Malaysia's Weekly Personal Finance Summary - Jan 24 2019

Intro

This one's a little longer than normal, but that's because last week was slightly shorter. Plus, there are some really good ones this week.

Also, since next week is Chinese New Year (and since I'm Chinese), the next release may be on a weird day (say Saturday).

Question of the week

Does your family own a family insurance package (it comes with a discount) or do you own seperate insurance policies? OR do you simply not have any medical coverage (which is very dangerous)?

Let us know in the Facebook group

From More Money Malaysia

We've released another this week! This one introduces you to family insurance. You can find it on our Youtube channel and on on Facebook Page!

How can we have made this more insightful?

Or is there a personal insurance related question you'd like advice on? Leave a message here!

Money in Daily Life

Money (Personal Finance) in 9 Diagrams
A very easy read with some very good, thought provoking diagrams!

For Financial Success, Adopt a Kondo Attitude.

In her book, The Life-Changing Magic of Tidying Up, Marie Kondo says, "The question of what you want to own is actually the question of how you want to live your life."

The same can be said for budgeting-the question of how you choose to manage your money is actually the question of how you want to live your life:

Marie's popularity suddenly blew up after the documentary Tidying Up with Marie Kondo was released on Netflix.

If you haven't heard of her, she's all about decluttering your personal belongings so that you are a lot more attentive to what really makes you, you.

Similarly, when it comes to personal finance, are you spending money on the things that really make your happy? Or are you spending it unconsciously?

Personal Finance 101: How Tax Brackets Actually Work

Often, each of those levels is known as a "tax bracket." So, someone making $120,000 a year might be described as being in the 24% "tax bracket." However, being in the 24% "tax bracket" does not mean that you're paying 24% of your income in income taxes. That is a huge misunderstanding.

Although taxes are not as high as the US, there are still tax brackets here in Malaysia. This article does a great job breaking down what exactly is a tax bracket and how to calculate the actual amount of tax that you owe the government.

If you're only getting paid a salary, then you can skip this piece. However, if you own your own business, this will really help.

[PERSONAL] How Money Affects My Dating Life

I rarely - almost never, actually - mention my romantic partners in my articles and social media. It's intentional. My approach to relationships is like how most people approach the subject of money: private. No one else needs to know the details.

Just to be clear, this isn't from anyone part of MMM.

Although there's not much content about improving your finances, what I do like about this blog piece is how options have been created because of the blogger's ability to understand how money works. And because of that, she's able to keep all her options open.

Of course, this piece is just her opinion on how dating should be like.

How To Invest Your Down Payment If You're Planning To Buy A House

For those of you who plan to buy a house in the near future, be it a first-time home or an upgrade, let me suggest a framework for how to invest your down payment or full payment while searching for your new home.

Some advice provided from this blog is:

• The closer you are to buying a house the less risk you should take.
• The lower your risk tolerance, the lower risk you should take.
• The better your investing acumen, the more risk you are able to take.
• The higher your existing cash balance (down payment or full payment), the more risk you can take.
• The higher your cash flow, the more risk you can take.
• The higher the mortgage interest rate, the bigger the down payment you should make.
• The higher you expect mortgage rates to go, the pickier you should be.
• The more bullish you are about your financial future, the more leverage you may take.
  Investments should be made in investments that can become liquid by the time you want to purchase.

I like the way he has presented the information but I'd change point 3. If you have a higher acumen / knowledge for the thing you are investing in, I wouldn't call it risk as they know what they are doing.

Besides that, this blog does a great job further breaking down how to think about investing for a down payment on a property.

Image from Shutter Stock

Grow Your Wealth

How to Invest in the Greater Good

But the fact is, what you choose to invest in matters. There is no better way to support a worthy cause than by putting your money behind it, and vice versa for companies you disagree with. In a world where money talks, nothing speaks louder than where you put your hard-earned dollars.

For those who want to be conscious of creating a brighter future, this piece is for you.

And if you would like to invest in some here in Malaysia, most islamic unit trusts would pass the criteria!

7 Investment Principles I Learnt from Berkshire Hathaway's Annual Report

Today, many who buy and sell stocks, believe that they are 'investing' when in fact, they are speculating. This is evident when stock purchases are based on a person's opinion on their stock prices and where they would be heading in the future, not based on a complete study of the stocks' business models, financial results, and their plans for future growth.

The 7 principles covered in this blog are:

• I View Common Stocks as Interests in Businesses
• Buffett Looks for Quality Businesses.
• Buffett has 6 Acquisition Criteria
• A Preference for Cash Flows
• A Depressed Stock Market is Good News to Berkshire Hathaway
• A Good Night's Sleep is More Important than 'High Risk, High Returns'
• Have Some Cash Standby for Great Opportunities

If you didn't know, all of Birkshire's annual newsletters are freely available and have been touted as even better than getting a MBA. Check out the 2017 newsletter

Cool Opportunities

BigPay - The Best Travel Credit Card for Malaysians?
If you ever travel out of Malaysia and use your credit card, then this is BIG (pun intended). AirAsia has released BigPay, a prepaid mastercard that you can easily top up through the BigPay app and be able to use instantly.

But more importantly, BigPay charges you at the real exchange rate (which means they charge no fees). This is something you won't get if you were to go to your bank or some exchange counter.

In fact, I plan on only using this when I go to Toronto in December.

Anyway, if you don't have one yet, you can sign up for free and get RM10 free when you use referral code B7D3YNZPGO.

Talking to an Independent Financial Adviser
A big issue when you work with someone who calls themself a financial advisor is you do not know if they really have your best interest at heart. That's one of the main reasons why I never work with any (the other one is that most of them get trained to say what the company wants and thus, do not know of all the other cool opportunities out there).

However, I've been talking to an independent financial adviser the last few months and I do believe that not only is she knowledgeable, but also super open to sharing her knowledge.

If you're interested in talking to her, join our facebook group and ask your questions. She will definitely find time to pop by and answer them.

Ready to get the highest quality information so that you can make the right choices? Check us out on moremoney.my