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.