Acquiring your inaugural home stands as an exhilarating hallmark in one’s life. For most individuals, the journey into homeownership involves the duty of saving for a down payment and securing a home loan or mortgage.
When delving into the latter process, it is imperative to have your documents in order, including several months of payslips to substantiate your income sources and more.
In partnership with Syarikat Jaminan Kredit Perumahan Berhad (SJKP), we present seven common missteps you should steer clear of when applying for a mortgage:
Indulging in substantial credit card expenditures While contemplating the interior design of your new abode, one might aspire to adorn it with top-tier furnishings or cutting-edge electronic systems. Yet, ponder whether using your credit card for these purchases is wise.
Accumulating a credit card balance beyond your means to repay in full may not align with your interests when tackling a mortgage in the future. These expenses can accrue over time, resulting in a perpetual cycle of debt repayment. Furthermore, it could imperil your mortgage approval, as it might impact your credit score.
Carrying a significant debt load This could potentially cast a negative shadow on your credit score. In Malaysia, your creditworthiness is commonly gauged based on your debt repayment history, outstanding loan amounts, and credit application trends. Collectively, these factors paint a picture of your likelihood to default on debts.
Consequently, a poor credit rating may impede your application, leading to less-than-ideal interest rates or outright rejection.
Underestimating the comprehensive expenses tied to home acquisition Many prospective homeowners, especially novices in the field, tend to overlook the myriad expenditures linked to property purchase. Hence, meticulous research and calculations are essential!
Various fees and costs demand your attention, encompassing stamp duty, solicitor fees, moving expenses, building insurance, and maintenance costs.
Failing to consider these outlays not only jeopardizes your purchase but could plunge you into unforeseen debt, necessitating borrowing to cover these financial commitments.
Providing misleading details on your loan application Resist the urge to embellish your application, even if you believe it may strengthen your chances of loan approval. Such dishonesty is a perilous path that could jeopardize your application. Avoid misrepresenting your deposit amount, income level, employment status, or other pivotal information.
Keep in mind that mortgage lenders mandate stringent financial requisites to ensure your ability to meet mortgage payments. Omitting critical financial details may lead to a mortgage beyond your means, potential application rejection, or even legal repercussions for fraud.
Purchasing a home for the wrong reasons or at an inopportune moment Homeownership is a significant milestone that necessitates informed decisions prior to purchase.
While the allure of real estate transactions during a trending market or peer influence may be enticing, it is crucial to evaluate whether the timing and rationale align with your circumstances.
Consider factors such as budget, lifestyle, and future plans to ascertain if the timing is right for homeownership.
Initiating the home loan process belatedly While embarking on the home buying journey often begins with property searches, initiating the financing process early is prudent.
By sorting your financing first, lenders can assist in evaluating your needs, potentially expediting the approval process, as opposed to encountering delays due to unmet requirements in your application.
However, commencing your search for a residence first is acceptable. Yet, bear in mind that your ideal home could captivate another buyer with sufficient funds or pre-approved mortgage offers, potentially leading to their bid being accepted before yours.
Overlooking loan comparison opportunities When it comes to home loans, opting for your regular bank may not always be the optimal choice. Explore alternative loan options available to you for improved financial decisions.
Loan products vary in type, terms, and down payment requirements. Understanding the range of mortgage options you qualify for empowers you to make sound financial decisions for both short-term and long-term goals while securing favorable terms.
In a tale of resilience and determination, a Japanese individual embarked on an extraordinary journey towards financial independence by embracing an exceedingly frugal lifestyle.
As reported by the esteemed South China Morning Post, this unnamed 41-year-old man initiated his savings quest in the early 2000s with a singular goal in mind: to liberate himself from the confines of his “steady yet demanding job”.
Engulfed in a work routine that often traversed late into the night, he labored diligently, reaping an annual income of 5 million yen (equivalent to approximately $150,000).
Driven by an insatiable desire to break free from his distressing employment, the man ambitiously aimed to amass 100 million yen (approximately $3 million) through meticulous savings strategies.
Bestowing upon himself the moniker of “The Man Who Will Definitely Resign,” he found solace and motivation in this self-appointed title, a constant reminder of his ultimate objective.
Throughout two decades, he sought shelter in his company’s dormitory, parting with a modest 30,000 yen (approximately $896) monthly for lodging. His abode was a mosaic of scavenged furniture and practical appliances, reflecting his steadfast commitment to frugality.
Dinner invitations were extended to a modest fare of sour plums, salted vegetables, and a humble bowl of rice, occasionally substituted by an energy drink procured with free points from nearby convenience stores.
His evenings were marked by the simple pleasures of cola, biscuits, and the entrancing allure of prison-themed films, a playful nod to his own life circumstances.
When faced with the untimely demise of his microwave, ingenuity guided his hands as he resorted to cooking sweet potatoes on his colleagues’ car windscreen, harnessing the scorching summer heat as an economical alternative.
Refusing the comforts of air conditioning or heating, he adopted unconventional methods to combat temperature extremes, embracing a wet t-shirt for cooling relief and resorting to winter squats for warmth.
Through unwavering perseverance and unwavering dedication, the man triumphantly amassed a total of 135 million yen (approximately $4 million) after weathering the toils of this stringent lifestyle for an impressive span of 20 years and 10 months.
His enlightening journey culminated in the authorship of a comprehensive saving guide derived from his firsthand experiences, paving the way for a newfound income stream through book sales.
Present-day finds him relishing in a breakfast of four boiled eggs and the luxurious addition of a microwave for the indulgence of hot meals, symbolizing his transition to a more comfortable existence.
Nevertheless, a shadow of doubt looms over his hard-earned accomplishments, as the depreciation of the yen at the dawn of 2024 threatened the sanctity of his savings.
Expressing poignant dismay, he bemoaned, “If the yen continues its downward spiral, the beacon of financial freedom may remain perpetually out of reach. What legacy have these laborious 21 years left me? A poignant tragedy,” echoing sentiments shared with South China Morning Post.
The narrative intriguingly leaves undisclosed the platform through which the Japanese man chooses to convey his remarkable odyssey, resonating deeply with a multitude of compassionate Chinese social media enthusiasts who found affinity in his testament of fortitude.
Life insurance, health insurance, personal accident coverage – these are just a few options available to safeguard yourself and your loved ones against unforeseen circumstances.
Among these, health insurance stands out as a fundamental component of any individual’s financial portfolio, bridging the gap between escalating medical costs and quality treatment.
The availability of medical and health insurance in Malaysia since the 1970s has transformed it into a vital necessity, particularly as more Malaysians favor private healthcare alternatives for enhanced services over traditional government hospitals.
Private medical facilities often come with a hefty price tag, emphasizing the importance of investing in health insurance to cushion the potential financial blow of significant medical expenses in the future.
If you have yet to secure health insurance for yourself, now might be the opportune moment to do so. Here are key considerations to bear in mind as you navigate the realm of health insurance plans:
First and foremost, it’s essential to determine the most suitable type of health insurance for your specific needs. While several medical coverage options exist, a foundational plan, such as a health card offering hospitalization and surgical benefits, may suffice.
The realm of medical policies encompasses four primary categories: i. Medical/health cards, offering coverage for hospitalization and surgery; ii. Critical illness or dread diseases insurance, providing a lump sum benefit; iii. Disability income insurance, supplying a steady income during periods of incapacity to work; iv. Hospital income insurance, furnishing a predefined sum daily, weekly, or monthly for hospital stays.
While comprehensive coverage comprising all four types is advisable for robust protection, affordability can be a concern for many. Opting for a basic health card could be a prudent choice, particularly for individuals categorized as Low Risk and maintaining a similarly low-risk lifestyle.
Typically, a health card entitles you to hospitalization at designated facilities, treatment, surgeries, and even intensive care. Some policies extend coverage to total permanent disability, accidental demise, and disablement.
Avoid overspending on unnecessary provisions or coverage that fails to align with your requirements. Delve into thorough research and consider seeking guidance from industry experts to procure a plan that not only meets your needs but also respects your financial boundaries.
When it comes to health insurance, cost-effectiveness is key. Ideally, your insurance premium should not surpass 1.5% of your monthly income.
Diverse insurance providers offer an array of plans with varying terms and benefits. Before finalizing a policy, pose critical questions such as: i. What is the duration of the policy contract? ii. What are the definitions and restrictions concerning benefit payouts, including annual and lifetime limits? iii. Are upfront payments necessary for medical bills, or can presentation of your health card suffice for coverage? iv. Is supplementing coverage from another health insurance policy permissible in case of inadequate financial protection? v. Are you covered for medical emergencies outside Malaysia, particularly crucial for frequent travelers? vi. What transpires if hospitalization occurs at a non-panel facility? vii. How are premium computations formulated, factoring in occupation risk, age, gender, and overall health? viii. What is the timeline for commencing benefit claims post-purchase? Notably, some policies institute a mandatory 30-day “cooling off” period where claims are prohibited. ix. What is the interval between successive claims? x. Does the policy guarantee renewal, ensuring sustained protection and stable premiums following recent illness diagnoses? xi. What scenarios could lead to claim rejections, such as initial claims within the first 30 days, exclusion clauses, unpaid premiums, or exceeding policy limits?
Be mindful of factors influencing your eligibility for insurance coverage, namely age and pre-existing medical conditions. Individuals above 60 may encounter challenges acquiring a plan, contingent upon specific preferences. Expect that pre-existing health concerns might not fall under future coverage.
Health insurance typically addresses critical medical needs necessitating immediate attention. Exclusions might encompass cosmetic procedures, dental care, and incidents involving illegal activities. While dental care exceptions exist for severe medical conditions, certain policies categorically exclude dental coverage, necessitating clarification from your insurance representative.
Instances where possessing multiple health insurance policies could prove advantageous include:
Overlapping coverage for distinct illnesses, compensating for potential gaps in individual policies.
Supplemental coverage when a single policy’s limit falls short of catering to medical expenses, subject to the regulations of both policies.
Augmenting employer-provided insurance with a personal policy, as workplace insurance often offers basic coverage with limited benefits, ceasing upon departure from the job.
Some insurers extend a “free look period” or a two-week trial phase, allowing a comprehensive review of the chosen policy’s particulars to assess long-term sustainability.
Committing to an insurance plan entails financial stability and aligning with your lifestyle. Terminating prematurely or midway could result in wasted investment exceeding the returns from the insurer.
Leverage the free look period to rescind the policy sans penalties if any exclusions or maintenance aspects clash with your preferences. Following cancellation, explore alternative plans catering to your distinct needs.
Nowadays, as the interest in cryptocurrencies grows, so does the presence of fraudulent schemes within the digital asset market.
The landscape of cryptocurrency scams is evolving, becoming increasingly intricate. Even seasoned investors in the crypto sphere may find themselves susceptible to deceit if not vigilant.
Protecting your crypto investments necessitates a keen awareness of potential scam variations and discernible indicators of fraudulent actors.
In collaboration with the cryptocurrency investment platform, Luno, let us illuminate several strategies to identify prevalent crypto scams:
Tempting Social Media “Giveaways” Vowing Crypto Multipliers Among the most prevalent crypto cons are social media giveaways, where scammers promise to amplify or match the amount of cryptocurrency sent to them. Often endorsed by celebrities or notable figures in the crypto domain, these giveaways can be alluring but deceptive.
These giveaway schemes often impart a sense of urgency, coercing impulsive decisions that can result in the loss of your entire crypto holdings.
How to safeguard yourself: While legitimate social media giveaways do exist, ensure thorough research and verification of the associated account. If prompted to submit cryptocurrency or disclose your login and wallet details, it is advisable to steer clear of such giveaways.
Deceptive Websites or Applications Coaxing “Investment” and Personal Data Sharing During your quest for promising cryptocurrency prospects, encountering websites touting substantial investment possibilities is plausible. While these sites may exhibit sophistication and gain recognition in the crypto community, scammers typically cease operations after amassing funds.
Alternatively, scammers might mimic popular crypto websites or apps to extract your login or wallet particulars. By the time this ruse unfolds, your cryptocurrency holdings may have been entirely siphoned away. :'(
How to shield yourself: Always exercise caution by meticulously vetting all crypto-related websites before divulging sensitive data. Refrain from downloading crypto mobile apps from unofficial sources and remain vigilant against deceptive lookalike applications.
Email Phishing Scams Peddling Time-Limited Crypto Offers, Fabricated Confirmations, and Potential Extortion Tactics employed in email crypto scams vary. Some emails coerce urgent payments to access limited-time offers that sound excessively promising.
Others may request you to ‘validate your transaction’ or deceive you by claiming a specified amount of cryptocurrency has been transferred to your wallet. Clicking on these validation requests often redirects you to a page soliciting your login or wallet details.
Another common email crypto swindle involves extortion, where scammers threaten to expose fabricated evidence of your visits to adult websites or access to your webcam. Failure to remit the specified cryptocurrency within a stipulated timeframe results in the threatened information being ‘leaked’.
How to defend yourself: Prioritize caution by refraining from opening emails from unfamiliar sources. Additionally, scrutinize URL links for spelling accuracy before clicking and remain wary of potential URL redirects (a significant warning sign). Above all, refrain from sharing your private keys or codes with any third party.
E-commerce Platforms Accepting Cryptocurrency Payments Without Fulfilling Commitments Certain e-commerce platforms now embrace cryptocurrency as a valid payment mode. Despite this, scammers may establish counterfeit e-commerce stores to entice crypto-based purchases, only to renege on delivering the products.
How to fortify yourself: Recognized as marketplace scams, your best defense involves patronizing legitimate platforms that accept crypto, especially those incorporating buyer protection measures. Exercise caution when dealing with standalone, lesser-known e-commerce sites lacking widespread validation or reviews.
Overhyped Crypto Investments Backed by Celebrity or Influencer Endorsements on Social Media Exercise vigilance when a cryptocurrency garners excessive attention, as this could be a sign of the ‘pump and dump’ investment scam. This ploy entails scammers bulk-buying a low-value coin, promoting (pumping) its value, and swiftly selling (dumping) once the price rises.
Often, these fraudulent tactics involve endorsements by celebrities or influencers on social media, fueling the hype and illusion of a coin’s legitimacy. These influential figures may be incentivized to endorse the cryptocurrency or might have fallen prey to scam tactics themselves.
Defensive measures: When observing a cryptocurrency acquire substantial attention and value escalation, resist succumbing to FOMO. Conduct thorough research as sudden value spikes fueled purely by hype should raise caution flags. Such schemes have the potential to artificially inflate cryptocurrency values, only to plummet shortly after.
Direct Messages from Acquaintances Promoting Crypto Investment Opportunities Should you receive unsolicited direct messages from old acquaintances or loved ones advocating crypto investment ‘opportunities’, it is advisable to ignore or directly contact the individual.
Chances are high that the individual has been manipulated by a scammer or their account has been compromised, enabling a fraudster to impersonate someone known to you.
How to safeguard yourself: Refrain from engaging in cryptocurrency investments advocated by others, even if the source is familiar. Opt for the secure route of investing through accredited and regulated exchange platforms.
Assurances of Free Money or Guaranteed Returns Exercise extreme caution whenever an entity or site claims to dispense free money or assures guaranteed crypto returns. If an offer seems too good to be true, it often is.
Financial ventures lack guarantees, as investments inherently fluctuate in value.
How to protect yourself: Stay vigilant for potential red flags, especially promises of effortless gains. Instead, seek comprehensive whitepapers on your intended cryptocurrency investments. These documents illuminate the cryptocurrency’s design and functionality, offering insight into its future growth prospects.
For a secure and regulated approach to crypto investments, consider Luno, the leading digital assets exchange in Malaysia. This platform facilitates seamless crypto transactions, providing users with added peace of mind.
The increasing debt burden in Malaysia has reached unprecedented levels, prompting concerns and discussions on the sustainability of such financial obligations.
The concept of a ‘fiscal deficit’ arises when a government’s spending surpasses its revenues, necessitating the borrowing of funds either domestically or internationally. Malaysia has grappled with this issue for the past two decades, with the current deficit marking one of the largest since the nation’s inception.
The stark reality was articulated by former second finance minister Datuk Seri Johari Abdul Ghani, stating, “There is no running away from the RM1 trillion debt that we have incurred.” As Malaysia’s income stagnates and expenditures surge, the pressing question lingers—can the country effectively manage its towering borrowings amidst escalating interest rates?
Projections indicate a worrisome trend in debt service charges, estimated to reach 16.1% or RM46.1 billion in 2023, with the likelihood of further escalation. This translates to a significant portion of government revenue—RM16.10 for every RM100—allocated towards debt servicing.
Comparative analysis against other countries sheds light on Malaysia’s external debt of RM269 billion (USD56.7 billion) in contrast to Singapore’s SGD2.4 trillion (USD1.7 trillion). While the figures may portray a favorable picture, the underlying narrative unfolds a more nuanced reality.
Economist Dr. Yeah Kim Leng emphasizes the significance of using borrowed funds for investments that yield substantial returns, distinguishing between debts fueling development and those catering to operational expenses. The quality of debt is crucial in ensuring economic advancement in the long term.
An analysis of Malaysia’s expenditure allocations unveils that a substantial 80% of the forthcoming year’s budget is earmarked for recurring operational costs, leaving a mere 20% for developmental initiatives.
The core component of Malaysia’s debt portfolio comprises domestic borrowings, primarily sourced from banks, insurance companies, the EPF, and KWAP—reflecting a scenario where the government borrows extensively from its citizens.
While the debate surrounding debt dynamics ensues, experts such as Prof. Dato’ Dr. Ahamed Kameel Mydin Meera caution against the potential pitfalls of borrowing practices, especially the nuances between domestic and external borrowing.
To navigate the escalating debt landscape, a dual strategy involving revenue enhancement and expenditure prudence is imperative. Dr. Yeah Kim Leng advocates for bolstering private sector engagement through incentivization and fostering opportunities for emerging industries, alongside a call for judicious spending practices and targeted subsidies to maximize impact.
Amidst the complexities of debt dynamics, Malaysia’s predominant reliance on the Ringgit offers a degree of stability and insulation against foreign exchange fluctuations—a notable resilience compared to counterparts facing more precarious debt scenarios.
As Malaysia charts its course in debt management, a cautious and strategic approach towards balancing burgeoning expenditures with sustainable repayment plans is imperative for long-term financial health.
Are you an avid traveller, constantly seeking new adventures and experiences?
AmBank recently launched new credit cards in collaboration with Enrich by Malaysia Airlines, offering a plethora of benefits.
Tailored for both business and leisure travellers, AmBank Enrich Visa Credit Cards offer a multitude of exclusive benefits and rewards designed to enhance your travel experience, both on-ground and in the air.
One of the most enticing perks is the ability to redeem flight tickets, allowing you to save on your travels and allocate your budget for other experiences.
What’s even better? The more you travel and spend with your AmBank Enrich Visa Credit Cards, the quicker your points accumulate, bringing you closer to your next travel adventure or rewards that you could redeem with the Enrich Points.
There are two different credit cards you can apply for — the AmBank Enrich Visa Platinum Credit Card and the AmBank Enrich Visa Infinite Credit Card.
For those seeking great privileges, the two AmBank Enrich Visa Credit Cards offer unparalleled benefits including complimentary Golden Lounge access, up to RM2,000,000 in travel insurance, and more
With the AmBank Enrich Visa Credit Cards, you will get these benefits:
– Earn Enrich Points with every spend (as low as RM1 = 1 Enrich Point)
– Enjoy complimentary access to Malaysia Airlines Golden Lounge
– Get up to 10% discount on Malaysia Airlines flight tickets
– Get up to RM2,000,000 in travel insurance
– Get fast-tracked to Enrich Elite status, with a 30% reduction in Enrich Elite Points requirement
In addition, new AmBank Cardholders can take advantage of a special welcome offer, referral rewards, and the chance to win a free trip!
Once you apply, activate, and spend within 60 calendar days, you will earn: – 10,000 Enrich Points with the AmBank Enrich Visa Infinite Credit Card – 3,000 Enrich Points with the AmBank Enrich Visa Platinum Credit Card
That’s not all, top spenders get to win an exciting trip for two to London in Business Class or to Phuket in Economy Class.
Plus, you will earn more Enrich Points with AmBank’s referral programme: – Earn an extra 10,000 Enrich Points for referrals to the AmBank Enrich Visa Infinite Credit Card – Earn an extra 3,000 Enrich Points for referrals to the AmBank Enrich Visa Platinum Credit Card
For instance, if you apply for an AmBank Enrich Visa Infinite Credit Card (10,000 Enrich Points) and refer a friend to apply for an AmBank Enrich Visa Platinum Credit Card (3,000 Enrich Points), you will accumulate a total of 13,000 Enrich Points!
*Terms and conditions apply.
What’s amazing is that by earning Enrich Points through spending, the welcome offer, or the referral programme, you can redeem flights to various destinations
Here’s a look at the flights you can redeem with your earned Enrich Points: – Phuket: 5,000 Enrich Points – Ho Chi Minh: 7,100 Enrich Points – Perth: 19,600 Enrich Points – Tokyo: 19,600 Enrich Points – Seoul: 20,000 Enrich Points
Find out more flights you can redeem using Enrich Points here.
There’s more. AmBank will also be organising a roadshow in Mid Valley, where you will get sign-up gifts, souvenirs, and more!
Here are the details: Date: 12 – 18 August 2024 Venue: North Court, Ground Floor, Mid Valley Megamall
Signing up for any of the AmBank Enrich Visa Credit Cards on the spot will grant you extra freebies! Plus, you will also get to redeem a souvenir from AmBank when you engage in on-ground activities at the roadshow in Mid Valley. All you have to do is collect four stamps by joining their activities.
In the wake of relentless thunderstorms and recent turbulent weather in Malaysia, chaos has ensued, leading to fatalities and widespread property destruction.
Numerous uprooted trees have resulted in significant damage to multiple vehicles.
Just this month, a tragic incident took the life of a 47-year-old man as a massive tree crashed onto his car in Kuala Lumpur.
Similarly, in Penang, several vehicles suffered damages when two uprooted trees collapsed upon them.
Universiti Malaya faced property losses exceeding RM1 million after uprooted trees struck vehicles on its premises, following a recent thunderstorm that swept through various areas in Kuala Lumpur and Petaling Jaya.
Reportedly, the public university noted 29 vehicles damaged on the past Saturday, the 25th of May.
The recent onslaught of severe weather has left car owners scrambling to verify if their insurance policies safeguard their vehicles in the event of natural disasters.
While it’s a legal requirement in Malaysia to possess car insurance in order to drive or renew your road tax, standard policies unfortunately do not cover damages caused by natural disasters such as floods, windstorms, rainstorms, landslides, subsidence, and other acts of nature.
Even comprehensive car insurance, offering a broad scope of protection in various scenarios, does not typically include natural disaster-related damages unless supplemented with additional coverage.
So, what options exist for safeguarding your vehicle against natural calamities?
In Malaysia, three primary types of motor insurance policies—namely, third-party insurance cover, third-party fire and theft insurance cover, and comprehensive insurance cover—do not inherently shield your vehicle from damages arising from natural disasters.
Nevertheless, there exists a solution known as special perils add-on coverage under comprehensive insurance policies, specifically tailored to provide protection against damages caused by natural disasters like falling trees and flooding.
Special perils represent an appended feature offering enhanced protection against specific risks typically excluded in standard policies.
Purchasing the special perils add-on coverage enables you to file an insurance claim for repairs due to damages caused by falling trees, recognized as acts of nature or convulsions of nature.
While the cost of this supplemental coverage varies across insurance providers, it generally proves affordable, often ranging from 0.2% to 0.5% of your car’s insured value.
Wishing to initiate a claim under special perils?
Refrain from starting your car’s engine or cleaning your vehicle if it’s been crushed under a tree or debris.
Capture as many photos and videos as possible to document the extent of damage to your car, both inside and out. After documenting the damage, promptly contact your insurance company to report the incident.
They will provide guidance and further instructions on the necessary steps to take.
Reach out to your insurance provider or agent to explore how to incorporate the special perils add-on coverage into your vehicle insurance policy.
Remember, you have the choice between two primary coverage options: full special perils or limited special perils, select the one that aligns with your specific needs.
For those embarking on their professional journey, the intricacies of financial management can pose a significant challenge, particularly when facing looming debts such as housing loans or car loans.
Against the backdrop of escalating tuition fees and substantial academic expenditures, PTPTN loans have served as a crucial support system for numerous Malaysians, facilitating their educational pursuits and paving the way for rewarding career paths. Empowered by this financial backing, aspiring students can immerse themselves in their chosen fields without the weight of financial constraints.
However, upon crossing the threshold into the realm of employment post-graduation, the obligation to repay your PTPTN loan takes center stage. Typically, the Repayment Schedule for PTPTN borrowers commences in the 13th month following the conclusion of the loan period.
While the process of repaying PTPTN loans may lack excitement, adeptly managing and settling the debt brings you closer to financial autonomy.
Here are seven practical steps to guide you in financial management and the repayment of your PTPTN loans:
Begin by delving into the terms and conditions of your PTPTN loan before formulating repayment strategies. Understanding the ujrah rates, repayment duration, and pertinent details equips you to make informed decisions and plan effectively for the future.
Construct a realistic budget tailored to your lifestyle. Assess your monthly earnings, encompassing salaries, allowances, and supplementary income sources. Deduct essential expenses like rent, utilities, and groceries, while earmarking a specific sum for PTPTN repayments to ensure timely settlements without jeopardizing your overall financial well-being.
Explore the array of repayment plans PTPTN offers to suit varying financial circumstances. Opt for a plan aligned with your income, which offers flexibility. For example, the Income-Contingent Loan Repayment (ICR) plan adapts your repayment quantum based on your earnings, ensuring a manageable portion of your salary is contributed.
Give precedence to high-interest debts if you have multiple loans. Prioritizing repayment of debts with higher interest rates can yield savings in the long term, as interest accrues swiftly on loans with elevated rates.
Capitalize on early repayment incentives provided by PTPTN, which encompass enticing discounts on outstanding balances. Seizing this opportunity aids in reducing your total repayment amount by settling your loan ahead of schedule.
Investigate employer-sponsored repayment initiatives in Malaysia, which form part of employee benefits. Inquire with your employer about the availability of such programs and your eligibility to benefit from them.
Stay abreast of updates in PTPTN policies, interest rates, or repayment avenues. Regularly monitoring the official PTPTN website or reaching out to their customer service ensures you remain informed of any discounts or rebates on offer periodically.
To incentivize the repayment of education loans by Malaysians, PTPTN has launched the ‘Jom Bayar PTPTN’ campaign, offering the chance to win cash prizes totaling up to RM70,000.
Until 31 December, individuals settling their PTPTN loans at any PTPTN branch become eligible not only for cash prizes but also for a discount of up to 15% on their loans.
This initiative coincides with the ‘Hari Mesra Pelanggan’, designed to assist those with PTPTN loans.
Moreover, by making a minimum payment of RM300 to restructure your loan, you qualify to participate in the ‘Jom Bayar PTPTN’ draw. Using the myPTPTN app for payment earns you two entries, while other payment methods grant one entry.
The prizes up for grabs include:
Grand Prize: RM2,000 (one winner in each of the 14 states)
Second Prize: RM1,000 (one winner in each of the 14 states)
Third Prize: RM500 (three winners in each of the 14 states)
Consolation Prize: RM100 (5 winners in each of the 14 states)
Participants also stand a chance to secure exclusive PTPTN merchandise.
This presents a prime opportunity for borrowers to engage with PTPTN officials. Participants not only benefit from loan repayment discounts but also gain the prospect to revise loans with more attractive terms, vie for rewarding prizes, and acquire exclusive PTPTN memorabilia. This convergence of benefits through the Hari Mesra Pelanggan PTPTN and Jom Bayar PTPTN Campaign offers a comprehensive and rewarding experience for borrowers.
I am frequently asked a common question that plagues many young professionals today. After much contemplation, I have decided to address this important topic.
This article delves into the timeless principles of personal finance while also offering insights into the future and drawing lessons from the past.
If you fall into any of the following categories, this article is tailored for you, and I sincerely hope you find it beneficial:
Recent graduates
Individuals in their early twenties
Students on the brink of entering the workforce
(And to our more seasoned readers, feel free to review my words and share your thoughts. Do you agree with my insights, or do you have financial wisdom of your own to impart?)
Challenges Faced by Young Professionals:
Every individual faces their own set of challenges, but yours possess unique characteristics. Let’s navigate through them step by step:
Financial Literacy The vast majority of adults I encounter exhibit only a superficial understanding of financial matters, a trend unfortunately prevalent among individuals of your age group as well. For those eager to gauge their financial acumen, why not test your knowledge with a brief financial literacy quiz?
This quiz comprises just five succinct questions and provides an opportunity to ascertain whether you possess greater financial savvy than the two-thirds of the global population who fall short.
Why isn’t personal finance a compulsory subject in schools and universities? The answer eludes me, yet it stands as a glaring deficiency within our educational system. Consequently, young individuals are left to glean financial wisdom from websites, guest speakers, and yes, even acquaintances and family members.
It’s not that self-directed learning is undesirable. However, well-intentioned friends and parents may inadvertently pass on poor financial habits. Let’s not forget those “friends” who purport to educate but are truly seeking financial gain from you.
Thus, your predominant issue lies in the absence of formal financial education. Even if someone did offer guidance, were they steering you in the right direction?
Evolving Employment Landscape During your formative years, you likely received counsel similar to that which was bestowed upon me by our elders: “Devote yourself to studies, excel academically, and a secure job shall be yours.”
However, the contemporary world substantially deviates from the era of our forebears. Presently, the notion of stable employment is shrouded in uncertainty. Lifetime job security is a relic of the past, and with the rapid advancements in robotics and artificial intelligence, the employment landscape is poised for continued transformation. While such prospects instill trepidation in me, experts prognosticate a marked decrease in traditional job opportunities in the foreseeable future.
Consequently, you find yourself navigating an unreliable job market against the backdrop of an increasingly nebulous future. Securing a stable income is becoming progressively challenging.
Cost of Living and Inflation Presuming you are Malaysian, I shall furnish a pertinent example from Malaysia. In the 1980s, one could likely purchase a two-story house in KL for approximately RM60,000 while commencing employment with a salary hovering around RM1,000.
Fast forward to today – envisage purchasing a RM500,000 (USD112,000) apartment with an initial salary of RM2,100.
According to the World Bank, housing affordability is a crucial factor. Ideally, the cost of your residence should not exceed three times your annual household income. For instance, if your annual household income tallies up to RM54,600 (RM2,100 monthly salary x 13 months x 2 individuals), an “affordable” home ought to cost RM163,800 or below.
Conversely, that RM500,000 apartment translates to nine times your annual household income. The World Bank would denounce it as “severely unaffordable.”
Such exorbitant costs prompt indignation. Amidst escalating expenses and stagnant salaries – particularly for recent graduates – discontent is not unwarranted.
Student Debt The majority of young individuals bear the weight of student loans. Thankfully, Malaysia – for better or for worse – adopts a lenient stance on debt repayment.
I do not advocate for evading repayment of your PTPTN education loan under the guise of seeking absolution from immigration officials at KLIA before your annual vacation. However, should you possess the resolve to discharge your obligations, prevailing circumstances render the process more manageable. An array of discount schemes exists, and when was the last instance of an individual being incarcerated for missing an education loan payment?
Nevertheless, student debt remains a pressing issue. Planning for the future becomes arduous when burdened by a substantial financial liability hanging overhead. I, too, have traversed similar circumstances, and empathize with the distress it begets.
Amidst these challenges, let’s examine the silver lining and dissect the advantages poised to benefit young individuals:
Advantages for Young Professionals:
Accessibility and Technology Reflecting upon my early days post-graduation, I reminisce about the need to summon TM Streamyx technicians periodically to rectify issues stemming from my copper-wire DSL modem’s susceptibility to lightning strikes. Not only was my wired internet connection sluggish, but also prone to unreliability.
Presently, the most rudimentary data plan on your mobile device outpaces the velocity of my lightning-prone DSL connection from 2007 by a factor of five. Furthermore, the expanse of freely accessible knowledge on the internet continues to burgeon exponentially.
Consider this: you are privileged to reside in an era characterized by affordable technologies and unfettered access to information. Acquiring knowledge is no longer a conundrum. The ease with which you and I can access information is often overlooked; with the click of a mouse, you can delve into the historical prices of Malaysian vehicles in 1985 sans the need for vocal inquiry.
Armed with technology, you possess the wherewithal to glean insights from eminent figures across the globe, free of charge. To underscore this point, allow me to direct you to Professor Robert Shiller’s course on Financial Markets. Consequently, I implore you to seize this opportunity to broaden your knowledge from a Nobel laureate rather than enduring my discourse.
The Gig Economy During my upbringing, I lacked the acumen typical of street-smart individuals. While I excelled academically, the spirit of entrepreneurship eluded me. Perhaps the conventional trajectory of schooling followed by tertiary education and subsequently entry into corporate employment was deeply ingrained in my psyche.
Conversely, you exhibit superior intellect and audacity. Evidently, you have likely dabbled in part-time ventures during your collegiate years, leveraging your skills and networks to generate income.
This inclination towards entrepreneurship constitutes a commendable attribute. Are you aware that freelancers presently constitute 35% of the American workforce? While precise statistics within the Malaysian context are elusive, this trend reverberates globally. Notably, individuals such as you and me who prefer the solace of home-based employment are aptly suited for these roles.
Your adeptness at utilizing available resources and technology renders freelancing a viable avenue for income generation. Acquainted with the intricacies of the internet and social media, coupled with the dynamics of globalization, you possess the potential to secure lucrative earnings, especially through international transactions denominated in high-value currencies.
In essence, we are all entrepreneurs. Regretfully, I wish to have assimilated this realization earlier in life; however, for you, a burgeoning talent – the world beckons for your conquest.
Time Time constitutes your most invaluable asset. Consider the exemplar of Warren Buffett, a magnate renowned for his financial acumen and presently commanding an estimated worth of USD 73.9 billion.
Did you know that 99% of Warren Buffett’s wealth was amassed post his 50th birthday? Reflect upon this fact anew; even a luminary in the realm of investing charted the trajectory to billionaire status over a span of 45 years following initial forays at the age of 11.
However, this narrative fails to resonate with the contemporary narrative of instant gratification. In a world fixated on emulating the likes of Mark Zuckerberg, a youthful billionaire at the age of 23, the reality often diverges from these aspirations.
For the majority, catalyzing significant achievements in one’s career necessitates time. Moreover, harnessing the power of compound interest across extended durations enables one’s financial capital to flourish.
Allow me to furnish a hypothetical scenario: consider an income of RM2,200 and the minimum contribution towards your EPF retirement fund. Presuming consistent contributions over 41 years until retirement, the denouement reveals a sum in excess of RM1 million:
And this calculation remains bereft of prospective promotions and increases in income.
Embrace your youth; time is your ally. Yet, do you harbor the patience requisite to realize these endeavors?
Guidance for Young Professionals:
Budgeting and Automation If I were to encapsulate personal finance within a single axiom, it would be this: spend less than you earn, and allocate the remainder towards investment.
This adage resonates profoundly. However, the allure of the latest iPhone models or irresistible holiday offers from AirAsia often beckon. Thus, the need for a meticulously crafted budget emerges. Neglecting to appraise your expenditures rigorously inexorably leads to insolvency.
Further insights on drafting a budget may be gleaned here; nonetheless, the crux of budgeting lies within its disciplinary function. Absent discipline, achieving financial prosperity remains elusive.
Here is a parting counsel on budgeting: Given our proclivity to succumb to impulse purchases, consider automating your savings and investments. Instruct your bank to automatically deduct a portion of your remuneration for investment immediately upon receipt, rendering these funds less accessible.
Accessible funds often precipitate impulsive expenditures – an indulgence that could culminate in the acquisition of that coveted iPhone.
Vigilance in Expenditure Analogous to enterprises striving for enhanced profitability via augmenting revenues or curtailing costs, young graduates, likewise, must scrutinize their expenses.
In most scenarios, assuming independence and non-reliance on your earnings for familial sustenance, there exists ample leeway for young professionals to trim expenditures.
“But my persona necessitates chic attire and visits to trendy cafes,” you posit. “Vacations abroad offer solace and contentment,” you contend.
I am not inclined to advocate relinquishing your penchant for overpriced Starbucks beverages or curtailing your globetrotting endeavors. Personal priorities are profoundly subjective. Yet, efficacious control of expenditures amidst contemporary economic exigencies mandates resolute decision-making.
Acknowledging life’s inherent trade-offs, be it temporal or pecuniary, is crucial. Allocate resources toward endeavors of paramount importance. Reserve a larger proportion of your budget for such undertakings while pruning extraneous expenses with zeal.
Reflect extensively; with age, you shall likely discern the insignificance of erstwhile priorities. Hence, choose judiciously.
Mastery and Diversification Upon optimizing your expenses to the fullest extent feasible, further reduction may yield insignificant returns. To scale greater heights, augmenting income emerges as the next logical progression.
Primarily, strive for excellence in your professional capacity. Alternatively, identify a profession wherein your skills flourish. Despite the shifting employment landscape, lucrative job opportunities still abound for those capable of delivering exceptional value.
A secondary avenue entails diversification – cultivating multiple income streams. Considering the burgeoning gig economy, a significant proportion of individuals boast side businesses (as per surveys, 44% of millennials aged 25-34 engage in secondary occupations, the highest among all demographics). This shift epitomizes a global trend favoring multiple revenue streams. Conceivably, these tertiary endeavors might eventually obviate the necessity of traditional employment.
Admittedly, transitioning into this realm may evoke trepidation, particularly if entrepreneurship does not come naturally. Acquiring indispensable competencies such as marketing, sales, and client interaction becomes imperative. Prowess in these domains proves beneficial, heralding personal growth and expanding horizons.
Asset Acquisition Numerous queries concerning financial matters intersect my purview, yet a perceptible dearth in proactive financial initiatives prevails. Perhaps apprehension surrounding financial losses underpins this reticence – thereby circumventing risk exposure. Alternately, individuals may default to familiar domains gleaned from conventional educational avenues.
Irrespective of the underlying rationale, knowledge bereft of application remains inert.
If your conception of investment entails entrusting funds to paternal oversight for oblivion, the onus rests with you to chart your fiscal course. Venturing beyond the confines of fixed deposits is warranted; eschew unwarranted complexities such as esoteric technical analysis in favor of exploring low-cost mutual funds, REITs, or the tried-and-tested Amanah Saham. However, real comprehension stems from the experiential domain. Venture forth with modest capital investments to imbibe invaluable lessons firsthand.
Embarking on tangible actions underscores a potent facet – fostering both knowledge acquisition and augmenting self-assurance.
Self-Investment Supreme among all investments is the commitment to self-enhancement. This imperatively encompasses allocation of resources towards personal welfare – be it through nutritious sustenance for the body, enriching literature for the intellect, or the procurement of enriching books.
Self-improvement transcends confines of personal finance, extending to holistic well-being. Nourish wholesome lifestyles, cultivate harmonious relationships, exhibit compassionate affability towards kin and kin, and extend benevolence to others. These endeavors not only benefit your psyche but manifest an altruistic gesture.
Failure to prioritize self-care today precludes savoring the fruits of labor in the future.
If you attended in anticipation of a formulaic strategy delineating a prescribed quantum of wealth by a designated age, or a purportedly infallible plan trumpeted on contemporary platforms, I offer my regret. Present realities in a boundlessly dynamic world replete with uncertainties and disruptions mandate resilience. While erstwhile recommendations akin to “Become a Property Millionaire by 30” might have thrived during the golden era of Kuala Lumpur’s property boom between 2009 and 2013, their relevance in the contemporary milieu is questionable.
Ephemeral tactics may furnish compelling narratives, yet sustained success ensues from solid foundational principles.
Conclusively, the onus rests with you to embark upon a journey delineating your financial destiny. Discard attributions of financial misfortune to external entities; eschew expressions of helplessness under the guise of ignorance.
Adopt an alternate perspective:
Perceive life as a riveting odyssey; a sojourn replete with twists leading to your destined terminus. Money functions as the vehicle steering you en route; its mismanagement portends a turbulent voyage. Adroit fiscal stewardship, contrariwise, smooths the sojourn – hastening progress towards your ultimate destination.
You are presently mid-stride along your expedition. Irrespective of antecedent occurrences, the prerogative to enhance your journey pervades your very being. The agency to fortify your course commences now.
Embarking on the investment path can appear daunting, particularly when financial resources are limited. Nonetheless, this shouldn’t deter you.
Insights from three financial strategists shed light on commencing investment endeavors across varying income brackets.
Kuah Soo Yee, Seasoned Associate at IPP Financial Planning Group Malaysia
Ian Wong, Visionary Founder of Uno Advisers
Linnet Lee, Director at Resolute Planning Sdn Bhd
Define Your Personal Objectives Ian Wong underscores how income levels significantly shape individual aspirations. Wong articulates, “As earnings increase, so do expenditures.”
Within the B40 segment, commonplace objectives include fostering financial security and establishing ample emergency funds. The M40 cohort often prioritizes homeownership, children’s education, and retirement provisions.
Conversely, the T20 demographic typically directs attention towards preserving wealth and devising future inheritance strategies.
Establish a Robust Financial Framework, Especially for Fresh Graduates or Individuals in Lower Income Brackets Linnet Lee stresses the significance of laying a sturdy financial groundwork, particularly for those in the lower income echelons or recent graduates entering the workforce.
Lee advocates concentrating on financial and debt management to fortify financial resilience against unexpected circumstances.
“Financial planning serves as the nucleus and essence of an individual’s wealth and financial well-being,” she articulates, accentuating the pivotal role of financial consultants in ensuring not only monetary success but also familial harmony.
Assess the Suitability of Your Investment Tools and Risk Preferences Delving into investment apparatus suitability and risk propensity, Kuah Soo Yee advocates tailored considerations.
For individuals with limited financial resources, expertise, or time, unit trusts may serve as a suitable investment mechanism.
Conversely, those with greater resources and time for monitoring investments might opt for securities—financial instruments denoting ownership or debt responsibilities of an entity. Examples encompass stocks, bonds, and derivatives, facilitating returns on investments through financial market transactions.
Kuah underscores the imperative nature of harmonizing investment choices with individual risk tolerance, delineated through conservative, moderate, and aggressive portfolio allocations.
Customize Your Investment Approaches Based on Present Financial Circumstances, Risk Appetite, and Investment Horizon Lee recommends tailoring investment strategies in sync with financial conditions, risk profiles, and investment durations.
For individuals with modest incomes, avenues like EPF or unit trusts with lower investment outlays may prove beneficial.
Medium-income earners could delve into stocks or alternative investments, while high-income counterparts might contemplate private equity or overseas investments.
Private equity entails investing in non-public companies to secure ownership interests and propel growth, whereas offshore investments encompass investing in assets or financial markets beyond domestic jurisdiction.
Harmonize Risk and Return Wong underscores the necessity of balancing risk and return, advocating for a diverse portfolio tailored to individual risk appetites.
He proposes adjusting portfolio compositions according to income levels and affordability, with the objective of optimizing returns while mitigating risks.
A diversified portfolio integrates a spectrum of investment categories. Consider the following:
Stocks: Diversify investments across various company stocks from sectors such as technology, healthcare, finance, and consumer goods, spanning large-cap, mid-cap, and small-cap stocks.
Bonds: Allocate a segment of the portfolio to bonds, incorporating government, corporate, and municipal bonds with varying durations and credit quality.
Real Estate Investment Trusts (REITs): Participate in REITs managing varied real estate portfolios for exposure to real estate markets without direct property ownership.
Mutual Funds or Exchange-Traded Funds (ETFs): Include funds tracking diverse indices or sectors.
Commodities: Explore investments in gold, silver, oil, or agricultural products for further diversification.
International Investments: Distribute a portion of the portfolio to foreign stocks and bonds for exposure to international economies.
Cash or Cash Equivalents: Preserve a portion in cash or cash equivalents like money market funds for liquidity and seizing timely opportunities.
By diversifying across these asset classes, investment risks are spread out. In scenarios where one sector or asset underperforms, others may offset losses, potentially bolstering overall returns.
Harness Government Initiatives and Incentives Lee sheds light on assorted government initiatives and incentives fostering investment and financial planning.
These encompass tax incentives for Private Retirement Schemes (PRS) investments and education saving incentives through programs like the Skim Simpanan Pendidikan Nasional.
Bursa Malaysia also extends programs aiding investors at various stages, such as the Mirror, Learn & Trade initiative.
