Should CFOs Network Online?

Social networking on the Internet is all the rage these days, if the mushrooming of CFO-focused groups in sites such as LinkedIn, Facebook and Twitter is any indication. A simple search will turn up such professional groups as “Chief Financial Officer (CFO) Network,” “China CFO,” and “Super CFO” on LinkedIn and “Indian CEO, CFO, CA, CS, ICWA, CFA, Finance, Corporate & Legal Professional” on Facebook.

It’s the digital equivalent of the face-to-face networking that business folks have always done, whether in industry conferences, Rotary clubs, cocktail parties, golfing trips or other social occasions. Tech-savvy executives see e-social networking as an additional tool for this time-honoured rite, and also invaluable as a free marketing vehicle for the business and for maintaining business contacts.

Read complete article at Social Media: Should CFOs Network Online?

Slow recovery for global economy?

A NEW survey by the Association of Chartered Certified Accountants (ACCA) shows that finance professionals are forecasting a slow recovery in the world economy.

The professional body says in a statement that the Global Economic Conditions Survey among 805 of its members in 80 countries reveals a slow and credit-constrained recovery that can threaten the world’s leading economies with stagnation.

It suggests that “confidence has been lost in the sectors and countries that were once the engines of world economic growth, and that the resulting decrease in demand and supplier credit may be causing much more damage than the banking sector’s new-found aversion to risk.”

According to the survey, the contraction in world trade has affected professionals in Asia-Pacific badly, especially in China. It has also resulted in a loss of confidence among professionals in the region for their Western counterparts.

“Despite this, accountants in emerging markets and the developing world are expecting the global economy to bounce back sooner – with African countries such as Botswana, Zambia, Ghana and Kenya having the most optimistic respondents,” the ACCA says.

The research also shows that hopes of an early recovery are underpinned by trust in governments’ responses to the crisis, with businesses having to play a part too.

Source: ACCA global economic conditions survey findings revealed

High time to refinance your loan?

WITH lending rates at historical low levels, the obvious question to ask is – should one refinance their home loans? The answer is simple – if there are net savings to be enjoyed by refinancing the existing loan, then yes. If the impact is neutral, then there’s little point going through all that hassle.

Two years ago, banks were charging home buyers base lending rate (BLR) “plus” interest rates for their housing loans.

Today, the BLR for mortgages has fallen to a “minus” level. In addition, then, the average BLR was about 6.75% which was later adjusted to about 5.55% currently.

The fall in lending rates followed the unprecedented cut in overnight policy rate (OPR) by Bank Negara Malaysia since November last year by 150 basis points to 2% as it stands now.

Over the week, the central bank paused on its rate cut, leaving the OPR unchanged.

This has led some economists to predict that there will be no more OPR cuts for the rest of 2009 and 2010 which may give borrowers a reason to lock in their interest rates for housing loans at current low levels.

If the economy stabilises by next year, analysts expect interest rates to rise. But the views are mixed as there are also analysts who feel that if the situation worsens, Bank Negara could further cut the OPR.

Dr Choong Kwai Fatt, tax consultant and associate professor at the Faculty of Business and Accountancy, Universiti Malaya, opines that now may be a good time to refinance home loans.

“For refinancing, we recommend customers to change to Flexi loan, which allows them to make additional repayment and draw balance at any time with convenience of automated teller machine cards and cheque books. In addition, any amount in the current account is used to reduce the outstanding loan amount, hence there are interest savings,” he says.

Typically, banks’ lock in period is about five years; customers who switch banks before this period ends will have to fork out a penalty fee which comprises 3% of total loan amount or loan outstanding or a minimum penalty of RM5,000-RM10,000.

The fees however vary from bank to bank. There are other costs involved in switching lenders as well such as search fees, inspection fees, stamp duty and loan legal fees (usually costs less than 3% of total loan).

It is important to note that all rates and terms and conditions are negotiable, and hence, vary on a case by case basis.

Details: High time to refinance your loan?

What's the real rate of return?

真正的回酬是多少？

国行日前的降息令很多靠定期存款利息过生活的退休人士担忧，过低的存款利息低抗不了通货膨胀。虽然数据显示1月份的通货膨胀已从最高8.5%降至3.9%，但定期存款利率是2.5%，负回酬是1.4%。虽然1988和1998国家经济也是萧条，但回酬率各别是1.8%和0.4%；而2008年则是-1.7%为30年来的最低。

投资者必须明白回酬不能年年平均2.9%。在目前经济情况，保住本金是最重要的。若以财务规划的条例来说，我们必需备有4至6个月的生活费。多储蓄，少消费是不败的法则！



原文：What's the real rate of return?

MONEY $ENSE -Getting Smart With Your Money

If I had it my way, every Malaysian student should read this book before going out into the working world.

It introduces you to the financial vehicles such as insurance, loans, investments and savings account – all from a Malaysian perspective. It also teaches you how to budget your monthly expenses, pay debts, and whether to buy property or rent.

If you want to start managing your money better, this book will give you a good start.

Download free ebook MONEY $ENSE [pdf] by AKPK
Related post:
Financially Secure Marriage Planning
Effective Cashflow Management
Control Your Spending Habit
7 ways to manage debts wisely
Secrets to achieving a loan-free life
Heed the warning signs
No problem$ if you plan well
Shop smart for the festivals
Resolutions to stay financially fit
Smart ways to spend your bonus
Spend smart during holidays

Consumer Tips by Association of Banks in Malaysia

Protecting Your ATM Card

ATM Card is a debit card that you can use to access your account(s) at your Bank, and at other MEPS ATM. Besides that, you can use your ATM Card to access other service Terminals such as Cash Deposit Machines and EFTPOS terminals (if the service is available at your Bank). If your ATM Card bears the VISA PLUS, VISA Interlink, MasterCard Cirrus or Maestro logo, you will be able to perform the ATM or EFTPOS transaction overseas.

Download ARTICLE [pdf]

Protecting Your Credit Card

A credit card is a payment instrument that enables you to make purchases of goods and payment of services instead of using cash or your debit card. You can use the credit card at any merchant locally or internationally, which displays the same credit card brand as that on your credit card.

The credit card issuer will pay the merchant on your behalf first and bill you later. When you get your statement, you are required to settle at least the minimum payment amount by the due date. The credit card issuer will impose finance charges (interest) on the outstanding amount if it is not paid by the due date.

Download ARTICLE [pdf]

Investing In Unit Trust

Unit Trusts are collective investments that allow investors with similar investment objectives to pool their funds to be invested in a portfolio of securities or other assets.

As investors seek to maximize returns on their financial resources, unit trusts provide an ideal way for them to gain in the long run, returns superior to cash savings and fixed deposit investments. Unit trusts allow investors to have easy access to a wide range of investment exposure not normally available to them.

A professional fund manager is appointed to oversee the performance of the pooled funds in the respective portfolio.

Download ARTICLE [pdf]

Pre-Payment Charges On Housing Loan

Most banks offer home loan facilities for their customers to purchase or refinance their properties. A typical housing loan requires a customer to pay a fixed monthly installment on a fixed due date. This is assuming there are no changes in interest rates, otherwise the installment amount and loan period could change.

When a customer wants to pay in excess of the fixed monthly installment, the excess amount is termed as “prepayment”.

Download ARTICLE [pdf]

Security Tips When Banking Online

Internet Banking is becoming increasingly popular as it allows you to carry out various banking transactions at the comfort and convenience of your home, office or wherever you may be, during and after banking hours. However, there are still some customers who remain hesitant over online banking due to newspaper reports of internet banking scams such as “phishing” and “script editing”.

Download ARTICLE [pdf]

Accessing Basic Banking Services At Minimal Costs

One may have already heard of the basic banking services, namely, Basic Savings Account (BSA) and Basic Current Account (BCA) but does not know that under these accounts, one can enjoy for instance free 8 ATM withdrawals and 6 over-the-counter visits. This article will provide you with some general information about BSA and BCA as well as assist you to choose the type of accounts that would best cater to your banking needs.

Download ARTICLE [pdf]

Source: TIPS FOR THE GENERAL PUBLIC, More: ARCHIVES

Global Retail Theft Barometer 2008

全球零售盗窃晴雨表2008

俗话说，小偷状元材，任凭如何藏、如何防，道高一尺，魔高一丈。尽管零售巨头各显神通反偷盗，惟窃贼无所不在，花招更是层出不穷，甚至上演“贼喊捉贼”，叫业者束手无策。

别以为身为诚实消费者的你我就能置身事外，殊不知这笔“贼费”已悄悄地潜入我们的生活消费，导致每一个家庭每年被迫为盗窃者的行为“买单”，吸收高达43.59美元（约157令吉）的“隐蔽税”。

根据美国保点系统Checkpoint Systems委托英国诺丁汉零售研究中心The Centre for Retail Research执行全球零售盗窃晴雨表（Global Retail Theft Barometer）的调查显示，大马2007年6月至2008年6月的经营损失达2亿5600万美元（约9亿1995万6480令吉），较前期高出3.4%，经营损失率为 1.53%。亚太总经营损失达154亿零500万美元，大马为众亚太国家中，经营损失第三高的国家，在全球则排名第五。

全文：不景氣竊案增‧天下防賊

Government fundings & advisory services for SME

为中小企业所设的政府基金及咨询服务

在8MP及IMP2期间，其中一项重要的发展是在2004年6月成立了全国中小型企业发展理事会(NSDC)。此理事会由首相主持，显示了政府对中小型企业发展的高度承诺。

此理事会负责协调各政府部门及机构之间的中小型企业发展工作，并且对未来的发展提供一个政策策略架构。

现今共有超过12个政府部门及38个次相关机构处理的中小型企业发展工作。这其中的每一个机构都对特定的目标拥有指定的发展目标。

资料来源：SMEinfo

中小型企业可联络以下机构以获取咨询服务：
1. 信贷担保机构(CGC)
2. 国家银行一站式财务咨询中心BNMLINK
3. 中小型工业发展机构(SMIDEC)的中小型企业专业咨询小组(SEAP)
4. 银行机构的中小型事务单位SMEinfo
5. 中小型企业咨询中心(SAC)
6. 农业与农基工业部(MOA)咨询服务

除了从游览以上网站了解详情或下载此份资料[PDF]

Is your savings safe?

The answer is YES! If your have deposited your hard- earned money in the bank of Malayisa, Perbadanan Insurans Deposit Malaysia (PIDM), a government agency is providing deposit protection against your savings.

Eligible deposits are protected up to RM60,000 per depositor per member bank. Member banks are commercial banks and Islamic banks in Malaysia.

Eligible deposits include savings and current accounts, fixed and Islamic investment deposits, joint and trust accounts - for individual depositors and business entities.

Find out more by calling 1-800-88-1266, visit PIDM's website at www.pidm.gov.my or pick up a leaftlet from any of member banks.

Now you could win RM25,000 by entering the "PIDM & You contest", from 14 July to 31 August 2008, check it out.

Financing for SME

Are you an SME looking for financing to grow your business?

If your answer is YES, so come and hear the bankers speak on:

• SME Financing in Malaysia - Issues & Challenges
• Contract Financing
• 21st Century Banking Channels
• Structured Trade Options for SMEs
• Survival of the Fittest - Effective Cash Flow Management
• Managing Risks
• Trade Products - Pre-shipment / Post-shipment
• SME Credit Bureau / CGC Guarantee Scheme

Also you can join the special Meet-The-Bank Session!

This Banking Industry Seminar for SMEs is organised and sponsored by The Association of Banks in Malaysia.

Seminar title: Enhancing SME Awareness And Access To Financing
Date: Wednesday, 9 July 2008
Venue: Grand Ballroom, Mandarin Oriental Kuala Lumpur.
Registration: RM 100 before 30 June 2008, RM 150 before closing date 5th July 2008
Tel: 03-2078 8041 Fax: 03-2078 8004 Email: banks@abm.org.my

Details & Registration Form: HERE [pdf]

Smart Consumer Video Clips

We are all Smart Consumer, here are some video clips from Federation of Malaysian Consumers Associations. By watching it, you maybe become even smarter...

Bijak berbelanja Kualiti Produk Cetak Rompak Buatan Tempatan Tarikh Luput Mini Sitcom

Plan and Win RM50,000

FANCY learning about ­financial planning and at the same time grab a chance to win up to RM50,000?

Thanks to Axa Affin Life Insurance Bhd, now you can, by taking part in the online game contest Turning Point.

Turning Point is a virtual boardgame that simulates “quality-of-lifestyle and wealth-­management experience,” the company said.

Axa Affin Life Insurance said the game is aimed at creating ­awareness among working Malaysians that financial planning is an important element in ­everyday life, and that life comes with ­obligations and surprises.

The contest ends on June 30, 2008, and is open to citizens and permanent residents of Malaysia age 21 years and above.

The top eight who accumulate the most points will be chosen as winners. The grand prize winner will walk away with RM50,000, second prize winner with RM10,000 while the third place winner will win RM5,000. Consolations prizes of RM1,000 each will be given to the next five winners.

Financially Secure Marriage Planning

SMATRT MONEY SERIES

Some married people would joke that there are three “Rings” in marriage – the Engagement Ring, the Wedding Ring and the Suffer-Ring! Ouch! How did that “ring” ever get onto our finger? Statistics have shown that one of the root causes of marital problems revolves around money. Just imagine if one individual can’t manage his finances well, what more when you put the two together (along with a few more juniors!)

Let’s Talk…

Are you a saver while your spouse is a spender? Coming together from two separate worlds, we may have our own ideas and feelings about money. We should sit down with our spouse to discuss how we regard and use money – be it how many pairs of shoes you “need” to buy to how many packs of cigarettes you smoke per month. Be honest about all debts and loans, especially if you have any outstanding credit card loans or the number of Ah Long “friends”! Being opened with your finances, you can be difficult but it’s better to share that information now than face surprises later. Talking about money early in your marriage may save you a lot of heartache.


Tying the Financial Knot

When we tie the knot, we have to ensure that our own financial knot is not entangled. It would be wise to be clear on each other’s roles and responsibilities pertaining to household finances. For example, who is going to pay the bills, save for children’s education and pay those monthly loan installments? It is also very important to decide on the issue of parental allowance as both parties have to agree on giving an acceptable amount to parents on both sides. Ideally, if both the husband and wife are working, they should maintain at least 3 accounts – “My Account”, “Your Account” and “Our Account”. This would allow each party to maintain some independence over their personal purchases while contributing their fair share towards joint expenses. Having a combined Cash Flow Statement showing “His”, “Her” and “Our” income and expenses, may be a good idea.

Another area is on the treatment of each other’s assets and liabilities. If a marriage starts on a clean sheet of paper, then both of you could still decide later on – either in joint names or in either party’s name. However, if the union comes with “excess baggage”, then the couple would need to be clear on how to deal with their existing personal assets and liabilities. Are they going to combine them or treat them separately as their own responsibilities? Very often, couples tend to carry over their liabilities into their marriage and that may be the bone of contention later on in their married life. Having a combined Net Worth Statement showing “His”, “Her” and “Our” assets and liabilities, may prevent any arguments.

Peace of Mind

Another very important area that should be looked into is Life Insurance. It would almost be a necessity to have sufficient coverage when we get married and start a family. This is because we are no longer living for ourselves anymore but also for our loved ones. Are we to leave our spouse and children in dire financial distress should something unfortunate happen to us? Life Insurance ensures that our dependents can pick up the pieces and carry on living with some measure of financial comfort. They need not worry about where the money coming from or whether they would still have a roof over their heads.

For those who already have some life insurances, it is advisable to review your benefits. You may need to drop some coverage if your spouse’s plan covers the family or perhaps enhance them to include your family. It is also advisable to update your beneficiaries if necessary. Ultimately, we want to optimize our benefits to be able to walk down the aisle with peace of mind.

Plan Your Financial Future Together

After reviewing what you have and expressing your feelings about money, you can now start planning your financial future together, which in essence is planning your life together as husband and wife. The other area may be your love nest. Where is it going to be? When is it going to be? Will it be landed or a “space in the air”? If landed, will it be single or double-storey or perhaps a semi-D or your very own bungalow? Property cost may be the single largest family expense and both of you have to manage your expectations.

The second thing may be children. Those bundles of joy may need bundles of cash too! It’s not too far-fetched to say that we may need as much as One Million Ringgit to raise a child in the future as a big chunk of it goes towards their education. Therefore, if the both of you decide to have a football team, then you’ll really need to sit down and start planning!

Last but not least, one of you may decide to quit job after marriage to concentrate on building a family. That’s not a bad idea but this topic should be discussed as early as possible to better prepare yourselves. Both of you have to agree on who’s going to be the “Finance Minister” and who’s going to be the “Home Minister”. It may be gradual (like going from full-time to part-time) or it may be immediate but the decision should not give raise to financial predicament.

Living Happily Ever After…

Marriage is just not a word; it’s a sentence… a life sentence! As you enter into this new stage of life, remember to review your finances together regularly as both of you will be taking a long journey together as man and wife. While Love is important, Money is a necessary ingredient towards a blissful marriage. So, start Planning for a Financially Secure Marriage so that we too, may one day have a fairytale ending: “… and they Lived Happily Ever After…”!

Source : AKPK
Related post:
Effective Cashflow Management
Control Your Spending Habit
7 ways to manage debts wisely
Secrets to achieving a loan-free life
Heed the warning signs
No problem$ if you plan well
Shop smart for the festivals
Resolutions to stay financially fit
Smart ways to spend your bonus
Spend smart during holidays

Effective Cashflow Management

SMATRT MONEY SERIES
Do you ever wonder why there are “too many months at the end of your money?” Do you find it difficult to keep track of your expenses? Ask yourself this: “Who's the Boss - ME or MY MONEY?”

Who’s the Boss?

One of the areas of Financial Planning is Cashflow and Debt Management. In this regard, it is important that we understand the kind of relationship we have with our money - do we have Control over our money or does money Control us? Who is the Master and who is the Servant? If we allow our Cashflow and Debt to manage us, then money’s our master. On the other hand, if we can manage our Cashflow and Debt effectively, then we are the master of our finances.

Let's take a look at this simple guideline:

Who's in Control?	Master	Servant
Cashflow & Debt	Money	Man
YOU	Man	Money

The question now is: "How do we make Man the Master of His Money?" BUDGETING, of course! One of the tools in managing our Cashflow and Debt effectively is through Budgeting. Even our country practises this and it is important that we too, form a habit of budgeting and more importantly, sticking to it!

What’s a Budget?

For most of us, a budget is perceived as something that restricts our spending and its main purpose is to make us Save, Save and Save some more. That is why so many of us just don't get down to it. In reality, a budget is a plan for spending our money - it does not tie us down. In fact, it liberates us! It does not tell us what we cannot spend, but rather it tells us what we can spend on without having to feel guilty about it later.

Let's take a look at some Key Components of a Budget:

Cash Inflow Cash Outflow Salaries Bonuses Dividends Rental Income Interest Income Part-time Job Fixed Expenses: Loan Repayment Children Education Life Insurance Premium Maid Salary Variable Expenses Income Tax Food Utilities Gifts Travel/Holiday Entertainment Road Tax / Motor Insurance Medical Expenses Car / Home Repairs

There are basically two main components to a Budget: Cash Inflow (Income) and Cash Outflow (Expenses). We’d have a Surplus if our Income exceeds our Expenses. On the other hand, when our Expenses are more than our Income, this would result in a Deficit. This Deficit would either eat into out previous years’ savings or force us into debt.

Needless to say, our goal is to ensure that our income is more than our expenses and most people will focus on increasing their Income rather than controlling their Expenses. Ironically, in our pursuit of increasing our income, we "unconsciously" increase our Expenses as well! The end result - our Net Cash Flow position would remain relatively the same or worse-off!

How Do I Do It?

There are really no hard and fast rules but below are some simple yet effective strategies for better control over one's Cashflow through proper Budgeting:

1. LIST
a) List down all your sources of Income
b) List down all Expense Items for the month, categorizing them as either Fixed or Variable (do not overlook one-off lumpy expense items like Road-tax & Motor Insurance premiums)
c) Calculate the Net Cash Flow position (total inflows minus total outflows)

2. CHECK
a) Screen through the list of Variable Expense Items and try to identify items that can be done away with or delayed.
b) Do a reality check to see if the budget is realistic and take one step at a time (don't be too hard on yourself, for starters)

3. TRACK
Warning: This involves a great deal of Discipline!
Depending on your preference, you could either record all your spending on a daily basis with the help of a PDA or you may stick to the conventional "555 Pocket Booklet". If possible, try to keep the receipts for all your purchases and sort them out according to your budgeted itme. At the end of each week, transfer the numbers over to the Master Budget Record. Do this religiously for the next 30 days and it will become your second nature.

4. REVIEW
After the 30-day period, sit down with your spouse or an advisor to review your progress by comparing “Amount Budgeted” versus “Actual Amount Spent” and determine the reasons for the difference. Adjust your budget or spending, where necessary.

In Summary…

The main thing to bear in mind is to ensure that our Cash Inflows are always more than our Cash Outflows in order to have “Cash Overflows” or what is commonly known as Cash Surplus. Only then could we embark on the journey towards Financial Independence. A journey of a thousand miles begins with the first step. So, take your first step by preparing your Family Budget and more importantly, stick to 'em!

Source : AKPK
Related post:
Control Your Spending Habit
7 ways to manage debts wisely
Secrets to achieving a loan-free life
Heed the warning signs
No problem$ if you plan well
Shop smart for the festivals
Resolutions to stay financially fit
Smart ways to spend your bonus
Spend smart during holidays

Control Your Spending Habit

SMART MONEY SERIES:

“To Spend or Not to Spend… that’s The Question!” How many times have this question crossed our minds? Almost every time when we take money out of pockets, right? Have a day passed by without us having spent a single cent? Unlikely! The question is not whether to spend or not but rather, How Do We Control Our Spending Habits. Below are some smart spending habits to adopt in order to be financially healthy.

Spend According to Budget

There is a Malay proverb that says “ukur baju di badan sendiri” that we should measure our clothes on our own shoulders. This is the equivalent of saying that we should spend according to our budget. We have already covered the topic on Budgeting in our previous article and to reiterate it: Budgeting is really a plan for us to spend without feeling guilty about it later. What is important here is that we need to have a “Spending Plan” in the first place. Without it, we would most likely be spending on impulse or what is commonly known as Impulse Buying. We can’t avoid impulse buying totally and it’s not wrong. There would be times when we just can’t resist that aroma flowing from that cup of Cappuccino or that pair of shoes or handbag which is on sale! However, when it becomes the norm rather than the exception, we have to be wary of our spending habit.

In preparing your Spending Plan, you should also learn to anticipate your needs. For example, if we are going to get ourselves new clothes for the coming festive season, get it earlier during the Mega Sale or whenever a good bargain comes our way (for example, during a warehouse sale or closing down sale). If we were to buy an umbrella each time it starts raining, we not only end up with too many umbrellas but may have to pay a premium for it. It is also advisable to budget for unexpected expenses like wedding angpows, car repairs, home repairs etc. These items, if not provided for, may throw us off-budget!

Compare Prices

Do we make it a habit to shop around before buying something or do we just buy it? Some of us might argue that the time and cost of shopping around before buying a bottle of cooking oil or a tube of toothpaste may not be worth it. True and that is why we have to be a Smart Consumer – we should plan our purchases and have a record of prices of these essential items. Here, we could devise our very own “Price Book” to record down the prices of the items that we buy regularly and know exactly where and when we could get the best deal!

For example, if Store A has the lowest prices for most of the items in our shopping list during weekdays, then we should plan our grocery shopping during the weekday there. However, if Store B has the best bargains during the weekends and we are only free during the weekends, we should go there instead. The point is – have a Shopping List, a Price Book and Stick to them. In fact, we can make this entire process a fun family activity by getting our children help in doing a “price survey” each time they go shopping. Each family member can then compare notes to see who can find the best bargain in town! This would not only help us in comparing prices but also teach our children the value of money.

Branded Stuff

What’s in a Name? Everything and it may be worth more than the product itself and as consumers, we tend to buy the brands that we trust the most. This is well and fine but when we end up buying things that we don’t need or can’t afford, it becomes a problem. Some of us buy branded stuff because we are influenced by the images conjured and emotional appeal created by the advertisement itself and not because we need it. As a Smart Consumer, we have to sometimes look beyond the brand and ask ourselves: “Do I really need it?”, “is it really worth that much?” and “Can I really afford it?” Don’t make purchases based on images or even what your friends have but rather on your needs and the merits of the product itself.

Buying Second-Hand Items

The thought of buying second-hand items might put some people off but this is a great way to stretch your Ringgit. The greatest benefit of doing so is to allow the first buyer to take the initial depreciation of the goods, which is normally the largest. Take for example of buying a brand new car. Most of the time, the new car owner would suffer between 10-20% depreciation of the value of his new car the moment he drives it out of the showroom! If he sells it after 3 years, he may sell it for two-thirds of the initial purchase price, if he is lucky! Imagine if you’d bought it from him… it’s like getting a “discount”. Yes, you may not get that “new smell” of a car but does it really matter? It may be worth the sacrifice as long as the car is well-maintained, accident-free and heavily discounted, don’t you think so?

Another good example of products that we may not want to buy it new is baby products, especially clothing and toys. Some of us might cringe at that idea but it is not uncommon. Baby clothing is not cheap and your baby will most likely wear for short period of time as the baby will outgrow the clothing very fast. Ideally, we could get hand-me-downs for free by dropping a hint here and there. Otherwise, we could either borrow or buy them second-hand from parents who will no longer need them anymore.

Buying Second-Hand items can also include new items sold at a fraction of their original price because of product defects, factory overruns and clearance of old stocks. Unless you are a celebrity or some very important public figure, you do not need to be spotted with the latest fashion or newest model of mobile phones, watches etc. If we do not mind the slight defects or it being a slightly older model, there are bounds of opportunities to grab a good bargain. There are numerous places to consider when buying these items, including warehouse sales, factory outlets, garage sales, junk stores and the flea markets. The process of bargaining can be quite fun and you will certainly sharpen your bargaining skills over time!

The Sleep Test

Shopping can be an addiction and is never easy to resist. We all know the symptoms when the buying bug bites… we feel the adrenalin rush that makes our hearts desire for it; then it goes right up our head and we start rationalizing about it. We tell ourselves that since we worked so hard, we truly deserve it and want to reward ourselves JUST THIS ONCE! Finally, it triggers our hands to dig into our pockets and out comes the “Plastic Card” – CHARGE IT!

Our will may be strong but our flesh is weak! After all, we are only humans, right? However, one effective way to counter this is through “sleeping over it”. This will be especially useful for big-ticket items like buying a new car, changing that old furniture set, renovating our home, buying that plasma/ LCD TV or even that home-theatre system or whatever else we are considering. Before committing ourselves to these items, sleep over it and take a closer look at our budget to see if the purchase fits into your current plan. Discuss it over with your spouse or family and take all the time you need to think it through carefully because once the money is gone, it’s gone!

Remember: When making your next purchase, ask yourself these questions: “Do I really NEED it?”, “Is it within my Budget?” “Is it the Best Deal?” “Can I find a cheaper Brand with the same value?” “Can I find a Second-Hand item instead?”

Be a Smart Consumer and let’s “Make Prudent Financial Management A Way of Life” today!

Source : AKPK
Related post:
7 ways to manage debts wisely
Secrets to achieving a loan-free life
Heed the warning signs
No problem$ if you plan well
Shop smart for the festivals
Resolutions to stay financially fit
Smart ways to spend your bonus
Spend smart during holidays

Rounding Mechanism

The implementation of the rounding mechanism to the nearest multiple of 5 sen for all payments will be fully implemented effective from April 1, 2008.

The introduction of this mechanism is to reduce the demand for one sen coins. However, the one sen coin remains as legal tender for payment of goods and services.

The implementation of the rounding mechanism would benefit both consumers and businesses. For members of the public, the rounding mechanism will make payments faster and more convenient. For businesses, it will reduce handling costs.

The rounding mechanism only applies to the total amount of a bill and not on individual items. Under this exercise, the total amount of a bill inclusive of tax, which ends in 1, 2, 6 and 7 sen will be rounded downwards to the nearest multiple of 5 sen while the total bill which ends in 3, 4, 8 and 9 sen will be rounded upwards.

Detail content by Bank Negara Malaysia : Rounding Mechanism
and Frequently Asked Questions (FAQs) on Rounding Mechanism
Video by Star: Introducing the Rounding Mechanism

Matching Grant and Soft Loan Application

Start up or expanding a business need financial capital. Do you know our government have channel through agency like SMIDEC to help SMI/SME by providing Matching Grant and Soft Loan? Come and explore how this financial aid can benefit you!

Seminar on Matching Grant and Soft Loan Application

Organise by: Klang Chinese Chamber of Commerce and Industrial
Date / Time : 05/04/2008 0930-1245
Venue: Klang Chinese Chamber of Commerce and Industry Auditorium

Limited seats, please contact 03-3344 7362 or Email klgccci@streamyx.com to reserve your FREE seat today!

7 ways to manage debts wisely

SMATRT MONEY SERIES
WE cannot just ignore or forget about our debt as it will never disappear for as long as it remains unpaid.

Therefore, the path towards a debt-free life would be to manage our debts wisely.

Below are seven highly effective ways of debt management:

- 1. Control the use of credit cards

The golden rule in using credit cards: "Treat them like cash."

If you don't have the cash now to purchase something, don't even think about taking the credit card out of your wallet!

Using the credit card in such circumstances is essentially spending future income which may not be payable in full later. And this is the start of getting ourselves straight into the debt-trap. If you don't trust yourself, then don't bother having one or if you already have a few, cut them up before they cut into your bank account!

- 2. Know where your money is flowing

If you can't track it, you can't manage it. Develop a habit of recording all your expenses for the month. You may write it down in the "555 Pocket Book" or the personal digital assistant (PDA) for the tech-savvy people. It is also a good practice to keep receipts. Add up your expenses and assess if you have overspent, by comparing it to your income.

Analyse those items that are taking the most money out of your pocket and see if you can do anything about them. You'd be surprised how much you're spending on those cigarettes, movies and "branded coffee". The main thing is to never spend more than you make.

- 3. Minimise the "nice-to-haves"

One of the reasons people fall into the debt-trap is that they don't know how to distinguish between the "need-to-haves" and "nice-to-haves". Food, clothing, home, life and health insurance and the likes are "need-to-haves".

You don't need a pack of cigarettes a day. You don't need a RM10 cup of coffee a day. You don't need to wear branded clothes all the time. You may not even need satellite TV or that 42" Plasma/LCD TV.

Go through your spending record and identify items that can be cut. Sacrifices have to be made and the larger the debt or the smaller the income, the bigger the sacrifice.

- 4. Create a budget

No country runs without a budget; neither should you. One of the most effective ways of managing our debts wisely is through proper budgeting. A budget gives us a "preview" of our financial position so that we can roughly estimate whether we would have a surplus or deficit.

If our budget already shows a deficit, drastic action has to be taken - you could either increase your income or cut out the "nice-to-haves".

In any case, a Budget is actually a Spending Plan that allows you to spend on areas that matter the most to you while ensuring that you don't overspend.

- 5. Look for cheaper alternatives

Revisit your monthly budget and see if you can use any other cheaper alternatives for the necessary items. For example, toothpaste - can we switch to brands which give better value for money? Check its net weight and decide on purchasing the brand that gives you the same value for a lower price. Sometimes, cheaper may not always be better. What we should be looking out for is value-for-money.

Is it cheaper and faster to take the public transport instead of driving? Is it better to shop for Christmas gifts much earlier, like during the Mega Sale instead of waiting till year-end?

Think of creative ways of cutting your expenses and yet maintaining your quality of life. This can be fun, too. Get your family involved by asking them to suggest and reward the person with the best idea.

- 6. Stay away from temptations

As the saying goes, "Out of Sight, Out of Mind". Many a times when we go shopping for our groceries, we end up buying things that are not on our shopping list.

This phenomenon is worse when we have kids around us. They tend to throw in a candy or a toy into the shopping cart and before we know it, we have spent more than we budgeted for.

Parents are partly to be blamed as they, too, can be tempted to buy things that they do not need. Unable to resist the magnetic pull of products on discount, ice-cream, potato chips and that pair of sandals on offer get "drawn" into their shopping cart. And we can always justify our actions by rationalising that "It's on offer!" or "I'll not buy any more sandals for the rest of the year!" but... we'd know better.

So, stick to your shopping list and keep everything else out of sight.

- 7. Remember to reward yourself

"All work and no play makes Jack a dull boy," so goes the saying. Managing our debt and getting out of it is hard but it doesn't have to be painful.

Once in a while, you should reward yourself by buying yourself a well-deserved gift or treating yourself to a good hearty meal. By rewarding ourselves, we'd feel motivated to stay on track.

You can actually organise a "pot luck"at your place instead of going out to eat and amaze your friends with your culinary expertise. Have picnics with your family and think of creative games or activities that you can do as a family. Make this whole exercise as fun as possible and after a while, you will come to realise that a lot of the best things in life are free.

There you have it - the seven highly effective ways of managing your debts wisely. We have to bear in mind that if we do not manage our debts wisely, they will manage us in return and it can be painful. The road to managing your debt wisely would be a smoother one if we try not to think of all these as a sacrifice, but as delayed gratification.

Remember: "Our actions today can determine our destiny tomorrow."

Source : AKPK
Related post:
Secrets to achieving a loan-free life
Heed the warning signs
No problem$ if you plan well
Shop smart for the festivals
Resolutions to stay financially fit
Smart ways to spend your bonus
Spend smart during holidays

Secrets to achieving a loan-free life

SMART MONEY SERIES:
We looked at the burden of having too much debt and suggested some smart ways of managing them last week.

This week, we will learn how to manage loans, especially home mortgage and car loans, which probably form the bulk of our loans. Ultimately, we want to be able to live in peace and to be truly free from debt stress.

Should you take a loan?

Now, most of you may think the question is absurd and may be saying to yourselves: “What, you expect me to buy my house and my car with cash?”

But before you flip the page, let’s try to understand some basic principles about taking on a loan.

First of all, we have to be aware that “the borrower is the slave of the lender". Wow, are you aware of this?

When we borrow, we are at the mercy of the lender and we would have to work very hard throughout our lives just to settle our debts. We would have to sacrifice precious time with our loved ones and forego pursuing our own hobbies because we have to put in longer hours at work.

Why? Because we have loan commitments. In essence, most of us, irrespective of our professions, are working for the banks.

Secondly, we should “never go into debt for anything that you don’t expect to appreciate in value". This is a good principle to follow the next time you intend to take a loan.

Take, for example, your car. There are so many young people who can’t wait to get behind the wheel, and not just any wheel. Their cars must be trendy, stylish and sporty.

It’s truly amazing how a fresh graduate could afford a brand new car, but wait... you don’t even need to put a down payment these days! Just vroom the car out of the showroom and pay later, goes the marketing pitch.

Do you know that the value of the car drops by 10-20 per cent the moment it leaves the showroom?

If you really “need” to get a car, buy it with cash. Otherwise, there’s always the LRT, buses or car-pooling (This can help reduce traffic jams, as well.)

Having said that, there may be times when taking a hire-purchase to finance your much needed car is warranted.

There are manufacturers who may want to clear their existing stock and offer very attractive financing schemes.

You would have to compare the cost of borrowing with what you can earn from your savings/investments.

However, hire-purchase rates are never the same as bank interest rates. A good rule of thumb would be to double-up what you’re offered as your financing charge.

So, remember this: for hire-purchase rates, what you see is not what you pay!

Do you own your home?

Now, let’s take a look at our dream home. It’s probably the single largest loan for most of us. We have to consider carefully before committing to one.

As mentioned last week, not many of us are able to buy a house outright with cash.

Instead, we apply the 90/10 formula — 90 per cent loan, with 10 per cent down payment for the purchase of our home.

Unless you’ve bought your home outright with cash, you can’t really say that you own your home. You may have a home but not own it, at least not yet.

Technically, the bank owns your home until you’ve fully settled all your loan obligations. Only then, the legal ownership of the house reverts back to you.

To purchase a house, it’s seldom feasible to buy it outright with cash and it’s quite all right to take a loan.

This is because a house will, in most cases, appreciate in value over time and is generally a good hedge against inflation.

However, you would have to ensure that your monthly instalments are not too burdensome to the point that it affects more important areas of your life.

It would be meaningless to be living in your dream home but having to constantly worry about how you’re going to make the next monthly instalment.

Remember, our ultimate goal is to be able to live in peace and be free from debt-stress.

The sooner the better...

The sooner we are able to pay off our mortgage, the faster we will be able to live in peace and be free from debt-stress.

In the process, we will be able to save thousands of ringgit in interest charges (which you can use to buy your car!)

So, how can we pay off our loans faster and own our homes earlier? Let’s reveal the secret...

Until recently, there were only term loans, and if you were committed to a 30-year loan, you’ll take exactly 30 years to pay it off.

By that time, your house would have probably doubled in value (as would your age).

You would be proud that you made a wise investment decision 30 years ago, but upon further analysis, you would realise that you have paid as much interest, if not more, than your original loan amount.

In short, the value of your house must appreciate that much to make up for all those interest charges.

So, don’t go popping the champagne just yet, unless you bought your property for RM50,000 at that time, and it is worth half a million today.

The trick to a debt-free life is to pay off your loans as soon as possible to save on interest charges.

Nowadays, banks offer various loan packages with various features and flexibilities.

You should carefully pick one which suits your requirement and pay close attention to other terms and conditions, like penalties and so on.

A good package may be one that allows you to pay any amount at any time and at the most competitive rates, with the least restrictions.

Set a goal of a desired time-frame by which you want to fully settle your mortgage, and commit yourself to that goal.

Dump your bonus into it along with all your “angpows” or pay more than the required amount every month.

In no time at all, you can say to yourself, “I own my home.” What a great feeling that’d be!

Debt Free, Stress Free!
Source : AKPK
Related post:
Heed the warning signs
No problem$ if you plan well
Shop smart for the festivals
Resolutions to stay financially fit
Smart ways to spend your bonus
Spend smart during holidays

Heed the warning signs

SMART MONEY SERIES:
In managing finances, things may not go as well as you have planned. So it is important that we should look out for warning signs that should trigger us to seek help.

IN our last article, we learned how to manage our cash flow effectively. However, there may be times when things don't go as well as we've planned. It's important that we look out for warning signs if we need help in managing our finances, particularly our debts.

Below are some indicators that should trigger us to seek help in managing our finances:

Frequent arguments over money

If you are arguing with your spouse frequently over money, then it's a sure sign that you are facing some financial difficulties. If this financial problem is not addressed promptly, it may lead to other marital problems and could result in a divorce.

High debt-to-income ratio

As a rule of thumb, we should limit all our debt obligations to about one-third of our take-home income (generally defined as gross income less EPF, tax and Socso deductions).

If our take-home pay is RM3,000 per month, then our housing plus car loan repayments (including other loans, if any) should not exceed RM1,000 per month. It's not surprising to find many families having a Debt-to-Income Ratio of more than 50 per cent. This would mean that they'd have less than half of their income left for basic living and child expenses.

What about those occasional holidays, gifts, outside dining and entertainment expenditures?

Most likely, they'd be forced into taking on more debt through credit card or personal loans. This will result in a vicious cycle and will only get us deeper and deeper into the debt trap!

Maxing out on credit limits

As a result of the above, that is, when an increasing percentage of our income is used to pay off debts, we would rely on credit cards.

If you notice that your credit balance is increasing each month, this would be another warning signal.

If left unchecked, you'd most likely hit the limit very soon and then start maxing out on the second and third card. Before you know it, you find yourself drowning in a pool of debt.

That's when your "good friend", Ah Long, will throw you a "float" to "save" you, not realising that this "float" of theirs is filled with rocks that will weigh you deeper down into the drowning pool of debt.

Paying the minimum only

Another tell-tale sign is when you start paying only the minimum of five per cent on your credit card balances. The balance would normally attract a finance charge of 1.5 per cent per month or 18 per cent per annum.

For example, if you have an outstanding balance of RM1,000 and decided to only pay the minimum of five per cent or RM50, whichever is greater, the amount of interest charged to you in the first month is about RM14.25.

You might not think of this as a lot but do you realise that if you continue this payment pattern, it'll take two years for you to fully settle your initial balance of RM1,000. The total interest incurred would amount to about RM173.

Imagine if the amount is RM10,000 -- it will take you more than seven years to repay and your total interest incurred would come up to RM3,740.

Of course, these numbers assume that you do not add-on to your present balance, but how can you be sure it will not happen? Yes... only if you cut your cards immediately!

Always late in settling bills

We are so used to the saying, "Better Late than Never!" However, when it comes to paying our bills, this is not a good sign!

Of course, we do not need to settle our bills immediately when we receive them but they should be settled by their due dates. If we are chronically late in paying our bills up to a point where late payment penalties are imposed, we need to re-examine our finances.

We don't want to end up in a situation where our electricity and water supply and telephone lines are cut or our cars are repossessed.

So, if we are a little behind most of the time, it's time to get behind the numbers!

Lots of IOUs

If we realise that more and more of our relatives and friends are avoiding us, most likely it's not because we've not bathed for a week!

Very likely, we have been borrowing money from them and have stacks of "I Owe yoUs" in our drawer!

Another early warning sign is when we tend to borrow to purchase things that we used to pay for in cash. This is an unhealthy sign and we not only lose control over our money but also our friends and relatives.

Sleepless nights

This is also known as the "Sleep Test". Can you sleep well at night or are you having sleepless nights thinking about your money problems?

In fact, the more you think about your money problems, the more money problems you would encounter.

Your mind attracts the things you think about most and we should focus on the solutions rather than the problems. And one way is to seek financial counselling and get started on a well-designed debt management programme.

This is not something that we can "sleep over" and hope that every thing will be fine tomorrow. We have to take action now!

If you do encounter any one or more of these warning signs, you should seek immediate help in getting your financial fitness back in shape.

Source : AKPK
Related post:
Shop smart for the festivals
Resolutions to stay financially fit
Smart ways to spend your bonus
Spend smart during holidays
No problem$ if you plan well