What is the difference between leasehold and freehold tenures?
When state land is disposed off by the state authority to an individual in perpetuity for an indefinite period, this land is now granted as freehold title.
When the state land is disposed of by the state authority to an individual for a term of years, by virtual of law, not exceeding 99 years, this land is now granted as leasehold title. Upon expiry of the period of the lease, the land should be reverted to the state authority.
The owner will then have to either apply for a renewal of the lease before its expiry or apply for a fresh alienation if the lease has expired. These will involve the payment of a hefty premium which would be close to buying the land all over again with perhaps some discount.
(1) Leasehold
(a) Land uses:
Lease duration usually 30, 60, 99 or 999 years.
Limited by purpose of lease and land legislation.
Stocking levels, cultivation, etc may be restricted by lease conditions.
Limited by environmental and town planning controls.
(b) Duty of care:
High level of duty of care defined in land legislation.
May be responsible for developing and maintaining improvements.
May be required to engage in property planning.
(c) Transferability, aggregation and subdivision:
Lease transfers require State or its equivalent's approval.
(d) Retrieval/resumption:
Powers to acquire leasehold interest or withhold land when lease expires.
(e) Security of tenure:
Varies according to lease type but forfeiture for non-performance may be possible.
(2) Freehold
(a) Land of uses:
Limited by environmental and town planning controls
(b) Duty of care:
Duty of care following common law and as required by some Environment Protection Acts or its equivalent.
(c) Transferability, aggregation and subdivision:
Few limitations on transfer.
Unlimited right to subdivide and aggregate subject to town planning controls.
(d) Retrieval/resumption:
Some powers to acquire land for public works.
(e) Security of tenure:
Very high level of security.
Wednesday, November 5, 2008
Thursday, October 23, 2008
Determining The Right Investment
Most smart investors put enough money in savings products to cover an emergency and invest the balance so as to maximise returns. To determine which investments are appropriate for you, you need to know how much money you can invest in depending on the current situation of your life.
You may want to consider the following factors as a guide to help you decide on the choice of investment.
Related Information
Managing your money
Lifecycle strategies
Planning your investment
Protecting investments
Goals and Needs
Your investment depends on your goals and needs for future investments. Do you wish to buy a house ? Do you want to plan for your children’s education or your retirement?
Age
Your age is important when deciding how much risk to assume. If you are young, you can invest in relatively riskier investments.
Income
Your income level influences the types of investments you can hold. If you earn more, you will have more money to invest.
Occupation
If your job provides a retirement plan for you, you may not need a separate retirement plan.
Wealth
The types of assets you hold would affect the level of risk that you are prepared to accept. Savings and fixed deposits are of the lowest risk while investing in bonds and equities are of higher risk.
Time Horizon
You need to choose the maturity of the assets you intend to invest in. When do you want to sell your assets?
Liquidity
Your need for funds in the future. If you need funds within the next 2-3 months, you may want to keep your funds in bank deposits which are most liquid as compared to bonds and unit trusts.
Tolerance for Risk
Assess you tolerance for risk to see how comfortable you are with market volatility.
Wednesday, October 15, 2008
The Importance of Financial Planning: A Key to S.U.C.C.E.S.S
“Failing to Plan is as good as Planning to Fail” so goes the cliché! As much as we hate to admit it, planning is an integral part of our lives, not just in our finances but in every aspect of our lives. Therefore, it’s better that we start planning early rather than regret later.
What is Financial Planning?
To quote from Wikipedia, the free online encyclopedia: “In general usage, a Financial Plan can be a budget, a plan for spending and saving future income. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial plan can also be an investment plan, which allocates savings to various assets or projects expected to produce future income, such as a new business or product line, shares in an existing business, or real estate.”
Wow, a mouthful of words indeed! In very simple terms, Financial Planning is really about: 1) Knowing where you are now, 2) Where do you want to go and 3) How to get there. It’s almost like planning for a holiday with your family. Take for example that you are currently residing in Kuala Lumpur and planning to take your family for a Cuti-Cuti Malaysia holiday. You would first have to decide where to go. Let’s say are planning to visit Langkawi during the next school holiday. Then, you have to decide on how to get there. You may drive and then take a ferry, go by bus or train, fly or even take a cruise! There are various means of getting to your destination and the choice will depend on a few factors – budget, time, convenience and practicality. However, you may need to think of a contingency plan, just in case something happens along the way, like your car or the bus breaks down, the flight’s delayed or even a road detour!
Similarly, in Financial Planning, we need to know what are our current resources, our financial goals and how to achieve them in the most effective and efficient manner. Let’s take a look at some reasons why Financial Planning is important to everyone, not only to the rich but the not-so-rich alike.
Why is it Important?
Money may not be the most important thing in life. Nevertheless, it is still important! Every single thing revolves around money, from the time we open our eyes till the time we go to bed (and even while we are asleep!) If only money grows on trees, then financial planning would not be such a headache, would it?
Financial Planning is a systematic way of organizing our financial affairs in the most effective and efficient manner in order to achieve our Life Goals. And Success is defined as the attainment of one’s goals. In short, it is truly A Key to S.U.C.C.E.S.S.!
Sense of Direction in Life
Dr. Stephen R. Covey gave an analogy in his book, The 7 Habits of Highly Effective People that a lot of us get caught up in our “busyness” of life, to work harder and harder at climbing the ladder of success only to discover, upon reaching the top rung that the ladder is leaning against the wrong wall! Through proper Financial Planning, we can then look at what is more important and meaningful to us. Then we can organize our finances and our lives around those things so that we do not end up on the wrong wall.
Understanding Trade-Offs/ Sacrifices
Though our Wants are infinite, unfortunately, our resources are finite! Financial Planning would help us realize and understand that in life, there is always Trade-Offs or Sacrifices to be made. By changing our good old car for the newest model or our “not-so-trendy” hand phones to the coolest model in town, we would have affected our retirement nest egg without realizing it. If we really want to achieve our important goals, we need to exercise Delayed Gratification and able to distinguish between Needs and Wants.
Coping Easier with Changes in Life
The only constant in life is Change and learning to cope with changes early in life would be a plus point. When we are still single and carefree, the world is for our taking and we could practically live like there’s no tomorrow. However, when we settle down and start to build our family, our world begins to change dramatically. It could also be the case of a person losing his job, going through a divorce, losing the breadwinner of the family or being diagnosed with critical illness. We are better prepared to face these challenges in life if we have done proper Financial Planning.
Creating Wealth
Ah, don’t we just love this! Almost everybody wants to be wealthy but few have a game plan towards achieving it. Wealth creation is not a sprint but a marathon for it takes time, discipline and a lot of financial stamina. With the help of a qualified investment advisor, we can select the most appropriate investments that suit our risk appetite to achieve our desired goals. By adopting various investment strategies and proper Asset Allocation, slowly but surely, we will cross the finishing line lifting our pot of gold!
Enriching our Lives
Financial Planning does not merely enrich us financially but also physically, emotionally and mentally. Without the financial stress, we will be able to focus on other important aspects of our lives like our health, our relationship with our family and friends and devoting our time to other charitable causes. We will be able to live a fuller life and in turn, enrich other people’s lives.
Security
One of the important goals in Financial Planning is to get a deep Sense of Security in our lives. We want to feel assured that no matter what happens, our goals can be realized, either for ourselves or our loved ones. Through proper Risk Management and Insurance Planning, we will be able to provide our loved ones and ourselves with total peace of mind while we go about living our lives and building our wealth.
Success
Yeah! Isn’t this what most of us aspire – to be Successful in life? The Oxford dictionary defines Success as “the attainment of one’s goal”. That’s exactly what Financial Planning aims to achieve – helping us realize our Life Goals. Our goal should not be just having a lot of money in our bank accounts but rather what can money do for us. Money can take care of our health through better quality food and health supplements. It could provide our children with quality education. It enables us to spend more quality time with our family and friends. It also helps expand our horizons by allowing us to explore and learn new things through our travels. Last but not least, it allows us to contribute back to the society through sharing of our knowledge, resources and time with the less fortunate. Therefore, True Success is not merely about how much we have (quantity) but the Quality of Life that we live!
In the final analysis, Financial Planning is really a means to an end. You have to ask yourself whether this is the kind of S.U.C.C.E.S.S. that you want. If you do, the first thing that you should do is to learn how to Manage Your Cashflow Effectively, which we’d be discussing in our next article. So, watch out for it and in the mean time, try to “Make Prudent Financial Management A Way of Life!”
What is Financial Planning?
To quote from Wikipedia, the free online encyclopedia: “In general usage, a Financial Plan can be a budget, a plan for spending and saving future income. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial plan can also be an investment plan, which allocates savings to various assets or projects expected to produce future income, such as a new business or product line, shares in an existing business, or real estate.”
Wow, a mouthful of words indeed! In very simple terms, Financial Planning is really about: 1) Knowing where you are now, 2) Where do you want to go and 3) How to get there. It’s almost like planning for a holiday with your family. Take for example that you are currently residing in Kuala Lumpur and planning to take your family for a Cuti-Cuti Malaysia holiday. You would first have to decide where to go. Let’s say are planning to visit Langkawi during the next school holiday. Then, you have to decide on how to get there. You may drive and then take a ferry, go by bus or train, fly or even take a cruise! There are various means of getting to your destination and the choice will depend on a few factors – budget, time, convenience and practicality. However, you may need to think of a contingency plan, just in case something happens along the way, like your car or the bus breaks down, the flight’s delayed or even a road detour!
Similarly, in Financial Planning, we need to know what are our current resources, our financial goals and how to achieve them in the most effective and efficient manner. Let’s take a look at some reasons why Financial Planning is important to everyone, not only to the rich but the not-so-rich alike.
Why is it Important?
Money may not be the most important thing in life. Nevertheless, it is still important! Every single thing revolves around money, from the time we open our eyes till the time we go to bed (and even while we are asleep!) If only money grows on trees, then financial planning would not be such a headache, would it?
Financial Planning is a systematic way of organizing our financial affairs in the most effective and efficient manner in order to achieve our Life Goals. And Success is defined as the attainment of one’s goals. In short, it is truly A Key to S.U.C.C.E.S.S.!
Sense of Direction in Life
Dr. Stephen R. Covey gave an analogy in his book, The 7 Habits of Highly Effective People that a lot of us get caught up in our “busyness” of life, to work harder and harder at climbing the ladder of success only to discover, upon reaching the top rung that the ladder is leaning against the wrong wall! Through proper Financial Planning, we can then look at what is more important and meaningful to us. Then we can organize our finances and our lives around those things so that we do not end up on the wrong wall.
Understanding Trade-Offs/ Sacrifices
Though our Wants are infinite, unfortunately, our resources are finite! Financial Planning would help us realize and understand that in life, there is always Trade-Offs or Sacrifices to be made. By changing our good old car for the newest model or our “not-so-trendy” hand phones to the coolest model in town, we would have affected our retirement nest egg without realizing it. If we really want to achieve our important goals, we need to exercise Delayed Gratification and able to distinguish between Needs and Wants.
Coping Easier with Changes in Life
The only constant in life is Change and learning to cope with changes early in life would be a plus point. When we are still single and carefree, the world is for our taking and we could practically live like there’s no tomorrow. However, when we settle down and start to build our family, our world begins to change dramatically. It could also be the case of a person losing his job, going through a divorce, losing the breadwinner of the family or being diagnosed with critical illness. We are better prepared to face these challenges in life if we have done proper Financial Planning.
Creating Wealth
Ah, don’t we just love this! Almost everybody wants to be wealthy but few have a game plan towards achieving it. Wealth creation is not a sprint but a marathon for it takes time, discipline and a lot of financial stamina. With the help of a qualified investment advisor, we can select the most appropriate investments that suit our risk appetite to achieve our desired goals. By adopting various investment strategies and proper Asset Allocation, slowly but surely, we will cross the finishing line lifting our pot of gold!
Enriching our Lives
Financial Planning does not merely enrich us financially but also physically, emotionally and mentally. Without the financial stress, we will be able to focus on other important aspects of our lives like our health, our relationship with our family and friends and devoting our time to other charitable causes. We will be able to live a fuller life and in turn, enrich other people’s lives.
Security
One of the important goals in Financial Planning is to get a deep Sense of Security in our lives. We want to feel assured that no matter what happens, our goals can be realized, either for ourselves or our loved ones. Through proper Risk Management and Insurance Planning, we will be able to provide our loved ones and ourselves with total peace of mind while we go about living our lives and building our wealth.
Success
Yeah! Isn’t this what most of us aspire – to be Successful in life? The Oxford dictionary defines Success as “the attainment of one’s goal”. That’s exactly what Financial Planning aims to achieve – helping us realize our Life Goals. Our goal should not be just having a lot of money in our bank accounts but rather what can money do for us. Money can take care of our health through better quality food and health supplements. It could provide our children with quality education. It enables us to spend more quality time with our family and friends. It also helps expand our horizons by allowing us to explore and learn new things through our travels. Last but not least, it allows us to contribute back to the society through sharing of our knowledge, resources and time with the less fortunate. Therefore, True Success is not merely about how much we have (quantity) but the Quality of Life that we live!
In the final analysis, Financial Planning is really a means to an end. You have to ask yourself whether this is the kind of S.U.C.C.E.S.S. that you want. If you do, the first thing that you should do is to learn how to Manage Your Cashflow Effectively, which we’d be discussing in our next article. So, watch out for it and in the mean time, try to “Make Prudent Financial Management A Way of Life!”
Thursday, September 11, 2008
Saving Dilemma - How to Stay Disciplined
How ambitious are you, financially, when it comes to New Year resolutions, or after receiving bonuses?
You’re most likely to say: “I’ll start saving RMX a month” or “I’m putting aside RMX for my emergency fund” and the wish list goes on.. But what happens 3 to 6 months down the line? Those resolutions would have altered completely to: ”Oh, I need to do some renovation to my kitchen” or “ This month is our wedding anniversary, I would like to take my wife on a nice vacation overseas”. Not that you can’t enjoy all the goodies, but like any other resolution, unless some action is taken on your part, nothing will ever change!
Most people face this dilemma when they have money in their hands – to save or to spend! Unless they decide to save, their financial future will be very bleak. Let us define the meaning of dilemma. According to Meriam-Webster Online dictionary, is a problem involving a difficult choice. A situation where you cannot decide what to do! Saving or spending has always been the most talked about topic in the area of financial planning because this is a basic decision one has to make in order to achieve financial independence!
Let’s look at the typical savings dilemma within each age group. These dilemmas differ as they grow older and hopefully become wiser!
The Savings Dilemma
Ages 21-30
I don’t need to save now… I’ve just started work
I don't earn a lot yet, and I'm entitled to a little fun while I'm young.
There is plenty of time. I'll start saving when I earn more…
Ages 31-40
I can’t save now….. I have a lot of financial commitments.I've got a growing family on my hands. It takes all that I have to keep them going. As soon as the children are a little older, I'll start to save.
Ages 41-55
I can’t save now…
I've got three children studying in college. I need to pay for their education.
My medical bills are piling up; my old car is acting up;
I have yet to settle credit card bills from previous family trips.
I can't save yet
Ages 56-65
I can’t save now…I know I should. I’m living on my EPF money...but it will only last me less than 5 years. If only I started saving 30 years ago, then I might be able to enjoy a nice vacation...
But it's too late now. You can't save when there's no income.
Sounds familiar? If you do not want to end up regretting and blaming yourself later, then you need to get rid of those dilemmas and save.It takes all that I have to keep them going. As soon as the children are a little older, I'll start to save.
Ages 41-55
I can’t save now…
I've got three children studying in college. I need to pay for their education.
My medical bills are piling up; my old car is acting up;
I have yet to settle credit card bills from previous family trips.
I can't save yet
Ages 56-65
I can’t save now…
I know I should. I’m living on my EPF money...
but it will only last me less than 5 years. If only I started saving 30 years ago, then I might be able to enjoy a nice vacation...
But it's too late now. You can't save when there's no income.
Sounds familiar? If you do not want to end up regretting and blaming yourself later, then you need to get rid of those dilemmas and save starting from NOW!! It’s never too late to start saving, better late than never!
You see, saving money isn't about sacrifice. It’s more of making small adjustments here and there. No matter how much you make, you can still save. If you earn less, then start with a small amount. As long as you follow the rules of living within your means, then you won’t go wrong. So, don't wait until you have more money to start saving. Start immediately because saving money is one of the means of building wealth and the smartest way to prepare for your financial future.
How do I do it?
All you need is to have financial-discipline which is about controlling your spending and making sure you pay for the things that need to be paid. What you need is to create a budget and implement it. If you cannot control your spending then no matter how much money you make it will never be enough. Control your WANTS, get only what you NEED, say NO to impulse buying and follow your budget strictly, then you’ll be alright.
Once you have changed your spending habits, the rest will follow through smoothly. A key part to financial success is learning the skill of discipline and spending wisely. Once you are able to accomplish both of these objectives, you will be well on your way to save more!
But, how to stay disciplined? Among other things that you can do are as follows:
Set a Goals
Make sure you set a goal that is SMART (Specific, Measurable, Attainable, Realistic, Timely). An example of a goal could be; I want to have RM15,000 in two years as deposit for a house. The ensuing action for the goal could be to save RM625 every month. Setting goals is likely the first step to turning dreams, ideas, and wishes into REALITY! When you set a goal, you commit yourself to achieving your goal.
Use Rewards and Punishments
If you are able to maintain your budget or able to reach your goals, then perhaps you can reward yourself a treat. However, if you suddenly find yourself going over the budget, then as a punishment, you may have to forego some pleasurable activities.
Automated Savings
For those who feel that savings on regular basis is a choice, one option could be through forced saving, which is via salary deduction.
Accountability
It is always good for you to share your goals with your spouse or a close friend. By doing that you are in some manner accountable to them. They may from time to time ask you about your goals, and surely you want to show that you are competent enough to stick to your goal.
In conclusion, it doesn’t matter how much you save. What is important is that the earlier you start saving, the more time that you’ll have to accumulate a really large nest egg for the years ahead. Stay consistent and be disciplined and god willing, when the time comes you know that you are financially prepared for them.
You’re most likely to say: “I’ll start saving RMX a month” or “I’m putting aside RMX for my emergency fund” and the wish list goes on.. But what happens 3 to 6 months down the line? Those resolutions would have altered completely to: ”Oh, I need to do some renovation to my kitchen” or “ This month is our wedding anniversary, I would like to take my wife on a nice vacation overseas”. Not that you can’t enjoy all the goodies, but like any other resolution, unless some action is taken on your part, nothing will ever change!
Most people face this dilemma when they have money in their hands – to save or to spend! Unless they decide to save, their financial future will be very bleak. Let us define the meaning of dilemma. According to Meriam-Webster Online dictionary, is a problem involving a difficult choice. A situation where you cannot decide what to do! Saving or spending has always been the most talked about topic in the area of financial planning because this is a basic decision one has to make in order to achieve financial independence!
Let’s look at the typical savings dilemma within each age group. These dilemmas differ as they grow older and hopefully become wiser!
The Savings Dilemma
Ages 21-30
I don’t need to save now… I’ve just started work
I don't earn a lot yet, and I'm entitled to a little fun while I'm young.
There is plenty of time. I'll start saving when I earn more…
Ages 31-40
I can’t save now….. I have a lot of financial commitments.I've got a growing family on my hands. It takes all that I have to keep them going. As soon as the children are a little older, I'll start to save.
Ages 41-55
I can’t save now…
I've got three children studying in college. I need to pay for their education.
My medical bills are piling up; my old car is acting up;
I have yet to settle credit card bills from previous family trips.
I can't save yet
Ages 56-65
I can’t save now…I know I should. I’m living on my EPF money...but it will only last me less than 5 years. If only I started saving 30 years ago, then I might be able to enjoy a nice vacation...
But it's too late now. You can't save when there's no income.
Sounds familiar? If you do not want to end up regretting and blaming yourself later, then you need to get rid of those dilemmas and save.It takes all that I have to keep them going. As soon as the children are a little older, I'll start to save.
Ages 41-55
I can’t save now…
I've got three children studying in college. I need to pay for their education.
My medical bills are piling up; my old car is acting up;
I have yet to settle credit card bills from previous family trips.
I can't save yet
Ages 56-65
I can’t save now…
I know I should. I’m living on my EPF money...
but it will only last me less than 5 years. If only I started saving 30 years ago, then I might be able to enjoy a nice vacation...
But it's too late now. You can't save when there's no income.
Sounds familiar? If you do not want to end up regretting and blaming yourself later, then you need to get rid of those dilemmas and save starting from NOW!! It’s never too late to start saving, better late than never!
You see, saving money isn't about sacrifice. It’s more of making small adjustments here and there. No matter how much you make, you can still save. If you earn less, then start with a small amount. As long as you follow the rules of living within your means, then you won’t go wrong. So, don't wait until you have more money to start saving. Start immediately because saving money is one of the means of building wealth and the smartest way to prepare for your financial future.
How do I do it?
All you need is to have financial-discipline which is about controlling your spending and making sure you pay for the things that need to be paid. What you need is to create a budget and implement it. If you cannot control your spending then no matter how much money you make it will never be enough. Control your WANTS, get only what you NEED, say NO to impulse buying and follow your budget strictly, then you’ll be alright.
Once you have changed your spending habits, the rest will follow through smoothly. A key part to financial success is learning the skill of discipline and spending wisely. Once you are able to accomplish both of these objectives, you will be well on your way to save more!
But, how to stay disciplined? Among other things that you can do are as follows:
Set a Goals
Make sure you set a goal that is SMART (Specific, Measurable, Attainable, Realistic, Timely). An example of a goal could be; I want to have RM15,000 in two years as deposit for a house. The ensuing action for the goal could be to save RM625 every month. Setting goals is likely the first step to turning dreams, ideas, and wishes into REALITY! When you set a goal, you commit yourself to achieving your goal.
Use Rewards and Punishments
If you are able to maintain your budget or able to reach your goals, then perhaps you can reward yourself a treat. However, if you suddenly find yourself going over the budget, then as a punishment, you may have to forego some pleasurable activities.
Automated Savings
For those who feel that savings on regular basis is a choice, one option could be through forced saving, which is via salary deduction.
Accountability
It is always good for you to share your goals with your spouse or a close friend. By doing that you are in some manner accountable to them. They may from time to time ask you about your goals, and surely you want to show that you are competent enough to stick to your goal.
In conclusion, it doesn’t matter how much you save. What is important is that the earlier you start saving, the more time that you’ll have to accumulate a really large nest egg for the years ahead. Stay consistent and be disciplined and god willing, when the time comes you know that you are financially prepared for them.
Living On Less Money
What goes up and never comes down?
Besides your age, the price of goods and services is a possible answer too! In fact of late, there has been much talk about rising food and fuel prices all over the world. With prices going up and income remains relatively stagnant, it’s very important that we learn how to live more prudently.
What does it mean to be Prudent?
We may not like to use this word in our daily lives but we are going to hear it more often today than ever. Ask our forefathers and most often than not, they would tell us that their lifestyle was synonymous to this word. People today may be earning more than their forefathers, much more, but somehow, we are constantly a little short of cash, what more to save. It’s really not surprising because in those good old days you can buy a bowl of noodles for five sen whereas today, even a beggar would snub at the five sen that you dropped into his bowl!
Being prudent or frugal simply means managing in order to save. It means getting the most for your money. People who are prudent constantly find ways to save time, money and energy and let us state that being prudent does not mean being a “cheapo” / stingy or “kiam-sap”, as the Hokkiens call it. How can I practice being Prudent or Frugal?
There are many ways to live on less money and below are some suggestions to help you stretch your Ringgit further:
• Reduce your daily expenses – before you buy anything, ask yourself:
1. Do I really need this?
2. Can I get it cheaper somewhere else?
3. Can I get it for free?
• Cut something big out of your budget – go without a car (ouch!) and save on petrol, repairs, road tax, insurance and tolls or for being less harsh, try scaling down on your car type, like going for lower capacity vehicles.
• Use less – turn off the lights when not in-use and switch to energy-saving bulbs, cut-down on air-cons, wash full loads of clothes and dry them outside (rather than using a drying machine) and turn off all electrical appliances when not in use.
• Reduce waste – use paper on both sides (go paperless, whenever possible!) and use cloth diapers rather than disposable ones.
• Reuse or Recycle – compost your wastes, wherever possible (which can be used to plant your own vegetables!), grow a garden & turn your trash to cash!
• Make things last longer – mend clothing, re-glue shoes, and fix things before they’re beyond repair.
• Find new uses for old things – paint old furniture, make quilts from old clothes and convert old large tables as desks. In other words, recycle, recycle, and recycle!
• Find cheaper substitutes – buy generic brands, shop at garage sales, rent instead of buy
You can also be frugal by taking care of your needs in creative ways, by sharing with others and buy using community resources. Here are some other ways to save:
• Find free or cheap entertainment. (we’ll talk about this more later)
• Share big purchases.Sharing can help you get what you need for less money. For example, you may share a ladder, drill and perhaps a vacuum cleaner with your neighbours. You can also share a lot of your children’s play equipment with your friends or family members and car pooling is certainly another good example.
• Trade or barter for services or products.Yes, we are living in a modern world but who says that we can’t practice bartering? In fact, you can trade or barter all kinds of things. If you can give a good haircut and your friend bakes very good cakes, trade your skills. You both get something you need and you both save money. Think about your skills, the things you enjoy and the things you do well. Next, think about the skills and talents of your friends, family and neighbours. Check around to see if someone wants to trade with you. Start out with something simple and see how it works. Who knows, you may someday create another “eBay”!
How can I save money on Entertainment?
This is one area where we spend quite a lot without realizing. However, it’s still possible to get good wholesome entertainment for free or almost free. Just because you’re trying to save money doesn’t mean you can’t have fun. No matter what your income, make time to relax and enjoy (after all, you only live once!) It’s probably even more important when you have less money. Without fun, it’s hard to lead a healthy life. Here are some suggestions:
• Borrow books or attend seminars/ programmes for free from the public library
• Rent a video and try making your own kacang putih / cookies instead of going to the cinema
• Visit the museums, zoos or the parks and enjoy the fresh air (depending on where you are!)
• Look out for free concerts, kid’s programmes and family activities from the newspaper or through the tourist information centres/ websites
• Take an inexpensive class through community education, learn a new craft or revive an old interest. You can even convert that hobby into a business
• Attend free book readings for adults and kids at your local bookstores or library
• Walk, hike or bike to explore something new or visit a favourite place
• Watch the sun rise and set, find constellations in the sky, or perhaps start a project with your family like planting a tree (durian or mango trees would be perfect as that will help you save money on fruits!)
There’re a whole lot of other ways to enjoy cheap, good and wholesome entertainment, if you care to look around (just get onto the internet and run a search on “prudent lifestyle” or “frugal” and you’d be amazed as to what you’ll find!). In fact, another interesting activity that you may want to try is “people-watching”! Sit by the parks or malls and just observe what people do, how they walk, talk and laugh and how some parents “communicate” with their kids. There’s a lot to learn by just observing other people and best of all, it’s FREE!
Conclusion
Living on less money does not necessarily mean living any less. It’s more about living our lives more abundantly and purposefully and not merely living for others. Being prudent in all aspects of our lives is the cornerstone of wealth-building. If you hope to be financially free someday, you’d need to make prudent financial management a way of life, no matter what your income level or status.
Be a Smart Consumer and let’s “Make Prudent Financial Management A Way of Life” today!
Besides your age, the price of goods and services is a possible answer too! In fact of late, there has been much talk about rising food and fuel prices all over the world. With prices going up and income remains relatively stagnant, it’s very important that we learn how to live more prudently.
What does it mean to be Prudent?
We may not like to use this word in our daily lives but we are going to hear it more often today than ever. Ask our forefathers and most often than not, they would tell us that their lifestyle was synonymous to this word. People today may be earning more than their forefathers, much more, but somehow, we are constantly a little short of cash, what more to save. It’s really not surprising because in those good old days you can buy a bowl of noodles for five sen whereas today, even a beggar would snub at the five sen that you dropped into his bowl!
Being prudent or frugal simply means managing in order to save. It means getting the most for your money. People who are prudent constantly find ways to save time, money and energy and let us state that being prudent does not mean being a “cheapo” / stingy or “kiam-sap”, as the Hokkiens call it. How can I practice being Prudent or Frugal?
There are many ways to live on less money and below are some suggestions to help you stretch your Ringgit further:
• Reduce your daily expenses – before you buy anything, ask yourself:
1. Do I really need this?
2. Can I get it cheaper somewhere else?
3. Can I get it for free?
• Cut something big out of your budget – go without a car (ouch!) and save on petrol, repairs, road tax, insurance and tolls or for being less harsh, try scaling down on your car type, like going for lower capacity vehicles.
• Use less – turn off the lights when not in-use and switch to energy-saving bulbs, cut-down on air-cons, wash full loads of clothes and dry them outside (rather than using a drying machine) and turn off all electrical appliances when not in use.
• Reduce waste – use paper on both sides (go paperless, whenever possible!) and use cloth diapers rather than disposable ones.
• Reuse or Recycle – compost your wastes, wherever possible (which can be used to plant your own vegetables!), grow a garden & turn your trash to cash!
• Make things last longer – mend clothing, re-glue shoes, and fix things before they’re beyond repair.
• Find new uses for old things – paint old furniture, make quilts from old clothes and convert old large tables as desks. In other words, recycle, recycle, and recycle!
• Find cheaper substitutes – buy generic brands, shop at garage sales, rent instead of buy
You can also be frugal by taking care of your needs in creative ways, by sharing with others and buy using community resources. Here are some other ways to save:
• Find free or cheap entertainment. (we’ll talk about this more later)
• Share big purchases.Sharing can help you get what you need for less money. For example, you may share a ladder, drill and perhaps a vacuum cleaner with your neighbours. You can also share a lot of your children’s play equipment with your friends or family members and car pooling is certainly another good example.
• Trade or barter for services or products.Yes, we are living in a modern world but who says that we can’t practice bartering? In fact, you can trade or barter all kinds of things. If you can give a good haircut and your friend bakes very good cakes, trade your skills. You both get something you need and you both save money. Think about your skills, the things you enjoy and the things you do well. Next, think about the skills and talents of your friends, family and neighbours. Check around to see if someone wants to trade with you. Start out with something simple and see how it works. Who knows, you may someday create another “eBay”!
How can I save money on Entertainment?
This is one area where we spend quite a lot without realizing. However, it’s still possible to get good wholesome entertainment for free or almost free. Just because you’re trying to save money doesn’t mean you can’t have fun. No matter what your income, make time to relax and enjoy (after all, you only live once!) It’s probably even more important when you have less money. Without fun, it’s hard to lead a healthy life. Here are some suggestions:
• Borrow books or attend seminars/ programmes for free from the public library
• Rent a video and try making your own kacang putih / cookies instead of going to the cinema
• Visit the museums, zoos or the parks and enjoy the fresh air (depending on where you are!)
• Look out for free concerts, kid’s programmes and family activities from the newspaper or through the tourist information centres/ websites
• Take an inexpensive class through community education, learn a new craft or revive an old interest. You can even convert that hobby into a business
• Attend free book readings for adults and kids at your local bookstores or library
• Walk, hike or bike to explore something new or visit a favourite place
• Watch the sun rise and set, find constellations in the sky, or perhaps start a project with your family like planting a tree (durian or mango trees would be perfect as that will help you save money on fruits!)
There’re a whole lot of other ways to enjoy cheap, good and wholesome entertainment, if you care to look around (just get onto the internet and run a search on “prudent lifestyle” or “frugal” and you’d be amazed as to what you’ll find!). In fact, another interesting activity that you may want to try is “people-watching”! Sit by the parks or malls and just observe what people do, how they walk, talk and laugh and how some parents “communicate” with their kids. There’s a lot to learn by just observing other people and best of all, it’s FREE!
Conclusion
Living on less money does not necessarily mean living any less. It’s more about living our lives more abundantly and purposefully and not merely living for others. Being prudent in all aspects of our lives is the cornerstone of wealth-building. If you hope to be financially free someday, you’d need to make prudent financial management a way of life, no matter what your income level or status.
Be a Smart Consumer and let’s “Make Prudent Financial Management A Way of Life” today!
Thursday, June 26, 2008
Tips to Managing Your Money
Whether you earn a little or a lot, it’s always wise to budget and plan your finances smartly. Common mistakes that most people would make when it comes to money is getting too deep in debt, paying bills late, and not knowing how to save for the future. You can avoid making these mistakes by always keeping track of where your money goes and knowing what you can spend on.
Here are some steps that you can use for managing your money wisely:
1) Set Up Your Financial Goals.
Financial goals reflect things you want to do with your money within a certain period of time. Setting these goals will help you understand the value of money and encourage prudent spending. Be sure to know how long you should plan for each goal. Choose the important thing first.
Are they short, medium or long term goals? Which one of the following are your financial goals?
*Starting a family
*Child’s education plan
*Traveling
*Medical and Health Insurance
*Saving for retirement
*Buying a new house
2) You Must Know Where Your Money Goes To
After setting your goals, start developing a spending plan so that it’s easier to achieve your goals. Remember that your aim is not to cut your budget but to note the direction of your spending.
With this you will know:
*Where and how you spend your money
*How much you owe monthly
*How much is left at the end of the month
3) Access Your Spending Habits
If you find that you have nothing left at the end of the month, it’s time to assess your spending habits. Look through your list of expenses and determine if they are a necessity or luxury item. Look out for the following warning signals of bad spending habits that may lead to real money problems:
*You use your savings to pay current bills
*You take new loans to pay for old ones
*You owe more than you earn
*You buy on impulse even when you know you cannot afford it
4) Write Down Your Spending Plan
A spending plan can help you manage your finances. You can also target areas where spending is out of control and also set a clear path for saving.You can start making your own spending plan by using this simple guide:
*Establish your monthly total income
*Add up your total expenses including fixed monthly bills, loan repayments, rentals and daily living expenses, etc
*Put aside a fixed sum of money to meet emergencies or seasonal expenses (e.g. school fees, road tax, insurance renewals)
Here are some steps that you can use for managing your money wisely:
1) Set Up Your Financial Goals.
Financial goals reflect things you want to do with your money within a certain period of time. Setting these goals will help you understand the value of money and encourage prudent spending. Be sure to know how long you should plan for each goal. Choose the important thing first.
Are they short, medium or long term goals? Which one of the following are your financial goals?
*Starting a family
*Child’s education plan
*Traveling
*Medical and Health Insurance
*Saving for retirement
*Buying a new house
2) You Must Know Where Your Money Goes To
After setting your goals, start developing a spending plan so that it’s easier to achieve your goals. Remember that your aim is not to cut your budget but to note the direction of your spending.
With this you will know:
*Where and how you spend your money
*How much you owe monthly
*How much is left at the end of the month
3) Access Your Spending Habits
If you find that you have nothing left at the end of the month, it’s time to assess your spending habits. Look through your list of expenses and determine if they are a necessity or luxury item. Look out for the following warning signals of bad spending habits that may lead to real money problems:
*You use your savings to pay current bills
*You take new loans to pay for old ones
*You owe more than you earn
*You buy on impulse even when you know you cannot afford it
4) Write Down Your Spending Plan
A spending plan can help you manage your finances. You can also target areas where spending is out of control and also set a clear path for saving.You can start making your own spending plan by using this simple guide:
*Establish your monthly total income
*Add up your total expenses including fixed monthly bills, loan repayments, rentals and daily living expenses, etc
*Put aside a fixed sum of money to meet emergencies or seasonal expenses (e.g. school fees, road tax, insurance renewals)
Tuesday, June 17, 2008
TIPS FOR BUYING A NEW HOUSE
For most people, buying a house would probably be the largest and most significant investment they will ever make in their lives. Althought a daunting task, prior research and preparation will help the prospective homeowner to reduce the anxiety level and prevent a post-purchase dissonance in teh very important decision.
These five important things would set the purchaser well on his way to owing a new home:
1) Am I financially prepared to purchase to purchase a home?
Purchasing a house is a huge responsibility and you have to ensure that you are financially, physically and emotionally equipped to undertake the task. It is a big first step. Signs that you are ready include a steady income for over two years, a good record of paying your bills on time, and not having too many large, long term debts.
Deciding how many you can afford for a new home can be tricky, especially since you have to take into account the interest and costs associated with a mortgage. A financial advisor or your local bank representative can assist you to determine your home affortability according to your current income, total expenses, the amount of money you can put down, and the loan terms you qualify for.
2) Which location should I opt for when purchasing a home?
When buying a home, it is imperative to live in a community that fits your lifestyle. Those looking for peace and quiet in a friendly environment might prefer a home in the suburbs, while those who enjoy the hustle and bustle of city life might find living in an urbanarea more appealing.
And in view of the increase in crime, homeowners are now more finicky about security and safety in a housing developement in order to have peace of mind. In fact, gated and guarded housing estates and condominiums with several tiers of securities are fast becoming popular and would usually command higher prices.
Equally significant when selecting the perfect location is the proximity to available amenities such as the wet market, schools, the post office, shopping malls, hospitals and transportation options. Also find out how the traffic situation is like in the area and wheather it would take you along time to get work. Taking these into consideration would not only make your stay in your new home a more enjoyable one, but also increase the property's resale value should you decide to sell it the future. That is important.
3) What is the role of a real estate agent and how do I find a good one?
The role of real estate or property agent is to guide you through the property buying process and helping you get the best deal possible. They would be able to assist you by giving you inside real estate and community information that can only strengthen or deter your decision to buy a home in a specific area.
Your property agent should typically be friendly, reliable and have the right credentials including a license, and an exclusive agreement with brocker. Property agents also have an extensive knowledge of properties available in the market, which allows them to keep an eye for properties they know will meet your requirements. To find a good property agent, ask for referrals from trusted sources such as family, friends and co-workers.
4) What should I look out for in a home?
Home viewing is one of the most important things to do when it comes to shopping for a new home, and unless you are extremely fortunate, you will probably spend a fair amount of time visiting many houses in search of that perfect property. It is advisable to make your visit during the day, and if posible, bring someone along with you, preferable someone with a sharp eye to spot things you may miss.
You should also make sure the size and space of the home is adequate for your immediate and future use. This applies especially to newlyweds and young couples who have plans to starts a family, and might be forced to search for a bigger home for extra rooms in the not-too-distant future.
5) Why and how I should insure my new home?
As your home is one of the largest financial investments you will make in this lifetime, it is vital that you take all the measures to protect it from any unforeseeable circumstances. Taking up a homeowner's insurance coverage can eliminate the financial risks involved with having to deal with these hazards. However, you must ensure that you are providing sufficient coverage to protect the value of everything you own in your home, and of course, the home itself.
These five important things would set the purchaser well on his way to owing a new home:
1) Am I financially prepared to purchase to purchase a home?
Purchasing a house is a huge responsibility and you have to ensure that you are financially, physically and emotionally equipped to undertake the task. It is a big first step. Signs that you are ready include a steady income for over two years, a good record of paying your bills on time, and not having too many large, long term debts.
Deciding how many you can afford for a new home can be tricky, especially since you have to take into account the interest and costs associated with a mortgage. A financial advisor or your local bank representative can assist you to determine your home affortability according to your current income, total expenses, the amount of money you can put down, and the loan terms you qualify for.
2) Which location should I opt for when purchasing a home?
When buying a home, it is imperative to live in a community that fits your lifestyle. Those looking for peace and quiet in a friendly environment might prefer a home in the suburbs, while those who enjoy the hustle and bustle of city life might find living in an urbanarea more appealing.
And in view of the increase in crime, homeowners are now more finicky about security and safety in a housing developement in order to have peace of mind. In fact, gated and guarded housing estates and condominiums with several tiers of securities are fast becoming popular and would usually command higher prices.
Equally significant when selecting the perfect location is the proximity to available amenities such as the wet market, schools, the post office, shopping malls, hospitals and transportation options. Also find out how the traffic situation is like in the area and wheather it would take you along time to get work. Taking these into consideration would not only make your stay in your new home a more enjoyable one, but also increase the property's resale value should you decide to sell it the future. That is important.
3) What is the role of a real estate agent and how do I find a good one?
The role of real estate or property agent is to guide you through the property buying process and helping you get the best deal possible. They would be able to assist you by giving you inside real estate and community information that can only strengthen or deter your decision to buy a home in a specific area.
Your property agent should typically be friendly, reliable and have the right credentials including a license, and an exclusive agreement with brocker. Property agents also have an extensive knowledge of properties available in the market, which allows them to keep an eye for properties they know will meet your requirements. To find a good property agent, ask for referrals from trusted sources such as family, friends and co-workers.
4) What should I look out for in a home?
Home viewing is one of the most important things to do when it comes to shopping for a new home, and unless you are extremely fortunate, you will probably spend a fair amount of time visiting many houses in search of that perfect property. It is advisable to make your visit during the day, and if posible, bring someone along with you, preferable someone with a sharp eye to spot things you may miss.
You should also make sure the size and space of the home is adequate for your immediate and future use. This applies especially to newlyweds and young couples who have plans to starts a family, and might be forced to search for a bigger home for extra rooms in the not-too-distant future.
5) Why and how I should insure my new home?
As your home is one of the largest financial investments you will make in this lifetime, it is vital that you take all the measures to protect it from any unforeseeable circumstances. Taking up a homeowner's insurance coverage can eliminate the financial risks involved with having to deal with these hazards. However, you must ensure that you are providing sufficient coverage to protect the value of everything you own in your home, and of course, the home itself.
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