followed by passenger car loans (25.2%) at RM 124.48 billion, and credit card debt (6.1%) at RM 30.3 million. Source from The Edge Financial Daily on March 21, 2011

The interest for credit card debt also known as the most expensive loan in the market ranging form 13.5% to 17.5% per annum. The wisdom of using this piece of future money eating machine lies in how the card is used. Discounts, cash back, rewards points and lots of goodies when using it correctly. On the other hand, using it aggressively with late payment or minimum payment will lead your financial health to "ICU", once you get into this debt, it's a extremely long climb out of the darkness.

Authorities have recognized the situation and stepped into to curb the situation. These are some initiatives measures taken by the Central Bank to prevent credit card debts from escalating.

1) Cap on the credit limit for those earning RM 36,000/year or less ( cardholders in this category are only allowed to own 2 credit card which the maximum credit limits are not more then 2 times of their monthly income)

2) Minimum income eligibility was raised from RM 18,000/ year to RM 24,000/ year requirement.

3) Cards issuers have also been given guidelines to improve transparency in their monthly credit card statement. i.e to illustrated the credit card in monthly statement to sent to card holder. Those with the credit card debt often have ignorance on how expensive and how long for them to settle the outstanding amount if minimum payment is made even without continue usage of the card.

4) Website financial calculators that compute the duration needed to settle the outstanding balance must be provide by card issuers.

5) Product disclosure sheet are to be understand by new credit card applicant.

Obviously, the card holder is responsible for all the spending with the card. After all...

"We are made wise not by the recollection

of our past, but by the

responsibility for our future."

~George Bernard Shaw

Our Wisdom, Your Wealth

The Sure Way To Get Rich

2011-05-31T01:16:00.001+08:00

There are 4 ways to get rich

1. The FAST Way => Strike a Lottery.

2. The WRONG Way => Commit Crime.

3. The EASY Way => Obtain Inheritance.

4. The GUARANTEED Way => Spend less than you Earn.

So, you are keen to get rich ? Is there really a hidden secret to it?

We discover there are 3 STEPS to reach your Money Goals :

Step 1
BE IN BUSINESS, LEARN THE ART & SCIENCE OF SELLING!
Remember, every successful rich people, who own some businesses are typically good sales person ! They sell their ideas across to customers, suppliers, employees, shareholders, investors and get the buy in.

So, to kick start, you must accept that CHANGE is necessary, and you must learn to be enthusiastic! Pick a company, a product or service that you are passionate about and start learning the selling skills, and speak about it like you live and breathe on it! But make sure the commission structure is rewarding enough for you.

Step 2
Beside doing sales, and make the money, you must learn INVESTING.

Learning investing is like learning how to make friend with Money. Only when Money like you, it will follow you, and give you more !

In essence, the Investment $$ is summarized as below:
Your Investment $$ = Time + Amount Saved + Return

Step 3
Alter your attitude from "I Try." to "I COMMIT"

I try give you a reason or excuse for your under-achievement. I Commit means you must achieve what you are set out for, no matter in what circumstances .

Last parting words :
Your success is in your own hands, not anybody else's. Think and ACT swiftly with a sense of URGENCY. What is needed to be completed today do not procrastinate till tomorrow.

Wishing you Happy, Healthy and Abundance Always.

What to Look Into in Unit Trusts Investments?

2011-05-26T23:23:00.000+08:00

The Golden Rule is to ask for the Prospectus. And READ it!

If you do not already know, Unit Trust Fund Investment is a medium to long term investment with relatively medium risk.

What to look into in the Prospectus?

1. Investment Objective.

2. Investment Strategies.

3. Risk Factors:
   a) Market Risk
   b) Interest Rate Risk
   c) Liquidity Risk
   d) Credit Risk

4. Investor Profile.

5. Performance of the fund.

6. Fees and Charges.
   a) Sales Charges
   - Front-end
   - Back-end
   b) Repurchase/ Redemption
   c)Switching Fee
   d) Management Fee
   e) Other direct charges:
   i) Custodian/ Trustee Fee
   ii) Accounting Fee
   iii) Legal Fee
   iv) Auditor Fee
   v) Taxes

7. Restrictions.
   (eg: Do you hold the ultimate decision as to when and the price to sell when you want to? Some investment decisions are done collectively, on a majority rule, where you minor sharing will not grant you the ultimate decision call.)

For the profits you made, how much of its fair portion was consumed by the Fees and Charges? Are you aware of the real costs of your investments?

Be a wise investor. Prompt and probe the right questions before you invest.

The above key terms do not serve to explain to you but as guidelines for you to prompt your investment agents or brokers.

Time Value of Money - Rule 72

2011-05-26T11:26:00.000+08:00

Ever heard of Time Value of Money?

Do you know the impact of inflation on your monetary value?

Question of The Day: How much is my money worth in the days to come?

The simple rule of calculating your monetary worth in the years to come is to divide 72 by the annual inflation rate estimated. That will be the estimated number of years it takes for your monetary value to depreciate to half of its current value.

For example,

Given today (year 2011) I have RM100,000 in my accounts and the estimated inflation is 6% per annum. How long does it take for my monetary value to be halved? How much money do I need to have in a future year in order to live comfortably as the lifestyle of a millionaire today?

Answer:

72 / 6 = 12 years. Therefore, in 12 years from today, your monetary value will be halved. Meaning, in year 2023 (2011 + 12), your RM100,000 will be worth as much as RM50,000 today's worth, provided inflation rate is 6% annually as estimated.

In order to live like a millionaire in year 2023, you will need to accumulate millions by then. But, do you have any ideas what your retirement figures are ? Continue to follow our blog and we will lead you to the answer.

Consistent and disciplined savings throughout your prime days is the key to your future retirement with dignity.

What is dignity to you?

Misconceptions about Medical Insurance / Medical Card

2011-04-29T23:20:00.005+08:00

This post is especially important for first time medical insurance consumers. It is intended to cultivate informed and wise insurance consumer.

Question of the Day: Is medical insurance a blood sucker or a blood donor?

1. Does Medical Insurance cover all medical related bills including out-patient treatment or clinical charges?

Medical insurance does not cover ALL medical related bills.

To understand this, medical insurance covers generally 2 types of medical benefits:
a) Hospitalization and Surgery,
b) Hospital Benefits.

If you noticed, the term "hospital" does not include clinics. Therefore, you will not be covered for petty clinical charges as and when you visit your panel clinics. Those are usually covered under Group Policies if provided, which will be an extra benefit from your current employer. They usually cap at RM30 - RM50 per visit.

Also medical insurance only covers your medical bills when you are admitted into hospital for at least 6 hours. The 6 hours minimum counts from treatment time, it does not include waiting time. Some insurance companies require you to overnight in the hospital in order to be reimbursed. (Hospitalization and Surgery)

The Hospital Benefit is an extra allowance paid to you per day of admitting into hospital, usually RM100 - RM200 per day, which is applicable only if you opted for the particular benefit during purchase of your contract.

If you are looking at large amount of lump sum allowance to be received upon diagnosis of critical illnesses. You should be opting for Critical Illness packages, where upon diagnosis of the specified illnesses, like stroke, heart attack, kidney failure or cancer related, you will receive the large amount of money compensation as a financial relief to you or your family members.

However, depending on the medical insurance package you signed up for, you will be entitled different rooms. Therefore if you are a person who is particular about staying in single bed rooms, you are advised to sign up for the medical insurance package with Room & Board rates above RM250 per day. Nevertheless, this does not ensure you will definitely receive first class services from the specialists depending on availability at the hospital at that moment. Your premium paid for medical insurance does not make you a king, but just as an alternative entry ticket to getting needed medical attention. Imagine getting rejected upfront because you do not possess a credit card, ATM card with sufficient balance or cash deposits to even see the doctors! With the medical card, you can be assured you get assess to the medical facilities available in this country.

In general, as long as your medical admission is genuine and necessary, your medical bill will be covered and claimable. The insurance companies are facing especially in Asia consumers that the people like to abuse conveniences given to them, thus complicating the process of having to decipher between necessary medical attention and uncalled-for additional expenses. Also there are situations certain parties took advantage of the claims benefits and inflated amounts of claims for both profit reasons and abuse. You might want to take note that Insurance Companies are not charitable organizations. For medical cards that can cost any individual as little as less than RM1000 per annum, which can easily cost insurers a RM3000 bill over a fever admittance to hospital for 2 to 3 days; if you were the business owner, is the business even viable? Therefore claims had to be scrutinized closely by special units of medical claim departments that work 24-7.

2. Is there a minimum or maximum bill amount to qualify for medical bill reimbursements?

There is usually a ceiling/ cap to your hospitalization bills per annum. However there is usually no minimum amount to claim, as long as you have a medical letters, receipts from your treating doctor. It is usually around RM100,000 or more limit per year.

However if you are not admitted into the hospital, for instance when you opt to undergo certain extensive medical examination on your own initiative, your bills may not be covered. It will be good for you to obtain a medical referral letter prior to the extensive examination if you wish to get your bills covered by your insurer.

Some insurers offer NO LIFETIME LIMIT which is a considerably good deal because as you age, you will definitely require more medical attention and that's when you do not wish your insurers deny you the attention due to limits imposed.

3. What other things should I take note of for a medical insurance?
Renewability : There are medical insurance offered either by a general insurance company and life insurance company. Area to take note is to find out whether the medical insurance package is guaranteed renewal or renew on year on year basis subject to your medical conditions.

Post treatment cover: This is important because patients are usually required to have follow up appointments with the physician and it can drag on to a month or more later. This facility/ benefit provided will entitle the insured to be covered for all other follow up bills provided it is within the post treatment timeline which can range around 3 to 4 months.

Co-insurance arrangement: Since 2006, Bank Negara has regulated the insurance industry to include a co-insurance arrangement with the insureds to share the cost of 90:10. However depending on different insurers, some offers to share the medical payments as early as your first medical bill claim, whereas some opt to share the cost after certain claim amount is utilized, with a maximum cap to what the insureds will have to pay.

Other benefits to note include:
- daily guardian benefits,
- emergency accidental outpatient treatment,
- emergency evacuation benefit,
- home nursing care,
- whole family coverage, etc.

In a nutshell, medical insurance is not a luxury but a necessity, which in many developed nations and even developing nations had been regulated by the governments that all citizens to be covered. Malaysian current coverage is merely at 40%.

There's a saying that man spends his lifetime accumulating his wealth at the expense of his health and only to use his wealth to regain his health. Have you taken care of your health and welfare while you are still entitled to medical insurance?

One important point to remember is the pre-existing conditions. It is the medical conditions a person already has before he sign up for the medical insurance. Hence, this pre-existing medical conditions are usually not covered. Therefore it is advisable that you obtain a reasonable medical coverage for yourself while you are still healthy. You can opt for a level premium whole life medical plan that does not progressively increase it's premiums as you age. Whether it is a worthwhile investment you will be able to deduce it with simple logic. As a matter of fact, Malaysian Medical Inflation is at a steep rate of 12% per annum!

Also, there have been many instances where insureds complained about insurers that the claims were not approved. As long as medical treatments are necessary and genuine, even if the hospitals are not under insurer's panel, you are entitled a claim. Failure to which not attended to, you may bring forward your matters and to lodge a complaint with Financial Medical Bureau (FMB).

Wishing you health from,

Post by Christopher Shee

Treatment Costs for Cancers in Malaysia 2010/ 2011

2011-04-28T00:23:00.000+08:00

Question of The Day: Are you prepared to hedge against your Rising Medical Bills?

Everybody has always been working harder and harder day by day for accumulation of a fortune. Sometimes to an extend they forgot true fortune is to be able to wake up every morning knowing that you are still alive and still capable of aspiring.

Perhaps misfortune had not knocked your doors. But we all know they are lurking around the corners waiting for us to test us of our true nature and wills. In what ways do most misfortunes spell their presence? It could be the bills tagged to your very survival. When cancer sneaks its way into your ears by your respected doctors.

This post is not intended to create fear but to give a transparent view to you of the true costs of your health.

The following are the Treatment Costs of Some Common Cancers:

(in Ringgit Malaysia RM)

1. Cancer Breast from 18,000 - 395,000

2. Cancer Nasopharynx from 22,000 - 70,000

3. Cancer Colon from 25,000 - 85,000

4. Cancer Cervix/ Uterus/ Ovary from 20,000 - 60,000

5. Cancer Lung from 40,000 - 56,000

6. Cancer Rectum from 36,000 - 121,000

7. Cancer Stomach from 35,000

8. Hodgkin's Disease from 20,000 - 95,000

9. Leukemia from 35,000 - 85,000

10. Cancer Thyroid from 16,000 - 22,000

11. Cancer Pancreas from 35,000

12. Cancer Tongue from 45,000

13. Cancer Kidney/Ureter from 23,000 - 98,000

Liver transplant can go as high up as RM400,000!

Medical inflation in Malaysia is estimated at 12% per annum.

We'll discuss about the definition of cancer in another future post.

Sources for further study:

1. http://biz.thestar.com.my/news/story.asp?file=/2009/3/14/business/3456038&sec=business

2. http://www.horlic.com/high-medical-inflation-rate-caused-malaysians-have-insufficient-medical-insurance/

3. http://www.moh.gov.my/

4. http://www.wellnessvisit.com/

5. http://healtharticles.cz.cc/cost-effective-treatments-boosting-the-growth-of-malaysia-medical-tourism-sector/

6. http://www.malaysiameditravel.com/costsavings.html

Your Health is Your Wealth.

Posted by Christopher Shee

2010/ 2011 Malaysian Health Statistics by Ministry of Health Malaysia

2011-04-26T00:01:00.004+08:00

Do you know how many Malaysians are diagnosed with critical health and medical conditions in year 2010/ 2011?

What medical surgeons can do for you is to cure your physical and some mental sicknesses. But what they certainly can not do is to solve your financial illnesses. One especially caused by your deteriorating health conditions if not monitored and planned for wisely.

On average, 6,500 people died from car accidents on a yearly basis.

6 in every 100 Malaysians are diagnosed with Diabetic related diseases.

1 in every 10 Malaysians have Kidney related diseases.

1 in every 4 Malaysians faces the risk of any Cancer!

In every hour, there are 6 Malaysians are hit by Stroke!

Question of The Day: Are you ready to take care of your health?

While we strive to take care of your wealth, your health is in your own hands, not your doctors'.

Sources from:
Ministry of Health Malaysia

Posted by Christopher Shee

Do You Know How Many Insurance Companies Are There In Malaysia?

2011-04-19T19:17:00.000+08:00

You'll be SHOCKED!!!

There are a total of 53 of them!

Did it cross your mind why are there more insurers than banking institutions in Malaysia?

They are consist of 17 Life Insurance Companies registered under Life Insurance Association Malaysia (LIAM) and 36 registered under Perbadanan Insurans Am Malaysia (PIAM) including pure general insurance companies, general and life insurance companies and reinsurance companies.

They are as follows in alphabetical order.

17 Life Insurers Registered with LIAM (1966):
1. Allianz Life Insurance Malaysia Bhd
2. AmLife Insurance Bhd
3. American International Assurance Bhd
4. AXA AFFIN Life Insurance Bhd
5. CIMB Aviva Assurance Bhd
6. Etiqa Insurance Bhd
7. Great Eastern Life Assurance (Malaysia) Bhd
8. Hannover Life Re, Malaysian Branch
9. Hong Leong Assurance Bhd
10. ING Insurance Bhd
11. Malaysian Assurance Alliance Bhd
12. Malaysian Life Reinsurance Group Bhd
13. Manulife Insurance Bhd
14. MCIS ZURICH Insurance Bhd
15. Prudential Assurance Malaysia Bhd
16. Tokio Marine Life Insurance Malaysia Bhd
17. Uni.Asia Life Assurance Bhd

36 General, Life & General and Reinsurance Companies Registered under PIAM (1979):
The 20 General Insurers are:
1. ACE Synergy Insurance Berhad
2. Allianz General Insurance Company (Malaysia) Berhad
3. AXA Affin General Insurance Berhad
4. Berjaya Sompo Insurance Berhad
5. BH Insurance (M) Bhd
6. Chartis Malaysia Insurance Berhad
7. Jerneh Insurance Bhd
8. Kurnia Insurans (Malaysia) Berhad
9. Lonpac Insurance Berhad
10. MSIG Insurance (Malaysia) Bhd
11. MUI Continental Insurance Berhad
12. Multi-Purpose Insurans Bhd
13. Oriental Capital Assurance Berhad
14. Pacific & Orient Insurance Co. Berhad
15. Progressive Insurance Bhd
16. QBE Insurance (Malaysia) Berhad
17. RHB Insurance Berhad
18. Tokio Marine Insurans (Malaysia) Berhad
19. The Pacific Insurance Berhad
20. Uni.Asia General Insurance Berhad

The 10 General & Life Insurers:
1. American International Assurance Bhd
2. AmG Insurance Berhad
3. Etiqa Insurance Berhad
4. Hong Leong Assurance Bhd
5. ING Insurance Berhad
6. Malaysian Assurance Alliance Berhad
7. MCIS Zurich Insurance Bhd
8. Overseas Assurance Corp. (Malaysia) Berhad
9. Prudential Assurance Malaysia Berhad
10. Tahan Insurance Malaysia Berhad

The 6 Reinsurers:
1. Asia Capital Reinsurance Malaysia Sdn. Bhd
2. Hannover Rueckversicherung AG
3. Malaysian Reinsurance Berhad
4. Munchener Ruckversicherungs-Gesellschaft
5. Swiss Reinsurance Company
6. The Toa Reinsurance Co.

Sources from:
1. LIAM Official Portal
2. PIAM Official Portal

So the question is, have you covered yourself even minimally with any of your trusted insurers and know what does your insurance cover ?

Posted by Christopher Shee

How Do You Identify "Get-Rich-Quick" Schemes/ SCAMS from The Genuine Ones?

2011-04-18T23:40:00.000+08:00

Question of the Day: How do you protect yourself from Scams?

A list of 7 precautions are compiled by Bank Negara Malaysia to share with you:
1. If it sounds too good to be true, it's potentially a scam!
   (eg: Risk-free high returns for small investments, unrealistic returns in no time, etc.)

2. Deal only with licensed financial institutions and authorised dealers.
   (eg: Refer to Bank Negara Malaysian's list of licensed companies)
   Do notice the governance from these 2 acts, Banking and Financial Institutions Act 1989 (BAFIA) or
   Exchange Control Act 1953 (ECA).

3. Check with the relevant authority before investing.
   (A good rule would be to contact Unit Penyiasatan Khas BNM at the following lines:
   1300-88-LINK (1300-88-5465)
   03-2691 5090/ 2698 4163/ 2691 0824/ 2692 6482/ 2698 2810/ 2694 2143)

4. Don't be pressured or rushed to invest.

5. Be extra careful with investments over the Internet.

Random email job offer, money offer, gift claims, money transfer, lottery, immediate money making, foreign listing sales, identity theft, charity scams, etc. Do research before you engage into any internet investments.

Check out:
Kampung Investor for local scams and Hotscams for international scams.

6. Be skeptical of any investment opportunity that is not in writing.

Does this look familiar to you? And yet people still fall prey to conman. Simply because we are eager to get rich fast and not willing to work hard. Greed.

7. In case an investment has been made, keep copies of all the investment(s) and communications.

As always, wisdom to you by

Looking for Banking Products or Services?

2011-04-16T19:16:00.001+08:00

Looking for banking products or services? You might want to know how many banks there are in Malaysia first to have a rough idea of the depth of your research for product comparisons. After all, are you seeking best value for money?

Question of The Day: Do you know how many licensed banking institutions are there in Malaysia?

Here are the registered list of commercial banks in Malaysia. They are consist of 9 domestic commercial banks and 14 foreign commercial banks as of 2011.

The 9 Domestic Commercial Banks:
1. Affin Bank Berhad
2. Alliance Bank Msia Bhd
3. Ambank Berhad
4. CIMB Bank Berhad
5. EON Bank Berhad
6. Hong Leong Bank Berhad
7. Malayan Banking Berhad
8. Public Bank Berhad
9. RHB Bank Berhad

The 14 Foreign Commercial Banks:
1. Bangkok Bank Berhad
2. Bank of America Msia Bhd
3. Bank of China (Msia) Bhd
4. Bank of Tokyo-Mitsubishi UFJ (Malaysia) Bhd
5. Citibank Berhad
6. Deutsche Bank (Malaysia) Berhad
7. HSBC Bank Malaysia Berhad
8. Industrial and Commercial Bank of China (Malaysia) Berhad
9. J.P. Morgan Chase Bank Berhad
10. OCBC Bank (Malaysia) Berhad
11. Standard Chartered Bank Malaysia Berhad
12. The Bank of Nova Scotia Berhad
13. The Royal Bank of Scotland Berhad
14. United Overseas Bank (Malaysia) Berhad

To considerably evaluate and compare the products and services offered by all the above banks will be impossible for any consumer. Even comparing similar category of products offered by 2 to 3 banks can be time consuming and might even require professional advices just to understand some fine prints or technical differences.

Let us give you an example, a commercial bank advertised to offer savings account with savings rate of
5% / annum. (This is considered reasonably high as the typical savings rate is hovering at 1-2%/annum)

Guess what, a further check reveal that the 5%/annum savings rate is offered for 3 months only, this means the depositor will get (3/12) x 5%/ annum = 1.25%/annum. So, at the end of the day, the depositor is getting the average saving rate offered by most banks!

Alternatively, you may have the option to consider finding a reliable 3rd party financial services consultant with considerable banking experiences to offer you some advices.

Source from:
Bank Negara Malaysia List of Licensed Banking Institutions in Malaysia.

Our Wisdom, Your Wealth

Posted by Christopher Shee

Hidden Investments Rules- Are You Aware ?

2011-03-29T23:55:00.004+08:00

It comes as no surprise that after awhile of staying under employment or in business, you started thinking about stocks, unit trusts, Forex, money markets, properties, commodities trading or mutual funds. Why? Simple. Money is never enough. But how much do you know about investments to guarantee yourself that you can make money out of it? How sure are you that you won't lose money by investing?

Question of the day: What should I know about Investments to get myself on the right track of money making?

Rule #1:
Do you know that in stock market, there's a 10:70:20 Rule?

What is 10:70:20 Rule?

Out of 100 people who invest in the stock market, 10 people make profits , 70 people lose money while 20 people just breakeven regardless of how long that takes.

Is this figure alarming? Does it now tell you why you should be actively engaged when you seriously want to make money out of your investments?

Rule #2:
Never buy stocks and hold for a lifetime. Since 1997 and 2001, it is proven that buying stocks and holding for a lifetime can even lose your capital.

Rule of Thumb: Hold a maximum of 10 years then sell depending on the circumstances.

Rule #3:
Cash is King. Your stocks will only be paper profit or paper loss unless you cash it.

Rule #4:
Don't aim for short term value. Aim for units. It is the number of units you hold or own that decides who you are and what you can potentially make.

Rule #5:
Low Risk High Return does exist. But you have to actively look for it. The LRHR proposal only exist to 2 types of people. The first is those who work hard and work smart actively searching for the money making avenues. Be a trained financial adviser in financial services could be one of the option. The second is the Opportunists who seek to make easy money with little or no means of creating values.

Rule #6:
The most profitable Investment is the investment on yourself.
Allocate 5-10% of your yearly income on training courses. Investment to make yourself better and smarter will never go wrong.

In Prajna Advisors, we believe that working hard and then working smart are the prerequisites to wealth creation. We subscribe to relationship building and informed decision making for our clients through our ethical consultative approach.

Money does exist out of thin air. But the question is, are you a Money Magnet?

Here's a picture worth sharing. Hopefully it inspires you to reevaluate your money prioritization.

Message from the owner of the picture: "I have money.. But what do I do with it?"

Posted by Christopher Shee

Do I Need to Buy a Life Insurance Protection?

2011-03-24T00:06:00.000+08:00


Question of the Day: What values do you intend to get and what price are you willing to pay?

Dear All, in case you were not aware. Insurance industry started in 1706 in the Great Britain serving the marine industry. It was a goodwill effort proposed by the shipping people to minimize the losses they suffered in the sea. It was through the concept of sharing the risk of the few unfortunate by the mass fortunate that created Insurance.

Today Insurance industry is still in existence. And if you were to question, it is here to stay and it is ever prominent! Why? We'll let you do the thinking yourself.


2011 Japanese Tsunami, Earthquake and Nuclear Plant Explosion Incident: Do you really believe you have a say or control over your life and death?


2010 China Earthquake remains.

2004 Indonesian Tsunami aftermath.

2001 911 Incident and the after effects in both the States and World Economy.

The innumerous coach accidents in Malaysia over the years, specially highlighted in the recent 2010 and 2011.

Has any of the above unfortunate events been preplanned by the victims?

Have control procedures and safety precaution measures not been reasonably taken?

Lost of lives can not be reversed no matter how much we wish to.

But imagine if you are the ones who survived with the lost of your loved ones. The burden does not stop with the lost of someone you treasure. Reality proved to us that financial burden is the next huge burden that can haunt your loved ones when the least expected happens to you. Have you done the necessary little commitments to secure your loved ones and yourself?

You do not need insurance if you believe responsibility is not what you stand for.

On the other hand, prudent business people who plan wisely to manage their risks will see these impacts and sail through most of the economic turmoil.

A lovely family portrait obtained from Google Images. If you don't stand for something, you will fall for anything.

Love from,

Posted by Christopher Shee

Aftermath of 2011 Japanese Tsunami and Earthquake - Will It Impact Our Personal Wealth?

2011-03-17T15:58:00.000+08:00

Mother nature has once again thrown us a big wave of shocks. Is it time for us to reevaluate our daily actions and options in life? Question of the day: Are we prepared for another blow?

A recap over the series of blows from the 2001 Terrorist Attack against United States, 2004 Indonesian Tsunami, 2010 China Earthquake, and the recent 2011 Japanese Tsunami, Earthquake and Nuclear Powerplant Explosion. Have we noticed the chain effects following these major disasters?

Prayers and donations aside, as much as we are concern about our counterparts in Japan at the moment, what we believe is the wisest thing to do now is to give Japan time, confidence and the support they need to revive and not offer unasked-for advices and expertise as we believe in their supreme leadership and superior management abilities.

Therefore, the objective of this post is not to quantify the losses, not to spread news, not to offer solutions, not to offer condolences, and also not to take advantage or to stand out amidst their crisis.

It has always been wisdom from centuries that while families were lost and relief efforts were carried out, businesses and human survival spirit move on and remain strong.

We believe Japan is able to contain the disaster and with the assistance of United States and the expertise from other powerful nations, relief efforts and revival of the Empire of The Sun will regain momentum faster than we can imagine.

Hence the question: Will Japan run into an economical tsunami and will it affect our wealth?

We believe you know the answer. Economical sentiments are created by human speculations. Positive faith and goodwill from us all will create unimaginable immunity to the country's presently much needed economic confidence. Provided most investors (especially big time investors) do not intend to take advantage of the current economical tsunami experienced by the Japanese, but willing to absorb the containable sunk in earnings for the greater benefit. Of course donations will be a great form of support too.

If you wish to find out professional advice to sail through the current 2011 economical tsunami in Japanese stocks, we would recommend you check out this short clip from Bloomberg Business News:
Bloomberg Taking Stock: Japan After The Quake Impact on The Markets

We earnestly wish Japan the best of support and confidence in the next 5 years of recovery.

(Disclaimer: The above comment is solely of Prajna Advisors opinion. While we remain unbiased with our comment, any inaccurate predictions, if any, are unintentional.)

Posted by Christopher Shee

Investment Rule 101

2011-03-15T23:08:00.002+08:00

Question of the day: Do you find any common traits between you and Warren Buffet?

After the Top 10 reasons why people get insurance cover, now we move on to a next hot topic- Investment.

Do you know what investment really is?

To many with minimal finance knowledge, investment means making the most money with the least money (capital) in hand in the shortest time possible. There's nothing wrong with that. In fact, it is ideal and probably the best proposal ever!

But is it true that such proposals exist in thin air? Does money come jumping in front of your face or falling from the sky?

There is a statement (amended version) put simply which we find particularly meaningful to explain this phenomenon or belief of free money:

"If there is such ideal formula to make money out of thin air, you'll be so crazy over the idea of making money that you will DIE almost instantly!"

So, what is Investment in essence?

Quoted from Wikipedia's definition:

"Investment is putting money into something with the expectation of profit. More specifically, investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, dividends, or appreciation of the value of the instrument (capital gains).^[1] It is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance no matter for households, firms, or governments. An investment involves the choice by an individual or an organization, such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility of generating returns over a period of time.^[2]
Investment comes with the risk of the loss of the principal sum. The investment that has not been thoroughly analyzed can be highly risky with respect to the investment owner because the possibility of losing money is not within the owner's control. The difference between speculation and investment can be subtle. It depends on the investment owner's mind whether the purpose is for lending the resource to someone else for economic purpose or not.^[3]"

We would like to highlight few key points from the above definition in our financial advisors' terms:

outlay of money,
expectation of profit,
assumption of risks (potential loss of principal sum),
returns in the form of interests, dividends, and capital appreciation,
related to savings or deferred consumption,
in ways of business management and finance,
investment vehicle/ instrument/ assets such as:

property,
stocks, mutual funds
commodity,
bonds,
futures or options, and
FOREX,

over a period of time (duration: short or long term)
purpose of lending resource: Is it for economic purpose?
fine line between investment and speculation.

We are not here to judge on your behalf if your investment is prudent or wise. Just a series of highlights we wish you are clear about before you consider yourself a prudent investor who has taken into consideration most of the necessary calculated risks.

But then again, a fully cost-effective investment proposal is not necessary and not viable because that does not justify the potential rewards in return if you are not a big player.

A wise Income allocation model recommended by mainstream financial advisors would be the

60:20:20 Rule.

60% of your annual income goes to daily expenses,,leisure, tax, loan repayments
20% for short term savings, children education and insurance
the remaining 20% is for long term savings and investments which includes planning for retirement savings.

Does this quote sound more like investment wisdom or investment winning formula to you?

Some investment quotes to note a few. Sourced from Google Images.

We'll introduce another investment theory 10:20:70 Rule in the near future. To get the latest updates, you can subscribe via email if you find what you learn here useful.

To conclude with, we hereby give you an additional quote from the famous Thomas Moore on luck:

"Care and diligence bring luck." - Thomas Fuller

Posted by Christopher Shee

Top 10 reasons why people buy insurance ?

2011-03-14T22:43:00.002+08:00

Hi again to our loyal readers! We are excited watching our traffic grow in this short period of time, special thanks to you all for the support. We hope prajna (wisdom) guides us well in adding financial values to you. Today we will touch on the bread and butter of Insurance Companies.

Not interested to learn about Insurance? Don't worry, We are not here to brainwash you. After all we are pretty sure you have considerable confidence in your ability to read in between the lines, don't you?

Question of The Day: A life is precious when it is first born, but how far will you go to preserve and protect it from the risks it is abound to face?

For academic study of the concept of insurance: insurance is related to the pooling of common risks faced by the general people (the insureds) and transferring them (the risks) to the insurer by way of paying a fee called premium.

So, in essence, insurance is a contract of time and money! It is a contract that guarantees some sum of money payout by the insurer in the circumstances the insureds meet or suffer from a covered event, such as death, disability, illness etc.

Compiled from international best seller book on 55 Reasons Why People Buy Life Insurance by Dr. Andrew Goh, here are the "top nominees":

For protection against loss of income (Death and Total Permanent Disability)
A form of Forced Savings (Endowment Plans)
Creation of an Immediate Estate (Sum Assured)
Medical and Hospitalisation (Critical Illnesses)
Provision for Children Education (Endowment Plans)
Provision for Retirement Fund
Mortgage Loan Cancellation
Business Continuation
Wealth Creation for Next Generation (You might have lived poor, but to some, dying rich means legacy taken cared of)
Tax Advantage
Insurance witnessed at Work
Spread the Risks
Trust Fund/ Trust Account

We have given you 3 extra reasons for taking the time to read. If you wish to learn more, don't hesitate to find out the book 55 Reasons Why People Buy Life Insurance.

Sickness and death is not your worst nightmare, your worst nightmare is to know that the ones who depended on you and loved you most is left to suffer because of your lack of wise planning.

Posted by Christopher Shee

Beware of Insurance sales SCAM !

2011-03-11T11:27:00.005+08:00

Is Insurance a SCAM ???

Question of the Day: Is insurance really a scam? Or are the selected few faulty practitioners the ones to blame?

We are sure this question will raise the eyebrows of many practitioners.

To summarize, the following are some of the feedback of the experiences with THE SALES SCAMS / METHODOLOGY encountered by some people:

The agent/ salesman probably does not know what he or she is selling except a concept or wordtrack he or she memorizes. (UNPROFESSIONAL)
The agent/ salesman is typically good at inflating the values of what he or she proposes to sell. And this issue is magnified when the agent is either unaware of the real hidden costs (INEXPERIENCED/ IGNORANT) or he/ she is trying to deceive you to buy into only the goods and ignore the costs. Typical of (UNETHICAL) sales people.
The agent/ salesman is just plain too suave in magnifying the problems tied to not owning the products or services he/ she proposes that it added insecurity and fear in us. (IMPERSONAL)
The agent/ salesman can be downright annoying because the fact is they are actually quite right in some facts they shared! BUT most people don't need an outsider whom they haven't trusted to tell how miserable are their planning for the "What If's" and future uncertainties or backup plans for worst case scenarios! They probably lack the simple wisdom to understand that a trust relationship has to be nurtured over time, not always created instantly. (UNWISE/ IMPATIENT/ INEXPERIENCED/ NOT RELATIONSHIP CONSCIOUS)
The agent/ salesman does not respect your stand when you say you are not free or not interested to listen at the moment. But please understand that customers are NOT ALWAYS RIGHT. I presume if you'd been in customer service line, desk front or sales, you will understand how this feels. Every distasteful experience transmits. Please do understand how often a salesman has to entertain clients at his or her own psychological/ emotional expense. (DISRESPECTFUL)
The agent or salesman is not fit to carry out the service! Insurance and Financial Planning is NOT an easy ABC business anybody with no experience and no pertinent professional qualification can do! Let's be honest about it. Will you allow somebody who knows little about finances and personal money planning to deal with your hard earned money proposing that he or she can help you make more money or cash values out of it? Come on! Isn't that simple logic? (LACK CONTINUOUS PROFESSIONAL DEVELOPMENT/ COMPETENT QUALIFICATIONS)
The agent/ salesman is not even trustworthy! He/ she cheats and lies just to get to the end of the deal. Once the deal is signed and cash received, he or she disappears and probably is untraceable. What do you not heard of the number of insurance agents who few years down the road when you called, informs you he or she is no longer in the business? (LACK CUSTOMER RELATIONSHIP BUILDING/ SUSTAINABILITY)
Finally, integrity! How many agents/ salespeople have values and principles that money cannot buy? How many of them have integrity and earns themselves integrity and nobleness? But please do understand that many salespeople live/ earn/ survive based on sales commission, when their survival is made or lost based solely on the sales, it is understandable that they might compromise their values. After all in today's modern world, you can survive easier with money and without principles but not with principles and no money. Think. (LACK INTEGRITY)

Nevertheless, having said that, we must agree that there are always yin and yang (positive and negative) side of the sales methodology. We have witnessed sales agents who adopted a professional sales approach are successful in the industry because clients keep refer new businesses to them !

In Prajna, where the principle of wisdom is constantly reinforced, we always proactively looking for better ways or better SOLUTIONS. Therefore the following is our compilation of key words to stir minds toward positive changes.

   1. Wisdom (Experience/ Patience/ Understanding)
   2. Trustworthiness/ Honesty
   3.  Relationship Building (Personalized Consultant-Client Experience)
   4. Ethics
   5. Professionalism
   6. Respect Earned
   7. Continuous Professional Developments/ Learning/ Professional Qualifications
   8. Integrity

Once again, specially researched for you by Prajna Advisors (Asia) Sdn Bhd.

"Thinking is the hardest work there is, which is probably the reason why so few engage in it." - Henry Ford.

Posted by Christopher Shee

Want to Invest or Buy A Property? Wait!!!

2011-03-09T23:02:00.000+08:00

Courtesy of Han's question for us, "What should I be aware of before i buy a property?"; we decided to post our 2 cents.

A little research on the topic tells us property investing is all about location, location, and location. Not to forget timing! That makes two key rules: Location and Timing!

However, rest aside the idea of how much you can potentially make through the right property invested at the right buy and the right sell; personally I was once convinced the ideal formula of:

"Purchase 3 right commercial properties, hold for 2 years until 40% capital increase, sell 2 and move on applying the same formula to the upcoming commercial properties you are looking at next." - courtesy of Genesis Jewels Sdn Bhd.

You can read further on that on this blog post.

Question of the Day: Is real property investing as simple as a Monopoly Game?

Here's what Financial Planners will advice you to consider before committing into any property buy or investment.

Will investing in property affect my pockets?

No worries people. We are not here to scare you or sabotage any property agencies. Peace and common wealth is sought here. The following list is just some aspects of worst case scenario to consider:

The ongoing search for tenant.
Potential late payment for rental.
Property damage caused by ruthless tenants.
Potential tenant complaints to entertain.
Broker commission.
Miscellaneous expenses.
Service fees.
Mortgage insurance.
Sinking Fund.
Assessment fee.
Maintenance and repair needs.
The search for the right buyer.
Lawyer fee.
Stamping fee.
Real property gain tax.
The uncertainty of property price bubble.

Is the list exhaustive? Does any of the above concerns really matter? At the end of the day, we all seek comfort of homes and more cash to spend, don't we? Investment is a choice. The only question is, had you taken the necessary steps to assume the calculated risk?


Arguably a house is made of money. The question is, if you intend to take it for investment purpose, are you making money or losing money out of it?

As always, Prajna Advisors wishes you prosperity and wisdom in your pursuit of wealth. =)

Posted by Christopher Shee

Disclaimer: Prajna Advisors is a financial planning and financial services company, not a property hub. Our stand is based on the perspective of financial planning (solely from Prajna Advisors) and strictly not reflective of any property expert.

Health is Wealth too !

2011-03-08T18:51:00.000+08:00

Be mindful dear visitors, you might find this ridiculous that today we discuss on health when our blog should focus on personal finance and money matters.

Let us tell you why.

Question of The Day: What is money if you have no health and wellness of living?

Wealth means nothing to you if you don't have health.

Wealth is meant to give you prosperity in life, and so does pure happiness, love, social support, abundance of all sorts and play!

We have witnessed many people who had a lot of money but tied down to commitments, commitments and commitments! Pressure, stress and probably unrealistic goals! And instead of becoming Master of their personal life goals , they become the Slave of company wide goals! Probably just for the exchange of more money!

So is money important ? Yes indeed it is. Because we probably can't live comfortably without money in today's materialistic world. And it might take plenty more years for people to reconsider the value of money as compared to the value of life on itself especially in booming Asia.

The key words are in Health and Wellness: Access to Wellbeing.

Check out: http://issues.tigweb.org/health?gclid=CPK_iOf5vacCFQd66wodEmCJXA

Let us summarize what we gathered.

"The World Health Organization (WHO) defines health as a state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity. Eating right, exercising, and sleeping well play an equal role in the prevention of infections and diseases. However, a good sense of self, a loving support network, and the potential for continued personal growth is also important to our overall wellbeing."

Let's be honest to acknowledge that there are a lot of uncontrollable factors that influence our health status: eg genetic, environmental and something else entirely.

However according to WHO, we can improve our overall health through both traditional and modern medicines when we are ill.

You should count your blessings in that as a Malaysian at least you have proximate access to some hospitals (if you can afford the extravagantly expensive treatment in private hospitals, or take queue for the government funded general hospitals.), at least some basic public transportation (buses, taxis, light rail transit etc), some green parks still available even in the KL city and lastly some form of social support systems for the poor and underprivileged..

So here you go, from the report of Canada and WHO's 2002 Social Determinants of Health Across Life Span, below are the top 10 controllable determinants of people's health:

early life,
education,
employment and working conditions,
food security,
health services,
housing,
income and income distribution,
social in/exclusion,
social safety net (voluntary or community sector contributions)
unemployment and job security.

Again quoted from http://issues.tigweb.org/health?gclid=CPK_iOf5vacCFQd66wodEmCJXA,

"Sustainable health and wellness is not only part of our survival but it is also a continuously rewarding way to live out our entire lives."

If you ask us what else should be looked into for health and wellbeing, personally we will suggest the following Top 10:

your beloved family,
slow down your life and reach out to see and feel others' lives,
yoga,
taichi,
any other healing therapies you are currently practicing (eg Prana Healing, Massages, Aerobics, etc),
religious gatherings that promote sharing, social support, love and peace; not superiority and social exclusion,
give back no matter how rich or poor you are (remember, you don't have to be a millionaire in order to give, you have many other ways to give apart from money. Time spent and effort to reach out is worth 100 times more than the monetary worth, probably not quantifiable by any currency in the world.)
smile or laugh heartily,
make someone else smile or laugh heartily today,
hold a child's hand today, squat to his or her tiny-sized height and squeeze your adult brain to his arguably peanut-sized brain but ingenuous baby heart to associate with his or her feelings. You'll see miracles we guarantee you. =)

Wishing you Happiness, Abundance and Healthy always !

Remember, Health is Wealth too !

Christopher Shee

Let’s Assess Your Financial Health! – Personal Balance Sheet/ Financial Self Assessment.

2011-03-03T23:53:00.001+08:00

As we promised to you last round, here's how you can check your Actual Net Worth.

Let's be honest about this, it is definitely not easy to figure out all your assets and liabilities! You might not even know what you have!

(In case you are not aware, assets are what you OWN, and liabilities are what you owe other people.)

As a tip, you might want to go through the following checklist first if you want an accurate view of your current financial status:

How much I have in my Fixed Deposits?
Do I have any Life Insurance policies and how much cash values I have in them at the moment?
How about my Unit Trusts? Mutual Funds? Stocks? Bonds?
How much is the current market values of my Properties (Lands/ Residential and Commercial Properties)?
How much had I accumulated for my Employee Provident Fund (EPF)?
Do I have any valuable jewelry or precious belongings that are worth some material cash values?
Do I have any other businesses that can be cashed out when I sell them?
How about my total unpaid loans or other liabilities?

Let's put it this way, you have either to figure it yourself and take all the hassle to face your financial reality and make positive changes consciously, or you can look up for Credit Counselling & Debt Management Agency(AKPK) or financial planners/advisers to steer you out of the Financial Trap. If you consider looking for one, you might want to consider finding a professional financial adviser that is wise, trustworthy and competent.

Below is a form we compiled for your Financial Self Assessment (in jpeg image format for your easy download usage).

For you exclusively and courtesy of Edmund, CEO Prajna Advisors (Asia) Sdn Bhd. =)

Fingers cross, let's hope you have a Positive Net Worth. ^_^

Question of the day: Which side of your Balance Sheet is heavier? Your Assets or your Liabilities?

Posted by Christopher Shee

Are You a Super Accumulator of Wealth?

2011-03-02T23:50:00.002+08:00

Let’s talk about your wealth status today.

Are you a Super Accumulator of Wealth?

First of all please do understand that the basis of this calculation takes into consideration a person’s age and current annual income.

Therefore this calculation of your wealth status works regardless of the huge or small paycheck you are earning, consistent with what you might be told before that how rich a person is not determined by how much he or she earns but how much he or she saves. Let’s not dwell into an argument of the importance of savings. We’ll leave that to another day, shall we?

Here’s the formula to calculate your Benchmark Net Worth or Target Net Worth:

Benchmark Net Worth = ( Age / 10 ) x Current Total Yearly Income

From this benchmark you can then calculate your Wealth Score using the formula below:

Wealth Score = Actual Net Worth / Benchmark Net Worth

There are 3 categories of Wealth Accumulators financial planners generally grade you into:

1. Under Accumulator of Wealth (UAW)

2. Average Accumulator of Wealth (AAW)

3. Super Accumulator of Wealth (SAW)

UAW is the result of your Wealth Score < 1.0

AAW is the result when your Wealth Score ranges from 1.0 - 2.0

SAW is the result of your Wealth Score > 2.0

So what’s your Wealth Score?

Have I gotten you worried or have I woken you up from your financial reality?

Congrats to those of you who achieved above 2. You deserve a pat on your shoulder. You have done a good job in accumulating wealth. Even some financial people are not aware of their own critical wealth status. Be mindful when you see financial planners who drive big cars and desperately imposing on you to purchase his or her plans for you, observe his options in life. A real rich person is one who has options to how he or she lives, not one that is tied up with little options and plenty obligations. Check out Rich Kid Poor Kid. Think.

Salary is not a reflection of your net worth, lifestyle is! Check out The New Frugality.

You might notice by now that the longer you saved, or the more years you have been in work, the higher the chances you’ll achieve the status of SAW. True. You have just gotten one step ahead of the rest by thinking.

And yes, if you are in your early twenties, before age 28, or more accurately defined as in your early stages of employment or business, you are likely to be rated UAW. No fret! That’s normal. It’s what we call process of life. People usually successfully accumulate their wealth in their 30’s to mid 50’s. It takes time for you to build your career from 20’s to mid 50’s.

As for those of you who outperformed your peers as an SAW especially in your 20’s, you deserve recognition award from your financial advisors. But please countercheck your Actual Net Worth value if it includes inheritance from your beloved parents.

Wealth Score = (Actual Net Worth – Inheritance)/Benchmark Net Worth

How do you calculate your Actual Net Worth?

That’s when you do your Personal Balance Sheet. We’ll discuss about your Personal Balance Sheet next round. If you like what you learned here, please do follow our updates. Thanks and good luck in accumulating your wealth! =)

Here's a money tree for you to envision your growth of fortune. Good luck~ =)

Reference from Millionaire Next Door.

Posted by Christopher Shee

4 Colours of Money

2011-03-01T23:26:00.000+08:00

Yes indeed we have impressed upon you that you will learn how to make more money in this blog, haven’t we?

How do you think you can make more money?

Can you make more money without first knowing about money itself?

So do you want to know the 4 basic colors of money we have to share with you?

Yes we know.. there are 5 colors of money in Malaysian Ringgit. Let us figure out again if there is the 5th color. ^_^ Anyhow RM1 is too small to mention at the moment. =)

Here you go:

Serious Money
Borrowed Money
Leveraged Money
Idle Money

What is serious money?

Serious money is the money or capital that you can’t afford to lose. This is the money you need in order to survive. According to Maslow’s Theory, that would mean for clothes, food, accommodation and transportation. But in financial term and especially for today’s modern world, that would pretty much mean also to include the money reserved for your education, medical needs and retirement.

What is borrowed money?

Borrowed money is the money you borrow in order to spend for current and future usage. The key word is present utility. For instance you take loan to buy your house and car. This is the money you borrowed which you do not look at return and you need to pay both the capital and interest.

What is leveraged money?

This is the key part where you should probably be looking at if you are serious about making more money in the shortest time possible. How do you think rich people get rich? Investment is the key word. This is the money people borrow to invest perhaps in stocks, shares, properties, commodities, FOREX or businesses of any kinds. This is where poor people with rich ideas can come about making their fortunes. But be mindful that high returns require high risk in general. Not everybody is risk taker. Evaluate your risk appetite before you consider taking huge loans for investments. Some people are more comfortable working decently hard to earn their solid paychecks because they feel more secured getting paid based on labor hours. Some on the other hand prefer risking losses to build or create potential future stream of passive income. Most wise people nowadays do both.

What is idle money?

Idle money is the money you keep idling in your savings account or Fixed Deposit account. They are not working for you. Why do we say so? Because generally the money you kept in these types of accounts earn you very low interest. Depending on your country’s inflation rate, in Malaysia the 2010 lifestyle inflation rate is 6-8%. So, is your money in your banking accounts making money or losing purchasing power for you in the future? Consider net present value of your money after discounting the impact from inflation. We’ll let you do the math yourself. However we are not discounting the fact that banks do offer you good rates of investments. You just have to be in a constant look out for the good deals. Be wary that good deals don’t usually come to you; you have to look for them. Idle money is the money that you can opt to use now, invest for higher returns or save for other future purposes. Remember, it is important to save for rainy days. But it is also important to have sufficient liquid cash to sustain your present lifestyle. The questions you should ponder upon should be:

1. Where should I save my money?

2. What is the purpose I save my money?

a. Retirement?

b. Protection?

c. Future planning?

i. Capital for business?

ii. Education planning?

iii. Medical needs?

iv. Travel?

d. Others? Such as?

3. Do I have a better alternative?

4. How do I balance my current lifestyle expenditure with future lifestyle expenditure needs (savings for future)?

5. Have do I ensure that my money work harder for me?

As always, the objective of our blog posts in Prajna Advisors is to inculcate thinking. Be wise, plan ahead for your personal finances or business finances wisely. As the saying goes; if you fail to plan, you are planning to fail. Think.

Posted by Christopher Shee

What is Financial Planning?

2011-02-18T17:39:00.000+08:00

There is very wide definition of financial planning.

First of all you have to know who the audience or client is. Is it an individual or family, or a business or a large organization?

Financial planning for individuals and family generally covers:

Understanding your financial goals,
Planning for life stages,
Wealth creation or passive income generation,
Expenses management,
Risk management or insurance,
Investments,
Tax planning,
Retirement planning,
Estate planning,
Budgeting,
Saving money,
Credit and debt management,
Real estate and mortgages,
Self-employment,
College savings and education planning,
Personal finances,
Other financial tools.

As for businesses or organizations, take personal or individual family financial planning and implement it in the macroeconomic scale. In such, you will have to assess the followings:

Assess the business environment [SWOT Analysis]
Confirm the business vision and objectives [Vision and Mission]
Identify the types of resources needed to achieve these objectives [Resources]
Quantify the amount of resource (labor, equipment, materials) [Assets and Human Capital]
Calculate the total cost of each type of resource [Liabilities and Costs]
Summarize the costs to create a budget [Budget]
Identify any risks and issues with the budget set [Risk Management, Audit and Corporate Insurance]

For detail information, you might want to engage professionals in respective areas for advices. Here we are just providing a guideline.

Blog sources from:

http://financialplan.about.com/

http://en.wikipedia.org/wiki/Financial_planning_%28business%29

Posted by Christopher Shee

What can you get from Prajna?

2011-02-18T09:22:00.143+08:00

As per our WISE model suggests, this is what you get:

Have you covered all about your personal money?

1. W – Wealth Resources and Network

Increase cash IN flow-assist you to build passive or multiple sources of income
Reduce cash OUT flow-assist you to restructure your expenses incurred on credit cards, mortgage loan or business loan

2. I – Investment for growth

Invest for the children education, retirement,

or other purpose

Unit trust/ shares
Properties
Investment-linked policies.
Commodities, gold
General advices on types of investments, the pros and cons and how can we add value to your investments

    3. S – Security for the Mind.
   Peace of mind against uncontrolled circumstances like diseases, disability,
   retrenchment, death.

What is comprehensive protection for yourself and your family?

Emergency Fund
Saving policies
Whole Life policies.
Term policies.
Takaful Insurance

This is now your house, what happens when you go?

4. E – Estate Planning for the Soul
Wealth transfer, or business succession to next of kin

Will, Trust
How to avoid Estate Shrinkage

Posted by Christopher Shee

Wealth Mathematics

2010-07-18T17:33:00.009+08:00

Question of the day: What is the key to your Wealth?

In the process of working with my clients on personal financial planning and business planning for the past 10 years, I have learned that there is ONE distinctive difference between an average person and a wealthy person, that is a wealthy person tends to have a strong business mindset and sharp perception towards wealth.

Let me illustrate by a simple example.

1 + 1 = ?

Many people will know the answer is > 2, because it is called a multiplier effect or synergy.

How about 10 - 1 then?

Is the answer 9 or 11?

The answer given by most people is that it should be less than 10. Let’s say if we have 10 dollars and we spent 1 dollar, aren’t we left with 9 dollar in our wallet?

But the answer should be 11 or more, this is the most interesting part about what I read and learnt.

In the mind of a wealthy person, for every 1 dollar he spent, he expects some form of return from it, it means if he spent 1 dollar, that 1 dollar should give some return and bring back another 1 dollar to him.

To sum up,

For an average person:

10 dollars - 1 dollar (spent as in expenses) = 9 dollars (I have 1 dollar less in my wallet)

For a wealthy person:

10 dollars - 1 dollar (spent as in investment) = 11 dollars (1 have made 1 dollar more)

Coincidentally, I was reading a book about ancient wisdom on wealth. I came across this gentleman by the name of Mr. Elber Siqiety. Indeed, what is mentioned in the book is the mindset of many wealthy people today, resulting in 15% of the world population controlling 85% of the wealth of resources. My highest tribute to him for his profound vision on wealth mathematics.

The Answer: Mindset.

Are you a thinker?

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2010-06-27T20:57:00.004+08:00

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