|
|
| |
Team Focus Wealth Planner
(IP0281218-K)
35, Jalan Seenivasagam,
Wisma Prudential,
30450 Ipoh,
Perak, Malaysia.
Tel/Fax: (6) 05 - 255 2118
Mobile: (6) 016 - 422 2118
E-mail:
victor.teamfocus@gmail.com |
| |
|
|
| |
|
| |
|
| |
Home |
| |
Financial Statement |
| |
|
| |
| |
4 Common
Financial Mistakes & How To Avoid Them |
| |
|
| |
Lack of Planning |
| |
|
| |
|
Q1. |
If you are struck with a
critical illness that requires
RM50,000 cash for medical
treatment, can you raise the
money easily within two weeks? |
| |
|
|
Q2. |
If your income stopped suddenly
due to retrenchment, death or
disablement, how long can you
and your family sustain on your
savings? |
| |
|
|
Q3. |
When your children are ready for
higher education, are you
financially ready? |
| |
|
|
Q4. |
During your golden years, do you
enjoy your retirement or retire
your enjoyment? |
|
| |
|
| |
No one
plans to fail, they just fail to plan.
You got to plan your future because you
and your loved ones are going to live
there! |
| |
|
| |
Lack of Knowledge About The Way
Savings,Investment & Protection Vehicles
Work
Be
financially literate and money savvy.
Read books relating to money matters,
e.g., "The Richest Man in Babylon." by
George S Clason or "Personal Money"
magazines.
Read
newspaper articles & journals on money
management.
Attend
talks on financial planning conducted by
local chapters or clubs.
Consult
with financial planning practitioners.
Search
the internet. |
| |
|
| |
Know the difference between
Savings and Investments:
Saving is to
temporary park your money for near
future spending as in putting your money
in the bank savings account.
Investment is money makes money. It is
to postpone current consumption and put
the money into a financial instrument or
vehicle, e.g., unit trust or property,
that gives a potentially higher return
than a saving account interest. It is to
exercise delay gratification as opposed
to instant gratification. |
| |
|
| |
Dependence On Someone Else To Be
Responsible For Their Financial Future
Can we
depend solely on the government, our
spouses or rich relatives to take care
of our medical & emergency needs,
retirement or children's education
funding?
Take
personal interest and responsibility for
your financial future.
Become a
financially responsible adult whether as
a single person, a married person with a
single-income or dual-income family. |
| |
|
| |
Procrastination
Have
confidence that you CAN save for your
future.The Malay proverb has it: "Sedikit-
sedikit lama lama jadi bukit." Winston
Churchill said "Great people are, by and
large, normal people who just did
something that others did not do." Begin
right now. |
| |
|
| |
Personal Financial Statement (Balance
Sheet):
Net Worth Statement |
| |
|
| |
The
Starting Point - Check Your Bearings
There are 5
not 4 cardinal points in a compass.
North, South, East, West and where you
are now.
If you
want to make your financial plan count,
then every year, you should count your
money. Draw up a Personal Balance Sheet
also known as Net Worth Statement. This
is an annual snapshot of your assets and
liabilities at a particular point in
time. Think of a photograph. It can help
you identify where you are on the road
toward your personal financial goals and
pinpoint obstacles that might be getting
in your way.
A Net
Worth Statement uses the Personal
Balance Sheet formula:
TOTAL ASSETS -TOTAL LIABILITIES = NET
WORTH
Total
assets = All the things you own in
monetary terms.
Total
Liabilities = All your debts. Things
owed and must be paid in the future.
Net Worth = The actual
amount you own. The bottom line. |
| |
|
| |
My
Net Worth Statement As At dd/mm/yyyy
(date) |
| |
|
|
|
| |
Cash Asset: |
| |
Bank Current A/C |
| |
Bank Saving A/C |
| |
Fixed Deposit |
|
|
| |
Fixed Income Assets: |
| |
Bond & Other Fixed
Instruments |
| |
Unit Trust Bonds |
|
|
| |
Equity Assets
(Stocks): |
| |
Stocks (Home) |
| |
Stocks (Overseas) |
| |
Unit Trusts Equities
(Home) |
| |
Unit Trusts Equities
(Overseas) |
|
|
| |
EPF & other Provider
Funds |
|
|
| |
Personal Assets: |
| |
Residence Home |
| |
Investment Properties |
| |
Life Insurance Cash
Values |
| |
Cars, Others Vehicles |
| |
Jewellery, Antiques &
etc. |
|
|
| |
Liquid Assets: |
| |
Business Interest |
|
|
|
|
|
|
|
|
| |
Short-Term
Liabilities |
| |
Bank Overdraft |
| |
Credit Cards |
| |
Others |
|
|
|
|
|
| |
MY NET WORTH (TOTAL
ASSETS – TOTAL
LIABILITIES) |
|
|
|
|
| |
|
| |
You will
find that you are in one of three
situations:
1.
Surplus (+)
2. Deficit (-)
3. Breakeven
|
| |
If you
are in breakeven or surplus position,
congratulations. Would you like to grow
your money so that you can reach your
financial objectives faster?
Should
you be in a deficit situation, do not
despair. You are not alone. Follow some
of the action plans in this article and
you will be back on track to good
financial health.
"If you
are going to manage your wealth, you
need to measure it."
"What gets measured, gets done."
Arm with your Net Worth Statement, your
objective is to increase your net
worth.
The strategy is to increase your total
assets and to reduce or eliminate your
liabilities so that you have a pleasant
bottom line.
You don't focus on one aspect or
product. You need to take all areas of
planning into consideration when making
financial decisions. |
| |
|
| |
|
1. |
Valuation & Appraisal:
If you have never had your
collections of antiques,
artwork, jewelry & other
collectables appraised,
completing your New Worth
Statement should prompt you to
do so. |
| |
|
|
2. |
Insurance: If some
of the items are not insured,
this process is a good reminder
to get that done. |
| |
|
|
3. |
Wealth accumulation:
Check whether you are sitting on
too much cash. Consider
diversification and put the idle
money to grow. |
| |
|
|
4. |
Growth: Check how
much your net worth has grown or
shrunk in the past 12 months. |
| |
|
|
5. |
Dynamic not static:
Please note that your Net Worth
Statement is at a particular
date - it is your current net
worth. Your net worth is not a
static figure. It will change as
your financial profile changes.
The Net Worth Statement
therefore needs to be updated
frequently, at least once a
year. If you are not happy with
the bottom line, then you need
to explore ways to cut down some
unnecessary expenses. If your 5
years old car is still giving
you good service, you do not
need to change it for a new car.
Or you may look for ways to
increase your income. You may
want to turn your hobby or
passion into a money making
venture. |
| |
|
|
6. |
Liabilities check:
Are you comfortable with and in
control of your liabilities.
Ensure that your debt has not
crept up too much. One area you
should consider is home
refinancing for a lower mortgage
loan interest. |
| |
|
|
7. |
Have a financial goal:
In building your Net Worth, it
is advisable to have a goal and
set towards achieving it, as to
have how much of net worth
within a time frame, e.g., to
have RM1 million net within 15
years' time. |
|
| |
|
| |
Monthly Cash Flow Statement |
| |
|
| |
Eliminate or Cut Down On Unnecessary
Expenses
Everybody
has heard of this advice. But not many
people do what they know! Perhaps it was
the relatively small initial outlay that
we do not feel. But as the saying
goes,"little grains of sand make a
mountain, little drops of water make an
ocean!"
A good guide would be to keep a monthly
cash flow statement and see which are
the culprits!
A Cash Flow Statement shows :
-
Summary of cash movement.
-
Inflow & outflow of cash and cash
equivalents.
- How
liquid are your assets
- How
efficient you are in generating
cash.
Here is a
model you can follow: |
| |
|
| |
Statement of Income & Expenses for the
month of mm/yyyy |
| |
|
|
|
| |
Salary or Earnings |
| |
Dividends / Interest |
| |
Commissions |
| |
Rental Received |
|
|
|
|
|
| |
Food |
| |
Clothing |
| |
Medical & Dental Care |
| |
Children’s Tuition Books |
| |
Children’s Allowances |
| |
Maids |
| |
Rent or Mortgage |
| |
Utilities |
| |
House Insurance |
| |
Repairs to Home |
| |
Petrol |
| |
Car Repairs /
Maintenance |
| |
Motor Insurance |
| |
Car Loan Repayment |
| |
Toll |
| |
Vacations |
| |
Eating Out |
| |
Entertainment |
| |
Gifts |
| |
Club Membership Dues |
| |
Contributions |
| |
Medical & Other Support
for Parents |
| |
Personal Loans |
| |
Credit Cards Repayments |
| |
EPF Contributions |
| |
Income Tax |
|
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
| |
RM |
|
|
|
|
|
| |
|
| |
A
monthly exercise like this is a
revelation! It will allow you to know
which items you have overspent and
manage them.
Financial planning is like all other
phases of life; it involves choices.
How shall I allocate my money?
Spend now or save for later?
Pay off existing bills or increase
retirement savings?
Focus saving money on short-term or
long-term goals? |
| |
|
| |
The Power
of Early Start & Compound Interest |
| |
|
| |
(A)
starts saving 10 years earlier than (B)
(A) saves only for 10 years while (B)
saves for 30 years |
| |
A |
| |
|
Year |
Age |
Saving |
Cumulative |
Interest |
Cash Value |
|
1 |
21 |
1,800.00 |
|
10% |
|
|
2 |
22 |
1,800.00 |
|
10% |
|
|
3 |
23 |
1,800.00 |
|
10% |
|
|
4 |
24 |
1,800.00 |
|
10% |
|
|
5 |
25 |
1,800.00 |
|
10% |
|
|
6 |
26 |
1,800.00 |
|
10% |
|
|
7 |
27 |
1,800.00 |
|
10% |
|
|
8 |
28 |
1,800.00 |
|
10% |
|
|
9 |
29 |
1,800.00 |
|
10% |
|
|
10 |
30 |
1,800.00 |
|
10% |
|
|
11 |
31 |
|
|
10% |
|
|
12 |
32 |
|
|
10% |
|
|
13 |
33 |
|
|
10% |
|
|
14 |
34 |
|
|
10% |
|
|
15 |
35 |
|
|
10% |
|
|
16 |
36 |
|
|
10% |
|
|
17 |
37 |
|
|
10% |
|
|
18 |
38 |
|
|
10% |
|
|
19 |
39 |
|
|
10% |
|
|
20 |
40 |
|
|
10% |
|
|
21 |
41 |
|
|
10% |
|
|
22 |
42 |
|
|
10% |
|
|
23 |
43 |
|
|
10% |
|
|
24 |
44 |
|
|
10% |
|
|
25 |
45 |
|
|
10% |
|
|
26 |
46 |
|
|
10% |
|
|
27 |
47 |
|
|
10% |
|
|
28 |
48 |
|
|
10% |
|
|
29 |
49 |
|
|
10% |
|
|
30 |
50 |
|
|
10% |
|
|
31 |
51 |
|
|
10% |
|
|
32 |
52 |
|
|
10% |
|
|
33 |
53 |
|
|
10% |
|
|
34 |
54 |
|
|
10% |
|
|
35 |
55 |
|
|
10% |
|
|
36 |
56 |
|
|
10% |
|
|
37 |
57 |
|
|
10% |
|
|
38 |
58 |
|
|
10% |
|
|
39 |
59 |
|
|
10% |
|
|
40 |
60 |
|
|
10% |
|
|
| |
B |
| |
|
Year |
Age |
Saving |
Cumulative |
Interest |
Cash Value |
| |
21 |
|
|
|
|
| |
22 |
|
|
|
|
| |
23 |
|
|
|
|
| |
24 |
|
|
|
|
| |
25 |
|
|
|
|
| |
26 |
|
|
|
|
| |
27 |
|
|
|
|
| |
28 |
|
|
|
|
| |
29 |
|
|
|
|
| |
30 |
|
|
|
|
|
1 |
31 |
1,800.00 |
|
10% |
|
|
2 |
32 |
1,800.00 |
|
10% |
|
|
3 |
33 |
1,800.00 |
|
10% |
|
|
4 |
34 |
1,800.00 |
|
10% |
|
|
5 |
35 |
1,800.00 |
|
10% |
|
|
6 |
36 |
1,800.00 |
|
10% |
|
|
7 |
37 |
1,800.00 |
|
10% |
|
|
8 |
38 |
1,800.00 |
|
10% |
|
|
9 |
39 |
1,800.00 |
|
10% |
|
|
10 |
40 |
1,800.00 |
|
10% |
|
|
11 |
41 |
1,800.00 |
|
10% |
|
|
12 |
42 |
1,800.00 |
|
10% |
|
|
13 |
43 |
1,800.00 |
|
10% |
|
|
14 |
44 |
1,800.00 |
|
10% |
|
|
15 |
45 |
1,800.00 |
|
10% |
|
|
16 |
46 |
1,800.00 |
|
10% |
|
|
17 |
47 |
1,800.00 |
|
10% |
|
|
18 |
48 |
1,800.00 |
|
10% |
|
|
19 |
49 |
1,800.00 |
|
10% |
|
|
20 |
50 |
1,800.00 |
|
10% |
|
|
21 |
51 |
1,800.00 |
|
10% |
|
|
22 |
52 |
1,800.00 |
|
10% |
|
|
23 |
53 |
1,800.00 |
|
10% |
|
|
24 |
54 |
1,800.00 |
|
10% |
|
|
25 |
55 |
1,800.00 |
|
10% |
|
|
26 |
56 |
1,800.00 |
|
10% |
|
|
27 |
57 |
1,800.00 |
|
10% |
|
|
28 |
58 |
1,800.00 |
|
10% |
|
|
29 |
59 |
1,800.00 |
|
10% |
|
|
30 |
60 |
1,800.00 |
|
10% |
|
|
| |
|
|
| |
|
| |
|
|
