Part 4:Public Speaking Experience @ Menjana Masa Depan Yang CerahForum @ NKF Kim Keat Road, 15 November 2015.
financial plan 12/19/2015 04:31:00 pm
Bismillah...
Assalammualaikum everyone. This is the 4th of 5 summary of the Forum. In my last blogpost, I touched on "Managing Expenses and Creating Emergency Funds". This blogpost shall be about "Investments and Wealth Distribution".
There are two types of
investments. Namely Conventional Investments and Afterlife Investments.
Before I continue to share with you about Investments, first
we need to know how much do we need to have in order to retire comfortably.
The above projection of funds required in order to retire
comfortably are based on Future Value calculation using a financial
calculation. For further explanation, you can check out my previous blogpost
here.
So, now you already know how much you need in order to
retire comfortably right?
You must be wondering which source of funds you
should use for investment.
Use the balance funds that is left after you have
done the following:
- Save 10% of your salary, first.
- Pay for your expenses
- Made donation
Salary-Emergency
Funds-Expenses-Donation=Balance funds of the Salary
Now you are ready to know about Conventional Investments and
Afterlife Investments.
Conventional Investments are investment vehicles meant to
grow your money in order to achieve your financial goals.
Some of us will know what does it mean by growing your money. Growing your money simply means making your money work for you or finding ways to obtain more money. This can be done by putting a particular amount into financial products or having your own business or help a business by providing monetary support.
Why do people want to grow money?
= So that the money that they grow, will be their passive income, apart from depending on their monthly salary from their employment. Some people who are smart enough will use their passive income for their retirement planning.
Beware that growing your money is not about getting into Quick-Rich-Schemes which are detrimental to an individual and their financial portfolio. I will write in depth about how to identify dubious investments or Quick-Rich Schemes in future blogposts.
Think carefully before exploring into growing your money with financial products.
So how to start and how long does it takes to grow your money?
As per my previous blogpost, I have mentioned that you need to ensure that you have built up your Emergency Savings which is 6 months worth of expenses that is being saved, before pursuing your intention to grow your money.
In the previous blogpost, there is also surplus money, after setting aside funds for emergency savings, donations and pay for expenses. This surplus money, you can actually use it to engage with a certified financial planner or banker to get them to recommend you the available financial products in the market. I will write in depth about how to identify a trusted and good financial planner or banker in my future blogposts.
If you are in urgent need to get a trusted financial planner or banker, feel free to drop me an email at nur.farhanah.jasni@gmail.com or you can drop me a Facebook message on my I-Finance Journey page and I will refer you to the respective financial planner or banker.
Keep in mind that in order to see impressive amount of profits, an individual requires to have a time horizon of between 5 to 10 years or more. This is due to the factors that you have to consider where all investments comes with risk and with higher risk comes higher profits, and low risk comes lower profits. Check with your respective financial planner or banker on your risk appetite, so that they can recommend you the right financial products for you.
What happens if you exit your investments too early?
You will face great loss of funds and also a possibility that you exit too early where the price of the market is declining or you have pumped in alot of money in your insurance and you are given not even half of what you have put in. Ensure that you make inform decisions before exiting.
Think carefully before exploring into growing your money with financial products.
I have cases whereby my ex-client came to me and complain that she got approached by another financial planner, who did not do a proper fact finding on her financial capability. Hence this affects her due to the fact that she pays her monthly insurance using her monthly groceries funds.
I also have a close relative whom engages with a banker to buy investment products, and after investing for long periods of time, he actually made a loss instead of profit. Thus affecting his confidence in doing future investments. Do your homework on the types of investments you are engaging in, before you sign on the dotted line on the document.
Afterlife Investments are investments that enable us to
contribute on faith-based investments.
So, what’s next after growing your money or when you are
actually growing your money? Of course you have to start thinking about Wealth
Distribution.
Wealth Distribution is important especially after we have accumulated assets during our lifetime. In Singapore context, Interstate law is being applied on non-Muslims’ legacy. Another option is through writing a will. However for Muslims, Faraidh Law is being applied on one’s legacy. Another option is through writing a Will, Hibah and other methods of wealth distribution.
These methods of wealth distribution is a means to prevent miscommunications and to ensure fair dealing. However, I have observed in the community that there are various cases of families squandering on the new pot of wealth. One has to remember that with these newly acquired wealth, it actually comes with a responsibility. One should not be overwhelmed with greed as it may destroy you and your relation with your other family members. Always remember to help your family members who are not well to do.
With this, I shall continue on to my next blogpost which will be the final summary of the talk.
Wassalam.
