by Helmi Hakim | May 23, 2009 | Investment, Miscellaneous
As normal,yesterday, I went for my Friday prayer’s in the mosque and listen to the sermon/khutbah…But hey…..the sermon is about my favourite topic…..
“Managing Family Finances”. 🙂
The khutbah discusses about the importance of managing family finances.
• A well-managed income and wealth will nurture a harmonious family.
• A Muslim should be wise and realistic in planning the family’s expenditure so as to avoid extravagance.
• Saving is one of the best practices to maintain a healthy financial structure in facing challenges in the future.
• To manage family finance effectively, debt and unnecessary expenditure should be avoided.
If you will like to read more, you can download the sermon here! Thanks! 🙂
http://www.muis.gov.sg/cms/uploadedFiles/MuisGovSG/Khutbah/E09May22.doc
by Helmi Hakim | May 3, 2009 | Investment
You see… I believe some of you who have been investing your money, witnessed a depreciation of value in your portfolio, especially investment in funds.
Your $100,000 investment is now $40,000 in value.
Your $50,000 investment is now $20,000 in value.
…and your $30,000 invesment is now $10,000 in value.
When emotions sets in, to most, they will panic and cry, telling themselves, “oh my god! I’m losing money…Have to sell, to CUT MY LOSSES”….
If you read my prior posts, I have already explain that, you do not lose money, if you do not sell your units. It is only known as “paper losses”. If you sell, you realised your loss.
The market will recover. Now is a good time to do top up or if you dont have spare cash, just hold on to your investments. The market will recover, for you to recover back your “paper loss” capital and then later make profit in the bull run.
Here are 2 main reasons,on why I say the market will recover.
1) Structure Of Index
You see, when you invest in index, in funds, you invest, in a group of “best” companies.
An index only retains the VERY BEST COMPANIES.
(USA) Dow Jones Index indicates performance of 30 largest capped American companies.
(USA) S&P’s 500 measures 500 best earnings performance companies.
(Singapore) STI Index measures top 29 representative companies.
(UK) FTSE 100 measures 100 most highly capitalised companies listed on London Stock Exchange.
(Japan) Nikkei 225 measures most watched Asian index.
(Hong Kong) Hang Seng measures 45 of the largest companies on HK stock exchange.
(China) SSE Composite tracks value of top 50 Chinese companies on the Shanghai Stock Exchange.
If any of the best companies, in the index, dont do well, they get KICKED OUT, replaced by a better performing one.
Example for Dow Jones. In October 2008, AIG not performing, thus was removed and replaced by Food and Beverage Giant, Kraft.
2) Inflation
I always tell my client, “Today, you eat MacDonald, costs $7.
20 years later, you eat MacDonald, will cost you DOUBLE, $14.”
That is what we called INFLATION.
Rising cost of living results in prices of goods and services going up. This then result in revenue of companies to increase. Which is then reflected in the stock price.
The stock price contributes to the value of index. So….if stock price increase, the value of the index will also increase. When you buy your index at $1, and you later sell it at $2, you make money! 🙂
So….Ladies and gentlemen…If you have money in funds, hold it or do a top up now, to dollar cost average your investments. Make money! 🙂
by Helmi Hakim | Mar 23, 2009 | Insurance, Investment
Many of us, today, are holding tight, holding dearly to our CASH, because of the economic uncertainty that is looming wide on us. 🙁
If YOU read yesterday’s straits times’ newspaper, under the finance section, they recommend YOU to keep at least 12 months of YOUR monthly expenses as YOUR emergency funds instead of the usual, recommended 6 months monthly expenses in YOUR bank account.
I think that is a prudent measure & I will like to add on to it 🙂
You see….I believe, overall, in life, many of us have GREAT AMBITIONS to fulfil.
Some of us are entrepreneurial, will love to start our dream business. Some are career minded, looking forward to climb the corporate ladder. Whatever route or path, you CHOOSE, there is 1 BIG PURCHASE that you will do in your life.
I will usually recommend all my clients to settle this 1 BIG PAYMENT as soon as possible before spending on other stuffs. That is….
1) Paying For Your House
Try to pay your house in full as soon as possible.
Yeah…I know, for some adventurous people, they will say, “Helmi….mortgage rate is so low. May as well, I invest the money, and get higher returns”.
The one philosophy that, I shared with all my clients, is anything you want to do, PROTECT YOUR FAMILY FIRST.
This includes buying life insurance, buying hospitalisation insurance plan, and the most important, pay off your house loan as soon as possible.
This is because, in life, many unwanted things can happen. Today, you may be making lots of money, running your own business, or perhaps earning BIG MONEY, holding an enviable corporate position in your company, BUT no one can guarantee you such blissful fate in the upcoming years.
At least, should anything unwanted happen, you know, you got life insurance, you got hospitalization plan and you got YOUR HOUSE all secured.
You then only, depends on your 12 months contingency savings in your bank to pay for your basic necessities.
You know, I always hear people say, those who indulge in business, are taking BIG RISK. In fact, I will say, most of them take “calculated risk”.
Many of those businesspeople, I met are super risk averse. They do anything ONLY with a clear goal and a well developed strategy.
In fact, if you follow what I share with you, in this article, you are taking calculated risk because all your fundamental needs are well taken care of, should your business or career failed. YOUR BOTTOM LINE IS TAKEN OF. You can explore, can indulge in any field of endeavour FREE FROM WORRY & ANXIETY, because why?
Because your main structural support is already in place. You have done your homework. You have a plan for your worst case scenario.
Only then, you can start planning your financial life in a more adventurous way! 🙂
by Helmi Hakim | Mar 5, 2009 | Investment, Miscellaneous
As you know, in my profession as a financial associate, I get to do financial planning for a lot of people. 🙂
It is a special privilege for me, as directly or indirectly, I get to see EXPLICITLY on how the rich and the poor managed their finance.
I realised, its not really how much you earned, that matters. Rather, it is how much you SAVED. One of the tools that enables me to see vividly, interpret the current financial standing of my clients, is the usage of cashflow statement.
I feel sad that a lot of people out there, GROSSLY mismanaged their finance….especially the young ones…. (my age group)
They got the concept, “Why need to save? Got money…ENJOY first….Savings? Do it later!”
They dine REGULARLY at places like Swensen, like Eatzy where it is “normal” to pay $30 for a single meal and drink coffee at places like Starbucks, like Coffee Bean where average cup of coffee cost $7. (You can go on weekly basis with your friends and families, but certainly NOT AND NEVER everydayla)
It is OKAY for them to pay to club, enjoying the occasional “booze”, yet “savings” seems like a jargon to the ear.
These detrimental pitfalls are really doing BAD for many. If you are in your 20s, let me elucidate to you, what will soon be your IMMEDIATE financial commitments in the NEAR future. You got to start planning! 🙂
1) Marriage
You need to set aside (depending on your race), at least $30,000 for marriage.
2) House
You need to set aside 20% downpayment for your house. For a 4 room HDB flat which cost $300,000, you need $60,000. You gotta asked yourself, how long will you want to stay with your parents? Come on….
3) Honeymoon
Depending on where’s your honeymoon destination, you gotta plan for it financially. If you dont have money, how to enjoy? You need at least $10,000.
I have not add in other additional commitments, that will just crop out, (married people got more expenses) but just by these “confirm to come” expenses, it already totalled up to about $100,000.
It is EASY to say, save later….enjoy first….be smoothened by instant gratification….So….EASY!!! Let us do simple maths calculation on this amount.
Example you are 23 years old. Want to get married in 5 years. You need to save at least $20,000/year, which is close to $2000/mth. BUT WHAT IF YOU PROCRASTINATE?
You DELAY….and you continue to delay…..The amount that you need per month,simply just gets HIGHER and HIGHER. That is very, very BAD!!!
Come on guyz…..You gotta plan for it! 🙂
by Helmi Hakim | Feb 17, 2009 | Insurance, Investment, Miscellaneous, Motivation
Yes…. I am writing a book on Financial Planning.
I will complete it by June 09 and then send it for publishing. It will be available in your local bookstores, once ready! 🙂
The “planned” title of the book is “33 Common Questions People Asked Me As Financial Consultant In Singapore“… (title may change, to make it more CATCHY)
Let me detailed you some of the questions that I will answer in the book….
……………………………………………………………………………..
Questions On INSURANCE
– Why You Must Get Insurance?
– How Much Coverage Do You Exactly Need?
– What Are The Different Types Of Insurance Available For You?
Questions On SAVINGS & INVESTMENT
• How Do You Create Your Personal Income Statement, Your Personal Balance Sheet & Your Personal Cashflow Statement?
• Discover 3 Big Differences Between People Who Are Successful Financially & People Who Failed Financially.
• How Do You Increase Your Savings By 10% Without Losing A Tint Of Sweat?
• What Is Parkinson’s Law & How Do You Avoid It?
• Why, When, Where and How Do You Invest In Funds? X% Bonds? Y% Equities?
• How To Logically Create Passive Income, So That One Day You Can CHOOSE Not To Work?
• How Do You Measure, How Much EXACTLY You Need For Your Retirement?
• Why Your CPF/EPF Is Not Enough For Your Retirement?
• Why You Should Never-Ever Buy Stuffs On Loan? Examples?
• 6 Months Of Emergency Funds In Fixed Deposit. Huge Opportunity Cost?
• How To Use A Financial Calculator? Just Remember 5 Variables & You BECOME A Financial Expert. 🙂
• Looking For Instruments With Best Return On Investment? How Is Compounded Interest Different Than Simple Interest? (Learn To Interpret Deceiving Financial Brochures)
• How To Create A Budget?
• Credit Card, Double Edge Sword? How To Use It To Your Advantage?
• What To Look For When You Invest In Stocks? Are You Dividend Oriented Or Looking For Capital Appreciation?
• How To Reduce Tax LEGALLY If You Are An Employee? If You Are A Business Owner?
• What You Should Know When Financing A Car?
…………………………………………………………………………………………….
These are some of the questions that I will answer in the book. (working very hard on it!)
Right now, I need your help. I am very sure that at the back of your mind, you have some BURNING questions, on insurance, savings or investments.
PLEASE…….Please leave your questions in the comments section below.
Should you have a website, and you will like me to include your name and website url in my book, please leave your details below too…. Its a POWERFUL viral strategy for you to market your business for FREE! 🙂
Yes…. Just type one of your burning questions at the comments section, below…. I truly APPRECIATE your help! Thanks so much! 🙂
by Helmi Hakim | Feb 9, 2009 | Investment, Motivation
I believe, this is a very intriguing topic, for Mondays’ motivational post.
You see, many people including ME, loves to spend. Everytime, earn money, I love to splurge on everything that looks ATTRACTIVE to my eyes. nike sales @ singapore expo just over
Yes… I always advise my clients on the boundaries of “needs” and “wants”. Buy stuffs only, if you NEED it. Save 20% of your monthly income. Have 6 months savings of your monthly expenses for contingencies….Think savings as on a daily basis, makes it much EASIER for you to save….Savings is GOOD, spending is BAD…..dadadahhhh….
It is like script that I have rattled over 1001 times….preaching and at times lambasting others to do savings. Easier said than done. Period.
The question now is, “How do you exactly MOTIVATE yourself, to do more savings?”
The strategy that I am about to share with you, is a well known strategy that many who find it difficult to save money like me, contends that this is the BEST, “sure to work” strategy.
It is called “FORCED SAVINGS”! 🙂
Most people, what they do, when they get their pay, is that they SPEND their money first, and then later, they SAVES.
They spend their money, and then later at the end of the month, begin to kancheong question themselves, “Eh? Where all my money gone into?”.
Unfortunately, for many, the “balance” at the end of the month is too little or worst… they have a negative cashflow, taking GE loans, Courts loans, even worst….credit cards loans @ 24% interest per annum! 🙁 –sigh, disappointment–
What you need to do is, save your money first, and the remaining, SPEND it! Get a regular savings plan, ie endowment plan or investment linked policy. (Note: Financial Advisors like us can do a risk profile analysis for you)
The money will be deducted every month automatically from your bank account. I did this, and NOW, whenever, I spend money, I can do so without feeling guilty.
Why? Because, I know that my savings, for the basic needs have been well taken care of! 🙂
So remember, when you get your pay, SAVE your money 1st, and then later, you can SPEND the rest, without feeling guilty! 🙂
