KUALA LUMPUR, April 16 (Bernama) -- Bursa Malaysia ended lower today, weighed down by persistent profit-taking amid ongoing concerns over global trade tariffs. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) slipped 9.51 points, or 0.64 per cent, to 1,476.92 compared to Tuesday’s close of 1,486.43. The benchmark index opened 0.02 of-a-point higher to 1,486.45 and moved between 1,472.84 and 1,487.50 throughout the day. In the broader market, decliners outpaced gainers 573 to 320, while 434 counters were unchanged, 1,071 untraded, and nine others suspended. Turnover slipped to 3.00 billion units valued at RM1.65 billion from 3.36 billion units valued at RM1.91 billion on Tuesday.
I've blogged about the some of the Universal Rule of Personal Financial Management and one of the rule mentioning about never depend on single income, which is actually taken from a famous quote by the Sage of Ohama, Warren Buffett. This rule is in fact the most important rule after one have discipline in controlling spending.
It's so coincidence that I read an article in The Star, and it mentioned about how hard does your money work, although towards the end of the article, it is starting to do a bit like "advertisement" by trying to get people to use the service of fund managers or financial planners. Nevertheless, that is not the most important message. The message is clear, how hard does your money work rather than how hard one work for money - exactly the same as what I was trying to imply on the Universal Rule of Personal Financial Management: #3 Never Depend on Single Income.
The article is as follows:-
YOU may be working hard for your money, but is your money working hard for you?
In this article, we look at three distinct groups of Malaysians and how their money works for them. Hopefully you will be able to get some inspiration to make your own money work harder.
As regular readers of this column know, we recommend striking a balance between “money making” and “money optimisation” in order to achieve financial freedom. Money-making strategies involve concentrating our time, energy and resources on what we do best in order to increase our income. On the other hand, money optimisation requires converting your active income into assets and then using those assets to support your lifestyle. In short, money optimisation makes your money work for you.
To begin with, it is helpful to understand that our attitude towards money divides us into one of three broad groups of people. Which of the following categories do you fall into?
The Procrastinators
The first group pays no attention to money optimisation. They believe that financial success comes from focusing 100% of their efforts on making more money.
This group often believes that they have no time to spare for money optimisation and as a result they tend to be largely reactive in managing their finances. People in this group are highly prone to procrastinating about their personal finances and very often, they adopt a “make or break” approach to money, with the hope that by paying full attention to making more money, they will be able to manage whatever financial challenges the future holds.
This group of people suffer from anxiety over their competing financial needs and are inherently exposed to various risk factors that may adversely affect them from time to time.
When the Asian Financial Crisis struck in 1998, a successful CEO sought my advice when his RM100mil per annum manufacturing business hit a wall. In the midst of the crisis, the foreign bank that had extended him his loan reduced its line of credit as part of its rationalisation exercise for the region and asked him to pay up the amount due from the previous credit limit.
When the local banks got wind of this, they too took similar action with their loans and his business ran into a cash flow crisis. This crisis brought the company tumbling to its knees and till today, the CEO who was in his 40s when the crisis happened, has yet to restore his financial health.
Previously when his business was booming, I had cautioned him on the need for a money optimisation strategy but during that time, he was too busy managing his business.
Thankfully, with financial literacy and education such issues can be avoided. The challenge is that this group of people probably still accounts for the majority of the population in Malaysia.
The Do-It-Yourselfers
The second group pays some lip service to the concept of money optimisation, but their financial strategy is mostly reactive and far from comprehensive. If asked how they plan to meet their various financial goals, they will admit that they are unsure of what components are missing in order to optimise their money.
It's a classic example of “you don't know what you don't know”. You can't address an issue if you don't know the root of the problem, the potential solutions and how best to manage them.
A few of these individuals are proactive and comprehensive in their financial planning but the majority manage their personal resources in isolation from one another. This scenario happens when they do not see the big picture and fail to adopt a holistic financial approach to their investments, children's tertiary education, retirement, asset protection, estate management, debt and loan management, taxation and insurance.
I recently met a doctor who was proud to share with me how he had optimised his money in a comprehensive manner. He shared that he had invested some money for his own retirement and also allocated savings for his children's overseas tertiary education. In addition, he planned to build a beautiful bungalow for his family. When I asked him whether he knew if he would have enough money to fund these financial goals, he was dumbfounded and admitted that he was not sure. By managing his finances holistically, he would have the answer clearly.
The Delegators
The final group of people seeks professional guidance and support to achieve money optimisation. As a result, they are proactive about their financial goals and adopt a comprehensive and holistic financial management strategy to ensure that their income is optimised to achieve long-term financial independence and to grow their wealth.
I met a young CEO one year ago who had gained exposure to the benefits of engaging an independent financial adviser (IFA) while he was working in Australia. Although he belonged to the smallest of the three groups we have identified, in countries such as the UK, US and Australia, this group form the biggest portion of the population, thanks to widespread public education and financial regulations to protect the consumer's interest.
As I outlined in my latest book, Set Yourself Free, there are five criteria that every IFA must have. Firstly, he must hold the right regulatory licences to facilitate the delivery of independent advice. Secondly, he must charge a fee for his advice and services, and thirdly, an IFA must be able to provide holistic and integrated advice that addresses all aspects of money optimisation for the clients. Fourthly, an IFA has no sales quota to meet so that he provides advice based on his clients' best interests. And finally, the IFA must have access to a wide range of financial products so that he can package a combination that will help the client achieve financial freedom.
In line with the country's aim of becoming a high income nation, Malaysians must make a mindset shift and proactively take control of their finances with both money-making and money optimisation at the top of their agenda. Only with this strategy will financial freedom be truly realised.
Source: The Star
It's so coincidence that I read an article in The Star, and it mentioned about how hard does your money work, although towards the end of the article, it is starting to do a bit like "advertisement" by trying to get people to use the service of fund managers or financial planners. Nevertheless, that is not the most important message. The message is clear, how hard does your money work rather than how hard one work for money - exactly the same as what I was trying to imply on the Universal Rule of Personal Financial Management: #3 Never Depend on Single Income.
The article is as follows:-
YOU may be working hard for your money, but is your money working hard for you?
In this article, we look at three distinct groups of Malaysians and how their money works for them. Hopefully you will be able to get some inspiration to make your own money work harder.
As regular readers of this column know, we recommend striking a balance between “money making” and “money optimisation” in order to achieve financial freedom. Money-making strategies involve concentrating our time, energy and resources on what we do best in order to increase our income. On the other hand, money optimisation requires converting your active income into assets and then using those assets to support your lifestyle. In short, money optimisation makes your money work for you.
To begin with, it is helpful to understand that our attitude towards money divides us into one of three broad groups of people. Which of the following categories do you fall into?
The Procrastinators
The first group pays no attention to money optimisation. They believe that financial success comes from focusing 100% of their efforts on making more money.
This group often believes that they have no time to spare for money optimisation and as a result they tend to be largely reactive in managing their finances. People in this group are highly prone to procrastinating about their personal finances and very often, they adopt a “make or break” approach to money, with the hope that by paying full attention to making more money, they will be able to manage whatever financial challenges the future holds.
This group of people suffer from anxiety over their competing financial needs and are inherently exposed to various risk factors that may adversely affect them from time to time.
When the Asian Financial Crisis struck in 1998, a successful CEO sought my advice when his RM100mil per annum manufacturing business hit a wall. In the midst of the crisis, the foreign bank that had extended him his loan reduced its line of credit as part of its rationalisation exercise for the region and asked him to pay up the amount due from the previous credit limit.
When the local banks got wind of this, they too took similar action with their loans and his business ran into a cash flow crisis. This crisis brought the company tumbling to its knees and till today, the CEO who was in his 40s when the crisis happened, has yet to restore his financial health.
Previously when his business was booming, I had cautioned him on the need for a money optimisation strategy but during that time, he was too busy managing his business.
Thankfully, with financial literacy and education such issues can be avoided. The challenge is that this group of people probably still accounts for the majority of the population in Malaysia.
The Do-It-Yourselfers
The second group pays some lip service to the concept of money optimisation, but their financial strategy is mostly reactive and far from comprehensive. If asked how they plan to meet their various financial goals, they will admit that they are unsure of what components are missing in order to optimise their money.
It's a classic example of “you don't know what you don't know”. You can't address an issue if you don't know the root of the problem, the potential solutions and how best to manage them.
A few of these individuals are proactive and comprehensive in their financial planning but the majority manage their personal resources in isolation from one another. This scenario happens when they do not see the big picture and fail to adopt a holistic financial approach to their investments, children's tertiary education, retirement, asset protection, estate management, debt and loan management, taxation and insurance.
I recently met a doctor who was proud to share with me how he had optimised his money in a comprehensive manner. He shared that he had invested some money for his own retirement and also allocated savings for his children's overseas tertiary education. In addition, he planned to build a beautiful bungalow for his family. When I asked him whether he knew if he would have enough money to fund these financial goals, he was dumbfounded and admitted that he was not sure. By managing his finances holistically, he would have the answer clearly.
The Delegators
The final group of people seeks professional guidance and support to achieve money optimisation. As a result, they are proactive about their financial goals and adopt a comprehensive and holistic financial management strategy to ensure that their income is optimised to achieve long-term financial independence and to grow their wealth.
I met a young CEO one year ago who had gained exposure to the benefits of engaging an independent financial adviser (IFA) while he was working in Australia. Although he belonged to the smallest of the three groups we have identified, in countries such as the UK, US and Australia, this group form the biggest portion of the population, thanks to widespread public education and financial regulations to protect the consumer's interest.
As I outlined in my latest book, Set Yourself Free, there are five criteria that every IFA must have. Firstly, he must hold the right regulatory licences to facilitate the delivery of independent advice. Secondly, he must charge a fee for his advice and services, and thirdly, an IFA must be able to provide holistic and integrated advice that addresses all aspects of money optimisation for the clients. Fourthly, an IFA has no sales quota to meet so that he provides advice based on his clients' best interests. And finally, the IFA must have access to a wide range of financial products so that he can package a combination that will help the client achieve financial freedom.
In line with the country's aim of becoming a high income nation, Malaysians must make a mindset shift and proactively take control of their finances with both money-making and money optimisation at the top of their agenda. Only with this strategy will financial freedom be truly realised.
Source: The Star
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