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Monday, April 27, 2009

Living With Student Loan

Nowadays, most fresh graduates will be burden with debts, even the moment they stepped in the varsity world. I'm quite positive that those not coming from a well to do family will need to get student loan or education loan. Students from Malaysia can apply for this student loan or education loan from a government body, PTPTN.

When I graduated three years ago, I directly have to start my payment for the education loan. The terms and conditions of the loan is to start the payment 6 months after I graduated. This applies to all the university students getting student loan from this PTPTN - which means that we have to get a job within 6 months after graduated. Well, for those getting jobs within the first six months after graduation, how many of them are actually paying back their student loan? I believe majority of them are not paying or just paid maybe once or twice the installment. Not that I want to criticize or condemn anyone, but I do believe we need to pay back this student loan that allowed us to get tertiary education. Without this repayment from us, how is PTPTN going to give student loans to others? Anyway, back to the real topic, living with student loan - if one delay his or her payment, the interest will accumulate, then one will starts to blame the government for charging high interest. I was wondering, is 3% from the remaning amount is high? For me, it is an ok amount, which is why we need to start paying as soon as possible and pay as high as we can afford so that the interest will be lowered drastically.

Financial management and discipline has a lot to do with not repaying this loan. If one does not have discipline or good financial management, he or she will always face with shortage of money, thus not repaying loans because there is no extra cash left with him or her at the end of the month. One can start by setting aside some amount of money for student loan repayment. By doing this, at the end of the month one will still have the money for loan repayment. Our income are fixed, thus we need to spend less than the income in order to have extra money for our student loan repayment.

Rule #1
Income - Loan Installment = Expenses + Savings

The above rule always apply to all of the working class. Or better still

Rule #2
Income - Loan Installment - Savings = Expenses

Ever wonder what is the different between the two rules? According to maths formula, both are the same, but from financial management stand point, the two rules are different. Rule #1 means setting aside loan installment and one will get expenses + savings portion, so this mean one does not necessary have savings. Rule #2 meaning setting aside loan installment and savings after income, then spend the remaining one. Thus with rule #2, one will be able to pay off loans as well as having savings.

In conclusion, we need to have very good financial management so that we can start paying off our student loan as soon as possible so that PTPTN can continue to provide student loan for those needy.

Wednesday, April 8, 2009


It's kind of ironic in our life that when we are young, we will wish that we are grown up but when we are grown up, we will be wishing that we are still the young and innocent guys or gals that we used to be. A lot of this was actually caused by one Money is the root of all evil and problems. We must not forget, we are living in the materialistic world no matter how much we would like to deny. Money, can be a great servant if we use it properly while a the same time, it can be an evil master.

So, what is money to us? Do we treat it as our master or our slave? How do we know whether we are the money master or the slave? If we are the master, surely it is the money who work for us while if we were the to be a slave to somebody, we would be sweating to please the master. There is no two way about it.

For the money case, it is very obvious that if we are the money master, we would be investing the money, so that in one way, the money will earn more money for us, while we just sitting around doing nothing. We work and earn money, and invest wisely on equities or properties or whatever investment vehicles that can generate enough ROI to hedge the inflation at least. This is call money make money. So, if the money is working for us, we are the money master.

For most people, it is the other way round. They are working day and night to earn money. Some take it to the next level where they will be cutting their expenses by skipping meals, ignoring health care etc and ended up living in depression or in bad health condition when they are old. If we are sweating all out, it means we are slaving ourselves for money.

I'm not here encourage people to invest or to spend or not to save money, but we should adopt a more neutral financial goals. There is no point earning a lot of money or having a lot of money in savings account, when we cannot really enjoy it. Be neutral....spend on what is necessary - spend smart and at the same time, invest.

Tuesday, April 7, 2009

Realm of Wealth

Money......what is the value of money for us? Some of us believe that money is everything while the others think otherwise. We use money to but stuff - food, clothes, transportation etc. Money seems to be a very important element in our life that everyone sweating day and night just to meet the daily needs.

We are living in a world where money seems to be everything - which is quite obvious why I name this blog Realm of Wealth. I was thinking whether to name the blog Realm of Money or Realm of Wealth, but decided on the latter one. The main reason I choose wealth over money is because wealth is made up of an abundance of valuable material possessions or resources, while money is just money. I want to blog more on money related stuff, while at the same time not only money, so wealth is more suitable. This blog will have information based on my perception, which can be right or wrong, but to voice out is the process of learning, which will happen all the time.