The Best Personal Finance Summaries – 6 January 2020

Happy new year! We've noticed a surge in interest in particular topics on our blog the last week. Especially around investing. Honestly, investing can be very simple and is one of the areas where the more simple it is, the better you will actually do.

In fact, by taking a set it and forget it strategy (AKA real passive income), you will be doing better than most professionals running unit trusts.

So if you're interested in doing better than professionals while doing things that excite you, reply to this email and we'll tell you how to do it (we'll even start you off with RM10 completely free!)

From Us

[VIDEO] Book Summary: Money Master The Game
Speaking of investments, this is an episode we did a few months ago but really speak towards just how easy investing can be (in fact many of the best investors in the US suggest this for the everyday people).

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

25 Books to Help You Make Money Moves in Every Stage of Life

Teaching financial literacy early is vital to ensure that you go out into the world, knowing how to make smart financial decisions.

Read more about the personal finance books that will help you make money moves and equip you with all you need to be money-savvy!

Here are lists of 25 books which are helpful for every stage of life!

For Children:

Book Description
A Chair for My Mother An interesting story about a family saving for a cosy chair.
How the Moonjar was Made Story about two friends’ perspectives on money.
The Missing Money Money Monsters Introduce modern money concepts.
The Go-Around Dollar Follow the life cycle of paper money.
Pretty Penny series Understand and master smart financial decisions.

For Young Adults:

Book Description
The Richest Kids in America Collection of impressive money moves by fellow teens.
The Complete Guide to Personal Finance Teach the skills to make well-informed financial decisions.
The Financial Diet Learn better money habits.
No One Ever Told Us That: Money and Life Letters to My Grandchildren Inspiring advice on how to manage everything from finances to families.
The Wealthy Barber Learn how to turn minimum-wage earnings into a secure future.

For Twenty- and Thirty-Somethings:

Book Description
Broke Millennial: Stop Scraping By and Get Your Financial Life Together Learn personal finance from real-life financial scenarios.
Business Adventures Go beyond personal finance.
The Total Money Makeover Debunk money myths and get out of debt.
How to Manage Your Money When You Don’t Have Any Follow an easily laid out path towards financial security.
Choose Yourself! Learn tips on building a path to reach your financial goals.

For Newlyweds:

Book Description
Money Talks Better your communication skills to manage finances with your partner.
9 Steps for Financial Freedom Conquer any obstacles in the way of being wealthy.
Money & Marriage Minimise the stress, money puts on your relationship.
Financially Ever After Prepare for financial issues you’ll face as a duo.
The 5 Money Personalities Identify how to speak the same “money language” as your partner.

For Retirees:

Book Description
The New Rules of Retirement Expect the unexpected in your retirement.
How to Make Your Money Last Turn your savings into a lasting retirement paycheck.
The Complete Cardinal Guide to Planning For and Living in Retirement Learn how to plan for a financially-secured retirement.
The Smartest Retirement Book You’ll Ever Read Master your retirement planning.
How to Retire Happy Check off the decisions you need to make with this step-by-step guide.

TnG eWallet, Boost & GrabPay selected for Government e-Tunai Rakyat

TnG eWallet, Boost and GrabPay have been announced as the selected e-wallets for Government e-Tunai Rakyat.

What is the e-Tunai Rakyat Program?

To encourage cashless spending using e-wallets, RM30 would be given to all eligible Malaysians.

Eligibility Impact Application e-Wallet Providers
Malaysian citizen with NRIC. Increase e-wallets usage. Start: 15/1/2020 Touch’n Go eWallet
18 years and above in 2020. Federal allocation of RM450,000,000. End: 14/3/2020 Boost
Annual income of less than RM100,000. Submission through e-wallet providers. GrabPay

Comparing e-Wallet Options

Boost GrabPay Touch’n Go
Use for top-ups, F&B, shopping and transports. GrabCar, F&B, shopping and transports. TNG RFID, F&B, top-ups, utilities and transports.
Withdrawal: Yes (Premium user only). 2% fee (Cap RM2). Withdrawal: Case-by-case. Withdrawal: No.
Points, discounts, cash-back eligible. Reward points, tiered membership. TNG RFID, Subway LRT/MRT, unauthorised transaction protection.
Earnings: 1 ~ 5% Earnings: 5.8% ~ 8.8% (Gold) Earnings: 5 ~ 20%

5 Important Personal Financial Ratios to Monitor Your Financial Health

If you want to know how healthy your debt level is, you can use financial ratios as a check-up. That’s what your bankers do before they decide on a loan request as the banks need to understand how strong you are financially.

PF Ratio How to calculate? Description Goal
Personal Net Worth Assets – Liabilities An overview of your finance trend. Concentrate on growing your net worth at least 5% a year. Reduce your liabilities and increase your assets.
Assets-to-debt Ratio Total Assets/Total Debts Indicate your financial solvency – capacity of you to meet your debts. Aim for a ratio greater than one so that you would be better qualified for a loan.
Basic Liquidity Ratio Cash and Near-cash/Monthly Expenses A measure of you to cover your expenses if faced with an emergency. Target to maintain a specific level of liquidity (suggested: emergency fund equivalent to 6 months’ expenses).
Debt Servicing Ratio Total Monthly Debt Payment/Total Monthly Gross Income The percentage of your earnings used to pay off debts. Ideally, you should have zero debt and high savings.
Savings Ratio Savings/Gross Income Gauge the money you save for future purposes. No one-size-fits-all ratio. But, the minimum is 15 ~ 20%, and the maximum can be 70 ~ 80% of your gross income.

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Grow Your Wealth

Fake Assets vs Real Assets

In other words, if you want to be financially wealthy, it behoves you to understand the definition of an asset so that you can invest in real assets and avoid an investment made to acquire fake assets.

In the latest article published by Ian Tai from KClau.com, a detailed discourse has been made to differentiate the critical concept in ‘Rich Dad Poor Dad’Asset.

Two Definitions of an Asset:

  • An asset is a resource that a person owns or controls which has economic value.
  • An asset puts money into your pocket.

Asset?

After discussing the literal meaning of asset, the writer then used the example of cars, unit trust funds, stocks and properties to differentiate between real and fake assets. In a nutshell, cash flow is what set the difference.

The author dissected the examples as mentioned earlier in great detail in his post. Do check it out from the link above!


This is Why You Should Ditch Your Resolutions and Set Financial Goals Instead

Just because New Year’s resolutions aren’t your cup of tea, there’s no reason to avoid setting financial goals. No matter the time of year, these are good to determine and achieve.

Here’s why setting financial goals can be a good idea:

Goals Provide You with a Focus

Instead of setting several goals, get your priorities right and decide on just one aspect. It can be anything at all – but it should align with your preference. Map out mini-goals to keep you on track and stay focused.

Goals Help You Measure Your Progress

Set milestones. When you’re discouraged, take a step back and look at your progress. Celebrate your milestones as a sign of recognition, too.

Goals Help You Think Long-Term

Reorganise your goals and compile them into your grand financial plan. Make collective efforts and steps to achieve it step-by-step.

Bottom Line

Goal-setting is an essential part of financial management. Look ahead and use financial goals to help you improve your situation.

Cool Opportunities

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!