Each year in October, the global financial planning profession comes together to help raise awareness of financial literacy, the importance of having a financial plan, and working with a trusted financial planner to formulate plans towards one’s long and short-term financial goals for financial stability.
Smart Investor takes a look at the current state of financial literacy in Malaysia, how the past two pandemic-fueled years have impacted Malaysians, and why a financial planner is an invaluable ally in working towards your financial goals.
Tough Times Called For Financial Stability
Vincent Kwo, President of the Malaysian Financial Planning Council (MFPC)
“The recent pandemic drove home the fact that financial planning and literacy are essentials, not options. This came about as many people lost their income unexpectedly and matters were made worse for those who did not have a comprehensive financial plan. Unfortunately, financial literacy is very low among Malaysians,” says Vincent Kwo, President of the Malaysian Financial Planning Council (MFPC).
Furthermore, Kwo reveals that, “Various studies, including the Capital Market Development Fund (CMDF) report on Financial Literacy and Utilisation of Financial Advisory Services in Malaysia, reveal that Malaysians generally have a worrying low financial capability, do not know how to manage their money, and do not plan ahead. This does not bode well for their financial sustainability, making them prone to falling into the bankruptcy trap, and becoming prey to loan sharks and get-rich-quick scams. The problems arising from the low level of financial literacy have been magnified by the recent pandemic, which greatly affected the financial well-being of many Malaysians.”
As the body representing financial planning and service providers, MFPC’s objectives – along with developing and enhancing the financial planning profession in the country – include elevating financial literacy among Malaysians with various initiatives for the public at no cost.
One of the initiatives of note to promote financial planning and literacy, observed globally on 6 October each year, is World Financial Planning Day (WFPD). This year’s theme, ‘Live Your Today, Plan Your Tomorrow’, is very relevant to Malaysians as we continue to face various challenges requiring better financial literacy and planning for a better financial stability.
Ooi Beng Cheang, Financial Literacy Manager at the Financial Planning Association of Malaysia (FPAM)
“As we live with post-COVID challenges, many are now faced with uncertainties as they might have drained their EPF savings, facing difficulty in servicing their loans again after the end of the moratoriums, dealing with rising healthcare costs, and overall inflation causing cost of living to rise. Adjustments must be made to our current personal finances to adapt to these challenges for us to achieve our future goals,” explains Ooi Beng Cheang, Financial Literacy Manager at the Financial Planning Association of Malaysia (FPAM).
As an affiliate of the Financial Planning Standards Board (FPSB), the global organizer of WFPD, FPAM has rallied its stakeholders and financial planners to take part in this year’s WFPD2022 to promote financial literacy and the financial planning industry.
Licensed Financial Planners Are Here To Help
In the forest of questions about money, a licensed financial planner is an invaluable guide in finding the best path for your life’s journey. No one path is alike, and a financial planner will be able to chart the best roadmap for each individual as they aim for financial stability.
“Malaysians are dealing with many pressing issues related to inflation that may derail their life goals. Plans for retirement or their child’s education fund may not seem feasible anymore. Will they have to push back their retirement age by working longer? Will their child still be able to afford tertiary education overseas? These are pertinent questions that one should sit down with a financial planner to hash out a plan together,” says Ooi.
He further adds that, “Financial literacy is a life skill that if not picked up early on, may result in personal finance mistakes that may have lifelong repercussions. The earlier one engages a financial planner in their life, the better, as they will have a proper financial road map of where they are headed in life. With a proper financial plan, one is much more prepared in facing the variables and uncertainties of the future as opposed to someone stumbling along, making knee-jerk reactions to major changes in their life. Should they encounter adversity, the financial planner will be there to guide them through the storm.”
Kwo concurs, saying, “A licensed financial planner can help one establish a personal financial plan, set measurable goals to work towards, track progress, reduce doubt and make better financial decisions. This will help one manage cash flow and debt efficiently. Planning can be tailored to suit every personality type and meet different needs, at different times of one’s life stages. A licensed financial planner can provide the necessary advice on changes and adjustments to support one’s lifestyle, resulting in peace of mind and general wellbeing.”
If one is looking to engage a financial planner soon, make sure that the financial planner is licensed under Securities Commissions Malaysia (SC) to practice as a Licensed Financial Planner (LFP). This can easily be done by going to SC’s website (https://easy.seccom.com.my:8222) and searching for the full name of the LFP under Licensed and Registered Persons.
The result should show their license number and the name of their financial planning firm. As for the other qualities in a financial planner, Kwo suggests the following should be considered: trustworthiness, ability to provide evidence of a good track record of success, ability to provide independent advice, compatibility with the client, the ability to provide up-to-date information, and the ability to refer to other specialists if required.
“In short, one should look for professionalism in a financial planner,” he concludes.
It won’t be easy to achieve financial stability, but it is also not impossible to do so.
World Financial Planning Day (WFPD) on 5 October 2022 is a global event organized by the Financial Planning Standards Board (FPSB). The Financial Planning Association of Malaysia (FPAM) as an FPSB affiliate, has rallied its stakeholders and financial planners to take part in this year’s WFPD2022 to promote financial literacy and the financial planning industry.
Ooi Beng Cheang, Financial Literacy Manager at the Financial Planning Association of Malaysia (FPAM), answers some questions regarding financial literacy and planning, and what it means to ‘Live your today, plan your tomorrow’.
Smart Investor: This year’s theme for WFPD is ‘Live your today, plan your tomorrow’. Who does it pertain to the most, and why the message is more relevant at this point in time?
Ooi Beng Cheang: It is a relevant theme for Malaysians as we continue to face various challenges requiring better financial literacy. With the rising cost of living, adjustments must be made to our current personal finances for us to achieve our future goals. Malaysians are faced with many pertinent questions today such as:
How do we setup a realistic monthly and yearly budget?
How will inflation affect my retirement plan?
How do I deal with rising healthcare cost?
There are many other questions with no easy answers.
In the forest of questions about money, many will need a licensed financial planner to serve as a guide to find the best path through life’s journey. No one path is alike, and a financial planner will be able to chart the best roadmap for each individual.
SI: What is FPAM’s plan to promote financial planning and financial literacy this year and how the public can make the most of it?
OBC: FPAM has organized a much larger campaign for WFPD this year compared to last year. This year, FPAM has engaged with its corporate and chartered members, financial planners, and the media to help promote financial literacy since July 2022. We realize it is important to get the financial planning firms and financial planners involved early so that they will be seen as a source of authority for financial literacy in Malaysia.
Financial Planners were encouraged to post financial literacy content on social media from 31 August to 5 October and use the hashtag #wfpd2022 and #MYwfpd2022 to increase visibility of the campaign. Postings were also shared by the financial literacy website SmartFinance.my on Facebook and Twitter.
To ensure that the campaign reaches as many people as possible, financial planners were also encouraged to post content in a variety of languages.
Besides the promotional campaign, FPAM is also working with the Securities Commission Malaysia (SC) on making #FinPlan4u a success this year. The yearly event allows the public to speak to a licensed financial planner in a one-to-one financial consultation session.
As the time is limited to one-hour for #FinPlan4U, one should prepare some talking points ready on what they want to address with the financial planner. This could be questions about their life goals like retirement or children’s education fund. In the session, the financial planner is not allowed to sell products and will advise the public in general about personal finance.
This year’s #FinPlan4u kicks off in Kuching, Sarawak on 17 to 18 September. After that, the event will continue with online sessions from 11 to 13 October. It will then continue on ground at KLCC from 14-16 October. FPAM is working with the state chapters, corporate and chartered members to rally our financial planners to take part in #FinPlan4u.
SI: Tell us more about smartfinance.my. Specifically, what function does it serve and how can those seeking the help of a licensed financial planner can make the most of it?
OBC: Besides the #FinPlan4U sessions for this year in September and October mentioned earlier, the public can also arrange to meet other financial planners by searching for one on smartfinance.my. The website list licensed financial planners that have been vetted to ensure they have the proper credentials. The public can search for a financial planner based on location of specialty area and then arrange for a free one-hour consultation to see if the financial planner is a good fit for them. This way, the public can screen several financial planners and only work with the one that best suits them.
The public can also read articles and watch videos about financial literacy. These will give them a good basic understanding if they are on the right path. These articles and videos will also give the public some talking points with the financial planner if they notice some areas of concerns.
SI: Why does one need a financial planner in their life and how can one go about looking for the right professional?
OBC: Financial Literacy is a life skill that if not picked up early in life, may results in personal finance mistakes that may have lifelong repercussions. For example, going into credit card debts and not paying it off in time will affect one’s credit rating. A financial planner will work with their client to help set a disciplined payment schedule, putting their client on the right path again.
The earlier one engages a financial planner in their life, the better as they will have a proper financial road map of where they want to go in life. If they should encounter any costly adversity, the financial planner will be there to guide them through the storm.
To be a licensed financial planner, the person must hold either of these credentials – CFP, IFP, ChFC, RFP, or Syariah RFP. The public should ensure that the financial planner is licensed under SC to practice as a Licensed Financial Planner (LFP). This can easily be done by going to SC’s website (https://easy.seccom.com.my:8222) and searching for the full name of the LFP under Licensed and Registered Persons. The result should show their license number and the name of their financial planning firm.
Ooi Beng Cheang, Financial Literacy Manager at the Financial Planning Association of Malaysia (FPAM)
The following story is based on an actual series of events with some names and circumstances fictionalised and any similarity to the name, character or history of any person is entirely coincidental and unintentional. It can’t be emphasized enough on the importance of estate planning.
The woman lunged forward, grabbed the hair of the man and screamed: “You influenced daddy to keep me out of the will!” That shattered the solemn atmosphere at the wake of the head of the family.
What started with three sisters huddled together next to the casket listening to their brother-in-law holding court, turned chaotic. Their murmurs grew louder and louder as it turned into a heated argument.
All eyes at the Funeral Parlour were now on the mourners. Daughter No 1, Cheng, held back by relatives from attacking her brother-in-law, continued berating the man. “I was in daddy’s will. He showed me…” she said in between sobs.
Daughter No 2 countered for her shocked husband saying, “You deserve it! It’s all your own doing!”
From a corner, a voice commanded: “Enough! We’ve not sent off daddy yet and you’re already fighting…”
The voice trailed off. Tears streamed down her cheek as she watched unbelievably at how the family was starting to break apart.
She was soon lost in her own thoughts as the altercation stopped. “Have we raised our children right?” she questioned herself.
She looked at Cheng, who was now crying quietly. She was more of a problem among her three children. Probably being first born, and the apple of Daddy Hock’s eyes, she was spoilt. Her gambling habit and getting into debts were what got her father angry most of the time in the past one year.
So, was disappointed Daddy Hock right in rewriting his will? Was Cheng right in saying Beng influenced Daddy Hock to leave her out of the will, she wondered.
“Ah, that Beng, he likes to show off that he knows-it-all! How much of an influence did he have over my Hock?” her thoughts went racing. Out of the corner of her eye, she could see Beng smirking.
She wondered why Hock ended up with making Beng the executor of his will and also letting Beng keep the will. The matriarch of the family was at a loss as to restoring the bonds between the daughters.
This is crucial why we need to understand the importance of estate planning.
The Importance Of Estate Planning
This family drama at the wake highlighted several pertinent issues which are valuable pointers to note for in the importance of estate planning.
Re-writing of Wills
The Last Will and Testament is an important legal document giving clear instructions for wealth distribution.
While the will can be re-written as many times as one wishes according to change in circumstances, it is nevertheless important that the document be kept private and confidential to avoid occurrences of tampering or being damaged and rendering the will invalid.
In the case of Hock, he has divulged the contents to his Daughter No 1, giving rise to possibility of squabbles among family members even before he is gone.
It is also prudent that the reading of the will be held at a conducive place and time. In the family drama above, Beng, a related party, who was appointed Executor and Custodian of the will, had – whether by design or coincidence – divulged the contents of the will at the wake. Stemming from this, things could get ugly.
Executor
Appointing the right Executor is crucial to ensure that the estate is administered professionally and efficiently to carry out the wishes of the deceased and avoid the bereaved family members and dependents having to deal with issues arising from the estate such as creditors chasing for payment and tedious administrative matters such as preparation of accounts and filing taxes.
With the right Executor in place, the administration can be carried out efficiently where the beneficiaries would have fast and easy access to their inheritance.
It is a common practice for testators to appoint, out of convenience, their spouses or children or trusted friends as executors to handle their estate administration. This is not wrong or prohibited but it could be counter-productive for the effective administration of the testator’s estate if the appointed executor is unfamiliar and inexperienced with the tasks at hand.
A trust company is a recommended option as unlike the individual, the company will exist in perpetuity and has experienced and dedicated skilled staff with the time, capability and resources on hand to perform the function of the Executor.
Custody
It must be the borne in mind that equally as important in having a will is the safe custody of the will. A will that cannot be found is as good as not having a will. Safe custody from possibility of being tampered or damaged is also essential.
Keeping the will in a Will Custody Centre is a recommended option to being in one’s locked cabinet or safe. Worse if the will is kept in a bank safe deposit box because it cannot be retrieved without probate, which cannot be obtained without the deposition of the will in court.
A dedicated Will Custody Centre can ensure that the will is easily located and retrieved; is in safe storage in a humidity-controlled environment that ensures the document’s good condition over time; and is in secure vault with appropriate tight security system in place.
It is hoped that we now understand the importance of estate planning and to avoid any last rites drama.
About Rockwills International Group
Rockwills International Group, now in its 27th year, pioneered professional will writing in 1995 and has since evolved into the leading estate planning specialist in the country. It is today the largest provider of solutions and support services in the areas of trusts, succession, management and distribution of wealth. It has shareholders’ funds exceeding RM50 million. It has done over 280,000 wills and 15,000 trusts and hold more than RM25 billion in assets under trust.
As more consumers embrace digital banking and faster, simpler ways to send money, it has created opportunities for fraudsters and increased the risk of digital fraud in Malaysia, particularly fuelled by the adoption of real-time payments.
Smart Investor recently got in touch with CK Leo, FICO’s lead for fraud, security and financial crime in Asia Pacific to find out his views.
CK Leo, FICO’s lead for fraud, security and financial crime in Asia Pacific
Smart Investor: What are some of the growing fraud threats that consumers need to be more aware of?
CK Leo: According to Malaysia’s Commercial Crime Investigation Department, the top fraud threats reported this year include impersonation scams, e-commerce crime, and phishing, which could lead to account takeovers and unauthorized transactions. At the same time, consumers should be mindful of Authorized Push Payment (APP) fraud, where fraudsters manipulate consumers or individuals at a business to transfer money to a bank account controlled by the fraudster.
APP fraud is rising globally, fueled by the adoption of real-time payments, such as DuitNow in Malaysia, which enables fraudsters to flee with the money at speed.
Threats such as APP fraud are particularly difficult to detect and prevent, and show how traditional safeguards such as authentication checks, a common security measure used by banks in Malaysia, are insufficient in protecting customers.
One tool that can be used to help protect real-time payments is to use analytics that look for changes in customer behavior, such as using accounts or devices outside of their usual habits, as well as standard anomalies, such as time-of-day or frequency of a transfer. FICO has found that the use of targeted profiling of customer behavior to spot scams has yielded some impressive results, with 50 percent more scam transactions detected.
SI: Why do we still fall for investment scams, when there are a lot of legitimate investments out there?
CKL: The answer is that people want to believe that there are easy ways to make money. We are influenced by social proof in the media and online with stories of overnight crypto millionaires, stock wizards and real estate moguls. The pandemic helped to super charge the problem, as people spent a lot more time online, unable to go anywhere or spend money.
While in this state many were enticed by greed and schemes peddled by scammers that promised easy money. It is, however, worth remembering that with a clever amount of social engineering used against us, anyone can become a victim of fraud. Some schemes out there are very sophisticated at mimicry of real investment companies, setting up spoof websites and advertising on Google to attract potential victims.
Although banks and authorities are in a constant race to update and upgrade their security measures, this is simply not enough to prevent all investment fraud. There is a paramount need to educate consumers on new and emerging threats and what checks to make before investing.
SI: What are the driving factors for the rise in fraud in recent years?
CKL: Today’s technology has enabled fraudsters to undertake globally pervasive scams with shocking ease, constantly shifting in approach to find new vulnerabilities. Malaysia’s digitally savvy population and banking penetration of 92%, is expected to grow significantly in the coming years and along with it the opportunities for scammers. Criminals are attracted to both the increase in money flows and the growth in the number of inexperienced users.
Fraudsters have also been making use of technology to scale up both the complexities and the scope of their operations. Automation and bots, for example, have been exploited by criminals to gain data and create fake consumer identities for application and card fraud. In Malaysia, scammers have even created their own applications to trick consumers into giving up valuable personal information.
So, the driving factors in fraud growth are that technology has enabled the reach, scope, volume and low cost of creating scams. While a growth in digital services has increased the attack surface and the number of less educated users as well. Plus, the honeypot, or the sheer amount of money that can be made from online crime means there is an arms race going on.
For banks, this means staying on top of their banking security game and evolving to prevent new fraud types like the growth in real-time payment fraud.
SI: How must banks’ fraud detection and prevention strategies change to minimize fraud risks?
However, this verification method can be easily compromised, through scams like SIM swap fraud. Banks will need to consider more robust or multiple factors of authentication for a layered approach to security. This includes tools available to them, such as biometric authentication, a method FICO found a preference for among Malaysians.
The reduction of information silos is equally key. Banks with different solutions for transaction monitoring and fraud must remove these separate silos and work collaboratively to create an integrated solution able to read data holistically, leading to timely detection and the prevention of fraud.
Thirdly, consumer education must remain a top priority for banks. Banks must maintain regular communications with their customers to assist them in preventing fraudulent transactions. They can do this by encouraging customers to keep their contact information updated to receive timely fraud alerts.
These three approaches can be realized through advanced analytics which enable real-time decision-making to prevent fraudulent attacks from taking place.
In contrast to siloed, single-focus solutions, an integrated, enterprise-wide fraud platform enables banks to have a more comprehensive approach to minimizing fraud risks. Banks will be able to dynamically adapt to emerging fraud types, while using machine learning models based on targeted profiling of customer behavior to separate between fraud, scam and normal behavior.
This shift away from siloed solutions also enables banks to choose the best channel when communicating with customers to ensure that they are safe and aware of possible fraudulent activities.
SI: What are some steps consumers can take to protect themselves from fraud and scams as they increase use of real-time digital payments?
CKL: Consumers need to be aware of the risks of APP fraud. They should always stop and think if something unusual happens, like someone messaging to say their bank account has changed. It is always worth contacting the person directly to check things like this to minimize the risk of fraud. Consumers should also be wary of downloading new applications, and scanning QR codes, which scammers are increasingly exploiting for fraud.
Above all, consumers should always be diligent about performing background checks before revealing their personal information and credentials, and always keep track and check their transactions.
SI: What’s your view on the adoption of digital currency (crypto) in the next few years?
CKL: While the technology behind digital currency has seen interesting developments over the past few years, the region has understandably been apprehensive about its adoption, especially considering the recent cryptocurrency crash and bad actors that use it to try and support criminal activity.
No matter where digital currency is headed in the next few years, stronger security and trust will need to precede its wider adoption.
SI: What makes FICO unique from others?
CKL: When it comes to fraud protection, we believe in an integrated approach that combines industry-proven advanced machine learning and artificial intelligence with real-time cross-channel fraud prevention. Our decades of investment in fraud research and innovation have yielded over 100 patents for fraud-specific machine learning innovation.
Our analytics expertise is trusted to protect 3 billion global payment cards and 65 percent of the world’s credit cards.
About FICO
FICO (NYSE: FICO) is a leading analytics software company, helping businesses in 90+ countries make better decisions that drive higher levels of growth, profitability and customer satisfaction. FICO’s groundbreaking use of Big Data and mathematical algorithms to predict consumer behavior has transformed entire industries. The company provides analytics software and tools used across multiple industries to manage risk, fight fraud, build more profitable customer relationships, optimize operations and meet strict government regulations.
When it comes to investing, you can either do it yourself (DIY) or you can rely on a professional.
The DIY approach requires you to take the time to study each investment asset and search for a brokerage firm or platform that will allow you to build your own portfolio.
However, the DIY approach can be very time-consuming. It also comes with increased responsibilities and worries. On your own, you will be more sensitive to shifts in the market and you may feel pressured into buying or selling the wrong asset at the wrong time, which can lead to heavy investment losses.
Additionally, certain investment products may be out of your reach. You may also be required to put up more capital than you are comfortable with.
The second option, relying on a professional, offers a safer investment experience. For investing in Unit Trusts, this means engaging the services of a Unit Trust Consultant, or a professional fund manager at a Unit Trust Management Company (UTMC) or at a funds distributor, such as at an Institutional Unit Trust Adviser (IUTA) or Corporate Unit Trust Adviser (CUTA).
What Can A Consultant Do For You?
Generally, Unit Trust Consultants are there to assist investor/client in establishing his/her investment objectives and to propose Unit Trusts products that are suitable to the investor/client based on his/her risk appetite. Additionally, Consultants are expected to provide prompt, efficient and continuous service to their investors/clients.
In short, Consultants have the necessary skills, relevant experience and dedicated resources to help you with your Unit Trust investments. They can help guide you towards your financial goals by helping you choose the right funds that suit your needs.
In addition, they can introduce investors to Unit Trusts that invests in assets/options that would otherwise not be accessible to an average DIY investor, vastly increasing your investment opportunities.
If you feel any hesitation about placing your trust – and your money – in the hands of another person, you can rest assured that legitimate Consultants are bound by FIMM’s Code of Ethics.
A good Consultant should have the following characteristics: honesty and integrity, professionalism, acting in the best interest of investors, deal with investors in good faith, comply with all requirements, avoid any conflicts of interest, provide accurate, timely and adequate information, and maintain investor confidentiality.
All these are meant to ensure that the Consultants’ ultimate duty is to help you reach your financial goals in the best way possible. Similar requirements are also applicable to the Private Retirement Scheme (PRS) Consultants.
The Benefits Of Choosing A Consultant
First-time investors, or those who have a particular financial goal in mind, would especially benefit from the advice that a Consultant can provide. The Consultant’s job is to educate you and help guide you along your investment journey.
A Consultant can also deliver a more personal touch, especially for investors that are new to or less familiar with Unit Trusts and Private Retirement Scheme (PRS).
Investors can engage a Consultant via the UTMC, IUTA, CUTA or even search for one themselves on the internet or through social media.
However, it is important to keep in mind that all Unit Trust and PRS Consultants are required to be registered with FIMM prior to them being able to market and distribute Unit Trusts and PRS. And it is easy to find out if your Consultant is legitimate.
By visiting FIMM’s website, anyone can check if a Consultant is authorised by FIMM or not. All he/she has to do is search the Consultant’s name or registration number. Additionally, anyone can reach out to FIMM – just send an email to info@fimm.com.my to make enquiries or to complaints@fimm.com.my to lodge a complaint.
This allows you to have a safety net while you embark on your investment journey. It also assures you that all your interests are safeguarded.
Bring Confidence To Investors
There are various channels to buy Unit Trusts, and investors who feel that they do not need advice may choose the DIY option without having to pay a sales charge or advisory fee.
One of the most common reasons for people not wanting to engage a Consultant has to do with the increasing amount of freely-available investment information over the internet.
Nonetheless, Consultants can provide a wealth of resources that investors doing DIY may lack. As investors become more aware of personal wealth management, continuous efforts in upskilling Consultants in advisory (goal-based investing) and client servicing (after-sales service) will add value and bring confidence to investors.
Regarding the issue of costs, in the form of consultant fees, it should be noted that all fees are clearly disclosed in the funds’ offering documents (i.e. prospectus), which is lodged with the Securities Commission Malaysia. Consultants cannot simply charge any fee that is not disclosed in the offering documents.
Furthermore, ongoing after-sales services from Consultants can also help investors achieve their financial goals by monitoring and keeping the investor informed of their progress, and reviewing the investment portfolio regularly and recommending changes where necessary.
The Final Word
Ultimately, the decision on how you wish to proceed with your investment is in your hands. Nonetheless, you must understand your investment objective and equip yourself with basic investment knowledge before you start investing.
Visit www.fimm.com.my for more information on Unit Trusts and Unit Trust Consultants.
The 2022 Budget was short on outlining any initiatives to enable Malaysia to build a more sustainable tax revenue base. The review of the tax incentives regime has yet to be finalised and hopefully, some progress will be announced in the coming Budget.
We expect the 2023 Budget to outline a more structured mid to long term reform of the tax system, so that we can have a more sustainable tax system. Malaysia needs to, in the medium term, broaden the scope of the existing Sales and Service Tax (SST), and ultimately make it a broad-based consumption tax with added features such as tax invoicing similar to a Value-Added Tax.
We should also have a more inclusive capital gains tax and move quickly on an efficient integrated national tax agency, in order to have a more sustainable tax.
Tax Treatments To Review
Currently, fees paid to tax advisers and company secretaries for the various services rendered on tax and corporate compliance matters are subject to restriction. Furthermore, the Inland Revenue Board of Malaysia (IRBM) recently issued the Corporate Tax Governance Framework (Framework) to enhance companies’ processes and governance on income tax matters.
The Framework expects the involvement from the board of directors, audit committee and senior management to set up appropriate checks and balances on tax reporting.
However, the IRBM states that costs incurred for advice and assistance to develop the Framework are considered to be capital in nature and therefore not tax deductible. This further irks businesses as such expenses are incurred to encourage corporate governance.
For a more sustainable tax, another area to review is the exclusion of Intangible Assets from the definition of the term “Plant” in the 2021 Budget. This has resulted in cost incurred such as computer software, licences, trademarks, patents, films, copyrights etc are no longer eligible for capital allowances or tax depreciation, despite these being assets utilised in the production of taxable income.
This is truly surprising, given the Government is leading the push from brick-and-mortar businesses to a digitalised and knowledge-intensive economy. Engagements have been held among various parties and it is hoped that in the upcoming Budget, the IRBM would review those tax treatments.
A More Sustainable Tax Structure
As a country, we cannot keep on borrowing and servicing debt. We should remove unnecessary exemptions and deductions, and simplify things to enable all to be part of the tax net. There is a need to push on towards a reliance on consumption taxes, in order to achieve a more sustainable tax.
The Ministry of Finance (MOF) has stated in the Pre-Budget Statement in June that tax reform initiatives with the objective of broadening the tax base, as proposed by Tax Reform Committee, will continue to be implemented.
The initiatives include:
a) Undertaking a review of broad-based incentives, reliefs and deductions
b) Improving tax administration through comprehensive registration of taxpayers
c) Better training of tax personnel
d) Improved registration of cross-border trade
e) Strengthening the tax audit and investigation
f) Enhancing legal certainty for taxpayers
Necessary details on the aforementioned will need to be spelt out in the 2023 Budget.
On the international front, Malaysia has committed to implement several agreed upon tax standards to create a competitive business environment for investors and to counteract cross-border tax evasion activities. To date, we have implemented four minimum standards of the Base Erosion and Profit Shifting (BEPS) Action Plans, while continuing to review the rest of the Action Plans under our domestic tax law.
Domestically, the tax net can be widened by tracking down those who should be within the tax net. That means curtailing tax evasion, curtailing smuggling, registering those who should be registered as taxpayers, and devising strategies using the tonnes of data that various agencies accumulate to ensure that all who should be taxable are indeed taxed.
In the Budget 2022, several initiatives were introduced to manage revenue leakages, including:
a) Removal of tax exemption on foreign-sourced income received in Malaysia by a Malaysian tax resident
b) Introduction of the Tax Compliance Certificate as a precondition for tenderers to participate in Government procurement
c) Implementation of a Tax Identification Number (TIN)
It was a surprise when a five-year exemption of the tax on foreign income was announced subsequently. Even Singapore and Hong Kong, which have similar tax systems to Malaysia do not have such a time-based exemption period.
However, the implementation of Tax Compliance Certificate and the TIN are very good compliance initiatives to reduce leakages, but more details are needed.
In line with the 12th Malaysia Plan to strengthen digital services infrastructure, the digitalisation of the tax function will be implemented with e-Invoicing to be done in stages. This will enhance the efficiency of the country’s tax administration, reduce compliance costs to taxpayers, and increase the efficiency of business operations. E-Invoicing will also support the use of TIN as a measure to expand the income tax net.
The Auditor General’s report has stated time and time again about losses and waste in the public sector. Greater accountability on where our tax ringgit goes and how it is utilised is essential to further narrow the trust deficit that exists, which is a factor why some are reluctant to pay their taxes.
A more sustainable tax structure for the future is probably in the pipeline. But such matters can be excruciatingly slow in coming into fruition, due to the lack of political will and vested interests.
All said, the 2023 Budget may turn out to be an election budget, with a slew of populist measures to score brownie points that may damage the country’s rather fragile fiscal momentum. Against this backdrop, debt and inevitably debt service charges, will rise.
Given that Malaysia’s narrow tax base means high concentration revenue risk to the overall economy, its fiscal vulnerability could increasingly become a trigger factor for sovereign rating downgrades by international credit rating agencies. Here’s to a more sustainable tax structure for a better Malaysia.
About the Author
Dr Veerinderjeet Singh is a tax observer who is the Non-Executive Chairman of Tricor Malaysia. He is the Immediate Past President of the MIA and MICPA, and a Past President of CTIM. He is a strong advocate of tax reforms and sits on the boards of a few public entities. He is also an Adjunct Professor at Monash University Malaysia, as well as a Vice Chair of the Global Tax Commission at the International Chamber of Commerce based in Paris.
In the midst of recovery, many sectors that were battered by the COVID-19 lockdowns, are looking to the government for further aid to strengthen and iron out obstacles in their path – more specifically for some help to be included in the pre-budget 2023 wishlists.
Small and medium-sized enterprises (SMEs), which had been the backbone of the economy but suffered greatly in the last two years, are looking for a stronger future in the new, digitalised economy.
The high incidence of death and loss of jobs during the earlier phase of the pandemic had also highlighted the importance of financial protection and planning. The current economic recovery had been boosted by, among other things, pent-up demand and a severely impacted base in the last two years of COVID-19 lockdowns.
Industries are now finding ways to sustain that recovery, with a much-needed assistance from the government.
Pre-Budget 2023 Wishlist: The SME Sector
In gauging the sentiment of SMEs, a survey was carried out by the Small & Medium Enterprises Association Malaysia (SAMENTA) with Affin Bank. Of the 613 SMEs responses received from the SAMENTA-AFFIN Survey on Business Conditions and Economic Outlook for SMEs 2022-2023, it showed that about 63% have cash reserves of less than four months, and 26% reported a revenue decline of 11%-30%.
The survey which was published in July 2022 noted that about 50% had expected a turnaround to pre-COVID 19 performance from 2023 onwards, around 4% have recovered and achieved pre-COVID 19 results and 2% do not expect to recover.
Almost 50% have moved part of their processes online, while 21% are performing better, while around 10% are fully digitalised.
The re-introduction of the Goods and Services Tax (GST) was favoured by 47% of respondents, while 25% are uncertain. Of those favouring the GST, 85% supported the initial rate of 4% and below, to be implemented beyond the second half of 2023.
In their digital transformation, SMEs subscribing to Software as a Service, which is a service infrastructure platform, are unhappy that they have to bear the costs instead of the foreign providers.
In this regard, they also want the digital tax to be suspended until a solution is found, said SME Association of Malaysia president, H.S. Ding.
SME Association of Malaysia president, H.S. Ding
To expedite the process of digitalisation, the Industry4WRD Intervention Fund should be extended to 2023. The current allocation of RM45 million is insufficient, as there are more than 500,000 SME manufacturing companies and related services sectors looking for a simpler and shorter approval process, informed Ding.
To promote and nurture the 5,000 start-ups and five Malaysian unicorns under the Malaysian Digital Blueprint, a RM10 million funding should be allocated for 2023, said Ding.
A ten-year tax exemption is sought for local manufacturers with a majority share of 70% and planning business expansion. A waiver or discount of 50% is also sought for business permits, licenses and assessments in 2023, as the COVID-19 lockdowns had caused Malaysian businesses to face losses and disruptions.
To assist SMEs and companies with reduced profits, corporate tax should be lowered. Higher tariffs for electricity lead to higher costs of doing business, SMEs are seeking to maintain the status quo in electricity surcharge or reduction in electricity and fuel tariffs in 2023.
The tenor for the SME Recapitalisation Fund of five years, or a repayment of 20% per year, should be lengthened to 10-15 years, as most SMEs do not have the cash flow to support that repayment period.
SAMENTA also proposes double capital allowance for companies that invest in research & development of orchards, as well as food or fruit related downstream activities.
For SMEs involved in domestic tourism, the tourism tax exemption should be extended to 2023. Under sustainable development, the Low Carbon Transition Facility for capital expenditure or working capital is proposed to be increased to a maximum of RM20 million from RM10 million.
The Business Recapitalisation Facility should also be increased to RM2 billion from RM1 billion, to cater for the 1.3 million SMEs in Malaysia. There should be more automation loans, and 120% loans are sought for SMEs to update the standard of factories to Industry 4.0.
For SMEs with profits of up to RM1 million, corporate tax should be lowered to 15%, suggested SAMENTA honorary secretary general, Yeoh Seng Hooi.
SAMENTA honorary secretary general, Yeoh Seng Hooi
Other budget recommendations by SAMENTA to help the SMEs to thrive include grants and workshops on ESG compliance, and double deduction on remuneration for the hiring of skilled workers and professionals (to enable SMEs to pay higher salary to attract talents), reintroduction of pre-shipment funding as per the Export Credit Refinancing and reduction in statutory fees by 50% for the first half of 2023, as post-recovery incentive to alleviate SME cost of doing business.
Pre-Budget 2023 Wishlist: Property Sector
Various measures have been taken to increase home ownership among Malaysians, but more needs to be done to address the problems of the housing and construction industries.
“We must ensure a smooth recovery from the pandemic lockdowns, and that all cylinders of the economy are firing. “It is tempting for stakeholders such as state and local authorities, as well as utility companies, to impose additional requirements on these industries. “But these temptations must be resisted,’’ said Real Estate and Housing Developers Association (REHDA) president Datuk N.K. Tong.
From right to left: Real Estate and Housing Developers Association (REHDA) president Datuk N.K. Tong, REHDA deputy president Datuk Ho Hon Sang
To mitigate the rising prices of building materials, REHDA proposes a waiver or reduction of duties on certain construction materials until prices normalise or become more manageable. Lifting of taxes and levies imposed on import materials as well as review and/or reduction of unnecessary charges will also help the industries.
To assist first-time homebuyers on properties priced up to RM500,000, REHDA proposes among others, a tax deduction on interest incurred during construction, personal tax relief (of RM20,000) and a one-off grant (of RM30,000) as well as a rent-to-own scheme to be considered.
The cooling measure since 2010, under Loan-to-Value, which compares the amount of the mortgage to the appraised value of the property, should be removed. REHDA also urged the government to review or relax the new and stricter conditions for participants of Malaysia My Second Home.
“A strong secondary market is crucial, as there will be more interest to invest in the primary market when buyers see property prices or rentals going up,” said Malaysian Institute of Real Estate Agents (MIEA) president, Chan Ai Cheng.
Malaysian Institute of Real Estate Agents (MIEA) president, Chan Ai Cheng
Stamp duty exemption for buyers in the secondary market and Real Property Gains Tax (RPGT) relief for sellers are proposed. Under a Home Ownership Campaign for Secondary Properties, MIEA proposes that buyers service the interest portion of the loan instalment for a certain period, instead of principal plus interest.
Pre-Budget 2023 Wishlist: Hotel, Tourism And Retail Sectors
As long as international leisure tourism is still restricted, the hotel industry will suffer a direct loss in revenue. Based on the Tourism Malaysia annual report 2019, receipts for accommodation from international arrivals had hit RM20 billion but currently, many are still on the road to recovery.
With the re-opening of interstate travel and domestic tourism, the Malaysian Association of Hotels (MAH) is asking for a lower wage subsidy, than previously requested, of 30% for employees with wages up to RM4,000, and 15% for those with wages up to RM8,000.
A minimum wage mechanism across the board does not encourage productivity or efficiency, instead, MAH proposes for an industry-based wage mechanism that is based on productivity, skills and tasks performed.
For reliable supply and demand of tourism-related data, a live on-demand, centralised tourism platform should be set up, to plan for the sustainable growth of the hotel and tourism industry.
In terms of tourism industry support as well as integrity and delivery of tourism data, the data should be released in a timely manner, in consultation with the industry.
In view of the massive upgrading and reinvestment required, the investment and reinvestment tax incentives for tourism and hotels should be extended for all categories up to 2025.
After suffering losses for two years, MAH is also seeking tourism recovery funding via soft loans that are interest-free or with low interest for reinvestment, upgrading, repair and maintenance of hotel properties as well as for operating expenses.
To drive domestic tourism, individual tax relief for travel and hotel expenditure within the country is proposed at RM5,000 per year. Exemption of the sales and service tax for hotels are to be extended till December 2022. The counter-productive tourism tax should be abolished to encourage high yield and long stay international arrivals.
To help address Malaysia’s weakness in international business events, a special budget should be allocated to the Malaysia Convention & Exhibition Bureau and Tourism Malaysia to pitch for international events. As the tourism industry invests heavily into international promotions, a special marketing grant for domestic and international marketing activities is proposed for business-to-business and business-to-consumer trade shows.
With the tourism industry just recovering from the lockdowns, there are very few group tours that hire 40-seater buses, many of which have not even had their road tax renewed. A conversion incentive should be given for normal tour buses to be converted into recreation or luxury vehicles, said Malaysian Inbound Tourists Association (MITA) president, Uzaidi Udanis.
A tourism bank can be set up to help expand the industry which does not just involve the provision of hotels and chalets for tourists, as there is also potential in medical, agriculture, youth and education tourism.
Retail Group Malaysia (RGM) hopes there will not be another movement restriction at the end of 2022, or early 2023.
“Malaysian retailers do not have the resources to deal with this crisis again,’’ said RGM managing director, Tan Hai Hsin.
RGM managing director, Tan Hai Hsin
The government has to resolve the problem of rising prices and its impact especially on the B40 and M40, and not allow these price shocks to linger until 2023.
Shortage of staff along the entire retail chain, and especially in Johor which faces competition from Singapore employers, also needs to be addressed soon, as this problem will slow down the economic recovery.
Against the threat of a looming recession, the government needs to take swift action to cushion the negative impact of a possible reduction in take-home pay and consumer spending.
Malaysia needs to attract more foreign tourists for the next one year, as foreign tourist arrivals of more than two million as of June, 2022 (with a target of 4.5 million by year-end, set by the Ministry of Tourism, Arts & Culture), is way below that of 26.1 million in 2019.
Pre-Budget 2023 Wishlist: Insurance And Financial Planning Sectors
The COVID-19 pandemic is a wake-up call, reminding us of how uncertain life can be. To encourage take-up of life insurance, the personal tax relief for life insurance premium should be increased from RM3,000 to RM5,000, said Life Insurance Association of Malaysia (LIAM) president, Loh Guat Lan.
Life Insurance Association of Malaysia (LIAM) president, Loh Guat Lan
Currently, there is a RM3,000 tax relief on insurance premium paid for medical and education insurance policies combined.
The tax relief for education, medical and health insurance (MHI) as well as MHI plans with co-share benefits should be raised from RM3,000 to RM6,000.
In Budget 2021, the tax relief limit on medical expenses for self, spouse and children for serious diseases, was increased from RM6,000 to RM8,000. This tax relief should be extended to include medical insurance premiums for self, spouse and children, said Loh.
LIAM informed that in 2021, RM11.9 billion in benefit payouts were made in the life insurance industry while RM4.6 billion were paid out for medical insurance.
The RM50 Perlindungan Tenang Voucher program for the B40 Bantuan Prihatin Rakyat group, which received encouraging responses but will end in December 2022, should continue for at least another year.
Many in this category do not have any form of insurance or takaful coverage. Having a second premium that is subsidised will be necessary in the midst of an uncertain recovery from COVID-19.
Data shows that less than half of employees, especially B40 workers, are being covered by some form of group insurance which is a cheaper form of insurance. LIAM therefore seeks a waiver of the 6% service tax for group insurance schemes.
The COVID-19 pandemic had caused many people to lose their jobs and also eroded their savings. Thus, to help Malaysians better manage their personal finances, Financial Planning Association of Malaysia (FPAM) proposed that a new tax relief of RM3,000 be given to Malaysians who engage licensed financial planners, said FPAM vice president, Rafiq Hidayat.
FPAM vice president, Rafiq Hidayat
As many Malaysians no longer have enough savings when they reach retirement age, tax relief on the private retirement scheme should be increased from RM3,000 to RM10,000 to attract more people to put aside their money for retirement.
With medical insurance premiums rising regularly due to the high inflation of medical expenses, FPAM also agrees with LIAM that this tax relief should be raised from RM3,000 to RM5,000.
Now that we’ve seen the Pre-Budget 2023 wishlist by the industries, let’s hope that their voices are heard.
While there are substantial views talking about crypto investment, especially views about cryptocurrency and blockchains are the future of financial services, disruptive fintech, potential lucrative returns and many more about the bright side the asset class.
However, what are the cons and risks, and should you invest in it?
Gambling, Speculating, Trading or Investing?
First and foremost, we must ask ourselves what are your objectives in crypto investment. Are you coming from the angle of financial planning? Which means that it serves as a tools to fit into a portfolio along your journey to achieve your financial objective such as retirement or child education.
Or, are you investing merely to earn fast money? Or, are you merely speculating. Speculating Trading is an active income and it merely cannot categorised as investment. Many people actually confused between trading and investing.
Between speculating and gambling, there are also many similar characteristics. Thus, in other words are you ‘investing’ into Cryptos for ‘gambling’?
In this modern world where public are generally getting more educated compared to the post-war era, there are least people going for the conventional gambling, but diverting into so-call speculative financial markets to ‘gamble’, yet seems above the class in eye of the public.
Conventionally, when a person is betting on horse racing, they will tell you all sorts of stories and logic in regards to horse riding. Hence, when a person is speculating on Cryptos, they may tell you all kinds of fintech and futuristic tech stories about blockchain or even the recent hot topic of Metaverse and NFTs.
In conventional gambling, there are licensed casino and the underground operators. Why do some governments grant casino a license then? Of course, there are many reasons, but probably few of the common reasons are due to profit making, demand and the need to safeguard public interest thru monitoring and control.
Would it be some similar reasons where many regulators or some financial institutions started to involve in Crypto business recently? Trading or investing in Crypto may incur significant level of risk, worst still if using unregulated or unlicensed platform.
‘Gambling’ is a bad habit across human civilization. Thus, one had to be aware that is he gambling, trading or investing.
Myth Behind Decentralisation
‘I like freedom!’
These might be the voice from many people especially the young ones. Indeed, everyone wish to have freedom. Some level of freedom is good for overall mankind living. However, would it be disaster behind ‘unregulated’ freedom?
Nobody like to be controlled. However, if you are living in a location which there are no government in place, what would be the scenario? When there are no effective government, there are mafia around. In another word, mafia may be controlling the area. Is it a safe place to stay?
Behind decentralisation, government may have great challenge to control their monetary policies. If we would imagine that our human body live because of blood as blood carries all the oxygen, nutrients etc to every part of our body in order to keep us alive while the brain is the regulator regulating the blood, then money is medium similar to blood that keep a country alive while the regulators act as ‘the brain’ to regulate.
Thus, every Central Banks and Government are working hard to keep their monetary policies in place and in control. Some may argue that blockchain technology in the Crypto can actually play the role of transparency and some kind of ‘self-governed’. Indeed, blockchain is a great technology for financial services. However, many people may be confused. Cryptocurrencies and Blockchain are totally two different matters.
As of March 2022, there are approximately 87 countries are exploring into issuing Central Bank Digital Currency (CBDC), according to the Atlantic Council. While CBDC may adopt blockchain or Distributed Ledger Technology (DLT), CBDC differs from Cryptos as CBDC is legal tender and backed by a claim on the central bank unlike Cryptos that are not legal tender and have no intrinsic value.
Bank Negara Financial Sector Blueprint 2022-202 stated that Bank Negara are exploring into CBDC thru a multi year exploration starting with Phase I via Project Dunbar.
Diagram : Comparison of CBDC, stablecoins and non-backed digital assets
Source : Financial Stability Board (2020), “Enhancing Cross-Border Payment System : Stage 1 Assessment Report to G20”
Crypto As Future Legal Tender?
According to BIS Annual Economic Report 2018, crypto currencies with decentralised trust model, such as Bitcoin, each user needs to download and verify the history of all transactions ever made. This has the effect of slowing down transaction processing time, making it not scalable to facilitate day-to-day retail payments.
Compared to major international cards networks which able to process 2,000 to 3,500 transactions per second, Bitcoin is only able to process 3.3 transactions per second. Most Cryptocurrencies are not likely to be used as payment instruments primarily because they do not exhibit the universal characteristic as money.
Due to price volatility, vulnerability to cyber attacks and lack of scalability, they are not a good store of value, payment method and medium of exchange.
Scarcity, Really?
People used to describe Bitcoin as Digital Gold as there are only a maximum capacity of 21 million coins in Bitcoin. Thus, it is said that Bitcoin has a unique feature of scarcity. Many people seems to illustrate the scarcity of Bitcoin to Gold.
There are limited supply of Gold in our planet. However, gold exist and play its role in mankind civilization since the ancient era as precious metal, jewelries, commodity, mean of storage of value, medium of transfer, barter trade, technology components, currencies etc. It is kept by government and central banks as reserve.
Gold are natural resources and does not created by human being. Thus, there are no other type of gold in existence. Cryptos are created by human being and there are more than 19,000 cryptocurrencies as to date.
Thus, ‘Scarcity’ is it for real then? Thus, it might not be accurate to compare cryptocurrencies to gold in terms of scarcity.
In short, one have to be clear about their objectives in investing into crypto. Is he or she gambling, speculating, trading or investing in crypto? Due to numerous uncertainty in regards to crypto market, one had to be very careful while placing their hard earned money into crypto investment.
About the Author
John Chan Ninyii FAR CMSRL BEng RFP ShRFP MBA PJM CEO of YES Financial Sdn Bhd Bank Negara Approved Financial Adviser Securities Commission Capital Markets Services Licensed Firm Email: john.chan@yesfinancial.co
Financial planning is a very important life skill that most of us had to learn on our own. At times, especially when we were young, we don’t realise how important it is to plan for our financial future until we hit a life-changing moment, such as marriage or having our first child, which require a lot of money.
As such, some of us will have to start making up for lost time, increasing the pressure to reach a certain financial goal. It may not be enough to just save money. We will need to invest too in search of better returns.
One option is to invest in Unit Trust Schemes, or Unit Trusts.
What Are Unit Trusts?
A Unit Trust is an investment scheme that pools money from many investors who have similar investment objectives, strategies and risk appetites. The pooled moneys are then invested into a diversified portfolio of investment assets, such as shares, bonds, and cash equivalents.
Unit Trusts are managed by professional fund/investment managers who have been licensed by the Securities Commission Malaysia. These professionals will be investing your money, using their expertise to help you reach your financial goals. With the professional fund managers making investments on your behalf, you are free from having to study the markets yourselves and making decisions on each individual investment.
Additionally, investing in Unit Trusts is an affordable option, especially for those who are just beginning their financial freedom journey. Only a small amount of capital is needed for you to start investing.
How Long Should I Invest In Unit Trust Schemes?
There are many reasons why investing in Unit Trusts makes good financial sense, particularly if you already have a goal in mind. You can choose to invest in a Unit Trust for varying lengths of time, from one to three years (usually defined as short-term), three to five years (medium-term) or more than five years (long-term).
Here are some examples of how these investment strategies would work with your particular goals:
Short-term: These are good for more immediate goals such as buying a car, looking to take a holiday, or wanting to start a family.
Medium-term: These are suitable if you are looking for slightly higher returns to be used towards the down payment for a house or seeking capital to start a new business in the near future.
Long-term: These are more suitable for big financial goals that you have lined up for the future, such as paying for your young child’s tertiary education or if you want a comfortable nest egg for retirement.
What Are The Risks Involved?
As with most forms of investments, there are risks involved in investing in Unit Trusts. But the beauty of investing in Unit Trusts is that you can choose an investment strategy that best fits your risk appetite.
In general, there are three types of investment strategies you can consider, based on your preferred level of risk:
Conservative: This is often the best strategy for older investors who have a large amount of capital and prefer stability over quick gains. Investments in this risk category tend to be in safe assets that are not easily susceptible to market shocks or swings, and very often, help to preserve the principal amount you invested.
Moderate: For investors who are willing to take some risks, this strategy is the perfect balance between wanting to preserve your principal investment, while still taking advantage of some assets that can offer potential growth.
Aggressive: For younger investors, a small amount of capital can go a long way, especially if you are willing to invest for the long term. While there might be a chance that you may lose some of the initial capital, the fact that you have time on your side means that you can take higher risks to maximise growth.
Let’s see how Unit Trusts measure up to other forms of investments and savings:
Unit Trusts offer a middle ground when it comes to investment options. Generally, it is safer than investing directly in the market and yet, it has the potential to offer better returns than standard savings accounts. For those looking to safeguard their financial future or grow their wealth, it is well worth considering investing your money into Unit Trusts.
Visit FIMM’s website for more information on Unit Trusts.
Perkataan persaraan adalah merujuk kepada berhenti melakukan kerja aktif dalam kehidupan. Namun dalam dunia serba moden hari ini, konsep rancang persaraan sering dipandang sepi dan seolah-olah tak penting.
Persaraan yang bermakna adalah di mana seseorang itu mampu untuk menghadapinya tanpa perlu risau tentang kewangan. Barulah anda boleh berehat dan menikmati kerja keras anda selama ini.
Walaubagaimanapun, persaraan yang ideal tidak berlaku sekelip mata. Sama seperti membina otot yang kuat memerlukan latihan yang konsisten, prinsip yang sama juga terlibat dalam persaraan. Apabila kita ingin bangunkan otot kewangan yang kuat, kita perlu melakukan usaha yang berterusan untuk satu tempoh jangka masa yang panjang.
Sekiranya merancang untuk bersara adalah mudah, kenapa tak ramai yang melakukannya?
Perancangan Kewangan: Titik Mula Untuk Rancang Persaraan
Kesilapan terbesar seseorang dalam perancangan kewangan adalah dengan merasakan bahawa kita tidak perlu rancang persaraan mereka. Secara umumnya, orang ramai merasakan bahawa perancangan kewangan adalah untuk mereka yang kaya-raya saja.
Sedangkan rancang persaraan diperlukan oleh semua orang, tidak kira tua muda atau miskin kaya. Pelan kewangan yang lengkap akan memberikan kita kejelasan mengenai situasi kewangan semasa dan membolehkan kita mengenalpasti kekurangan yang ada, dan berusaha untuk mencapai sasaran kewangan.
Masa Takkan Tunggu Kita
Ada pelbagai alasan yang diberikan berkenaan tidak merancang kewangan dengan baik, dengan alasan paling biasa didengari “Saya terlalu sibuk dan tiada masa!”
Saya pasti kebanyakan daripada kita menghabiskan masa melakukan kerja yang tidak produktif seperti banyak masa dibazirkan di media sosial atau menonton terlalu banyak televisyen. Tetapi bukankah ianya merugikan kita sendiri apabila kita tidak merancang untuk masa depan kerana kesuntukan masa?
Sekiranya kita membiarkan saja persaraan untuk terjadi dengan sendirinya, kita berisiko wang kita akan habis sebelum nyawa kita yang habis! Adakah kita nak hidup di usia emas dengan berjimat cermat setiap masa?
Lebih Cepat, Lebih Bagus
Masa untuk anda berpijak di bumi yang nyata dan usah biarkan alasan menghalang anda. Sekiranya anda berusia pertengahan 20-an, ianya merupakan masa terbaik kerana usia yang muda akan beri banyak manfaat berganda. Sekiranya anda berusia 30-an, ianya lebih kritikal untuk mulakan perancangan persaraan dengan kadar segera.
Sebaik saja anda mencecah usia 40 tahun, anda perlu bekerja lebih keras untuk mencapai sasaran persaraan dan semakin mencabar untuk melaksanakannya ketika berusia 50 tahun.
Mula dengan mengira perbelanjaan peribadi untuk mengenalpasti ke mana duit anda dihabiskan sebelum anda mempunyai kawalan yang lebih ketat ke atas kewangan anda. Bak kata pepatah, “Sekiranya kita tak urus wang, wang yang akan mengurus kita”.
Generasi Sandwic
Dilema yang dihadapi kebanyakan rakyat Malaysia adalah ibubapa yang mempertaruhkan persaraan mereka demi masa depan pendidikan anak-anak, sementara itu terpaksa pula menjaga orang tua mereka. Ini merupakan kitaran kewangan yang tidak sihat, menyebabkan ramai yang berdepan dengan risiko persaraan yang tertekan.
Generasi muda sendiri berdepan dengan pelbagai bebanan disebabkan komitmen tinggi disebabkan oleh kos sara hidup yang tinggi dan tahap hutang yang menggunung.
Mindset perlu berubah bahawa ibubapa yang semakin berusia tidak meletakkan harapan kewangan yang tinggi ke atas anak-anak mereka. Pada masa yang sama, anak muda perlu lebih celik kewangan dan merancang duit mereka dengan lebih baik.
Dapatkan Bantuan Untuk Rancangan Persaraan
Sekiranya sesuatu masalah itu terlalu berat untuk diselesaikan seorang diri, ianya merupakan idea yang baik untuk meminta pertolongan. Ramai orang sibuk dengan kerja hakiki sehinggakan tak mampu untuk uruskan kewangan peribadi dan merancang secara serius tentang persaraan.
Sebenarnya bantuan sentiasa ada di dalam bentuk nasihat profesional dan bimbingan yang betul untuk mencapai sasaran kewangan anda. Semua orang ada kelebihan dan kemahiran sendiri, anda perlu fokus terhadap kepakaran anda untuk memperolehi pendapatan aktif di samping menggunakan khidmat perancang kewangan untuk mengembangkan kekayaan anda.
Sebelum ini, perancangan kewangan adalah sesuatu yang janggal dan orang ramai jarang berfikir mengenainya. Tetapi hari ini kita tidak mampu untuk berdiam diri sedangkan dunia bergerak dengan amat laju, dan mengambil pendekatan yang pasif adalah merugikan.
Masih belum terlambat untuk mempunyai rancangan yang kukuh dan pandangan yang jelas tentang bagaimana untuk berusaha dengan strategi yang betul.
Satu langkah kecil ke arah persaraan, satu langkah besar ke arah kebebasan kewangan.
Mengenai Penulis
Chan Li Yun merupakan seorang Perancang Kewangan berlesen dengan Finwealth Management Sdn Bhd dan ingin membantu orang ramai untuk meningkatkan taraf hidup dengan perancangan kekayaan yang betul. Beliau boleh dihubungi di liyun@finwealth.com.my.
Kami di Smart Investor dan Finwealth komited untuk bantu anda mengurus kewangan dengan lebih baik. Dapatkan sesi rundingan daripada seorang pakar secara percuma, dengan mengisi butiran anda di sini: https://www.smartinvestor.com.my/SIxFinwealth
