Some item may be new to you; some item may be irrelevant to you. Anyhow, it is always good to know because Financial Matters.
PFP includes:-
- Generate Income
- Allocation of Income into Saving and Expenses (aka Budgeting)
- Allocation of Saving (into various form of investments)(aka Assets Allocation)
- Lastly, distribution of Saving by Will and Trust. (aka Assets Distribution)
There are basically two type of income
- Active income generated by rendering services e.g. Salary, Wages, Consultancy Fee, Commission etc.
- Passive income generated by Investment (Saving from the income earned in Active Income and also other Passive income)
There are many forms of saving you can use:-
- Keep the portion of income not spent in Bank's saving account or fixed deposit account;
- Keep some with insurance company under a participating-fund policy;
- Keep some with Broker firm to buy shares, warrants, ETF etc.
- Keep some with fund manager in Mutual Fund.
- Keep some in the Property in the form of equity. (installment - interest charges = equity)
- Convert cash to "things" that can be sold later at higher value.
Hi, I am a stay at home mom, I have surrendered part of my insurance policy and switched to another higher sum insure but lower premium policy...and just received an amount of RM15,000 surrender value, how should I invest this sum of money so that I can generate more passive income to cover my new premium?
ReplyDeleteRM15,000 is not a big sum for certain category of investment but for share, should be good enough.
ReplyDeleteIf you open a CDS account (with any investment bank), it cost you only RM10 and if you buy only REIT (Real Estate Investment Trust) and get a conservative dividend of 6.5% (after withholding tax of 10%) you are looking at RM1,000
I assume your low-premium-high-coverage still need RM100 per month, i.e. you may need to top up some.
If 6.5% not good enough, you may have to learn other way to invest to get higher return but if not careful, or not enough experience/skill... always a chance to lose the principal sum.
M-REITs are good and steady, so far....