Tips on How to Plan for Retirement
1. Start planning for retirement. It may seem as if retirement is in the distant future, but it is never too early to start planning to enjoy it and finance it.
2. Think about how you want to live and where. Calculate how much money you will need.
3. Plan for the possibility of living longer than you expect. Include the possibility of being on a fixed income for as long as 20 or 30 years.
4. Create a financial plan with an expert financial planner.
5. Pay off major debts, such as home mortgages, college loans and other significant cash-flow drains,as quickly as you can.
Source: 1klassifieds, New Straits Times, November 30, 2009
Monday, December 14, 2009
Monday, June 15, 2009
Tips on How to Manage Your Finances
One of the world's easiest and most effective money management system introduced by T.Harv Eker is called Money Jars. Over 500,000 lives have been changed by this fail-safe, sure-fire money management method by setting aside your money in six different jars each month, which are:
1. Financial Freedom Account (FFA-10%)
This is your financial freedom jar where the money is not spent, but used for savings and investment to generate more income.
2. Long Term Savings for Spending (LTSS-10%)
The purpose of this jar is to prevent impulsive buying and encourage one to save for an expensive item like going for a holiday.
3. Necessities Account (NEC-55%)
This jar is for all your daily expenses. if it exceeds 55% you have to simplify your lifestyle or finds ways to earn more.
4. Education (EDEC-10%)
You must keep investing in your own education as anything that is not growing is dying.
5. Give Account (GIVE-5%)
Contributing to others is one of the most fulfilling goals in life, and one of the impetus of earning more is so you can give more.
6. Play Account (PLAY-10%)
This is one of the most important jars. By celebrating your success each month, will boost your spirit and confidence to achieve more.
Source: 1Klassifieds, New Straits Times, Tuesday, June 9, 2000.
Why Blog? The Purpose of Blogging
1. Financial Freedom Account (FFA-10%)
This is your financial freedom jar where the money is not spent, but used for savings and investment to generate more income.
2. Long Term Savings for Spending (LTSS-10%)
The purpose of this jar is to prevent impulsive buying and encourage one to save for an expensive item like going for a holiday.
3. Necessities Account (NEC-55%)
This jar is for all your daily expenses. if it exceeds 55% you have to simplify your lifestyle or finds ways to earn more.
4. Education (EDEC-10%)
You must keep investing in your own education as anything that is not growing is dying.
5. Give Account (GIVE-5%)
Contributing to others is one of the most fulfilling goals in life, and one of the impetus of earning more is so you can give more.
6. Play Account (PLAY-10%)
This is one of the most important jars. By celebrating your success each month, will boost your spirit and confidence to achieve more.
Source: 1Klassifieds, New Straits Times, Tuesday, June 9, 2000.
Why Blog? The Purpose of Blogging
Monday, July 9, 2007
Wealth Cycle
Wealth Cycle
Most individuals and families go through a series of financial events during their lives. As they pass each of these stages, their financial strategies need to change to reflect their evolving needs and financial circumstances. In this series, this article gives readers insights and understanding on the cycle of wealth and how each phase has a profound impact on one's fortunes.
Ralph Waldo Emerson, an American author in the early 19th century, once said: "It requires a great deal of boldness and a great deal of caution to make a great fortune, and when you have it, it requires 10 times as much skill to keep it."
Even back then, the West understood the importance and the difficulties of accumulating and preserving wealth. They discovered that everyone goes through a lifecycle that consists of different stages and each phase calls for certain financial needs and objectives they want to achieve.
These different stages are known as the "cycle of wealth". Our Western counterparts have actively practised this concept, as they understand the significance of the cycle and the important role it plays in building and sustaining one's wealth.
Via a simple researh, it found that a majority of Malaysians has yet to adopt the wealth cycle formula. Instead, Malaysians tend to manage their wealth in fragments with most concentrating on wealth creation and enhancement, and often ignoring preservation and distrubution.
Neglecting any of these cycles will impact on one's retirement and can result insufficient means to provide for family members or even future generations. Taking the right steps in accordance to the wealth cycle can reduce financial uncertainty and financial distress.
The wealth cycle is commonly known to consist of four pillars - creation, enhancement, preservation and distribution. "Wealth creation", also known as "start-up", is the first pillar of the cycle. It plays a vital role in forming the base for the wealth accumulation process.
"Wealth creators" are individuals who are in the early stages of their professional career and they tend to have larger financial responsibilities such as mortgages and credit purchases. Typically, their liabilities tend to be higher than their income.
Financial decisions tend to be mostly short term and they often adopt the characteristic of an aggressive investor, seeking ways to maximimise the returns on their assets.
Once wealth is established and created, these individuals - by now in their mid to late career life - would shift their focus to "wealth enhancement". The primary objective of this cycle is to multiply or enhance the returns on the accumulated assets with lower risks or better capital protection.
This is where with proper asset allocation, they are able to determine areas of financial interest and investment products that suit them in order to generate more income. Managing the acquired wealth is also crucial at this stage, taking into account tax considerations and debt management.
"Wealth preservation" starts when one has built up a substantial amount of wealth. The key strategy is to ensure that wealth is well managed with protection being the key objective. At this stage, the portfolio is managed with greater focus to generate income, while minimising risk.
Many times, individuals or families fail to anticipate and prepare for this cycle. They focus on accumulating wealth only to lose almost everything in the end as a result of not having proper wealth management structure.
Finally, the "wealth distribution" phase is where one ensures that one's assets or wealth and even business are transferred or distributed in the most optimal way and according to one's wishes. This is also a stage most individuals and families often ignore.
Estate and succession plans should be put in place well in advance to ensure that the family wealth and the reins of the family business are handed over to the following generations in an orderly manner.
Too many people have learned that making a fortune is the easy part. "In the long run," cautions multi-millionaire entrepreneur and educator Robert T. Kiyosaki, "it's not how much you make, it's how much you keep, and how many generations you keep it."
As such, wealth distribution through the use of mechanisms such as trusts and wills would make certain that one's wealth will last over many generations, thus ensuring a legacy of prosperity that every individual dreams of.
It is every individual's dream to have financial freedom at retirement or at the very least, most hope to be free from any debt obligation. This is achievable if one were to diligently pratise the management of wealth cycle accordlingly.
In essence, one needs to understand that the key to success in using the wealth cycle is to know what steps to take and in what order.
What is a Will?
A Will is a legal document which enables you to determine how your property is to be distributed upon your demise. It is neither a contract nor an agreement and will only take effect upon the demise of the testator.
One of the best definitions of a Will is taken from Mellows: The Law of Succession which states that ‘A Will is a declaration in prescribed form of the intention of the person making it of the matters which he wishes to take effect on or after his death, until which time it is revocable’.
In Wills Act 1959, a Will is defined as follows : ‘A Will is a document where a person states his intentions as to how his estate is to be administered and distributed after his death and who is to administer it. A Will may include provisions for guardianship, custody and tuition of a child ’. Furthermore, in respect of Muslim Wills, Muslim Wills Enactment (Selangor) 1999 defines Will as an ‘Iqrar of a person made during his life time with respect to his property or benefit thereof, to be carried out for the purposes of charity or for any other purpose permissible by the Islamic Law, after his death ’.
Why do we need a Will?
A Will is an important tool of estate planning as it encapsulates the Testator’s directions in relation to the administration and distribution of his/her estate.
Writing a Will is a step towards ensuring that the persons you wish would benefit from your estate will be able to inherit from the same.
A Will also helps in expediting the legal process involved in estate administration as no sureties/security deposits are required prior to the issuance of the grant of representation. It would also relieve the Beneficiaries of the Deceased from having to decide on who shall become the Administrator of the Deceased Testator’s estate upon the death of the Testator.
At the same time, a Will enables a person to choose and appoint his/her own Executor and Trustee to carry out his/her wishes and protect his/her interest as well as to appoint the Guardian to his/her minor Beneficiaries. A Will provides an opportunity for the Testator to bestow and make allocations for any special needs of their loved ones such as providing for heirs who are financially insecure or heirs with physical disability. A Will also enables a person to bestow gifts to non-family members/non heirs as well as various charities and religious organizations that the Testator may choose.
In summary, having a Will enables a person to plan smooth transfer of assets to his/her beneficiaries according to his/her wishes.
Who can make a Will?
Essentially every individual who seek to put their affairs in order by taking the advantages offered by planning their estate early can make a Will. For Muslims, only 1/3 of the whole estate may be given away to non beneficiaries while the balance must be distributed in accordance with the Islamic Faraid Law, except where the lawful beneficiaries of the Testator agree otherwise. On the other hand, for Non Muslims, a person may determine the manner in which his/her entire assets were to be distributed upon his/her demise through a Will without any restrictions.
It should be noted however that a Will is only valid if at the time it was made the Testator: is :
a) a person who has attained the age of 18 (Peninsular Malaysia & Sarawak) or 21 in Sabah;
b) of sound mind;
c) acting on his own free will and without coercion; and
d) not prohibited to administer his property.
What are the characteristics of a Will?
A Will would normally include information on the appointment of an Executor who will execute the Will, the beneficiary or beneficiaries to the Will and allocation of assets to the named beneficiaries. Apart from that, the appointment of guardian for minor beneficiaries, revocation of earlier Wills, donation of organs, direction for burials and other special instructions can also be included in a Will.
The basic requirements of a valid Will stated in the Wills Act 1959 are generally as follows:
a) It must be in writing;
b) The testator must sign the Will at the end of the document;
c) There must be at least two or more witnesses present at the same time to witness and to attest to the signature of the testator. However the witnesses who are attesting the testator’s signature must not be beneficiaries to the Will, otherwise the gift will fail.
d) The testator must be of sound of mind and not under any undue influence during the execution of his or her Will.
e) The testator making a Will must not be under the age of majority.
Now that you have decided to make a Will, what is the next step to take?
There are 6 steps that a person needs to take upon making his/her decision to write a Will which are:
1) Establish one’s wealth distribution objectives prior to nominating beneficiaries and the estate allocation. Some of the objectives would include to provide adequate income to dependents to maintain their standard of living, to preserve family legacy and sentimental assets as well as to provide for non heirs, special needs and donations.
2) Analyze and evaluate one’s state of assets by compiling all the related documentations such as insurance policies, certificate of unit trusts and others. This information gathering is essential as the facts and figures are crucial to establish an accurate one’s assets profile
3) Nominate beneficiaries and allocate assets for them as per one’s wealth distribution objectives.
4) Appoint a trustworthy executor with the capability to execute the Will in a reliable manner
5) Get assistance from a reputable Will Writer to assist in writing the Will
6) Ensure that the Will is kept in a safe place and inform the Executor on his/her appointment as Executor as well as the location where the Will is to be kept.
How to Become Professional Blogger
Proven Ways to Make Money On the Internet
Most individuals and families go through a series of financial events during their lives. As they pass each of these stages, their financial strategies need to change to reflect their evolving needs and financial circumstances. In this series, this article gives readers insights and understanding on the cycle of wealth and how each phase has a profound impact on one's fortunes.
Ralph Waldo Emerson, an American author in the early 19th century, once said: "It requires a great deal of boldness and a great deal of caution to make a great fortune, and when you have it, it requires 10 times as much skill to keep it."
Even back then, the West understood the importance and the difficulties of accumulating and preserving wealth. They discovered that everyone goes through a lifecycle that consists of different stages and each phase calls for certain financial needs and objectives they want to achieve.
These different stages are known as the "cycle of wealth". Our Western counterparts have actively practised this concept, as they understand the significance of the cycle and the important role it plays in building and sustaining one's wealth.
Via a simple researh, it found that a majority of Malaysians has yet to adopt the wealth cycle formula. Instead, Malaysians tend to manage their wealth in fragments with most concentrating on wealth creation and enhancement, and often ignoring preservation and distrubution.
Neglecting any of these cycles will impact on one's retirement and can result insufficient means to provide for family members or even future generations. Taking the right steps in accordance to the wealth cycle can reduce financial uncertainty and financial distress.
The wealth cycle is commonly known to consist of four pillars - creation, enhancement, preservation and distribution. "Wealth creation", also known as "start-up", is the first pillar of the cycle. It plays a vital role in forming the base for the wealth accumulation process.
"Wealth creators" are individuals who are in the early stages of their professional career and they tend to have larger financial responsibilities such as mortgages and credit purchases. Typically, their liabilities tend to be higher than their income.
Financial decisions tend to be mostly short term and they often adopt the characteristic of an aggressive investor, seeking ways to maximimise the returns on their assets.
Once wealth is established and created, these individuals - by now in their mid to late career life - would shift their focus to "wealth enhancement". The primary objective of this cycle is to multiply or enhance the returns on the accumulated assets with lower risks or better capital protection.
This is where with proper asset allocation, they are able to determine areas of financial interest and investment products that suit them in order to generate more income. Managing the acquired wealth is also crucial at this stage, taking into account tax considerations and debt management.
"Wealth preservation" starts when one has built up a substantial amount of wealth. The key strategy is to ensure that wealth is well managed with protection being the key objective. At this stage, the portfolio is managed with greater focus to generate income, while minimising risk.
Many times, individuals or families fail to anticipate and prepare for this cycle. They focus on accumulating wealth only to lose almost everything in the end as a result of not having proper wealth management structure.
Finally, the "wealth distribution" phase is where one ensures that one's assets or wealth and even business are transferred or distributed in the most optimal way and according to one's wishes. This is also a stage most individuals and families often ignore.
Estate and succession plans should be put in place well in advance to ensure that the family wealth and the reins of the family business are handed over to the following generations in an orderly manner.
Too many people have learned that making a fortune is the easy part. "In the long run," cautions multi-millionaire entrepreneur and educator Robert T. Kiyosaki, "it's not how much you make, it's how much you keep, and how many generations you keep it."
As such, wealth distribution through the use of mechanisms such as trusts and wills would make certain that one's wealth will last over many generations, thus ensuring a legacy of prosperity that every individual dreams of.
It is every individual's dream to have financial freedom at retirement or at the very least, most hope to be free from any debt obligation. This is achievable if one were to diligently pratise the management of wealth cycle accordlingly.
In essence, one needs to understand that the key to success in using the wealth cycle is to know what steps to take and in what order.
What is a Will?
A Will is a legal document which enables you to determine how your property is to be distributed upon your demise. It is neither a contract nor an agreement and will only take effect upon the demise of the testator.
One of the best definitions of a Will is taken from Mellows: The Law of Succession which states that ‘A Will is a declaration in prescribed form of the intention of the person making it of the matters which he wishes to take effect on or after his death, until which time it is revocable’.
In Wills Act 1959, a Will is defined as follows : ‘A Will is a document where a person states his intentions as to how his estate is to be administered and distributed after his death and who is to administer it. A Will may include provisions for guardianship, custody and tuition of a child ’. Furthermore, in respect of Muslim Wills, Muslim Wills Enactment (Selangor) 1999 defines Will as an ‘Iqrar of a person made during his life time with respect to his property or benefit thereof, to be carried out for the purposes of charity or for any other purpose permissible by the Islamic Law, after his death ’.
Why do we need a Will?
A Will is an important tool of estate planning as it encapsulates the Testator’s directions in relation to the administration and distribution of his/her estate.
Writing a Will is a step towards ensuring that the persons you wish would benefit from your estate will be able to inherit from the same.
A Will also helps in expediting the legal process involved in estate administration as no sureties/security deposits are required prior to the issuance of the grant of representation. It would also relieve the Beneficiaries of the Deceased from having to decide on who shall become the Administrator of the Deceased Testator’s estate upon the death of the Testator.
At the same time, a Will enables a person to choose and appoint his/her own Executor and Trustee to carry out his/her wishes and protect his/her interest as well as to appoint the Guardian to his/her minor Beneficiaries. A Will provides an opportunity for the Testator to bestow and make allocations for any special needs of their loved ones such as providing for heirs who are financially insecure or heirs with physical disability. A Will also enables a person to bestow gifts to non-family members/non heirs as well as various charities and religious organizations that the Testator may choose.
In summary, having a Will enables a person to plan smooth transfer of assets to his/her beneficiaries according to his/her wishes.
Who can make a Will?
Essentially every individual who seek to put their affairs in order by taking the advantages offered by planning their estate early can make a Will. For Muslims, only 1/3 of the whole estate may be given away to non beneficiaries while the balance must be distributed in accordance with the Islamic Faraid Law, except where the lawful beneficiaries of the Testator agree otherwise. On the other hand, for Non Muslims, a person may determine the manner in which his/her entire assets were to be distributed upon his/her demise through a Will without any restrictions.
It should be noted however that a Will is only valid if at the time it was made the Testator: is :
a) a person who has attained the age of 18 (Peninsular Malaysia & Sarawak) or 21 in Sabah;
b) of sound mind;
c) acting on his own free will and without coercion; and
d) not prohibited to administer his property.
What are the characteristics of a Will?
A Will would normally include information on the appointment of an Executor who will execute the Will, the beneficiary or beneficiaries to the Will and allocation of assets to the named beneficiaries. Apart from that, the appointment of guardian for minor beneficiaries, revocation of earlier Wills, donation of organs, direction for burials and other special instructions can also be included in a Will.
The basic requirements of a valid Will stated in the Wills Act 1959 are generally as follows:
a) It must be in writing;
b) The testator must sign the Will at the end of the document;
c) There must be at least two or more witnesses present at the same time to witness and to attest to the signature of the testator. However the witnesses who are attesting the testator’s signature must not be beneficiaries to the Will, otherwise the gift will fail.
d) The testator must be of sound of mind and not under any undue influence during the execution of his or her Will.
e) The testator making a Will must not be under the age of majority.
Now that you have decided to make a Will, what is the next step to take?
There are 6 steps that a person needs to take upon making his/her decision to write a Will which are:
1) Establish one’s wealth distribution objectives prior to nominating beneficiaries and the estate allocation. Some of the objectives would include to provide adequate income to dependents to maintain their standard of living, to preserve family legacy and sentimental assets as well as to provide for non heirs, special needs and donations.
2) Analyze and evaluate one’s state of assets by compiling all the related documentations such as insurance policies, certificate of unit trusts and others. This information gathering is essential as the facts and figures are crucial to establish an accurate one’s assets profile
3) Nominate beneficiaries and allocate assets for them as per one’s wealth distribution objectives.
4) Appoint a trustworthy executor with the capability to execute the Will in a reliable manner
5) Get assistance from a reputable Will Writer to assist in writing the Will
6) Ensure that the Will is kept in a safe place and inform the Executor on his/her appointment as Executor as well as the location where the Will is to be kept.
How to Become Professional Blogger
Proven Ways to Make Money On the Internet
Subscribe to:
Posts (Atom)
