Issue No.


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It's Never Too Lat Or Early

This article is reproduced with permission from
Normandy Advisory Services Sdn. Bhd (Licensed Investment Advisor)
15th Floor Menara Multi-Purpose, No 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur
Tel : 03 - 469 5560 Fax : 03 - 294 5561

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When is the right time for you to start planning for yourself financially? Do you wait until your debt begins to pile up? Spending money is often easier than saving and changing ones credit habit is always an uphill task. You could have overextended yourself financially and may face disastrous consequences if you do not act early.

Simply ask yourself this -

1. Do you own more than 2 credit cards?
2. Do you have to work part-time to supplement your spending activities?
3. Do you bounce your checks regularly?
4. Do you borrow for major purchases like cars, houses?
5. Are you responsible for any form of debt?
6. Are you the main provider for your family?
7. Are you adequately covered by life/disability insurance?
8. You always do not have cash allowance for discretionary expenses?
9. You are aware of retirement but have not made any plans?
10. You are always late in paying your bills.

If you have answered yes to more than half the questions, most likely you need financial planning immediately and quite likely you have overextended yourself financially. In order to understand why financial planning is important, get a snapshot of the value of anything that you have. Then, create a simple balance sheet and determine your assets and liabilities.

Is your current mainstream income enough to support your basic living? Then list down all your financial goals. You need cash for discretionary expenses. You need emergency funds in the event of divorce, death or accident for instance.

Professionals suggest a 3-6 month net income should be set aside as reserves for emergencies. How much money do you expect to live on upon retirement? Ask yourself whether you are able to achieve them with your current financial strength.

You could be surprised to find out how much or how little you actually have left after deducting all your expenses and things could be more severe if you have to support your dependents.

It is never too late or too early to start a savings investment plan. It is important for you to realize the benefits of an early investment plan. Start as soon as possible to stay ahead of the curve.

The fact is, you are unlikely to achieve any major financial goals without a proper financial plan. Successful planning helps you to better control your budget - increase savings and cut spending. Most importantly, it will help you to meet your retirement needs in the long-term.

So now you are convinced that you should start your very first investment plan right away. You should be aware of the impact of inflation that shrinks the value of your money. Your money in the fixed deposits is not likely to ensure your future well-being or success. You have to identify all your short and long-term financial goals.

How you do start then?

Before you do anything, determine your risk temperament. How much risk can you tolerate? The trade-off is fair and simple. High rewards come with high risks, lower risk with lower return. Do you consider yourself as aggressive, moderate or conservative. The more aggressive you are - the more willing you are to take higher risks in return for high rewards. At the other end of the scale, the more conservative, the less risk you are prepared to take on.