Wednesday, April 12, 2017

How to fund your retirement?

There are various way to fund your retirement. You can dispose your house in Klang Valley and move to rural area as a way to fund your retirement.

Today, we discuss only those can be done via regular saving method.


If you are employee of a company, EPF is not really an option but if you are self-employed, then you can choose to 'self-contribute' or not.

REIT is a stable as compared to other stock you can buy from the Share Market.

Endowment plan is offered by Life Insurance companies, usually low but stable return, bundled with insurance element.

Platform investment including iFast Capital or Philip Capital, where you can invest in over 200 unit-trust funds (over more than 20 fund houses) under one account.

Platform investment also available for non-RM but minimum is USD350 per month. Currently only available through the service of Financial Adviser's Representative (licensed by Bank Negara Malaysia).

Why you need Emergency Fund? Can EIS helps?

Most American do not have enough emergency cash. Malaysian also same same...

As an example, imagine you're out of work, you need RM5,000 a month to cover your living costs, and all you have is RM500 in a savings account. 

Now let's assume that you weren't fired for cause and are therefore eligible to receive some unemployment benefits while you look for work -- say, RM1,500 a month. Even if you manage to find a new job in just 30 days' time, you'll still be short RM3,000 that first month. And what happens if it takes you three months to find a new job? Suddenly, you're RM10,000 in the hole.

Hey man! Don't forget, there is no such thing as "Unemployment benefits" in Malaysia, yet, so you will be RM14,500 in the hole if it takes you three months to find a new job. However, soon we may have once government pass the new law and force employer and employee to contribute in a new scheme call "Employment Insurance Scheme" (EIS). It is not free, you got to pay for it and our cost of living are on the rise and getting from bad to worse.

It is coming...

Read more here about EIS.

1) NST 

a) 20.03.2017 http://www.nst.com.my/news/2017/03/222766/employees-insurance-scheme-approved-cabinet-hr-minister
b) 29.03.2017 http://www.nst.com.my/news/2017/03/225306/human-resources-ministry-eager-table-bill-employment-insurance-scheme
2) The Star
a) 30.03.2017 http://www.thestar.com.my/business/business-news/2017/03/30/fmm-defer-and-review-employment-insurance-scheme/

What should be your key (money) concern?

Most people, whom are not super rich and not an orphanage, will have at least these three (3) key money concern. Other money concern must be addressed too but these three (3) should be made top priority.

First key money concern is Death & Disability (DD).
Die too young (or lose the ability to earn...)
Imagine if you died yesterday, what happens to your loved one? Who is going to take care of them next 12 months and next 10 years, financially?
Accident happens everyday, you can read from newspapers, how about disability to earn as much as you do now? How is your lifestyle be affected? Watch "Dr. Strange" and you will know what i mean. Not everyone can become the powerful Dr. Strange. 
Thanks to hardworking life insurance agents and financial advisers, most people has a life insurance policy now. Some have more than a policy. They just need to review it periodically to ensure the coverage stays relevant and adequate.

Next is Retirement.
If died too young not a problem, then die too old is another problem you got to deal with. 
If you think you are too young to plan, you are definitely wrong. People regretted not planning earlier at age 40 when they are at the age of 50.

Above chart show how inflation can eat into your retirement fund fast. At inflation rate of 2% the fund last till age 89 but when inflation rate is 4%, it lasts at age 79 only. Scary? It is hard cool fact.
Lastly, third concern is Education.
Don't worry about this, only applicable if you are married or planning to..... 
No wonder many young generation only have one or two kids. Some even can't afford to marry since they can't even take care of their own retirement.
Without proper planning, Education can jeopardize one's retirement plan or vice versa. 
 To avoid having such problem, you just got to start early in Financial Planning.
Other money concerns, including but not limited to below are (not covered above) ....

  1. Medical Plan to cover hospital bills.
  2. Writing a Will (what happen when die too young...)
  3. Debt Management
  4. Investment Plan
Let's talk to your Financial Adviser or Agent today to plan or review your money health.

Saturday, March 18, 2017

What happens when mortgage payment defaulted (not paying on time)??

When one offered a loan by the bank, usually he / she only focus on the interest rate, lock-in period and MRTA requirement, if any.

Most people don't know this "Default Clause" where borrower fails to pay the installment on time.

What will happens if you have bad paying habit like.... always forgot to pay, every 2 months pay one time, delay a month or two before making up the outstanding?

Well, you have to aware of the Default Clause, example:-

Public Bank



Hong Leong Bank
They call it "Additional Interest" AND "Default Interest"


Seem like there are no standard clause for the default set by Bank Negara, you just have to watch out, and be a good pay master.

The different in offered rate like BLR-2.0%~2.4% and default rate like 2.0% + BLR can be as low high as 4% and multiplying the outstanding balance, for a small outstanding loan like RM300,000 you might be charged additional RM1,000 a month without knowing it. If you only know it 2~3 years later, the additional interest charged to your account could be RM24,000 to RM36,000. So, you know how serious it is now?

If you drag more than 3 months, you may even run into 'bankruptcy procedure' initiated by the financial institution.

Tuesday, February 21, 2017

Motor Insurance Claim Management

What is Merimen?
(https://www.merimen.com.my)

It is a online centralized claim management system for the following parties to work together on motor claim management:-
1) Agents
2) Adjusters
3) Repairers
4) Insurers

For claims, few parties involved but most of the time, consumer / insured blame insurers or agents if things don't go smooth because lack of understanding on how the whole process works.

Currently there are 30 participating insurers (almost all insurers with motor business)
    Malaysia

  1. ACE Jerneh Insurance Berhad
  2. AIG Malaysia Insurance Berhad
  3. Allianz General Insurance (Malaysia) Berhad
  4. AmGeneral Insurance Berhad (AmAssurance)
  5. AIA Bhd
  6. AXA Affin General Insurance Berhad
  7. Berjaya Sompo Insurance Berhad
  8. Etiqa Insurance Berhad
  9. Etiqa Takaful Berhad
  10. Hong Leong MSIG Takaful Berhad (Formerly Hong Leong Tokio Marine Takaful Berhad)
  11. Lonpac Insurance Bhd
  12. MAA Takaful Berhad
  13. MCIS Insurance Berhad
  14. Malaysian Motor Insurance Pool (MMIP)
  15. MSIG Insurance (Malaysia) Bhd
  16. MPI Generali Insurans Berhad (Formerly known as Multi-Purpose Insurans Bhd)
  17. Overseas Assurance Corporation (Malaysia) Berhad (OAC)
  18. Pacific & Orient Insurance Co. Berhad (P&O)
  19. Progressive Insurance Bhd
  20. Prudential Assurance Malaysia Berhad
  21. QBE Insurance (Malaysia) Berhad
  22. RHB Insurance Berhad
  23. Sun Life Malaysia Takaful Berhad (formerly CIMB Aviva Takaful Berhad)
  24. Syarikat Takaful Malaysia Berhad
  25. Takaful Ikhlas Berhad
  26. The Pacific Insurance Bhd
  27. Tokio Marine Insurans (Malaysia) Berhad
  28. Tune Insurance Malaysia Berhad (formerly known as Oriental Capital Assurance Berhad)
  29. Liberty Insurance Berhad
  30. Zurich Insurance Malaysia Berhad (formerly known as Malaysian Assurance Alliance)

The following Franchise also part of the MERIMEM system....

Malaysia
1.Auto Bavaria
2.Auto Eurokars
3.Auto Italia
4.BMW Malaysia
5.Cycle & Carriage Bintang
6.Daihatsu
7.Edaran Otomobil Nasional (EON)
8.Euromobile
9.Federal Auto
10.Hap Seng Star
11.Hino Motors
12.Honda
13.Hyundai-Sime Darby/Hyumal Motors
14.Ingress Auto
15.Land Rover
16.Lowe Motors
17.Kah Bintang Auto
18.Mitsubishi
19.Motor Image Enterprise
20.Naza Kia
21.NZ Wheel
22.Perodua
23.Proton Edar
24.QUILL Automobiles
25.Sapura Auto
26.Sime Darby Automobiles
27.Tan Chong Express Auto
28.Tan Chong Industrial Equipment
29.Tian Siang Premium Auto
30.Torino Motor
31.UMW Toyota
32.Wearnes Automobile
33.Wheelcorp Premium