The Best Personal Finance Summaries – 16 December 2019
Happy December! We hope that as the year wraps up, you take some time to reflect on just how much you've grown as a person.
We also hope that you will be able to win some free stuff for the end of the year giveaway!
Last week we hinted at holding a giveaway. Instead of holding one small one, we decided to join Ringgit oh Ringgit with her giveaway. Make sure you check it out as there are some great prizes to be won (including RM300 cash from us!)
[VIDEO] Book Summary: The Automatic Millionaire
Did you know that it's possible to create a system that will automatically make you a millionaire over time? We have summarised the most important parts of this great book so that you don't have to read it all.
What is Inflation
We have created a mini series called fundamentals 101 (where you can learn all the basics to money). By going through this blog posts (videos will come in the future), you will definitely be better off than 50% of the population.
This week's episode is around inflation, how it destroys your money, and how what to do about it.
Reply to this email to let us know what you think or what you would like us to summarise in the future!
Money in Daily Life
Staycations are an excellent option for homebodies, those who don’t like flying, or just those who are curious about learning more about their hometowns. These following tips will help you plan a memorable staycation that’s just as relaxing as going to an all-inclusive resort and are much more wallet-friendly to boot.
Check out the checklist below to plan your ultimate staycation!
|Set Your Budget.||Decide your budget and know your limitations (a few big-ticket items worth splurging in). From there, structure your budget which you could reasonably stick to.|
|Plan Your Stay.||Look into local free things to do for inspiration. You could check online for local deals as well! Use this opportunity to explore with those you love.|
|Stay Somewhere New.||Experience where you live in a whole new light. Explore as if you are a tourist!|
|Prep Your Meals.||Splurge at the grocery store. Try different themed meal days. Experience cultural, culinary trips and enjoy their unique food.|
|Ditch Your Routine.||Embrace something new! You are supposed to relax during your trip, plan and take care of necessary chores beforehand.|
|Put It on Hold.||Take a break and rest completely. Relish in the ability to do what you please, uninterrupted.|
|Decorate to Relax.||Switching up your surroundings to match your vacation state of mind.|
|Make Memories.||Enjoy your staycation with people you love.|
No matter how you choose to spend your staycation, remember to enjoy it!
Is Monopoly more than a way to pass a few hours, and are there lessons we can take from a monocle-wearing millionaire, for use in our finances?
1. Life is What You Make It
We all start with the same amount of money in Monopoly. It is the person who takes the most significant advantage from their opportunities which can triumph over their opponents. Also, as Monopoly will prove, there are both good and bad surprises in life. We should accept these surprises for what they are and simply do what we can.
2. Seize Opportunities
In a game of chance like life, we will eventually have an advantage turned our way, and we have to make sure we seize that opportunity and make the most of it.
3. Build a Strong Asset Base
In Monopoly, the player with the most properties win. In real life, real assets can give us passive income too.
4. You Need an Emergency Fund
If we get a chance card in Monopoly, we might have to pay for improvements on assets, taxes or rents. It is essential to learn that we should have some emergency fund to prepare for a rainy day!
5. Take Time Out
If we are unlucky, we might end up in jail if we got the wrong chance card. While it might seem bad, but time in prison can serve as a welcome reprieve from the game itself. In real life, it is vital to step back sometimes and refocus on our goals.
6. Shortcuts are Not the Answer to Success
In Monopoly, rolling a double can reward us with another extra turn. However, rolling three doubles in a roll will land us straight in jail. Similarly, while shortcuts are useful in real life, being too greedy could backfire!
We could learn to budget in Monopoly when we are planning our purchases. Sometimes, if we have depleted our cash reserves, we would have to wait until we pass ‘Go’.
8. Small Steps Can Make a Difference
There are times in Monopoly we could not afford the pricey property. Despite so, the cheapest property on the board could still sting your opposition whenever they pass by. Thus, don’t be discouraged from investing to start small. Small investments could grow over time.
9. Work On Your Relationship but Don’t Rely On Those
More often, if we would like to get 3 properties in a series in Monopoly, we might need to negotiate with the players. In real life, the same strong relationship is necessary for our wealth-building. However, a word of warning: while relationships are meaningful, don’t always rely on them!
Want To Have Your Money Accelerate Your Goals?
Grow Your Wealth
In this article, I’ll share 3 things I’d picked up from KC in regards to compounding wealth via savvy stock investing. They are as follows:
#1: What Will Happen 10 Years Later …
There are 3 crucial keywords, grow sustainably, more assets and more earnings and cash flows. A good stock should fulfil all 3 of them.
One good example is Berkshire Hathaway Inc. It can achieve sustainable growth through organic means and acquisitions into highly profitable businesses. Berkshire Hathaway Inc. had also hit CAGR of 14.85% in its portfolio valuation. Thus, it is a good selection for its long-term track record of sustainable growth!
#2: Who Stands to Gain the Most in an Economic Crisis?
The short answer is the same Berkshire Hathaway Inc. for two simple reasons – able to absorb any unprecedented insurance losses and seize investment opportunities in times of financial turmoil.
When doing stock investing, we should apply the same wisdom as well. We should prioritise on building an all-weather portfolio which can profit consistently in all market conditions.
#3: Words on Dividends
While receiving dividends from stock investments is good, sometimes it is ok to opt for stocks which do not pay them. Financially, it is wiser for the company to reinvest its profits for business expansion. However, if a stock is not efficient in reinvesting earnings for higher earnings, it would be better for it to pay dividends to its shareholders.
Conclusion: Arguably The Best ‘Mutual Fund’ in the World …
In a nutshell, don’t overpay for your stock investments. Here are 3 simple questions for you to gauge your stock portfolio:
- Are the stocks in your portfolio filled with good companies which are excellent in reinvesting their earnings for higher earnings for the last 10 years?
- What is their current financial position? Are they cash-rich companies?
- What are their growth plans in the past and the immediate future?
If the answer is unsatisfactory, you might want to reconfigure your stock portfolio!
The latest initiative – Bursa Marketplace’s Mirror, Learn & Trade Platform or MLT Platform for short – may be the coolest one yet. I tried it out. Here’s what I thought of it.
#1 – Choosing who to mirror is the first step
MLT Platform provides you with an opportunity to mirror the trades of licensed equity analysts. Currently, there are 9 experienced yet professional analysts.
So, how to mirror the trades? First and foremost, you are unable to mirror all trades from all analysts. By design, you could imitate a maximum of 10 stocks. You could choose who to mirror based on their respective performance (which is listed clearly at the main page).
For Suraya, she chose her traders by first categorising based on two trading strategies: fundamental and technical analysis. Next, she decided to mirror the trades of the technical analysts because simply, she knew a little about it before.
#2 – It’s a good place to learn stock trading jargon
Apart from mirroring trades, the platform also hosts notes and commentaries done by the analysts on their strategies and insights. The MLT platform can let you know your knowledge gap for you to understand more!
#3 – Mirror-trading is not a new idea
Mirror or copy-trading is not a new thing. While they are similar in certain aspects; the MLT platform lets you copy-trade stocks and learn from the pros at the same time.
#4 – You get to learn your trading personality in a safe environment
The MLT platform allows you to trade with virtual money as well. While some might think virtual money encourage riskier behaviour, ultimately it all depends on you.
#5 – Using the MLT platform as stock picks?
The short answer is yes. The MLT platform reports live stock prices and allow analysts to share with users their justification as well as the rationale behind their trades.
e-MIS (Members Investment Scheme) was introduced by KWSP to allow EPF members to diversify their retirement portfolio their way via EPF i-Invest portal.
|Malaysians, Permanent Residents or Non-Malaysians which are registered as EPF member since 1st of August 1998.|
|54 years of age or below.|
|Must have sufficient funds with EPF. Check here.|
How to apply
a) Apply via Agent/IPD counter
- Select from a list of appointed FMIs/related IUTA who will manage your investments.
- Prepare and complete the application form provided by the FMI, along with a copy of identification.
- Submit them to EPF via chosen FMI agent/counter IPD.
b) Apply via i-Akaun portal
- Register to be an i-Akaun member. Check out how here.
- Log in, select ‘Investment’ and then ‘Transaction’.
- Click ‘Buy’ at the left panel and select the chosen FMI and UT fund.
- Check and verify the details. Key in the amount to invest.
- Click ‘Proceed to Checkout’ at the bottom right.
- Again, verify your selection. Click ‘Buy’ at the bottom right. Read the ‘Terms and Conditions’, then click ‘Ok’ to continue.
- Complete the transaction.
- Authorise your transaction via TAC. Click ‘Proceed’ and check the shown summary.
How to select the correct Unit Trust for you?
Set your investment and asset allocation goal. Use statistics such as historical returns and fund rating agencies like Lipper Leaders and Morningstar to make informed decisions.
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!