Leverage on the benefits of refinancing

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In chapter five of my book, How You Can Become a Multi-Millionaire Real Estate Investor, I wrote on the five types of returns from property investment. There is a sixth and powerful return which I shall call, The Power and Magic of Refinancing! One unique feature of property investing is the ability to pull money out every few years via refinancing as the value of property increases due to inflation and the outstanding loans are reduced, thanks to rental income. In this article, I will highlight a simple example where you can take out your original down payment in the seventh year. Thereafter, you own a “zero-money-down” asset working hard that generates infinite returns for you.
Your family’s inflation rate is much higher, around 6 to 8% p.a. It is primarily dependent upon the parent’s and children’s lifestyle. Usually, children’s inflation rate is higher than their parents due to difference in lifestyles. Hence, any long term investments that do not give you returns above your family’s inflation rate are considered to be poor investments.
Assumptions:
Purchase price = RM100,000 (for a low cost apartment which most people can afford
Down payment = RM20,000 (20%)
Loan = RM80,000 (80%)
Interest = 5% p.a.
Tenure = 20 years
Note: The interest and tenure is on the conservative side. Today, it is possible to get loans at BLR – 2.2% p.a. and tenure of up to 40 years or age 70.
Yearly instalment = RM6,418 or RM535 per month
Rental = RM600 per month (which is enough to pay the monthly instalment and service charges)
Cashflow = Zero every month
Apartment location = Within 15 minutes’ walking distance to a nearby train station, where the occupancy is more than 90%
For simplicity in calculations, other costs such as legal fees, stamp duty, etc, are ignored. We also assume that interest rate, rental and price appreciation over 20 years remains unchanged.
Reduction of loan over time
Take a look at how a loan of RM80,000 reduces over time from the Loan Amortisation Table below.
                                                                                                                  Loan Amortisation Table

		A			B		A-B
Year	Interest             p.a	Loan start               Balance	Yearly           Instalments	Interest     payment	Principle       repaid	Total     principal       repaid	Loan end      Balance
1	5	80,000	6,418	4,000	2,418	2,418	77,582
2	5	77,582	6,418	3,879	2,539	4,958	75,042
3	5	75,042	6,418	3,752	2,666	7,624	72,376
4	5	72,376	6,418	3,619	2,800	10,424	69,576
5	5	69,576	6,418	3,479	2,940	13,363	66,637
6	5	66,637	6,418	3,332	3,087	16,450	63,550
7	5	63,550	6,418	3,178	3,241	19,691	60,309
8	5	60,309	6,418	3,015	3,403	23,094	56,906
9	5	56,906	6,418	2,845	3,573	26,667	53,333
10	5	53,333	6,418	2,667	3,752	30,418	49,582
11	5	49,582	6,418	2,479	3,939	34,358	45,642
12	5	45,642	6,418	2,282	4,136	38,494	41,506
13	5	41,506	6,418	2,075	4,343	42,837	37,163
14	5	37,163	6,418	1,858	4,560	47,397	32,602
15	5	32,603	6,418	1,630	4,788	52,186	27,814
16	5	27,814	6,418	1,391	5,028	57,213	22,787
17	5	22,787	6,418	1,139	5,279	62,493	17,507
18	5	17,507	6,418	875	5,543	68,036	11,964
19	5	11,964	6,418	598	5,820	73,856	6,144
20	5	6,144	6,456	307	6,149	80,005	-5

Under the column ‘Total Principal Repaid’ in blue, take a look at the numbers highlighted in yellow. At the end of year seven, the total principal repaid is around RM20,000 which is the original down payment amount. It’s possible (subject to the bank’s terms and conditions) to refinance this apartment and increase the loan quantum back to the original amount of RM80,000 and cash-out RM20,000.*
* Note: In reality, as property prices goes up over time due to inflation, it’s even possible to refinance to an amount higher than the original loan amount. Alternatively, you can pull-out the RM20,000 in a shorter time, perhaps five years instead of seven.
Leverage on the benefits of refinancing
• Properties will always be around
An investor is able pull out his original down payment or equity of RM20,000 within seven years and put it to work somewhere else, preferable on a second property. Thereafter, none of his original money is left in the first property. The first property then becomes a “zero-money-down” investment, enabling him to enjoy infinite returns.
In fact, he can keep refinancing and pull out RM20,000 every seven years for the rest of his life. Even after he passes away, the apartment will still be around and his children will be able to withdraw RM20,000 every seven years for the rest of their lives. Human beings will come and go whereas properties will always be around!
• Low risks
The investor enjoys a payback period of seven years on his capital of RM20,000. This is not considered long considering the low risks involved (as long as the property is in a good location that has high occupancy). In comparison, the payback period for new restaurants or retail outlets, which are considered to be much higher risks, is approximately three years.
For example, a good friend of mine today owns three franchises of a famous kopitiam (coffeeshop) chain. He told me that his investment in one outlet is approximately RM1 million. Each outlet is able to generate profits of around RM30,000 per month or RM360,000 per year. Within three years, he is able to recover his original investment of RM1 million, which he then uses to open another outlet. On the surface, the returns and payback period may seem very attractive, but the risks he takes are also very high.
• Keep duplicating
If you are a full-time employee, it’s possible for you to replicate my business friend’s success via property investments which entails much lower risks. You can easily recover your down payment of RM20,000 within seven years, which you can then use for a down payment on your second property. If you wish, you can then duplicate the formula seven years later (in year 14) by refinancing the first and second property and pull out RM40,000, which you can then use to purchase two more properties.
An initial down payment of RM20,000 in one property has enabled you to acquire four properties within 14 years. Another seven years or in year 21, you can refinance all four properties, pull out a total of RM80,000 and purchase another four properties. This is the power and magic of refinancing that no other investments can offer!
For more information and the latest dates on Milan Doshi’s property preview or the full 3-day workshop, call 019-572 8898 / 017-966 6178 or visit starprop.propertyintensive.com

If you have comments or questions about this article, write to contents@starproperty.my

Debt & credit score management

For those who are in debt,  Yes, paying off your debt is the simplest and surest way to improve your credit. But, believe it or not, this is only 15 percent of what goes into your credit score. To have the best effect on your score, you need to improve as many areas as possible.

Step 1: Pay Off Your Lowest Balance First

If you owe a small balance on a credit card, or only have a few hundred dollars to go on a medical debt, then finish it off and close it out. This will have a positive effect on three areas of your credit score: amount of debt, total lines of credit, and debt to income ratio. This will also help you build momentum in your debt elimination plan, and free up more money in your budget.

Step 2: Improve Your Debt-to-Income Ratio

The higher your income in relation to your debt, the better your credit score. Either find a way to bring in more income, or sell something to pay off your debt. Ideally, do both.

Step 3: Eliminate High Interest Debt

Develop a plan to pay off your highest interest debt as soon as possible. Debt consolidation is a great way to improve your score by doing precisely this.

Step 4: Avoid Opening a New Line of Credit

Unless it is absolutely necessary, don’t take out any new loans or credit cards. The more credit accounts you have open, the more lenders view you as a risk. On the other hand, paying off a debt will close a line of credit and improve your score.

Step 5: Check Your Progress Often

Monitoring your progress will help you work towards a goal, and make better decisions. There are a lot of free or low-cost services online that enable you to check all three-credit scores at any time. Keep in mind that you are entitled by the government to a free credit report from each service once a year. Reviewing your credit report will also give you the opportunity to make sure there are no mistakes on your report which can cause significant damage to your score. You'll also be able to ensure that the debts you pay off are removed in a timely manner.

Step 1 vs Step 3

Does paying off lowest balance first contradict with paying off highest interest balance?

It is about logic vs emotion.

• Paying off highest interest balance is logic.

• Paying off lowest balance is emotion (few better and have less account to manage).

Consolidate a few balances (few credit card) into one does make sense in term of reducing the cost and easy management.

Household debt vs Property price

Household debt vs Property price

Property has been the hot topic for most people in year 2010 till now..... lot of agents said now is the best time to sell (if you have one, other than your own home).

Found some key points from Dr. Dzul's blog, a post dated 25 November 2010,

• It is worth noting that our household debt to GDP ratio shot up to 76% between 2004 and 2009 and is the highest in Asia, except for Japan. But as a reminder, Japan’s per capital income of US$32,700 or about RM8000 per month in 2009, while Malaysia’s average income per capital is less than RM2000 per month.
• According to a note by CIMB Research, the ratio of household debt to personal disposal income hit 140.4 % in 2009- higher than Singapore 105.3% and the US 123.3%. This means Malaysians owe double the amount they earn. 
• unsold properties in Malaysia rose to 22.6 per cent of new launches in the second quarter of this year, from 19.5 per cent in the fourth quarter of last year. For Kuala Lumpur, unsold properties rose to 16.1 per cent from 15.8 per cent, while for Selangor it rose to 14.6 per cent from 12.4 per cent.
• Checks on developments completed this year also show that vacancy rates remain at 50 per cent or higher.
• Property Overhang as reported by Napic (National Property Informational Centre) for the third quarter of last year was supposedly a cause for alarm. Then there was an overhang of 20,286 residential, 5,450 shop and 619 industrial units worth a whopping RM5.3 billion.
• Credit Counselling and Debt Management Agency (AKPK) reported a total of 50,361 cases enrolled in debt management program with 10.6% of them who could not pay their credit card debt while 74.3% had repayment problem with housing loans, car loans and credit cards outstanding.
• AKPK’s CEO Mohamed Akwal Sultan said some 44% of the individuals who join the programme belong to the 30 to 40 age group.
• High car prices, due to protectionist policy of the government doesn’t help while most are already in debt as soon as after graduation because of loan repayment for their studies ie the PTPTN. The problems worsen when they hit their 30s and beyond.

Can property price be sustained when national household debt soar "further"?  Christmas has just over but "you better watchout.... you better not cry, you better not pale.... I'm telling you why......bubble is coming to town"

Small Business Plans

For small businesses, costs are always an issue. Small employers don't have the resources that large enterprises do. However, they have to compete against larger organizations for good employees. As a result, many small businesses will offer plans that help people save for retirement while keeping costs low. SIMPLE IRAs and SEPs allow employers to offer incentives with very little administrative cost.

SIMPLE IRAs and SEPs

The Savings Incentive Match Plan for Employees (SIMPLE) IRA is a plan offered by businesses with no other retirement plans and with fewer than 100 employees. As in 401(k) plans, your contributions and earnings are tax-deferred. You can contribute up to $10,500 a year, and the employer must either match 100 percent of your contributions, up to 3 percent of your salary, or contribute 2 percent of compensation for each eligible employee, even those who don't contribute to the plan.
A Simplified Employee Pension (SEP) IRA is similar to a SIMPLE IRA, except that only your employer can contribute. The disadvantage of this plan is that you have no control over how much goes into your plan because you can't contribute any of your own money. However, if you're self-employed, you're the employer and the employee at the same time, so you get to control things. The limit on employer contributions is 25 percent of your compensation up to a maximum of $45,000. With both the SIMPLE IRAs and the SEP IRAs, you can still invest in a traditional or Roth IRA.

Solo 401(k) Plans

Solo 401(k) plans are among the most powerful options available to small businesses. However, they only work for a one-person (or family-only) business. They share many of the characteristics of a standard 401(k) plan, including the ability to take loans. However, they are less expensive to administer.
If you do any freelance or contract work, consider opening a Solo 401(k) plan. In addition to your “salary deferral” contributions, you can give yourself a profit-sharing contribution of up to 25 percent of compensation. In other words, you can contribute the same amount as you would to a SEP, and then some.

Other Retirement Plans

Depending on the goals of an organization, there are plenty of other retirement plan options available. The bosses get to pick who they'd like to reward, and how, and then find a plan that does what they want. Nonquali-fied plans and other retirement benefit plans may be available to you if your skills are in high demand or if your employer is creative. For example, DB(k) plans provide a small pension-like guaranteed income stream, along with the ability to save money as you do in a 401(k). Other plans might promise you a lumpsum payout every ten years or so.

Choosing What's Best for You

Before you choose a credit card, think about how you intend to use it. Do you plan to pay off the balance every month or carry a balance from one month to the next? If you pay the balance every month, the annual fee and other charges may be more important than the annual percentage rate (APR), so you should look for a no-fee or low-fee card. Even if the issuer charges an annual fee, you may be able to get it waived by calling and asking them to remove it. If you carry a balance and pay for your purchases over time, the APR and the method of computing your balance are most important, so you'll want to look for the lowest interest rate and the best grace period. Getting a rebate or frequent flier miles is usually not a good reason to choose one card over another unless everything else is equal. You'd have to do a lot of flying to build up enough frequent flier miles to pay for the fee that often accompanies these cards.
Beware of teaser rates, which sound tempting because the introductory rate is much lower than the going rate on most cards. The downside is that if you have a balance on the card when the introductory rate ends, you could be in worse shape than you were with a higher rate, depending on how high the rate spikes at the end of the introductory offer.

Interest rates on cards that award frequent flier miles for certain purchases are usually several percentage points higher than regular credit cards, so don't carry a balance on them. If you pay even one day late, you're hit with finance charges and you may lose any miles earned that month.

In general, if you have a good credit history and you're paying more than 7 or 8 percent above the current prime interest rate on your VISA or MasterCard, you're paying too much. Considering that the prime rate is in the single digits, lenders that charge 16 to 21 percent interest on credit card balances are gouging you. A few percentage points in the interest rate could save you thousands of dollars depending on your balance and how quickly (or slowly) you pay it off.
If you can obtain a lower-interest credit card, you can usually use cash advances to pay off the balance on your other credit cards and transfer this debt to the lower-rate card. Be sure to read the fine print, though. The interest rate on cash advances and transferred balances is usually much higher than the standard interest rate, so be sure you can pay off the cash advance before the introductory offer runs out.
If you have a questionable credit history, you'll pay higher interest rates. Lenders try to reduce their risk by increasing the interest charges on higher-risk debts. The higher the rate, the faster your debt will grow, and the harder it will be for you to pay it off.

Paying Down Debt on Your Own by Debby Fowles

Once you realize and accept the fact that you have too much credit card debt, the question is, what are you willing to do about it? The first step is to put the credit cards away, or better yet, cut them up and cancel them. Then consider the following options to see which ones might work for you.

Use Your Savings or Sell Something of Value

If you have something of value, consider selling it. You may have some stocks or mutual funds you could cash in. How about those savings bonds Uncle Herbie gave you every year when you were a kid? Do you own a collection of some sort that has value?
If you're earning less than 3 to 4 percent interest on your savings account while paying 12 to 21 percent on credit cards, you may need to use your savings to pay off debt in order to prevent ruining your credit. Try to leave yourself a savings cushion even if you can't keep a full three months' worth of basic, no-frills living expenses.

Use the Equity in Your Home

Using the equity in your home may be another option. If interest rates are lower than your current mortgage rate, and you haven't yet damaged your credit, you may be able to refinance and roll your debts into the new mortgage. If that's not an option, you might be able to get a home equity loan or line of credit to pay off your other debts. Rates on mortgages and home equity loans are much lower than the rates on most credit cards, so besides the obvious slash in the interest rate, you may be eligible to reduce your interest costs even more by deducting the home equity loan interest from your taxes. Don't forget that even if you can deduct 28 percent of mortgage interest if you're in the 28 percent tax bracket, the other 72 percent still comes out of your pocket.
Exercise extreme caution when you consider borrowing against the equity in your home. If you get into trouble financially due to job loss, illness, medical bills, or divorce, you may not be able to make your mortgage payments and the lender may foreclose on your house. Don't jeopardize your most valuable asset if you really can't afford the increased mortgage payments or if you haven't made changes in your spending habits and credit use. Using equity in your home to pay off consumer debt once may get you ahead, but you can't keep going back to the well.

Use the Credit Crunch Method

This method of paying down debt goes by a number of different names, but whatever the name, the strategy is the same. It seriously reduces your interest expense, which could be 90 percent of your monthly payment if you've been paying the minimum, and it allows you to pay off your balances sooner.

If you drive an expensive car, consider getting a less expensive one. It's not just that the monthly payment is higher; it's the repairs and maintenance, special tires, gas, and insurance. Drive a reliable, inexpensive car for a few years and apply the savings to your credit card balances.

First, to really get a handle on your debt, develop a written plan. Prepare a schedule of your debts, listing the creditor, the balance due, the interest rate, and the current monthly payment. Rank the debts in descending order by interest rate (highest interest rate first, lowest interest rate last). Each month, pay the minimum balance on all credit cards except the one with the highest interest rate. Pay as much as you possibly can on this card each month until it's paid off. Use all available money for this payment including overtime pay, tax refunds, bonuses, money generated by reducing expenses, and your bottle deposit money.

Find out how long it will take to become debt-free and how much you'll pay in interest by making the minimum monthly payments by using the Debt Reduction Planner calculator in the personal-finance section of CNNMoney (www.cnnmoney.com).

When you've paid off the first debt, pause briefly to pat yourself on the back, and then start in on the next debt with the highest interest rate. Pay as much as you possibly can each month, including the amount you were previously applying to debt number one. Continue to pay the minimum balance on the others. Keep moving down the list of debts until they're all paid off. This is the only time you should ever pay the minimum balance on any credit card.

Pay Off Your Debt or Invest?

Maybe it was the financial planner on CNBC, a casual conversation with a friend, or just the small voice inside, but something has caused you to keep asking yourself the same thing: should I pay off my debt or start investing? This question, perhaps more than any other, has plagued investors for generations. Ironically, it is one that can be easily decided by using a bit of simple math.
Whether it's a mortgage, car loan, student loan, credit card, or medical bills, you probably have some amount of debt in your life. It is only natural that you want to pay it off as soon as possible. On the other hand, it is understandable that you want to start putting money away for your retirement or some other important milestone in your life. Since there is only so much cash to go around, a decision normally has to be made between the two, neither of which leaves a person feeling completely satisfied.
What should you do? The answer depends on two variables:
1. The rate of after-tax interest you are paying on your debt
2. The after-tax rate of return you expect to earn on your investments
Before you answer the first question, you must understand that there are two different kinds of debt. On one end of the spectrum is high-interest credit card debt that originates from things such as credit cards and department store charge accounts. This type is the deadliest and generally should be avoided unless absolutely necessary. The second type of debt is the lower interest variety; your mortgage, student loans, etc. Often, the interest on these types is partially or wholly tax-deductible, making it even more attractive.
With that in mind, the answer to the debt reduction vs. investing problem can be solved with this one statement: If you can earn a higher after-tax return on your investments than the after-tax interest rate expense on your debt, you should invest. Otherwise, you should pay off your balance.

Example of debt reduction vs. investing calculation

Scenario 1
Assume you have a thirty year, $150,000 mortgage with a six percent rate. Also assume you are in the 25% tax bracket. Due to the itemized deduction of mortgage interest, your after tax annual percentage rate is really 4.02% (not the 6.00% you are paying). Hence, if you expect to earn an after-tax return higher than 4.02% on your investments (odds are substantial you will if you have a long-term horizon), then you should invest.
Scenario 2
You have a $10,000 balance on a credit card with a 22% annual percentage rate. Credit card interest expense is not tax deductible, meaning you should only invest if you think you can earn a 22% after tax return on your investments. Given that the historical long-term return on equities has been somewhere around 11-12%, this seems highly unlikely. In this case, it would be foolish to invest.

The bottom line

Although you may be eager to invest, you need to do what is best for your bottom line. Regardless of which is the wiser course of action at this stage in your life, the ultimate goal should be to have no debt and an abundance of great, lucrative investments. With enough patience and hard work, this is a goal that you can, and will, attain.

5 More Reasons for Quitting a Job

Perhaps these signs will give you the boost you need to strike out in a new direction. If so, here are also the resources you need to maintain economic viability and pursue your job search while maintaining your current job. You can make a job search or career change feasible if you prepare for the change in advance.
Ready to quit your job? You can resign from your job in a way that reinforces your professional image and keeps current employer relationships positive.
Don’t wait to get the boot that makes you change direction. Prepare for the future now, while you’re still employed. Here are five more signs that it's time for quitting your job; find recommendations on maintaining your economic security and pursuing a job search while you’re currently employed.

Your Job Saps Your Spirit and Steals Your Soul

Copyright Sheryl Griffin

Sometimes your unhappiness on the job has little to do with your employer or your job function. You may be using the job to hide out from your need to press ahead with the work that makes your heart sing. Don’t blame the job.
With fifty administrative tasks, timelines, goals to meet, a demanding boss with her own goals and timelines, and a hundred competing things you need to do to be successful, your job is normal, necessary, and serves a customer. You benefit from the regular paycheck, the opportunity to grow your skills, the many fine people you meet at work, the camaraderie, and the regular schedule. Really.
But, if your career goals and vision lie elsewhere, there is nothing that your poor job can do. If a novel is your current goal, a small business your dream, or a move to a city with myriad outdoor physically challenging events your aspiration, you must eventually, follow your heart. Otherwise, you’ll live in a time inverted world wherein your best hours serve your job and the hours you can fit in, fulfill your dream and nourish your spirit. Many employees live this way, but if it saps your spirit and steals your soul, you know this is a serious sign that it's time for quitting your job.

You Feel Constantly on Edge and Apprehensive

Steve Cole / Getty Images

Life at your company is changing. Your sales are down and closed door meetings are increasing. Whispers by the water cooler are mostly about more bad news: lost customers, delayed orders, no money to lend, loan requirements that enable only already successful businesses to borrow money, orders that promise work booked only through the end of the month, rumors about layoffs increasing, and new products put on hold. No good news, and only what constitutes bad news in your industry.
The rumors and gossip are enough to make you hold your breath and talk about the company’s problems every night at home. It’s good that you have somewhere to discuss your concerns, however, because many companies clam up when problems are on the horizon or even, barking at your door. This is the opposite of recommended best practices, but when the environment is volatile, companies mistakenly think that saying nothing will retain employees and preserve morale. They’re wrong.
You might want to be a smart employee. When problems surround you, rumors abound, and you can’t get straight answers from your boss or your company, you might take this as a sign that you may want to think about quitting your job.

Poor Job Fit

Copyright Amanda Rohde

You have great skills to succeed in corporate life at work – or do you? Sometimes, you wonder any more. In your current job, you seem to spend the most time using your least developed skills. They’re required to succeed in your core job description.
Perhaps you long to research marketing opportunities and measure the results of successful product launch marketing campaigns. In your current job, you execute press releases and brochures and schedule worldwide public relations events. Not a bad job description – just one that is incongruent with your strongest skills and interests.
Or, you answer customer service calls and help customers use your products. What you long to do, and have top notch skills to do, is to design training videos that teach clients to help themselves. None of these are indicative of a bad job or a poor company.
You just long for the opportunity to use your strongest talents and skills. You know that, in the right job, you’ll set the world on fire. This may be a case of poor job fit. Before you begin looking in this economy, make sure that you have explored opportunities to change jobs with your current employer.
Unposted job opportunities are often available for valued employees. But, you must make your job fit needs known to your employer. Despite your best efforts, if a new opportunity fails to emerge, poor job fit is a sign that it's time for quitting a job.

Opportunities Are Passing You By

Copyright Stefanie Timmermann

For whatever reason, you feel as if opportunities are passing you by. You apply for promotions, and even lateral moves, only to find another employee chosen. You ask for feedback and take action to improve the suggested skills and gain the recommended experience. You apply again, and once more, you're bypassed for your desired opportunity.
You’re unable to identify the real reason, but your boss’s excuses, such as you need more experience, offered three years in a row, don’t fly. Perhaps you’ve made yourself too valuable where you are. Perhaps you’re doing a poor job of presenting your skills and knowledge. Maybe you’ve alienated coworkers or an important boss somewhere along the way.
Whatever the problem, and often, despite asking, you are unlikely to ever know, it seems as if opportunities are continually passing you by. These lost opportunities are signs that you may want to think about quitting your job.

Your Corporate Culture Is Changing

Online Creative Media

You joined a company with a fun, laid back corporate culture. You excelled in an environment that allowed you to exercise the quirky, fun-loving portions of your skills and nature. But, something changed. Your company was bought out by a staid and stable older concern and the new culture is taking over. It’s gradually shaping a new workplace that may not be appropriate for you.
Or, a new CEO or department head came onboard and the focus has turned corporate. Where once you could talk with your boss’s boss and no one batted an eye, now such an action is looked on with suspicion. Or, your emphasis has been on generating new consumer loans and credit guidelines are now so tight and you are now so limited in the applications approved, that you are failing to generate new business. A thousand different scenarios are possible.
But, they all have one thing in common. You may no longer feel comfortable in your current corporate culture. You may no longer feel happy or comfortable in the new or emerging corporate culture. You may want to consider this a sign that it is time for you to think about quitting a job.

Before Quitting a Job

A job is a tough thing to lose, even in a positive job searching economy. In the current job searching environment, you'll want to make sure that you have prepared your world and your family for the job search. Most of the time, this means preparing financially and mentally for a change in employment, pursuing a new job while you are still employed, and accepting only a solid job offer before giving notice and making the change.
Prepare for a Job Search

Financial Considerations When Changing Jobs

Whether it’s a planned job change or a sudden job loss, planning ahead can save you from heading into a financial disaster. Changing jobs or your entire career is an exciting, and possibly frightening journey. During this transition, it can be easy to overlook some basic financial issues that can end up costing you.

Planning Ahead

Even if you aren’t actively seeking new employment, it pays to stay on top of your resume and skills. If you’ve been working in the same field for a number of years, it may be difficult to go back and think of accomplishments or other things you’ve learned. So, if you regularly maintain and update your resume, certifications, and contact list, you’ll be prepared to quickly take that first step in seeking out a new job when the time comes.
You’ll also want to take advantage of your benefits if you currently have them through your employer. For example, if you currently have vision coverage, but think that your next job might not offer it, or it might cost too much, consider getting your annual eye exam, glasses, or contacts before you leave and are no longer on the plan. Thinking ahead with opportunities and benefits currently available to you will help make sure you’re not stuck after changing jobs.

Check if You’re Vested

If you’re fortunate enough to have a pension plan at your existing job, now’s a good time to double check the vesting schedule. Are you vested? If not, how much longer do you need to work to become vested? If you are, how much will your benefit be? The last thing you want to do is find out that you left your job with only a few months until you became fully vested. That could cost you tens of thousands of dollars in retirement benefits.
This goes for 401(k) or other retirement plans that have a company match. Most employers have a vesting schedule tied to the match, and it would be a shame to leave just prior to becoming fully vested. So, take the time to double check the vesting schedules and make sure you won’t be giving up unnecessary money.

Consider a Rollover of Retirement Assets

Once you leave an employer, retirement accounts such as a 401(k) are generally available to you. One of the best things you can do is a 401k rollover. As long as you remain invested in your employer’s plan, you’re bound by their plan terms and whatever investments they choose to use. When you move to an IRA, you have much more flexibility.
In addition, you’ll want to check if there are any restrictions or time limits on your funds. In some plans, if your vested balance is under a certain amount, they will automatically issue a lump sum payment if you don’t roll it over within a certain amount of time. If this happens, they will withhold 20% for taxes and 10% for an early withdrawal penalty if you’re under age 59 1/2.
The biggest reason to roll over your retirement account is that you can continue delaying taxes. One of the biggest mistakes people make is to unnecessarily cash out their 401(k) when they leave their job. This creates a significant tax burden, and really sets your retirement savings back.

Keep a Savings Cushion

Even when you’re planning for a job change, having a safety net of cash set aside to help through the transition is a good idea since there can still be a few weeks where you may not receive a pay check. The last thing you want to do is to find yourself unprepared and have to rely on high interest credit cards to get you through the transition.
Start by creating an emergency fund as soon as possible. It’s always good to have an emergency fund, but making sure you’re prepared during a job transition is when it’s especially important. You should focus on keeping this savings in something relatively liquid such as a savings account or money market so that it’s easily accessible if you need it.

Prepare for Uncle Sam

If a new job means more money, that also means shelling out more money to Uncle Sam. You should check to see if your new income will result in reaching a higher tax bracket, and plan ahead by making early tax deductions to minimize the impact.
And don’t forget, searching for a new job and moving expenses related to the job change may be tax-deductible. So, make sure you’re keeping track of your expenses so you can make the most of any possible deductions.

Kurangkan Kad Kredit

Saya percaya ramai di antara anda mempunyai kad kredit. Setuju?
Kad kredit merupakan satu kad plastik yang membolehkan anda membeli bermacam-macam barang selagi anda tidak mencapai had penggunaan kad tersebut. Dengan sekali lerekkan dan satu tandatangan, barang tersebut sudah menjadi milik anda tanpa mengeluarkan sebarang wang tunai sedikit pun.
Tetapi awas! Jika anda berbelanja secara berlebihan, anda mungkin akan terperangkap ke dalam hutang kad kredit yang tidak berpenghujung. Walaupun tiada wang tunai dikeluarkan tetapi anda sebenarnya berhutang dengan pihak bank yang mengeluarkan kad kredit tersebut.
Untuk itu, dalam Bahagian 6 bagi siri Rancang Kewangan Anda ini saya ingin berkongsikan dengan anda mengenai tips menggunakan kad kredit.

Hutang Kad Kredit

Setiap bulan saya akan menerima panggilan daripada ejen-ejen bank yang menawarkan pelbagai promosi kad kredit bersama kelebihan yang akan saya dapat apabila berdaftar dengan mereka. Bermacam-macam tawaran menarik yang mereka berikan tetapi saya menolak kerana sudah cukup bagi saya mempunyai satu kad kredit sahaja.
Tidak salah untuk kita mempunyai kad kredit yang banyak. Tetapi apa yang penting, kita dapat membayar habis segala hutang kad kredit sebelum sampai tarikh akhir bil tersebut.
Apabila kita tidak membayar hutang kad kredit sehingga selesai, hutang kita itu akan bertambah dan terus bertambah selagi ada baki hutang di dalamnya. Ini disebabkan interest yang dikenakan oleh pihak bank di atas kegagalan anda dalam menyelesaikan hutang kad kredit dengan mereka. Dan ya, bank lagi suka apabila anda berhutang kerana lagi banyak anda berhutang, lagi banyak duit yang mereka akan dapat.
Jadi siapa yang rugi? Fikir-fikirkan..

Kaedah Melangsaikan Hutang Kad Kredit

Berikut merupakan di antara kaedah bagi mengurangkan penggunaan dan melangsaikan hutang kad kredit:

1. Simpan hanya satu kad kredit sahaja
2. Selesaikan bayaran penuh kad kredit setiap bulan
3. Jangan sesekali menggunakan kad kredit jika anda ada wang tunai di tangan
4. Jika anda memiliki banyak kad kredit, langsaikan hutang kad kredit yang mempunyai interest yang paling tinggi terlebih dahulu dan potong kad kredit tersebut
5. Usaha untuk mendapatkan pendapatan sampingan sekurang-kurangnya RM200 setiap bulan bagi mempercepatkan proses melangsaikan hutang kad kredit
6. Ulang proses #4 dan #5 di atas untuk kad-kad kredit yang lain sehinggalah anda hanya tinggal satu kad kredit sahaja
7. Berjimat dalam berbelanja dan gunakan kad kredit apabila kecemasan sahaja (membeli barang kehendak bukan kecemasan ya)

Selain daripada tips yang saya kongsikan di atas, anda juga boleh baca ebook Teknik Kurangkan Interest Kad Kredit Terbongkar yang ditulis oleh saudara Abd Hakim. Di dalam ebook tersebut beliau menceritakan secara mendalam tips yang dapat anda gunakan bagi mengurangkan perbelanjaan kad kredit serta dapat membebaskan anda dari hutang kad kredit yang membebankan.
Secara peribadi, saya mengatakan kad kredit adalah bagus sebenarnya. Tetapi ianya akan menjadi bermasalah apabila anda menggunakan kad kredit dan tidak menjelaskan hutang kad kredit secara penuh setiap bulan. Ini menyebabkan hutang kad kredit anda bertambah setiap bulan (disebabkan interest) sehinggalah anda tidak termampu untuk menyelesaikan hutang tersebut dan mungkin boleh diisytihar sebagai muflis.
Sebagai kesimpulan, berbelanjalah dengan bijak. Gunakan kad kredit apabila perlu dan jangan sesekali membeli barang dengan kad kredit sekiranya anda mempunyai wang tunai di tangan. Ingat, satu kad kredit sahaja ya.

Perancangan Hanya Sia-sia Tanpa Pelaksanaan

Setiap apa yang ingin anda lakukan, perlukan perancangan. Jika tidak bertulis, sekurang-kurangnya perancangan yang anda buat itu disimpan di dalam otak anda.
Otak merupakan satu organ yang sangat istimewa. Anda boleh melakukan apa sahaja dengan otak. Ianya bukan sahaja untuk menyimpan memori, malah anda juga boleh menjadikan sesuatu perkara itu menjadi satu realiti. (akan saya kupas perkara ini lebih lanjut dalam artikel saya yang akan datang)
Berbalik kepada topik kita tadi, anda perlukan perancangan dalam setiap aktiviti yang ingin anda lakukan. Tetapi, adakah anda hanya pandai merancang sahaja? Bagaimana pula dari segi pelaksanaan? Adakah anda melaksanakan setiap apa yang telah anda rancangkan tadi?
Walaupun anda mempunyai perancangan yang baik, tetapi jika anda tidak laksanakan, segala-galanya akan menjadi sia-sia. Anda hanya membazir masa sahaja. Tidakkah ianya merugikan?

Jangan hanya merancang, tetapi laksanakan!

Saya mempunyai banyak perancangan yang ingin saya laksanakan. Di antaranya adalah, membuka sebuah perniagaan yang menjual produk secara online, membuka kedai di sebuah shopping complex, membuat peraduan di blog Pengendali Blog, dan juga menulis ebook.
Namun begitu, tidak semua perancangan saya ini dapat dilaksanakan dalam masa yang sama. Saya perlu melaksanakan perancangan saya ini secara berperingkat-peringkat. Selepas berjaya laksanakan satu perkara, barulah saya akan laksanakan perkara yang berikutnya.
Jika anda hebat, anda boleh laksanakan kesemua perancangan anda sekaligus. Tetapi awas! Ianya pasti akan membuatkan anda mudah hilang fokus dan membuatkan anda rasa tertekan. Dan juga result yang anda harapkan tidak menjadi 100 peratus.
Sebagai kesimpulan, memang bagus jika anda mempunyai perancangan dalam kehidpan anda. Tetapi apa yang penting adalah pelaksanaannya. Jika tanpa pelaksanaan, perancangan hanyalah mimpi yang tidak bermakna.

Realisasikan Impian - Satu Panduan Berguna

Sumber : Website Pelabur Malaysia
Tips Pertama
Libatkan seluruh ahli keluarga
Ketika menentukan matlamat kewangan, paling baik kalau dapat melibatkan seluruh ahli keluarga. Cadangan, komitmen dan sokongan mereka amat penting dalam mencapai matlamat anda.
Tips Ke-2
Buat matlamat yang S.M.A.R.T.
Matlamat mestilah khusus, boleh diukur, boleh dicapai, relevan dan ada tempoh tertentu (specific, measurable, attainable, relevant, time related – SMART). Salah satu contoh matlamat SMART ialah "Saya mahu menjelaskan hutang kad kredit saya menjelang Januari 2005 dengan bayaran bulanan sebanyak RM150".
Tips Ke-3
Senaraikan keutamaan matlamat anda
Senaraikan matlamat anda mengikut keutamaan di segi kepentingan atau tempoh masa dan letakkan senarai itu di tempat yang mudah dilihat setiap hari bagi membantu anda sentiasa ingat dan memberi tumpuan terhadap mencapai matlamat tersebut.
Tips Ke-4
Perancangan dan tindakan
Tentukan langkah khusus yang perlu diambil dan dilaksanakan. Misalannya, jika anda merancang untuk meningkatkan tabungan bulanan anda sebanyak RM100 atau hendak membawa bekal ke tempat kerja, pastikan anda melakukannya.
Tips Ke-5
Pantau perkembangan anda
Pantau perkembangan sendiri secara kerap bagi memastikan yang anda berada pada haluan yang betul. Berikan ruang untuk pengubahsuaian atau perubahan (jika perlu) dalam perancangan anda.
Tips Ke-6
Tabah
Buat takrif semula matlamat kewangan atau perancangan anda sekiranya perancangan asal tidak berlaku sebagaimana yang dikehendaki. Jangan sekali-kali berputus asa.
Gunakan "Lembaran penentu matlamat kewangan" ini sebagai langkah awal

Matlamat jangka pendek (bagi tempoh setahun)

Matlamat kewangan	Tarikh sasaran	Anggaran kos (RM)	Jumlah disimpan (RM)	Bagaimana untuk memperoleh (jumlah bulanan, pekerjaan sampingan dsb.)

Matlamat jangka sederhana (bagi tempoh 1 hingga 3 tahun)

Matlamat kewangan	Tarikh sasaran	Anggaran kos (RM)	Jumlah disimpan (RM)	Bagaimana untuk memperoleh (jumlah bulanan, pekerjaan sampingan dsb.)

Matlamat jangka panjang (bagi tempoh 3 hingga 5 tahun)

Matlamat kewangan	Tarikh sasaran	Anggaran kos (RM)	Jumlah disimpan (RM)	Bagaimana untuk memperoleh (jumlah bulanan, pekerjaan sampingan dsb.)

Posted at 05:25 pm by zunur
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Thursday, August 23, 2007

WEALTH CREATION - Tips Mengukuhkan Kewangan

Jadikan hobi sebagai perniagaan yang menguntungkan

Jika anda mempunyai hobi yang anda benar-benar bagus dalam melakukannya, anda mungkin boleh menggunakan hobi itu sebagai punca pendapatan. Pelajari tentang asas kewangan dan perniagaan di rumah, supaya anda tidak melakukan kesilapan yang biasa dilakukan oleh usahawan amatur dan kehilangan modal yang dilaburkan dalam perniagaan itu. Jika semuanya berjalan dengan baik, hobi anda boleh bertukar menjadi perniagaan yang berjaya.

Bina kemahiran yang boleh dikomersialkan pada masa akan datang

Jika anda tidak mempunyai hobi yang boleh dijadikan duit, berusahalah untuk mendapatkan kemahiran yang perlu, yang boleh dikomersialkan pada masa akan datang. Jika anda tidak tahu apa kemahiran yang anda ada, cari sesuatu yang anda minati dan bina kemahiran dalam bidang itu. Sebuah majalah pernah menyiarkan satu artikel yang menyatakan bahawa perniagaan yag berjaya lazimnya berasaskan perkhidmatan, misalnya penyediaan makanan, rawatan muka di rumah, mencuci rumah, menjahit, kerja tangan dan banyak lagi.
Cari peluang di sekeliling anda

Perhatikan di sekeliling anda dan cari jenis perkhidmatan yang boleh disediakan untuk kawan-kawan, jiran-jiran atau saudara mara dengan bayaran yang berpatutan. Misalnya, menjaga anak kawan-kawan, membersihkan halaman jiran, memberikan tiusyen atau menjaga haiwan kesayangan kawan-kawan atau saudara mara. Semua perkhidmatan ini boleh dijadikan pendapatan sampingan dan boleh dilakukan di rumah sendiri.
Kitar semula dan dapat wang
Jika anda tidak mempunyai kemahiran atau hobi yang boleh dikomersialkan atau boleh menghasilkan pendapatan sampingan, satu lagi yang boleh dilakukan untuk mendapat wang ialah menjual barang-barang yang boleh dikitarkan semula seperti surat khabar, majalah, botol plastik, tin makanan atau tin aluminium kepada pusat kitar semula. Contohnya, pusat kitar semula biasanya membayar 16 sen untuk 1 kg surat khabar lama. Jika anda boleh menjual surat khabar lama seberat 100 kg (yang boleh anda kutip daripada jiran-jiran dan kawan-kawan) anda mendapat RM16. Walaupun tidak seberapa, tetap merupakan pendapatan sampingan bagi anda.
Dengan cara ini, anda dapat duit daripada barang-barang yang hendak dibuang. Malah, dengan mengumpulkan barangan kitar semula daripada jiran-jiran dan rakan-rakan, anda membantu mereka membuang semua barangan yang tidak diperlukan di rumah mereka. Sekarang ini, tidak ramai yang ada masa untuk menghantar sampah mereka ke pusat kitar semula. Jadi, dengan menawarkan perkhidmatan ini, anda bukan sahaja membantu memelihara alam sekitar dengan mengitar semula sumber-sumber alam semula jadi tetapi juga mendapat duit.

Bina satu rangkaian kerja

Beramah mesra dengan rakan-rakan lain dan bentuk satu kumpulan yang boleh memberikan sokongan moral, persahabatan, peluang-peluang perniagaan, serta pusat sumber bagi individu untuk bertukar-tukar idea dan maklumat, mendapatkan nasihat pelaburan dan strategi pemasaran.

Posted at 05:01 pm by zunur
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Tuesday, July 17, 2007

Wanita - Ketahuilah Tentang Pengurusan Kewangan Yang Betul!

Sumber : http://www.min.com.my/bm/html/#grace

Mengapa wanita perlu berdikari dalam soal kewangan?
Wanita patut membina matlamat untuk mempunyai kedudukan kewangan yang kukuh dan tidak bergantung kepada lelaki. Hakikatnya, jangka hayat wanita kini lebih panjang berbanding lelaki dan biasanya wanita hidup dalam kesempitan selepas bersara kerana kurang persediaan. Lazimnya wanita berpendapatan lebih rendah dan wanita juga kurang membuat pelaburan. Ini bermakna wanita mendapat kurang ganjaran pencen dan faedah persaraan. Oleh itu, penting bagi wanita untuk belajar mengawal cara berbelanja dan menyedari bahawa menguruskan wang adalah sama penting dengan mendapatkan wang.

Mengapa wanita perlu mempunyai pengetahuan mengenai kewangan? Kebanyakan wanita berasa bahawa mereka tidak begitu memahami soal kewangan peribadi kerana mereka tidak begitu pandai matematik. Mereka lebih konservatif dan takut untuk membuat keputusan dalam soal kewangan. Dan jika ragu-ragu, mereka lebih cenderung berdiam diri.
Pengetahuan mengenai perkara yang membabitkan kewangan dapat membantu anda lebih cekap membuat keputusan. Pengetahuan itu juga mengurangkan kemungkinan anda melakukan kesilapan dan tertipu, di samping itu anda dapat belajar membezakan antara keperluan dan kehendak anda. Anda akan lebih memahami jenis produk pelaburan yang berbeza di pasaran, teknologi baru dan kemajuan dalam perkhidmatan kewangan.
Dengan menjadi orang yang celik kewangan, wanita boleh memperbaiki kualiti hidup mereka melalui amalan tatalaku pengurusan yang lebih kukuh, membuat keputusan yang tekal dengan nilai-nilai mereka dan lebih peka terhadap hak dan tanggungjawab mereka. Wanita mempunyai keupayaan untuk belajar dan memperoleh pengetahuan serta kemahiran.
Di manakah wanita boleh mendapat maklumat dan bantuan?
Maklumat boleh didapati secara bebas daripada akhbar, televisyen dan media lain. Tumpukan kepada sumber maklumat yang secara tradisionalnya dihormati, yang turut merangkumi buku dan majalah kewangan. Hadiri seminar dan bengkel untuk pembelajaran yang lebih interaktif.
Dapatkan nasihat daripada institusi kewangan

• Bank menawarkan pelaburan tradisional dan menyediakan maklumat pendidikan mengenai produk dan perkhidmatan baru. Sistem perbankan persendirian menyediakan khidmat nasihat kewangan mengikut kehendak pelanggan.
• Broker saham membeli dan menjual sekuriti seperti saham, bon dan unit amanah. Mereka menyediakan bahan-bahan penyelidikan dan maklumat lain yang berkaitan.
• Pengurus dana dan penasihat bebas menyediakan perkhidmatan pengurusan aset dan bahan-bahan penyelidikan yang boleh membantu dalam membuat keputusan.

Dapatkan nasihat daripada penasihat kewangan

• Akauntan menyediakan perkhidmatan perakaunan, nasihat kewangan dan nasihat mengenai perkara yang berkaitan dengan cukai.
• Perancang harta menyediakan khidmat nasihat perancangan harta, duti harta pusaka, dan strategi pengurusan aset apabila berlaku kematian.
• Perancang kewangan menyediakan khidmat nasihat mengenai perancangan kewangan.
• Ejen insurans menyediakan khidmat nasihat mengenai semua perkara berkaitan perancangan insurans dan pengurusan risiko. Mereka juga menjual produk insurans.
• Penasihat pelaburan menyediakan khidmat nasihat bagi perkara-perkara berkaitan pelaburan berasaskan sekuriti tetapi tidak dibenarkan menjual sekuriti.
• Ejen cukai menyediakan khidmat nasihat bagi perkara-perkara berkaitan dengan cukai dan boleh membantu menyediakan dan menghantar borang cukai.

Ketahui Tentang Penasihat

• Apa yang mereka perlu lakukan
  Penasihat wujud untuk membantu mengenal pasti masalah dan matlamat anda supaya mereka dapat membantu anda merangka pelan bagi mencapai matlamat tersebut. Mereka membantu anda memahami risiko yang berkaitan dengan pelaburan dan menyediakan khidmat nasihat pelaburan.
• Apa yang mereka perlu beritahu anda
  Mereka mesti memberikan anda maklumat mengenai diri mereka bagi mengukuhkan kredibiliti mereka kepada anda. Mereka mesti memberitahu anda apa yang berlaku kepada wang anda sekiranya anda membenarkan mereka menguruskannya, apakah yuran yang dikenakan ke atas anda dan sama ada mereka menerima sebarang manfaat daripada cadangan mereka itu.
• Jangan percaya semua perkara yang diberitahu oleh mereka
  Ingatlah bahawa nasihat mereka mungkin bersifat berat sebelah, dan apa yang baik untuk orang lain tidak semestinya baik juga untuk anda.

Membuat keputusan berdasarkan maklumat

• Risiko dan pulangan berkait rapat
  Ingatlah bahawa pulangan tinggi sentiasa diiringi risiko yang juga tinggi. Jika anda mahu pulangan yang baik, bersedialah untuk menghadapi risiko kerugian.
• Rakan kita bukan semuanya pakar
  Kita sering dipengaruhi kawan tetapi perlu diingat bahawa objektif mereka mungkin tidak sama dengan objektif kita. Pandangan mereka mungkin berbeza dengan pandangan kita. Juga, sumber mereka mungkin tidak boleh dipercayai.

Enam perkara perlu diingat

1. Jangan terima sahaja sebarang nasihat
2. Fahami sepenuhnya ciri-ciri sesuatu pelaburan
3. Fahami kesan daripada setiap keputusan kewangan
4. Jangan laburkan semua wang anda dalam satu pelaburan
5. Dapatkan nasihat secara bertulis
6. Selalulah menilai kedudukan kewangan anda

Perancangan kewangan
Dalam perancangan kewangan anda, tetapkan matlamat yang realistik dan bersikap realistik terhadap jangkaan anda. Sentiasa bertanggungjawab terhadap kewangan anda.

Posted at 04:37 pm by zunur
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Tuesday, June 19, 2007

Ilmu dan Kemahiran Pengurusan Kewangan

Selepas beberapa hari menyelusuri alam maya...dan telah pun tersangkut dengan blog Mohd Suhaimy a.k.a Shuth, banyak lagi ilmu yang telah saya dapati dan pelajari...
Sebagaimana yang diterangkan dalam model SSW (Shuth Strategy of Wealth), keseimbangan antara elemen Ilmu dan Kemahiran adalah penting dalam pembentukan piramid Kekayaan dan ke jalan menuju kebebasan kewangan (financial freedom).

ILMU perlu dicari, tak kira sama ada membeli buku/majalah berbentuk ilmiah, menyertai kursus dan bengkel yang berkaitan atau melayari forum, blog atau website yang menyediakan maklumat-maklumat berguna yang berkaitan dengan pengurusan dan kebebasan kewangan.
KEMAHIRAN diperolehi setelah sesuatu pekara dilakukan secara berulang kali. Ia merupakan satu output yang terhasil selepas melalui beberapa proses dari pengalaman, pengamatan dan pembacaan.
Seperti yang diperkatakan oleh Shuth :-
Selain dari seimbang, ia juga bermula dari sedikit dan kemudiannya bertambah & meningkat dari semasa ke semasa, selari dengan peningkatan tahap kewangan anda. Semakin tinggi tahap kewangan anda, semakin banyak ilmu & kemahiran diperlukan