my financial journal

Better Invest In ASB If You Are Not A Risk Taker

Mar 16

Photo:zen

I have put some money, for the purpose of investing, into a unit trust fund where it concentrates an investment in China. At that times, I felt like — wow!! — Beijing at that time was going to hold the olympic games. There would be money pouring in like sambal belacan in the afternoon.

Well, I was a greedy bastard that I couldn’t care enough to follow the agent advice; this was a high risk investment. So, he couldn’t guarantee how big the magnitude of loss would be.

When there’s a high risk, there’s a high financial gain. That’s what I thought at that moment.

Jacquilyn wrote:

For those who are not risk takers and prefer the comfort of consistent returns can place their money in fixed deposits or in fixed-income instruments. That way, they know the exact returns from their investments no matter what is happening to the interest rate. The good news is fixed deposit rates will also go up giving the investor higher returns. However, bondholders will be negatively affected but will benefit those who buy in after the rate hike. The general advice is to keep yourself updated on local and world economic situation and adjust your investment portfolio when necessary to protect your money.

Here came the nightmare; the unit trust price per share plummeted from RM1.00 to RM0.20. I slapped myself in the head because I learned that the China economy was not doing very well despite the Olympic games — there’s a few natural disaster — that I could see my money flew away. Kaput.

I realized that I’m not the man who can dealing with the risk very wise. I could go mad, and stay mad for a long time if I experienced a financial loss.

I should stick with ASB then.

[What should you do when interest rates rise? via KCLau]

Money can buy you a valuable time

Apr 26

It was 10.30 p.m. and my wife started to call my phone several times. When I was driving home from office after a hectic task, I listened to Mix.fm and DJ Radio was mumbling about the relationship between you and your love one and several ways to spice up your intimacy. And then He said something that interest me about how a gift can aid a serious situation, I turned my volume up and listened to it very closely.

You need to learn how to trade money with the time. This is not the exact word from DJ but it sound something like this.

”Men who often working late and always hardly find spare time to be with your wife or your girlfriend, don’t forget to buy something nice before you step into the house. Purchase anything that can bring a smile back to her face because she’s so bored and out of skull waiting for you”

It inspires me that actually money can buy you time. It is hard to find balance between work and life. My work requires me to stay back so often because there are many unfinished tasks. It’s hard to leave my wife alone at home. Sometimes my wife frowned at me every time I went home so late. I appreciate her and her time, waiting for me to have dinner together by bought her favorite chocolate or ice cream

Things I already gave her.

Laptop.
My bonus. i gave all my yearly salary to her and hope she’ll spend it wisely.
Lot of fine chocolates-my useful defensive tool before she gets mad at me because I come home really really late.

When you are coming home late, don’t forget to purchase something that really nice for your love one. Something that less expensive but can be used as a gift, it a big relief for your love one that has been waiting for you for hours to come home.

Technorati Tags: journal, money, time, financial journal, radio,

My baby grows up rapidly, as well as our expenses

Apr 21

As at 21 february, my son is 2 months and 2 weeks old and he is growing up so healthy. He started to roll on one side but unable to complete full roll, may be next month. His neck grows strong and his arm muscle grows stronger.

As our baby is developing rapidly, our expenses is expanding as well. In order to cater our baby’s need, there a lot of purchases on baby items lately. We had to use some of our savings to buy for one-time-purchase items which involved big amount that excess our pocket money.

Here I point our baby boy’s expenses. We try to spend on average, and try not to overspend on extravagant baby’s items. Before we bought something cheap, we have to analyze each item whether the item provides good quality to our baby.

Regular expenses

1. Pampers – RM 200.00.
Many people complain about Pampers diapers that always cause leaking and frequent changing, but our baby is fine with this diaper. He didn’t at all and I didn’t notice the leaking so far.

2. Formula milk – RM 40.00 for 700 grams
We have tried a formula milk that fairly cheap which equals to our baby’s requirement (something to do with nutrition, i don’t know about that). But our baby got constipation after consumed that milk. We have to buy new formula milk due to his constipation.

3. Unscented Baby Wipes – RM 2.90 , Best buy at Tesco.

4. Monthly medical : RM 50.00

5. Clothes : more than RM 30.00 – I didn’t make proper calculation yet, my friend said the baby will grow up so fast it won’t fit the clothes that you bought now. So better not to buy many clothes for the first 3 months.

One-time-purchase expenses

1. Cradle – RM 79.90 – my baby will not sleep without this.
2. Baby Carseat – RM 159.00 , 20% off at manjaku – this act as a safety seat for our baby.
3. Stroller – free, my wife got present from her office, we save money on this one.
4. Small closet – RM 49.90
5. Big basket – RM 15.90
6. Others – baby bottle, thermometer, baby bed, bag etc. – RM 300.00

This is our baby’s expenses so far. For regular expenses we expected to amount about RM 3874.80 per year. One-time-purchase expenses are RM 604.80. We didn’t our baby boy’s expenses because it is still under our family budget. We didn’t include the babysitter monthly fee which costs us RM 200; we got the best deal from my wife’s friend. I would say that it is affordable service and our babysitter takes a good take of our baby boy.

Technorati Tags: parenting, expenses, budget, pf, savemoney,

My Money or My Baby Boy

Apr 18

Save money on milk
My wife has completed 60 days of fraternity leave. She couldn’t give breastfeeding all the time, so we decided to buy supplementary formula milk that is cheap and adequate to our baby’s need. We want to save our money on milk that supplies maximum nutrition at the same time. We
chose Dutch Lady Formula milk step 1 as the breast milk substitution. It was our best choice because the price was at RM21.90 per kg and it enrich with DHA, taurine, and vitamin C. Beside, it achieved our objective; finding the best value for our money.

Constipation
My baby didn’t pass a stool for three days after consume the milk. Then, I felt a big relief after day four when he made his bowel’s movement but three days after that, he didn’t pass a stool. He got sick and cried all day long We’re getting worried and seek a doctor’s advice. The doctor told us that we should switching other different formula milk that contained no lactose to prevent constipation, it’s a little bit burden because of high price but we have to consider health of the baby. The milk that we bought before was cheap and full with nutrition that fulfill our baby’s requirement but it has no formula for constipation.

We made a mistake
We thought it was appropriate to use save-money approach for baby’s expenses but the outcome would jeopardize our baby’s health. We made a mistake, we shouldn’t that approach. What’s best value for our money is our baby boy’s health.

Money and Five Things I truly hate doing

Apr 14

This post was inspired by simple dollar’s article: reflection on money and I want to share with you on how money can reflected by five things i most truly hate doing.

”what five things do you most truly hate doing? You hate thinking about them and doing them in everyway? Are these in any way worth the reward you get for doing this?”

1. Go to work.
I hate to go to work. I hate my company. I hate everything in the organization. But I have to face a reality. I keep telling myself that I need to show my commitment to my job, working efficiently from 8 am to 5 pm, and be nice to every one.

My job is my only source of income. I have to do it to financially support my family expenses; I keep working as I feel responsibilities as a leader of family. I wish I could do something that I love for a living but I can’t. I still put my greatest effort to land my dream jobs.

My dream job is self-employed and working at home, take care of my children, enjoying every moments together, and be the greatest father to my loving children.

2. Make a monthly budget.
I admit that I didn’t like to do a monthly budget and I wish I could spend my money with nothing to worry. But I think again, my family does need a budget, We could go broke if we didn’t supervise our cash flow. Although I hate doing this, but worth it, when we know where our money went.

3. Help my wife doing housework.
Laundry, cooking, house cleaning, and changing diapers – those are the things that I didn’t really into it. I’m doing housework because I want to treat my wife as a partner, not as a housemaid. So we tolerate each other on many things not only on housework matter, that what’s marriage is all about.

4. Saving my money instead of buying things I desire
I was sweating bucket when I look PS3 through the glass of the gaming outlet in mall, I had to hold on my desire of buying that gadget. I have money and it’s enough to buy it but I must set aside that money for savings. The truth is, I hate saving my money. The reason I save my money and go for the right investment is because it will reward me someday in future. It is good for me and my family to build up wealth early, I rather hate today and not having regrets tomorrow.

I cannot think the number five that I hate doing things regularly because my life is full of happiness recently. I have a loving wife with my newborn baby boy that excite my journey of life.

It’s time to think about life insurance.

Apr 07

My life has emerged into a lot of changes since I’ve got a child to take care of. I’ve become more commited to my family, I spend a lot of time at home helping my wife changing diapers. When think about my son, I think about financial security. After all this time, I have no insurance that acts as the safety net when disaster happens. As my son opened his eyes to a new world, I know that it is time to think about insurance.

Choosing the right life insurance.
A wise decision has to be made when it comes to choosing the right insurance. I need help from someone professional to choose what the types of life insurance that can really suitable with my family needs and protect against all debts, life expenses and school fees, and other expenses. A lot of question playing in my mind such as Can my wife and son survive without me? Can she pay all the debt that I’ve done?

Understanding the basic terms and types of insurance can help me to make my decision. Deep knowledge about life insurance can gives you the ability to manage your finance wisely and easily and you’ll be able to know what types can fulfill your beneficiary needs.

+Major types of insurance.

1.Term insurance

2.Whole life

3.Universal life

4.Variable life

For further and detail explanation, read life insurance on wikipedia.org

The article of how to choose life insurance from wikihow gave me some good point that I have to consult with financial advisor or expert. Searching guide online will not help me much and it will make me blur and uncertain. When consult with financial advisor, you can discuss more details about current situation, financial asset, current risk, liabilities, and others.

How to find the right amount of insurance.

I was having a hard time to calculate the right figures to adequate my family needs in future. Too small amount can distort my family’s financial in future, too large will burden myself to pay monthly premium and can hurt my current finance.
After reading How to Determine the Amount of Life Insurance You Need at freemoneyfinance.com, my understandings became clear as I can calculate easily. The amount of the insurance should be:-

“The formula is Future Financial Needs minus Current Assets
equals Your Current Risk. How much you want to provide for your loved ones should you predecease them (A) minus how much you have that could be used to provide for the survivors (B) equals your surplus or shortage (C).”

The article also mention about the six items that are accountable when calculate futute financial needs;

1.debts,

2.mortgage,

3.education,

4.final expenses, and

5.family income.

What matters the most among the six items is debt, you must free all the debts, let them fly away because you don’t want them haunt your family when you’re gone. The ability to liquidate all the debts is big relief to your family.

Choosing the right life insurance and the right amount has to be made by wise decision, it is neither simple nor easy. I guess I need to get a consultation with financial expert that can be found around my local area. There is a lot of things I need to discuss and get advice about my financial matters.

Money and Five Things I Most Truly Love Doing.

Mar 31

This post was inspired by simple dollar’s article: reflection on money and I want to share with you on how money can reflected by five things i most truly love doing.

”what five things do you most truly love doing?.Think of the things that you both enjoy in the moment and also enjoy looking back on later. Do any of these cost money?”

Watching movies
I used to watching movies with my wife every week because we both love it. Usually we didn’t care about the genre or the title of the film since we have an activity that we are both enjoy. Well, one ticket costs me RM11 and we spend our money at cinemas about RM88 a month.

Walking on the park
The best activity that we both love doing is walking on the park or garden. We both sharing our stories or our favorite topic of the week and walking around and never stops talking and laughing.

Take Photographs
My wife loves so much in taking photos, she brings camera plus her cameraphone wherever she goes. She pushes the snap button when something caught her eyes. We happily doing this together and it involves no money, except for the initial investment to buy the camera and cameraphone that cost us RM1900 and the cost of printing the photos.

Read something at book store outlet.
On Sundays, we spice up our bored life by reading books and magazines at book store outlet that allows us to read more than 2 hours or so. This costs us nothing and we gain something valuable by doing this. Actually, we want to do this reading activity at the closest library but they don’t open on Sunday

Visit our friends and relatives.
We often visit our families to make sure the valuable relationship is heathly and continuos. Yes, we enjoy doing this activity and delight every moment of it. We surely have to bring something nice like fruits and chocolates but not necessary expensive. If our friends and families visit us at our place, we have to buy a decent dinner for them, and involves some money but it worth spending. Togetherness brings happiness and laughs; it shares our feelings emotionally.

The end of cheap food, in Kota Bharu

Mar 24

For five days I’ve been in Kota Bharu to visit my parent in law to celebrate our newborn baby. As early plan, they suppose to visit us at Hospital Putrajaya. But sadly, they couldn’t travel all the way from Kota Bharu because of my father in law’s condition. Both of them were excited to meet our son.

First time my plane landed on Kota Bharu, I was eager to go to my favorite food stall – Gerai Jaimah Nasi Kukus. After unloading all my stuff at our parent’s home, me and wife went to eat at the stall but only to learn that the price has increased 40 sen; from Rm3.50 to Rm3.90. The increase of 11.4% gave a little bit burden for the ones who love to eat Nasi Kukus in Kota Bharu because all the Nasi Kukus Stalls also have been infected.

Beras Siam or Siamese Rice also has increased sharply according to my mother in law. For 25kg of Siamese Rice price only at Rm42 but after the general election, the price chalked up three times in a short period of time. See this table for simple explanation:

Cost of 25kg Siamese rice
Before Election <8th: RM42 ,
After Election >8th Mar: RM55, RM62
As at 23 March 2008:RM67

The rising price was frustrated because me and my wife have planned to bought 25kg of Siamese Rice and bring back to our home. It is one of my methods to save money on groceries and I think it is the best way to save; balik kampong every four month and buy Siamese Rice.

Other foods have increased in Kota Bharu recently:
+Tapai Ubi (Breakfast) – from RM1.00 to RM1.20
+Nasi Lemak – from RM1.00 to RM1.20
+Fried Rice – from RM1.50 to RM2.00

Even though the price increased on most major foods in Kota Bharu, it is still economical compared to foods and groceries in Selangor. I’m still amazed that fresh orange cost me 60 sen when I wandering around at Pasar Malam.

For all I know, the inflation has invaded the land of Kelantan, especially in Kota Bharu. Just don’t overspend for unnecessary items or ignore the price hikes- be careful, learn how to fight inflation. Here I suggest my own How I save money.

My father and his brand new Bravia.

Mar 17

I usually sleep at 10.30 every night. One night i was about to sleep, my father knocked my door and asked if I didn’t mind set up his new TV he just bought from Sen Heng.

‘Why dad bought a new TV? Our TV at hall didn’t show a sign of malfunction yet’ that was the question crossed my mind and i was surprised to see Sony Bravia box at the back of the car. (Nice Bravia ad)

After setting up the luxurious 32 inch Sony Bravia LCD TV, I asked my father:

Me: Dad, why did you actually buy this TV, ours didn’t broke yet?
Father: I was getting bored waiting your mom’s to finish her aerobic class, so I entered the store and bought TV and Laptop.
Me: A laptop? You just bought PC last year. Don’t you think it’s kinda wasting?
Father: Nope, it’s kinda mobile. I can go online wherever I want.
Me: Ok dad, it’s your money and I can’t argue about that.
Father: Relax, son! It only eats me RM150 a month.

My father has the purchasing power of four times better than me and his desire is likely four times than mine. He has less commitment and responsibility than before – what I mean here is that he only finances my younger sister and my brother’s cost of living and education. His other four children have live on their own feet and don’t need financial support from their father anymore.

As a conclusion, my father has a lot of money with low expenses, so he started to strike off all the things on his wish list.

Cooking our own meal. Save time vs. save money.

Mar 13

We know that the consumer goods are increasing recently. With the non-consumer goods are likely to escalate as well, me and my wife decided to cook at home rather than eat at restaurant.

But there’s other thing needs to consider and that is time. It is as valuable as money also. Money can be regenerated but time is irreversible. You cannot turn back the time no matter what.

Cooking at home does save you a lot of money. You can see the differences if you dining out. Let’s see if you eat restaurant, the price of a cup of rice is RM1.20. A cup of rice only costs you RM0.20 if you cook at home.

Cost of meals if we eat at restaurant:
Fish (2 persons) = RM 5.00
Chicken (2 persons) = RM6.00
Vegetable (2 persons) = RM 3.50
Total = RM14.50

And if we cook at home:
Fish (2 persons) = RM1.50 (saves RM3.50)
Chicken (2 persons) = RM2.00 (saves RM4.00)
Vegetable (2 persons) = RM1.00 (saves RM2.50)
Total = RM4.50

We save about RM 10 a day if we cook our own meals. In a year, we save about RM3600.

Cooking at home may eat up your time over an hour if you want to serve 3 dishes of food. Dining out actually save you a lot of time. Just choose any meal that you have in mind, call up waiter and order. In 15 minutes, your food is well served and ready to eat.

You save 1 hour when you eat at restaurant but cost you about RM7 per person (RM14.50/2). For one hour, you can many productivity things like writing, exercising, email answering, reading and many more.

As my opinion, eat at restaurant is for busy people whose time is precious and valuable item and it is not a good decision to cook at home despite it saves money.

For the ones who have family like us, it is the best for our money to cook at home plus we can spend time together doing the activity that we love.

How can I get 80k by just saving RM100 every month.

Mar 12

Last year, I have invested in one mutual fund called Public China Ittikal Fund managed by highly acclaimed Public Mutual Bhd. Last night I try to draw the illustration of 20 years of investment to see how my money growth in that period.

Below is the table of 20 years of investment with the interest rate is considered constant 10% every year.

Why 20 years?
My previous post, I’ve stated that my goal is only 12 years of investment. But now I think 20 years is a good measurement for a long-term goal and I believe it is the best for me for not to take out that money before it hits 20. With an increment of RM 1200 deposit every year, I can get over RM80,000 when I’m 43 year-old.

What do you need to get RM80k in 20 years?
I need a steady saving of RM100 every month without a miss to get RM1200 in a year. It also needs discipline and strict budget. It’s not easy to wait for 20 years of investment; it requires patience in my heart to get over my greed to fulfil my goal.

Will the interest rate goes 10% every year?
No. It is only the drawings of 20 years of my investment with 10% steady interest rate. We should be well informed that the interest rate will go up and down throughout the years. Let’s hope it will give us the average of 10% every year.

PCIF is the favourable mutual fund in Malaysia. See why I chose PCIF as my first investment.

My Ringgit has gone wild and uncontrolled.

Mar 03

Last month’s expenses exploded suddenly because of unexpected events happened. Emergency situation and other things turn out beyond my expectation. Here, I list down what have occurred last month:

+My eyeglasses frame was damage, went to repair, and break again. RM 160.00
Consider it emergency case because it broke unexpectedly and I can’t live without my eyeglasses, I’ll go blind. So I have to use my emergency fund to pay a new frame because my current frame can’t be repaired.

+Labour fee: RM420. Prepaid call card in case of emergency: RM60.00. Massage for new mom: RM150.00 Other Medical Expenses: RM 110.
My wife had delivered our cutest little baby on February. I already separated for labouring budget in emergency fund and I don’t have to worry about insufficient money when it comes to medical expenses.

+Flight for Balik Kampung : RM86.00 + RM285.00
I planned to visit my parent-in-law and share our happiness of our newborn baby. Ok, I’m not supposed to use emergency fund for this kind of purpose, but I have no money left. I reluctantly used it and I know I broke the emergency fund rule.

+My little nephew throw a rock to my back glass pane of car for fun: RM350.00
At that moment, I felt furious and I really spanked my nephew for doing that thing. New back glass pane cost RM350.00. I really need to use the car and so I drew out my emergency fund.

I’m glad I have emergency fund that covered all these unpredicted expenses and I feel a little bit relief because my regular monthly cash flow ran smoothly without heavy distortion. As at 3rd march 2008, my emergency fund decrease 70% and it may be takes a while to recover. My goal for the next three months is to concentrate on raising emergency fund and I’ll set aside my money for RM300 a month.

What I’ve learned from this situation.
++Unexpected things happen and we need to get prepared when they come.
++Emergency fund is useful when in case of emergency.
++Emergency fund is a mandatory thing for everyone.
++It gives you financial safety net, so your cash flow didn’t blow up.
++Don’t use your emergency fund for fun, travelling, high tech gadget, and others.

I might be in the financial stress if I don’t make an emergency fund a few years back. I’m very thankful because I have no money problem when handling unexpected event.

Living with one income: Tips from Parent.com

Feb 28

My wife and I discussed about whether my wife want to be 24/7 mom, quit her day job and take care of our baby.

After I did the calculation at stay-at-home calculator, my result didn’t show positive figures. It is better for both of us to work because my income alone is inadequate to tolerate with our cost of living.

Parent.com gives us tips and strategies on how to live with one income, but it told us that we have to watch our financial situation more carefully.

These are the tips and strategies:

++ You need to cut spending, so start with the cuts that will offer the biggest payoff. We need to live with tight budget. It also considers move to less expensive neighbourhood. But I need to think deeply about moving out.

++ Know what’s really important to you. I know what’s important to me. Family security and health is my no.1 priority. Saving and emergency fund come in second.

++ Work on building a stash of cash for unplanned emergencies — especially unplanned medical emergencies. I’m working on it. My strategies run as it planned

++ Cut your car insurance premiums

++ Take your spending off of auto pilot. I’ve been monitoring our both personal expenses, groceries, and others carefully

++ Shop with a list — and be militant about sticking to it. It becomes my habit to write a listing before enter a shopping mall.

++ Reign in the small stuff. We set an allowance or pocket money for both of us and keep it separates from home expenses and groceries.

++ Put your money in envelopes. Great idea. Ok, I’ll give it a try using this method.

++ Look for creative ways to make up the difference between expenses and income. Good idea on getting a part-time job. I’ll try to evaluate whether our family needs more money or needs more expenses to cut.

++ Know your tax situation.

++ Make sure you can make do without benefits.

How to use credit card for daily expenses

Feb 25

Many people thought that using credit card is a first step to bankruptcy if you just mount up the credit balance. The interest is ridiculously 18% – 27% and it can bury you deep into huge unpleasant debt and you can’t get back. But if you use it wisely, you may find credit card isn’t that bad like other people said. For me, it gives you a lot of benefits and I commonly use my credit card to pay my daily expenses.

How to use credit card for your regular expenses

+take advantage of interest-free period.
Pay your balance in this period of time. My credit card has the 20-days interest-free period and I fully utilize it to pay off my balance. See what is interest-free period or grace period

+make sure balance is zero every month.
Financial charge occurs after the interest-free period expires. Do not waste your money paying interest that you can surely avoid. Pay full amount of balance every month.

+make a list of things that you really need.
To make sure that you’re not desirably swiping your card for any unneeded item, make a list before you enter the shopping mall. Just fight your temptation whenever you see something nice and interesting. Remember, stick to the list.

+Pay bills through credit card.
I usually pay electric bill, Internet connection bill, and water utility through credit card every month.

+Avoid buying things that you cannot pay back.
Do not use your credit card for buying something that values more than your monthly income or something that you can’t afford to pay back in a month.

What are the benefits of using credit card wisely
+Increase Credit rating
If you use credit card regularly and pay the balance accordingly, your credit rating is likely to increase and you can easily apply for any loan.

+Gain bank’s confidence
The bank sees you as a discipline customer and the bank gains confidence in you. Your reputation rises as you pay your credit card statement regularly without a miss.

+Pay your regular bill in one account
It is convenient to pay your bills in one account. It’s better if you do an automatic debit from your credit card rather than pay bills through over-the-counter method. Save money, petrol, and time.

+Get redemption points from credit card instead
Take a look at your credit card offers for gifts and other benefits. My credit card (Maybankard Visa) offers treat point in every ringgit I spend. Accumulated point that I’ve collected can be traded with gifts and items show in the catalog.

Beware, do not use credit card for the purpose of
Please no matter what, do not use credit card for
++borrow cash money from credit card.
++buying new luxurious hand phone.
++pay your down payment of your new car.
++purchase laptop and computer.
++buy game consoles: PS3, nintendo, xbox.

But if you do so, you may dig your own grave of debt. Credit card may gives you a lot of benefits if you use it wisely. One of the big advantage that I mentioned above is credit card can increase your credit rating.

Other articles on how to use credit card wisely.

My rules of using credit card on myopenwallet.net
Bankrate.com has an interesting article about this topic

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