22 Things Money Can and Can’t Buy

1. Money can buy you an expensive house,

Money can’t buy you home sweet home.

2. Money can buy you a comfortable bed,

Money can’t buy you a good night’s sleep.

3. Money can buy you a fast car,

Money can’t buy you safety on the road.

4. Money can get an education for your children,

Money can’t buy knowledge for your children.

5. Money can buy material things for your children,

Money can’t buy appreciation from your children.

6. Money can buy you a grand wedding,

Money can’t buy you a lasting marriage.

7. Money can buy you all the books in the world,

      Money can’t buy you intelligence.

8. Money can buy you healthy food,

      Money can’t buy you a healthy lifestyle.

9. Money can get you credit cards,

Money can’t buy you credibility.

10. Money can get you financial security,

Money can’t buy you peace of mind.

11. Money can get you services,

Money can’t buy you friendship.

12. Money can get people to work for you,

Money can’t buy passion and engagement from the worker.

13. Money can buy you a branded watch,

Money can’t buy you more time.

14. Money can buy you advertisement,

Money can’t buy you a trusted brand.

15. Money can buy you the VIP treatment,

Money can’t buy you respect.

16. Money can buy you a compass,

Money can’t buy you the direction to go in life.

17. Money can buy you delicious food,

Money can’t buy you appetite.

18. Money can buy material wealth,

Money can’t buy contentment.

19. Money can buy you a peaceful county mansion,

Money can’t buy you a cool, calm, and collected mind.  

20. Money can buy you excitement and thrill,

Money can’t buy you lasting happiness.

21. Money can buy a surveillance system in the office,

Money can’t buy the honesty of the staff.

22. Money can buy you an air-conditioner

Money can’t buy you a good feeling about yourself

Readers are encouraged to add more items to this list.

Source: 22 Things Money Can and Can’t Buy

Effective Ways to Avoid Debt

According to the general manager (operations), Azman Hasim, of Bank Negara Malaysia’s Credit Counseling and Debt Management, there are three reasons why people over-borrowed – greed, lifestyle, and unavoidable circumstances. How do you take steps to avoid unmanageable debts?

Greed

• Gambling: Gamblers are no winners or else there will be no gaming outlets or they will be out of business. Don’t get involved.

• Get rich quick schemes: There is no way to make a quick and easy gain in a short time with your money. Don’t believe in such schemes. Even a solid business venture needs time and hard work to grow.

• Invest for the short term: The stock market is bullish and you decide to make a killing. You use your savings and even borrow more money from a financial institution. Initially, it looks good but a terrorist attack somewhere in another corner of the earth triggers a market slump. You decide to hold on but it is a downward slide all the way and it is too late to salvage the huge loss. It is a situation of investing too much, too short a time for too quick again and at the wrong time. You are now in debt. Investment is for the long term. 


Lifestyle

• Wants: Your wants are unlimited but your resources are limited. Every day you see new gadgets, new cars, TV in 3D, and many more. Advertisements are luring you to spend and spend and your neighbors are trendsetters. Can you control yourself to spend less than your means? 

• Credit cards: The fastest way to get into debt is to spend on your wants on credit, pay the minimum amount, and incur interest at the highest rate. If this is not enough, get advances from your credit cards to spend even more. Can you manage your credit cards without getting into debt?


Unavoidable circumstances

• Accidents and illnesses: Accidents on the road can be prevented when you drive with care. Illnesses can also be avoided when you look after your fitness and health. You can also take up insurance coverage to cushion the blow of an accident or a critical illness. An emergency fund is more effective to meet such unforeseen circumstances. 

• Jobless: The smart way is to acquire more skills so that you will be more valuable in the workplace. In case of retrenchment, you are the last one to go. In the event that you are jobless, an emergency fund will get you through a difficult period until you get a new job.

The key to avoiding debt effectively is your preparedness and discipline.

Source: Effective Ways to Avoid Debt

7 Effective Ways to Manage Your Debt and Boost Your Creditworthiness

A man in debt is so far a slave. ~Ralph Waldo Emerson 


Standard and Poor's has downgraded the U.S. credit rating for the first time ever from AAA to AA+. S and P said it lowered the rating because the deficit reduction plan Congress passed on Tuesday did not go far enough to stabilize the country's debt situation.


On a personal level, how do you manage your debt and avoid erosion of your credit rating? Here are 7 simple ways to do it:

1. Monthly repayments to be included in your budget: It is imperative to factor in all loan repayments into your monthly budget because it is not an optional item. You have to plan for it and you work on your plan. 

2. Timely payment: Do not be late to make your monthly payments. If you do, it will impact your credit rating negatively. You don’t go to work late, right? 

3. Do not skip a single payment: It is a very serious matter to skip even one payment. You are sending a signal to your creditors that something is not right and you are in financial trouble. It will negatively affect your credit rating even further. It’s like you are missing in action for one day and everyone is worried about you.

4. Avoid incurring more debt: At this critical stage, avoid getting into any more debt than you can possibly manage. The most important thing is to get rid of all debt as soon as possible. Curb your wants. 

5. Cut spending: While you are in debt, go for an austerity drive. Look into your spending pattern and cut unnecessary items such as entertainment. 

6. Look for new income streams: It is also wise to look for additional sources of income. Can you turn your hobby such as photography to be a freelance photographer?

7. Be responsible: The worst thing you can do is to jeopardize your credit rating by not communicating with your creditor when you are unable to meet payments. Go and negotiate with your creditors to reduce the monthly payment, waive a few monthly payments or reach a mutually agreeable solution. 

What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience? ~Adam Smith

Source: 7 Effective Ways to Manage Your Debt and Boost Your Creditworthiness

7 Effective Ways to Avoid Poverty

According to the Census Bureau, one in every six Americans is living in poverty. The population of Malaysia is more than 27 million but there are 47.8 million people struggling in America. How do you deal with poverty effectively?

• Professional and technical skills: It is essential to obtain professional expertise such in law, marketing, computer science, and accountancy. If not, you can also acquire technical know-how like plumbing, wiring, and carpentry. The most important thing is to equip yourself with marketable talents that you can apply what you know throughout your life. As long as you are not lazy, you can work, earn, and live a decent life and avoid poverty. It is also prudent to renew what you have learned and keep yourself updated by learning new things relating to your trade. 

• Start early to save: First of all, you develop a saving habit at an early age. Secondly, the sooner you start to save the more you will be able to accumulate over the long haul. The power of compound interest will work wonders for your money.

• Invest wisely: Invest for the long term. .Avoid get-rich-quick schemes which are too good to be true. Growing your wealth is like growing a tree, it takes time and patience.

• Live within your means: Spending less than what you have earned means there is an excess fund to save and invest. It is also a great way to avoid getting into debt by overspending.

• Avoid bad habits: Bad habits like gambling, smoking, and drinking hurt not only financially but your well-being as well. Smoking will affect not only your health but others who are close to you. Drinking can ruin your life when you are involved in a fatal accident after drinking too much. Gambling is the fastest way to incur unmanageable debt.

• Debt-free: Use your credit cards with caution. Use them for convenience only and not to pile up debts. Getting into debt is easy, but getting out of it is difficult. Pay fully and promptly every month to settle credit card bills.

• Less material wants: When you want less, you spend less and you allow your money to grow further when you don’t touch it.


Be knowledgeable, skillful, and avoid bad habits are the ways to be financially independent and avoid poverty.

Source:7 Effective Ways to Avoid Poverty

8 Reasons Why You Have Unmanageable Debts

The following are the reasons why people seek help from the Credit Counseling and Debt Management Agency of Bank Negara in Malaysia:


1. Poor personal financial management 26%
2. Huge medical expenses 25%
3. Credit card misused 15%
4. Failed in business 13%
5. Out of a job 11%
6. Other reasons 6%
7. Death of a breadwinner 2%
8. Mistakes in investing 2%


Three words describe the debt situation: greed, lifestyle, and unavoidable circumstances.
However, there are effective ways to avoid debt:


Poor personal financial management: A budget is a key to personal finance. The aim is to allocate your income in such a way as to meet all your monthly expenses and include an amount for savings. The whole idea is to live within your means and avoid debt.

Huge medical expenses: The first step is to take preventive measures by keeping fit and maintaining robust health. Eating a balanced diet, exercising regularly, and having sufficient sleep are essential for your well-being. The next step is to take up adequate medical insurance coverage. In case you are seriously ill or as a result of an accident you can reimburse your medical expenses and get compensated for your loss of income while you are in a hospital or recuperating at home 

Credit card misused: It is a credit card, but its main purpose is not for you to purchase items on credit. It is only for your convenience and nothing else. It means you must pay fully and promptly upon receiving the monthly credit card statement. You avoid paying interest on the outstanding amount when you do not pay just the minimum amount and you also avoid late payment charges. When you are in debt, it is very difficult for you to get out of debt. That is the reason why so many people seek help for debt management. 

Failed business: There is always an element of risk in any business venture. The prudent thing to do is not to put all your money into it. Set aside a contingency fund in case your capital is wiped out in a failed business attempt. 

Out of a job: Take steps to secure your job. One effective way is to acquire more skills. In fact, employers are looking for staff with multi-skills to reduce costs. With more skills, you are more valued at the workplace and less likely to be laid off.

Other reasons: One of the things that you should not do for your good friend is to be a guarantor for his or her loan. When someone applies for a loan and the financial institution asks for a guarantor, it means the loan applicant is not qualified for the loan. As a guarantor, you are more likely to end up servicing the loan.

Death of a breadwinner: An accident can happen at any time. The wise thing to do is to get sufficient insurance coverage against death due to accidents and critical illnesses. The proceeds can then allow family members to carry on living without financial difficulties. 

Mistakes in investing: The mistake is about greed. Instead of investing for the long term, you want a huge gain in a short time because the stock market is on an upward trend. Apart from your own savings you also get a personal loan from a bank and dump all your money in the stock market. However, a terrorist attack somewhere triggers a market slump. You continue to hold on to your portfolio, but there is no sign of recovery and you have suffered a huge loss and owe the bank a substantial amount. 


Live within your means, never be in debt, and by husbanding your money you can always lay it out well. But when you get in debt you become a slave. Therefore I say to you never involve yourself in debt, and become no man's surety. If your friend is in distress, aid him if you have the means to spare. If he fails to be able to return it, it is only so much lost.

Andrew Jackson

Source: 8 Reasons Why You Have Unmanageable Debts

10 Money Matters to Teach Your Children

We, as parents, have made many gains and losses in personal finance. It is our duty to share what we know so that our children can take advantage of the knowledge to invest wisely and also to avoid the pitfalls. I think the following are the 10 most important things our children should know and follow faithfully. 

1. The power of compound interest: Start to save early and take advantage of compound interest Just look at the following illustration taken from Money Sense Getting Smart with Your Money, a book published by Credit Counseling And Debt Management Agency: 

2. The danger of credit and credit cards: Credit cards are double-edged swords. They can serve you or ruin you financially. The most important thing is to avoid credit. Credit means incurring debt and paying very high interest. It can easily lead to bankruptcy. Treat your credit cards like cash. Keep a dollar for every dollar charged to your card so that at the end of a month you can pay the credit card bills fully and promptly.


3. Avoid get-rich-quick schemes: It is always too good to be true. Why should the person approach you? He could have made more money by himself instead of asking you to join in.

4. The importance of working hard for financial success: To be successful and ahead of others it is necessary for you to be innovative and creative. You can run your own business or you can be employed, you need to have unique and original ideas and work hard at it. The money will follow. Money is the by-product of your productivity.

5. Long-term investment: It is important to invest and hold an investment for many years. It will even out the rise and fall of the market Landed property is one of the best investments Land is scarce; it appreciates over time, it is good to rent out and collect rental or as a roof over your head. Be careful to choose a good location. Invest and hold shares of companies that are trusted brands. Collect dividends, get bonus and rights issues and let the value of shares appreciates over time

6. Avoid gambling: The root cause of this problem or bad habit is greed, one of the human weaknesses. Once you are addicted, it is a one-way ticket to hell.

7. The power of networking: Get to know professional people in the field of finance. Learn a thing or two from them. The more you know the more resourceful you are to make a wise decision pertaining to financial issues.

8. Save up for a big-ticket item: Instead of getting it on credit and incurring interest, save up and buy in cash. .In a way, it is to avoid impulse buying and on second thought you may not want the item after all.

9. Live within your budget: Children should budget their pocket money or live within their means when they have started working. The budget should include an amount set aside as savings besides the normal monthly expenses. The most important thing is to avoid overspending. It means incurring debt. It is very difficult to get out of debt.

10. Cultivate the habit of savings: Inculcate the habit of savings. The amount is not important but the habit is. Savings serve many purposes. The money can be put aside as an emergency fund. You can also save up to buy a big-ticket item. When you have saved up sufficiently you can also invest and build your wealth. 


What are the other important things to teach our children about money? Share with us.

Source: 10 Money Matters to Teach Your Children

How Safe is Your Money in the Bank

In Malaysia, there is a system established by the Government to protect depositors against the loss of their insured deposits placed with member institutions in the event the member institution fails. It is administered by Perbadanan Insurans Deposit Malaysia (PIDM) and brought into effect in September 2005.

All types of depositors, whether businesses or individuals are protected. The maximum limit of coverage is RM250,000 per depositor per member institution.

Your deposit with member banks is covered automatically and it is free. When you have one million Ringgit you can deposit with four different banks and not four different branches of the same bank at RM250,000 each to get effective cover.  

Your money may be safe in the bank but is it productive? There are two factors to consider:

·     Internally

 Interest on savings accounts and fixed deposits are so low that it is impossible to keep up with inflation. It means you need to fork out more money to buy the same item as time goes by. For the money you keep in the bank it is worthless and less over time.   

·         Externally

Malaysia’s credit rating according to Standard & Poor is A-. It means Malaysia has a strong capacity to meet financial commitments, but somehow susceptible to adverse economic conditions and changes in circumstances. In case of a negative revision in credit rating, the exchange rates for the Malaysian Ringgit against other currencies will be weakened. It means you need to pay more of your money to exchange for the same amount in foreign currency. As an example, the exchange rate for 1 US dollar is RM3.22 as of December 13, 2011. If there is a negative revision of our credit rating because of adverse economic conditions, you may need to pay more than RM3.22 to get one US dollar.  On the other hand, the Malaysian currency will appreciate against other foreign currencies if there is a positive revision of our credit rating.      

You can view Standard & Poor's Credit Rating for each country here. 

It is advisable to keep your money in the bank for emergency purposes only. You need other investment vehicles to grow your wealth and beat inflation and currency fluctuation.

Source: How Safe is Your Money in the Bank