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Tuesday, December 31, 2013

Summary on FY2013

In less than 24 hours, we will be entering the year 2014 and so it is time again for us to reflect on the annual financial goal and how we are doing in terms of achieving the financial goal.

I have posted my financial resolution for the year 2013, in the beginning of the year and for the year 2013, I have set a rather cautious outlook on the global equities - thus, I'm targeting about 10% equities growth and true enough my total local equity growth is about slightly more than 10%, which is within my financial goal target, and in fact it is in almost in line with the local stocks growth. There are some increase in other area especially cash allocation for local equities and the growth in oversea stocks portfolio.

Existing housing loan is reduced periodically, while I've finally settled the education loan, PTPTN in order to enjoy the 20% discount. A major purchased done through the end of the year, in which I'm hoping to have it finalized within the first quarter in 2014 so that I can plan ahead the budget throughout the year.

Overall, it's been quite an eventful year for 2013 for me, at least, having settled one of the loan; while committing to another major purchase. The year 2014 is expected to be way more challenging, given the way our Government rationalizing the subsidies while the pay is expected to be about the same.

Friday, December 20, 2013

2014: Increased expenses

Well, like it or not....2014 is the year for increased expended....a 15% increase in electricity bill, increase in tolls, LRT, sugar etc...

It is probably one of those time when the Rakyat asked the question....what about my salary?

I think this story best sum up how Malaysians feel about 2014...

A bit of laughter and humor on this is good...after all, whether we like it or not, 2014 is going to be a year where your expenses go up even though you try to tighten your belt.



Saturday, December 14, 2013

Ways to Save Money In the Midst Of Rising Cost of Living

The last few post from the blog mentioned that you have been warned regarding the Malaysia's electricity tariff hike and with just about half month to go before 2014 when the thing happens, let us figure out ways to save money. While doing so, I come across the article from The Star and the article is really suitable for the current situation that is faced by most Malaysians.

The article is about the unconventional money savers and talk about cutting cost - by all means which include unconventional method. The article is as follows:-

FUEL prices are up. Electricity tariffs are rising. In a nutshell, the cost of living is being elevated. Many of us, in our attempts to be frugal, will tighten our belts.
Naturally, there are many ways of doing this. The following are some obvious, though not necessarily conventional methods to cut down your costs.

According to, certain home appliances and electronics will continue to use power even when they’re switched off. It estimates that 10% of the average home electricity bill comes from the energy used by these products, which are popularly called “energy vampires.”

“The only way to completely prevent such appliances from using standby power – that is, drawing on the energy supply even after they’re turned off – is to unplug them.”
According to, such products include those that typically have standby power use, such as a remote control, external power supply, digital display, LED status light, or digital clock, a battery charger or a soft-touch key-pad.

Paint it white
According to an article in The New York Times, painting your roof white can actually reduce air-conditioning costs by 20% or more in hot, sunny weather.

“Lower energy consumption also means fewer of the carbon dioxide emissions that contribute to global warming. What is more, a white roof can cost as little as 15% more than its dark counterpart, depending on the materials used, while slashing electricity bills,” it says.

Freeze it
Contrary to popular belief, the freezer in your fridge can be used for more than just preserving food. According to, a website that provides interior design tips and ideas, the lifespan of candles can be almost doubled if they are placed in the freezer for a day before using them.

“Chilling the wax gives it a bit longer before burning through and leaving you with an empty jar. For some candles this will also cause them to drip less and burn straight down without burning through the side of the candle.

“Although this isn’t a life-altering tip, nice candles can be pricey and making them last a little longer might mean you get to purchase them in the first place, or purchase them more often, or possibly more like all those tables in the magazines that seem to be loaded up with flickering wicks,” it says.
Battery life can also be extended when stored in the freezer, according to how-to website,

“A number of studies have shown that storing batteries in the freezer helps them retain their charge longer.

“This is less true for alkaline batteries (freezing extends their shelf life by only about 5%) than it is for NiMH (nickel–metal hydride) or and Nicad batteries often used in electronics. Keeping NiMH batteries in the freezer can boost battery life by 90%.”

Citing battery-centric site GreenBatteries, says alkaline batteries stored at room temperature tend to self discharge at a rate of less than 2% per year.

Normally refrigerating or freezing them will only help maintain their charge by a tiny amount. Hardly worth the effort of chilling them. However, if alkaline batteries are stored at higher temperatures they will start to lose capacity much quicker.

At 85 degrees Fahrenheit, they only lose about 5% per year, but at 100 degrees they lose 25% per year. If you live in a very hot climate or are storing your batteries in a very hot location, it may be worthwhile for you to store your alkaline batteries in a refrigerator instead.

Flush it less
While not related to electricity cost, flushing your toilet regularly can add to your monthly water bill.
A popular (though probably not regularly followed) tongue-in-cheek adage on when to flush your toilet immediately comes to mind: “If it’s yellow, let it mellow. If it’s brown, flush it down.”

According to Mother Nature Network (MNN), an environmental and social responsibility online network, the average person urinates six times a day, which is about 7.6 gallons flushed.

“That equals 2,774 gallons per year to dispose of just 171 gallons of urine. The average person defecates about once per day, and if that were the only occasion you flushed, it would equal 584 gallons of water, saving 2,190 gallons. If a household of four followed this flushing rule, they would save 8,760 gallons of water a year.”

However, not flushing can be considered as a very unhygienic, unappealing practice by many (if not most). MNN does go on to note that there is an aversion by many people to looking at urine.
“Then there is the more serious concern about toilet bowl cleanliness. True, “letting it mellow” increases the rate at which a toilet bowl becomes scummy.

However, in many households, the toilets are brushed at least once a week (hopefully) anyway, and so there is no chance for significant scum to build up.

 However, for the purpose of this “money-saving” tip, it is suggested that one should definitely consider the hygienic practicality first before the financial implications that come with flushing (or not flushing) your toilet.

Sunday, December 8, 2013

Understanding GST

We have been talking about GST for a while now and with the implementation set to be in 2015, a lot of Malaysians are starting to worry about the impact that it has upon the country.

While the Goods and Service Tax (GST) has a lot of positive wealth impact that was lauded by a lot of experts in the economy, common folks in Malaysia still worry about the negative impacts on the livelihood and affordability of the Rakyat.

Before we move to talk about the pros and cons of GST,

what is GST in the first place?

GST is a consumption tax that is imposed on goods and services at every stage of the supply chain, which typically begins at the manufacturing stage and ends at the retail stage.

GST is based on the “valued-added” concept to avoid duplication in tax collected.

Here is a simple scenario of how the implementation of GST will look like, assuming we take the 10% tax rate.

A) Let's say we take a manufacturer of dairy product. The manufacturer of dairy product will have to buy from the supplier....for example, at RM1 to manufacture the dairy product. Under the GST system the manufacturer paid RM1 and RM0.10(GST), where the RM0.10 is collected for the government.

B) The manufacturer will charge the retailer RM3 and a RM0.30(GST), where the RM0.30 will be collected for the government.

C) After that, the retailer which sells the product to the end user (consumers) at RM5 and a RM0.50 is charged as GST to be given to the government.

After the numerous stages, we can see how the GST add up as a collection of tax for the government.

The next question that comes to mind:

how different is the GST from the current tax system (Sales Tax and Service Tax, SST).

For many people who know and follow about the development of the GST in the country, one will know that it is not a new tax charged on the Rakyat but rather, a replacement to the SST system.

There are two key parts in this tax system, one of is the goods while the other the service. For goods tax, it is normally at 10% and the tax is normally priced into the product price while 6% is charged on the service and is indicated in the receipt.

GST Impact on the prices of goods

There are a few scenarios that we have to look at when we talk about how the impact will be on the prices of goods as there are no straightforward answer. Here are the few scenarios by taking the announced 6% rate.

Scenario 1:

Paying 6% more for certain products that were previously not tax under the SST system. With the GST system, there will be wider range of products/services that are covered.

Scenario 2:

Paying less for the products that were also tax under the SST system for goods and services.

Scenario 3:

Paying the same amount for products previously taxed under the service tax (6%) but not the goods or when the products/services are not covered in both the GST and SST.

Scenario 4:

Paying more because at every stage of the supply chain, there is an increase of products/range and companies that will be charged with the GST system.

In conclusion, there is a risk of the GST implementation that leads to an increase in prices but it is not in a universal manner.

No doubt, concern over the impact of the GST implementation is understandable but given the examples from country like Singapore, there is every reason to be optimistic and confident that GST might just be the right step for Malaysians.

However, the obvious concern here is to make sure that businesses do not take advantage of just the fact that GST has been introduced as a reason to raise prices of goods and services indiscriminately. To this end, the Anti-Profiteering Act has been tabled to enable enforcement against such practices. In theory though, the multi-stage tax nature of the GST should allow the Customs department to aggregate pricing information far more accurately than they do currently, the implied monitoring of this should serve as a deterrent to unscrupulous businesses.


Wednesday, December 4, 2013

Is Medical Insurance important?

So, how many of you have a medical insurance? 

Probably it doesn't mean much to you when you are young but looking at the statistic above, I think there is every reasons for us to start planning while we are young. 

We are thankful that medical fees inflation is second to the college tuition and fees but it's still at a big figure....a forecast of 607% increase in comparison to 1978. Well, you probably argue that it's in so many years...but you may compare the increase in medical fees to the average income.

The increase of the medical cost is way more than the increase of household income. The data shown until year 2010. 

Well, for those of you who have no clue about medical insurance, here is a simple explanation of it.

Medical Insurance functions as a form of protection to cover unforeseen expenses arising from illness, injury or accidents – which can be very expensive, especially if hospitalisation and / or surgery is required. 

Getting the right Medical Insurance also ensures that you won’t have to fret about the cost of seeking treatment during an emergency. In addition, it also provides you with a stream of income while you undergo treatment. There are 4 major types of medical policies:

  • Medical Card/Health Card – covers hospitalization and surgical benefits
  • 36 Critical Illness or Dread Diseases Insurance – a lump sum benefit
  • Disability Income Insurance – stream of income when you are unable to work
  • Hospital Income Insurance – provides a specified sum of money on a daily, weekly or monthly basis if you are being treated in a hospital

What to do when purchasing a policy?

1) Do your research and find out what policies are available out there.

2) Shortlist a few policies from different insurance companies and ask your agents to compare the differences in the policies. Don't worry about having to know a few different agents from different insurance companies. It is your right to find out what's best for you.

3) Once you have decided on a policy, decide on the sum insured and make sure the premium amount is a figure you are comfortable with.

4) Read and understand the terms and conditions of your policy before signing on the dotted line. To help policyholders better understand the policies, Bank Negara Malaysia has directed a move towards standardisation of terms used in policies to reduce confusion among policyholders.

Things to look out for

definitions and limitations to payment of benefits
how a disability is defined
how soon after a claim can one claim again
special provisions (succeeding policyholder after the first policyholder dies to avoid the hassle of declaring their health again)
does the policy have guaranteed renewability – to ensure protection is available throughout and premiums are maintained despite recent diagnosis of illness.

Purchasing a health insurance policy has become more of a need than a want in today’s society. Yet, a fraction of people are still skeptical about buying medical insurance after hearing stories of people who face difficulties claiming against a policy after a surgery or medical treatment.

That is why it helps to understand what your health insurance policy covers and how you can make the most of it. Choosing the right insurance company will also help ensure smooth claim process, when the need arises.

Tuesday, December 3, 2013

Malaysia’s electricity tariff hike...YOU HAVE BEEN WARNED!


Well, if you have not heard the news, then it's time to tune into it...because beginning in January 2014, electricity tariff in the country will rise by around 15%. 

It is not a standard increase...but the average is about 15%. In the Peninsular Malaysia, the increase is about 14.86% while it is about 17% for Sabah and Labuan. 

In Peninsular Malaysia, the rate will be about 38.53sen/kWh from the current average rate of about 33.54sen/kWh while Sabah and Labuan will seen an increase from 29.52 sen per kWh to 34.52sen per kWh. The Sarawak state will not be affected by the rate though, as the electricity supply in the state is operated by state-run company, Sarawak Energy.

Of course, not all is bad news as those who use below 300kWh a month will not be affected. So, if your monthly electric bill is about RM77, you will not be affected. So, try to stay below this and you will be okay. 

check out the new rate

Well, there are of course valid reasons for us as Malaysians to be upset with this are the justification for the increase:

I read this from The Star Online...

The Government cannot continue to subsidise increasing fuel prices. The country needs to move from blanket to targeted subsidies as it tends to result in an inefficient allocation of resources and, therefore, distorts the economy.

According to the 2011 International Monetary Fund (IMF) report, when low to medium-income countries apply blanket subsidies, about 46% of the energy subsidies benefit only the top 20% of society, with only 7% reaching the lowest 20% of the population.

This is because the rich generally consume higher volumes of scarce resources compared with the poor.

The consumption by the rich could almost be limitless, if the goods are too cheap. For the poor, however, their consumption is always limited, no matter how cheap a resource/good may be.

Adjustment of electricity tariffs is one of the steps to restructure subsidies into a form that is more targeted and sustainable.

And the more important question: if the rise next year 2014 will already be a burden to the consumers (Rakyat), what happened in 2015 when the GST is implemented?

As per Budget 2014, GST will be imposed on all consumers with effect from April 2015.

However, domestic consumers using 1-200 kWh per month will not be subject to the GST.

Furthermore, they will not be affected by the tariff hike from January.

Well, I guess the simple statement would be this: like it or not, the electricity hike is happening. 

And of course, the bigger concern is how will business owners pass these costs to the consumers? Increase prices? So the next question: inflation? Well, BNM sees 0.4% increase in inflation due to tariffs hike...currently, the inflation rate is at 2.8% and with this, it means the inflation rate would have just touch over 3%.

There are a lot of justification for the hike...the need to educate Malaysians on the right way to spend, to cut budget deficit, etc etc....well, probably it's just a bit too overwhelming at this point of time. First is the petrol, sugar, GST and now this hike. Are Malaysians ready? That's probably a question we are about to find out...

Anyway, there is one good news out of this, especially for those of you who bought the Tenaga Nasional Berhad stock, a big jump in the stock market...

I am not sure about you but as for me, I think it's time to plan my expenses well....the hard times are coming for least for the coming years...