Versa Cash Newest Promotion - 4.9% per annum

 In case you have not signed up to Versa (wrote about it here), maybe this will pique your attention. 

With interest running high, the more you keep in your bank, the less valuable your money will be. Best to put it somewhere with better interest rate. And, for me, Versa is the place to go. 

It is an fully mobile app that help you put your money into a money market fund by Affin-Hwang Capital Asset Management.

And with this special promotion, you will get 4% per annum from 1st Nov 2022 until 31 Jan 2023. While it seems to be very short period of time, your money will continue to work for you no matter how much keep it there.

And the best thing is, if you sign up with my referral code (X3Q3UGR8), you will get "free" RM 10 when you put in RM 100 or more. I will get RM 10 too.

This is my referral link.

Personal Finance Terms You Should Know

This are the personal finance terms that you should know. It is not completed but good to have. Hope you enjoy it.

 

• Active management - A type of financial portfolio strategy that involves frequent hands-on strategic intervention (buying and selling assets) from a financial adviser.
• Amortization - The process by which the amount due on a loan is reduced over time. Generally a higher proportion of each payment goes toward interest when you begin paying off the loan, with an increasing proportion going toward principal over time.
• Annual Percentage Rate - Annual percentage rate (APR) is the total amount it will cost you to borrow money, be it through a loan, credit card, or other instruments, each year. It takes the amount of interest you'll owe and adds it to any other relevant fees.
• Annual Percentage Yield - Annual percentage yield (APY) represents the total amount of interest you'll earn on an investment or savings account in a year, including the effects of compound interest.
• Appreciation - An increase in the value of a particular asset over time.
• Asset - An item a person or entity owns that has financial value or is expected to have financial value in the future.
• Asset allocation - The mix of different financial vehicles (such as bonds, stocks, ETFs, cash, mutual funds) that an investor can spread their money across. It's important to maintain an asset allocation that's in line with your risk tolerance.
• Balance sheet - A document that provides prospective investors with a summary of a company's financial standing by detailing its assets, liabilities, and shareholders' equity.
• Bankruptcy - A legal proceeding that gives a person or business who can no longer pay their debts a chance to be released from the responsibility of paying those debts.
• Bear market - A way of describing the state of the stock market that indicates that stocks are declining in value overall.
• Blue chip - A term used to refer to companies whose stock is considered a solid investment. Maybank, Axiata, Kuala Lumpur Kepong, and Nestle are blue-chip companies.
• Bonds - A type of investment that is essentially a loan from the investor to the bond issuer ( such as the Malaysia government or a corporation). The bond issuer pays back the invested money, with interest, at specified intervals of time. Bonds carry less risk than stocks.
• Bull market - A way of describing the state of the stock market that indicates stocks are increasing in value.
• Capital gain - The profit that results from selling an asset that has grown in value.
• Capital loss - The loss an investor experiences when they sell an asset that has lost value.
• Cash flow - The movement of a person's, household's, or business's money (coming in as income and going out as expenses).
• Fixed Deposit - A financial instrument that locks away cash so that you can't use it for a certain time in exchange for a higher interest rate. Returns on FDs are guaranteed.
• Index - A tracker that measures the market performance of a particular sector, often by using a group of different securities to represent a theoretical investor portfolio. The KL Composite Index and the Dow Jones Industrial Average are indices.
• Index fund - A mutual fund made up of investments that reflect a market index, which gives investors built-in diversification. Index funds are known for their low fees.
• Inflation - The percentage by which the cost of goods and services increases and the value of money decreases over time.
• Initial public offering (IPO) - The first time a private company offers shares of itself to investors at large.
• Liabilities - Money that an individual or entity owes someone else.
• Management fees - Money paid to investment managers and/or investment advisers in exchange for managing investments.
• Mortgage - A loan you take out to buy a piece of property, where the piece of property is the collateral. That means if you fail to make payments, the lender can seize the property.
• Mutual fund - A financial instrument that uses a pot of money from many different investors to buy a diversified mix of stocks, bonds, and other securities.
• Net worth - The total value of all of your assets (wage income, investments, property) minus the total amount of your debt.
• Passive management - A hands-off investment strategy where the investor sets up a portfolio to reflect a stock index, often through ETFs and mutual funds.
• Premium - The amount you pay monthly to maintain insurance coverage.
• Price-to-earning (P/E) ratio - The measure of how a company's current stock price relates to its current earnings per share.
• Principal - The dollar amount of money you deposited into an account or borrowed, not including interest.
• Real Estate Investment Trust (REIT) - A public company that owns a series of properties that generate income. Investors can buy shares to gain exposure to real estate.
• Recession - A prolonged period (at least several months) of declining economic activity.
• Refinance - To replace a loan, such as a mortgage, with a different loan that has a better interest rate or other more favorable terms.
• Return on investment - ROI is a measurement of how much a particular asset has grown in value since you bought it relative to how much you paid for it.
• Risk tolerance - The measure of how much market fluctuation an investor is willing to take on in their investment portfolio. Risk tolerance depends on many factors, including how close a person is to retirement, what other goals they may use the money for, and their general disposition.
• Robo-adviser - An online service that offers financial planning and automatic investing operated by algorithm, generally with a much lower fee than a human financial planner.
• Stock - A type of investment that, when purchased, gives you partial ownership of the company. Also known as a share.
• Yield - The earnings an investment returns to its owner, expressed as a percentage. Yield can include interest and dividends.

Tax Relief 2021

Well, it is that time of the year again for those who are able and earning a certain amount of salary every year, we have to pay our income tax.

But fear not, we have our friendly "Tax Relief" by LHDN Malaysia (Sorry, not Spidey) to help us out.

Tax relief basically help us to reduce our taxable income and reduce the tax we need to pay.

We are all good citizens and we should pay our taxes. But our government is good to, giving us many tax reliefs.

Hope this tax relief infographic is able to help you with your income tax submission this year.

 

How to spot an Investment Scam?

Not too long ago, a friend of our family has confined to us that they were scammed of more than RM 150,000 by someone in the same group. We didn't know all the details but it makes me thinking of these scams that are happening almost on daily basis (just that we don't know) and how we could actually avoid being scammed. 

How to know if it is an investment scam?

Clue 1 - Amazing returns

Any investment that promises returns that are greater than what investment markets are able to generate should immediately sound alarm bells. If the investment promises to double or triple your money in a short period of time, runaway as fast as you can. 

Clue 2 - Jargon and pressure

Investments that use words such as ‘exclusive offer’, ‘select’, ‘elite’, ‘limited offer’ or ‘opportunity of a lifetime in their marketing material is trying to put pressure on you to give them your money asap. The longer it takes for you to decide, the higher chance that you may not "invest" with them. Thus, they want to get your money and go missing. Knowing this, runaway as fast as you can.

Clue 3 - Private bank account

A legitimate enterprise, it would hold a business account with a reputable financial institution. If the bank account of the investment is held in the name of a private individual, be suspicious. runaway as fast as you can. 

Clue 4 - Physical address

The physical address of the organisation should also appear in all their marketing material, including websites and brochures – but don’t take the printing of a physical address at face value. Use Google maps to look up the address and locate the actual building. Many legitimate companies pin their physical locations on Google maps as an added measure of credibility. If it looks weird, runaway as fast as you can.

Clue 5 - Investors recruit more investors

Many multi-level marketing (MLM) schemes and Ponzi schemes operate a business model which requires each ‘investor’ to recruit more ‘investors’ in order to keep the scheme afloat. If the scheme involves any form of recruitment, it is likely to be some form of a pyramid scheme. So, runaway as fast as you can.

Clue 6 - Complex business models

The company should take time to explain their business model to you, including underlying assets and how income will be generated. The business model should be wholly transparent and easy to understand. Investment scams are notorious for their complex business models and technical jargon. If you don’t understand how your money will be used to generate investment returns, runaway as fast as you can.

 

The Green Challenge, Round 2

2021 has ended and do you remember the green challenge that I have posted early 2021. In the year 2020, managed to "save" 50 pcs of RM 5, which let me saved RM 250. It was a fun experience and I have invited anyone who wishes to join this challenge for 2021. So, here is my Green Challenge, Round 2 report card.

In 2021, I managed to "save" 53 pcs of RM 5. This is equivalent to RM 265, which is 6% more than 2020.

It was a nice experience to have this intentional saving challenge. Now that we have saved up some ringgit RM 515, we are moving to the next step, which is to invest and let it grow. My first option to "invest" nowadays is using "Versa".

Versa (read my article on Versa here) is an alternative of Fixed Deposit, where the ringgits are put to work in the money market (short-term debts issued by bank in order to accumulate a short-term cash-pile to make up for their shortfall in their daily deposit reserve).

The great thing about Versa is that you can earn up to 2.46% of interest per annum, and the interest is credited to your account every other day.

As long as you have a smartphone that can download the app, you can sign up as a investor with a minimum deposit of RM 1 only. And if you use my referral code (X3Q3UGR8), both you and me will be able to get a bonus of RM 10 as bonus once you deposit RM 100 into your account.

How to increase your net worth in 2022

As a start, you must know what is your net worth. To calculate your net worth, you need at add all the value of your assets and minutes out all your liabilities.

Net worth = Assets - Liabilities

Method 1

The first way of increasing your net worth is to increase your assets. What are assets? Assets are things that you own that increase in value over time, or things that you own that earn income for you.

Assets that increase in value includes properties (like the home that you are staying), limited edition collectibles. Assets that earn incomes for you includes securities such as shares in publicly traded companies, fixed deposits, rental properties, intellectual properties, etc.

You can either save and invest, buy, or you can produce it yourself. As long as it belongs to you, these assets will generate some incomes for you.

• Caution: please do your due diligence before buying anything. Remember that all investments will have done risks involved.

Method 2

Another way to increase your net worth is by reducing your liabilities. Liabilities are things that you buy with credits and would need to pay back with interests. Things that you own and depreciate over time are also a type of liabilities.

Debts are what we get when we buy things in credit. And usually, we would be using credit card, personal loans, mortgages and car loans to pay for what we are buying. Eventually, we would need to pay for the credits plus interests. The amount of interests that we are paying will depends on the time we choose to pay off the credits. It also depends on the interest rate of the debts. The higher the interest rate, the more that you will need to pay for it.

So, if you have a high interest rate debt, the more you pay it down, the more you will save in interest rates. In another way, it means that you are earning more because you are paying less.

When you reduce your debts, your are reducing your liabilities and at the same time, increase your net worth.

Method 3

The third way of increasing your net worth is by saving up. By reducing your expenses, you are effectively increasing the numbers of ringgit available to invest and increase your assets. But be cautious not to overly deprived yourself by cutting off everything. Give yourselves some rewards. Reduce spending on what is not necessary but keep those that keep you moving and happy. Be truthful to yourselves on this.

Versa - Digital Cash Management

I have been looking for alternative for Fixed Deposit for a long time. I don't think FD is a good option due to the long lock-up time. I heard about Stashaway Simple, but I think the process to get into it was tedious thus, I didn't do anything with it.

Then, I came across Versa and after using it for a while, I find it very easy to use. Furthermore, the returns that I am getting it great.

A bit of information about Versa:

• Established in 2021
• Regulated by Securities Commission of Malaysia
• Earn up to 2.46% interest per annum (on par with FD)
• Any Malaysians aged 18 and above can start saving/invest via Versa from as low as RM1
• Can withdraw anytime without being charged any penalty fee.

How it works:

1. Versa help investor to put their money into the money market (short-term debts issued by bank in order to accumulate a short-term cash-pile to make up for their shortfall in their daily deposit reserve).
2. Versa invest the money they got from investors into Affin Hwang's Enhanced Deposit Fund and earn similar interest rate to FD as returns.
3. Versa give the earning back to investors.

Versa is a safe place to use as it is under the regulation of Securities Commission of Malaysia. The cash deposits from investors are held by HSBC (Malaysia) Trustee (a third party trustee).

What else you need to know about Versa:

• Withdrawal will take 1 or 2 days, depending on the time of withdrawal.
• It is not Shariah-compliant.
  

As long as you have a smartphone that can download the app, you can sign up as a investor with a minimum deposit of RM 1 only. And if you use my referral code (X3Q3UGR8), both you and me will be able to get a bonus of RM 10 as bonus once you deposit RM100 into your account.

Versa: https://versa.com.my/