Inovatif

Category: lifestyle

  • Gen X VS Millennials In The Workplace

    Gen X VS Millennials In The Workplace

    There have been countless studies about the generational gap between Gen X and millennial workers, with the topic stirring up much debate to this day. Broadly speaking, Gen X are born between 1965 and 1980 and are currently 41 to 56 years of age. Millennials are born between 1981 and 1996, ranging between 25 to 40 years of age.

    With the Movement Control Order (MCO) forcing many businesses to operate remotely, many millennials took to the situation like a duck to water thanks to their digital savviness and familiarity with
    remote working tools. However, with offices reopening after the MCO was lifted, many now find themselves at a crossroads and are often reluctant to return to a centralised workspace.

    “The reality of the matter is that employees were forced to adapt to the culture of working from home, and just as they got accustomed, it is now time to revert to the old ways of working with added restrictions – the SOPS,” says Rita Krishnan, the managing director and training consultant of Impian Helang.

    To her, CEOs and management of any company will return to the office and face new challenges, some of which they have never dealt with in the past thanks to the unprecedented effects of the Covid-19 pandemic.

    “In the past, it was performance and productivity that mattered most for organisational growth,” she recalls. “But today, compassion with high
    emotional intelligence is crucial, being the way forward in managing the workforce, especially in retaining the talents.”

    In Deloitte’s 2021 Millennial and Gen Z survey, it was found that only 38% of millennials felt comfortable voicing concerns to supervisors about work stress.

    This suggests that many are unable to trust or anticipate a clash with higher ups about the rigours of work. A correlation can be drawn to 31% of millennials taking time off work due to pandemic-related stress and anxiety. According to the survey, almost half of them gave a different reason to their employers, likely due to a stigma around mental health at work.

    It is no surprise that CEOs and senior management figures today must be more well-rounded figures – able to lead and dissect numerical patterns as well as business strategy, but being able to relate to their subordinates on a more personal level rather than simply boss and employee. However, the difference in age can often mean that there is a clash in culture and expectations.

    The topic is widely documented and debated, with both sides often convinced that they are not compatible with the other. This often boils down to a mismatch in terms of ideology, with Gen X workers likely to espouse more traditional work values, while Gen Y or millennials subscribe to more flexible or unconventional working mantras.

    “Generally, Gen X are hard workers while Gen Y are smart workers,” she postures. “Gen X do not jump jobs and are comfortable with where they are. This may seem like the safer option but can also be dangerous as career progression is not usually an option.”

    What about the retirees?
    For all the talk of Gen X v s millennials, the pandemic has also depleted the savings of many retirees. This has resulted in an influx of retirees in their fifties and sixties re-entering the job market, but who may be under the impression that time has left them behind. However, Krishnan believes retirees have much to offer in terms of their knowledge and experience, and suggests that there are many job opportunities for such individuals.

    “Training and consultancy in sharing a wealth of knowledge, experience and skills that were useful then and useful now,” she shares.

    The experience accumulated by such individuals suggests that within them is a treasure trove brimming with a wealth of knowledge; they simply need to leverage this into potential job opportunities.

    “I believe in reinventing and recycling talents that upholds the reputation of recreating past performance. This is where retirees can attend the HRD Corp Certified Train-The- Trainer programme, for a new career altogether whilst recreating and reliving the successes of their past,” adds Krishnan.

    Job hopping a competitive disadvantage?

    Krishnan also suggests that the typical Gen Y employee prefers to job hop often in order to gain experience quicker as well as to be exposed to various industries. While she does not dismiss this career strategy, she highlights that it also has its pros and cons.

    “Employers are reluctant to invest in and develop employees who show no promise of ‘stayability’,” Krishnan explains.

    “The working style of Gen Y comes with the mindset of expectations – less work, more pay, with flexi hours.”

    This shift in mindset is evidenced by concrete data. The Deloitte survey indicated that job loyalty is slipping among millennials, with 36% of respondents open to leaving their current employer within two years if the opportunity arose, a drop from 31% in last year’s survey. However, 34% of millennials say they would only consider leaving after five years, which suggests it is not prudent for senior managers to paint the entire generation with the same brush.

    She believes that, although difficult, this difference in culture and expectations can be bridged with programmes that facilitate interaction between Gen X and millennials.

    “It is important to allow employees to explore their skills and abilities with the intervention through team bonding programmes where Gen X and Gen Y can interact and learn from each other,” says Krishnan.

    These types of considerations should be taken into account by HR departments, especially when it comes to upskilling the workforce, an area in which Krishnan is well-versed.

    “The pandemic has altered traditional training styles, and the responsibility of the HR department would be to select relevant training programmes related to industry needs,” she says.

    “At the same, employees’ morale and productivity levels can be elevated using positive reinforcement.”

    She is also a keen advocate for companies to develop a psychological connection with their employees, resulting in a relationship that presents “a sense of belonging”. This demonstrates the company caring about their employees’ personal development and workforce growth. Such a result would inevitably translate into a win-win situation for both company and employees.

  • Financial Planning: Things to Do After a Flood

    Financial Planning: Things to Do After a Flood

    The 2021 year-end flood which affected many areas nationwide surpassed all previous year’s floods within Malaysia.  These has financial implications on the lives of our fellow Malaysians. For those affected, here are some ideas on how to pick up the pieces and build resilience moving forward.

    1. After the flood – restarting your life

    Consider the immediate aids you can leverage on to restart your life and get back on track. These can come in the form of financial, food, or accommodation aid, life essentials such as clothes and household items, or even transport arrangements for stranded individuals.

    2. Get your mental health in check

    Be sure to stabilise your frame of mind and check your stress level. There are a number of free services and apps such as:

    • Talian KASIH (8am – 5pm daily 15999, WhatsApp 019-261 5999)
    • Naluri (03-8408 1748, 24 hours, English, Malay and Mandarin)
    • Selangkah – Selangor Mental Sihat (SEHAT)
    • MySejahtera (Digital Health > Minda Sihat)

    3. Gauge your financial situation

    Once more urgent and pressing matters are taken care of, you can now take stock of your current financial situation. Ask yourself:

    • What are my losses?
    • What are my family incomes?
    • What are my monthly commitments?
    • What are my debts?
    • What is the position of my current investments and savings?
    • What is my protection coverage for my life and assets (takaful/insurance for personal and workplace)?

    These questions will help you paint a picture of your financial situation and will quickly bring up areas of concern (if any) which you can focus on as you look to recover.

    4. Salvaging assets from flood damage

    The next step is to consider your current assets. Firstly, assess damage to items within your household. Check if you have household insurance and if yes, whether it covers special perils or not.

    Assess damage to your vehicles, and be sure not to start them as the electronic system will short-circuit; get tow trucks to haul it to a workshop. Depending on the make of your car, the repair cost may range from RM4,000 to RM10,000.

    Other things to consider:

    • If you are working from home, is your laptop and handphone provided by your company? Do you need to report up or make a police report?
    • Are your important documents destroyed?
    • Do you need to replace NRIC/birth and marriage/divorce certificates at the Registration Department, driving licence and road tax at the Road Transport Department (JPJ), and school certificates from the respective schools?

    5. Stay safe and healthy

    In such trying times, keeping healthy may be the last thing on your mind but it is very important that you do your best to follow Covid-19 standard operating procedures (SOP) by getting help from NGOs and volunteers for masks and hand sanitisers.

    Be wary of water-borne diseases such as typhoid, cholera and dysentery and use water-purifying tablets if you are unsure if the water is safe for drinking or you do not have access to clean water. Follow the dilution instructions that comes with the tablets.

    6. Rebuild your financial status 

    The information in point (2) above is important to guide you on your next steps. You may seek help from:

    • Agensi Kauseling & Pengurusan Kredit
    • A licensed financial planner at SmartFinance.my where you can talk to an expert

    Be on the lookout for scammers; they are heartless and only want your money. Only accept help from reliable sources.  When in doubt, err on the side of caution!

    7. Preparing for a future flood

    The financial challenges you face today is the basis of your emergency fund for the future. Therefore, it is crucial to start building one when you can. Transfer some of the risks to your protection coverage and tap into your network of friends or relatives that you and your family can stay with.

    Flood-proof your home and/or prepare your evacuation SOP and equipment (torch lights, inflatable boats, dry food, bottled water, charged power banks, clothes, blankets and toiletries in waterproof bags, disposable wares and bags). Be constantly alert of your surroundings. Chances are, it may be difficult to sell your home and move to another so you may need to continue staying in your current place.

    Review how you place your furniture and appliances. Some homes put them on platforms that can be jacked up to desired heights (granted, if water level too high, it can render platforms useless). Store critical items in waterproof boxes when the rainy season approaches. It may also be prudent to check if you can convert your rooftop to an emergency accommodation equipped with the evacuation items listed above?

    My heart goes out to all flood victims.  We are fortunate there are volunteers and NGOs that we can contribute to, who will organise, mobilise and distribute contributions to as many victims as they can.  I hope the above is useful to those affected. May you have a respite from your situation and the strength to ride through this tough times.

    This article is contributed by Linnet Lee, CEO of the Financial Planning Association of Malaysia (FPAM).

  • Learning More about Kidney Cancer

    Learning More about Kidney Cancer

    Dr J.R Sathiyananthan, a Consultant Urologist at ParkCity Medical Centre, explains about kidney cancer and the measures that can be taken to minimise the risks of getting it.

    Kidney cancer is a disease in which malignant tumour is found in one  or both kidneys.

    Kidney cancers account for a small proportion of all cancers, and the insidious nature of it makes early detection difficult.

    In 2010, kidney cancer was reported to affect 1.9 in every 100,000 Malaysians, while 2020 data from World Health Organisation showing 2.1 per cent of all cancers in Malaysia to be kidney cancer.

    Types of kidney cancer

    “Kidney cancer is generally divided into two—primary and secondary kidney cancer.

    “Primary kidney cancer comprises renal cell carcinoma, which accounts for 90 per cent of all kidney cancers, and other rare cancers such as lymphoma or medullary and collecting duct cancers.

    Dr J.R. Sathiyananthan ParkCity Medical Centre kidney cancer
    Dr J.R. Sathiyananthan

    “Secondary kidney cancer originates from cancers in other organs such as breast and colon. This in turn spreads to distant organs such as liver, lungs, and the kidney. This is not considered kidney cancer per se.,” says Dr Sathiya.

    Although there are instances when kidney cancers are caught early, most are diagnosed at a more advanced stage. This is due to a variety of reasons, including the cancer being localised and growing without causing any pain or symptoms. Besides that, the nature of the kidneys lying deep within the body, small kidney tumours cannot be felt during a physical exam.

    “At times when we examine patients for kidney cancer, it may have progressed to be locally advanced. Patients may have come in with flank pain, blood in urine, and sometimes the cancer is large enough to be palpable. The definite test which can confirm this is a contrasted multiphase CT scan, an imaging tool that provides accurate diagnosis. Besides that, percutaneous biopsies are also used in some circumstances to confirm the diagnosis and exclude metastasis from other cancers, bilateral cancers affecting both kidneys, or possibly benign tumours,” explains Dr Sathiya.

    How the disease progresses

    Currently there are no recommended screening protocols for kidney cancer in people who are not at increased risk. As of now, no screening test has shown to lower the overall risk of dying from kidney cancer.

    Kidney cancer is known in some instances to grow aggressively and invade the surrounding bowel and solid organs, which is called local extension.

    Other methods of progression could be blood borne, and spread to the lungs, liver, pancreas, lymph nodes, and bone. This is referred to as metastasis. When metastasis occurs, the outcome is expected to be poor as patient may not benefit from surgery.

    The spread could occur anywhere between six months to years depending on the type of kidney cancer. Clinical data suggests that cancers larger than 3cm have higher tendency to spread compared to smaller ones. Nonetheless, the more common renal cell carcinoma has a slow progression rate compared to the rarer varieties, leading to the possibility of better outcome.

    Treatment options

    “Localised kidney cancer can be treated by surgery. This can be done by removing the entire kidney, also known as radical nephrectomy, or removing only the tumour, with multiple factors taken into consideration prior to this decision. For metastatic kidney cancer, there is evidence that removing the kidney may benefit the long-term systemic treatment, and it is still an evolving area. For those with advanced cancer where surgical options are not available, arterial embolisation to block blood supply to the tumour can treat some symptoms,” describes Dr Sathiya.

    Although radical nephrectomy has been the mainstay of treatment for kidney cancer, the last 20 years has seen partial nephrectomy being the treatment of choice for most patients. This can be performed by open surgery, keyhole (laparoscopic) surgery, or robotically with the Da Vinci robot. The newer treatments include cryoablation and radio-frequency ablation, which can be used for tumours smaller than 4cm. Larger tumours may require multiple treatments.

    “However, the evidence for the newer treatments is not strong and only supported by inferior clinical trials. Nevertheless, they are a viable option for weak patients who are unfit for surgeries or could be used in combination with surgery in familial kidney cancers where multiple tumours are found within the kidney,” Dr Sathiya elucidates.

    Since it’s difficult to catch kidney cancer early, what can people do?

    “The known risk factors associated with kidney cancer are smoking, obesity, and hypertension. If you can avoid those or keep them in check, you could reduce the chances of getting kidney cancer.

    “Those who are at risk, for instance known family history of kidney cancer, should be aware of the symptoms and perform regular screening by ultrasound, blood, and urine test as prescribed by your Urologist,” highlights Dr Sathiya.

  • Tax Obligations For Self-Employed Entrepreneurs

    Tax Obligations For Self-Employed Entrepreneurs

    With the rise of self-employed entrepreneurs, here are some tax compliance obligations and common oversights.

    There has been a dramatic growth in recent years on the number of self-employed entrepreneurs in Malaysia. From 2017 to 2018 alone, this number increased from 2.57 million to 2.86 million, an increase of 11.3% (source: Department of Statistics, Malaysia). In 2018, the self-employed are the second largest category (19.3%) in the Malaysian workforce out of a total of 14.8 million working adults.

    Malaysia adopts a self-assessment system where taxpayers are responsible to determine their own tax liability and to submit their tax returns accordingly. As the number of self-employed entrepreneurs continues to grow in the Covid-19 economy, it is important for the self-employed to be aware of one’s tax obligations especially in the area of tax compliance. Failure to do so could result in penalties and additional tax payable.

    A self-employed person is an independent contractor or a sole proprietor. The self-employed consists of sub-contractors working in the trades or construction sectors to professionals such as doctors, lawyers, accountants, engineers, and management consultants. Recent iterations include freelancers working in the commonly named “gig economy” (such as e-hailing drivers).

    Here are some tax compliance obligations a self-employed individual should take note of:

    1. Registration of Tax Identification Number (TIN) and submission of tax return

    A self-employed individual should register for a TIN when the person has taxable income which exceeds a threshold of approximately RM28,000 per annum. A TIN can be registered at the nearest Inland Revenue Branch (IRB) branch or via e-Daftar at the IRB website.

    For entrepreneurs running a business, the income tax return (Form B) will need to be submitted by 30 June the following year (eg. Form B for the year of assessment 2020 is due by 30 June 2021*extended to 30 September 2021 due to Government movement control, IRB website)

    2. Estimate of Tax Payable

    Under the Malaysian tax regime, a taxpayer pays income taxes on a “Pay-As-You-Earn” basis. Where an individual taxpayer receives other than employment income, the IRB may issue a Form CP500 setting out the estimate of tax payable under an instalment scheme. The Form CP500 is determined based on the tax liability of the previous year. What should you take note of:

    • The tax estimate is six (6) bi-monthly instalments commencing from the month of March every year.
    • Each tax instalment payment needs to be made within 30 days from the due date.
    • The remittance slip (Form CP501) should be submitted together with the instalment payment.
    • Should there be a need to revise the tax estimate which affects the instalment amount, you must submit Form CP502 to the IRB not later than 30 June each year on the revision payments. The IRB will issue a Form CP503 if the application is successful.
    • The penalty for late payment of 10% shall be imposed on the unpaid amount if the tax instalment payment has not been paid within 30 days from the due date.
    • Where there is a difference between the revised tax estimate submitted and the final tax liability which exceeds 30% of the tax payable, the difference will be subject to a penalty of 10%.

    The following illustration shows the impact when an estimate of tax payable is inaccurate.

    3.Employer’s Responsibilities

    As an entrepreneur, you might hire employees to expand your business. In this case, you will be considered as an Employer for tax purposes. The responsibilities of an Employer are as follows:

    • The Employer is to inform IRB of any new employees within one month from the date of commencement of employment.
    • Submission of Return of Remuneration by an Employer (Form E) to the IRB on or before 31 March each year. <continues…>

    [ You may read the full article HERE ]

     

  • Cover Story:Bringing Malaysia E-Commerce To The Fore

    Cover Story:Bringing Malaysia E-Commerce To The Fore

    Homegrown e-commerce platform PGMall aims to compete with the big boys with its long-term growth strategy.

    Being part of the booming e-commerce industry, PGMall is the fastest growing e-commerce platform in Malaysia.
    However, this entirely homegrown operation has quickly established itself as one of Malaysia’s leading marketplaces and has big plans for expansion.
    We sat down with Jerry Ng, the chief operating officer of PGMall as he outlines his vision.
    Smart Investor: You studied physics for your degree and scientific computing for your Master’s,  both  in the UK. How did you find the transition from such contrasting industries to e-commerce?

    Jerry Ng: Yes, I had a passion for physics and computing while I was pursuing my studies. After completing my studies, I secured a job in the UK as a software developer. This was definitely an extension of my passion in computing and I really enjoyed the experience.

    And to be honest, I found that this transition over to e-commerce was not that big a jump. This is because whatever you need to do in the e-commerce industry, you need that technological understanding. This includes the operational side on the backend, as well as how to scale a marketplace platform from small volume of consumers, sellers and transactions to a much higher volume.

    For me, my experience working as a software developer meant that I gained valuable technical knowledge while working on similar websites and companies. I believe this knowledge will help me guide PGMall in the coming years to the next level as we aim to transform into a highly scalable and cross-national entity.

    SI: When talking about e-commerce, there are many other companies in the market. So what sets PGMall apart from these other marketplaces in Malaysia?

    JN: The biggest thing that sets us apart is that PGMall is a fully, locally owned and operated company in contrast with the other two companies which have ties to China and Singapore. We are very proud to say that right now we are the number one local e-commerce player in Malaysia.

    All things considered, we are doing well against our competitors considering that we are the third largest platform in Malaysia. We are delighted that we have managed to achieve significant growth over the past few years, alongside the explosive growth of the e-commerce market. We are also confident about our business model as our customer base is stickier than that of other platforms. This is because we reward our customers based on their behaviour; anytime they buy or spend on our platform, we will reward them accordingly.

    <You May Read The Full Article HERE>

     

     

  • How to Make a Financial Plan for Myself As a Beginner?

    How to Make a Financial Plan for Myself As a Beginner?

    A good financial plan creates a roadmap or a guiding light for your financial life journey. It’s more than money and gives you an overall picture of where you stand financially and where you’re heading to. It should include financial details about your cash flow, savings, debts, investments, insurance, and any other aspects of your finances. Financial planning is an ongoing process that allows you to get your money and life under control so that you can reduce stress, fear, and worries about your future life. I think everyone should have one, and it can be done in your own style or with a financial planner. Remember, financial planning is not only for the wealthy or people earning a high income. You don’t need sophisticated software or tools to draw up your own financial plan; instead a blank piece of paper will help you to kick start the process. Start by listing down what you have (assets eg. savings account, EPF, investment account, investment property, business, etc.) and what you owe (liabilities eg. mortgage loan, car loan, personal loan, credit card, study loan, etc.), income (cash inflow) and expenses (cash outflow). This will give you a snapshot of whether you’re at a financial surplus or deficit, making it easier to work out a financial plan – covered in the next step.

    Setting goals for your financial plan

    This is where you decide how to design your own life. When crafting your own financial plan from the viewpoint of what your money can do for you, you’ll make saving and investing feel more intentional than overspending it. Your goals should be inspirational, measurable, and realistic – ask yourself where do you see yourself in five years’, 10 years’ or even 20 years’ time? It’s important because it gives you direction to achieve your financial goals at different life stages and it also influences how you plan your career as well. For example, there will be different needs when doing financial planning in your 20s, 30s, 40s and 50s. In your 20s, you might want to make sure you have sufficient emergency savings that lasts for at least three to six months so that in emergencies you won’t  be running on credit. Don’t forget to factor in insurance and ensure you get adequate coverage for personal accidents and a medical plan. In your 30s to 50s, you’ll likely be experiencing high commitments due to getting married, raising kids, preparing university tuition fees, and funding your retirement fund. As you progress from different life stages, you’ll need to regularly keep an eye on your allocations for investing and spending. If you know that these things will happen in your 30s to 50s, you may save and invest more in your 20s or prolong the retirement age from 55 to 60.

    Monthly budgeting for your financial plan

    The next step is to allocate your monthly budgeting – what is coming in and what is going out to understand your spending habits and only able to take a balance between spending and savings. It depends on where you live and how you spend – living in an urban area may result in spending more due to higher rent, eating out more etc. If you don’t spend more than half of your income, then you can start saving enough to fund your goals. Of course, you can’t own the whole world, but you can own the things that you value the most!

    Executing your financial plan

    This is all about allocating your resources or cash surplus to fund your goals. Saving and investing must come into play and you should consider the types of financial products, the risks, returns and liquidity, as well as understanding your risk tolerance. For example, if you set aside 15% of your gross income for long-term goals like retirement, you may consider investing in stocks or equity funds that aim for capital appreciation. For shorter goals like saving for an emergency fund, you wouldn’t put your money in a high-risk fund because you might need it quickly in an emergency. It’s best to have separate accounts for different funding purposes.

    Review your financial plan

    Lastly, review and monitor your financial plan regularly to ensure you exercise strict discipline with the flexibility to adjust accordingly in the future, especially when entering different life stages. It’s easy to talk and plan, but execution remains the most challenging task as we may not have the discipline to stay on track. So, reviewing, monitoring and fine-tuning acts as reminders of your goals all the time. It’s best if you can make it measurable so that you can reward yourself with small gift when you are on track!
      A good financial plan is not a beautifully written document that is presented nicely to you. It’s a tool to track your progress and help you reevaluate plans after a life milestone such as getting married, raising a kid, buying your first property, upgrading to a new car, preparing for a kid’s college fee, or building your retirement fund. When everything is handled, you can enjoy living your life. The small steps you are taking now will definitely have a huge, positive impact on your future.

    About the author 

    Eewen is a licensed financial planner and strongly upholds the belief that financial wellness is all about money bringing a positive impact into your life. She can be contacted at keaheewen@vka.com.my
  • What is Financial Wellness – It’s Not Just About The Money

    What is Financial Wellness – It’s Not Just About The Money

    Taking personal finance to another level by looking at it from a more holistic view.  How has the past year been for you? I’ve done a lot of reflection on myself and how I want to further evolve when things get a little more normal for the coming year (fingers crossed)! One thing I personally learned is about life and recognising that money is just a tool. We must make sure we use it correctly in order to work towards financial wellness.
    “People first, then money, then things.” – Suze Orman

    Reflection on the path to financial wellness

    The stoic path to wealth mentions that the fear of losing all our wealth is creating a monster inside us and therefore turning the chase for wealth into fear of losing it. This eventually turns money into our master and we’re enslaved by fear until we almost lose touch with ourselves. There is a saying “Money is the root of all evil”. But in actual fact, the full quote is “the love of money is the root of all evil.” It’s the greed for wealth that is bad as it can corrupt minds, and the need to keep accumulating more and more is the real issue.

    Money is not the end goal

    Personal finance is not about the money we have or about creating more wealth. Its main purpose should be more holistic, ie. leading the life you were born to lead, no matter what your financial status is. You’ll see money in a different light if you began your career with a student loan. Even before starting your career, you’ve already created a load of fear by accumulating a large amount of debt. This results in your mind becoming clouded with thoughts of the repayment of loans first and pushing aside all other goals or dreams. I personally experienced it as a child; teachers kept telling me to finish school, get good grades, go to university, get a degree and get a good paying job. As a child I thought that was the dream, but it didn’t turn out the way I imagined it would as a child. We were repeatedly told this fairytale, and subconsciously I believed it. But now that’s not the case. How can we take a holistic approach around our personal finances and take back control of our life? Believe me, we’re not meant to suffer through life constantly worrying about paying bills.

    Reflecting on your childhood dreams 

    Have a goal in mind. You already knew what you wanted when you were a child. In fact, there’s a good chance you were so good at it. Try asking your parents or other close family members what you were like when you were around the age of 9 to 12. It’ll give you some insights about your strengths and your childhood dreams. I grew up observing how passionate my parents were and how they were willing to give their all to their career. At the end of the day, my parents still had time to spend with us and go on a little vacation once in a while. It was a nice balance. That’s currently what I want to strive for – a balanced life between my career and family. I’m not saying I don’t want to be rich (who doesn’t), but it’s not my main focus right now. Between juggling two young kids, my husband works long hours because he enjoys the work he does. Even though in my opinion, he deserves to be paid better, it matters less. There’s been a string of financial decisions we made that may be a sin in the personal finance community focused on accumulating wealth. But we needed to make those decisions to get to where we need to be in life. Our goals were bigger than wealth accumulation.

    Using my finances to find peace 

    We can never be free. I believe there’s no such thing as financial freedom. This is because I realised just when I thought we were “free”, something would suddenly hit us like a bomb and I would think “Here we go scrambling again”. Getting married is expensive. Staying married is expensive. Having kids is expensive. I remind myself of my battles daily. If my needs are covered, I am willing to forgo some of my wants. How precious and priceless is the laughter of a child?

    Just do you 

    It‘s terribly hard to maintain a balance and I personally struggle with this on a regular basis. Turning off the work switch and being present was a difficult process. Being frugal and being disciplined in managing our budgets has a big impact on our long term finances. But this just makes me exhausted. There’s no point stressing about maximising my savings or the future so much that I forget to be present. The goal is not the money – it’s my life. I’m not going to kill myself just to keep striving towards this illusion that my future will be far brighter if I continue maximising my savings and investments. I choose to enjoy every step of the journey instead, without mentally burdening myself. Use your wealth-building experience to create happiness for yourself and inspire others to do the same. Remember it’s not about the numbers and figures in your portfolios, but what you do with the money.
    “Wealth consists not in having great possessions but in having few wants.” – Epictetus 
    Move from survival mode to thriving mode. Choose not to be trapped in the illusion of not having enough. You’re enough! If you’re in survival mode, you’ll trap yourself in the rat race. Therefore, there’s no room for helping others and all you’ll think about is how to make yourself better instead of the community around you.

    About the author

    Nurul Yahi has a background in Business Administration majoring in Islamic Financial Planning. She’s a financial enthusiast and you can find her at dearduit.com. You can also find Nurul on Twitter, Instagram and Facebook.

  • 6 Tips on Financial Risk Management in the New Normal

    It’s been a tough year for the world, and Malaysia is no different with Covid-19 cases rising to a new high from 2,000+ cases to 6,000+ cases daily despite several Movement Control Orders (MCO).

    It doesn’t seem that the pandemic is going to end anytime soon, so what’s the best way to manage personal risks in this new normal?

    Managing personal risks means being prepared for the worst possibilities that may occur.

    It also means that you should ensure that if something unprecedented does happen, it would leave little to no impact on your family finances and well-being. 

    Here are six tips on how to manage your financial risks in this new normal:

    1. Prepare a buffer of emergency funds

    Thanks to the Covid-19 pandemic, the economy has been severely impacted and the unemployment rate is rising. Due to the restrictions set by the government, many businesses couldn’t survive, leaving them with no choice but to enforce pay cuts, retrench staff, or in the worst case scenario, shut down their businesses.

    In addition, there are also businesses that are quick to adapt and move towards digitalisation which can often mean that human capital is then regarded as redundant, leading to further retrenchments.

    This turbulent time has taught us that anyone can be at stake, which is one of the main reasons why it’s absolutely crucial for us to build up an emergency fund that can last at least 6-12 months.

    Having this fund will provide a buffer of cash reserves to help us weather tough times if we are no longer able to rely on our active income or even when we experience pay cuts. It’ll also help us avoid relying on a credit card for essential expenses as a go-to fund will be in place to help us stay afloat.

    2. Upskill or reskill to stay relevant

    With the increasing unemployment rate, the job market is becoming more uncertain and tough. The supply of labour is now greater since more people are actively seeking jobs.

    Thus, it’s essential to always ensure your skills aren’t obsolete and are still relevant. That way, if you’re still employed, your company will see you as valuable and thus increases the chance of job security. 

    On the other hand, jobseekers will benefit from upskilling and reskilling as you’ll remain employable and at the same time stand out in the job market. There are tons of free and paid courses to explore online.

    You can check out Linkedin Learning, Skillshare, Udemy, and Coursera to name a few, and you’ll be able to upskill and reskill whenever and wherever you are. 

    The Employment Insurance Scheme (EIS) under the Social Security Organisation (SOCSO) also provides vocational training to eligible participants who have been retrenched. The training cost will be covered by them and you may also be eligible to receive a training allowance.

    In addition to all these, do consider being flexible and open to any job even though it’s not paying as much, as this will not only help you with learning and using relevant skills but will also help to stretch your emergency fund before you land yourself a suitable role. 

    3. Reduce the risk of getting infected

    The number of cases has shown that the virus doesn’t discriminate or choose its victims. We also know that people who fall under vulnerable categories have a higher risk of getting infected, and it can even be fatal for them.

    Regardless of which category we’re in, it’s important to follow the standard operating procedure to reduce the chances of getting Covid-19 and to ensure that we won’t become a carrier to those who are more prone to be infected.

    Try to lead a healthy lifestyle; be it in terms of adopting a balanced diet or engaging in physical activity to boost our immune system. It’s easy to opt for a sedentary lifestyle these days, especially now that some of us can work in the comfort of our home without having to travel back and forth to the workplace.

    In addition to that, it’s crucial to get vaccinated to prevent you from getting infected with Covid-19, and by doing so, we can also help reduce the spread of the virus. You can register on the MySejahtera app if you’re yet to do so.

    4. Be prepared for unfortunate events

    As much as we try our best to maintain a healthy lifestyle, we’re all exposed to risks other than Covid-19. Death is inevitable, while total permanent disabilities and illnesses are potential risks in life.

    If we’re not prepared for such events, it may leave our family finances vulnerable and possibly break the bank or worse yet, spiral into debt.

    These are scary events to think of, but we have to face the fact that not preparing for them is more detrimental. So how can we start? Think about how you would want your money to be managed in these events.

    For instance, if you were to pass away, how would you settle your debts and ensure the continued survival of your dependents? This is imperative for parents with minors and those with special-needs dependents.

    As for disabilities and illnesses, are your funds enough to take care of this, or is it cheaper to opt to be insured in the first place?

    5. Take up financial initiatives by the government 

    Since the first MCO, there has been much financial assistance offered by the government to safeguard the people’s welfare as well as to continue stimulating the economy.

    While some financial initiatives announced aim to help vulnerable groups and daily wage workers, there are also optional initiatives like the EPF i-Sinar advance facility and loan moratorium where you can defer your loan repayment.

    So who should take up this financial initiative? Those with little or no emergency funds, high-interest debts like credit cards and personal loans, at risk of getting retrenched, experiencing pay cuts or retrenchment, or a monthly cash flow deficit should consider taking these up.

    Take this period of assistance as an opportunity to reset and improve your financial situation so it’ll be more resilient to withstand any shocks. Having said that, it’s also important to understand the impact of utilising these facilities.

    The EIS by SOCSO also offers a job search allowance (JSA) for those who are eligible, and if you do, you can claim this allowance for up to six months. It will be reduced over the period so you won’t be able to fully rely on this, but it’ll certainly help your emergency fund last longer. 

    6. Review your investments 

    ‘Should I redeem my investments?’, is one of the questions I received a lot during this hard time as people are uncertain about the market. If this is what you are thinking of, review your investments and ask yourself:

    What is my investment objective for that particular investment?

    The objective of investments will determine how long you should stay in the market. A longer time horizon should be able to withstand the turbulence as you’re not going to need the money in the short term.

    This is also where the emergency fund plays a role to increase the holding power of your investment and you won’t need to cash out in times of emergency.

    Am I able to withstand the ‘roller coaster’ movement of the investment?

    If your answer to this is no, you may want to switch to a lower risk profile. This doesn’t mean that you’re exiting the market; it just means that you’re lowering your exposure to high-risk investments and increasing exposure to low-risk investments so you’ll not have to experience as much volatility.

    Are my emergency funds enough?

    It’s essential to have a buffer of funds prior to any investment. However, different people have different circumstances these days.

    If you’ve suffered a job loss, and are currently living on your emergency funds, you may want to have the a final backup plan ie. selling your investment, should you exhaust your funds before you can secure a job. It’s a better option compared to relying on credit cards.

    With the current work arrangements, you may also find that you have extra money to invest. If this is the case, regularly saving will help you get into the market at different times and you will benefit from the market dip where investments are on sale!

    Conclusion

    Being prepared with risks will give us peace of mind that things will be taken care of. A resilient financial situation will certainly help us weather this crisis. If you’re unsure about how to go about your finances and stuck, do seek unbiased professional help. It may be a daunting period but there are also lots of opportunities.

    ‘Tough times never last, tough people do.’ – Robert H. Schuller

    About the author

    Nursyahirah Mohd Ghazali (CFP, IFP) is a Licensed Financial Planner. She strongly believes that financial education starts from home and that parents play a huge role in raising financially savvy kids, and that a collective effort from parents in this matter will result in a more financially literate generation, helping to transform Malaysia for the better. She can be contacted at nursyahirah@wealthvantage.com.my

  • Saving Towards Your RM1 Million Goal

    Lots of us would like to reach our RM1 million goal, but how do we do it?

    What is your MAGIC number to reach your first million?

    While it may seem like a number that’s hard to achieve, let’s break it down to see how it’s possible to do so with discipline, time and the power of compounding!

    When do you want to achieve your RM1 million?

    Keep a time-based goal in mind.

    For example, if you set a timeline of 30 years to achieve your first million, that will take you RM2,777.78 of savings a month.
    But, if you want to achieve it in a shorter time span of 10 years for example, it requires you to save a whopping RM8,333.33 a month without compounding. Therefore, keep in mind that time is your best friend.

    Longer time = lesser RM saved each month
    Lesser time = more RM saved each month

    So, the time is NOW! It’s just a matter of how much you want to commit to saving on a monthly basis.

    What is your targeted return rate?

    I’d like to introduce to you the rule of 72!

    Some of you may be asking what this rule is so allow me to explain.

    It’s a fast track to calculate how long it takes to double your money with a fixed interest rate without using a financial calculator.

    How does it work?

    For example, if you have RM100,000 in a fixed deposit that yields 3% interest, how long does it take to double your money?

    Simply take 72 / 3 = 24. This means your RM100,000 will take 24 years to become RM200,000. If you were to get an interest rate of 5%, 72 / 5 = 14.4 years to double your money.

    Below is a table with some examples of the rate of return that will affect the amount of years needed to double up. The higher rate of return, the faster you’ll achieve your goal of RM1 million.

    Rate of Return Years it would take to Double Up
    3% 24
    5% 14.4
    8% 9
    10% 7.2
    15% 4.8

    For example, RM100,000 at a rate of return of 15% per annum will accumulate as per the table below. This means it will take 20 years to reach RM1.6 million!

    Year Amount (RM)
    1 100,000
    5 200,000
    10 400,000
    15 800,000
    20 1,600,000

    How much would I need to save each month?

    Let’s use an example of 8% return per annum.

    This table below shows that the more money you set aside, the faster you can achieve your RM1 million.

    If you were to increase your savings from RM500 to RM1,000 a month, you can achieve your first million eight years faster!

    Monthly Savings Years to RM1 Million
    500 33
    1,000 25
    2,000 18
    3,000 15
    4,000 12
    5,000 10
    10,000 6

    Summary

    Ultimately, it doesn’t matter if you’re 10 years or 30 years away from your RM1 million target. Take some time to think of the three steps below and apply the rule of 72 to it.

    1. When do you want to achieve your RM1 million?

    2. What is your targeted rate of return?

    3. How much am I saving monthly?

    With the above information now set in stone, you’re now able to clearly plan your destination and search for a vehicle or investment products that are able to drive you towards your goals.

    Saving as much as you can now will help you to reach your first million as soon as possible.

    The more time you let your money grow, the less you’ll need to set aside each month, and this in turn will mean you can accept lesser returns to reach your designated amount and goal.

    While lesser returns may not sound attractive at first, it also means you don’t have to expose yourself to much market risk and simply let time do the work for you.

    As the saying goes, better late than never.

    So keep in mind that it’s never too late to start saving now and I hope this will help you to achieve your goal with more clarity and direction!

    About the author 

    Nick Lim is a licensed financial planner under Capital Markets Services Representative License (CMSRL) and a Bank Negara-approved financial advisor representative (FAR). He can be contacted at nicklim@imaxfinancial.com.my

  • 3 Tips on Property Investment for Beginners

    Very recently, I’ve been shopping around for property for my own stay. This reminds me of the time I looked for my first property investment over five years ago. I’m still holding on to that property at a loss – both in cash flow and unrealised capital losses.

    As a friend once said, things that happen to us could either be a blessing or a lesson.

    This loss-making investment has given me three very important lessons that I hold close to my heart when it comes to property purchases.

    1. Avoid new developments

    As a professional real estate lawyer friend once told me, “Buy certainty when you are looking at investment property”.

    The allure of a new development is apparent – minimal to no upfront costs (i.e. affordable), a lot of incentives, looks new and nice, etc.

    However, every new development that we buy into is a bet. A bet that the developer will not fail, a bet that the future market is bright so that the value goes up, a bet that it has a market for good rentals.

    When I bought mine, it was going to take three years to finish building. It was a mixed development that was supposed to come with a mall right in the middle (the second mall in that area). But, it didn’t happen.

    The (prominent) developer decided to take out the mall from the development, SECRETLY! I only found out about it after it was completed in three years.

    The mall just disappeared from the plan altogether as if it never existed.

    Furthermore, more high-density properties started to pop up around that development. Causing supply to skyrocket around that place. Naturally, the value of my property dropped significantly.

    As a result, I’ll be avoiding all new developments, even for my own stay. Nothing’s stopping them from delivering the property to you hastily or taking forever to fix the defects in the property.

    Or building up the commercial space, which they promise will be vibrant, but end up becoming a dead place with only a few tenants.

    Rather than buying something so uncertain, it would be better to buy into an existing property, where I can clearly evaluate how good or bad the place actually is.

    2. It’s all about the maths

    From the get-go, it’s all about the calculations when it comes to property investment. I got suckered in by the sales pitch for my first property and being a newbie then I didn’t do my own calculations.

    The obvious part is that the rental income has to be higher than the mortgage payments and management fees.

    The not-so-obvious part is the indirect costs – agent fees, maintenance fees, assessment tax, income tax, etc. These will eat into the income and hence reduce the net income that we would get.

    Which means, we’d require a bigger margin in order to cover all these costs so that it’s profitable in the end.

    For example:

    – Mortgage + management fees = RM1,500
    – Rental Income = RM1,700
    – Indirect costs = RM140 (RM1,700 / 12 being the agent’s first month fee) + RM200 (miscellaneous fees)
    – Loss = RM140 per month (= RM1,700 – RM1,500 – RM140 – RM200)

    Don’t hope for capital gains because it’s uncertain. Ask anyone who bought a new property five years ago at the peak of property prices. Most, if not all, are suffering from capital losses now.

    Get the profit maths right before any investment. If it’s cash flow negative, forget it. It’ll be a pain somewhere down the road.

    The saying of, “at least partially it’s being paid by someone” or “It’s breaking even!” is nonsense at best. Nobody enters an investment to break even!

    3. Property investment is semi-passive

    When we talk about property investment income, mostly we talk about renting out to tenants to collect rental income. The passive income part is when tenants pay rentals on time throughout the tenancy.

    That’s about it.

    There is a whole other side of property investment, which demands active participation. Some examples:

    – Getting a tenant in involves liaising with the property agents on and off (every month it’s not tenanted is a loss to the P&L)
    – In between tenancy, there is a period where the property needs to be “cleaned up” and ready for the next tenant. The degree of work (and costs) required depends on how well the previous tenant took care of the place
    – Tenants with issues can create headaches during their tenancy. This could be delayed payments, pests, broken things, etc. We won’t know any of these for sure until the start of the tenancy

    Some investors, especially those with a big portfolio of properties tend to engage property managers to manage the portfolio to get the headache off their minds.

    This will bring down the returns but at least it’s converted into a mostly passive income portfolio. However, for most of us, this can take up significant brain juice, time, and effort to handle.

    However, it’s all good as long as the profits from the investment better justify the effort required. Refer to lesson no. 2.

    Closing thoughts

    My first property was a headache. Students are potentially one of the worst tenants ever, in my experience.

    In contrast to my trading and other investments, I’d rather put in more of my efforts there. The rewards in property can be huge, no doubt, but it isn’t one that I prefer.

    It might be obvious for many but hope this reaches those of you who are looking into your first property for investment. It may help you in your journey!

    About the Author

    This article was originally published at betweenthemoney.com, a personal finance website by Jason Loh that focuses on money matters and investment topics for Malaysians