Category: business

In April 2022, our national inflation rose to 2.3%, which exceeded the average inflation of 1.9% in Malaysia from the period April 2011 to April 2022. And just recently, it was reported that inflation rose to 2.8% in May against consensus of 2.7%. A vast development indeed. In addition, US Federal Reserve’s (Fed) move to raise the interest rate hike by 75 bps on 15 June 2022 had alarmed all quarters over the world on what could possibly be coming next – big inflation. However, what does all these means? Especially to the people out there?

Generally, if most people do not understand what the numbers above mean, they do know one thing – they are feeling the pinch from the price hike of basic necessities, which has begun trickling the wallets of every household. From there, they knew and sensed that the inflation period is here. Not very surprising but not pleasant either, inflation is to stay persistent this time around.

In concurrence with the recent development, Mr Jason Wong, Research Manager of FSMOne Malaysia commented: “On one hand, inflation is reducing the purchasing power of consumers. On the other hand, rising interest rates means that consumers are “forced” to absorb these rising borrowing costs. These are double whammies for consumers which would lead to dwindling disposable income while wages and salaries are hardly changed.”

“Nevertheless, Bank Negara Malaysia’s move through its raise of Overnight Policy Rate (OPR) in May 2022 by 25 bps to 2.00% is commendable as the central bank is being proactive to stave off rising inflation in the country. At the same time, we believe this move will cushion some of the negative impact on the Malaysian Ringgit caused by the Fed’s recent aggressive interest rate hikes.”

“The Research Team at FSMOne foresees that the central bank will make another 3 more 25 bps hikes to the interest rate during the remaining Monetary Policy Committee Meetings (MPCs) that are set to take place this year. We believe the central bank does not wish to make the mistake like Fed did, by hiking rates too slowly and letting inflation to spiral out of control. Hence, BNM stays abreast on this matter,” said Mr Jason Wong.

Translating this to the current daily living of majority of people, Jason further elaborated that the current economic situation has led to Hobson’s choice moves by the Government. “Government has started the removal of subsidies moderately. As the pandemic came along with the Ukraine-Russia war recently, where supply chains were disrupted and shortages increased, many household commodities prices have been soaring up. China’s lockdown at certain provinces also affected major productions of industrial parts that they supply to Malaysia and other countries. Domino effect took place and subsequently, our local production is delayed resulted from this and affected end users as well.”

“All factors combined and ramped up, these contributed to the increasing inflation in the country. Malaysian Government is now challenged to cope with the increasing cost of many commodities,” added Mr Jason Wong.

By 1 July, the prices of eggs and chicken are expected to increase from the current price, RM8.90 per kg. The Prime Minister recently announced that the new ceiling price for chicken will be announced by Agriculture and Food Industries Ministry (MAFI) soon. The price ceiling for bottled cooking oil weighing 2kg, 3kg and 5kg will also be removed on 1 July.

Based on these factors, it is foreseen that Malaysians will be facing greater food security issues as food items, even eating out, will be more expensive. In addition, food supplies could be tighter than before which may lead to limited quantity to be sold to consumers.

Besides food security, majority of Malaysians are challenged with job security in terms of disposable income, as basic items are getting more expensive and possibly overall wholesale, retail and trade sales would drop as an effect to this. Malaysians may have no other choice but to start cutting off expenses and tighten their budget to match with their monthly income.

Not to mention commodities and energy prices are also increasing higher than ever. RON97’s price is now lifted to RM4.84 per litre from RM3.94, which was last recorded on 11 May 2022. Although the price of RON95 has not changed from RM2.05 per litre, but it is foreseen that the price of RON95 may follow suit RON97 at certain point of time. It is just a matter of sooner or later. However, the water and electricity tariff maintain in Peninsular Malaysia.

What does this mean to all Malaysians? Are we expecting recession in the near future?

We are living in the bubble of protection from the Government today, with the lifting of fuel subsidies, like a balloon, as the air pressure increases internally, it’s only a matter of time, the rubber material gives way and pops.

About FSMOne Malaysia and iFAST Capital Sdn. Bhd.

FSMOne Malaysia (previously known as Fundsupermart.com Malaysia) is a Multi-Asset Investment Platform under iFAST Capital Sdn. Bhd. (“iFAST Capital”), established in Malaysia since 2008.

iFAST Capital is a holder of a Capital Markets Services Licence (CMSL) and is licensed by the Securities Commission to deal in securities (includes Stocks & ETFs, unit trusts and OTC bonds), dealing in private retirement scheme, offer investment advisory services, financial planning services and fund management services in relation to portfolio management.

iFAST Capital is a Federation of Investment Managers Malaysia (FiMM) registered Institutional Unit Trust Adviser (IUTA) and Institutional Private Retirement Scheme Adviser (IPRA). It is also an approved Financial Adviser licensed by the Central Bank of Malaysia to conduct financial advisory business and also a Participating Organisation of Bursa Malaysia Securities Berhad.

iFAST Capital is a subsidiary of iFAST Malaysia Sdn. Bhd. which is wholly owned by iFAST Corporation Ltd. (“iFAST Corporation”). iFAST Corporation is headquartered in Singapore and the iFAST group of companies are also present in Hong Kong, Malaysia and China. The company was incorporated in Singapore on 10 January 2000.

iFAST Corporation was listed on the Singapore Exchange Mainboard in December 2014.

A middle-aged executive named John finished work, drove home, and the very first thing that he saw was an envelope that contains the latest credit card statement. It states:

Outstanding Balance: RM 36,867.44.

He was overwhelmed and pondered, “How on earth am I going to clear off my credit card debt? It’s way too much, and I don’t have much cash in my bank account to do so. I’m so screwed.”

If this sounds like you, fret not – let this article be a helpful guide on how to move forward.

1. What’s a Bad Debt?

First, not all debts are bad. There are two types of debt: Good Debt and Bad Debt.

Good debt is debt that makes you richer. For instance, property investors are experts in using debt as their leverage to expand their property portfolio and thus, have become wealthier as their properties’ value continue to appreciate over time.

Bad debt is debt that makes you poorer. For instance, many borrow money to buy things where their value drops over time, thus, resulting in the person becoming poorer. These debts include credit card debt and personal loans, where the interest costs are substantially higher than collateralized obligations like a mortgage.

2. Discover the Root Cause

For some, such is life. For many people, their debts may stem from medical bills, a failure in business, a pay cut, or job loss. If this is you, just know this: It’s temporary and you may proceed to Point #3 to work on a solution.

In most cases, having excessive bad debt is more than just a financial issue – it can be a psychological issue. I believe there is a deeper cause that might be the main culprit to your financial problems. For example, let’s say now you don’t have much money. Why do you:

• Buy stuff that you do not need?
• Attend expensive social gatherings?
• Go on a holiday trip overseas?

3. Work with a Partner

If you are young and single, you may consult your parents for some financial advice. In many cases, you might even receive some financial grace which is much needed as a temporary relief to your problems.

But, with that said, you might lose a valuable chance to improve your financial intelligence as you’ve been bailed out. But, if you opine: “I still want to solve the issue like a man”, then your next best option is to find a friend whom you trust and is more financially-savvy than you to impart some financial wisdom to you.

If you are in a relationship, it’s ideal for you to work on these financial issues as a team. It’s helpful, but not easy, to be transparent about it and to find the solutions together. One thing is for sure: Both of you will come out stronger and more refined as a couple after you have cleared your bad debts.

4. Go on the Offensive

If you have little financial resources to work with, you may set a small goal to raise another RM500 a month which is dedicated to clear off your bad debt.

It may be hard initially. But, if you have learnt how to raise RM500 a month to clear bad debts, very soon, you’ll also know how to raise even more which could be used for your investments.

Here, I’ll share a guideline that enables you to take baby steps towards your freedom from debt. Firstly, you can split the RM500 a month into two categories:

• Earn RM250 a month
• Cut RM250 a month in expenses.

Secondly, here’s a list that you can do to:

Make RM250 a month

• Do Overtime
• Make more sales if you’re a salesman.
• Take up one or two freelancing jobs.
• Sign up as a Grabcar driver.
• Have a part-time job.
• Give tuition classes to school kids.
• Sell your unwanted stuff on eBay or Mudah.my
• Refer customers to your business friends for a commission.
• Join MLM, sell insurance, but please … don’t join money games.

Save RM250 a month

• Track your expenses. You’ll find items to cut on very quickly.
• Say ‘No’ to expensive social gatherings.
• Say ‘No’ to smoking, alcohol, nightclubs and KTVs.
• Say ‘No’ to gambling.
• Cut entertainment expenses.
• Cancel expensive gym memberships. Run in the park or do Tabata at home.
• Cancel Low-Yielding Unit Trust Investments.
• Cancel endowment plans with Low Sum Assured.
• Exercise delayed gratification.
• Quit drinking Starbucks or reduce four RM15 drinks a month.

5. A Word on Balance Transfers

Being aware of the latest promotion of Balance Transfers is helpful. Having said that, it’s essential for you to check the following before agreeing to do a balance transfer on your credit card debt:

• Is it on an Effective Rate or Flat Rate?
• Is it calculated based on an Annual Rate?
• What are the clauses for Early Repayment?
• How much is your monthly repayment after doing balance transfer?

If you are not sure whether a Balance Transfer is to your advantage, you may consult a trustworthy friend first before proceeding with it.

About the Author

This article is co-written by KC Lau and Ian Tai.

Ian Tai is a Dividend Investor. Financial Content Machine. Producer of 200+ Articles, Weekly Host and Presenter at KCLau.com. Co-Founded DividendVault.com, an online educational membership site that empowers retail investors to build a stock portfolio that pays rising dividends in Malaysia and Singapore. 

KCLau is a financial educator, having published seven books including the current bestseller Money Smart, and co-created a dozen online financial courses. He gives away his popular Money Tips e-book volumes free at his website: https://KCLau.com

Retirement, is defined as the ending of working phase in life, which is anticipated to be one that is dominated by leisure that is paid for by savings and benefits accumulated during the employment phase. This is how most investment companies sell retirement plans ideas anyway.

There seems to be a great divide of lifestyle – before and after retirement period.  But most people who have experienced the shift would tell you otherwise, especially as we journey into the future with increased longevity, greater responsibilities, eroding filial piety, shifting attitudes and different economic landscape.

The idea of retirement would be rather different, say by 2050. I would think that in the future, the younger cohorts may not know the word retirement, either due to circumstances or by choice.

Stop Working? No Way!

“Oh I don’t plan to retire. I’ll work till I die. It’s more fulfilling.”

This is a phrase we hear increasingly often nowadays. Unfortunately, this may soon be a reality for many of us, as the sociographic landscape is bound to evolve in years to come.

The societal acceptance of single living or family without kids has dropped birth rates historically low, causing our projected population to be made out of a growing number of the elderly.

This would undoubtedly affect our dependency on the older generation to contribute to the workforce. Coupled with the increase in retirement age following the increase in life expectancy in the next 30 years, we would have no choice but to let the elderly continue working for the betterment of our economy.

Work? Leisure? Why Not Both?

Friedmann and Havighurst who first defined the concept of retirement  which we think of today, in a 1954 research found that people at that time viewed retirement as a time that they could truly engage in leisure activities and that their working age was the period of time to save towards this end.

However, fast forward to today and towards the future, when general standard of living increase and leisure becomes more accessible and affordable, not to mention more varied, we tend to enjoy both work and leisure at the same time.

This makes the concept of retirement seems less convincing and attractive. In the past, people did not see work and the workplace as central to their life interests.

Today, as the pace of economic growth quickens, we look at our career as being central to our lives, and as work and leisure become inextricably interwoven, Friedmann and Havighurst’s idea of retirement as a discrete phase of life dedicated to leisure becomes less relevant.

Blessed With Longevity

With progress in medical treatments and the rise of health-conscious lifestyle through better awareness, an extended life expectancy can be expected.

There is a high probability that life expectancy will continue to increase in industrialised countries in the Americas, Australia and the Asia- Pacific. Already, the average life expectancy will increase in many countries by 2030 – with South Korea expected to exceed 90 years of age. (Source: A 2017 analysis by Imperial College London and the World Health Organisation)

As life expectancy increases, people are also living healthier lives both physically and mentally, and being “too old” to work may seem to come much later in life than anticipated.

Some would argue that the elderly would become irrelevant due to technological knowledge demands. We might be able to say this about the elderly of yesteryear, but it certainly would be different for current generations which grew up with technology and the Internet of Things, and whose lives are being intertwined with technology whether they like it or not.

Shifting Attitudes – Do You Even Want To Retire?

As jobs turn into careers and knowledge or experience is prized over physical labour, we value our contributions to the society.

With mundane jobs and repetitive tasks are replaced by technology and artificial intelligence, our society in the future would be left with nothing but intellectual jobs.

Having to stop working all of a sudden would certainly leave a gap in a person’s purpose in life, especially when filial piety is on a downtrend as well.

As we crystal-ball into the future, the very idea of retirement may seem invalid as people would continue working until they are mentally incapable. Indeed, the very idea that a person stops working and becomes irrelevant to society does not sound like a very appealing thing to do.

Do You Still Need Financial Planning?

With all that said, having a financial plan will allow you to successfully not retire. Financial planning is far more expansive than just “save for retirement.” There’s a lot of life to live between now and when or if you decide to stop working.

There are plenty of other short-term goals and milestones in your life that you likely want to hit – starting a new venture, growing your family or buying a new home and traveling around the world. And financial planning provides a system and a process to make some of these goals possible.

About the Author

Alvin Kwan, CFP ^{CERT TM} is the executive director and head of financial planning at Redvest Wealth & Asset Management. He has over 12 years industrial experience in the financial industry, specifically in wealth advisory, private banking and stock broking. He was also a lecturer in areas of investment management, derivatives, and financial markets.

We at Smart Investor and Redvest 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/SIxRedvest

I learned my first money lesson from my parents. Did you?

My parents are thrifty folks. They are always on the lookout for a bargain, down to the smallest item even when grocery shopping. The first thing they taught me about money is to always spend less than I make.

It is the first rule in personal finance – never spend more than you earn.

The Jews are one of the best wealth creators on earth. As part of their culture, Jewish parents teach their children about wise money management as soon as they can talk. One of the critical lessons is to have a “savings” jar. Children are required to put money in the jar, and they can only open it on special occasions like a medical emergency. 

Now we can agree that saving is essential. But the problem is that saving money is hard. It is a money habit that is hard to practice due to the human nature of desiring instant gratification. If everybody can help themselves, there will be no need for charity. Kudos to you if you can regularly save a portion of your income.

During the old days, some determined families save their cash in Milo tins. It took a long time for them to trust the banks and deposit their money with financial institutions.

Back then those who did not bank in their money were losers because let’s face it, you don’t gain any interest return by having your cash sitting idly under your pillows, do you? Moreover, what if you got robbed?

After decades of changes, people are more comfortable depositing their money in banks nowadays. Most people perceive Fixed Deposit as the safest investment that gets guaranteed interest income, and capital protected. In Malaysia, we also have PIDM to safeguard your bank deposits with insurance. However, the same situation still persists – savers are still losers. You might be robbed too.

Now you must be wondering why I say saving money could get you robbed later. I am referring to the effect of inflation. Imagine your FD interest being 3.5%, and the inflation rate is 4%. The phenomenon depletes your buying power day by day, year by year…until it might be too late for you to do something about it.

Banks run a leveraged business. Your money in a bank’s savings account allows the bank to lend a higher amount to someone else, who is more capable of making good use of it. Borrowers fund their business ventures and real estate investments with the money you put in the bank.

In other words, think of the bank as the middleman. On one side, the poor and the middle class try to save as much as they can with the banks. On the other side, business owners and investors borrow more money through bank loans to leverage up their business expansions and investments.

Savings is for losers. Inflation and also the government that prints more money are probably “robbing” the savers. Going to the other side, when you take a loan from a bank, they become your business partners because they have confidence in you to make better use of the funds.

When you face problems while trying to pay back, they will share your fear as well. Therefore, if you want to beat inflation and do not want to see your savings depreciate over time, you will need to be the player on the other side.

In fact, saving money is just halfway to financial success. If you do nothing with the money to generate a higher return, you will always be on the losing side. Investing your savings and also borrowing more from the bank to invest will make you a player on the other side.

Treat the bank as your financier to fund your business and your investment. Don’t treat them as a safekeeper of your money. If you do, just wait to be robbed.

About the Author

This article is written by KC Lau. KCLau is a financial educator, having published seven books including the current bestseller Money Smart, and co-created a dozen online financial courses. He gives away his popular Money Tips e-book volumes free at his website: https://KCLau.com

Life can throw us curveballs unexpectedly. Some of the events can be devastating and when we get hit, it could make life hard for many. To some, it may not be a significant event but to others, it may be a huge blow.

Whether or not it is a huge blow, it boils down to whether or not we are in a good or healthy position to deal with the consequences and many a time, it involves spending or using money to solve or put off the fire.

When these surprises happen, we have to deal with it and make adjustments.  Generally, we have these three choices:

• Extend our timeline;
• Forgo our goal;
• Live with regret.

Of Critical Importance

That is what makes having emergency funds or savings a critically important item.

I have seen many people in “thin” situations financially. In fact, not too long ago, it was reported in news that many young people (75% as a matter of fact) admitted that they would not be able to fork out RM1,000 to deal with unexpected emergencies. This shows how fragile we are.

If you think that this news is unfounded, please know that the source of the alarming data is the central bank of Malaysia, so, this is certainly no fake news. In another news, we were told that working Malaysians could not survive six months if they were to lose their income.

How to Put Money Away Easily

Is there a good way for people to save money and ensure the money gets saved? The easiest way − and I have seen it working countless times − is to save the money you bring home without you being aware of it, or having to remind yourself to do it.  

Automatically Move It

The first way is pretty simple. You just have to login to your internet banking and look for the transfer of fund button, make it automatically repeat on a monthly basis on a date you are certain your salary will be credited to the account (don’t pick a date that is too far away from this date but try to be within a three-day range).  

This mean you will have successfully “outsourced” this job to your online banking system in that it moves your money from your salary-receiving account to another account without you having to worry about forgetting to do it.

However, it is important to note that you nominate an account you will not have easy access to, like an account without an ATM card, or an account that has very few branches or that each MEPs withdrawal will cost more than RM1.06.  The trick is to move the money where it will not be easy to make unplanned withdrawal or spending.

Park at Flexi Mortgage Account

If you have a flexi mortgage account, you can also “park” your money there. It will benefit you and help you to retain the money as a rainy day fund.

Liquid Cache

Alternatively, you may set up a standing instruction to move this saving into a money market fund or cash management fund. It is important for our rainy day fund to be liquid-like cash and money in a savings account, as these two options provide this feature.

Big No-No

If you are trying to force yourself to save money by signing up for an insurance endowment or savings plan, this may not be the best thing to do because when you signed on the dotted line, you are in fact agreeing or committing to pay the fixed amount of premium over a long term period which could be five to 20 years or even longer. This means you will not be able to withdraw the amount you may need in an emergency, unless you are in the late stages of the policy life or have past the guaranteed premium paying years.

It is important to note that the instrument or place we choose to park our emergency or rainy day fund has the right criteria and characteristic, and is safe, liquid, and cost-free.

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. 

The search for “the fountain of youth” has had a long history, from tracking down sacred, life-giving water sources in the days of antiquity, to the invention of “miracle pills” and stem cell research in the modern age.

You are born with approximately 20,000 blood stem cells, which your body uses to replenish your blood. Over time, and depending on the “abuse” you put your body through, these cells become damaged and die. As your blood stem cells dwindle, your body becomes less efficient at repairing and regenerating itself.

In essence, your blood stem cells may be the proverbial “clock” that eventually runs out, no matter how well you take care of yourself. In the meantime, however, you have a great deal of control over how quickly those cells perish.

Is your personality geared for longevity?

Personality for Long Life

According to results from The Longevity Project, a Stanford study spanning 80 years, your level of conscientiousness may have a great deal to do with how long you end up living. Having a personality that strives to do things well; being thorough and vigilant − this is a trait that most of the people who live the longest share.

Sense of Purpose

The Longevity Project also dismisses the idea that hard work will kill you early. On the contrary, those who stayed productive and worked hard all their lives tended to be happier, healthier, and more social compared to those who didn’t work as hard. That’s not to dismiss work stress as a factor that needs to be addressed and kept in check.

Social Connection

But being productive can also lend a sense of purpose, which is very important for longevity. And working—especially in your later years—tends to keep you socially connected, which has repeatedly been shown to be an important factor for longevity.

You Are What You Eat

No discussion about longevity would be complete without addressing diet. A processed, high-sugar diet is undoubtedly the quickest route to an early death, barring a lethal accident. This is because consuming sugar and grains increases your insulin and leptin levels, which is the equivalent of slamming your foot on your ageing accelerator. Besides that, research by Professor Cynthia Kenyon shows that carbohydrates have a direct and detrimental effect on two key genes that govern longevity and youthfulness.

Ideally, you’ll want to replace all forms of processed and refined sugars and grains with healthy fats such as butter, olive oil, coconut oil, avocado, grass-fed meats, and raw nuts. Many would benefit from getting as much as 50-85 percent of their daily calories from fats.

Mindfulness and Perpetual Motion

There’s compelling evidence suggesting that having a calm mind and active body are two important ingredients for longevity. The meditative technique known as “mindfulness” has even been shown to have a beneficial effect on genetic expression. Meditation has also been found to affect the enzyme telomerase, which some researchers believe is actively involved with the process of ageing. As for keeping your body active, avoiding sitting is perhaps of even greater importance than having a regular workout regimen.

The science is very clear on this point: sitting too much is a surefire way to take years off your life! And that applies even if you exercise vigorously a few times a week. Basically, what the research is telling us is that getting too hung up on a once-a-day exercise routine is to put the cart before the horse. First, you need to make sure you’re engaging in more or less perpetual non-exercise movement, as this is an independent risk factor for chronic diseases like diabetes and heart disease.

Life Long Learning

Education is also strongly correlated with a longer life. If you think you know it all just because you went to high school or college, you might as well pack it up. It’s all downhill from there. My perspective is to be a lifelong student. If I lived for several hundred years, I don’t think there is enough time to learn all the topics I would like to. That said, merely getting an education can have a great impact, and perhaps it’s because it teaches you to be a student.

Lifestyle Choices Today Impact Tomorrows

The takeaway message here is that you have a great deal of control over your life expectancy, based on the personal choices you make − from how you think to how you move, and what you choose to eat − and when.

In the end, there is no quick fix when it comes to longevity. There is no magic pill and no fountain of youth. Although some people seem to be blessed with longevity in spite of their lifestyle choices, this is the exception and not the rule. For most of us, becoming healthy Centenarians will require effort and attention to the factors discussed above.

This article was brought to you by Dr Mercola, a New York Times bestselling author. For more helpful articles, please visit Mercola.com