Friday, November 28, 2008

EPF @ KWSP Contributions Reduced to 8% - Part 3 - Form KWSP 17A(AHL) - KHAS Is NOW AVAILABLE!

For those who wish to maintain the EPF @ KWSP contributions at 11%, the new form - Form KWSP 17A(AHL) KHAS is now available, earlier than what has been mentioned ealier (1 Dec onwards). You can get it from your nearest EPF office or you can download the form from KWSP website. Only those who wish to maintain the contributions at 11% are required to fill up the form.

Actually, the main content for form KWSP 17A(AHL) is "Saya dengan ini membuat pilihan untuk mencarum melebihi kadar berkanun bagi syer pekerja sebanyak 3%" or "I agree to contribute additional 3% for employee contribution". The options is needed only for the period of 2 years - from Jan 2009 till Dec 2010 wages. The effective date of your request depends on the month/year you filled in Part C of the form or ONE MONTH after EPF received your KSWP 17A(AHL) form.
Hurry! Fill up and Submit the Form before Jan 2009!
P/S: Please seek for advices from your Human Resources Department on submission of forms, because there is another form, Form KSWP 17AA(AHL) - KHAS. This form is for employer who wish to submit the request for a group of employees.

Updated on 3 Dec 2008: Download your Form KWSP17A(AHL)-Khas and KWSP17AA(AHL)-Khas here, Part 4 of this post.

Thursday, November 27, 2008

EPF @ KWSP Contributions Reduced to 8% - Part 2

Yesterday, I just received the information from our Human Resources Department that we have to wait for the new Form KWSP 17A (AHL) which will only be available from 01 Dec 2008. You can get the form for EPF offices nationwide or it's website, Do not use the current Form KWSP 17A (AHL), it's not valid. If you have submitted the current form, make sure you resubmit the new form from 01 Dec 2008 onwards.
It's has been 3 weeks since the announcement been made. So far no news to hold the 3% reduction for employee EPF contributions. I definitely will prefer to mantain my contribution at 11%. These are the reasons why:
  1. Less taxable income (Higher reduction, means less taxable income -> Pay less income tax)
  2. Bigger @ Fatter retirement fund (3% x 12 months x 2 years = quite a lot of $$$)
  3. More yearly dividend (average 5% dividend x (3% x 12 months x 2 years) = more $$$)

Feel free to share your views :)

Wednesday, November 26, 2008

Maybank eFixed Deposit - Fixed Deposit Placement Made Easy - Part 1

Have you heard of e-Fixed Deposit? I first came across eFixed Deposit when I was performing an online transaction at Maybank (MBB) online banking, It's an online fixed deposit (FD) placement with NO certificate issued. This is something convenient for me as I do not need to personally go to the bank for FD related matter. At first, I was a bit skeptical about this certless FD, but after did some research and called to the bank to enquire, I feel quite confident with this eFD. So, I gave it a try.
Before you can do your eFD placement, you must have the followings ready:
  1. A saving account with MBB (with enough cash to start a FD placement, min RM1K)
  2. Registered with MBB online banking (else, you can't log in)
  3. Update your mobile number for TAC (Transaction Authorisation Code) through local ATM (TAC prevents unauthorized transaction. For online transaction, users will need to click on 'Request TAC' button before can continue with transaction. Within a few minutes, a 6 digits pin will be delivered to your mobile through SMS. This 6 digits pin only valid for 2 hours upon request.)
Once the above is ready, log in to, you'll notice there's eFixed Deposit on the left navigation bar. Click on eFD Placement, then just follow step by step instructions. Once completed, you will see a computer generated receipt (refer to the screen shot below).

It is advisable to print out this receipt for future references. To avoid any difficulty or issue with your eFD placement, remember NOT to close your saving account. Make sure it is valid and active. Because the eFD placement and uplifting is link to your saving account. Hopefully there wont be any problem with my first eFD placement. Will update with another post on the uplifting.

Online Banking @ E-Banking - What's Your View?

Yesterday, I asked a dealer whether she received the payment which we had banked-in to her bank account earlier this month. She said should be ok. She adds, it's troublesome for her to call the bank officer to check the transaction for her. Then, I asked her whether she has online banking facilities. Her answer was "I never trust internet banking..". I was a bit shocked as she's the IT-savvy type. She also told me "I don't even have an ATM card because I don't trust the ATM facilities". Wah! This time I was really shocked! Jokingly, I said "You must be very cash rich!". I think you're just like me wondering how she got her $$$ from the bank. She said she assigned her assistant to withdraw the $$$ for her during bank office hours.

Anyway, I shared my e-banking experiences with her and the benefits from e-banking. Of course, I also shared with her the safety measures when performing e-banking transactions. At last, she asked me whether she can register one for her company. Let's hope she'll find the e-banking helpful and beneficial for her.
What's your view? Are you against the idea of e-banking?

Sunday, November 23, 2008

Maximise Your Return From Investment

If you are serious about your financial planning, I am sure one of the the questions which you wish to know the answer is how to maximise the return from your investment. Before you are able to find the answer, you will need to refer to the table below.

From the table above, you can see that:

  • If you place your initial investment of RM10K in a fixed deposit of one-month tenure (3.0%), you will double your investment after 25 years of investment. For fixed deposit with tenure of 12-months (3.7%), you will have your RM20K after 20 years. There's a reduction of 5 years.
  • If you place the same RM10K in your EPF @ KWSP or ASB/ASN (average 5-8%), you will double your investment after 15 years
  • For the same RM10K, if you invest in the right unit trust or mutual funds (average 10-20%) , or stock market, it is possible to double the investment within 10 years time.

To simplify, if Mr A invested RM10K in a 12-month tenure fixed deposit, he will have RM20K after 25 years of investment. While for Mr B who invested the same RM10K in a high-yield mutual fund*, it is possible that he will earn RM800K after 25 years. There is a difference of RM780K, and it's a lot of money.

If you wish to maximise your return from investment for long term financial planning, where you place your investment is one of the most important factor. Make sure your make the right decision.

*P/S: Please also take note that high-yield investment involves high risk.

Financial Lessons

As a child, I accidentally learned a lot of financial lessons from my parents. They taught me to value money and not to simply spend them away on unnecessary stuff. They taught me to manage and control money and not to let money to control me. They also taught me to prepare an emergency fund in case I suddenly need the cash. Though these are not formal lessons, but these lessons do greatly affect my views and perception of money as I grew up. I am really thankful to my parents for all these accidental financial lessons.
My parents also taught me - money is not everything but, we can't live on without money in these modern world. Can you go on a day without spending a single cent? How about a week? Or a month? Unless you are living in an isolated island or some remote places, you can't go on a week without the need to spend some money. It's true, we can't live on without money.
But, have you ever wonder why we never have formal financial lessons during our schooldays (at least in Malaysia)? These financial lessons can provide a brief idea on the importance of proper financial management in their life. Perhaps these lessons can create awareness in the students to prepare their education fund for their college years. These lessons can also teach them to manage their finance properly when they started their working years. Perhaps less people will need to borrow from loan-shark or fall into heavy debts. One will also be able to plan and prepare for their own retirement earlier. I foresee a lot of benefits from financial lessons.
I really hope our future children will be able to have formal financial lessons in their classroom.

Thursday, November 20, 2008

PB Gold Investment Account - Part 3

I have friends who asked me how to invest in PB Gold Investment Account. It's just like opening a saving or current account. You bring your cash to any Public Bank branches, tell the customer service you wish to apply for a Gold Investment Account. Then, she'll pass an application form/agreement form to you. You will need to fill in the application form/agreement, read the terms & conditions and sign on the application form/agreement form. Then, you will need to pass your cash to the bank officer at the counter to deposit your cash in your PB Gold Investment Account book. I show a sample of my PB Gold Investment Account book below.

In the transaction details, you will see the amount (in gram) for each purchase and their selling price. You will also see the total purchase or gold balance at the end of each transaction details. I show a sample of the details as below.

Before you open a PB Gold Investment Account, do consider the details below:

  • You must be at least 18 years old
  • Minimum initial purchase is 20g (If the bank selling price for the gold for that particular day is RM90.00/g, then your minimum initial purchase is RM90.00 x 20g, which is RM1800.00.
  • Minimum subsequent purchase must be at least 5g and must be in multiple of 1g (Meant cannot purchase 5.5g or 10.2g)
  • Minimum balance in the account is 2g. There will be a service charge of RM10 if your account balance is less than 10g at 31 Dec.
  • For payment, you can use cash or debiting from your PB current/saving account or house cheque.
  • When you buy the gold, please refer to 'Selling Price' and when you sell, please refer to 'Buying Price'.

Another friends asked if Public Bank accept physical gold for the PB Gold Investment Account, the answer is NO. For more details please refer to PB Gold Investment Account website.

Happy Gold Investing!!!

Monday, November 17, 2008

Money and Relationship

Do you find that you have financial compatibility issue with your partner? Do you find that you're trying hard to save every cents while she's spending that every cents away? Financial isssue is one of the most sensitive issues in a relationship. It's also not an easy task to sort it out especially if both of you have different views on $$$.

I find that it is important for you to understand your partner's financial style in the early relationship. I hope the followings will ease the financial tension in your relationship:

  1. Observe & Ask. Try to observe and ask questions related to her finances. Encourage her to ask you back. Both of you must try to be as open as possible.

  2. Show your true self. If you're planning to walk you life with a particular person, there's no point to hide your true financial personality. Show the real you and in respond she must show her true self as well.

  3. Compromise. You cannot expect her to fully adapt to your style and she can't expect you to do the same as well. Both of you were brought up with different financial environment which make both of you perceive $$$ differently. Compromise financial issues.

  4. Cooperate. Plan a goal together and both of you work together in a team to reach the goal. Each of you must know your own responsibilities. Do share your updates from time to time.

Dont let $$$ matters ruin your relationship. After all, money supposed to make your relationship richer.

Saturday, November 15, 2008

Education Fund in Malaysia - Where to apply for Scholarship?

If you are a Form Five or Form Six student in Malaysia; and you are not from a well-off family, most probably you and your parents is worried about your next step - where to get money to fund for your college or university years...

For relatives and friends who shared their concern to me about not able to further study due to no education fund or not enough education fund, my first advise to them would be, make sure you score a good result in your exam. Because it's always easier for you to apply for a scholarship if you have an outstanding result. Another point to increase the possibility for you to be selected is to excel in the subjects related to your interest/area. For example, if your dream is to be a doctor, you must do well in Biology and Chemistry. If you dream to be an engineer, your Math and Physics must be among your best scored subjects.

I understand how hard it is to find ways to fund your tertiary education. So, I had done some research on scholarship applications in Malaysia. For more details, you can visit the websites below:
  1. MARA Scholarship (for Malaysian Bumiputera only)

  2. Yayasan Sarawak Scholarship (For Sarawakian only)

  3. Yayasan Sime Darby Scholarship

  4. Measat Broadcast Network Systems Sdn Bhd (ASTRO) Scholarship (For Astro subscriber only)
  5. Sunway Group
  6. Monash University, Sunway Campus

From time to time, there will be more education sponsorships from government parties, corporates and other organizations. Do take your time to do more research on available scholarships. Keep your eyes open on local media (radio/tv/newspaper) announcement. Wishing you all the best in your study.

Thursday, November 13, 2008

Are YOU Your Own Banking Transaction Centre?

Do you find that your bank saving account is just like your banking transaction centre? Every end the month, you see your salary slowly crawls into your bank account. Once it reaches your account, with just a few clicks (either through ATMs or e-banking or cash deposit centres), you see a big part of the $$$ flies into other accounts; your housing loan account, car loan account, credit card account, study loan account, personal loan account... etc. So, what's left? You will be lucky if you still have 25% left in your saving account. Because you still need to have the balance of 25% for your survival for the next 30 days, before you can see the next bunch of $$$ crawls into your account.
Is the above situation sound familiar to you? If yes, it's time for you to sit down and think serious on your financial strategy. After all the hardwork for the one full month, you deserved to have at least a 10% of your monthly salary to be transfered to an account under your own name. Make it a priority to pay yourself first before you pay the banks. Try to practice for a minimum of 6months and you'll see the rewards. Good Luck!

Wednesday, November 12, 2008

Emergency Account - How To Start?

In my previous post, i wrote about how much do you need for your emergency account. For this post, I will be sharing with you on how to achieve your desired emergency account. Firstly, calculate the actual amount you wish to have in your emergency account. From there, have a proper plan on how and when to achieve your desired emergency fund. Let's say your monthly expenses is RM2k and you have a family of 4 (your stay-at-home wife, a young son and a baby girl). Referring to my previous post, it's wise to have at least 4 months expenses in your emergency account. So, 4 months x RM2k = RM8k. If you start from zero, give yourself about 1 or 2 years to achieve the amount. It's not wise to spend more than 2 years for your emergency fund as you need to get your emergency fund to be ready as soon as possible. Let's say you give yourself 2 years to gather the RM8k. Then, calculate how much you must put aside every month. In your case, it will be RM8k/24 months, which is about RM334month. It's easier to achieve right? Make sure you are persistent and follow the plan accordingly. Good Luck!

Tuesday, November 11, 2008

Emergency Account - How Much Do You Need?

Do you have an emergency account? A saving account for rainy days - when your car broke down, when you or your loved ones suddenly need medical supports, job loss/retrenchment and other unforeseen life circumstances? If you have one, how long can your survive with your emergency account? Everyone needs an emergency account. But, how much do you need in your emergency account?. If you read financial articles, you will notice that financial experts recommend between 3 months to 6 months expenses in your emergency fund. Some even recommend for a minimum of 12 months expenses to be ready in your emergency fund.

Personally, I believe how much you need in your emergency account depends on several factors. I listed the factors below:

1) Stability of the source of your income - If you are in a stable career, 1-2 months expenses is good enough for your. Else, it will be wise for you to have at least 3-4 months expenses in your emergency fund.

2) Your ability to replace the source of income - If you are in a profession where it's easy for your to find a new job, then 1-2 months expenses is good enough for you to survive. If you find that from your previous experiences, you had difficulties to find a new job, then to be on safe side, it is advisable to have at least 4-6 months expenses in your emergency account.

2) The number of dependents - For single adults, you will be able to adapt yourself when you find that you need to spend less so that the emergency account can last longer. If you have a family and you are the sole breadwinner, make sure your saving will cover at least 4-6 months of your family's needs. Some family members (newborns, young baby, aging parents) will not be able to tolerate their needs according to the $$$ in the emergency fund.

How much you need in your emergency account is a personal decision. If you don't have one, it's never too late for your to work out your plan and start saving for your emergency fund now. If you already have one, make sure you have enough funds based on your own needs. With these, you will be able to sleep better at night :)

Sunday, November 9, 2008

The Most Powerful Force in the Universe

Do you know what's the most powerful force in the Universe? Volcano eruption? Tsunami waves? Nuclear energy? According to Albert Einstein, the most powerful force in the Universe is compound intest. Compound interest is the situation where interest is added into the principal so that interest can be earned from the interest (and principal) from that moment onwards. For example, on 1 Jan 2008, you invested RM10K with a Bank XYZ at the interest rates of RM3.7%/year. By 1 Jan 2008, you will have RM10370 ((3.7% x RM10K) + RM10k) in your account. By using the compound interest method, you reinvest the RM10370 so that the interest of RM370 will also earn interest by the next year. Using the same example, by 1 Jan 2010, you will have RM10753.69 ((3.7% x RM10370) + RM10370) in your account. Here's a sample of the calculation of compound interest with RM10k invested at interest rate of 3.7%/year, for 20 years.Based on the calculations above, after 19 years, you will doubled your initial investment.
Lesson learned: Do not cash out or spend the interest generated from your Fixed Deposit account. It'll help you to reach your financial goal faster.

Friday, November 7, 2008

EPF @ KWSP contributions reduced to 8% - Part 1

"EPF contributions reduced to 8%". This is among the stories on cover page of yesterday's local news. For those of you who has no idea what is EPF, it stands for Employee Provident Fund, a forced saving fund by Malaysian government for old age. All employer must contribute 12% and employee contribute 11%.
At first, I thought employee who wish to have more money to spend, can submit a request to adjust their contribution from the current 11% to 8%. When I checked the news on EPF website today, it's the other way round. With effective from 1 Jan 2008, all EPF member contribution will be reduced to 8% for a period of 2 years. For those who wish to maintain their contribution at the current 11%, they can fill in the Form KWSP 17A (AHL).

I dont agree with this. I still prefer the rate to maintain at 11% for all employees. It's crucially important for working adults to save for their retirement. It's really sad to be old and not able to support oneself financially.
I hope the government will reconsider before the enforcement on Jan next year.
P/S: You may wish to read part 2 and part 3 of this post.

Advantages and Disadvantages of Online Banking @ E-Banking

When I first learned about Online Banking or E-Banking in year 2000, I totally cannot accept the idea of putting my bank details over the internet. I doubt the security level and so worried that when I log-in to the E-banking website, my bank account become '0.00'. In year 2004, I started to familiarize myself with the E-banking facilities. I am surprise that E-banking make my life so much smoother and stress-free. Here are the benefits from E-Banking:

1. Save your time and money
If you are the one who pay your household and utilities bill (phone bill, electric bill, water bill, Astro Bill, etc), you will know how much time you wasted in performing each of the task. You waste your valuable time and petrol for going to those bank location and waiting for your number to be called to settle your bills. With E-Banking, you can pay most of the bills at your own comfort at home. There is no need to rush to different places just to settle your bills.

2. Convenient
You can perform your banking transaction almost anytime (for Public bank, except from 12am-6am), even on weekend and public holiday. You can check your account transactions (whether your cheque is cleared/payment received from customer/your salary has been banked-in, etc) whenever your wish without the need to go to the ATM/bank.

3. Manage your finances
E-banking also provide the facilities where you can link all your financial products (fixed deposit, current/saving accounts, credit cards) under the same account name. It's easier to monitor your financial transactions online. You can check your credit card balance with just a few clicks. With this, you can better control your spending.

On the other side, the disadvantages of E-banking are 'phishing' scam and fraudulent or hoax emails by identity theft. These internet crime mislead users to a similar E-banking website where sensitive information (username/passwords/credit card numbers) are captured and later to be used by them to log-in to E-banking and perform unauthorised transactions. There is also possibility that hackers gaining access to your accounts.

To avoid these, E-banking site always take precaution by advising customer to clear the internet cache after each internet transaction. Users must also connect to the E-banking through a secured connection. And must always remember, bank do not send emails and requesting for personal information through the internet. Never reveals your sensitive information to anyone.

Be a smart E-banking users. Always be cautious and take precautions. Enjoy your E-banking sessions!

Thursday, November 6, 2008

When and How to be a Millionaire

Do you dream to be a Millionaire? Most great achievement start with a dream. But, do you just dream (day dreaming) or you work towards your dream? If you want to know when and how to be a Millionaire, you will need to do some basic calculations based on your current situation (how much you have/can save, how long you can save, how frequent is your saving plan, what is your rate of return (ROI) of your investment). You also need to include other factors in your calculations, such as the inflation rate and your bank taxes (if any).
You will have to use your mathematical skills, spend quite a few hours and some headache to know the final answers. Thanks to the current technology and MSN Money. They have a Millionaire calculator to help us to plan for our Millionaire dream with just a few clicks. Do try out the Millionaire calculator and plan your Millionaire journey ahead. Perhaps you can read up this MSN articles too. The author, Liz Pulliam Weston is a Millionaire herself.
See you at the Millionaires Club!

Wednesday, November 5, 2008

CHANGES is in the Air

Today, probably the most mentioned word @ name in the air is 'Obama'. From United States (US) to Kenya to Indonesia... From local radio stations to local tv to the internet... His name is everywhere. Barack Obama or his full name Barack Hussein Obama II, is the newly elected forty-fourth President of US. He is also the first African-American US President. He brings new hope not only to US nations but to the whole nations.
Personally, I hope Obama brings peace to the world. May he brings more love to the heart and make the Earth a place for everyone. May he calms the global crisis which we are facing now. May he brings those serving soldiers to their beloved family.
Yes, 'We Need CHANGE'.

Monday, November 3, 2008

What is Your Number?

This morning I heard an advertisement through a local radio channel that Prudential has a website on one of most important reason for us to save, retirement planning. The website is called What is Your Number? When I clicked on the poll 'Have you ever thought about how much you need for your retirement?' - Only 39% responded YES (poll data as at 11:36pm, 3 Nov 2008). That's very sad to know. Are you in the 39% or the 61%? I really hope you're in the 39%. If you're not, don't worry, you can find the retirement number by clicking 'What's your number' calculator in the middle of right hand side. You will need to answer a few simple questions. Bear in mind, the answers are important as it will affect your number. Make sure you provide the closest answer possible if you want to get a real number. For me, my number is RM1,611,103. Previously, I thought RM1m will be enough for my retirement at 55 years old. :( It's time for me to review my retirement planning.
Other than the calculators, you can also find a lot of useful and 'scary' facts (real facts which is hard to accept because it's really sad most people did not plan for retirement. even if they planned, it didn't turn out to be what they wished) on the website. Another special things about this site is most of the data are based on Malaysian populations. It's quite accurate for me compare to other facts and figure which were published based on western populations.
Share your number with me ya!

Start your Saving Plan NOW

If you're like most of the people in the financial articles which I read through, you will think that you can't start your saving plan now. You would think you don't even have enough to last till the end of the month, where to get the extra cash for saving? Mostly you will hear the responds from your own mind "Wait till next year, when I have my increment" or "Wait till i settled my car/house loan".... and so many more excuses... From my readings, I have also learnt that the group of people who managed to save are not the group who are in the highest earning. Most of them are in the lower and middle income group. But they have strong desire with persistent action to save. They have a clear define financial goal, and work towards the goal.
I believe the thinking of 'I will be able to save when I have my salary increased' is a myth. The truth is when your income is small, you have a simple life. But, when your income is getting bigger, your car, your house, and even your stomach will be getting bigger as well. This is human nature to lift their standard of life as their income is growing. So, when will you have enough to save?
The best time to start your saving plan is NOW. No other time is better than now. The amount that you earned is not related to the amount you can save. Stop giving excuses. Start your saving plan today.