Plan Before Invest

Invest with smart not only help you to protect your investment but also protect you from the effect of loses such as you living style, living cost, etc. This plan is help you to achieve you goals in your investments and life. With a good & stable plan, it can help you to make money, achieve your targets, and have a stable living standard. So, with this plan, you will have a clear strategies and know how much and where you are going to invest to achieve all these.

 

Q: What is the relation between my goals and my investment?

A: As a investor, you must know how to protect your fund, and fully utilized of it, then use it to turn into your highest profit. This is why you need to set a clear plan for your investment target. If your plan is to use the returns of investment on your life goals and other specific purpose, then this will be more easier plan. This is include of financial protection / independent for you and your family,  make sure that that is sufficient of saving when there is needed, children education fund, plan for retirement life, your dream car / house, or round the world. It is tough to accumulate your wealth and achieve your goals in a certain period of time only by saving. So, you need to start invest. In your plan, you might indicate the amount, when and what to invest, and targeted returns of investment.

 

Q: What is financial plan?

A: A financial plan is very important to an investor, it just like a coach(financial consultant) of a soccer player. He know what his player wants (Champion), then he start to train them, and set up strategies for them to work towards their target (champion). Beside that, the coach also need to help them to prevent some injury / interruption (loses) during the tournaments or training.

Q: Can someone help me to set up my financial plan?

A: Of course, you can get a financial consultant to assist in set up a workable & stable financial plan. He can assist you to set the target / goals, set up the strategies to achieve goals, and understand which saving plan or investment tools is more suitable to you. The financial consultant need to build up a good relationship and understand what is your wants. But please remember that, a responsible financial consultant will not force you to invest in certain investment project, he have to respect / listen to your comments before making decision, it is because that is your fund and you have to responsible for your financial situation.

Q: How do i set aside the money for investment purpose?

A: You need to have a good financial discipline. You have to come out a plan with budget such as income, monthly expenses, control your debts, and then start saving (every month).

 

 

Q & A for Financial Planning and Investment

We have to start to learn how to invest in order for us to achieve financial independent. The longer time you invest, the longer the time you can increase your wealth. You might start with RM 100 or any amount that you think that is comfortable to you. But the most important is, you must have a correct investment concept and thinking. If your concept is wrong, then it might cause you to waste your time and money.

Q: What is the Smart Investment?

A: Smart investment is mean a consciousness decision, which use your budgeted amount of money, invest into an investment market which you have do some research and go through a serious consideration on it, and monitor closely in order to protect your investment and get the returns than you want.

Q: If i am a small investor, is it worth for me to learn it?

A: No matter how many is your investment, learning the right concept and knowledge is a MUST for you. You only can choose the right investment when you have the knowledge ( it is not only cost consideration, but also the risk of losing). If you manage it carefully, even though it is just a small investment, it also can growth and help to earn more than your expectation. So, please do not under value the potential of an investment value.

Q: Do i need a high education level to invest with smart?

A: You don’t need a Bachelor Degree / Master to help you to make a smarter choice or decision in investment. But the most important is, you have to read or find out more about the investment. You have to learn for long life, no matter you are the “veteran” or newbie in the investment market, it is because by reading it can help you to increase your knowledge and skills day by day. Sometimes mistake also will give you a valuable lesson too. If you are losing some of your money in this progress (sometime even “veteran” also will make mistake), you can find out the problems and learn from the mistake.

Financial Planning for Age 46 – 80

In the third part, we will talk about the financial planning for age 46 to 80. In this time frame, our timeline is almost finish, and some of it might already pension and enjoy the rest of their life, but some might not achieve their financial independent. Why? What is the problems within it? It’s all about yourself, am i right?

According to the latest research, among 100 people who already pension, there is 95% of people still worried of their saving and living cost for the rest of their life, 4% achieve financial independent, and 1% is the rich. Actually, these people suppose to enjoy their life with those passive income from IGA (Income Generating Assets), but remember that, just invest in those low risk and conservative investment tool will be enough. Besides that, it also the time to went through the your own RMP (Risk Management Portfolio), to make sure that yourself is in protection and safe. This is important because many of illness will follow you due to your age increment year by year. Your kids starting to go for college / university, they need a pool of money to finish their study, other than that, your spouse’s also will become older and the medical fee will be increase too!!

You can ask yourself: Am i in this stage?

I already achieve financial independent?

If no, what is your plan?

Are you cleared you debts?

Is your work stable?

How is your current financial status?

At here, we have to congrats to those people who already achieve financial independent, but don’t forget to educate your next generation about the financial planning  knowledge. For those who are not achieve, don’t be dejected. At least you still learning for now, and you can pass the knowledge or help your next generation to plan in the future!! Thank you.

Financial Planning For Age 26 – 45

For the most people in this age range, they are starting to plan for their wedding, have a stable career, or slowly making profit in their own business, but it also the hardest and most busy timeline in our life, it is because we have to responsible on many things such as family, children, parent, business and others, we can’t ignore either one, am i right?

On the other hand, if you have a well and stable financial plan in the earlier stage (age 18 – 25), and having your own IGA on that time, then your life now would not be so tough but more relax, beside that you also know that what you want to achive and also what are you working for? Remember that, do not increase your debts during this time, it is because most of the people will start to purchase cars & houses at this time, this is not wrong, but you have to know your own financial ability.

Try to ask yourself if you’re fall in this stage, you have a plan? you are now heading towards your plan? How much your income / debts is increase? Is your financial consultant assisting you to observe your plan? Is your plan need to be improve on? etc. These questions are important, because some people think that they already have a plan and just put the plan aside, but plan will changed due to time & any emergency cases, so we must check and update our plan every 6 months.

So, for the people fall in this range, how they going to plan? Actually, it is just the same in the earlier stage which is stick to 5 principles. What we need to do is improve your plan when any problems are occurring. Let me repeat again the 5 principles:

a) Have a clear plan (To have a clear goals / targets)

b) Plan / state clearly how many resources you have now (How many assests? How much debts? How much income? etc.)

c) Get a professional financial consultant’s feedback (any consultant will do, as long as they can help you ; If you sure that you can D.I.Y, they you can do it yourself)

d) Have a fixed period (e.g. every 3 / 6 months) meet up with your consultant to discuss, survey, or update your current investment, saving, or insurance plan.

e) Lastly is to set up your own IGA (Income Generating Assests)

Discussion 2:

Danny, 23 years old, came from a normal family, he got a sister age 20. Danny is in relationship with a beautiful girl, and they plan to wedding after 3 years. Danny is an obedient boy,  every month he will give RM500 to is parent (still working) as pocket money. Before that, Danny do not have any financial plan when he is in age 18 – 25, he is very regret on it, now he wanted to start to plan for himself, can anyone help him to plan?

General Expenses:

1. Cloth: RM 150

2. Food: RM 200

3. Phone: RM 100

4. Entertainment: 300

IGA:

1. Saving Insurance: RM 120

2. EPF: RM 12490

3. Income: RM 3500

4. Bank: RM 4000

Income Tax:

1. Personal: RM 80

Debts:

1. Credit Cards: RM 2500

Family Expenses:

1. Parent’s Pocket Money: RM 500

Transport:

1. Car Installment: RM 600

2. Petrol: RM 250

3. Roadtax: RM 60

4. Car Insurance: RM 55

5. Maintenance: RM 20

6. Toll & Parking: RM 55

Financial Planning for Age 18 – 25

People in this age, their wants is more than the needs, and they might have a lot of dreams (Find a good job, credit card, but a dream car, get a girlfriend, or make big money), but we all only have limited resources (unless they are came from rich family), so we have to accumulate the plan slowly (your own financial plan, quite offensive investment, saving greater than inflation, etc.). In this age level, we called it as “People Earning Money”, because we have to work hard to build up our own IGA (Income Generating Assets). With this IGA, then you will come to another stage called “Money Earning Money”, so that you can achieve your financial freedom.

So, for people who are fall into this level, try to ask yourself these few question:

i) what kind of life you want for the future?

ii) You want to achieve financial freedom at what age?

iii) Who is going  help you to build up / implement your financial plan?

These questions are important because you can’t really plan when you don’t know what you actually want.  So, how we going to set up our  own IGA? We need to stick to 5 strategies:

a) Have a clear plan (To have a clear goals / targets)

b) Plan / state clearly how many resources you have now (How many assests? How much debts? How much income? etc.)

c) Get a professional financial consultant’s feedback (any consultant will do, as long as they can help you ; If you sure that you can D.I.Y, they you can do it yourself)

d) Have a fixed period (e.g. every 3 months) meet up with your consultant to discuss, survey, or update your current investment, saving, or insurance plan.

e) Lastly is to set up your own IGA (Income Generating Assests)

**To achieve “Fully Home Paid + 6 – 12Months Saving Expenses + Income Generating Assests (IGA) = Financial Freedom”, you might need to stick to the above strategies and insist on it. On that time, it is not a “MUST” for you to work, you can choose either you want to or not. The earlier you achieve financial freedom, the earlier you can enjoy you life.

 

DISCUSSION: (you are always welcome to present your own opinion. How to help David to update his financial plans & problem?)

David, 22 years old, came from a poor family, dad (63) & mum (62) with low education level, so that they can’t get a good job in the society. Due to Davis just started to work,so that his salary is really low, and his brother is in national service now. So, the whole family expectation and hopes is on David. Then David think that he want to give their family some financial protection and plan, just in case any accident is happen on him. Below is some data for the David’s family financial data:

Expenses:

1. Electric & Water bill – $80

2. Internet – $40

3. House repairing / renovation – $20

4. House loan & insurance – $255

5. Land tax – $30

 

IGA:

1. Saving Insurance – $30

2. EPF – $2168

3. Income – $1200

 

Income Tax:

1. Personal – $0

 

Family Expenses:

1. Food – $250

2. Cloth – $50

3. Family Midical Plan – $0

4. Pocket Money for Parents – $300

 

Personal Expenses:

1. Food – $200

2. Cloth – $50

3. Phone Bill – $30

4. Transport – $100