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/

Keeping up with the Shah

Have you ever wonder why you are unable to save and invest even though you are making decent Ringgit from your works? Also, you might, or might not, realize that you are spending too much of your Ringgit and frequently upgrading your stuff to the latest and greatest in the market.

These are indications that you might be "keeping up with the Shah".

"Keeping up with the Shah" is adapted from "Keeping up with the Joneses". It is a kind of mentality by which we try to keep up with our vision for success, and it usually revolves around keeping up with our neighbours who seem to be more wealthy than us. It is the constant interpersonal evaluation of haves and have-nots and comparing our material accumulation and visible signs of wealth with our immediate relatives, friends, peers, and neighbours.

In the era of social media, this Keeping-up Mentality has grown dramatically. This is mainly due to the increased exposures to other peoples’ spending habits and our corresponding increased desire to “keep up.” The more we look at how others are spending, the higher the desire to keep up with them. Other people will have the same mindset when they look at how we are spending and would try to keep up with us. This, in turn, increase our own expenses and the cycle would never end.

However, if we can realize what is actually happening, we can actually break away from this cycle. Instead of the never-stopping desire to spend, we will be able to control ourselves and step out of the cycle. We can make better use of the money to enrich our lives. We can buy assets that would, in turn, produce income for us.

To remove ourselves from this endless cycle, we must, first and foremost, tell ourselves that we do not need to keep up with anyone. We can have things that others have not but before that, we must first build our foundation. We would need to buy income-producing assets so that there would come a time when these incomes would be able to pay for the things that we want. Even if you can't pay for all of it, these income-producing assets would help in reducing the money that you need to take out from your own pocket.

In the end, if you want less by no longer keeping up with the Shah, you will be happier and happier.

PEMERKASA

Prime Minister Tan Sri Muhyiddin Yassin has announced the Rakyat Empowerment Programme — or Pemerkasa — an initiative that aims to revitalize the economy

Yesterday, Prime Minister Muhyiddin said the government has allocated RM20 billion for the program, of which RM11 billion constitutes direct fiscal injection.

Here are the highlights of the initiatives under the PEMERKASA programme:

• The government will allocate RM5 billion more into the immunisation programme in order to hasten and achieve the herd immunity target in December 2021, compared to the initial target of the first quarter of 2022.- With the ongoing immunisation programme, Muhyiddin said the government may no longer need to implement the statewide or nationwide MCO.

• Employers who conduct COVID-19 tests on employees will be allowed additional tax deductions.

• To ensure businesses' sustainability, the government has agreed to continue Geran Khas Prihatin (GKP) or GKP 3.0, whereby eligible small-medium enterprises (SMEs) will receive a one-time payout of RM1,000.

• For those who have lost their job during the pandemic, the government will allocate RM300 million to pay unemployed Malaysians RM600 a month for a maximum period of six months.

• For gig economy employers, they will receive RM200 for every employee they employ during this period.

• The National Employment Council (NEC) targets to create 500,000 jobs.

• The government will extend tourism tax and service tax exemption on accommodations provided by hotel operators until 31 December 2021.

• The government has agreed to offer a one-off Geran Bantuan Khas of RM3,000 to more than 5,000 travel agencies registered with the Ministry of Tourism, Arts, and Culture (MOTAC).

• Homestay operators registered with MOTAC will also receive a one-off cash aid of RM600.

• Hotel operators, theme parks, convention centres, shopping malls, local airline offices, and tourism agencies will enjoy a special 10% discount on electricity bills.

• To help reduce the burden of companies facing financial problems, the Companies Commission of Malaysia (SSM) has agreed to increase the indebtedness threshold from RM10,000 to RM50,000.

• SSM will waive business registration fees for the B40 group and university students who want to venture into entrepreneurship.

• Meanwhile, the Malaysian Co-operative Societies Commission (SKM) will provide financing incentives of up to RM100,000 without collateral to help affected companies.

• Households that purchased smartphones or new devices for schoolchildren will receive a subsidy of RM300.

• The government will offer a one-off RM500 cash aid to the B40 group who have lost income during the pandemic.

• An additional payment of RM500 will be given to Bantuan Prihatin Rakyat (BPR) recipients who earn RM1,000 and below.

• There will be a temporary shelter in Taman Desa, Kuala Lumpur to help out those who don't have a place to live.

• RM100 million in e-wallet credits will be given out to low-income households so that they can purchase basic food items.

• The retail price of RON95 and diesel will have a ceiling price of RM2.05 per litre and RM2.15 per litre respectively.

x