Mistakes In Personal Financial Planning

This time I want to share about mistakes in personal financial planning through research and my reading. This may be true and may even one.

You must have seen or personally experienced this situation. 2 of my colleagues who have the same household income, but the new age of early 40s , we can see the difference Assets ownership and financial stability. The main reasons are wrong when financial planning into the workforce.

Below I list a few examples of mistakes in personal financial planning : -

1). Buy a car that should not be

- Now seems to have become a trend when new friends work buy car loan 9 years, for a third salary (maximum that banks allow ). Example : Working as an officer with a salary of RM 3,600 . Buy a Honda Civic with a monthly fee of RM 1,200 per month. Remember, the car is priced liabilities decreased by 25 % right after it you bring out of the store. Every year and depreciate further by 10 % each year ! Let alone Tolls, fuels and maintenance !

- Moreover, if this happens to you, then you would be problematic to have assets at a young age. This is because often, the bank had a loan calculation is dependent on your monthly commitment (known as debt service ratio - DSR ). DSR must be less than 1/3 to pass next paycheck loan (some banks are more lenient ). So you have to wait for next 9 years to apply such new loan home loan. That's why I put it first in the list error in personal financial planning.

- But this may not be relevant to workers who need always find clients. Reason expensive car show credibility and professionalism and we've got a confidence boost.

2). No Reserves Fund

- Reserves Fund is used for things like emergency car suddenly breaks down, the ceiling or leaking toilet, we have to buy a new laptop and so on. Reserves Fund to act as cover for the risks that we cannot transfer to other institutions (in contrast with medical bills because of takaful cover). In his pack Plans Money From now suggest we keep up to 84 months of expenses. However, I would agree to keep the Zakat Nisab 3 times, equivalent to about RM 32,000 if you are in the state as Nisab september 2011 was RM 10,650 .

- Azizi Ali, Robert Kiyosaki and many other western Financial Experts recommend 6 months of household expenses. It’s up to you. Importantly, no Reserves Fund. No reserve fund cause you use a credit card which is very expensive interest which is 17.5 % per year ( for comparison, the Pilgrims Fund Dividends only give 5 % savings for you ). Credit card greatly disadvantages than advantages ( no point to the story -5 ). So, the credit card = mistake in the second financial plan.

3). There is no strategy to pay for home loan

- Most of us buy a home, make a loan of 20-30 years. After that, many people who succumb pay every month until the expiration of 30 years. Actually Most of payment for the first few years just to pay the interest, not the principal ( your actual loan amount ). So, we have to make sure that we do allow loan we pay more than the monthly amount set by the bank. So that we can quickly reduce the principal, thereby reducing the interest is in the long term.

- To facilitate calculation example (note interest rate of 10% despite the current is about 5 %) :-

- Homes purchased with RM 100k loan ( principal). 10 % interest for 20 years. The actual amount is RM 230k payment (principal + interest ). So, interest is RM 130K !

Monthly commitment for 20 years = RM 965

- RM 965 just now actually pay interest only during the first year. To make sure we ALLOCATE little money to pay the principal, we should pay a little more than this RM 965. For example, if we pay extra RM 135, we can solve the loan in just 14 years ! Save 6 years. Trying times RM 965 X 6 X 12. That's the value you save. So, we try to avoid mistakes in personal financial planning.

4). No one bought Takaful products. Also prior insurance ( over-insured! )

- “Financial Insurance is a fabulous tool and a great armor for defense. It is beneficial only When Used correctly. No other product is as misunderstood as insurance”. ( Azizi Ali )

- I own one family buy insurance products as well as the denizens are manipulated (read : cheated ) insurance agent. Imagine my dad bought 9 insurance products ! Yes, Nine ! Another sad all compatible products conventional and no medical insurance card already ! Now, I managed to cut down to only 4 insurance for my family and get back a sum of RM 36,000. Loss is loss indeed. Long as he already paid. But, we think of every month discuss still payable. And confirm it was illegal lap, we think that the results for less damage for us.

- In summary, this is the reason why we buy Takaful protection : -

Medical Card - So that we can transfer the risk to pay tens or even hundreds of thousands of our medical bills to a third party tabarru “fund takaful”. We want to continue to pay the insurance bill online we care. And instead pay claim. Comparison medical card vs savings Haji funds.

- This protection if we are dead or disability, how much money we have left for the family to start a new life or solve our debt ? Did you know that hundreds of thousands of home loan could easily be solved by insurance or MLTA MRTA called ?

- Storage - Out there, there insurance cause our money burn if there is no claim. So, ask the agent, where our contributions go, what percentage of savings and how Projected earnings. Another nice, asked how the system want to see how your savings now.

- I know, just some takaful operators only give this 3 in 1 plan. And each has advantages and disadvantages. Buy insurance is our risk management techniques. So, we need to define themselves as going takaful purchased, not influenced by friends. All paper out for help for treatment purposes never knew that one day, they need insurance. More importantly, the medical card! So, we make an example, do not make mistakes in their own financial planning this.

- Here I want to share based software SQS 1.8.6 Prudential. Buy age of 25, the price of RM 150 . And most important we remain like that came old. If buy after the age of 45, to get the same coverage, you need at least RM 270 per month. If you have warded, maybe it is not eligible to apply.

5 . Choose conventional banking

- Anything in financial difficulties, we want the blessings of living. Money and property should be a one-way street to get to heaven. Try checking where you save, invest, or borrow money. If the conventional institutions , quickly made ​​a u- turn. Remember, lap practitioners seem to declare war with Allah and His Messenger.

- In addition to fear Allah and do not want to remain in Hell for illegal lap, we know that conventional banks oppressive. Suppress conventional credit card due to high interest. And if it’s too late to pay more, last added interest with existing debt, other interest will then apply again. They are compounding. Same goes for a conventional home loan. If the use flexi interest rate on Base Lending Rate ( BLR - / + ), the interest is no ceiling or cap. In 1997, 13 % BLR. Too high, that’s why many do auction houses. If you use Islamic banking for loan finance, Base Financing Rate ( BFR ) are trademarks. So, can Reduce of the damage down economic times. While it is recognized Islamic banking has yet to perfect, but I think this time we can contribute to the economic development of Islam in a way to give support to the roads.

Personal Financial Management Tips

Practices should be practiced austerity as the price of consumer goods is now growing up. It feels when you see the price of uncertainty. If ever a trolley RM 100 meet but now to get the same stuff, need to spend as much as RM 250.

People can still spend, but let sparingly. Preferably to modified buy local products and visit holiday destinations in the country. Instead of wasting a lot of money to eat out, it's better if the money is used to buy raw materials and eat at home. In this way, we can save money while improving family harmony.

Besides eroding attitudes extravagant, obsessed by credit card must also be controlled.

Here are some personal finance management tips to guide you : -

1).  Spend less than the amount of Net Income

- No matter how you pay, you should never spend more than the income. It is easier to restrict the expenses of earning more. Save even a little can have a huge impact on savings.

2). Plan and schedule follow spending

- Plan your expenses. You will not be able to spend and save at the same time without proper financial planning.

3). Pay off credit card debt

- Continually have credit card debt is the greatest mistake. It is too easy to use a credit card but it was difficult to settle the debt and eventually you will continue to be overloaded debt is HUGE!

4). Contributions to the retirement plan

- If your company retirement plan, do not miss the opportunity to contribute. If not, consider a plan or scheme provided for employees.

5). Save

- Make sure you save at least five per cent to 10 per cent of the salary before settling the bill. The best way, for automatic deductions for different accounts.

6). Invest

- Make sure you make the investment - if you still have more money after contributing to superannuation or provident scheme and save in a savings account.

7). Increase employee contributions to facility scheme

- Add the value of your contribution scheme for employees of the facilities provided. It will help you reduce tax payments and limit unnecessary spending.

8). Check coverage Insurance / Takaful

- Many people buy Insurance / Takaful with high premiums without first researching whether it should or not. Make sure you have insurance / takaful adequately but at the same time not burdensome financial position.

9). Will update

- Protect your loved ones. Make sure you make will not matter how little even your property.

10). Keep good financial records

- If you do not keep a record of all expenses, you might have overlooked to get tax exemption for certain expenses.

5 STEP PERSONAL FINANCIAL PLANNING

Personal financial planning carefully is very important in our lives. Good financial management will undoubtedly engender a sense of confidence and a positive appreciation. But, failing good financial planning can contribute to a serious family conflict factors.

If you know the steps to manage their finances effectively, of course you will be able to reduce your financial problems and could lead to a better life. There are a few steps to your personal financial plan more effectively.

FIRST : ANALYZING YOUR CURRENT FINANCIAL SITUATION

We always say money is not always enough. At the end of the month we will ask, where are my money has been spent ? At this time many people will have trouble paying debts and bills. So before planning, it is important to be clear of where your money will come from and where it is spent. Important to carefully monitor expenses and do not forget to record in writing to where you spend your money.

SECOND : PROVIDE YOUR SHORT-TERM GOALS AND LONG

Many of us fail to set short-term goals and long-term personal financial goals. Make short and long term goals can be a guide for us to spend wisely. We have made ​​it clear and specific goals and priorities. This process requires us to think deeply about what is the important thing to achieve in life. To have good financial support it quite easy for us to carry out what we have planned in life.

THIRD : IDENTIFY AND EVALUATE THE STRATEGY TO ACHIEVE YOUR GOALS

Having goals is not sufficient. To achieve long-term or short, you need to reduce spending and increase saving. To achieve your goals, you should identify the strategies by comparing the benefits and costs of each alternative. With that, you will choose the strategy that most efficiently and effectively.

FOURTH : IMPLEMENTING STRATEGY THAT YOU CHOOSE TO ACHIEVE GOALS

Implement strategies that have been made is a very important process to achieve the desired goals. Your strategy must be divided into concrete actions such as allocating 10 % of income to savings for emergencies , provision of buying expensive products like children's education and retirement. The important thing is that we must strive to implement the strategy.

FIVE: EVALUATION AND REPAIR YOUR PLAN FROM TIME TO TIME

Changes in our lives will surely happen. Many changes occur throughout your life. The changes can be expected as the car turns or married intentions and unforeseen changes such as health problems or accidents. External changes also occur as a result of the loss of jobs to foreign labor, rising interest rates or loan-housing price increases are not expected.

Therefore, we must take into account these changes and adapt planning financial planning to address the new situation. This change may be a threat or an opportunity for you to act immediately to deal with these changes.

Why choose an Affiliate to make Money Online?

Affiliate programs have become a staple of course to Internet Marketers. It is not only convenient and safe but most importantly as long as there is no element of permitted lap ..

In a nutshell, the affiliate is commission sales system. No sale, no commission, no sale, it is no commission. Agents need only affiliate promotional products online or offline but purchases must be made ​​online via the website promoted by affiliate agent. Indeed, it can help generate extra income.

This is one reason many people become Affiliate Agent : -

1). There is no registration fee

- Registration as an affiliate is a free agent. To be paid only your broadband costs. Upon registration, you will be given your affiliate web link that you must use as a promotion.

2). No sales quota !

- Not as a conventional sales person where they have sales quotas to achieve sales targets. Affiliate Agent is not bound by the contract of sale or quotas.

3). No production or inventory costs

- As an affiliate agent, you do not need capital for development or storage products. Will you sell products usually in digital form ( ebook ) though there are also physical. Your job is only to promote the product.

4). Promotion no boundaries of time and place

- Your affiliate link will always be ON even when you are asleep and very flexible, can be done anywhere, anytime as long as you have internet connection. You can also target marketing to the whole world up to the suitability of such products.

5). Do not need experience

- As an affiliate agent, the best part is when you have knowledge or experience using the product because it is easier to promote. However, it is not a major requirement or a big problem. Capitalising some idea, you already can promote your affiliate links. Space and wide open opportunity for you to promote various kinds of products according to your suitability.

6). No need to worry about transaction

- As an affiliate agent, transaction payment is made directly to the account of an affiliate owner. We need not keep a record of each transaction for an affiliate program owners have a system to record and trace the sales generated by any affiliate agent.

7). No delivery of products

- Shipping products bane especially if we sell a physical product. Packaging and managing time-consuming post. As an affiliate agent, all of that does not need to worry because it is the business of the affiliate program owner.

8). No customer service

- Who would like to hassle people? Sure there's all wrong in their eyes. This item can not be avoided for any transaction of sale and purchase. However, as our affiliate agents do not need to worry too much. Any inquiries and complaints from customers we can channel them to the owner of the affiliate program to run properly. Affiliate agent can play a role as a mediator while learning about the product. Not compensated ?

9 . Low Risk , High Gain

- The reasons above clearly shows the risk is very low as an affiliate agent but with ideas, creativity, effort, it will give good returns.