Tuesday, November 2, 2010

Personal Finance 101

Money Talks News' Stacy Johnson recently confessed to the 10 dumbest money moves he had ever made. The list:
1. Not having a goal
2. Not having a spending plan
3. Attempting to derive self-esteem from possessions
4. Doing what everyone else is doing
5. Starting to save large and late rather than small and soon
6. Paying interest to buy things that drop in value
7. Turning down free money
8. Buying a new car
9.  Buying more house than you need or can afford.
10. Not protecting your good credit
My experience (in the past)
# 1 - I don't have any goal
# 2 - I don't have any plan. I just spend as much as I earn
# 3 - Buy "Things" to feel good and proud.
# 4 - Follow others. Buy share when market is hot. Sell share with everyone is panic
# 5 - I think I can save more when I earn more later. So I delay ...
# 6 - I buy "things" that depreciate in value. The highest value things i bought was a car now worth less than RM10k.
# 7 - Never seriously looking into it.
# 8 - Yes, my first car was a NEW CAR.
# 9 - Not applicable to me.
# 10 - Not applicable to me.


What do I do now (or have done recently)?
# 1 - Buy things that appreciate in value e.g. Good shares. When I received RM625 from government in year 2008 for petrol subsidy, I keep it in trading account and buy shares.
# 2 - I start saving even from small amount by a Regular Saving Scheme.
# 3 - I limit my spending.
# 4 - I set goal and review it.
# 5 - I bought USED CAR.
# 6 - Feel good by doing the right things, not OWN things (possessions).
# 7 - Get FREE money without effort (e.g. Cash Back from OCBC credit card and Citibank Credit Card)
# 8 - Learning to improve financial position