Weekly Personal Finance Summary - Aug 18 2018

From moremoney.my

The Best Way to Make More Money
Let’s be real. The thing that most people are looking for is how to make more money. Most bloggers talk about investing. Others talk about saving. But no one has ever talked about the biggest thing that you can do for yourself: hacking your career growth to become so valuable that you get to choose who you work with.

From traditional media

Young and jobless in Malaysia
The youth (age 18-24) unemployment rate is 10.8%, which is actually much better than the global rate of 13.2%. That said, this is still a huge issue as many new jobs are still not focused on requiring higher educated people, but on cheap labour.

The article goes on and talks about what Malaysia can do to improve their youth unemployment. The one idea that may help move the needle faster is providing apprenticeship to help give more people a head start in getting experience in the workforce.

I have personally never found it hard to get a job. Maybe it’s because the area where I grew up was booming, or maybe it was because I had already differentiated myself by the time I graduated. That is why I am such a believer in controlling my own value in the marketplace by accelerating my skill development.

EPF partners Grab to promote i-Saraan

For those who are driving for Grab, or those who have family and friends doing it, this might be helpful to know. Grab and EPF have recently signed a memorandum of understanding to promote EPF’s voluntary retirement savings programme.

If the drivers do contribute into their plan, the government is willing to top up 15% of what is contributed (maximum RM 250) and Grab will be willing to also contribute 5% (maximum RM 80).

This is definitely a great start to help people start saving especially as we transition out of the old way of working (where most people are employees) to the new (most people are contractors). Hopefully the amount that both the government and Grab will match increases, but I would definitely suggest taking advantage of the free money.

From Malaysian Bloggers

One Way to Know How Much to Spend on a Car in Malaysia
Did you know that car ownership is one of the four leading reasons for bankruptcy in Malaysia?

The suggestion from this blogger is to buy a car that is less than your total annual income. That way, not only would you be able to pay for your monthly instalment, but you would also have enough breathing room to pay for gas, tolls, maintenance etc. while still having enough money to pay for your EPF and SOCSO.

I have personally never experienced buying a car. I have found public transportation and Grab to be efficient for me and if I ever were to, I would buy a used car. Speaking of which, I met a used car dealership owner at an event a few weeks back and he was demystifying a lot of used car questions that I threw at him. Maybe I’ll write a complete guide to used car purchasing sometime in the future. Let me know if this is something you’d find helpful and I can put it closer to the top of my priority list.

(image from shutterstock)

Ideas From Around the World

With $2.89-million net worth, this B.C. couple should be wealthy — but they have a cash flow problem
The main idea in this article is that 2 of the 2.89 million is tied into real estate. So although they are “rich” on paper, they have no way of turning that into cash and thus, are foreseeing issues in their retirement.

Of course, they have many options such as selling the property, or taking a loan out against the property. However, the point I’d like to make here is that being rich and being able to make ends meet can sometimes be unaligned.

When people talk about being financially free, what they really want is the monthly cash flow that allows them to make ends meet and do whatever else they would like.

How much money will you need after you retire? Likely less than you think
The article argues that people will spend far less than they think they can because they are afraid of their savings being used up. However, what they forget to take into consideration is the fact that you are more likely to spend a lot more at the beginning of retirement (to check off whatever is still on your bucket list) and by the time you’re in your 80s, you probably wouldn’t want to travel as much or don’t have the health for.

There was even a study done which showed that most people who have saved over 200,000 in non housing assets still have 70%+ of their savings 18 years after they retired which is crazy.

I am personally very surprised to see this article as what media always talks about is fewer and fewer people having enough money to retire. On a second read through the article, I realised that there might be some bias-ness. The studies seemed to have focused on people who are relatively well off (in the sense that they have a few hundred thousand saved up in assets and cash). So maybe the average person who has not saved up is not in this scenario.

What Value Are You Really Getting?
When you buy something, think of what value are you primarily after and how the item you are buying satisfies that value. The example used in the article was someone who stopped at a Taco Bell. She wanted something that would satisfy her hunger, quench her thirst and be relatively healthy. After knowing what exactly she was after, she then started to quickly do her research on Google and found that the most inexpensive way of satisfying her needs was something that costed 1/4 of the price of what she would have initially gone after.

A good way to practice this is to take step back and ask yourself what value are you really getting out of this expense. It it hits the minimum requirement of what you’re looking for, then you can ask if the additional value it provides is worth the additional cost compared to what you already have.

Although I think I practice this somewhat regularly (particularly with higher expense decisions such as rent, travel, grab rides), I have not really tried to phrase my thought process like this. The goal of having more money isn’t to live off the minimum, but to optimise what it can do for you and this question is definitely a great way to help you start optimising.

8 Instagram Accounts for Stepping Up Your Money Game
For those of you out there who are active on instagram, these accounts might be a fun lot to get some reminders and inspiration:
@debtstoriches
@thefinancebar
@thefinancialdiet
@savingwithsprunk
@bkfuniversity
@seekwisdompcw
@askforkasasa
@webravelygo

Single Parent Finances: Six Tips to Find Financial Success When It’s All on You
It can be tough to be a single parent, however this blog offers six great tips:

1. Have Confidence in the Plans You’re Making for the Future
   Stay confident. Keep taking a step forward, even if they feel small or insignificant. Have a group of people who can keep you accountable.

2. Get Control of Your Budget and Debt
   “With one income stream coming into the household, knowing what money is coming in and having the power to tell your money where to go is important”

3. Help Your Children Understand That Happiness Is Available Within Your Budget
   “What’s most important to the child is your love. If you do everything you can for them, they’re going to appreciate you, and they will also grow up with good values.”

4. Develop a Plan to Increase Your Earning Potential
   “Educate yourself for the next step, so that in five, 10, or 15 years, you will succeed.”

5. Don’t Cheat Your Retirement
   “Establishing financial security also means taking care of yourself, so that you don’t eventually become a burden to your children”

6. Don’t Try to Keep up With the Joneses
   “In the end, you’ll be proud of many things – having raised your child and bettered yourself, and those things will be more important than whether you could buy something or go on vacation.”

Parenting is easily one of the hardest things to do in life. I really respect everyone who has or is going through that walk of life. Although I am not at that stage of life yet, I really resonate with a lot of what the author has suggested.

If you are a parent (single or not), please do share with the group your financial experiences and / or struggles in raising your children. There’s so much for us all to learn from each other!