Senior Savings Accounts

A savings account is one of the most basic banking products. For senior citizens who have to take on less risk with their funds, there are accounts that are specially targeted at preserving their nest egg.

Table shown below is a number of banks offer such accounts to those senior citizens.




The most higher interest rate offer is from Affin bank with starting rate of 2.8% per annum for minimum deposit of RM 5,000. The rate is almost like most banks' 12-month Fixed Deposit rates of 2.85%.

However, we all know the interest rates offer couldn't beat the market inflation!!  Inflation can REDUCE Purchasing Power with the advancing of time...So, it's better to have a better knowledge on financial planning at younger age to learn not just to know how to preserve your wealth but MAXIMIZE your wealth!

Remember! Small effort to put in if you are start at young age!

How Do You Trim Down Your Expenses ??

Few guidance that you can trim down your expenses:-
1) Go for cheaper alternatives. Anything from furnitures to food stuff to toiletries will have their upmarket brands with upmarket prices and the ordinary brands with more down-to-earth prices.

2) Watch out for the sale periods. As far as possible, hold your purchases of non-regular items like camera, golf equipment or electrical appliances until the sale comes. You will surprised at how much you can save. You can also get good bargains at numerous exhibitions fairs for computer, home decorations, tours and travel and so on.

3) Delay your purchases of your "want" items for as long as possible. You may realized that you no longer "want" it after a while. Or if you are fortunate, your close friend or relative may want to give it away and you would have gotten it free!

 

Financial Planning And You

A net cash flow situation is important because it helps you to build up assets that can be used for the future, for instance, at retirement. Financial planning is about meeting future goals and objectives either for children education planning, retirement planning, optimize your investment portfolio etc.. Such goals can only be met by net cash inflows that are accumulated year after year until it is needed.

Prudent cash flow management means to keep our expenses well below our income levels, and have some amount of savings set aside for the future. As a rule of thumb, you should always have  at least 3-6 months of your household expenses kept as emergency funds in your Savings Account or Fixed Deposit to meet unexpected events like a retrenchment, a sickness in the family, major car breakdown, house maintenance and so on.

Individual should attempt to do the following to increase his net cash inflow.

1. Set up a budget to keep expenses within limits. Track all expenses to ensure they do not exceed what has been allocated.
2. Look for ways to restructure your debts to reduce borrowing cost / monthly repayments.
3. Look for opportunities to reduce taxes.
4. See if the net cash inflow is sufficient to meet the future goals and objectives.
5. If it is insufficient, go back to your budget to see if there are areas where you can trim down your budget.
6. Repeat these steps until you are satisfied that you have channeled the maximum portion of your income into your future goals.

You should start immediately to create the Family Budget, as it is important part that you cannot miss.

  

New Rules & Requirements For Credit Card Application In Malaysia

Bank Negara Malaysia (BNM) has set the new rules for credit card application. The credit card rules were tighten. Below are the major announcements:-

IMMEDIATE EFFECT NEW CREDIT CARD RULES TO BE IMPLEMENTED

Minimum Income Requirement
Previously: RM18,000 per annum
Currently: RM24,000 per annum

Maximum Credit Limit
Previously: Credit limit was set based on bank’s discretion, respectively.
Currently: For those who earn less than RM36,000 per year, credit limit shall be capped at two times their monthly income per issuer.

Maximum Credit Card Issuer
Previously: No restriction on holding credit cards from multiple credit card companies (issuers).
Currently: For those who earn less than RM36,000 per year, they shall be restricted to hold credit cards from not more than two issuers.

ADDITIONAL NEW CREDIT CARD RULES TO BE IMPLEMENTED IN FUTURE

Effective December 2011,
Cardholders’ annual statements issued by issuers shall include the details of time frame needed to fully pay off the outstanding balance and the total interest costs to be charged if only minimum repayment is made.

Effective 1 January 2012,
Issuers shall send a transaction alert via SMS for cardholder after each transaction is performed.

Effective 1 January 2015,
Personal Identification Number (PIN) verification shall be performed for all credit card transactions.

This is good for us and we should spend our money wisely and avoid becoming a credit card slave! Plan before spend and spend within our means.

Common Mistakes To Avoid When Invest In Unit Trust

Below are some few common mistakes made by some investors:-

1. Ignorant of specifics of fund are acquiring.

2. Treating unit trust investment like a stock investment. Unit trust need at least 3 years to average down the lost years.

3. Lack of monitoring causes investors to make another mistake. They should take profit when a fund is rate of return is hitting the targeted rate of return.

4. Cut the loss as soon as possible if the fund is not well perform after your pre-set time horizon.

Common Mistakes To Avoid When Investing In Stocks Markets

1. Consider only company fundamentals and ignore market risks (Political risk, Natural disasters, and government conflicts).

2. Pick a “CHEAP” price share (below RM 1 Share) not its value and without looking P/E (Price to Earning) ratio or whether stocks Over valued or Undervalued.

3. A bullish stock market is breeding ground for mistake. Let’s say, the banking sector P/E ratio historically trades at 14 to 15 times. In bull market, can shoot up and hit 20 times P/E ratio. If you are emotional, you will lose track of fundamental (value) and buy at high price.

4. Investing base on “Rumors” which can be partly true or false and “Speculation” without research on company fundamentals are very dangerous.

5. Lack of monitoring and strategies are also a very common mistake. Malaysia stock market is unlike US stock market. If you buy a stock and would keep for few years later and expected the stock rising without consistent monitoring may exposure to even higher risk. 

How To Ensure You Have Sufficient Fund For Your Children’s Higher Education Fund?

Few steps for you to ensure you have adequate funds:-

1) Determine time horizon that each your children has before they go for their tertiary education.

2) Determine their main area of interest and decide if they want to admit in local or oversea university.

3) Determine the course fee and cost of living. (Financial Adviser may assist you for info).

4) Work out total amount needed with projected rate of education inflation. ( A )

5)  Determine the projected amount of savings you might have from: Unit Trust Portfolios, FD, Maturities Policies, Property Portfolios..etc. ( B )

6) Compute the difference ( A – B ) and work out new or supplementary savings programmed. (May work with financial adviser to determine the amount to be set aside)

7) The sooner you realize the need to have adequate funds, the better chances of having compounding interest to work for you.

You have the power in your hands to Make Sacrifice Now so that you have a more Comfortable Future!