Get Smart! with our Money

What is MRTA and what is MLTA?

2009-10-06T00:03:00.001-07:00

Mortgage Life Insurance

Mortgage Life Insurances are designed to pay off the outstanding loan balance in the event that the borrower dies or suffers from total and permanent disability (TPD) before the loan is fully paid off.Basically there are two types of mortgage life insurance available in the market.

One type is commonly known as Mortgage Reducing or Decreasing Term Assurance (MRTA or MDTA) and the other choice is Mortgage Level Term Assurance (MLTA).

Mortgage Reducing Term Assurance (MRTA) or Mortgage Decreasing Term Assurance (MDTA)MRTA or MDTA is a reducing term life assurance specially designed to protect a loan borrower against death or TPD (total permanent disability) due to natural or accidental causes.
Some lenders will allow you to finance and add the premium to your home loan (up to a certain percentage of your loan amount).
MRTA or MDTA is a simple insurance policy and has become a common and acceptable policy taken up by the borrower whenever he takes up a mortgage loan. The premium is paid upfront in one lump sum. Some lenders will finance and add the premium to your loan. The borrower can choose the amount and tenure of the coverage and the amount of premium will be determined by these factors as well as his age and gender.
Banks normally encourage the borrower to take up this policy by giving better pricing on their interest rates if the borrower signs up a MRTA or MDTA policy.To the borrower this is relatively a hassle free, affordable and necessary policy as their mortgages are covered in the event of any unfortunate incident that may caused death or TPD.

Mortgage Level Term Assurance (MLTA)MLTA is a slight variation from MRTA or MDTA and offers an alternative for a borrower who is looking for a life insurance which offers protection plus savings and in some policies returns on the premium.Premium is paid on a monthly, quarterly, half yearly or yearly basis and the policy holder can choose to have a wider coverage other than death and TPD.
The amount of the premium will be determined by the usual factors and the scope of additional coverage.

Comparison and Features of MDTA and MLTALife-MLTA
1. Transferable
This policy is transferable whenever the borrower buys a new property or refinances his loan with another bank.Example: Transfer this policy, adjust the sum assured to match the new loan, as many times as you need.
2. Insurability is GuaranteedYou purchase only once, with the same sum assured, there is no need to prove your health condition again.
3. With Savings or Returns (Cash Value)Premium paid will be accumulated either as savings or savings plus returns. The cash value can be used to reduce or pays off your mortgage.

MRTA
1. Not TransferableIn most cases, new MDTA policy has to be taken up whenever a borrower changes his properties or refinances his loan with another bankExample: 5 yrs later, refinancing at the older age, for same tenure of same loan amount, the MDTA cost is higher.
2. Insurability is not GuaranteedMost of the time every time you finance your property, you have to prove that you are healthy to purchase MDTA.
3. No Cash ValueIt is an expense with zero cash value at end of the mortgage tenure.

In lament term with example :For example : The applicant name is Ken. He's a 24 male and bought a property for 230k but he only take 100k loan.

MRTA scenarioSo if he purchase RM100k for 30 years MRTA the premium will be RM2165 and the surrender value from time to time is less and less. So, if anything happen to Ken at 5th year, the benefit he get from insurance com will be RM95299 while 10th year will be RM87319. So at the end, the value will be zero at 30th year.

MLTA scenarioIf he purchase same RM100k and 30 years MLTA, he needs to pay RM61 every month and gets the level protection. He can choose to pay monthly, quarterly, semi-annually or annually. If Ken is TPD and can't make a source to pay for monthly installment, the benefits he get is RM100k no matter at which year. If Accidental death it would be X 2, the benefits will be RM200k. This is consider savings and you get the level benefits no matter 1st year or 18th or 30th year. Because the surrender value is high and higher. If Ken have nothing happen at 30th year, he can get back the value he prepaid. This is the benefit you get from MLTA. And, Ken is only 24, if he buy a better property, he can bring this MLTA over to that property and extend it.

Social Security and EPF

2009-05-12T22:48:00.000-07:00

Social Security and Medicare are fading even faster under the weight of the recession, heading for insolvency years sooner than previously expected, the government warned Tuesday. Social Security will start paying out more in benefits than it collects in taxes in 2016, a year sooner than projected last year, and the giant trust fund will be depleted by 2037, four years sooner, trustees reported.

Medicare is in even worse shape. The trustees said the program for hospital expenses will pay out more in benefits than it collects this year, just as it did for the first time in 2008. The trustees project that the Medicare fund will be depleted by 2017, two years earlier than the date projected in last year's report.

The trust funds -- which exist in paper form in a filing cabinet in Parkersburg, W.Va. -- are bonds that are backed by the government's "full faith and credit" but not by any actual assets. That money has been spent over the years to fund other parts of government. To redeem the trust fund bonds, the government would have to borrow in public debt markets or raise taxes.
Treasury Secretary Timothy Geithner, the head of the trustees group, said the new reports were a reminder that "the longer we wait to address the long-term solvency of Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be."
Geithner said that President Barack Obama was committed to working with Congress to find ways to control runaway growth in both public and private health care expenditures, noting the promise Monday by major health care providers to trim costs by $2 trillion over the next decade.

However, Republicans pointed to the newly dire assessments as evidence the Obama administration has failed to come forward with actual entitlement reform to close the funding gaps.

"Instead of getting existing public programs in order right now, some are saying we should create a new government-run health insurance plan," Sen. Chuck Grassley, the top Republican on the Finance Committee, said in a reference to the administration's health care proposals. "When we can't afford the public health plan we have already, does it make sense to add more?"
House Republican leader John Boehner said the trustees report "confirms what we already knew: Our nation cannot afford to continue this reckless borrowing and spending spree."

The findings in the trustees report, the annual checkup given the two benefit programs, did not come as a surprise. Private economists had been predicting that the dates the programs would begin to pay out more than they take in and the dates the trust funds would be insolvent would occur sooner given the economic recession.

The deep recession, the worst the country has endured in decades, has resulted in a loss of 5.7 million jobs since it began in December 2007. The unemployment rate hit a 25-year high of 8.9 percent in April.

Fewer people working means less being paid into the trust funds for Social Security and Medicare.

The Congressional Budget Office recently projected that Social Security will collect just $3 billion more in 2010 than it will pay out in benefits. A year ago, the CBO had projected that Social Security would have a much higher $86 billion cash surplus for the 2010 budget year, which begins Oct. 1.

The trustees report projected that Social Security's annual surpluses would "fall sharply this year," then remain at a reduced level in 2010 and be lower in the following years than last year's projections. The report said that the Social Security annual surplus would be eliminated entirely in 2016, reflecting increased demands from the wave of 78 million baby boomers retiring.
That means Social Security will have to turn to its trust fund to make up the difference between Social Security taxes and the benefits being paid out beginning in 2016. The trustees projected the trust fund would be depleted in 2037, four years earlier than the 2041 date in last year's report.

At that point, the annual Social Security taxes collected would be enough to pay for three-fourths of current benefits through 2083. To tap the trust fund, the government would have to increase borrowing or raise taxes because Social Security bonds exist only as bookkeeping entries.

While the smaller surpluses that will begin this year will not have any impact on Social Security benefit payments, the government will need to borrow more at a time when the federal deficit is already exploding because of the recession and the billions of dollars being spent to prop up a shaky banking system.

Medicare's condition is more precarious, reflecting the pressures from soaring health care costs as well as the drop in tax collections.

The options available to deal with the Social Security shortfall include raising the payroll tax that funds Social Security, such as removing the cap on income subject to the tax, or cutting benefits in some fashion such as raising the retirement age.

The administration is pushing Congress to pass legislation this year to extend health care coverage to some 50 million uninsured Americans, preferring to tackle health care before Social Security.

The trustees report is likely to set off renewed debate over Social Security and Medicare. Critics have charged that the Obama administration has failed to tackle the most serious problems in the budget -- soaring entitlement spending.

The administration on Monday revised its federal deficit forecasts upward to project an imbalance this year of $1.84 trillion, four times last year's record, and said the deficits will remain above $500 billion every year over the next decade.

----------------------------------the above article was adopted from Yahoo! Finance----------

Social Security is the equivalent of EPF (employee provision fund) in Malaysia, while Medicare to Our SOCSO. However the management style of the US counterpart are so different from the one in Malaysia, at least the one in our country is not that obvious.
Without the Medicare that comes to par with the US counterpart, it would be wise for malaysian to have their own medical backup fund to go through the hardship of enduring a disease or an emergency hospitalization, whatever the cause may be, you need to settle the hospital bill if you have been admitted into it. So, the ultimate question would be, do you want to spend your hard-earned money on the hospital bill? If your answer would be a normal and common 'NO', then you should begin to analyse what do you have as the alternative precautionary step.

Definition of 36 Critical Illnesses in Insurance Policy

2009-04-25T10:49:00.000-07:00

As you may have well aware, most policy holder who bought the common 36 critical illnesses coverage (also known as 36 dread diseases), will have the definition clearly stated in their life insurance policy. But most of the policy holders actually do not really quite understand what was stated there as they hardly ever flipped through the pages in the policy at all. If you just happen to search for definitions regarding the dreaded 36 critical illnesses, here is the definition taken from Great Eastern Life insurance policy. Other life insurance company also uses the same definition although some wordings might vary. Anyway, the general definition should be the same.

Here is the list:

1. Heart Attack
The death of a portion of the heart muscle (myocardium) as a result of inadequate blood supply and being evidenced by:-
(a) A history of typical prolonged chest pain; and(b) New electrocardiographic changes resulting from this occurrence; and(c) Elevation of the cardiac enzyme (CPK-MB) above the generally accepted laboratory levels of normal.Diagnosis based on the elevation of Troponin T test alone shall not be considered diagnostic of a heart attack.Angina is specifically excluded.

2. Stroke
Defined as a cerebrovascular accident or incident producing neurological sequelae of a permanent nature, having lasted not less than six months. Infarction of brain tissue, hemorrhage and embolisation from an extra-cranial source are included. The diagnosis must be based on changes seen in a CT scan or MRI and certified by a Consultant Neurologist.Specifically excluded are cerebral symptoms due to transient ischaemic attacks, any reversible ischaemic neurological deficit, vertebrobasilar ischaemia, cerebral symptoms due to migraine, cerebral injury resulting from trauma or hypoxia and vascular disease affecting the eye or optic nerve or vestibular functions.

3. Coronary Artery Disease Requiring Surgery
Refers to the actual undergoing of coronary artery by-pass surgery by way of thoracotomy to correct or treat coronary artery disease but not including angioplasty, other intra-arterial, keyhole or laser procedures.

4. Cancer
Cancer is defined as the uncontrollable growth and spread of malignant cells and the invasion and destruction of normal tissue for which major interventionist treatment or surgery (excluding endoscopic procedures alone) is considered necessary. The cancer must be confirmed by histological evidence of malignancy.The following conditions are excluded:-(a) Carcinoma in situ including of the cervix(b) Ductal Carcinoma in situ of the breast(c) Papillary Carcinoma of the bladder and Stage 1 Prostate Cancer(d) All skin cancers except malignant melanoma(e) Stage I Hodgkin’s disease(f) Tumors manifesting as complications of Acquired Immune Deficiency Syndrome.

5. Kidney Failure
End stage kidney failure presenting as chronic irreversible failure of both kidneys to function, as a result of which regular renal dialysis is initiated or renal transplantation carried out.

6. Fulminant Viral Hepatitis
This is defined as a sub massive to massive necrosis of the liver caused by any virus leading precipitously to liver failure.The diagnostic criteria to be met are:(a) A rapidly decreasing liver size as confirmed by abdominal ultrasound; and(b) Necrosis involving entire lobules, leaving only a collapsed reticular framework; and(c) Rapidly deteriorating liver functions tests; and(d) Deepening jaundice.Hepatitis B infection or carrier status alone does not meet the diagnostic criteria.

7. Major Organ Transplant
The actual undergoing of a transplant as a recipient of one of the following human organs:(a) Kidney(b) Lung(s)(c) Liver(d) Heart(e) Bone marrow

8. Paralysis / Paraplegia
The complete and permanent loss of use of both arms or both legs, or one arm and one leg, through paralysis caused by illness or injury persisting for at least six (6) months from the date of trauma or illness.

9. Multiple Sclerosis
Unequivocal diagnosis by a Consultant Neurologist confirming the following combination, which has persisted for at least a continuous period of six (6) months:(a) Symptoms referable to tracts (white matter) involving the optic nerves, brain stem and spinal cord, producing well-defined neurological deficits; and(b) A multiplicity or discrete lesions; and(c) A well-documented history of exacerbation and remissions of said symptoms / neurological deficits.

10. Primary Pulmonary Arterial Hypertension
Means primary pulmonary hypertension with substantial right ventricular enlargement established by investigations including cardiac catheterization, resulting in permanent irreversible physical impairment to the degree of at least Class 3 of the New York Heart Association Classification of cardiac impairment, and resulting in the Life Assured being unable to perform his/her usual occupation.

11. Blindness
The total, permanent and irrecoverable loss of the sight of both eyes. Certification by an ophthalmologist is necessary.

12. Heart Valve Replacement
The actual undergoing of open-chest surgery to replace or repair cardiac valves as a consequence of heart valve defects or abnormalities that have occurred after the date of issue or date of reinstatement of this contract.Repair, via valvotomy, intra-arterial procedure, key-hole surgery or similar techniques are specifically excluded.

13. Loss Of Hearing / Deafness
Total, permanent and irreversible loss of hearing in both ears as a result of disease or accident. Medical evidence in the form of an audiometry and sound-threshold test must be provided.

14. Surgery To Aorta
The actual undergoing of surgery via a thoracotomy or laprotomy to repair or correct an aortic aneurysm, an obstruction of the aorta or a coarctation of the aorta. For the purpose of this definition, aorta shall mean the thoracic and abdominal aorta but not its branches.

15. Loss of Speech
Total and irrecoverable loss of the ability to speak for a continuous period of 12 months. Medical evidence to confirm injury or illness to the vocal cords to support this disability must be supplied by an appropriate (Ear, Nose, Throat) specialist.All psychiatric related causes are excluded.
16. Alzheimer’s Disease / Irreversible Organic Degenerative Brain Disorders
Deterioration or loss of intellectual capacity or abnormal behavior as evidenced by the clinical state and accepted standardized questionnaires or tests arising from Alzheimer’s Disease or irreversible organic degenerative brain disorders excluding neurosis, psychiatric illness, and any drug or alcohol related organic disorder, resulting in significant reduction in mental and social functioning requiring the continuous supervision of the Life Assured. The diagnosis must be clinically confirmed by an appropriate consultant.

17. Major Burns
Third degree burns covering at least twenty percent (20%) of the Life Assured’s body surface area as measured by “The Rule of 9” of the Lund & Browder Body Surface Chart.

18. Coma
A state of unconsciousness with no reaction or response to external stimuli or internal needs, persisting continuously for at least 96 hours, requiring the use of life support systems and resulting in a neurological deficit, lasting more than 30 days. Confirmation by a Consultant Neurologist must be present.Coma resulting directly from self-inflicted injury, alcohol or drug misuse is excluded.

19. Terminal Illness
The Life Assured must be suffering from a condition, which in the opinion of an appropriate Medical Practitioner is highly likely to lead to death within 12 months. The Life Assured must no longer be receiving active treatment other than that for pain relief.

20. Motor Neurone Disease
Motor neurone disease of unknown aetiology is characterized by progressive degeneration of corticospinal tracts and anterior horn cells or bulbar efferent neurons. These include spinal muscular atrophy, progressive bulbar palsy, amyotrophic lateral sclerosis and primary lateral sclerosis.Diagnosis must be confirmed by a Consultant Neurologist.

21. AIDS Due To Blood Transfusion
The Life Assured being infected by HIV virus or AIDS provided that:(a) the infection is due to blood transfusion received in Malaysia or Singapore after the commencement of the Policy; and(b) the Life Assured is not a haemophiliac; and(c) the Life Assured is not a member of any high risk groups such as but not limited to homosexuals, intravenous drug users or sex workers.Notification and proof of incident will be required via a statement from a statutory Health Authority that the infection is medically acquired.

22. Parkinson’s Disease
Unequivocal diagnosis of Parkinson’s Disease by a Consultant Neurologist where the condition:(a) Cannot be controlled with medication; and(b) Shows signs of progressive impairment; and(c) Activities of Daily Living assessment confirm the inability of the Life Assured to perform without assistance three (3) or more of the Activities of Daily Living.Only idiopathic Parkinson’s Disease is covered. Drug-induced or toxic causes of Parkinsonism are excluded.

23. Chronic Liver Disease
End stage liver failure evidenced by permanent jaundice, ascites, encephalopathy and portal hypertension.Wernicke’s encephalopathy and liver failure secondary to alcohol or drug misuse is excluded.

24. Chronic Lung Disease
End stage respiratory failure including chronic interstitial lung disease.The following criteria must be met:(a) Requiring permanent oxygen therapy as a result of a consistent FEV1 test value of less than one liter.(Forced Expiratory Volume during the first second of a forced exhalation); and(b) Arterial Blood Gas analysis with partial oxygen pressures of 55mmHg or less; and(c) Dyspnoea at rest.

25. Major Head Trauma
Physical head injury causing significant permanent functional impairment lasting for a minimum period of three (3) months from the date of the trauma or injury. The resultant permanent functional impairment is to be verified by a Consultant Neurologist and duly concurred by the Company’s Medical Officer and must result in an inability to perform at least three (3) of the Activities of Daily Living either with or without the use of mechanical equipment, special devices or other aids and adaptations in use for disabled persons. For the purpose of this benefit, the word “permanent”, shall mean beyond the hope of recovery with current medical knowledge and technology.

26. Aplastic Anaemia
Chronic persistent bone marrow failure which results in total aplasia of the bone marrow and requires treatment with at least one of the following:(a) Regular blood product transfusion(b) Marrow stimulating agents(c) Immunosuppressive agents(d) Bone marrow transplantation

27. Muscular Dystrophy
The diagnosis of muscular dystrophy shall require a confirmation by a Consultant Neurologist of the combination of 3 out of 4 of the following conditions:(a) Family history of other affected individuals(b) Clinical presentation including absence of sensory disturbance, normal cerebro-spinal fluid and mild tendon reflex reduction(c) Characteristic electromyogram(d) Clinical suspicion confirmed by muscle biopsyNo benefit will be payable under this Covered Event before the Life Assured had reached the age of 12 years next birthday.

28. Benign Brain Tumor
A life-threatening, non-cancerous tumor in the brain giving rise to characteristic signs of increased intra-cranial pressure such as papilloedema, mental symptoms, seizures and sensory impairment. The presence of the underlying tumor must be confirmed by imaging studies such as CT Scan or MRI.Cysts, granulomas, malformations in or of the arteries or veins of the brain, haematomas, tumors in the pituitary gland or spine and tumors of the acoustic nerve are excluded.

29. Encephalitis
Defined as severe inflammation of brain substance, resulting in permanent neurological deficit lasting for a minimum period of 30 days and certified by a Consultant Neurologist. The permanent deficit must result in an inability to perform at least three (3) of the Activities of Daily Living either with or without the use of mechanical equipment, special devices or other aids and adaptations in use for disabled persons. For the purpose of this benefit, the word “permanent”, shall mean beyond the hope of recovery with current medical knowledge and technology.Encephalitis as a result of HIV infection is excluded.
30. Poliomyelitis
Unequivocal diagnosis by a Consultant Neurologist of infection with the Poliovirus leading to paralytic disease as evidenced by impaired motor function or respiratory weakness. Cases not involving paralysis will not be eligible for this benefit. Other causes of paralysis (such as Guillain-Barre syndrome) are specifically excluded.

31. Brain Surgery
The actual undergoing of surgery to the brain under general anesthesia during which a craniotomy is performed. Bur Hole and brain surgery as a result of an accident is excluded.

32. Bacterial Meningitis
Bacterial meningitis causing inflammation of the membranes of the brain or spinal cord resulting in permanent neurological deficit lasting for a minimum period of 30 days and resulting in a permanent inability to perform at least three (3) of the Activities of Daily Living either with or without the use of mechanical equipment, special devices or other aids and adaptations in use for disabled persons. For the purpose of this benefit, the word “permanent”, shall mean beyond the hope of recovery with current medical knowledge and technology.

33. Other Serious Coronary Artery Disease
The narrowing of the lumen of at least three major arteries i.e. Circumflex, Right Coronary Artery (RCA), Left Anterior Descending Artery (LAD), by a minimum of 60 percent or more as proven by coronary arteriography. This benefit is payable regardless of whether or not any form of coronary artery surgery has been performed.

34. Apallic Syndrome
Universal necrosis of the brain cortex, with the brainstem remaining intact. Diagnosis must be confirmed by a Consultant Neurologist and condition must be documented for at least one month.

35. AIDS Cover of Medical Staff
Infection by any Human Immunodeficiency Virus (HIV) only if the Life Assured is a Medical Staff as defined below, and that such infection was considered by the medical authorities involved to be caused by a needlestick/sharp instrument injury or by exposure to blood or bloodstained body fluid which occurred after the commencement of the Policy. The accident must have occurred whilst the Life Assured was following his normal occupational duties and reported in accordance with the established occupational procedures for such accidents. The Life Assured must, within 5 days of the accident have undergone a blood test indicating the absence of HIV or its antibodies but a further blood test performed within 6 months of the accident must indicate the presence of HIV or its antibodies after the commencement of the Policy.However, the benefit payable will not apply if any medical cure is found for Acquired Immune Deficiency Syndrome or the effects of the HIV virus or a medical treatment is developed which results in the prevention of the occurrence of AIDS.“Medical Staff” is defined as Doctors (General Physicians and Specialists), nurses, laboratory technicians, dentists (surgeons and nurses), ambulance workers who are working in the medical centre or hospital or dental clinics/polyclinics in Malaysia.

36. Full Blown AIDS
The clinical manifestation of AIDS (Acquired Immune-deficiency Syndrome) must be supported by the results of a positive HIV (Human Immuno-deficiency Virus) antibody test and a confirmatory Western Blot test. In addition, the Life Assured must have a CD4 cell count of less than two hundred (200) and one or more of the following criteria are met:(a) Weight loss of more than 10% of body weight over a period of six (6) months or less (wasting syndrome)(b) Kaposi Sarcoma(c) Pneumocystic Carinii Pneumonia(d) Progressive multifocal leukoencephalopathy(e) Active Tuberculosis(f) Less than one-thousand (1000) lymphocytes(g) Malignant Lymphoma

Howdie!
Complicated and difficult it seems for one like us to read through this and expect to gain a comprehensive understanding on this thing, right?
If you encounter some areas which need verification and clarification about, please feel free to text me and i will gladly attend to your needs.

Risk Choice Behaviour

2009-02-27T00:17:00.000-08:00

Financial Analysts are often perceived as experts who incorporated information regarding their field, i.e., finance and investments immediately as they make predictions on future earnings (forecast), and give advices on stock markets based on their rational analysis in an unbiased way.

Nevertheless, like normal human-beings, the decision-making process of an financial analyst is also affected by various factor as several studies have reported inefficiencies and/or biases in analysts’ ability to incorporate new information into their earnings forecasts, albeit the results of these studies have been mixed.

Specifically, when the accuracy of initial earnings forecasts is evaluated as a loss (a loss is deemed to have occurred when the estimation on earning made by the analyst is not met by the actual earning), analysts will choose more risky prospects when issuing revised forecasts. As a result, risky choice may lead to optimistic forecast behaviour. Furthermore, the prospect of getting incentives also deter the analyst to display a more risk tolerant character when making revised forecasts, regardless of the accuracy of their initial prediction.

This finding has proven that financial analyst, no matter how qualified or experienced they may be, tends to make biased predictions, estimations and outlooks as their thinking circuit is affected by the incentives and various motivational factors as well. Therefore this has somehow explain why the experts in Wall Street have been giving comments such as prices for petrol would not reach $100 per barrel 2 years ago, only to get shocked by the price that peaked at $147 last July, and this time, Wall Street experts also claimed that the subprime crisis and housing bubble would not have the effect we are not experiencing that has cast a huge gloomy shadow on a global scale. Need more proof to convince that experts might not give rational prediction?

Look at the technological bubble, before the bubble burst, and even the bubble had burst, so called experts still claimed that the growth in world wide web and technology would not be saturated, forgetting to take into account limiting factors.

The ups and downs in the market should be predicted by those experts if their expertise and knowledge were really to be such rational and accurate. But there are other factors at work here, like the incentive they would receive, and their bullish egoism. Analysts tend to be more motivated to take riskier action after suffered an initial loss, prompting them to make more mistake by being more risk tolerant. Analyst who would gain more incentive or lucrative deal would also tend to take more risk, after all, higher risk comes higher return.

Hence, people, the public should be aware that no one can help us to make any single decision, no matter how light the decision may be, or how handicapped we are, we should always make the recommendations, predictions made by experts as our guidelines and reference point only, but not to follow what they say, because, their decision may biased toward their own perspective, but not ours.

"Recycle and Conserve" our Money

2008-12-30T02:09:00.000-08:00

With the cries to get people involving in 'Go-Green' movement getting louder and louder nowadays, Great Eastern Life has launched one saving plan that enables people to RECYCLE MONEY, meanwhile, it also CONSERVE our money.

How do we recycle our money? Does this sound absurd at the first hearing? Not at all, this is the mechanism that explains the how.

Example illustrated by Miss V, age 24 yr-old, who has decided to recycle her money and conserve her money, in order to make this plan work, Miss V will put aside RM 200 each month as saving for her retirement fund; this saving plan has a time horizon of 30 years.

For 30 years, Miss V would each month put aside RM 200 thanks to her disciplinary determination, so after 30 years, Miss V will have saved RM 72,000 into her retirement fund, right?

This plan will recycle Miss V money by giving Miss V RM 3675.4 in every two year, which means that in that 30 years of time, Miss V will have received RM 3675.4 x 15 times = RM 55,131, the amount of money that been recycled to Miss V, so far so good right?At the end of the day, when Miss V retires30 years later, She will receive RM 60,400 as retirement fund, this is the money that has been conserved.

Look at the Gloss total of money Miss V has
saved aside, RM 72,000;
received ( Recycled Money), RM 55,131.00
( Conserved Money), RM 60,400.00

Total Received : RM 115,531.00
Projected Interest Rate : 5.34 % p.a, isn't this more attractive than the conventional saving plan,
'when we recycle, we get more'
In these days we find that we need to have more cash in hand, but we are also spending the cash in hand because we find that there're things that we must spend money for, hence, with this attractive and lucrative plan, we can have a way to recycle our money, as well as conserving it to realize our financial dream.

* the illustration is based on terms and condition that person participating in this saving plan needs to fulfil. Time Horizon ranging from 15,17,18,21,23,25,27 and 30 years.

Go-Green Saver Saves the Earth

2008-12-25T04:33:00.000-08:00

Go Green is the trend that is being widely accepted and promoted by all kinds of people, no matter who you are, where you live, or what you do, because we are all becoming more and more aware of the condition in which the planet we live call earth is getting worse courtesy to the by-product of human evolution and revolution..
Today, we can even start to save our money with programme launched by Great Eastern Life to contribute to the well-being of our beloved planet, earth!
An impressive saving plan namely Great Multicash, is a programe aimed to promote ‘GO-Green’, as well as to promote proper and good saving habit to allow one to realize financial goal.
As an simple yet realistic example,
Mr N, age 25, decides to contribute to the environment today by signing up this saving plan, would save RM 2400 per year into this account, in order to prepare retirement fund for 30 years later.
In participating in this plan, Mr. N would have to put RM2400 into this account for 23 years, and when the 30th year arrive, Mr. N would harness his retirement fund figured around RM 126,222.00.

Taking a closer look at this scenario, it means Mr N has saved into this account RM 55,200.00. In case catastrophe befalls onto Mr. N inside this 30 year time frame, Great Eastern Life would take over the responsibility of saving RM 2400 from Mr N, and Mr N would still get the big sum of money in the 30-th year.

So how does Mr N contribute to the environment?Easy.
The company would put aside a certain percentage of money as corporate social responsibility to contribute and do funding for events that promote ‘Go-Green’, and it is in this way we give our contribution to the environment, because two is always better than one, and by having a pool of fund, we can contribute more than if we were to do that alone.

In a nut shell, this is a saving plan that allows one to realize one’s financial dream, and also offering a sacred chance for one to contribute to the ‘Go-Green’ revolution!

THE REAL GOAL OF FINANCIAL PLANNING

2008-12-17T00:55:00.000-08:00

Financial planning is a systematic and effective way of organizing our financial affairs to achieve our life goals. The much-quoted phrase “failing to plan is planning to fail” is all-too apt in this context. It’s better to start planning early than regretting later. In very simple terms, financial planning is really about knowing where we are, where we want to go to, and how to get to there.

Dr. Stephen R. Covey, the author of The 7 Habits of Highly Effective People said in his book, many of us get caught up in the ‘busyness’ of life, working harder and harder at climbing the ladder of success only to discover, upon reaching the top rung, that the ladder is leaning against the wrong wall!Bringing what he said to the area of financial planning, it is only through proper financial planning that we can identify what is most important and meaningful to us. Then only we can organize our finances and lives so that we do not end up leaning on the wrong wall.

Though our wants are infinite, unfortunately, our resources are finite. Financial planning helps us realize and understand that, in life, there is always trade-offs or sacrifices to be made. By trading in our good old car for the newest model or changing our ‘not-so-trendy’ hand phone to the coolest model in town, we are affecting out retirement next egg without realizing it. If we really want to achieve our important goals, we need to exercise delayed gratification and distinguish between our needs and wants.

The only constant in life is change and learning to cope with it early in life is a plus point. When single and carefree, we can practically live like there’s no tomorrow. However, when we settle down and have a family, our world changes dramatically. If you were to lose your job or be diagnosed with a critical illness, the effects would be magnified. With proper planning, you’d be better prepared to face such challenges.

Almost everyone wants to be wealthy but only a few have a game plan for achieving it. No involvement, no commitment. Wealth creation is not a sprint but a marathon. It takes time, discipline and a lot of financial stamina. With the help of a qualified investment adviser, we can then select the appropriate investment profiles that suit our risk appetite. By adopting various investment strategies and proper asset allocation, slowly but surely, we will cross the finishing line.

We want to feel assured that no matter what happens, our goals can be realized, either for ourselves or our loved ones. Through proper risk management and insurance planning, we will be able to provide ourselves and our loved ones with total peace of mind while we go about our daily lives.

With proper financial planning, we will be able to successfully realize our life goals. Our goal should not be just having a lot of money in our bank but also knowing what money can do for us. With its help, we can take care of our health with better-quality food and health supplements, provide our children with quality education and expand our horizons via travels. Last but not least, it allows us to contribute to society through the sharing of our knowledge, resources and time with the less fortunate. Therefore, true success is not merely about how much we have(quantity) but our quality of life.

Financial planning is really a means to an end. Ask yourself whether this is the kind of success that you would desire to have.

Insurance and Bereavement Package

2008-12-04T00:08:00.000-08:00

TM(Tokyo-Marine) Asia Life has introduced 'The abode of boundless gratitude insurance package' in collaboration with Nian En Memorial Park Sdn. Bhd.

The comprehensive plan consists of Nian En's bereavement care package with a single-premium investment-linked plan.

For the latter, investors can choose from 3 attractive funds managed by TM Asia Life's fund managers. Besides death and total permanent disability benefits, policyholders will also receive a burial plot in their park in Alor Star, Kedah (which they can sell at a PROFIT later) and enjoy cash appreciation from the investment funds in the insurance plan.

It sounds attractive a deal to decline isn't it?
if you would love to have more info or to know more on this plan, you could choose to email or text me, or you could also visit:
http://www.nianen.com.my/ or http://www.tmasialife.com.my/ for more detailing info.

How NOT TO BE a millionaire

2008-12-03T23:16:00.001-08:00

You have your first pay check.

That's a great news! You should stop reading right now for i will not be held responsible for what is about to unwind. It could get pretty depressing.

So, with your first pay check, you think you needed a car now.

Welcome to the world of debt repayments, road tax, auto insurance, ever increasing fuel, sky-high parking fees, tolls, traffic offences, maintenance fees and those occasional, completely unavoidable little accidents that seem to happen when you are replying to 'important and pressing' phone calls, you know, things like that.

Living in your prime time, you begin to think luxury is something you should go after and make it your brand. So, indulgences in things, and also probably on your hobbies, getting your collectible items, partying, entertainments, outings with your close pals, clothes, etc. Everything is insignificant when it comes to taking care of the most important thing in your life, YOU~

Bargains are irresistible. Even normal priced items cannot be denied their place of consideration. And we all have an urge to shop and buy stuffs, it doesn't matter for what, but it is in our genetics.

Then, you realize you would need a dream house now. You move out. You rent that dream single's pad. you fill it with minimalist designer furniture. You make sure its completely air-conditioned, you invest in a proper kitchen even if you do not know how to cook.

One day you wake up and you curse everyone, because you are now officially bankrupt. You were merely broke few paragraphs ago. You wish that you could turn back time and plan your money and manage your money in a smarter way.

Now, if you really want to enjoy everything that life has to offer way before an appointment with your personal plastic surgeon becomes a routine you can't live without(if you can afford these costly operations of course), simply visit
www.managemywealth.blogspot.com

It takes time to make our money make more money, but the first step always start with ourselves.

It is the education system in our country that has made us so exposed and victims to failure in managing our money, but it is not too late if we realize that is essential to keep us to go further in life, start to mind your own finance today, NOW

Today's luxury Compensates Tomorrow's Quality

2008-11-17T17:30:00.000-08:00

Our Government has recently come up with a New Policy that seemed to lightened up most of the citizens by declaring that people who are contributing to EPF can choose to cut 3% of the contribution from monthly paycheck, up to 2 years time.

It was deemed as a piece of good news by most people because we could have more 'cash' by taking this 3% decrement in our EPF saving. This is exactly what the government is intended to do. By giving more ‘Cash’ to us, so that the demon of spending the money which is residing in everyone of us can finally get the better of us. When we have more cash in hand, we tend to spend more, and by doing this we stimulate the economy growth. So this is the intention behind the government rational for implementing this policy.

But to some people who have opted to stick to the 11% contribution to EPF instead of taking the 3% decrement, it doesnt mean they have enough cash in hand though. They simply see the huge complication this 3% cut would bring about in the future. By saving lesser into the retirement account, we are actually taking out our retirement fund and use it for today's luxury, risking the quality of our retirement lifestyle for today comforts.

Take for example, a person who's making RM 5000 for a living monthly would have extra RM 90 per month by taking the 3% off EPF saving. So for the effective time period of 2 years under this policy, RM 90 x 24 months = RM 2160.

However, if this RM 90 is injected into EPF like normally would, under the projected 5% interest rate offered by EPF, in 2 years time there will be RM2160 as well. However, as this RM2160 would be inside this account and enjoy a 5% interest rate, let say for 20 year time horizon when this person reach retirement age, this RM2160 would become around RM 5200, we are looking at a 100% increment from the RM2160. If this person draws salary RM 10000 monthly, it would become RM 9600++(take RM300 n spend it today, or prefer to have RM 9600 when retire)

Havent this illustrates that if we decide to spend more today by using the money saved for retirement purpose, we actually compensated the quality of our retirement lifestlye?

What is FOREX?

2008-10-20T00:38:00.000-07:00

What is Forex?

Forex — the Foreign Exchange Market is the and the most liquid financial market with the daily volume of more than $3 trillion. The Forex market has no physical location and no central exchange. It was created in the 70’s when international trade transitioned from fixed to floating exchange rates, and nowadays is considered to be the largest financial market in the world because of its tremendous turnover.

Forex simply means the buying of one currency and selling another at the same time. In other words, the currency of one country is exchanged for those of another. The currencies of the world are on a floating exchange rate, and are always traded in pairs Euro/Dollar, Dollar/Yen, etc. In excess of 85 percent of all daily transactions involve trading of the major currencies. Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in.

However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates.
The Forex market is unique because of trading volumes, extreme liquidity of the market, large number of, and variety of, traders in the market, geographical dispersion, long trading hours: 24 hours a day (except on weekends), variety of factors that affect exchange rates, low margins of profit compared with other markets of fixed income.

The main trading centers are in New York, Tokyo, London, but banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session, excluding weekends.

There is little or no ‘inside information’ in the foreign exchange markets. Exchange rate fluctuations are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in GDP growth, inflation, interest rates, budget and trade deficits or surpluses, large cross-border M&A deals and other macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time.

Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar.

Unlike stocks and futures exchange, foreign exchange is indeed an interbank, over-the-counter (OTC) market which means there is no single universal exchange for specific currency pair. The foreign exchange market operates 24 hours per day throughout the week between individuals with forex brokers, brokers with banks, and banks with banks. If the European session is ended the Asian session or US session will start, so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets.

Wake Up to Rising Prices

2008-10-19T05:28:00.000-07:00

Life insurance is a simple matter.

Just choose the amount of coverage you want. If the unexpected and dreaded event happen, this amount will be enough for your family's needs, just as you wanted.

Wait. Not so quick. There is something else that must be considered here.

Rising price.
or in a term which everyone hate it,
Inflation.

Spurred by soaring fuel and energy prices, the inflation rate has galloped to a 27-year high of 8.5% in month July 2008, as compared with 3.8% in month May.

Because of the high cost of living, most of us have had to tighten our belts. Some of us may even consider cutting back on insurance when, in fact, during inflationary periods, we should actually be thinking about increasing our level of protection. That's because inflation has an effect on insurance coverage, be it life, medical, investment-linked or some other plan you may name about.

Keep Pace with the Rising Cost of Living

I'm sure all of us know that the cost of living today is higher than it used to be. Because of this harsh fact, the value of insurance coverage purchased a long time ago is less today than it used to be. Have your own say bout this? Let us look at this case study closely.

" Soon after his marriage in year 1984, Mr. Andy Examined his personal financial position and he concluded that a life insurance policy worth RM 100K would be sufficient for his family's needs if anything happened to him as a keyman to his family. But over twenty years on, his children have discoverd that the value of the coverage has diminished considerably."

'since the time our father first bought his insurance, prices have gone up for almost everything. Those days, you could eat lunch for under RM 3 but at this time it would easily costs RM 5 or even more. The rental has also spiked up,' said his daugher Mary. 'The money which was paid to us is not going to sustain as long as our father planned for it to be.'

Besides the value of insurance coverage, inflation also erodes the value of savings. Assuming an inflation rate of 6.0% p.a, RM 500k today will have the purchasing power of less than RM 150k from now. That's sobering thought because, if the rate were to remain at present levels, our money would be worth even less.

Start with a Review of Your Protection Options

Because of the rising cost of living, a review of your coverage is timely. It may no longer be sufficient for you and your family to maintain the standard of living that you originally intended. To bridge that gap, you should consider getting additional coverage to offset the effects of inflation- wheter it's with life, medical, retiremetn, education or estate planning, we just need a review on this area of our life.

Nowadasy, most company are promoting 'investment-linked' plan, a plan that offers protection and investment value at the same time to its holder. This trend has come about in our country because of the new rule that Bank Negara is about to implement next year, probably next June, a law known as R.B.C( Risk Based Capital). Under the implementation of RBC, company that would have to offset the amount they guarenteed to policy holder aside, unmoved, the fund that being offset is meant to give capital protection and assurance to policy holder that their guarenteed sum of money is being assured. This new implementation has spurred insurance company to start to venture into promoting investment-linked plan, as invesment-linked plan does not guearentee any capital protection to its policy holder whereas the risk is wholly dependent on the investment portfolio holds by the policy holder.

So at this juncture of time, if we were to do a review on our financial health status, we have to be very meticulous as well. But nevertheless, it is something we cannot escape from, to check on our financial and risk planning from time to time. Because the world that we live in is always changing, in fast pace.

Singaporeans want to Retire Abroad

2008-10-19T05:15:00.000-07:00

Nearly two-thirds of Singaporeans polled in a recent survey said they have considered retiring in another country that offers a slower pace of life and lower cost of living.

The survey on ageing polled some 300 people from 21 yr-old to 55 yr-old, with 75% of them were between 21 and 34 yr-old. The survey which was commissioned by non-profit organization, The Tsao Foundation, also found that:

- 58% are prepared for ageing and feel confident.

- 80% say they have started saving for retirement.

- 92% do not expect their children to live with them in their old age.

- 90% want to spend their old age at home, and not in a nursing home.

- 79% feel they will be financially independent and do not see the need to rely on children or
social support.

- 50% feel comfortable with the physical and social support in the country.

Seeing the results that concluded 80% of the subjects have already begun saving for retirement (exclusive EPF) and 75% of the subjects came from group with age 21-34 yr old, it is clear that people in Singapore realized the importance of saving money for retirement. Is this the similar scene in our country, Malaysia?