WHAT IS MONEY MANAGEMENT.?

 

Do you have a proper money management system set up for yourself? Why is it important to have one? Have you ever forgotten to pay any of your bills on time? Have your ever misplaced any of your financial records? Are you often clueless as to how much you have in your various bank or investment accounts? If you answered ‘yes’ to any of these questions, then you probably need a proper money management system to prevent any of these incidents from reoccurring again.

Having a proper money management system simply means establishing a set of tasks that can assist you in reaching your financial goals. Below are some examples of money management tasks.

• Prepare a spending plan / budget plan (monthly)

• Pay utility bills (monthly)

• Pay credit card bills (monthly)

• Pay house mortgage and car loan (monthly)

• File finance related documents / financial records (monthly)

• Analyze net worth (yearly)

• Complete income tax return (yearly)

• Review financial portfolio (yearly)

• Review insurance needs (yearly)

• Review retirement plan (yearly)

Looking at the tasks above does not look so intimidating after all as you are probably doing some of the tasks consistently already. It is your responsibility to ensure each one of the tasks is completed according to schedule.

If you are thinking that it is still a lot of work to do, then use the computer and internet to simplify your life. For example, you can use online banking to pay your bills, monitor your account balance, create a spending plan, etc. If you are computer savvy and like the idea of using financial software, below are some tasks you can do to manage your finances even more efficiently.

• Create financial graphs and reports

• Put all your accounts in one place

• Do a daily or weekly tracking of your expenses

• Analyze your spending history

• Keep track of your assets, liabilities and net worth

• Set up reminders for bill repayments

Do a search for ‘free financial software’, ‘financial software’ or ‘financial tools’ and you get a lot of choices to try on. Examples of often-heard financial software are Quicken, Mint, Mvelopes and Myspendingplan.

OK, you have reached the bottom of the page. If someone asks you about money management, you are not in the dark about it anymore. Hopefully, reading this article has given you some ideas on what you can do or should do to manage your money and put a money management system in place.

Making You Rich Is Not A Financial Planner's Responsibility

What are the responsibilities of a financial planner? There are many kinds of financial planners marketing their services to the market. Some are single-product planners: insurance agent, unit trust agent. Some are multiple-products planners – they deal with insurance, will writing, unit trust etc. Some are fee-based consultants – they are independent and charge consultancy fees only. The latter kind of planner are rare in Malaysia. In fact, I still don’t know any whom only charge fees and doesn’t deal with any financial product.
No matter what kind of planners they are, their role or responsibility to the clients might be similar to the list here:

• provide proper advice on related financial matters
• provide product information
• recommend suitable product based on the client’s need
• engage clients with the suitable product supplier ( insurance company, unit trust company, will writing company etc)
• provide after sales services
• help client to save
• help client to invest for medium to long term
• help clients to protect their wealth

Their roles is to help on managing the client’s financial resources, which is $$money$$. As stated above, the list does not include “help the client to become rich”. This is certainly out of the job scope. If meeting a financial planner and getting proper advice will make you rich, you will certainly feel that the consultant fees are too cheap to be true. In other words, don’t expect the financial planner can help you get rich. But if you meet the right one, he might be able to show you how others get rich.
If you still haven’t got what I am saying, this is the conclusion: – getting rich (if and only if we really want to get rich), is our own responsibility. It is not a burden or role of the financial planner.

Malaysian Not Saving Enough Money

In my friend previous posting “Are You an Active Saver“, She wrote about a survey result concerning Malaysians’ financial situation. The conclusion is that we Malaysians are not saving enough for the future. You may belong to this group that is not saving enough if you agree with any of the statements below.

• I do not know where my money goes each month
• I do something everyday that wastes money
• I do not know my own weaknesses
• Spending on big items like a car, a house and even groceries are dragging me down
• I am wasting money carrying debt

In reality, these are the issues that need to be addressed and tackled everyday. These are the obstacles that may have been blocking your ability to preserve some money and save for the future. You may be earning a reasonable amount of money but still find it hard to save money.

How do you improve your financial situation?

The answer is by improving your financial literacy or financial IQ. Robert T. Kiyosaki, the author of the book “Increase Your Financial IQ”, advocates learning to solve financial problems to learn, grow and become more knowledgeable in order to become rich.
According to Kiyosaki, rich people view financial problems as opportunities to enhance their financial IQ or increasing their financial knowledge. Hence, having better knowledge means being able to solve more complicated problems and make more money.
On the other hand, the poor regards money problems as problems. They feel victimized which is compounded by their failure to solve their problems. Consequently, the problem stays and worsens and the poor becomes poorer.
A rich person may not be able to solve all his money problems but instead of ignoring them or walking away, he refers to others who are experts in the field to solve them and learn from the experience.
Lastly, everyone has financial or money problems even the rich people. Those who choose to face and solve the problems will fare better compared to those who choose to ignore or pretend they don’t exist.

Malaysian Not Saving Enough Money

In my friend previous posting “Are You an Active Saver“, She wrote about a survey result concerning Malaysians’ financial situation. The conclusion is that we Malaysians are not saving enough for the future. You may belong to this group that is not saving enough if you agree with any of the statements below.

• I do not know where my money goes each month
• I do something everyday that wastes money
• I do not know my own weaknesses
• Spending on big items like a car, a house and even groceries are dragging me down
• I am wasting money carrying debt

In reality, these are the issues that need to be addressed and tackled everyday. These are the obstacles that may have been blocking your ability to preserve some money and save for the future. You may be earning a reasonable amount of money but still find it hard to save money.

How do you improve your financial situation?

The answer is by improving your financial literacy or financial IQ. Robert T. Kiyosaki, the author of the book “Increase Your Financial IQ”, advocates learning to solve financial problems to learn, grow and become more knowledgeable in order to become rich.
According to Kiyosaki, rich people view financial problems as opportunities to enhance their financial IQ or increasing their financial knowledge. Hence, having better knowledge means being able to solve more complicated problems and make more money.
On the other hand, the poor regards money problems as problems. They feel victimized which is compounded by their failure to solve their problems. Consequently, the problem stays and worsens and the poor becomes poorer.
A rich person may not be able to solve all his money problems but instead of ignoring them or walking away, he refers to others who are experts in the field to solve them and learn from the experience.
Lastly, everyone has financial or money problems even the rich people. Those who choose to face and solve the problems will fare better compared to those who choose to ignore or pretend they don’t exist.

The - Get - Rich - QUICK Nonsense

At one point or another, you may have encountered an online banner displaying a smiling person offering you the secret to earning 4 digits per hour. Surely, it is an enticing offer; but isn’t it a little too good to be true?
We’ve seen online schemes growing by the numbers. It is very likely that you, and the rest of the public who want to get rich quick, would just end up funding what these online offers are promising, instead of you and the others getting funded by these promises.
Most people who fell for these schemes are more likely to have more holes in their pockets or worse, become victims of identity theft. These schemes usually contain proposals disguised as “investments” or “franchises”, or even unclaimed “wills” set out to grab your money.
Cyber crime is on the rise with the current downtrodden economy, leading to more and more people stretching the boundaries of the legal and the illegal. Online schemes are out there to steal personal information to support their own interests. God knows what these strangers can do with your information. Think forged signatures and false credit card purchases.
With the rising cost of living, along with rapid technology growth, life is becoming more expensive to catch up on with the latest fads and comforts.
There are many different ways in attaining absolute financial freedom (A.K.A. getting rich). Some people choose to work double jobs along with other side jobs to make ends meet. Some even go back to school to sharpen their skills and get connected to key people in the field they’re passionate with. Some would quit their vices altogether.
The truth is no matter what they tell you about getting rich automatically, quickly or instantly, it just doesn’t cut it. Getting rich is a process and a journey. There is no short cut to it. One must rely on his own sense of judgment, his instincts, practicality and sufficient knowledge of accounting and applied math to become financially advantageous.
To avoid the hassle of putting your money where it isn’t supposed to be, listed here are 5 warning signs of online schemes
1. Nigerian Scheme
The Nigerian Scheme gained its notoriety by sending e-mails to unsuspecting people claiming that the sender is a lawyer and is and will be responsible for transferring money to your account since you are an heir to a wealthy “relative” who has recently passed away. These emails usually come in wrong grammar; but here’s where it gets suspicious: the “lawyer” requires you to give a copy of your personal information and wire in money to pay for “processing” fees. Good luck with getting a response after sending in your cash and info.
2. Ponzi Schemes
A Ponzi scheme can be identified afar by an offering of exorbitant returns on an investment. It gathers its victims by promising an average of 30% interest on your investment every 60 days.
Say you invest $100; you would receive a check 60 days later telling that your investment has earned you $30. You make another investment, this time $200. After 60 days, your $200 becomes $260. Quite a get rich quick scheme obviously. Then here you go, happy that you’ve made a quick buck, you start referring friends and they fall for it.
What’s really going on here is that the administrator pays off your returns using other investors’ money. Once referrals stop coming in, finances will fall like dominoes and once the company runs out of money to pay back majority of its investors, they run off with what’s left.
3. Affinity Fraud
Affinity is called as such because most of its victims are mainly soft-hearted and sympathetic internet users. This scheme starts off by an email claiming that the sender is entitled to a huge trust fund back in his native country. The sender however is abroad and lacks the funds to travel by plane. He then proceeds to tickle the heartstrings of the receiver, promising that once he gets home to his country, he’ll give more than what the plane tickets cost.
4. Work-at-Home Scams
Work-at-Home scams target housewives and other young people seeking self employment. While work from home is becoming a great way of earning under the comfort of your own roof, scams still exist, giving this thriving occupation a bad name.
Work from home scams usually start off with a tag-line offering the secrets on how to earn 4 digits per hour. Sign up and send in a registration fee to get a worthless work from home kit and a fluctuating work from home career where the paychecks do not arrive regularly. Breaking even for that registration fee will take longer than how quickly you’ve paid for their promise.
5. Foreign Lotteries
The foreign lottery win scheme preys on the gullibility of people who see winning the lottery as a lifetime accomplishment. This starts off congratulating the receiver as he has won the lottery in a foreign country, and since he’s not a registered citizen of the said country, he then is required to pay taxes from his winnings before the winnings can be released to him. The only ends that meet here are for the scammers, and never for you.

$ 10 to $ 1 million. How Long Does It Take..?

$10 can be turned into $1 million. If you are immortal, being a millionaire is too simple. But human life is short. What we want to know is the speed of wealth creation. I will elaborate some methods to turn that $10 into a million dollars, and the time it takes. Start with the fastest way:

Change the US$10 into Turkish Lira currency – you will get TRL 14 millions, instantly you become a multi-millionaire.
Buy lottery – High risk, high return. You only need to wait a few weeks for the lottery results.
Buy a domain name and start blogging – This depends on your talent and hard work. Maybe 2 years of persistence will make you a millionaire.
Buy GOOG (Google Inc.) - Since Google‘s IPO on August 13th, 2004 at $85, now the share price is around $500, giving an average 80% annual return. If you use $10 dollar to buy Google’s share now, it will take about 20 years only to make a million dollar. Of course $10 is not enough to own a GOOG share, just find a way to own a bit of it.

Invest in mutual fund or unit trust – Let’s say a unit trust fund consistently gives you a return of 10% a year, you would have to wait 120 years for the $10 to become a million dollar.
Put it in a bank saving account and wait – wait and wait ………….. wait .. still wait … and wait .. zzzzZZZ – 293 years!
Conclusion: It is too easy to become a millionaire. What makes it difficult is the limited amount of time we have.
If you give up already, just buy a million dollar insurance policy. At least your nominee can become one when you die.