The Best Personal Finance Summaries – 28 October 2019

We're excited to introduce a new part to More Money Malaysia and that is a weekly video.

This will be a test that will run the rest of this year but each week we will introduce a video. These videos will be summaries of some of the best personal finance books. So instead of having to read them yourself, we've broken it down for you.

From Us

[VIDEO] Book Summary: The Richest Man in Babylon
How do you become rich even if you are starting with 0? The Richest Man in Babylon shares exactly that.

We go over the 5 main take aways from this classic book as well as the 2 action steps you can take.

Reply to this email to let us know what you think or what you would like us to summarise in the future!

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Money in Daily Life

Pros & Cons of 4 Part Time Jobs for College Students in Malaysia

In fact, doing a little work is right for you, beyond the apparent income factor. If your parents make noise, tell them HSBC-led research said that ‘the academic performance of students who work 10-19 hours per week is superior to their peers’.

In one interesting article on Ringgit Oh Ringgit, Suraya shared her personal views on the pros and cons of 4 current part-time jobs among college students. They are best summarised as below:

Jobs Pros Cons Places to Browse Jobs
Booth attendant/ Promoter Good and quick money. Opportunities arise during festive seasons. Tiring. Competitive. Parttimejobs, Upal
Focus group Great money. Easy. Fixed timing. A rather strict requirement. Not immediate. Can be spammy. OpinionHero
Service jobs Autonomy. High-income potential. Have to learn marketing and networking. Need to differentiate yourself. Any job listing sites.
Uni student jobs Convenient. Easy to find. Have perks. Don’t pay well. Student centre.

Not All Income Is Created Equal

These days I care a lot about how I earn my money. And my favorite income is naturally the nontaxable variety. My least favorite income is the type that requires not only income tax but also other taxes such as employment taxes.

3 Types of income

In general, there are 3 types of income, namely:

1. Earned income

  • Money made from your work.

2. Portfolio income

  • Money from capital gains.

3. Passive income

  • Derived from real estate, royalties and distributions.

Convert ordinary income into passive income

Not all income is created equal. Passive income, generally, is taxed less when compared to earned income. Therefore, the key to growing wealth is by converting ordinary income into passive income to minimise tax rate!

Understanding how different types of income are taxed will help you to achieve your financial target. If you do not know how to do so, consider consulting financial assistance to leverage the actual value of your money!

Do check out the original article from the link above to read an interesting analogy by the author on how different incomes are taxed.

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Grow Your Wealth

How should Freelancers Manage Their Money?

I always wonder what is a fundamental sound framework to think about managing money if your income is not very stable. It bothers me because I seemed to have an idea that as freelancing and doing gigs get more popular, there will be more people struggling to save and manage their money well.

As the gig economy is gaining ground, Kyith from the Investment Moats voiced his worry regarding people’s general inability to manage their volatile income.

Why Income can be Volatile

The author started by mentioning the volatile nature of the free-lancing works, such as the income, frequency of projects and payment schedule. However, the writer also acknowledged that the problem could be solved by getting better and buffer. It is surprisingly similar to working a salaried job or on your own business!

How you should Frame the Money Game

Also, Kyith compared managing money as a gig worker similar to that for a retiree. There is a need to create a sustainable spending plan. The main difference is that the freelancer has to emphasise more on savings. Therefore, he suggested that fellow gig workers view their money management in 2 phases.

1. Business Building Stage

At this stage, freelancers should go into “siege mode” or “living like a student mode”. Their income is low and volatile. To ensure the money last longer, it is vital to categorise spending accordingly to the “Essentials” and “Less Essentials”. Apart from optimising the expenses, Kyith also suggested saving 3 months of essential expenses as emergency funds and applying You Need a Budget (YNAB) technique to live on last month’s income.

2. Stabilized Business Stage

For most freelancers, their income has grown considerably at this stage. However, it’s still not consistent. Similarly, spending categorisation would be needed – but they can have two more expenses now, namely the “Constant Savings” and “Good-to-have Savings”. These two groups serve to fund future goals and liabilities.


There are a lot more insights being shared by the author to systematically and efficiently managing money as a freelancer. Read the full article from the link above!

The Cost of Being Employed in Malaysia

We think of employment as money coming in, but what if we told you profession also means money going out? We explore the hidden costs of a job.

It turns out there are some hidden costs which most of us may not have considered when taking up employment and the ways we are paying to work.

1. Lunch, Dinner, Takeout and Coffee

Most Malaysians do not realise that we could easily spend RM 10 to 20 for meals daily. They add up and eat into a large chunk of our salary!

2. Commuting To and From Work

A big city, you are prone to spending a significant amount of time and money commuting to work. Fees for parking and petrol quickly add up to approximately RM 500 a month! Not to mention, the time spent stuck in rush hour traffic jam. Some might suggest using public transport – but currently, it is too inconvenient and time-consuming.

3. Professional Wear

To look presentable at work, most of us would need to spend to improve our wardrobes. However, wardrobe allowance is rare – we would have to pay them ourselves.

4. Medical Conditions Down The Line

Healthcare in Malaysia is expensive. Commitment to work can easily cause mental and physical conditions to our body. Therefore, we should consider potential medical bills as well!

5. Services That Make Our Lives Easier

Due to a busy work schedule, we need to pay for services that make our life easier, such as dry-cleaning or hiring a maid. They are not cheap.

6. Retirements, Farewells, Birthdays and Office Events

Ultimately, workplace events are inevitable in any corporation. Small contributions can add up to a sizable amount of money!

7. Taxes

Unfortunately, income derived from employment is taxed higher compared to other forms of passive income. Although for the greater good of society, the fact remains that taxes are still an added cost of working.


All these expenses combined, add up to a significant amount of money. For average Malaysian in Klang Valley, they might spend up to RM 2,050 per month as hidden costs! Therefore, the best you can do is to minimise your workplace expenditure!

How to Get Rich by Buying a Franchise (Really)

It’s promoted as a way to gain independence and build wealth, but entrepreneurs need to know what they are getting into first.

When an economic cycle is at its height, there’s a risk that people will move too fast into a new franchising concept and not do enough due diligence, which could lead to a dream of wealth turning into a nightmare of loss in a recession. Most people have a misconception thinking franchises are businesses that fare well in a recession. But, this is not true; they are susceptible to downturns as well! Here are some questions to consider.

Pick a Winner

Even in growth areas, not every franchise is a winner. Firstly, it is essential to focus on the return on investment and unit economics to know the underlying industries better. Secondly, branding matters – consistency and expectation are usually ingrained in the name.

Get Corporate Support

Unless the brand is already widely known, like 7-Eleven or Midas, what the franchisees receive support from corporate headquarters can determine whether they build wealth. The most successful franchises focus on technology and systems that create a repeatable experience for consumers. It is the business elements that count the most: sales, marketing, finance, technology, operations, human resources and whom you have on your team.

Understand the Risks

There are downsides, including the risk that the franchiser may not be well run. Potential investors need to take the competition, the economy and changes in customer tastes into consideration. Another chance is an oversaturation of the concept in one area. Thus, one way to mitigate this risk is to spread it around.


As one interviewee put it nicely, “You can’t expect the franchiser to do everything for you,” he said. “Ultimately, you’re an independent entrepreneur and have to work your tail off.” Getting into the business of franchising is not easy! However, this article should give you some ideas on the relevant insights into the industries!

Profit From Art Isn’t Dirty. It Means: Make More Art.

People in the artistic community sometimes see money as somehow dirty. The art should be its reward.

Sometimes, artists do not think profit is vital in their trade. However,

1. Artists generate income from their work.

2. Artists have expenses.

3. If income is greater than expenses, it’s called profit. Profit allows artists to focus on having their art as their day job.

For artists, the goal is to have the financial freedom to give the art the attention it deserves. To achieve so, there is no better way than to profit from artworks! It is not dirty – but, practical.

The author, Carl Richards from The New York Times argued that while most artists despise profiting from their works, it is necessary sometimes. He went on to tell his past stories on how he started from a similar mindset. He never considered selling them, but the interest was there – so he just went with it. At last, he realised the profit he made was effectively the permission slip for him to pursue the next project.

The writer then came up with a conclusion that making a profit from artworks is part of the creative process. The business is part of the art. “Profit makes it possible to do more art. And isn’t that what all artists want — permission to keep making it?”

To summarise, it is a novel insight from how artists should view and manage their money. Some lessons could be extracted to be applied for us as well!

How Much Should Your Monthly Grocery Budget Be?

Your grocery bill can add up fast. From dinner entrées to snack items, the amount you spend makes a difference in your budget. Luckily, there are some guidelines to ensure you’re not overspending.

Monthly Grocery Budget

As a national average in the United States, the following table is proposed.

Family Size Suggested Monthly Budget
1 Person $ 251
2 People $ 553
3 People $ 722
4 People $ 892
5 People $ 1,060
6 People $ 1,230

The figures could be slightly adjusted depending on your location and dietary restrictions. Use a budgeting app or credit card statement to track your current spending and work towards a reasonable monthly grocery budget for you.

Purchasing Groceries vs Dining Out

On average, Americans spend 11% of their income on food – 6% on groceries and 5% on dining out. This could be a baseline for you to gauge your spending on meals. If you notice that you have overspent, reduce your grocery bills or frequencies to eat out.

Tips for Reducing Your Budget

1. Use Coupons

Some stores offer coupons with a discount, which could be found online. Make use of the coupons to save money. However, before using coupons, ensure that you do need the item so that you are not making unnecessary expenses.

2. Plan a Weekly Menu Ahead of Time

Determine the food items and quantities you need. Make a specific list before heading to the grocery store. Also, try recipes that use the same ingredients, so there’s less to purchase. Making bulk meals is one way to save money as well.

3. Bring Lunches to Work

Make your monthly food budget go farther by making lunches and bringing them to work. Inexpensive but healthy options include salads, sandwiches and dinner leftovers.

4. Buy Store Brands.

Store brands are cheaper than name brands. While the savings on a single item may not be much, when you multiply it across several products, there will be a difference on your bill.

5. Shop at a More Affordable Store

The differences in prices among grocery stores can be considerable. They can make a massive difference over time!

The Things We Do for Work

Then, one day, I was reading the book Your Money or Your Life, which offered a discussion of the concept of one’s “real hourly wage”.

The idea is a straightforward one at its core. Your real hourly wage is the amount of money you earn in a year minus all of the work-related expenses you incur divided by the total number of hours in a year that you devote to work and things you have to do solely because of work.

Trent Hamm from The Simple Dollar talked about his takeaways from the book Your Money or Your Life.

Some of the most impactful realisation by the author is that “all of the extra hours you give to tasks related to work and all of the extra expenses you have due to your work chip away at what you’re earning per hour, often quite dramatically.”
There are many hidden costs associated with jobs. Things like commute time to work, presentable dress, travel, extra work at home and so on. The straightforward advice is to encourage people to seek a different job, one that eliminates a lot of these costs even if the hourly wage is somewhat lower. But it’s not that simple for most people. Therefore, it is crucial to look for ways to raise that real hourly wage without switching jobs.

Reduce Your Overall Time Commitment

These strategies aren’t about reducing your actual time at work, but more about reducing the time you commit to tasks outside of work.

1. Move closer to your workplace.

Move 15 minutes closer to where you work is equivalent to adding 30 minutes of extra time to every single workday.

2. Telecommute as often as possible.

Telecommuting means that you work from home for the day, which allows you to drop the time commitment of commuting entirely. If you usually commute for an hour, but you can telecommute today, you’ve suddenly saved yourself an hour, which has a real impact on your actual hourly wage.

3. Put your phone in “do not disturb” mode often, and carefully adjust the settings in that mode.

Turn off the notifications regularly during your time away from work.

4. Multitask your lunchtime with personal tasks or other professional benefits.

Maximise your lunch break to get actual value out of that time. It can be networking for career prospects or fulfilling your to-do list.

5. Multitask your commute time, too.

Spend your commute listening to an audiobook or a podcast related to your field. The key is not just to leave that time as blank space. Use it for something so that when you’re at home and you have more actual free time.

6. Get maximum value out of your trips, and use them to multitask, too.

You could use it for the mundane task such as buying a gift; or for professional advancement such as updating resume.

Reduce Your Professional Expenses

1. Carpool.

Carpooling allows you to save on fuel, depreciation and maintenance on your car. Don’t hesitate to ask around!

2. Consider alternative methods of commuting, like mass transit, bicycle, or scooter.

Compared to driving a car, these alternatives can save you a fortune!

3. Telecommute as often as possible.

Similarly, you could save on the expenses of driving a car. Besides, you can eat at home to maximise your savings too!

4. Buy sturdy work clothes that mix and match well.

Make sure the clothes you buy are well made. Check all the seams to make sure they’re well-stitched so that they won’t be easily damaged.

5. Bring your lunch to work and start a “brown bag” club.

Rather than eating out with co-workers, start bringing your lunch bag to work and encourage others to do the same.

6. Keep some cheap non-perishable food staples in your desk for those times when you forget to bring lunch.

Sometimes, you’ll inevitably forget your lunch. The best way around that is to keep a few lower-cost non-perishable items in your desk that you can use for meals in a pinch. They are pretty inexpensive, and they can all work as a nice lunch in a pinch.

Final Thoughts

Having a higher real hourly wage is a great thing. It means that you’re getting more money in your pocket out of every hour you devote to your work or some task brought on by your work, and that means that you have more resources to spare, whether it’s more time or more money!

Cool Opportunities

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've already saved over RM 10,000 using this card (you can read about it in our BigPay Review)

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

A way for females to get free insurance
We were talking to our super humble financial advisor friend one day and she started talking about some insurance product for females that provides coverage for all these female related illnesses. But more importantly, the contract also states that all the premiums will be returned at the end of the contract.

Seriously something for all females to consider!

Building a financial roadmap
For those who are lost when it comes to tracking your net worth and using it as a way to create the ideal life, this is something you should check out.

We have worked with a financial advisor to lead you through building your own financial roadmap by yourself online.

And if you want them to do it for you (at a huge discount), you can make the request as well.

Check it out here!

Talking to an Independent Financial Adviser
A big issue when you work with someone who calls themself 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.