One of the quickest ways to grow your money is to do some investments, but it is also one of the fastest way to lose it all.
However, just like everything else in the world, there are always two parts to it – in this case, there are safe and risky investments.
Risky investments are basically investments with a higher risk of losing your money. Safe investments are investments with very low risks, but also low returns. Obvious explanations aside, there is actually more to that.
To go into details, risky investments are deemed ‘risky’ because there’s a higher risk of losing money in the investment. Nonetheless, if there are gains, they would usually be better returns. In regards to those who are suited to invest in high-risk investments, it all boils down to perception – some see the fear of losing money as an acceptable undertaking for the chances of higher gains. Examples of risky investments include:
(i) Stock Market Investment:
Although there are good and bad things about investing in stock markets, the fact that the industry is a roller coaster ride makes it subsequently a high risk. A pro tip would be for potential investors to opt for blue chip stocks as they are stocks with a positive record of paying dividends.
Many believe that investing in gold metal is a solid plan; but that is only if the price and time is right. Truth is, the price of gold will nonchalantly fall over time. In fact, according to The Telegraph, gold finished as one of the worst-performing asset classes in 2013. Noted as its sharpest fall in 30 years, gold was down almost 28pc at about $1,200 (£725) an ounce. Proving that gold is indeed a risky investment.
For safe investments, returns are pretty much guaranteed. In addition to that, your investments would be “safer” when you get a financial education, actively invest your money in investments you understand, receive majority of the returns, and become your own financial advisor. To put into perspective, low-risk investments include:
(i) Fixed Deposit:
If you have an undying fear of losing your savings, opening up fixed deposits in banks are one of the safest bets. It’s safe, backed by the government, works in a way that’s easy to understand and carries little risk. The drawbacks include annual bank fees, and that returns would generally be not that attractive.
(ii) Investment-linked Insurance Plans:
While there are those who might not see this as a safe investment, it can’t be denied that the pros outweigh the cons. Generally speaking, an individual would be killing two birds with one stone with investment-linked insurance plans – you secure your funds while having an insurance plan under your name.
This article is brought to you by Etiqa, the Insurance & Takaful arm of Maybank Group
For more information on Etiqa’s wide range of investment-linked insurance plans, please call 1300 13 8888 or refer to their website.
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Would you blame your goldfish or your husband?
We’re all a little guilty of leaving our tax submissions to the last minute every now and again usually due to hectic schedules or..let’s be honest, just plain laziness.
However, some British people have come up with creative excuses for why their tax return is late, as reported by Her Majesty’s Revenue & Customs (HMRC) in the UK.
In no particular order, they are:
1. “My pet goldfish died.” – Self-employed builder
2. “I had a run-in with a cow.” – Farmer
3. “After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else.” – A woman in London
4. “My wife won’t give me my mail.” – Self-employed trader
5. A hairdresser claims her husband told her a late deadline, and she believed it.
6. “I’ve been far too busy with my play!” – A writer who claims to have been busy touring the country with his one-man play
7. A taxi driver said that his bad back made him unable to walk up the stairs to where his tax return was.
8. “I’m on my yacht too much.” – A man said that he had been cruising around the world on his yacht so much, that he only picks up his letters when he’s on dry land.
9. “Our business doesn’t really do anything.” – A financial services firm
10. “I’ve been too busy submitting my clients’ tax returns.” – An accountant.
What does the HMRC have to say about this?
“There will always be unforeseen events that mean a taxpayer could not file their tax return on time. However, your pet goldfish passing away isn’t one of them.”
Source: Huffington Post
Listen up everyone! If you’re unaware, the tax submission dateline for personal tax is just around the corner. 30th of April to be exact!
Ka-Ching.. There goes our money! The good news is, not every salaried worker is liable to pay tax. The even better news is that there are various ways of reducing your taxable income. To makes things easier, we’ve listed down 10 of the most common types of tax reliefs that are available in Malaysia;
1. Self relief (RM 9,000)
Every taxpayer is entitled to a relief of RM 9,000 every year.
2. Medical expenses for parents (maximum of RM 5,000 per year)
Each taxpayer is entitled to claim a relief on medical expenses of their parents. This includes fees for doctor consultations, medication purchases and medical supplies. Purchases of medication and medical supplies from pharmacies are also allowed.
3. Fees for acquiring specific skills or qualifications (maximum of RM 5,000 per year)
Fees for acquiring any technical, vocational, industrial, scientific, technological, law, accounting, Islamic financing skills or qualifications at tertiary level or any course of study at post graduate level are eligible for this type of relief. Examination or enrollment fees for the above industries are eligible too!
4. Purchase of books, journals, magazines and other similar publications (maximum RM 1,000 per year)
That’s right dear readers. We sure hope that you’ve been keeping those bookstore receipts, ladies!
5. If you have a child/children
a. If your child is unmarried and 18 years old and below – RM 1,000 per child
b. If your child is over 18 years old and in:
– Local university, colleges or similar establishments RM 4,000
– Overseas university, colleges or similar establishments RM 4,000
c. If your child is disabled child and unmarried – RM 5,000
d. If your child is disabled child and pursuing tertiary education – RM 4,000
6. If you paid for any life insurance premium, approved fund contributions or private pension funds (maximum RM 6,000 per year)
This covers all insurance premiums paid for life insurance. Contributions to the EPF are also included under this relief.
7. Insurance premiums for education or medical benefits (maximum RM 3,000 per year)
Any form medical insurance and your child’s Education Insurance plan are also eligible for tax relief.
8. Purchase of computer for personal use (maximum up to RM 3,000)
This is one of the more common one that everyone would know of. However, you can only claim relief on this purchase once every three years.
9. Purchase of sports equipment (maximum RM 300)
Purchases of sports equipment are eligible for tax relief of up to RM 300. Only equipment though, sports clothes or shoes are not eligible. Darn it!
10. Broadband subscription fees (maximum RM 500)
Broadband subscription fees of up to RM 500 are eligible for tax relief. Who knew our Unifi or Stremyx monthly fees would come in handy here!
So dear readers, please don’t waste all these available reliefs. They have been given to us by the government to reduce our burden, use them to the uttermost! By simply including one or more of the above, you may be able to move down a tax bracket and substantially reduce payable tax. Just remember to keep all those receipts and statements for the Inland Revenue Board to review, aye!
It’s cute, it’s pink, it’s Hello Kitty, and it’s a limited Winter edition debit card. You have to have it!
Following the success of last year’s first Hello Kitty Debit Card inMalaysia, fans of one of the world’s most famous kitty can now get their paws on a limited Winter edition of the card which features a one-of-a-kind vertical design, unlike the common horizontal layout of other debit cards.
Available from 1 December 2012, the limited winter edition Hello Kitty Debit Card is available to all new customers aged 18 years and above who open any Hong Leong Bank Savings or Current Account for individuals, either on a single or joint-name basis. Members of the public can open an account with as little as RM200.
The Hello Kitty Debit Card, which is targeted at women and families with young children, offers tailored privileges ranging from beauty to fashion, health and fitness, and more, as well as special edition Hello Kitty collectibles for Hong Leong Bank customers.
Besides the other benefits of a HLB Debit Card, users can also enjoy exclusive discounts when dining, shopping, travelling and more, including all the discounts and privileges offered to HLB Credit Card members.
Hello Kitty fans will be glad to know that Hello Kitty is coming to Malaysia for Meet and Greet Sessions at Paradigm Mall on 26 and 27 January 2013 during the roadshow happening from 24 to 27 January 2013, as well as during the roadshow at City Square Johor Bahru from 1 to 3 March 2013.
For details on the Hong Leong Bank Limited Winter Edition Hello Kitty Debit Card, visit any HLB branch or log on to the HLB website.
When a fashionably clueless soul is conned by a fashion sneak – things get real ugly.
This is a story you always hear somewhere else but can’t really be happening at this tech-y age. Sheila duped Nate to invest in a non-existing Birkin business. He lost $15million (aproximately RM47mil) from trusting a good friend cum business partner over years. Sheila is nowhere to be found now, and the case is currently being processed in the Philippines court, where the scam took place.
It all started with a meeting through a mutual friend, Jack. Nate knew Sheila, an ex-air stewardess who is taking a break from her job and take up a saleswoman position in Jack’s gallery. Nate, who is Jack’s friend, knew Sheila the simple girl who ‘even regarded Nine West or Cole Haan as expensive’.
The business kicked off when Sheila asked Nate, who frequently flew to Europe, to get her designer bags to sell off. The buys include Chanel, Goyard, and the most expensive of them all: Hermes. The catch was for Nate to benefit from the tax refund, which was approximately 11% of the bag’s price. Sheila always paid on time, and Nate got his European flight tickets paid for. Sounded like a win-win situation so far – and the status quo lasted for 2.5 years.
“Let me be clear that I was only doing it for fun. I only did it on the side, I didn’t travel to Europe just to buy bags for her,” Nate stated.
Sheila then proceeded to offer Nate to invest in her Birkin business, whereby she would collect Birkins from all over the world and sell them off to eager fashionistas. The cheapest Birkin you can get in the Phillipines cost P50,000 (approx. RM37,313), and she practically needs tens of millions to sustain the life as a Birkin distributor. Take note that by then Sheila had metamorphosed from a simple girl into a socialite – countless branded bags, lavish parties, and such.
And the rest of the story is cliché. It turned out Sheila had duped a lot of other ‘investors’ with her branded appearance and seemingly harmless attitude. She was just taking money from one investor and pass it to many other creditors, and the cycle continues until the pyramid collapses. She had to sell her possessions and then went missing. The case is now pending for filing in court, and until then – we could only hope Nate earns his money back from other sources, and Sheila gets what she deserves. Karma is a b*tch, Sheila.
*all names are disguised for legal reasons
Source: Phillipine Daily Inquirer / Asia News Network
Financial mission: single, having the time of your life, and filling up the piggybank
Tod’s loafers, the Lana Del Rey bag, the Marni for H&M collection – the list goes on. As a single woman, the tendency to splurge is stronger, as most of us do not have that much financial commitments. Just look at it this way – while some provide for parents and family members, some others have only themselves to fund.
To avoid a remake of ‘Two Broke Girls’ – we tell you how to be a smart single woman who is all ready for rainy days!
1. Be a creative shopper
Stack up on staple pieces from trustworthy brands. When it comes to trends, lead your way to economical finds. Mix the classic staple pieces and match them with trendy pieces and voila, never again will you splurge on things you will only wear for a couple of months.
2. Set a monthly target, and make it visible
If you are planning to save RM500 per month, print out the amount on a bright neon pink paper and stick it around the house as a constant reminder.
3. Shop at the end of every month
It is a common behaviour to shop half of your monthly salary on the first few days after the payday. It is destructive and you know it. Manage your financial state better, save, and whatever is left after all dues are paid – that is your real shopping budget.
4. Cook at least once a week
2 to 3 meals a day could cost you a bomb when you add them up. For breakfast, stock up on oatmeal or muesli and yoghurt so you save one meal budget a day. On the weekend, make some effort to cook your dishes. Besides saving money, you take stock on health too! Talk about killing two birds with one stone.
5. Schedule your outings, social butterfly!
Lots of women, at the end of the month, realize they have spent too much on drinks and high tea – they have zero money and no concrete goods. Having some fun out with your girls is a must-do to ensure a stress-free you. However, put aside a ‘social butterfly’ monthly allowance so from there, you can budget your outings.
6. Reward yourself
If you like fancy nail art or such little rewards, do it every time you hit a monthly target. Pat yourself on the back and tell yourself that you have done a good job, then splurge wisely.
7. Posses only one credit card
Remember Becky Bloomwood from Confessions of a Shopaholic? Well, you won’t wanna end up like her. Have only one credit card and set the limit according to your personal financial situation.
8. Keep an achievement record
Rate and grade yourself monthly on this savings program. When you achieve it, relive the feeling which is akin to when you make it to the top 10 of the class back in the school days.
9. Buy something concrete every 3 months
If you have been eyeing the sleek white smartphone, or new sofa for your pretty home – you shall grant your own wish every 3 months. That way, you would still have stable savings and see something concrete before your eyes to ensure that your effort is worth it.
10. Have a “5 ringgit jar”
Every time you get a 5 ringgit note from change, put it aside and slip it into a jar. You are now saving without realizing! We call it effortless saving. You’d be surprised how much it adds up to. A friend I know then spends it on holidays or emergencies when it adds up.
Banking is tough enough without its insanely confusing jargon. If you’re looking to buy a house, we’ve compiled a list of good to know terms to make your life that little bit easier:
Anything you may possess which holds monetary value will be calculated as an asset. Any debt a debtor may owe you will be counted as well. All your investments will also be added to your assets, which include bonds, stocks, CDs or any business you may own.
To calculate your net worth, you have to subtract any outstanding debt you may have from your assets. In fact, someone may have billions of dollars in assets but have a negative net worth. This is why net worth is often viewed as the most accurate measure by which wealth can be calculated.
Only a few people truly understand how compound interest works. Compound interest is interest that will be calculated not only on the initial capital but on all the interest that has been earned. For debtors, that means your debt will grow quicker since not only will you have to pay the principle, but also all the interest it has gathered over the term. If you’re a saver on the other hand, compound interest is a great thing since you’re investment will grow quicker than if you only collected single interest.
Fixed Rate loan
A fixed rate loan will be loan on which the interest rate will stay the same during the whole term of the loan. This is a great thing if interest rates are on the rise, but if you’ve contracted your loan at a period when the interest rates were particularly high, you might regret your choice if there’s a sudden drop in interest rates.
Floating/Variable Rate loan
A variable rate loan is a loan on which the interest rate will fluctuate depending on the current interest rate movements. A variable rate is not always the best idea when you’re contracting a long term mortgage on your home since you can never tell in which direction the interest rate is going to go in the future. However, if your loan is for a smaller property in which you only intend to stay for a couple of years, a variable rate can be a great option for you if the current interest rates are good.
Annual Percentage Rate
The annual percentage rate, or APR, is the interest rate that you’ll have to pay on your loan every year. While the APR is one of the first thing you should look for when you’re shopping for a loan, you should also consider other costs, such as any application fees, closing fees, early repayment penalties or any other fee that might be involved with your loan.
A lot of people get confused by the term “prime rate”. A lot of lenders will wave theirprime rate in front of borrowers to lure them into thinking that they’ll be able to get this rate on their loan. The truth is that the prime rate is only reserved to select customers and the requirements to qualify for the prime rate are very high in most cases. The prime rate is basically the rate that is offered to customers a certain institution deem most important. That means that if you don’t have a long standing relationship with a bank and your credit score is average at best, you probably won’t qualify for their prime rate
Letter of Offer (LO)
A contract between the borrower(s) and the bank stating the terms of the housing loan package.
The period of time that you will take to fully repay your loan.
The number of years that you are tied to your lender. If you fully redeem your loan within this period, there will be a full redemption penalty that is equal to a percentage of your loan quantum. Lenders may also charge a penalty for making partial payments within this period.
Base Lending Rate
Base Lending Rate (BLR) is a minimum interest rate based on a formulated calculation that includes the financial institutions’ cost of funds and other administrative costs. The BLR is almost always the same amongst major banks.
The loan quantum or principal is the amount of money that you borrow.
Full Installment Repayment
means that the instalments cover both principal and interest payable.
Interest Only Repayment
covers only the interest portion of the loan. The principal loan remains unpaid during this period. Mortgage packages which offer interest-only repayment will usually have to revert to full instalment repayment at some point, so that the principal loan is repaid.
Banks offer up to 10% of the purchase price or valuation, whichever is lower, to meet the initial downpayment for a property purchase. Generally you will only need to service interest on the Bridging Loan. Bridging loans are for period of up to 6 months only.
Now, go knock yourself out with mortgage payments.
Information sourced from various websites, including OCBC and smartloans.my.
While men tend to be decision makers in major purchases in the household like electronics and cars, women are usually at the core of grocery, healthcare, beauty, clothing and childcare purchases. Another survey revealed that 40% of the women in emerging markets like Malaysia are willing to spend more money on vacations.
According to Nielsen’s Global Survey of Consumer Confidence and Spending Intentions, Malaysians have changed their spending habits to accommodate what respondents perceived to be a tougher future ahead. Having said so, Malaysia takes seventh place among 56 countries surveyed on the most optimistic job prospects list, with 64% online respondents rating their job prospects as excellent or good over the next 12 months.
85% of the 500 respondents in Malaysia reported that their spending patterns have changed to manage their household budget. 58% of those said they spent less on new clothes, 56% downsized on out-of-home entertainment, 53% switched to cheaper grocery brands and 54% reported to cutting down on telephone expenses.
Does this mean that women will start going into brands that are inferior in quality? Most likely not. Nielsen has found that the most important drivers to bring women into stores was good value and quality products. Also, people tend stick to good quality brands that they are familiar with.
Maybe cutting down to just one cup of bubble milk tea a week?
What goes around comes around they say, and in our fondest dreams we hope that money spent that goes around will eventually come back around to us. Reality says, “dream on,” and tells us that money takes the course of a river, or a waterfall maybe.
We can, however, control the cash that flows through our household before it our very last cent decides to jump off the cliff with none to follow. But in order to even begin crafting a game plan, you need to know your players, the field and the rules of the game.
“Dare to struggle, dare to win.”
You cannot change your financial situation if you do not face it head on. Millions of people are living in financial oblivion. You need to know what you have to take control of the situation. Open up those bills that you’ve been stacking on the table, spread the statements over a table and start piecing your long neglected financial puzzle together.
Then you can begin on your budget.
“Make two cents spend one, result: prosperity. Make two cents spend three, result: misery.”
No, we didn’t come up with the sentence. Common sense, really, yet it eludes even the brightest minds sometimes. If you want to be secure financially, spend less than what you earn; else you could be taking the high road to misery by signing off amounts two times your pay cheque.
Why can we not adhere to such a simple rule? There are various reasons out there, and we often become victims of impulse buying, attention seeking, retail therapy or something of the sort. Watch yourself when you shop, why are you buying something? Is it a want or a need?
“Failing to plan is planning to fail.”
But what is a budget? It’s really a plan to tell yourself how you’re going to put your hard earned money to good use, how you’re going to survive the rest of the month/year/decade, and what luxuries you can afford. There is no one-size-fits-all budget that will work for everyone.
There are recommendations, of course. A good way to distribute your finances is to remember the essential, the necessary, and the nice-to-have. That new Prada handbag? Definitely very nice-to-have. Some financial advisors recommend allocating your funds as such: Home – 35%, Transport – 15%, Debt – 15%, Savings – 10%, Others – 25%. You can use this as a guide and adjust it to reflect your needs, take care not to let the Other slice of your pie become the pie.
You have now graduated. Really.
Do financial matters overwhelm you?
What is money to you? It’s associated with greed, power and the root of all evil. You cannot bring money away with you at the end of your life. What is the whole aim of having money? Look at money from a different perspective, as a resource, as a tool. While the notion of wealth might not interest you, surviving in this world must hold a high priority on your list of things to do. And how do we survive without money? Well, we can’t.
Many women are prone to be dependent on their spouse, and are less literate in financial matter compared to men. As acclaimed financial guru Suze Orman puts it, “A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” Depending on someone, anyone, does not give you financial freedom nor indepence. Women generally outlive men, and that alone can jeopardize one’s financial future if she is not prepared, not to mention the termination of marriage due to one reason or another.
What can you do to empower yourself and take charge of your finances?
Set a financial goal
We hear about goals all the time, but we almost never keep to them. How do you set good goals? Remember the SMART acronym: Short, Measurable, Achievable, Realistic and Time-based. Get your budget and career plan into the picture. Maybe you want to save RM25,000 within the next 5 years, or be able to pay off your mortgage or even a retirement plan. Whatever it is, stick to SMART goals and you’ll see your plans bear fruit.
Be aware of your money
Do you know where your money is going in the long term? According to Nielson’s research, men in emerging countries are still viewed as the primary decision-making stakeholders when it comes to purchasing home electronics or cars, while women rule in the health and beauty department and all child care matters. This is all fine and well, but women have to get involved in major financial decisions as well as understand how money is being spent. This is not because you do not trust your significant other, but to keep your head in the money game.
Get a home
“Owning a home is a keystone of wealth… both financial affluence and emotional security,” says Suze Orman. Buying your own home is probably the best investment you can make for your future. Do not expect someone to come along and buy it for you. Be independent!
Be more confident in yourself
Many women believe that their paychecks will reflect the effort put into their work. Not really. Many women underestimate and undervalue themselves. When you get a job, learn how to negotiate for the pay that you deserve. You rarely get something you want that you don’t ask for in life.
Invest in your future
Whether that means saving for your retirement instead of your kid’s college education or asking the boss for a raise, be willing to put yourself first for a change. “The reason more women are not a financial success is they don’t want to be uncomfortable,” says Barbara Stanny, author of “Secrets of Six-Figure Women”. “Every time you deviate from the norm, any time you do something you’re not used to doing — ask for a raise, buy some stock — it will feel uncomfortable.”
Remember that if you cannot provide for yourself, you will not be able to provide for others, or you’ll die trying. It’s never too late to begin planning. Do not be afraid to take risks and ask for professional advice.