For traditional insurance policy, the life assured can either pay yearly, half-yearly, quarterly, or monthly.If the yearly premium is RM1000/year,the monthly premium = RM1000 x 1.05/12 = RM87.50 (total 5% extra)the quarterly premium = RM1000 x 1.03/4 = RM257.50 (total 3% extra)the half-yearly premium = RM1000 x 1.02/2 = RM510.00 (total 2% extra)If we want to compare the interest rate with Fixed Deposit Rate or Home-loan daily rest rate, we need to calculate the effective annual rate (EAR). It can be calculated using the Financial Calculator.(I use HP 10B)Let's ...

Net Worth = Asset - LiabilityTo increase our net worth, we must accumulate more assets and reduce our liability.In order to acquire more asset, we must have more savings.Savings = Income - Expenses.In order to increase Saving, we must increase our income and reduce our expenses.We can plan and plot our graph of Net Worth vs Age. Which one is similar to yours?

There are 3 types of business entity in Malaysia.1. Sole Proprietor (1 business owner only)2. Partnership (2 or more business owners)3. Corporation a) Sendirian Berhad. b) Berhad ( > 50 shareholders)Most small business start-up are sole proprietorship or partnership. As your business grows, there shall be a time when your business should be established as a corporation, namelySdn. Bhd. Here are a few reasons to do so:1. Lower tax rate.For profit lower than RM500k p.a., the tax rate is only 20% flat. For personal income, the tax rate is ...

Before you read this post, make sure you had read this:Why Mutual Funds Are Lousy Long-Term InvestmentsI couldn't agree more with the article. For your information, I am a big fan of Robert T. Kiyosaki. I read most of his books.The article concludes that "are you an active investor or passive?".If you are an active one, unit trust is really not your piece of cake.If you are a passive investor, is there any other better choice than unit trust?Besides the initial 3-7% service charges which most contribute to the consultant's ...

Refer to my previous post about the cheapest consumer debt: Mortgage - The Cheapest Debt , it is wise to keep the mortgage as our only debt.Most people hesitate whether to buy a new car first or a house? Let's see the pro and con:CarHouseMaintenance, petrol, servicing cost about RM300-500/monthMaintenance, electricity, water bill, assessment cost aboutRM200/monthMost likely Depreciate in valueMost likely Appreciate in ValueLoan: Hire Purchase AgreementOnly a little bit discount if we want to pay advanced installmentHigher interest chargeLoan: MortgageAdvanced payment will settle on the principle loanDaily restLower interest ...

It is year end again. It is the time we review our budget and tax planning for the whole year. Have you fully utilized the tax relief for book purchase of RM700? Next year 2007, it will be increased to RM1000/person!I am going to list down the advantages of using this tax relief:1. Save a few hundred Ringgit of taxes. If your tax bracket is 20%, you will save RM140 if you fully utilize the relief.2. Normally books can be bought at a discounted price at Popular, MPH, Border etc. ...

Leverage means The use of credit or borrowed funds to improve one's speculative capacity and increase the rate of return from an investment, as in buying securities on margin.Investing is already a high risk activity, according to those not used to do investment. If to use leverage in our investment, it means the risk involved is even higher. But only with the proper use of leverage, a person can grow rich even faster. We must have heard that most wealthy people actually had gone through some difficult years prior to ...

I like to ask my friends what do they think about the mathematic equations above? What's the major difference between the 2 "similar" equation? The answer is: what is the priority? spending or saving? If your priority is to spend first, then only to save what's left, it is most likely expenses>savings If your priority is to save first, then only spend what's left , it is most likely savings>expenses Majority of wealthy people are the 2nd type. Saving is their priority! If you find it difficult to delay your gratification, please engage some ...

I am sure that most people can find something in the house which are not used for a long time, such as used hand phone, watches, read books & magazine, CDs etc. Why don't we throw them away since it is not useful anymore? They take up extra spaces in our lovely home! I believe that we don't throw them away because those things still worth a certain value.I always liquidate the stuff that I don't use/need anymore. We can sell them to others who need it. It is like ...

There are many types of life insurance plans. If we categorize them based on the premium paid and the protection we are getting. Basically there are 3 types (refer chart):Type A : High Protection, Low Cash Value.Type B : Medium Protection, Medium Cash ValueType C: Low Protection, High Cash ValueIf there is a fortune teller who can foresee our life expectancy. If he says we can live very long, we should buy type C insurance, e.g. endowment plan. If he says our life is short, we should ...