Wednesday, November 21, 2018

How to Actually Save Money?

How to actually save money? It is not about packing your own lunch.

This article and video from Motley Fool stated that we simply need to focus on our three biggest expenses in our life, i.e. house, car and education. While I agree with the author, there are variations for Malaysians.

Here is the article from Motley Fool on How to Actually Save Money Below is the video from the same article.

In the context of Malaysians:

  1. Clear understanding of what is a good enough house for your family. Make careful decision based on affordability of house/ apartment, size, amenities and location, and its potential to increase in value over the years. 
  2. Finding an affordable house that will increase in value over time is important. It will help to fund your next bigger house. When you retire your children left home and you can sell the house and move to a smaller condominium. The extra money funds your retirement.
  3. Always compare your home loan interest rate with the market rate. Negotiate with your bank periodically. 
  4. Use Flexi Home Loan, so that when you have extra money you can pay down extra loan amount to reduce interest cost or shorten loan tenure. When you need money, you can also withdraw the extra loan payments you made to the Flexi Home Loan account. So instead of keeping fixed deposit which gives you 2%-3% interest income, keep this money in your Flexi Home Loan account to reduce your interest expenses which is at around 4.4%-5.5%.
  1. Second hand simple model (e.g. MYR60,000 or less) vs brand new luxurious model (above MYR300,000)
  2. Use your extra payments made to Flexi Home Loan, instead of car loan, to fund your second hand car. (Home loan interest, as at today, is much lower than car loan. Note: Interest rate used for home loan is effective rate, interest rate used for car loan is flat rate. 3% flat rate of a 3-year car loan has effective rate of around 5.7%. The effective rate for home loan on the date of this post is around 4.4%.)

Student loan was almost unheard of during 1980's. It is a ridiculous loan that exists only because the university's fees has gone extortionately high. Here are a few comparisons:
  1. Quality public school fee (FREE) vs private school fee (MYR19,000 - MYR85,000 per annum)
  2. Local public or semi government funded universities (around MYR50,000 for entire 4 year course) vs overseas universities (minimum MYR400,000 to study 3 year in UK). For courses like accountancy, students can even study and take the overseas professional exam in Malaysia.
  3. Low education fees means you can free yourself from the financial slavery of student loan or save your parents' retirement fund. 
Choose your lifestyle

Sunday, December 31, 2017

Bitcoin et al - Making Sense of Cryptocurrency

Like every economy bubble in human history, i.e. Tulip mania in 1600s, silver bubble in 1980s, Dotcom bubble in late 1990s, housing bubble that led to subprime crisis in 2008, etc,  this cryptocurrency mania will also end badly. However, it doesn’t mean that we should avoid it entirely.

From investment point of view, there are 3 things we need to be very clear about bitcoin and its sort of altcoins like Ethereum, Litecoin, Ripple (XRP), etc.:

  1. FIRST: Speculative. It is highly speculative for now. You really should not say you invest in bitcoin or any other cryptocurrency (altcoins). You can only say you put a bet on bitcoin or altcoins.
  2. SECOND: But it is REAL. The technology, i.e. blockchain, behind cryptocurrency is revolutionary and is REAL. It will change the world entirely and significantly. It will especially change the global financial and banking system in probably a decade or two. Not now. There are also real and practical economy usage for these cryptocurrency especially on the international trade and settlement front (on top of the black markets for drugs, guns and sorts., smuggling, tax evasion, money laundering, etc.). It will eliminate inefficiency in international trade and payment settlement. 
  3. THIRD: Scams in the name of cryptocurrency. In this unregulated wild wild west of cryptocurrency world, there are a lot of scams. There are many pyramid schemes and outright scams disguise as ICO, cryptocurrency and even as exchange. They use the name of cryptocurrency to con investors. Be very very careful.

We must know clearly that cryptocurrency at this point of time is like internet company before dotcom bubble. Some will survive the definitely inevitable crash, but MOST will fail, will lose all its value and will never be seen again.

We cannot ignore crytocurrency. They will change our world for sure. But we must know, at this point, any digital coins we bought are akin to venture investment. It is a BET on new start-ups (refer to the teams who created digital coins.) with highly speculative valuation. It is not a safe value investment.

In another word to common persons like you and me, for simplicity, buying coins is a bet, not an investment.

Lesson from History (Before we BET)

Let’s us refresh our memory of a not so distant history. There were only a handful of websites like Amazon and ebay survived the burst of dotcom bubble in year 2000. They proceeded to revolutionize the world entirely, bringing the original vision of internet to our life. But numerous websites like Pets dot com, etoys, etc. failed and disappeared forever. Their investors lost all their money. Some dotcome companies like AOL, Yahoo, dragged on for years into obscurity.

IPO price of Amazon was US$17. At its height before the dotcom crash, the price was $100. Right after the dotcom crash the price fell below $10. Today, Amazon share price is above $1,100 per share. IPO price was $11. The price fell to mere $0.19 before the announcement of liquidation. US$300 million of investors’ money were wiped off to zero.

You just have to pick the right horses. (and yes, again, it is a BET. Not investing.)

For cryptocurrency now, at the end of year 2017, it is like the dotcom companies at probably 1998 of the build-up of internet dotcom bubble. The CRASH is inevitable. The questions are, when? And which coin(s) will survive subsequently and prosper into greatness to change the world?

Buy only with the money that you are ready to lose all. Don’t bet your life savings for sure, and don’t even bet with an amount that you will feel painful to lose. Cryptocurrency is a highly speculative play for now.

Tuesday, June 25, 2013

Koperasi Loan – The Personal Loan for Employees of the Government, Statutory Bodies, Selected Government-Linked Companies and Municipal Councils

KOPERASI LOAN – The Personal Loan for Employees of the Government, Statutory Bodies, Selected Government-Linked Companies and Municipal Councils

Are you an employee working in a government department, a statutory body, a government-linked company (“GLC”) or a municipal council?  If you are, you could be one of the lucky Malaysians who qualify for Koperasi Loan – an easy-approval, low-interest loan with an ultra-convenient loan-repayment mechanism.

What is a Koperasi Loan?

A Koperasi Loan (or Credit Cooperative Loan) is a type of loan that is reserved specifically for workforce of government departments, statutory bodies, selected GLCs and municipal councils of Malaysia.  The amount that can be borrowed from a typical Koperasi Loan starts from as low as RM1,000 all the way up to RM300,000.  Loan periods range from one year to 25 years.

As a financial product, a Koperasi Loan resembles a personal bank loan in almost every way.  It involves the lending of a sum of money from an institution to a borrower, at terms which are agreed upon by both parties.  And just like any personal loan, a Koperasi Loan can be taken for any purpose: from settling a debt, starting a business, getting married, buying a home or a car, financing your children’s education to taking a holiday, just to name a few.

Ultimately, the greatest difference between a Koperasi Loan and a conventional bank loan lies in the fact that the terms of a Koperasi Loan are usually much more flexible and “borrower-friendly” for those who are eligible to apply.

Key Difference between a Koperasi Loan and a Conventional Personal Loan

Interest Rate: Generally speaking, the interest rate of a Koperasi Loans is almost certainly much, much lower than that of a conventional bank loan.  As at June 2013, the lowest prevailing interest rate for a Koperasi Loan is 3.99%, compared to 7.6% for a consumer bank.

More Flexible Criteria:  Koperasi Loans are, on the whole, more lenient in the approval process compared to conventional bank loans.  In fact, Koperasi Loans can even be approved for borrowers with bankruptcy status, as well as those who could not get loans from banks due to less-than-desirable track records in the Central Credit Reference Information System (CCRIS) and the Credit Tip-Off System (CTOS).

Repayment Method: Repayment for a conventional bank loan is done at a bank branch, via an ATM or through some form of direct-debit arrangement from a bank account. Repayment for a Koperasi Loan is much simpler – it is conducted via direct deduction from one’s salary.

Loan Payout: An important thing to take note about Koperasi Loan is that it does not disburse 100% of the loan amount to the borrower.  Usually, a percentage of the loan amount is retained, which can be interpreted as “one-time charge” incurred by the borrower.  The percentage retained can be up to 10% of the loan amount, or more.

Where do I get a Koperasi Loan?

There are many different types of Koperasi Loans all managed by different cooperative entities.  To apply for one, you could either approach such entities or go through an authorized agent.  An easier alternative is to use a Koperasi Loan comparison table, where you can compare the rates and apply for one online at no charge.

This article is brought to you by – Malaysia’s biggest comparison site providing free information about home loans, personal loans, credit cards and investments.

Wednesday, May 02, 2007

Prosper for life

It bothers me when I read a financial blog "frugal for life". It is a blog dedicated entirely to living a frugal and simple life.

I agree living frugally. I always believe we don't need to spend (or spend only minimal) to live to the fullest. However, I disagree to make frugal an objective of life. For instance, I will not disagree a statement like this "Live to the fullest without spending much". It is still about being frugal, but only as a means to the objective of living to the fullest.

There is a major difference between "buy cheap things" and "buying quality things cheap".

I agree with the blogger's message, though not her emphasis on FRUGAL instead of satisfaction of life (frugally).

It will be better if it is about prosper for life without waste.

Wednesday, August 23, 2006

Saving Tips (2): Food

Depending on your lifestyle you can save quite a fair bit from your daily food.

1. Instead of eating out for dinner daily, why not "ta pao" (take-away) mix rice, noodles, etc.? A two-person meal in a restaurant with three dishes can easily cost you more than RM30. While take-away for two persons will not cost you more than RM10. (I do know some middle class couples who dine out every evening.)

2. Call your mother and ask her for some good recipes. Cook at home. Spend the later part of your evening play with your computer and/ or children.

3. Stay with your parents or parents in law or invite your parents or parents in law to stay with you. Depending on your family, this can be one of the biggest saving opportunities.

4. Are you too used to have your lunch at expensive outlet with your colleague? A quick reminder here, take-away mixed rice lunch is usually less than RM5. What about packed lunch from home?

5. Meeting your friends for dinner? Such outing usually ends up at expensive restaurant. Tell your friends you are on budget. There is nothing to be ashamed of. (I can be more blunt, I told some of my friends that I simply hate expensive restaurant. I will join them after their expensive meal.) A better idea is to schedule a gathering after dinner at mamak store.

6. Do away with beers, cigarette and pubs. Stay at home with your family or go out with your friends to mamak store. If you are surrounded by friends that drink beers, smoke and go pubs and you are financially strained due to such habits. You are probably with the wrong company. :-) Join another group of friends.

7. Find a place for good coffee at good price, instead of drinking Starbuck's cafe latte.

Tuesday, August 22, 2006

Saving Tips (1)

I should have started the topic of saving strategies long time ago. Let's begin with the first saving tip with idea from MSN's Money...

There are things in life that you should not buy new. These are 10 of them among all. By Liz Pulliam Weston.

1. Books
2. DVDs and CDs
3. Little kids' toys
4. Jewelry
5. Sports equipment
6. Time shares
7. Cars
8. Software and console games
9. Office furniture
10. Hand tools

Read the original article on why you should not buy these items new and how to save money from buying second hand with bargain, sharing, renting, etc.

Friday, October 14, 2005

A way of life

A way of Life: Spending, saving and living every moment

How to enjoy the present (carpe diem, seize the day, my friend) and save for future? Let us compare these three types of lifestyles summarized in three scenarios.

Lifestyle ONE

You walked into this expensive restaurant in Bangsar with your friends and family. You were a bit intimidated by the prices in the menu though you knew you could afford them. Uncomfortably you made the order and wondered how much the bill is going to be. You felt a little bit of tension every time before an item from the menu was mentioned. You forced yourself not to look at the prices and told yourself, hey, live for the moment, not for the money.

After the meal, though you had strong desires to order another Irish Coffees and a special dish of desert, you controlled and told yourself that delay gratification is the way to save for a better future.

At times, you wonder whether you really are living for the moment.

Lifestyle TWO

You walked into this expensive restaurant in Bangsar with your friends and family. You were not intimidated by the prices in the menu as you knew you could afford them should you visit such restaurant less frequently. Price did bother you when order was made but you knew better that, for now, you don't have to worry about money. You called the most delicious item (happened to be the most expensive as you accidentally peeped over the price) and two Irish Coffees for yourself. Why should I delay gratification? Live for today, you said (and unknowingly defined your version of "“live for today").

When you received your credit card statement a month later, you weren't really lived for that moment. Due to such consistent financial choices of instant gratifications in many expensive ways, you have cumulated quite an amount of credit card debts and you weren't really "“living for the moment"”, in the way you define the phrase, for many months later. The repercussion to "live-for-the-moment-and-spend"” was painful.

Lifestyle THREE

Up front, you made a conscious choice not going to that expensive Bangsar'’s restaurant. You walked into this nice restaurant (let's say one of those few restaurants beside Petaling Jaya States' UOB, half the price that of Bangsar's) with your friends and family. It was a little elegant air-conditioned restaurant with warm yellow lighting. You can choose to sit either outside for natural breeze or inside for cool air. You had a great time dining with your family and friends. You did not realize the prices in the menu as you knew it is really affordable. At the end of the meal you ordered few ice creams and deserts for your family and friends and two cups of coffee for yourself. You looked at the bill, "“so cheap,"” you thought. This was the first time you thought about money in the entire evening. You insisted to pay for the meal happily, oh, and gratefully, as you realised that things, recently, were so affordable to you. You reminded yourself to send a cheque to the charity that you were dedicated to.

Money wasn't an issue, not even crossing your mind through out the dinner, as it was simply so affordable. You fulfilled all your instant desires and gratifications. Everyone had a great evening and you were grateful that you could afford such a great meal even if you come here every week. Many years later, you think, "“I really lived in those moments."”

It is quality lifestyle and not high-priced lifestyle that you are going after. Due to such consistent financial choices, where decisions were made up front for a quality yet much cheaper lifestyle and habitat, you managed to save for your future yet without sacrifice in living the moment. There were always instant gratifications without the need to think about money now and when your credit card statement comes.


Many financially cautious persons choose lifestyle ONE. It is a lifestyle of control, rigid, packed with unsatisfied desires, unfulfilled gratifications and bitterness of others affluence, and eventually ended with regrets of not living for those past moments.

Many "living-for-the-moment-and-spend" persons choose the lifestyle TWO. The repercussion of such carelessness with money is painful. You could die broke.

I loathe lifestyles ONE. Every time we cut down our small satisfactions in life we increase our bitterness. This lifestyle always makes us feel poor. I fear of lifestyle TWO. I am afraid of dying broke, owe money and living on the street.

Lifestyle THREE is a lifestyle where money doesn't stand in the way for us to enjoy the moment. It is the way to live for today yet to save for future. It is not about "“scrooge"” at the moment when you need to spend for gratification. It is about sensible choice for completely different price range of lifestyles and habitats so that you can fill your heart desires and gratifications instantly and financially comfortably. When you keep realising things are so affordable everywhere you go, the only feeling you can have is gratefulness.

In a more conventional way of saying, yes, it is about live within your means. But the choice is made up front of choosing a lifestyle, not saving and penny-pinching at moments in live.

Make a wise choice right from the beginning and don't "“scrooge" for the moment. Live now, with efficacy.


* I am not saying you should not go to restaurants in Bangsar. I am stereotyping and conveniently using them to illustrate a point. I am saying you should not go to a place where the prices bother you, either when you spend or when you received your credit card statements. I am saying you should go to a place where prices are well below your affordability, and that you can spend to your heart desire without the issue of money, now or future. Even Restaurants in Bangsar can be such a place when you are financially affluent.

* This is just an illustration of point using the difference between an expensive good restaurant and a cheap good restaurant. It is the same for other major items, between BMW 5 series and Proton Saga (Azizi Ali's favourite), between a 48"” Plasma TV and a 21"” cheap TV, between eat out regularly at restaurants and "“ta pao"” back home, between a home in Bangsar (again!? Hey chentong, what is your problem with Bangsar?) and a home in Shah Alam, between vacation in London and vacation in Bali, etc.

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