Weekly Summaries - August 8 2018 1

From traditional media

Opening up fibre market; fixed-line broadband for all telecos
Infrastructure for broadband is currently a very expensive thing. It requires digging holes to run lines all around the country. And because of that, there is a huge barrier to entry (both politically, to get approval for destroying current roads and financially, to dig those holes). Right now the only company that has successfully done this is TM. But that’s set to change as “the new mandatory standard access pricing coming into force, any player can use TM’s ducts to lay fibre to reach out to existing and new areas. The wholesale pricing for HSBB (high speed broadband) usage has also been lowered.”

This means that the other companies will be able to get access to TM’s infrastructure (of course they will still pay for the access) which allows for more competition (and more competition means better offers are lower prices).

I’m personally super excited for this because I will soon be moving into a new place which means getting broadband internet. Though it may take some time before we see prices drop, I do believe that Malaysia will see decent internet speeds (15mb/s) and usage (100GB+) under RM100.

If you know any other traditional media sites that offers good finance information, please let me know so I can start summarising that as well!

Weekly Summaries - August 8 2018 1

From traditional media

When we are living much longer… better prepare MORE
Malaysia is starting to run into the same troubles that developed nations run into. In some studies, Malaysia will have more people who are going to be in the “retirement phase” of life than in the income producing phase. Not only that, but the life expectancy will also continue to improve.

Now that’s great news from person to person, but it’s actually a tough spot for a government because they will have more people to take care of than people who are paying taxes. The government has already increased retirement age from 55 to 60, however, that number will only go up. In Canada, it’s already at 67.

This is one of the reasons why I don’t believe in relying on the government for retirement. By the time I get to that age, the age would be much higher, or the income they provide will be much lower. But more importantly, I don’t believe in waiting until I’m that age to be able to do what I want (more on that in the future).

Take away: create your financial plan under the assumption that you will not get any support from the government. If, by the time you’re at that stage in life and there is some sort of support, then it’ll be the cherry on top.

What can RM100 so? Unlimited rides? More, actually.
One of the promises that was made during the elections was to give everyone the ability to have unlimited public transport rides at a cost of RM100 / month. This article goes onto talk about how the savings could be tremendous especially if people who were originally thinking of buying a car.

What I’m most interested is how this impacts me. As I will be moving further away from the office, each ride will cost me about RM3.50. This means one day’s ride would be RM7 and if we assume that I only use it during workdays, I would spend about RM140 with the current model. However, I am also going to be using the transit system to get to a lot of my favourite places to eat which means the monthly costs will probably be closer to RM250. With this new system, I can project to save about RM150 a month which can be now used in other ways.

Who are some of your favourite Malaysian personal finance bloggers? Let me summarise their work for you!

Weekly Summaries - August 8 2018 1

Ideas From Around the World

What your flippant beliefs cost you
If you’re thinking about automating your investment, this article does a great job in pushing you over the fence. Remit is actually writing about a study that was done that showed how much worse off you would be by somehow missing some of the biggest stock market rallies. 

For example, did you know that if you had somehow missed the 5 biggest stock market rallies over the past 20 years, your portfolio value would be 45% lower!?

Take away: Don’t try to time the market. Have your investments automated by purchasing a basic index fund.

The One Major Move To Increase Your Net Worth
One of the biggest obstacles to building wealth is not necessarily having a low income – it’s having high living expenses. And the biggest living expense if the cost of your home (whether that’s renting or paying a mortgage).

Although the article goes into giving an argument for moving cities and finding a new job, I find that far too extreme. Instead, I would suggest that you live further from work or from the super popular places. 

The best example I can give is what I’m about to do. I work in the Bangsar area. Bangsar is known to be the expat area which means that not only is rent here super high, but so is the cost of food and groceries. Although many of my colleagues decide to live in this area, I decided to move 30 minutes away by LRT. The price of the place I got is 1800 for a 2 bedroom (whereas that won’t even get you a bachelor pad in Bangsar). To top it up, I am splitting the rent with a friend which drops to under RM1000 a month. This move will save me at least RM500 a month in rent, but equally as important, saves me money for groceries and food (I’m a lot closer to cheap delicious food now). I believe that the total savings would be close to RM1000 / month compared to what my colleagues would be paying.

Take away: think about living further away from work as a way to save some major money.

With termination payments ending years before retirement, this Ontario couple’s free spending ways are over
This is a really sad article. The husband and wife were caught in a bunch of unfortunate events. The husband is 55 and took a voluntary retirement package at the age of 55 and the wife was unexpectedly let go at the age of 48. Because of this, they will have to rely heavily on Canada’s retirement benefits but will also have to cut their $1000/month expense in living their lives to almost $0.

The article goes into how they would have to do this but the point I would like to focus on is how you would never fall into that trap. It’s true that as you get older, you’ll be less likely to be hired and more likely to be let go of. However, there is something that will easily make this whole thing highly unlikely and that is to be an expert in your field. 

I’m not referring to the expert where you say you have x years of experience in the industry when you’ve been doing the same thing day in, day out. But expert in the sense of you know the latest trends in your field. You know the pros and cons of those trends, and you’re able to take advantage of it. It means people constantly come up to you to get your opinion. That type of expert will make it really hard for the company to let you go, and if they did, someone else would want you. That or you can easily become a consultant in that field.

Take away: never let your financial future be controlled by your employer. Build out your skills to be top class so people are always looking to you for your thoughts. Otherwise you may end up like this couple who will be living without being able to truly enjoy life.

Weekly Summaries - August 8 2018 1