Is lottery our God of Fortune?

Who are not intrigued by the thought of striking a lottery and get rich? Chances are, you would have bought some lottery tickets before just to test your luck. Maybe you are still buying it religiously every week.

Many people that went to buy the lottery would view the seller at the counter as their God of Fortune. But is it really as what you think? God of Fortune supposed to be giving you a fortune. But when you are buying the lottery, are you getting any "fortune" from them? Or are you giving your "fortune" to them? 

But if you really look into the possibility of winning the lottery, you would soon realize that the odds are actually against you. For a game of four digits (4D), there are a total of 10,000 combinations so, if you buy one number, the probability of winning is 1 over 10,000 or 0.01%. I am not sure about you but for me, that percentage is very, very low. 

Do note that it does not mean that you will win it once after buying the same number for 10,000 times. Every time you buy, you have the probability of 0.01% of winning.

So, the best thing that you should do is to save up these monies and invest it in right places, such as SSPN (if you have a child), money market or investing in REIT or some of the blue chips stocks such as PBBANK, MAYBANK, or TENAGA. This way, your money would be able to grow.

The Side Hustle Series 3 - Use other people's Ringgit

As discussed in the previous posts, it does not take money to make money. What it actually means here is that you don't need to use your own Ringgit to make more Ringgit for yourself. Don't get me wrong here, I am not asking you to steal other people's Ringgit. It is another method of doing business.

For some business idea, it is possible to use someone else Ringgit to makes Ringgit for yourself. I don't mean it in any way that is deemed illegal, such as robbing the bank or cheat someone off their lifetime savings. I am not asking you to go and take a loan from the bank or loan sharks. Those are technically suicide for your side hustle and yourself. So, please don't... It is not worth it.

Rather, I am referring to get part of the Ringgit from your customers first. Let me share an example.

Makcik Kiah is starting a homemade nasi lemak business. It is a make upon order business to make sure that the nasi lemak will be freshly cooked. When an order of 100 packed of nasi lemak comes in, Makcik Kiah might not have the Ringgit to buy for the required ingredients. It is unwise to borrow from others. What do you think is the best option for Makcik Kiah?

The best thing that she can do is to take a deposit from the customer. Maybe around 50% upon confirmation. That way, Makcik Kiah will have enough Ringgit to pay for the ingredients.

Another advantage of this is actually to get the commitment from the customer. Imagine if Makcik Kiah pay for the ingredients and once the nasi lemak are made, the customer have a change of heart. He didn't honour his part of the deal. When this happened, Makcik Kiah will have 100 packs of nasi lemak that no one wants. She can still sell it somewhere but it needs to be cheap so that people will buy. The unsold nasi lemak will be considered a loss in the business.

With the advance payment, the chance of default by the customer will be much lower. Even when the customer defaulted, Makcik Kiah still has the advance payment to cover for the ingredients.

It is also very important for us to keep our end of the deal. Else, the customer may make a police report, and we will land into a bad situation.

If you have not read the rest of the Side Hustle Series, you can check out Part 1 here and Part 2 here.

The simple maths to achieve Financial Independence.

Financial independence is where your stash of Ringgit is able to provide you with enough Ringgit to pay for all your expenses without the need for you to work at all (unless you want to). The stash of Ringgit would usually be invested somewhere with a minimum return of at least 4%  (the higher, the better).

For you to be able to achieve financial independence, there is only 1 factor only. And the factor is (drum rolling), your savings rate, as in the percentage of your take-home pay.

WHAT? WHAT IS THAT?

To put it simply, it is how much of the pay that you are saving.

For example, if your salary is RM 36,000 per year and after all the expenses are being deducted, you still have RM 3,600, then your savings rate is 10%. If you still have RM 18,000 after all the expenses, then your savings rate is 50%.

To find out how long would it takes to achieve financial independence, we would have to make some assumptions to proceed.

• Assumption 1 - You can earn a 5% investment return after inflation during the savings years.
• Assumption 2 - You will live within the 4% safe withdrawal rate after retirement.
• Assumption 3 - You will want your stash of Ringgit to last forever.
• Assumption 4 - Your net worth is RM 0.

Below is how many years you would have to work until you achieve financial independence according to the different savings rates. 

As you can see, if you can increase your savings rate, you would be able to achieve financial independence faster. 

So, how do you increase your savings rate?

There are two factors:

1. Increase your income.
2. Reduce your expenses.

While both of the above are important, you can start working on increasing your savings rate by cutting down on your expenses. Tracking down all your monthly expenses would give an idea of how much is your expenses (and how much you are saving at the moment). Look into your expenses and think of how you can reduce it. The more common methods are changing mobile phone plan to a cheaper one, eat at home instead of eating out, cut subscriptions that you don't use often (gym, Astro, Netflix), and take public transport if possible. The reason is simple to start reducing your expenses because of its double effect:

1. Increase the amount of money you can save.
2. Reduce the amount that you need every month for the rest of your life.

With this, you would be able to achieve financial independence faster!

The Side Hustle Series 2 - Don't Just Sit There, Take Action

This is part 2 of the side hustle series that I am writing to guide those that want to take the side hustle method to increase your income. If you have not read part one, the link is here.

Now that you have validated your idea (or even if your idea is not validated), it is time for you to make your idea into something concrete. With the advancement of technology, especially the internet, it is possible for you to start something without paying a single cent. Remember that your main aim is to create a mini-experiment, not the final product. This mini-experiment will let us know if the idea that we want can become a viable side hustle or if it is not something that the market is looking for.

Storytime

When we started The Malaysia Dividend Champions List, we started with the most basic structure. We only have a few parameters that are critical to our needs. We didn't focus on the aesthetic factor because it was not important yet. It took a while for us to get it to be acceptable for our soft launch. We called it the beta version. Once it was launched, we continue to improve it week after week. By the 10th issue, what we deem good has been created. Thus, we launched the official product on our 11th issue. Still, improvement continues to take place with feedback from our subscribers.

The main idea here is that it is okay to launch a not complete product as long as there will be continued improvement taking place. Let your customers know about it. If it does bring value to them, they will not mind. The customers may even help by giving constructive feedback to improve it.

 

It is important to get the product into something tangible or it will continue to be an idea in your mind only. And when someone else does the same thing and succeeds, you would only have yourself to blame because of your inaction.

But if your side hustle actually takes off, you will have to think of the following:

1. What do you think about your side hustle?

2. Do you like it?

3. Do you mind taking the time and effort to continue this side hustle?

4. Does it bring you the joy that you hope for?

5. What now? Do you have any plans for the future?

6. Would you want to continue with this side hustle?

7. Would you want to bring it up to the level of a full-time business?

Again, take action. At least even when you failed, you can tell others that you have tried but it was not meant to be.

If you have not read Part 1 of the Side Hustle Series, you can click here.

The Side Hustle Series 1 - Validate That Idea

There are many ways to increase our income. Some prefer to invest in the stock market for passive income, and others would work on a side hustle. There is no right and wrong way. Each has its pros and cons. This article will be a series of articles that will discuss mainly on starting a side hustle.

Let's admit it, we all have that one big idea that we believe will change the world. Some of us may have more than one. I personally have quite a few and at least one of it has become a small side hustle for myself. I was lucky because I took action on the idea. And the results are showing that I am on the right track.

Have you taken the action for your big idea?

Many of us would not dare to take action because we have been told that to start something, we need to have Ringgit first. (And for those that did, chances are, it didn't work out.)

This thought came from the saying that "It takes money to make money" but it is not real. Do you know the origin of the saying? It was to by a comedian for a play as a joke! And yet, many of us actually choose to believe that it is true.

And because of this saying, there are a lot of "starting a business" guide on the internet would tell you that you would need a business plan prepared by a professional first because that's the way it should be. In the business plan, you will put in a lot of information. You would find out that you need a lot of Ringgit to start because you will need to rent/buy an office (not forgetting the furniture and all related office items), registered the company, print name card, etc. according to your business plan.

I am sorry to tell you that this is all BS. It is on the internet to makes you believe that it is real so that you would engage the professional to write a business plan for you. What happened in the end? You will pay a certain amount of Ringgit to the professional even before you start.

You don't need a business plan to start. You need an idea to take action on. With the power call internet, it has become so easy to take action without breaking the bank. I started mine with 0 (zero) Ringgit.

But I have so many ideas. Which one should I focus on?

It is easy to feel overwhelmed because we are not sure which idea we should focus on. It was the same as mine and in my opinion, the best way is to focus on an idea that came about from our own needs.

In early 2020, I was looking for ways to find the right companies to invest. I was particularly intrigued by the idea of dividend growth investing where we invest in companies that pay out increasing dividends on yearly basis. This concept leads to the creation of the US Dividend Champions List and many similar lists have been created for a few other countries. Unfortunately (or should I says, fortunately), there is no such list in Malaysia yet (at least I don't know). So, I took the time to start researching the market and after a few months, I have established basic criteria and more than 30+ companies are able to meet these criteria.

With some help from my partner, we work out the concept into "The Malaysia Dividend Champions List" and we start promoting it to the world. It takes a while for it to start moving (people signing up) but things have been steady now. All these are done without using a single Ringgit to start but it does take a lot of our time.

Our own story for "The Malaysia Dividend Champions List" is just one of the side hustle that was started without putting in a lot of money. Some started without any Ringgit and yes, it can be done.

So, if you have an idea that you wish to test if it is workable, you can try to pitch the idea to your relatives and friends. Most of the time, you will not get real feedback because they don't want to hurt your feelings. To counter this, tell them how much you are charging for it and ask if they will sign up right there and then and become your first customer. When real Ringgit is involved, you will get their true feedback. If they rejected your idea, don't be dismayed. Use the feedback to improve your product/services or the reason to stop and focus on the next idea.

If there is at least one who signs up, you already have a winner. You have validated your idea.

Side note - even when you didn't confirm your idea, it is okay to move on to the second stage to build up your idea.

Check our Part 2 of our Side Hustle Series here.

Most Fuel Efficient Cars in Malaysia

What is the most important thing that one should look at when buying a car?

Many people would mention the brand, the model, the design, and a lot of other factors.

I personally felt that what is most important is actually how fuel-efficient is the car. Why? Because you will be driving the car for many years and that one thing that is constant is the fuel that you will pump into the car. If the car is not fuel-efficient, ringgit will flow out of your pocket faster than you realize. 

For example, a car with a fuel-efficiency of 5L per 100 km can go double the distance compare to a car with a fuel-efficiency of 10L per 100 km. Same distance but double the price. I would have nothing to say if you find paying more is nothing. But for me, and most of the people who are more financially literate, it is never a good idea to pay more. The extra money can be put to good use for a better future.

Below is a list of some of the most fuel-efficient cars in Malaysia.

• Est. 4.7L/100km - Perodua Bezza 1.0 Standard G – A/T
• Est. 5.2L/100km - Suzuki Alto 1.0 A/T GLX
• Est. 5.2L/100km - Mazda 2 Skyactiv 1.5 SDN
• Est. 5.3L/100km - Mitsubishi Mirage 1.2 Sport (2014)
• Est. 5.3L/100km - Ford Fiesta SE with 1-liter EcoBoost A/T
• Est. 5.6L/100km - Honda Jazz 1.5 S
• Est. 5.6L/100km - Kia Picanto 1.2 A/T
• Est. 5.8L/100km - Proton Iriz 1.3 MT
• Est. 5.8L/100km - Hyundai i10
• Est. 6.0L/100km - Nissan Almera 1.5E A/T
• Est. 6.2L/100km - Myvi 1.3 Standard G – A/T
• Est. 6.3L/100km - Toyota Vios 1.5G
• Est. 6.5L/100km - Volkswagen Polo Sedan 1.6
• Est. 7.5L/100km - Honda City 1.5L S

I got the information from imoney but I rearrange it to show the most fuel-efficient car first. Of course, there are many more cars that are not listed here. If you have any idea of other fuel-efficient cars that should be listed here, please let me know.

Should Malaysians strive for Financial Independence?

There have been reported that 76% of Malaysians do not have enough savings to last them for 3 months if some unexpected events (loss of job, accident) happened in their lives. Most of us believe that because we have a job that is paying us every month, we are safe. Thus, many people do not save much.

But it may not be true. The current Covid-19 pandemic is a very good example. Covid-19 pandemic basically put most of the economy in the world into a standstill and many companies are unable to sustain in paying the salary of its employee. Thus, there are many people that have lost their job or would experience some pay cuts.

Without enough savings, many of these people are in a very bad situation.

It is only with the correct financial know-how that we are able to overcome this and the concept of financial independence is the know-how to overcome this situation.

The basic of financial independence is to be able to have a nest egg that would be enough to sustain the required expenses in case of losing the ability to earn, whether because of losing a job, accident, or even loss of life.

The simple steps to financial independence are as follows but it does require certain discipline to make it a success:

1. Understand where your money comes from or where it goes. A full record of the most recent income and expenses will give a good idea your financial situation.

2. Minimize/eliminate debts, especially lifestyle debts such as credit cards and personal loans.

3. minimize spendings by spending only on needs instead of wants, though some wants is acceptable but not excessive.

4. increase income by buying assets or starting a side hustle that will generate long-term incomes.

By knowing your financial situation, you will be able to eliminate debts and lower down the spendings. This will help to lower the required amount of passive income, and thus making financial independence easier to achieve. By increasing the income, especially passive income from income-generating assets, there will be a time when it is okay no matter what type of economic downturn that you may face.

So, in my point of view, financial independence is something that everyone should strive for. Even if you are not there yet, the benefit of eliminating your debts and increasing your incomes will benefit you greatly.

Save Up to 20% on Your Electricity Bill

Electricity bills are getting more and more expensive as we are staying at home more often due to the lockdown for Covid-19 pandemic. However, it is possible for us to save up to 20% or more on our electricity bill. Our electricity bill are usually not more than RM 80 every month even though we have 4 air-conditioners, 2 water heaters, a fridge and an inductor cooker. From my understanding, the bill for our neighbours are usually at the range of RM 100 to RM 150.

Below is some steps that we took to save on our electricity bills:

Use LED light

With the advancement of technology, the current LED light is as good as, if not better than the conventional light bulb. In fact, the LED bulbs and lights are able to save up to 85% of the energy compare to the incandescent lights. It is also more eco-friendly, durable, energy efficient and affordable.

So, my best suggestion is for you to change your lightings to LED lightings when your current lights "give up".

Also, using natural light would help to keep the bill low.

Manage the cooling system.

We are living in a tropical country and most of the time, the temperature in our home would be hot or warm. We would need the air-conditioner to avoid being roasted by the heat. As mentioned earlier, our home have 4 units but it does not contribute a lot to our bills.

We do that by making sure that we set the temperature toward room temperature (aka 25 Deg C) instead of the lowest temperature possible on the air-conditioner unit (16 Deg C). If you turn it to 16 Deg C, your air-con unit will need additional energy to bring down the temperature. But if you keep it at 25 or 26 Deg C, it is still cooling but would not burn your pocket.

An inverter air conditioning unit will be helpful too because it will "stop" when the right temperature is achieved and start again when it is out of a range. This is better than the conventional air conditioner that continue to blow out cool wind no matter what is the temperature.

Also, never forget to service your air conditioner unit from time to time. It helps by making sure that your unit is running at the best conditions.

Electrical appliances

1. Change the old fridge to a new one. Look for the one with 5 Stars rating as these fridges would be more energy saving. Yes, you may pay a bit extra initially, but you will be using it for 10 or even 20 days. The amount of electricity that you would save would be worth more.
2. Just like the air-conditioner, don't turn the water heater to the extreme when you can adjust it with the intensity of the water flow. Running it at optimum temperature with suitable water flow would give you the same shower experience and save money.
3. Use your washing machine when you have a full load. Believe it or not, the amount of energy use would be the same whether you have a full load or half a load. Also, use cold water for washing as heating up the water will cost more.
4. Turn off the electrical appliance when it is not in use. Items such as TV, computer, rice cooker, etc.

Is it better to invest or pay debts?

For many PF blogs out there, the first answer that you would get if this is the question asked is to pay off the debts.

But the answer actually depends on your current financial situation.

First of all, list down all the debts that you have. Credit cards, hire purchase, mortgage, personal loans, student loans, etc. Next, find out what is the interest rate for each of these debts. 

For me, my current interest rates are as follow:

Credit cards - 15%

Mortgage - 3.85%

Note: I am paying off all my credit cards outstanding at the end of the month. So, I don't have to pay for the interest charge to my outstanding credit cards.

Looking at the above interest rate, I would choose to invest if I can be sure that my annual return of the investment is higher than the interest rate for the debts. But that is impossible to guarantee that my investment returns would be higher than 15%. Thus, I would choose to pay off my debts first.

But in another scenario, if I do not have the credit card debts but only the mortgage, I would definitely invest if I can find an investment that has proven to give me at least a 5% return. That way, I would be able to cover the interest of the mortgage plus earning a bit if passive income for myself.

Also, there are people that would choose to clear off the debts first just because they cannot accept the fact that they are having debts. For some, debts are totally unacceptable.

Which one would you choose?

3 Reasons Why I Would Not Invest in Gold

While many people would tell me to buy gold to invest, I felt that there is no reason why I should have gold as part of my investment portfolio. Thus, after many arguments (with myself in my mind), I have decided to write a post on why I would not buy gold as an investment.

I know that many gold lovers would hate me for this but still, you can read what I got to say and decide later to hate me or not.

1. Gold is not an investment

For me, an investment is something that would provide a certain return of investment for as long as I am holding that investment. For example, if I am holding some shares of Public Bank Berhad (PBBANK), I would be receiving a certain amount of dividends every year. I don't see how that happens when I am holding Gold. The only way I can realize the return of investment is when I sell it.

2. Gold is gambling

That brings me to my second point. When you buy gold, what do you hope for? Obviously, you are hoping for the price of gold to go up and when you sell it, you would get your profit as your return. What if the price goes down? That will be a loss. And when you look at the price, there are only two possibilities, UP or DOWN. Hmm, that sounds familiar. Something like a game of chance (Sic Bo). SO, for me, buying gold as "investment" is actually a form of gambling.

3. What is the worth of gold?

What is the worth of gold? It is only worth what people are willing to pay for it. Still, it has little real value as in 'the things you can actually do with it'.

If you can do this, it will be great but no, you are not Scrooge McDuck.

As Warren Buffett once famously said about gold:

"Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

You can argue that gold is used in your smartphone and some other electrical items, but the quantity used is not really significant. The primary use of gold is actually for jewelry. Jewelry use up 78% of all gold production. And what do you do with jewelry? You either wear it and let others see it or you keep it in a box in your house or bank. Truth be told, even my wedding ring is not made of gold.

Summary MORATORIUM 6 bulan

(1 April 2020 hingga 30 Sept 2020)

CIMB - Automatik
Ambank - Automatik
Bank Rakyat - Automatik
MBB - Automatik
Public Bank - Automatik
MBSB - Automatik
Agro Bank - Automatik
BSN - Automatik
Bank Islam - Automatik
Bank Mualamat - Automatik
Affin Bank - Automatik
UOB - Automatik
Hong Leong Bank - Automatik
OCBC - Automatik
RHB - Automatik
AKPK - Automatik
HSBC - Automatik
KFH - Automatik
Citibank - Automatik
Alliance Bank - Automatik
Al Rajhi Bank - Automatik
Public Bank - Automatik

Toyota Capital - Automatik
Tan Chong Capital - Automatik
LPPSA - No Info
Aeon Credit - Bukan Institusi Kewangan
Angkasa - Masih Dalam Perbincangan
Parkson Credit - Bayar Seperti Biasa
Sabah Credit - No Info
Chailease Berjaya Credit - No Info
Yayasan Ihsan Rakyat - No Info
Kowaja - No Info
Kowamas - No Info
Petronas - No Info

Amanah Ikhtiar - Tangguh 6 Bulan
Tekun - Automatik Tangguh 6 Bulan Bermula 1 Mac 2020
KOOP - Tangguh 6 Bulan

Coway - No Info
Singer - No Info

Ringkasan berkenaan Auto Loan Moratorium supaya lebih ramai faham dan tidak keliru.

1. Bila ianya bermula?
- 1 April 2020 hingga 1 September 2020 (6 bulan).

2. Jenis loan yang dapat moratorium?
- Pinjaman Perumahan.
- Pinjaman Kenderaan.
- Pinjaman Peribadi.
- Pinjaman Perniagaan.
- Syaratnya, pinjaman tiada tunggakan selama 90 hari.

3. Macam mana nak mohon?
- Automatik, tak perlu pohon, tak perlu hantar borang, tak perlu telefon bank dan sebagainya.

4. Siapa yang layak?
- Semua rakyat Malaysia tidak kira kerja Kerajaan atas Swasta.
- Tak ada konsep gaji jalan tak boleh dapat ke atau gaji tak jalan je boleh dapat ke. Semua layak.

5. Kad Kredit pun dapat penangguhan ke?
- Tidak.
- Bank boleh convert baki hutang kepada pinjaman tetap.
- Faedah maksimum akan menjadi 13% setahun berbanding 18% sebelum ini.

6. Jumlah pinjaman akan bertambah ke?
- Tidak akan bertambah.
- Cuma akan bertambah faedah sebanyak 6 bulan (kerana penangguhan 6 bulan).
- Jangkamasa pinjaman sahaja ditambah 6 bulan.
- Jika sebelum ini pinjaman adalah selama 7 tahun, dia akan jadi 7 tahun DAN 6 bulan.

7. Kalau pinjaman yang bukan melalui Bank contohnya AEON Kredit, pinjaman kenderaan dengan Kedai dan sebagainya?
- Sila berurusan terus dengan pemberi pinjaman kerana mereka bukan institusi Perbankan.

8. Ada kesan tak kat rekod CCRIS dan CTOS?
- Tiada, ia tidak terkesan langsung.

9. Rumah sewa dapat tangguh secara automatik tak?
- Tidak. Tetapi boleh berbincang dengan pemilik untuk diskaun dan kelonggaran kerana secara dasarnya, pemilik pun dapat penangguhan bayaran pinjaman.

10. Bagaimana kalau tak mahu buat penangguhan dan nak bayar macam biasa?
- Hubungi bank dan beritahu mereka.

11. Penangguhan akan kena faedah atau penalti tak?
- Tidak. Anggap sahaja penangguhan ni satu anjakkan ke depan dan 6 bulan ini hanya satu ruang kosong yang anda tak perlu bayar dan tak memberi kesan.

12. Selepas 6 bulan moratorium macam mana?
- Bayar pinjaman seperti biasa.

13. Insurans perubatan, insurans nyawa dapat penangguhan juga tak?
- Tidak termasuk dalam Moratorium.
- Kalau tak bayar, takde perlindungan.

So tak payah dah nak pening2 kepala, kerajaan dah bagi kelonggaran tu. Ambil sahaja, pasal kita x tahu di kemudian hari, disebabkan itulah kerajaan buat kelonggaran begini.

Kemungkinan kita akan menghadapi kegawatan ekonomi yg menggerunkan, simpan duit cash, berjimat cermat mulai sekarang.

Harap ni boleh membantu semua, semoga dapat memberi pencerahan, kongsikan supaya orang tidak lagi tertanya-tanya.

Stimulus Package by Malaysia Government - Malay Language

Summary of the Stimulus Package by Malaysia Government:

One-off Assistance:

1. RM1600 kpd 4 juta isi rumah berpendapatan RM4000 ke bawah.
2. RM1000 kepada 1.1 juta orang yg  berpendapatan antara RM4000-8000
3. RM800 kepada 3 juta individu bujang berpendapatan RM2000 ke bawah
4. RM500 kpd individu bujang berusia 21 tahun ke atas berpendapatan RM 2000-4000
5. RM200 kepada pelajar di IPT
6. Golongan mudah terjejas, warga emas, oku, kanak-kanak, gelandangan akan diberikan makanan, tempat tinggal dll
7. PTPTN ditangguhkan 6 bulan sebelum ini, diberi penangguhan juga kepada PTPK
8. MySalam mendapat RM50 sehari maksima 14 hari, bagi mereka yg dimasukkan ke wad. B40 yang dikuarantin juga akan mendapat yg sama
9. Mereka yang mencarum Skim persaraan swasta- boleh keluarkan pra-persaraan RM1000
10. 6 bulan pengecualian sewa kepada penduduk PPR
11. DBKL juga mengecualikan sewa
12. 6 bulan pengecualian sewa bagi premis milik kerajaan persekutuan
13. Diskaun berperingkat 15-50 peratus utk bil elektrik.
14. Pakej telekomunikasi. Internet percuma bernilai RM600 juta
15. RM500 one off kepada kakitangan kerajaan gred 56 ke bawah
16. RM500 kepada pesara kerajaan
17. Insentif upah
18. RM500 kepada pemandu ehailing
19. Pekerja kontrak pembersihan dan makanan, kerajaan tanggung gaji yg sepatutnya dibayar kontraktor walaupun pekerja tidak hadir bekerja
20. Dana RM4.5 bilion untuk membantu IKS

More initiatives:

• KWSP- khidmat rundingan majikan diperkenalkan
• Levi tabung pembangunan sumber manusia
• Bayaran cukai pendapatan dikecualikan selama 3 bulan kepada PKS
• Moratorium bayaran hutang/pembiayaan oleh bank-bank dilaksanakan bagi tempoh 6 bulan. Juga dipanjangkan moratorium utk pinjaman tekun, MARA bagi IKS
• Sumbangan kewangan sosial kerjasama antara bank-bank Islam dan majlis agama Islam.

What I Learn From the Covid-19 Catastrophe

Covid-19 was announced to the world just before Chinese New Year. At that time, no many people would care much about it as it was happening in Wuhan, China. But as it spread to other countries, many starts to take notice but there are still many that are ignorant about the severity of Covid-19, even up to today.

Below are some lessons that I have learned from this Covid-19 pandemic:

We need to prepare in advance

It never hurts to get ready when everything is still normal. Stocking up non-perishable items even just a little bit won't hurt much. It may take up some space but the relief it brings in a time of disaster is totally worth it.

Emergency Fund

Why stocking up non-perishable items is good, we must also prepare the same financially. This is where an emergency fund comes in. This is especially true for those with irregular incomes. The fund will help to mitigate the time you are not able to generate income. You can read more about Emergency Fund here

Investing precautions

Only invest with Ringgit that you do not need in the coming 5 years. Given how low the shares market has tumble down and with no end in sight, many people would be experiencing financial Armageddon. This is just paper loss until you really sold off the shares. That's when you are experiencing real loss. But if you are investing with Ringgit that you don't need now, you can wait and ride through the storm and be much tougher.

No to "automatic" reduction of EPF Contribution

In case you don't know, there was a stimulus package announced by the interim PM to tackle the Covid-19 pandemic. In the stimulus package announced, one very important announcement was about the reduction of the monthly contribution to our EPF from the current 11% to 7%. The reason given was to help the rakyat to have additional cash to spend during the pandemic and stimulate the economy. But employees who would not want to reduce their contribution can inform their HR or Payroll department.

While the idea is good, I will always opt-out from reducing my contribution to my EPF. The main reason is that the 4% reduction would not make too much of a difference for my monthly expenses but will have a big difference for my retirement fund. Imagine that the 4% would be compound at the rate of 5% for 20 years. Let's take an example. If 4% is RM 100 and we accept the reduction for 6 months, we have RM 600 to compound for 20 years. The RM 600 will grow to become RM 1,591.98. That is an increase of 265.33%.

So, for me, the best thing to do is not to accept the reduction of 4% but to reduce our expenses in all other possible ways. Cook at home instead of eating out or call for delivery. It is many times cheaper. And since you would not be driving around, your petrol cost will be lower too. You may complain that the electricity bill will be higher but as long as you are not using air-con and water heater excessively, you would not have issues of very high bills.

The Bear and the Bull

Yesterday, the Wall Street tumble again and Dow confirmed that a bear market is happening as the financial crisis after the World Health Organization called the coronavirus outbreak a pandemic.

But what is a bear market anyway?

A bear market is when the stock market moves down by at least 20% from recent highs. Interestingly, a bear market is named for the way that the bear attacks its victims. A bear swipes downward during an attack, thus becoming a metaphor for market activity under these conditions.

If the bear market is when the market decline, what is the opposite?

The opposite of a bear market is called a bull market. A bull market is defined by the market going up aggressively over a period of time. As the market starts to rise, there becomes more and more greed in the stock market. More and more people will "invest" into the market, pushing it higher and higher.

So what should I do if there is a bear or bull market?

The most simple answer is to do nothing but to stick to your financial plan. If you are investing in a ringgit cost averaging, continue with it. But if you have been preparing for this bear market, buy the company or companies that you know are good at a discounted price, if any. Technically, a bear market is like the "Sales season" in Malaysia where many, if not all products are being sold at a discount. If you have been doing market research and know a certain company has a solid foundation, you can buy into the company if you think the price is right. In the long run, the market will reach a bottom and start moving up again.

How much is Enough?

In the world today, we are being brainwashed to think that we should have more and more. We should have more things, more money, more social media likes, more food, more gadgets, more of everything.

Success in life is often judged by external indicators like luxury items, popularity, salary, or status items. But, in reality, these external indicators are actually poor guideposts because they are not the real indicator of true wealth, contentment or positive lifestyles. The reality behind the shiny facade is often debt, money worries, stress, poor health, and dysfunctional relationships.

Understanding the reality, we need to reject this acquisition mindset and the consumerism that everyone is being caught up in. Thus, in order to restore balance as we pull back from our lifestyles of excess, we should strive for a more moderate lifestyle and care less about what other people think about us. With this, we may experience greater fulfillment and happiness.

Never enough

The problem with the current society is what we have is never enough. We would want more of everything. Collectively we are better off and have more than any generation before us, but it still isn’t enough. Even when we have everything we need, we are told that we must have better, upgraded versions of our endless possessions.

The race for more is a vicious cycle. The more we buy, the higher our expenses will be. Thus we need to work harder and longer to pay for these expenses, resulting in less time to enjoy life and more stress. Then, we would spend for more goods and services to compensate and make us feel better. And the cycle repeats again and again.

Striving for a more simple life

Instead of running the never-ending race for more, it would be better for us to strive for a more simple and moderate life. 

Life is not about how fast you get to the end. Rather, it is a marathon that we would take time to enjoy the scenery and companionship of your family and friends.

By understanding that more does not mean better is one of the first steps. There are many times that when we take things easy, we would be much happier.

Take a step back and stop everything that you are striving for. Take your time to look into all these goals and activities. Do you really need them or it is just a wants? Would it really make you happier? Does it improve your life by a large margin? Is there something similar that can give you just as much happiness?

Take an example of myself. My dream car when I was young was actually a Honda Civic. But the cost of buying that new car then was about RM 100,000 which is an exorbitant amount of money that I could not afford. So, instead of working endlessly to pay for the installments, I look into other alternatives that are more affordable. In the end, I bought a new 2003 Perodua Kelisa (which I still own until today). This Kelisa is still as good as it used to be and even until now, I am happy with it and have no thought of selling it, even if the one buyer is willing to pay double or triple the current price.

JoyRead #4

Should I Invest for Capital Gains or Dividend Yields? by KCLau.com - KC wrote a wonderful post regarding why we should invest for dividend yields. He shared 9 reasons while investing for dividend yields is a better choice and I totally agree with him.

How To Start Working From Home In 6 Steps by Out and Beyond - Aisha gave a good step-by-step guide on how to start working from home. The post is very practical because she has done it.

How to save money for your kids and teach them about finance by Think Save Retire - I always believe in financial literacy and it should be learned from young. Thus, I find this post most informative as to how I should guide my little one.

* Note to the authors of the featured article, it would be great for you to grab the following image and link it back to Radical Ringgit.

Frugal Living

When I learn about financial independence, I have started to adjust my life according to this new goal. What I didn't know is the life that I am living in now is call frugal living. Frugal living means adjusting the priorities of life by focusing more on things that are important. As a husband and a father, my top priority would be to provide for my family, both now and also in the future.

But how does frugal living works?

Frugal living works in 3 different areas:

1. Smarter Money Management
2. Smarter Spending
3. Smarter Lifestyle

Smarter money management

When you know what is going on with all your money, you would be able to make smarter decisions. You will know if you should save or spend it. You would know if that something is really worth your money or not. And the only way to know what is going on with your money is to have a cash flow records (aka track your money).

Record all the money that comes in and go out. Over a month, you will find some surprises on where did your money went to. And you will start to be more mindful of how you are spending. That is what we call smarter money management.

Smarter spending

As mentioned, once you know where you are spending your money, you would be more mindful of how much you are spending. You would start to look for alternatives whereby you would still get the same result but at a lower price. This is what we call stretching the money.

You will also start looking for possible ways to get cashback, discount coupon, rebate, and up to possible buying in bulk and stockpiling certain items that you found at an unbeatable price. Another way of smart spending is when you know when you would not spend it. When the purchase doesn’t fit into your budget, you would wait until the item goes on sales before buying it. That is what I call smarter spending.

Smarter lifestyle

Do you know that the supermarket/hypermarket/retail stores are charging you RM0.20 for each plastic bag that they provide for you? It may not seem much but if every 3 days, you would go for grocery shopping, 1 one year, you will be paying RM24 just for 1 plastic bag. What if you are taking 2 plastic bags? That is RM48! So, instead of continuing using plastic bags, use a recycle bag. It is much more convenient and cheaper and stronger too.

Also, instead of eating out every other day, cook the meal at home and enjoy the more wholesome meal. Have fun during the process. Or bring your lunch from home and you can skip driving out of office to buy your lunch. That is what we call a smarter lifestyle.

Why Live Frugally?

Frugal living unlocks a world of possibilities. You can pay off all your debts, pay for your child's education, retire early, travel the world, etc. It may not be an immediate result but eventually, you will get there.

Are you with me?

JoyRead #3 - 21 February 2020

This time around, I would be sharing 3 articles written by our local blogger.

The Actual Cost Of Owning A Car in Malaysia by The Money Magnet - When we think about buying and owning a car, we usually think about the cost of the car alone. What many of us didn't realize is that there are other costs involved too, such as fuel, maintenances, spare parts, car washings, insurance, road tax etc. Michelle did a good job of writing out most, if not all, the additional costs that we did not think about.

Balancing Consumption by Aishah Kamaluddin - We, humans, have a certain instinct that we didn't realize. We would not want to waste our time, and indirectly, we would want to get the best out of everything. So, we would try to consume something all the time. Have a read of how we could/should balance our consumption.

Luxury cannot be low-cost. True? by kopiandproperty.com - There are many rich people in the world. And there are also those people who are not so rich too. Either way, all of us are consumers and we would want something out of our money. What this article share is more about how different people would consume the same thing at the different standard. Read the article and you should understand what I am saying. This article is one of my favourite articles for February 2020.

* Note to the authors of the featured article, it would be great for you to grab the following image and link it back to Radical Ringgit.

Insurance 101 - What is Insurance anyway?

Insurance is an arrangement whereby a company or government agency would provide a guarantee of compensation for specified loss, damage, illness, or death. In return, those that bought the insurance will make a payment to the company call premium periodically. 

For Malaysia, we also have Takaful, the shariah compliant version of insurance. The concept of Takaful insurance is based on the Shariah laws whereby a group of participants mutually agree among themselves to guarantee each other against a defined loss or damage that may inflict upon any of them. These participants will be contributing a tabarru’ or donation into the takaful funds. Takaful emphasizes unity and co-operation among the participants.