The Best Personal Finance Summaries – 7 April 2020
We've been looking for different ways to help you financially through this covid situation.
Last week we introduced the idea of referring a friend to buy car insurance through this site that allows you to customize and compare quotes in real time. We've decided to make it easier – any sale that happens, you will get RM30 (they have to use the email address we're currently sending this to).
This week, we have another way to make some extra money.
If you've ever wanted to buy and sell US stocks and options, you would have noticed that it's so hard to do here in Malaysia. However, we've partnered up with a company to help make this super simple.
And if you refer friends to open an account (no need to fund it), we will give you RM10. But before that, you have to personally open an account (no need to fund it).
If you're interested in this, sign up / send people to this page.
Also, anyone who opens an account will get access to the giveaway at the end of this month!
The first winner will be announced in:
Get started here. (or go to the bottom of this newsletter).
Remember, this MCO can be an event that will accelerate your future success. Or it won't. The current pain won't change but you do have the option to choose your future.
Money Advice from StashAway
StashAway is Malaysia's largest robo advisor and makes investing super easy (and takes about 30 minutes to set up!).
Money in Daily Life
So you’ve probably heard all about the PN government’s RM250 billion economic stimulus package, designed to reduce the financial damage that COVID-19 and reduced oil prices will do to Malaysia’s economy.
As a remedy to provide reliefs in times of financial hardships, the Malaysian government has recently introduced a hefty RM250 billion economic stimulus package with RM25 billion of direct injection. Listed below are some ways to make good use of the stimulus money as recommended by Suraya from Ringgit Oh Ringgit:
#1 – Have at least RM1000 in emergency savings
First and foremost, make sure you have set up your emergency funds. More is better, but RM1000 is the bare minimum to prepare for an actual emergency!
#2 – Build up 3-6 months of living expenses
The pandemic has impacted the job market severely. It is estimated that the upcoming recession might result in 2.4 million in job losses. Start by tracking your total monthly expenses. Then, you should start saving 3 to 6 months’ worth of expenditure as soon as possible. Also, look for ways to increase your salary and reduce expenses.
#3 – Save more money so you can pay off your high-interest debts
Save up the money and pay off all of your high-interest loans right after the 6-month moratorium period ends.
#4 – SPEND
Make practical purchases. Focus on products and services that can save time, improve health, relationships, and even earn money. Lastly, allocate some of your cash to invest in stocks, insurance, or start a business if you can.
Right now, many Americans are diving into cooking at home, due to business shutdowns and, for many, financial necessity, too. For almost all of us, the need to stretch every dollar has quickly become very important.
There are many great strategies out there for cutting food costs. Here are five essential ways to make your food dollars stretch as much as possible.
#1 – Have a sensible grocery shopping strategy.
Always spend as little as possible on food and household supplies. Achieve this by following tips below:
- Make a clear meal plan. Ideally, the meal plan should use affordable staple foods (preferably on sale). Decide what you want to eat and prepare a grocery list from that.
- Use a discount grocer. Shop at a discount grocer so that you can get the best bang for your buck.
- Focus solely on that grocery list when you’re in the store. Don’t get distracted and overspend on what you don’t need.
- Buy the generic store brands whenever available. Store brands are usually cheaper and offer identical items.
#2 – Make low-cost staple foods, prepared at home, the backbone of your diet.
Your staple food choice should be evaluated via cost per calorie, flexibility, and healthiness. For example, rice, beans, eggs, pasta, fresh produce, and oatmeal are great staples for your meal.
#3 – Find cheap ways to make stuff you actually like rather than just aiming for the most economical possibility.
Inexpensive foods do not translate directly to boring meals. Always look for new exciting recipes to introduce different flavors to your meals while using the same ingredients. By doing this, you can enjoy the food while still saving your food spending.
#4 – Use recipes you like as your inspiration.
Learn the art of seasoning and preparation of your meal. Try out different ways to make your inexpensive meal delicious and tasty. They cost very little and make an enormous difference in taste.
#5 – Learn how to cook dry rice and dry beans.
Dry rice and beans can be bought in bulk – therefore, they are incredibly cheap and affordable. It’s incredibly easy to cook both dry rice and beans, but it does require some planning in advance because these items take a while to prepare (you cook them both low and slow). However, it’s easy to season them and create all kinds of different flavors and recipes!
How would the early retirees fare when the market goes down?
As the market has gone down considerably since the start of the year, many have questioned the robustness of their retirement plans. In this context, Kyith from Investment Moats thinks we should not be too worried about this matter as long as our plans are stable.
Nonetheless, some who did not do their planning well might be in for some trouble as:
- many are myopic in how they assess their returns, this drawdown versus the returns projection in their financial plan.
- their plan might not be very sound in the first place.
When You Speculate with a Short Time Horizon.
Equities (includes REITs and dividend stocks) are highly volatile, and it takes 5 to 10 years to capture the returns required. If you happened to speculate with a short time horizon, the market fall would affect you and push back your retirement timeline. A balanced approach would have fared better.
Could You Be Financially Independent When a Bear Market Cut Your Portfolio by 40%?
By sharing a hypothetical story about retirement planning, Kyith shows the correlation between actual and projected portfolio value. Essentially, the moral of the story is that a robust long-term financial planning will not be affected by short-term market fall.
Could You Retire at the Start of 1998?
By judging from the figure above, you will be all fine if you were to retire at the start of 1998. Despite the shaving of wealth by 50% between 2000 to 2002, a low withdrawal rate (less than 2.8 or 2.5%) can secure you a sustainable retirement.
The Last Word
What worked is not just about the returns in the market. It is sensible planning. Take the following factors into account when you are doing your retirement planning:
- Rationalize how much you need.
- Have a realistic inflation rate.
- Use a conservative yet realistic growth rate.
- When things turn out better, know what you should do.
- When things turn out not so good, know how to course-correct.
Always remember, growth rate and period are essential to gauge the robustness of a retirement plan!
Want To Have Your Money Accelerate Your Goals?
Ways to Qualify for the Giveaway
Here are some ways you can qualify for our giveaway happening in
Open an account to trade US Stocks and Options for free
Opening an account is super easy. There are no fees to buying / selling US stocks / options. There are no account fees. The only fee you pay is a wire transfer fee.
Compare the different car insurance providers from one site
Is your car insurance coming up for renewal soon? If so, make sure you check if there are better deals that other car insurance providers are willing to give you by comparing them all at once.
The best part is you can customize what it is you want and have your quotes in real time.
Oh and your No Claim Discount will carry over to the new provider as well.
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!
Learn how you can be paying 50% less for medical insurance
We had to interview an expert insurance agent who told us ways that we could be reducing our premiums by 50%+ by following these few tricks. Take a watch and qualify for the giveaway after answering a few questions to prove that you had watched the interview.
Figure out investing in 30 minutes and never deal with it again
Truly investing on autopilot. By signing up for Stashaway, you will literally be able to have it automate your investing. Plus with the super low fees, your path to success just got a lot easier.
You can start with any amount as there are no deposit or withdrawal fees!
Plus get the fees even lower by signing up for Stashaway through us*!
Figure out investing in 30 minutes and never deal with it again (halal version)
Truly investing on autopilot (halal version). By signing up for Wahed Invest, you will literally be able to have it automate your investing. Plus with the super low fees, your path to success just got a lot easier.
You can start with as little as RM100 and there are no deposit or withdrawal fees.
Plus get RM40 from Wahed Invest for signing up through us and funding your account by RM100.