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Good Debt VS Bad Debt?

Debt, in essence, is all about borrowing money from a third party, and having the means to pay it back. Debt is not always bad news; it really depends on the kind of debt you currently have and your ability to pay it back. Let’s take a closer look at ‘good debt vs bad debt’.

Therefore, let’s start off with a self-assessment on debt. Referring to Table 1, kindly answer the statements with a “yes” or “no”. The more “no” in your replies, the higher your stress level in debt management.

1	My monthly loan servicing ratio over my monthly income is about 38% or below.
2	I am only investing my free money and never borrow to invest.
3	I have consistently (monthly) and/or fully paid my credit card debts.
4	I keep a track of my total debts annually and it is decreasing over the years.
5	I know the difference between good and bad debt, and only utilise the good debt to acquire appreciating assets like property.
6	I pay all my household bills on time.
7	I am current on all my debt payments.
8	I know who to look for help if any of my family members r I are in deep debt.
9	I know the risks of becoming a guarantor, co-loan owner and supplementary credit card owner.
10	I know the interest rate of each loan that I borrowed, and how the interest is charged on the loan amount.
11	I know how to restructure my debt wisely if needed, and clear the loan with the highest interest rate first.

Table 1: Self-Assessment

Good Devt VS Bad Debt?

Did you know that debts can be categorised as “good” or “bad”? Good debts refer to the ones with low-interest rates (below 8%), and your borrowing is used to purchase appreciating assets such as residential or commercial properties, or investing in a business.

A study on Malaysian property valuation between 1991 and 2014 showed that the compound annual growth rate (CAGR) for overall property in Malaysia is around 5.97%。No doubt that property is an appreciating asset, still location is key for greater return.

Bad debt, on the other hand, is akin to borrowing money to buy a car, which is a depreciating asset, although the loan interest rate is considerably not high (around 4-6%). Every year, the car value will drop at an average of 10%.

From Table 2, it is crystal clear that we shouldn’t borrow if the interest rate is more than 8%.

Debt Type	Average Interest Rate (Annual)
Illegal Shark Loan	60%
Credit Card	15-18%
Personal Loan	10-12% (Promotional 8.88%-9.99%)
Education Loan	8-10%
House Loan	4.5-6.5%
Car Loan	4-6%
PTPTN	1% (3% is the old rate)

Table 2: Types of Debt and Average Interest Rate (Annually)

Words Of Advice

Healthy Debt Ratio – A key indicator on whether you have a healthy debt ratio is the Monthly Debt Servicing Over Monthly Income Ratio. It simply totals up your monthly debt repayment amount over your monthly income.

This ratio should always be kept below 40% at all times, though a temporary spike is still acceptable. For those far below 40%, you have more room to gear on appreciating assets resulting in easier loan approvals.

Never Borrow to Invest – The first rule of financial planning is not borrowing to invest, even in share margin investment, where the interest rate is low at about 4%.

We should only invest free money. Don’t borrow money even from family members, relatives or friends to invest. Otherwise, it could cost you both money and relationship.

Get the Longest Loan Period (if possible) – Forget affordability, will you apply for a 25-year loan (instalment: RM2,400) or 35-year loan (instalment: RM1,200) for a property purchase?

Choosing 35 is a wiser strategy to deal with loan and cash flow. Even if you opt to pay RM2,400 (instead of RM1,200) monthly and consistently, the loan will end in 25 years.

However, if you select the 25-year package, there is no way you can reduce your monthly repayment if you have cash flow problems in certain months.

In the event you don’t pay consistently, banks will increase the interest rate causing the repayment amount to rise, lesser free cash in hand, and a whole lot more stress!

If non-repayment continues for two months or more, you will be seen as failing to service your home loan, and worse, the bank might even auction your house. Therefore, why risk your financial position with a shorter period of loan which offers lesser flexibility?

The longer the tenure of your home loan, you would have more cash in hand to actively invest into an investment instrument that can give you an annual return of more than 6%. This is smart financial planning.

About the Author

This article is written by Yong Chu Eu. He is the Founder, Principal, MFPC Shariah RFP, CPD/CPE, HRDF Certified Corporate Trainer of Money & Life, Financial Book Author, Licensed Financial Planner, E2E Financial Literacy Principal Coach & Local Media Guest.

August 17, 2022

Fighting Over Equity Distribution, The Importance Of Succession Planning
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. Hopefully we can understand the importance of succession planning and make the necessary preparation.

Elder Tan put down his chopsticks, looked up and smiled.

His three sons and their spouses are seated together once again for a reunion dinner which the COVID-19 pandemic denied the family for two consecutive years. In the next table, the children are noisily tucking in their food and chattering away as well as occasionally peering into each other’s phones.

Tan was a picture of contentment. He has raised his children well to be successful in their own right. He is proud of his eldest son Seong who is doing a good job taking charge of the hardware business that Tan had built from scratch. Danny, the No 2, is head of the engineering department in a construction firm while Chye, his street smart youngest son, is doing well in sales in his father-in-law’s spare parts company.

“I want to tell all of you something…” Elder Tan interrupted the conversations at the reunion gathering.”

Succession Planning Is About Being Prepared

I want to retire and leave the family business to Seong,” he added. Seong looked at his father, beaming that he is getting just rewards for the hardwork that he had put in to run the business.

“I’ll transfer the shares of the company to all three of you equally,” Tan said looking at his three sons. The expression in Seong changed on hearing that. He looked startled as he had expected the lion share for all his sweat, literally!

“Equally with Danny and Chye! They didn’t lift a finger to help out in the business! And they now get equal share of the fruits of my toil? No way!!!” Seong now getting red faced with anger.

He rose from his seat and smart-mouth Chye stopped him in his tracks with his remark: “What, you’re not happy?”

The whole atmosphere changed as Seong lunged towards Chye. Danny stepped in between and after that, chaos broke out. A breakdown in family harmony over too-soon, unforeseen, unexpected equitable or inequitable distribution of family assets?

Tan’s desire to be fair and thus, the equitable distribution of equity in the family business probably blindsided him from the possibility of a family feud erupting from it. Estate planning and succession planning needs to be skillfully handled and prudently managed to avert any unwarranted situation such as a family feud.

Succession planning inevitably is critical for business, especially family-owned business. Business owners tend to underestimate and downplay its importance, ignoring possible downsides when they are no longer in charge. It holds true that failing to plan is planning to fail.

A pre-planned succession such as through a Family Business Trust or a Family Foundation would be a prudent way to lay down instructions on conditions for ownership succession, management succession and rewards and conveyed impartially and professionally by an independent third-party such as a trustee would avert family feuds over inheritance.

Three key areas need to be considered in setting up a business succession plan namely:
- Ownership Succession. This will ensure that the shares of the family business will be protected and not likely to be fragmented over generations. The rightful heirs are clearly defined, thus enabling ring fencing against outsiders to own the family business
- Management Succession. Successor is crucial for continuity of the family business. By having a capable candidate to be successor of the family business, it retains the goodwill of the family business and it improves the confidence of the investors, customers, and employees
- Family Wealth Management. Proper planning and allocation of family resources effectively will maximise the benefit for each of the family members, such as in areas of financing family education, family medical and family reserves needs
Business succession planning is an essential part of the risk planning for the business.

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.
August 17, 2022
How Can A Licensed Financial Adviser Help You?

Many people are always wondering what or who a “Licensed Financial Adviser”(LFA)” or a Financial Adviser’s Representative (FAR) is. Also, many do not understand what is a “Financial Plan”.

Did you know that there’s only about 1,300 financial adviser in Malaysia, versus our population of 32 million?

When their numbers are small and very little is known about them, surely a lot of myth and misconception that happens.

How Can A Financial Adviser Help?

Why do anybody need a financial adviser while we already have banks, insurance agents, unit trust consultants, estate planners, lawyers and accountants? What resources or values that an LFA/FAR could assist or deliver impact into their life?

Most Malaysians have the impression that an LFA/FAR is “not focused” or “unprofessional” because he or she is able to provide financial services from multiple providers. For us Financial Advisers, financial providers are our resources and financial tools which are suggested to solve different individual or corporate needs.

To clarify this misunderstanding, a Licensed Financial Adviser DOES NOT represent any company or financial providers. They represent you.

All advice and solutions are solely based on your needs, and they will look into the financial market for the best financial tool to suit your life goals.

Usually we are too busy earning money with our job or business, or too busy with family, that we barely have time to deal with their financial planning. People who are too busy making money for them to make a living, paying off debts and liabilities, is hardly able to get the latest investment updates, market outlook, insurance plans and taxes.

Due to the lack of financial literacy and knowledge, many have become the victim of ponzi schemes or get-rich-quick schemes. This resulted in many Malaysians losing their wealth.

Some went into huge debts, by applying personal loans, credit card cash outs, or even loan sharks and ended up a bankrupt. This is one of the reasons why bankruptcy statistics increase gradually every year. It is human nature to take risk and gamble, but why gamble when a Licensed Financial Adviser can help you better manage your finances and investments?

Most of us gets mixed up with “investment” and “gambling”. Many Malaysians thought that investing in high-risk instruments like stocks, forex, crypto or private equities are similar to gambling. Whereas gambling is purely based on luck or a probability of winning chance.

A good investment is when you have the knowledge and understand clearly about the instrument along with the risks and rewards. You can predict the results, whether it is an instrument that comes with low risk with low return, or high risk with high potential return. Also the time frame and financial goal or purpose of a particular investment.

What’s even more important is to make sure that it is being regulated by by Bank Negara Malaysia, Securities Commissions Malaysia or Bursa Malaysia.

A wise man once said, “Fast is actually slow. Slow is actually fast.” Deep thoughts, deep wisdom.

A Licensed Financial Adviser is specialising in the Finance industry. They are well-trained professionals that are focused on Financial Planning. To deliver value to your family and businesses, solely based on your needs in order to achieve your life goals.

Don’t wait no more, get in touch with a licensed financial adviser today.

About the Author:

Cheong Kwang Siang, CFP ^{Cert TM}
FAR, CMSRL
Genexus Advisory Sdn Bhd
He can be contacted at cheongks@genexus.com.my

August 17, 2022
3 Most Popular E-Wallet in Malaysia
An e-wallet or also known as digital wallet, is an electronic device, online service, or software program that allows one party to make electronic transactions with another party for buying goods and services. With the rise of smartphone usage, so does the popularity of e-wallet in Malaysia.

Let’s check out the 3 most popular 3 e-wallet in Malaysia.

Boost
- Backed by Axiata Group
- One of the pioneers in the Malaysian e-wallet market
- Accepted at any UnionPay QR merchants
- BoostUp Reward Programme and CashUp Cashback Programme
GrabPay
- Backed by Grab
- Leverages the Grab Ecosystem for GrabFood, GrabRide and other provided services
- Partnership with Maybank for cross platform use
- Earn GrabRewards Points from every transaction
Touch ‘n Go e-Wallet
- Backed by Alipay and Touch ‘n Go
- Taps into the large existing user base of Touch ‘n Go cards
- PayDirect: link your Touch ‘n Go Card and pay toll fare directly with your e-wallet balance at participating highways
- Money-back guarantee: full refund within five working days if your e-wallet is charged erroneously
Each e-wallet in Malaysia comes with its own uniqueness. You should look at which is more convenient and brings the most benefits to you as a user.

In terms of benefits, here’s what you can expect from the 3 e-wallet in Malaysia as per below:

1. Convenience And Safety

What is the first thing you take when you head out? Your wallet or phone? Frankly speaking, I will often forget my wallet, but never my phone. We heavily rely on smartphones today and with the high adoption of e-wallets among merchants, we can easily make payments without cash on hand. Besides, I think everyone has faced the awkward situation of having to squeeze the notes and “syiling” back into your wallet after receiving your change. With an e-wallet, problem solved!

The safety of digital payments is also a concern for some, but data in the e-wallets are encrypted and some providers even provide money back guarantee features to ensure the safety of using their services. It can be also argued that e-wallets have helped to reduce theft cases, which usually occurs with physical cash!

2. Spending Tracker

Do you always get shocked when checking your bank balance? Clueless on where the money has gone? You can easily check your e-wallet where all transactions made are recorded. Gone are the days of forgetting where you spent your money. Keeping track of your daily spending is crucial to cultivating good financial habits. This provides an overview of your spending patterns and insight as to where you could improve.

3. Promotions And Rewards

While having many e-wallets has been confusing for some, the war to acquire users has been beneficial for us consumers. All e-wallets offer their own rewards, and it’s up to you to make the most of it:
- Boost allows you to earn BoostUp coins with every transaction and exchange for gifts
- GrabRewards Points comes with an extendable validity feature which technically makes it technically a “never expiring” points system (every point-earning transaction will extend the expiry date of your GrabRewards points till the last day of the 3rd month)
- Touch n’ Go e-wallet rewards frequent user with cashback vouchers for selected merchants
All the e-wallet players partner with various merchants to provide attractive promotions to users in a bid to increase their market share. So look out for where you can save and earn through regular activities like refueling your car, buying groceries or even reloading your mobile credit. But please don’t use these promotions as an excuse to spend more than you need to!

4. Private Assistant

Paying your utility bills? Use e-wallet!

Topping up your mobile credit? Use e-wallet!

Sending money to your spouse? Use e-wallet!

The utility of e-wallets is increasing by the day, and are no longer just avenues for sending or receiving money. Many can be used to pay for your parking, buy insurance, settling utility bills and more! There will be definitely more that an e-wallet can do in the near future.

About the Author

Ocean Pon is a Licensed Financial Planner and likes to help millennials make wiser financial decisions to achieve financial independence. He can be contacted at oceanpon@finwealth.com.my

We at Smart Investor and Finwealth is committed to help you better manage your financials. Get a free consultation from an expert by filling in your details here: https://www.smartinvestor.com.my/SIxFinwealth
August 17, 2022
Fuller Academy Targets To Upskill 30,000 ASEAN Talents, Bridging The Knowledge Gap In Sustainability

Kuala Lumpur-based Fuller Academy is poised to enrol to 30,000 learners across ASEAN through its 12 sustainability short courses, designed and curated by the industry, for the industry, to enhance talents’ knowledge and skills in sustainability.

Chief Executive Officer Wan Imran said all programmes certified by Human Resource Development Corporation (HRDCorp) are part of micro-credential short courses, which aim to provide knowledge solutions for talents, in line with the global demand for talent upskilling in sustainability.

“Based on a recent analysis by Bloomberg, global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management. This is a strong driving force encouraging the industry to shift towards a more sustainable approach. Hence, now is a critical time for organisations to start enabling their talents with knowledge and purpose in the areas of sustainability. This is also aligned with our national agenda of creating 200,000 green jobs by 2030.” he said during the launch of Fuller Academy.

Wan Imran, Co Founder and CEO of Fuller Academy & Michelle, Co Founder and COO of Fuller Academy

To date, more than 1,600 participants from various industries have signed up across various of our programs from within the country and abroad.

“Our learners come from different industries and backgrounds, as we offer a range of courses targeting different skill sets from sustainability communications to the introduction of carbon emissions. We have been getting a lot of learners from ASEAN and other regions, with many learners hailing from Europe. The courses which were curated with our global instructors have set a new standard in sustainability learning, which is effective, practical and engaging.” he added.

Breaking it down further, Imran said the courses are all designed and created by industry experts and practitioners thus providing insights into the practical industry knowledge.

“We have made it accessible geographically and financially. Being an online platform, anyone from across the region and beyond can sign up as a learner. For Malaysia-based companies, they can benefit from the financial support HRDCorp can provide, and for outside of Malaysia, they can also take advantage of our entry-level pricing.”

“The courses are designed to be short and bite-sized, with the flexibility for the learners to complete the course in their own time within the monthly cohorts. This on-demand format is

ideal for busy professionals, allowing them to learn around their working schedule through a structured yet flexible course.”

In conjunction with the launch, Fuller Academy also hosted a series of dialogue sessions on sustainability, attended by experts in the field such as Elina Jani from Malaysian Green Technology And Climate Change Corporation (MGTC), Wan Dazriq from Ethis Malaysia, Karina Cady from Nandina Partners, Yasmin Rasyid from EcoKnights, and Yasir Qureshi from Kantar Malaysia.

About Fuller Academy:

Fuller Academy is the trusted strategic partner in the business sustainability journey, providing industry-driven sustainability education through online courses. Current open enrollment includes Fundamentals of Business Sustainability, Introduction to Carbon Emissions, Internal Communications for Sustainability, and Shaping Consumer-Centric Sustainable Strategy.

August 16, 2022
Banking For Expats In Malaysia, 6 Things You Should Know

It has become increasingly difficult to move money anywhere around the world, and it is set to get tougher. Fraud, cyber security, tax and compliance procedures, amongst other rising trends, are creating obstacles. Traditional banks are being marginalised by digital transformation in banking and non-banking sectors, with the ease of moving money around with crypto wallets, in Malaysia, and worldwide being a prime example.

So, if you are an expatriate in Malaysia, or thinking of moving to Malaysia, you may be left wondering what’s the best option for banking.

Let’s check out banking for expats in Malaysia.

1. Setting Up A Bank Account

Abstract blur and defocused hotel lobby interior for background

Opening a bank account as an expatriate in Malaysia is straightforward and fast, if you have the relevant paperwork. If you do not then it is not possible. If you are employed in Malaysia, then you will be able to open a bank account at a local Malaysian, or international, bank.

If you are not employed in Malaysia but own a residential property, then you should also be able to open a bank account. If you are considering starting up your own company in Malaysia then it is best to check that it will be possible to open a corporate bank account in Malaysia before you take the time and expense to establish a legal identity.

Due diligence on several aspects of opening a company should be done in Malaysia, and in any other Asian countries, before you decide to proceed. You may find that it is possible to open a company but not possible to open a corporate bank account in Malaysia, or elsewhere. Check before you get started on the incorporation to avoid wasted effort and expenses.

2. Banking For Expats: Multi-Currencies

Caution should be exercised when you open a multi-currency account in Malaysia, or anywhere in the world. You may find that, despite having a choice of accounts to keep your hard-earned currencies in, when you transfer foreign currency from abroad your bank in Malaysia will convert all currencies into Malaysian Ringgit initially.

This is fine if you intend to spend most of your money in Malaysia, but if you want to hedge against currency volatility then you may lose out on any initial transfer on the exchange rate and on currency risk.

3. Digital Wallets

Digital wallets are hot. They are useful too. If you have not already tried using one, or more, digital wallets, then what is stopping you exploring? There are currently over 40 similar providers but this space is likely to reduce to a few niche players in the future.

The Covid-19 pandemic has accelerated the adoption of e-money payments in Malaysia, and globally, with transaction value crossing RM30 billion (between January and September so far in 2021, according to data from Bank Negara Malaysia.*

Points earned from spending through your e-wallet may be going to waste and if you look at the amount of money you, and your family, will save in a whole year using e-wallets then this may be a good motivator. E-wallets also mean you do not have to handle cash for shopping and small purchases.

Read: What are The Many Benefits of E-Wallets in Malaysia?

4. Fraud And Cyber Attacks

The two major security issues a local or an expatriate faces with their bank account in Malaysia, or anywhere in the world, are fraud and cyber risks. Malaysia is reportedly a leader in cyber security amongst Asian countries. Does this really mean your bank account is safer in Malaysia than somewhere else?

Reportedly, Malaysia leverages policy capacity with a broad network of international intelligence alliances to rate highly in the cyber-power rankings. Malaysia came in fifth out of 194 states in the 2020 Global Cybersecurity Index constructed by the International Telecoms Union, a United Nations agency.

With 98.06 out of a possible 100 points, Malaysia was only fractionally behind Singapore and South Korea, and equal with Russia and the United Arab Emirates. It has been in the top 10 since the first report was released in 2014. However, the best way for you, and your family to prevent losses through cyber attacks is to be vigilant when banking online.

5. Benefits Of Domestic And Overseas Credit Cards

Cashback is one benefit of shopping with a local Malaysian credit card. If you are an expatriate and want to make the most of your earnings in Malaysian Ringgit then it is probably a good idea to spend most of what you earn in Malaysia. From time to time, a few countries may not allow you to exchange your hard-earned Malaysian Ringgit for foreign currency when you travel overseas, or the exchange rate may be unfavourable.

If you are sending Malaysian Ringgit savings back home, or to an overseas investment, then you may also be caught by a dip in the value of the Malaysian Ringgit. Remember, it is usually best to have more than one credit card just in case there are simultaneous cyber and fraud attacks on both your credit cards at the same time, leaving you stranded overseas without means to pay for a night out or accommodation.

Some international credit cards offer no international currency charges, as well as favourable exchange rates, so take a look around at what is on offer. You may find that using an overseas credit card in Malaysia is low on cost and favourable on exchange rates.

Read: How Credit Card Works in Malaysia: Credit Card 101-Know the Rules Before Playing The Game

6. Money Transfers

Most banks around the world now require that you give a reason for any money transfer from your own bank account to a third party. Any bank transfers of a substantial sum must be investigated by the bank and a report made to the central bank, Bank Negara.

You can save yourself time, money and stress by making money transfers of small amounts, less than US$10,000 or foreign currency equivalent, if you want to avoid unnecessary hassle. Some crypto currency wallets do not require you to state a reason for your money transfer and, if you have not already tried, you may be interested to transfer funds around the world using cryptocurrencies.

It is not as difficult as you may think with many transfers simply requiring you to cut and paste an ‘address’ into their portal, then press send.

A lot of wasted time and money is not down to banks, it is down to you. Becoming more aware of the benefits of non-bank and digital banking options, and their associated risks, could save you pennies or earn you pounds.

So there you have it, the available options on banking for expats in Malaysia.

About the Author

Dr. Jonathan Di Rollo (PhD Econ) has been actively and passively investing in Asian markets for more than 20 years.

August 16, 2022
Malaysian Brands Return To Growth After COVID As Petronas Remains On Top

Petronas has retained its position as Malaysia’s most valuable brand for the 12^th consecutive year, with its brand value rising strongly by 13% to US$13.6 billion, according to a new report from leading brand valuation consultancy, Brand Finance. The brand value of Petronas is worth just over three times as much as the second-ranked Malaysian brand, Genting (brand value up 44% to US$4.5 billion).

The brand values of many big Malaysian brands have returned to growth as the nation looks beyond the pandemic, with Malaysia’s 100 most valuable brands worth 21% (US$ 9.3 billion) more in 2022 (US$53.7 billion) than they were worth in 2021 (US$44.4 billion).

Every year, leading brand valuation consultancy Brand Finance puts 5,000 of the world’s biggest brands to the test, and publishes around 100 reports, ranking brands across all sectors and countries. Indonesia’s top 100 most valuable and strongest brands are included in the annual Brand Finance Malaysia 100 2022 ranking.

Alex Haigh, Managing Director, Asia Pacific commented: “Top performing brands in the oil and gas, banking and telecommunications sector including Petronas, Maybank, and Affin Bank continue to innovate using digital transformation and are making up for losses incurred during the COVID-19 pandemic, gearing up and enhancing customer acquisition and engagement.”

Petronas brand value growth is correlated with their sustainability agenda and increased demand for their core products. The brand is fully committed to remain disciplined in its delivery of its Three-Pronged Growth Strategy, strengthening its core and growth portfolio while investing for the future and resolute in its efforts to achieve the goal of net zero carbon emissions by 2050. As the energy transition unfolds, Petronas continues to seize the attractive opportunities and recently introduced a new entity, Gentari Sdn Bhd which aims to accelerate the adoption and commercialisation of clean energy, by offering a suite of renewable energy, hydrogen and green mobility solutions that are safe, responsible, cost-optimised and emissions-abated via an integrated approach across the clean energy value chain for customers globally.

Genting rises to second place, overtaking Maybank.

The Genting brand (brand value 44% up to US$4.5 billion) has achieved strong growth following the removal of pandemic-related constraints. The brand is placing greater emphasis on maximising its overall operational efficiency by intensifying performance, optimising its databases, the quality of its services and its marketing strategy with the ultimate goal to elevate customer experience. Looking ahead, Genting has further opportunities for growth as its major operations in Singapore and Malaysia become more accessible to more tourists, especially from mainland Asia.

Airlines are bouncing back

AirAsia (brand value up 18% to US$1.4 billion) retains the 9^th position in the 100 most valuable brands 2022 far away from the second and last airline company included in the ranking, Malaysia Airlines (brand value up 15% to US$200 million) which rank 44 this year, one position higher.

Revenues was significantly increased for AirAsia Aviation Group (AAAGL), a subsidiary of Capital A (formerly known as AirAsia Group), in Q1 attributed to improved demand and further easing travel restrictions across the key markets in the region. The brand has had a shake-up with new management and plans to diversify its business during 2022 especially since the recent launch of the AirAsia Super App.

Maybank is Malaysia’s strongest brand with AAA ranking.

In addition to calculating brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Compliant with ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 100,000 respondents in more than 35 countries and across nearly 30 sectors.

According to these criteria, Maybank (brand value up 7% to US$3.9 billion) is Malaysia’s strongest brand, with a Brand Strength Index (BSI) of 89.1 out of 100 (up by 2.3 points) and a corresponding AAA brand strength rating. Maybank overtakes Petronas (87.7 out of 100) in the strength ranking in 2021 and DiGi (79.2 out of 100).

Maybank, aims to accelerate its growth post COVID-19 and entrench its position among the leading financial services groups in the region with specific focus on enhancing digital capabilities, discovering new value drivers for business growth besides championing sustainable practices.

Affin Bank, Top Glove and Genting are the fastest growing brands in Malaysia

Affin Bank is the fastest growing brand in Malaysia (brand value up 45% to US$232 million) followed closely by Top Glove (brand value up 44% to US$499 million) and Genting (brand value up 44% to US$4.5 billion).

Affin Bank doubled their net profit this year, the bank has achieved growth as it increased its issuance of loans because of consumer spending in the region. The brand’s Brand Strength Index (BSI) also jumped 7.8 points this year, owing to an improvement in consumer perceptions such as ‘value for money’ according to research conducted by Brand Finance coupled with the company’s commitment to ESG resulting in an improvement in BSI scores.

The bank has also invested in technological innovation to grow and has therefore won two awards under the Cloud and Mobile-Banking categories in the Malaysia Technology Excellence Awards 2022, a strong reflection that customers and industry stakeholders are aware of their ongoing strategic focus.

The brand value of Top Glove has grown strongly in connection with the very obvious increase in demand for gloves globally. Top Glove has developed a strong reputation amongst stakeholders for their glove products and is now producing up to a quarter of gloves in the world.

Mah Sing and IHH jump 10 places in rankings

Mah Sing (brand value up 35% to US$130 million) and IHH (brand value up 38% to US$87 million) both jumped ten places in the ranking, to 56^th and 67^th place respectively. Mah Sing’s projects continued to record a rebound in sales momentum as the reopening of the country’s borders and the transition to the COVID-19 endemic phase spurred a recovery in economic activities. The group plans to hive off its rubber glove business which contributed to accelerate its growth, after venturing into the segment only 19 months ago under the Mah Sing Healthcare Sdn Bhd banner as the demand for rubber gloves has decelerated sharply.

On its part, IHH is working to align itself with three major trends that have begun to shape the healthcare industry: healthcare being delivered digitally, growing consumer demand for greater transparency and improved public-private collaboration. The hospital operator said that Covid-19 accelerated the group’s efforts to innovate, leverage synergies and build platforms for growth.

August 10, 2022
The New Heir: Managing Your Inheritance
Managing an inheritance can be life-changing and for many people, as it can open up many new possibilities. The biggest question one would probably face, therefore, is how your new inheritance should be managed to benefit you the most.

Whether wealth management is something that you are familiar with or whether your inheritance suddenly puts you in an entirely new financial situation, receiving a substantial amount of money or a property can be overwhelming if you don’t know what to do with it.

With that in mind, Smart Investor spoke with experts to give you a clearer understanding on managing your inheritance.

Set Up a Trust

Azhar Iskandar Hew, Group Chief Executive Officer of Rockwills Trustee Berhad

If your inheritance comes in the form of cash or property, the best way to handle an inheritance from the perspective of the heir, would be to cooperate with the executor or trustee on obtaining details required for probate application and to track the progress of the estate.

Upon receiving the inheritance and if the inheritance comes in the form of cash, one option is to set up a trust with a professional trust company. You then execute a trust deed in which the terms for the use of the cash can be clearly written down.

At the same time, the heir can also mention who should inherit the cash and how it is to be distributed, should anything happen to him. This way, the heir or settlor of the trust would have control over the distribution or usage of the cash.

Some of the main instructions in the trust can include directing the trustee to pay for the settlor’s maintenance, medical bills, children’s education and family’s living expenses on a regular basis. By doing so, the money will not be given to anyone in one lump sum which can be wrongly invested or misused.

Of course, another advantage of a trust is that unauthorised persons will not be able to touch the cash, as only the named beneficiaries can receive the money.

It’s All About Priorities

Kenney Khew, CFP
Philip Wealth Planners

Upon receiving your inheritance, you should first of all, list down all your financial goals and prioritise them according to your preferences.

Put aside an amount (at least 6 months of your gross salary) into an Emergency Fund. This is recommended, as you would then have money to fall back on in the event of an urgent matter that is out of your control.

With the cash you should also pay off your debts, including your credit card debts, outstanding housing loan, car loan, student loan and any other personal loans.

It is also recommended that you put aside an amount of money for your children’s education fund according to the calculations made based on future values of tuition, transportation, living, and course fees. In this case, you must also take into consideration the inflation, as well as exchange rates.

Be sure to also purchase a term life insurance of up to 80 years old. The rule of thumb is for the sum insured to be 10 times your annual income. A medical insurance plan is also important in this context. By doing so, you will be able to protect your assets against mishaps as to not affect your future plans.

The remaining money can further be used to invest in properties. You can rent out these properties to earn extra income and what’s more, this is a form of passive income that would benefit you in your golden years.

I Just Inherited a Property – Now What?

Gor Sheau Shuenn, CFP
Blueprint Planning

If you’re lucky enough to receive an inheritance, you should consider what the assets are and how much you will be receiving. If cash is the legacy you’ve received, it should be invested in a proper mixture of different portfolios, as otherwise, liquid assets are bound to be spent too frivolously.

However, if the inheritance you will receive comes in the form of a property, there are a few factors that need to be considered:
1. Has the mortgage of the property been paid off in full; if not, what is the loan repayment amount?
2. Is the property currently being rented out? If so, is the rental yield positive?
3. What are the appreciation possibilities of the property in the future?
4. Who is going to manage the property, and will the return be able to cover the maintenance cost?
If all answers to the above questions point to a resounding ‘yes’, the property will be all the more attractive as you will receive rental income and capital gain for the disposal of the property.

At the end of the day, it doesn’t really matter whether the legacy you’d inherited comes in the form of cash or property. All that matters is how the legacy can assist you in shortening the period of time you will need to achieve your financial goals.

The Financial Planning Factor

Kevin K.M. Neoh, CFP CERT TM
MBA, VKA Wealth Planners Sdn Bhd

It is perfectly normal to do nothing while you consider what to do with your inheritance. Ride out the emotional period and contemplate what you hope to achieve from this fund or inheritance with a clear mind to avoid mishandling or making poor decisions. Even if it means waiting for a couple of years as you do some soul-searching, go for it.

Should you be the sole beneficiary of this inheritance, why not consider investing or managing it based on your financial plan, or in a manner that will support your life goals and values? Proper management and budgeting is important to ensure that the windfall will not be squandered unnecessarily.

While you sit on your inheritance, it is also important to note that inflation will erode the purchasing power. Therefore, the need to find an instrument that can yield at least above inflation rate is important because it tends to shield the inheritance from being eroded by inflation.

Don’t change your plan or your spending habits just because you have received an inheritance. In fact, try to use this as an added advantage to help you realise your life and financial goals.

Making the Most of Your Inheritance Money

Yong Chu Eu, FAR, CMSRL, CFP®, Shariah RFP
Founder, managing director and principal trainer of Money & Life Academy

Your inheritance can be divided into 3 parts:

a) Untouched – This portion of your inheritance money can be put into liquid investments (property, insurance, PRS or EPF) and locked down

b) Investment – Done according to your risk profile and availability of knowledge and time. You can also purchase stocks or unit trusts with the purpose of growing the money, or use it to start a business in a field that you are passionate about

c) Spend – upgrade your lifestyle with comfort, quality and safety in mind, further your studies, clear off your debts, travel, or give back to the community
August 10, 2022
Lifestyle VS Living Your Life?
During the pandemic, two words that we always heard or read are “lives and livelihoods”. These two words were often mentioned in press conferences by the government and how they are trying hard to balance between the two.

How does this relate to us an individual, lifestyle vs living your life?

Based on the Oxwhite Shopper Survey 2021 published on TheEdge on 28 June 21, about 58% of the participants shop for only things they need when they need them, 24% usually keep a wish list. While the remaining 12.5% buy on impulse and 5.5% always on the lookout for the latest product.

Let’s explore few ideas before you decide to place your next order.

Luxury VS Necessities

When we talk about luxury product, there are generally perception associated with a certain product. Be it a luxury watch or car, it is either a symbol of success, quality or excellent.

Does that mean you have to avoid buying luxury product altogether? No.

The more important question to ask yourself are as follows:
- What is your current financial situation?
- Have your cover your necessities?
- Have you been putting aside your monthly savings for protection or medium to long term financial needs?
For instance, if you spend more than 1/3 of your expenditure to pay for your luxury items, then you may need to reconsider whether buying that item is necessary now or should you defer or consider another product.

Only when your financial situation allows, then you can re-evaluate whether to buy it in the future.

Buy Now Pay Later (BNPL) VS Pay In Full

Another new payment method that offers interest free payment is “Buy Now Pay Later” (BNPL). It is actually be good for consumers who are prudence in managing their spending, as they do not have to come up with a large sum of money at one go to purchase something and is also not subjected to any interest payment. But if you do not not pay the amount every month as per the due date, you tend to build up more debts and end up spending over your means.

It is the same with anything, for example a knife. If you use it appropriately in the kitchen, it is a great cooking tool. However, if it falls to the wrong hands with bad intentions, it can take away someone’s life.

Current VS Future

By having ads being shown to us many times when we are searching for something online, it builds our liking towards that product unknowingly. Not many of us are able to refrain from the temptation of getting the latest gadget and or any new product that is being launched in the market.

Some products are marketed via influencers or artists as their ambassadors, therefore this encourages their fans to buy the product because of their idols are associated with that particular product or brand. Our brain tends to focus more on the present rather than the delayed gratification that enable us to build more sustainable savings at a later age.

Choose The Lifestyle That You Can Afford

There is always a choice in how we live our life. Do we really buy certain items because we can afford it and want to give the best to our loved ones? Or do we only need certain product to perform certain task?

There is no right or wrong on how one lives their life. Therefore, we cannot have one rule for all circumstances. These are just some of the factors for you to consider before making your next purchase.

A great habit to inculcate is to manage your money and spend it prudently. It is about finding the right balance between lifestyle and living your life.

“Lifestyle is not an amount, it’s a practice.”
– Jim Rohn

About the Author

Goh Chee Yong is a Licensed Financial Planner under Capital Markets Services Representative License (CMSRL) and Bank Negara approved Financial Advisor Representative (FAR). Prior to becoming a financial advisor, he spent eight years working in Big 4 audit firms and multinational corporations. He can be contacted at cygoh@imaxfinancial.com.my
August 10, 2022
Financial Management Basics In 3 Steps
Despite the well accepted fact that everybody has unique circumstances, in general each of us should do the following in order to have a solid financial management:
- Establish an emergency fund;
- Ensure sufficient insurance coverage is in place for your dependents in the event of death or at the onset of critical illness;
- Ensure you and your partner have wills on how your estate should be distributed in the event of death.
Emergency Fund

The foundation to a great financial management is that we should set aside some money or follow a disciplined effort to build up an emergency fund that is equivalent to at least 6 months of our income. For a safer and secured future, you may want a buffer of 9-12 months and more if you have a young family.

It does not always have to be an accident or hospitalisation. Many times, we associate emergency funds with these events.

There are many other forms of emergency or unexpected events such as usual sickness, retrenchment, dental issues, or when one is out of job after resigning and yet to land a new offer.

This emergency fund should be kept in a deposit or money market account, which will give ease of liquidity when it is needed.

With adequate emergency funds backing you up, things could not possibly go too wrong as you have a buffer to support you through the rough tide. Thus, it is advisable not to invest any of your savings until you have accumulated this buffer fund.

Insurance Coverage

Just think about how much is needed to settle your debt today if something untoward happened to you? Most of us have mortgage, credit card, study loan (such as PTPTN), hire purchase and so on.

How will your dependents continue to survive with these challenges and financial hurdles? What’s even worse is if you’re the sole breadwinner of your family, or you contribute a huge chunk to the household income?

If you were to become ill for long-term, how much of your current income or savings can continue to support you and your family, and for how long?

That is why in financial management, we need to ensure that we have at least this amount of life insurance coverage in place. Also, ensure that you have a basic medical insurance in place, so that your emergency fund and hard-earned savings will not be wiped out overnight by hefty hospital bills.

There are many types of insurance products; some are good for you, and some are good for the one who sold you the products; so, be sure to read the fine print, and know what you’re signing for.

What’s better is to work with someone who is independent and not tied to a product provider. This way, the chances are that your best interest is likely to be more protected.

Write a Will

A Will is a legal document that sets out who is to benefit from your property and possessions (your estate) after your death.

There are a number of ways to make a Will, but to be on the safe side, it is advisable to seek the assistance of a licensed financial advisor on how your Wills should be drafted in order to cater to your unique situation and wishes.

It is important to have a Will in place as if you were to die ‘intestate’ (without a Will), there is a danger that your assets may not reach your family or beneficiaries. Furthermore, it will relatively take a longer time for the court to issue a clearance order.

Depending on your circumstances, you may wish to include guardianship arrangements in your will so that, in the event that your children are left parentless, there will be someone to take care of them: you obviously need to get the agreement of the people you intend to name as guardian(s) beforehand.

Conclusion

The three areas mentioned above may look unimportant to most people, or appear to be ‘simple’; however, we should not underestimate its importance for a solid financial management.

The benefit of having an emergency fund allows the person to have the ability to handle unexpected events without having to incur mental stress that usually comes when we deal with money issues.

It also reduces the chances of enlisting an external party to assist us. Moreover, if any form of loan or borrowings was involved today to address any unexpected issues, it simply means we have to pay back in the future.

Thus, having an emergency fund could help prevent these from happening. I would say the same is true with regards to having adequate insurance coverage, especially personal accident and medical insurance.

While the first two areas provide flexibility and ability for an individual to deal with unexpected events without having to trouble others, preparing a Will or paying attention to estate planning can help ensure that our family members do not have to deal with the emotional pain of losing out their family member

It also makes the process of unfreezing and distributing the estate much easier; thus, preventing them from going through more troubles, that potentially could drag up to years, or create tension and conflict among the surviving family members.

By building up this financial cushion (and taking concerted efforts to maintain it), you will protect yourself when things go the wrong way. This allows you to be in a better position to work out alternatives, in order to focus on the next important step in peace.

About the author

Kevin Neoh is a NextGen Money Coach who works with people to help them transform their relationship with money to improve their lives with the money they have. Kevin can be contacted at kevin@nextgenadvisors.my and www.kevinneoh.my.
August 10, 2022