Malaysia's Weekly Personal Finance Summary - Oct 17 2018

Intro

We're going to be introducing a new section starting this week and that's a question section. As you may know, we're starting to partner with financial advisors to get them to share their insights with the community (which is why you can get your questions answered in our Facebook group.

We are also planning to start a video series where we get our members the chance to get a general financial plan created for them for free (typically this would cost 1500+). And as part of it, we'll ask the advisor a few of your questions!

So don't hold back on your questions!

Weekly Question

Question 1: If you're an expat, what are you doing to invest here in Malaysia? What are the struggles you run into when you invest here? What are some tips you have for other expats?

Question 2: As a local, what are you investing in that is low - medium risk? Do you have a process for automating your investing? What challenges do you face when it comes to investing?

From More Money Malaysia

The Best Broadband Internet in Malaysia
Now that all the main broadband internet providers have released their new pricing, it's time to talk about which one is the best for you.

image from shutterstock

Local

Govt to set up three categories of affordable houses

Houses fetching RM150,000 and below, RM150,000-RM300,000 and RM300,000-RM500,000 would make up the new categories.

Besides that, all housing projects under the five housing entities will be merged into one so that everything will use the same pricing, same design and same management.

What do you think about this? Are you looking to buy a house through a government program or do you have a different housing goal?

Govt not removing toll collection, says Works Minister

The government will not be able to do away with the highway toll collection due to the country's current financial position, says Works Minister Baru Bian.

I respect their decision as it can be really easy to take it away now to become popular, only to let our kids deal with the excessive debt.

Govt not selling affordable housing units in cities

Zuraida also said that under the proposed plan, which will be unveiled later, units developed in the cities will not be sold but be rented out. The federal government will help subsidise the development of these units in the city and rent them out.

It only makes sense as most land within the cities are already used up or are a lot more expensive. That said, as a potential investor, there's no need for you to feel threatened because most people who can afford it, will still look to be within the city.

Local Bloggers

How To Make A Million Ringgit With Compound Interest

Compound interest is interest that is added to the principal amount. With compound interest, you will be earning interest on top of the interest you have already earned. The addition of interest to the principal amount is known as compounding.

image from comparehero.my

Compound interest is one of the wonders that can really change your future. It is something I definitely recommend, but not something I would recommend so early in your career. Instead of putting your money away and letting it compound, I would highly suggest investing it in yourself because those returns will be way more than the compounded returns, which will ultimately give you the ability to put far more money away for compounding.

How to Save Money Without Losing All Your Friends & Family
If you're always running into this situation, here are some great tips:

1. Know what's important to you
   'My philosophy is to only be stingy with things that don't matter, but generous with things that do'
2. Come up with better alternatives
   Instead of going out to karaoke, why not suggest going to listen and sing along to live music?
3. Be the voice of reason
   Within your groups, most people are probably struggling with money and are afraid to admit it. So by being the voice of reason, you're able to help them improve their own finances.
4. Win some, lose some
   Unfortunately there will be some people who not only refuse to compromise, but will throw a lot of negative energy at you. You must, at that time, be willing to let them go as that emotional drain is definitely not needed.

Know The Difference Between Good Debt and Bad Debt

By definition, a debt means you borrow money from another individual or a financial institution for a period of time for which you will pay back the amount you borrowed along with interest. For most of us, taking on debt via loans is necessary because we often don't have enough cash to make essential purchases. What makes debt good or bad, however, is defined by the impact that it will cause in your financial life; whether the impact is positive or negative.

Good debt is something that improves your financial situation in the future. These could be things such as growing your business, improving your skills and expertise, and, if done correctly, investing.

Bad debt is money that is not adding any financial value into your life. These could be things such as credit card debt, phone loans, cars, etc.

DividendMagic Taught Me How to Read Financial Statements and Buy Stocks
If learning to invest is one of those things that you've always said to yourself, then here's a great place to learn the fundamentals.

I highly suggest you go through this whole thing, try it out for 5 companies and once you're done, see how you feel. If you found the whole process fun and insightful, then you have a high chance of being successful by buying individual stocks.

If on the other hand, you're not making progress, find the whole thing stressful, and don't see this being something you'll enjoy anytime soon, then maybe choosing specific stocks are not for you. At that point, I suggest sticking with unit trusts or other things that you do enjoy and can turn into a profit.

Me? I'm definitely in the latter category. I accept it and I focus my time on real estate and building this website up with the goal of being able to have enough people following that I can negotiate exclusive deals with companies to give us all cheaper access to their products and services. That's a lot more exciting for me.

International

Sometimes Pumpkin Passion Pays off Big

Last month, Steve Geddes of Boscawen, New Hampshire, took home a $6,000 prize for his 2,528-pound pumpkin (the largest pumpkin ever grown in North America!). In 2016, Cindy Tobeck of Olympia, Washington, earned $11,460 for her 1,910-pound pumpkin. Oh, my gourdness, that's a lot of cash!

What do you spend a lot of time doing that you can call a passion or hobby? How can you potentially monetise it so that you can spend time doing what you love AND have it contribute to your future (which could be buying back time)?

Share with us on the facebook group!

What Everybody Is Getting Wrong About FIRE
FIRE stands for Financially Independent; Retired Early. It's a term that's only starting to catch the eye of traditional media and I'm sure you'll be hearing more about it everywhere in the future.

Here are some FIRE facts that this writer believes in (and he's been living this lifestyle for as long as I've known of his work, so that goes to say something)

• This is ALL WINNING and there are NO DOWNSIDES
  Because the whole reason for doing any of this is to lead the happiest, most satisfying life you can possibly lead.
• It Doesn't Matter How Much Money you Make
  At the core, these FIRE ideas are simply about taking some solid math, combining it with principles of human happiness, and then distilling it down into a list of simple tactics that will get you way ahead in all areas of life. The benefits go way beyond money.
• FIRE Is Not Really About Early Retirement
  For most people who get there, Financial Independence does not mean the end of your working career. Instead it means, "Complete freedom to be the best, most powerful, energetic, happiest and most generous version of You that you can possibly be."
• You Can Be Happy on ANY Level of Spending
  Happiness is your goal in life, and it comes from meeting certain core Human needs. The thing is, that there are many ways to meet each of these needs - some of them free and some of them shockingly expensive.
• It Doesn't Depend on A Booming Stock Market
  People who are on the path to the FIRE lifestyle are the ones who fully understand their emotional and financial needs. They are the ones who are not leasing items that they don't need to. They are the ones who know how to live without relying on an excessive amount of money, and they will be the ones who will still live a similar lifestyle if and when the stock market collapses.
• Education, Health Care, or High Cost of Living areas are Comically Tiny Obstacles

The potentially costly monsters mentioned above are simply things that cost money. So if you get better at managing your money, do you think these problems will loom larger, or smaller, in your life?

• The Only Thing To Fear, is Fear Itself

If you are afraid of what might happen in the future, you have a mental problem rather than a financial problem. So you should work on that first, by training your mind and body

• Place Your Bets Where The Odds Are In Your Favour
  What's more risky? Working 10 extra years in a job that you hate, stresses you out, so that you can have more money saved in case you run into health issues i the future OR quitting the job now, investing those 10 years into living a healthier, less stressed life, building a diverse set of skills and more importantly, focused on you instead of your account?

I wouldn't call myself a FIRE follower, though the way I'm planning to live my life is definitely geared towards that. I guess I just phrase it as how can I spend more time doing what I enjoy.

What do you think about the FIRE movement? Share with us on the facebook group.

What's Important About Money to You?

For example, money offers security and peace of mind to a lot of people. It was a common thread in the answers of many women I spoke with in particular. Having a large security nest egg, owning safe investments, and feeling secure about your future tie in with that feeling of financial security. It means you don't have to worry about money. You can focus on your life.

Besides looking at money as money, have you ever thought about the emotional needs that money fills for you? Once you have an answer to that, it'll be much easier for you to understand what type of money advice makes sense to you.

As the writer says: it's not about the money - it's about your life.

Cool Opportunities

I have decided to show these opportunities to you because I believe that they are some of the best ones out there and in many cases, are ones that I am personally involved with or am looking to get involved with.

BigPay - The Best Travel Credit Card for Malaysians?
If you ever travel out of Malaysia and use your credit card, then this is BIG (pun intended). AirAsia has released BigPay, a prepaid mastercard that you can easily top up through the BigPay app and be able to use instantly.

But more importantly, BigPay charges you at the real exchange rate (which means they charge no fees). This is something you won't get if you were to go to your bank or some exchange counter.

In fact, I plan on only using this when I go to Toronto in December.

Anyway, if you don't have one yet, you can sign up for free and get RM10 free when you use referral code B7D3YNZPGO.

Talking to an Independent Financial Adviser
A big issue when you work with someone who calls themselves a financial advisor is you do not know if they really have your best interest at heart. That's one of the main reasons why I never work with any (the other one is that most of them get trained to say what the company wants and thus, do not know of all the other cool opportunities out there).

However, I've been talking to an independent financial adviser the last few months and I do believe that not only is she knowledgeable, but also super open to sharing her knowledge.

If you're interested in talking to her, join our facebook group and ask your questions. She will definitely find time to pop by and answer them.