One Second Difference

Just a second, your money in your pocket is depreciated by 13.80% ! 1 second before, whole Malaysian still very happy to celebrate the Malaysia National Day and enjoy their holiday, but after 11.59pm our petrol price for RON97 raised up to RM2.05 per liter, at the same time RON95 quoted at RM1.80 per liter! Well our government said since we launched new RON95 recently it is able to replace RON97, if consumer don't wish to pay so much extra they can choose RON95 because it only increased by RM0.05, and our government also said RON95 is suitable for most Malaysian car.

Firstly, since we able to classify RON95 and RON97 which mean that the ingredient among this two types must have difference, whether your loved car is suitable to use the lower grade one or not I don't know, we better ask the expert or engineer instead of government.

Despite of the petrol quality, I am more concern about the chain reaction of this increment. For those who are seldom using their car or motorbike riders, the increment impact to them maybe lower relatively, no matter they're using RON95 or 97, but a lot of consumer products price will be increased including servicing lines and public transport fees due to their operating cost increased follow by the fuel price goes high, well now, you see no matter you're using car or not you will still suffer, the matter is the impact to you is More or Less only. Still remember while our petrol and diesel price standing sky high on early last year, the fees for power supply, public transport, transportation services, toll, foods and other basic consumer products were relatively increased, but when the international crude oil price drop to the scarcely low, we never see the above said prices drop automatically!

Malaysia is a very lucky country, we have a lot of natural resources including crude oil, our government export the crude oil products to others to earn the significant income for our country, but this seem like nothing benefit to the populace, the subsidy to the fuel became lesser, which mean that your earning and your saving become lesser and lesser if you don't get your salary increment every year and your bank rate unable to overcome the inflation rate, then one thing is sure; you will lose your purchasing power in no time.

Then what should we do? my personal opinion is we should spend wisely, never buy the thing you don't need to use it now no matter how cheap it is...never forget that you money will become smaller (depreciate) in future, if you can buy it at the same price in future why you need to store it now? the principle here is never put your money in the item that won't appreciate your hard earn money unless you truly need to use it now. e.g. toilet paper, people like to store toilet paper more than their need especially when hypermarket doing sales, but I always see the hypermarket or supermarket doing promotion no matter in what reason and season, so why should worry you don't have the cheap toilet paper use? but if you're running a sundry shop then that is another story... . Save back the money from the unneccessary item is the most effective and instant way to accumulate your wealth.

Save first then spending, commonly, people's saving habit is save after spent, but usually this is not workable, because this is not discipline and systematic enough, we must change the way back if we wish to have a better future and opportunity, set your target saving amount every month (no matter what figure), then spend the balance after saved.

NEVER SPEND FUTURE MONEY, nowadays credit card is one of the most common paying tool, but always bear in mind that you must pay off the entire credit card bill every month, don't just serve the minimum payment every month, because it is like a "blood sucker" the overdue interest will be compounded at 1.5% per month! you will need a very very long time to finish the outstanding amount in case you cut out your card, otherwise it will become a never ending story, the bank will earn a big pile from you, hence, think twice before you use it!

Invest your saving money, especially now is a good time to invest, reason (1) a lot of investment items are now selling at a very attractive discounted rate, but you must choose the item you're familiar and the fund must be from your surplus, if you know very little about the investment, unit trust can be the best solution for you as your investment will be well taken care by a group of professional fund managers, (2) the fixed deposit rate is too low, transfer your FD to an investment, just like you shift your money from your right pocket to left pocket, but you can see the gain result is in a big difference, but be reminded that you must always leave some fund in your bank account just in case of an emergency need.

There are some common investment items in the market, the investment risk can be vary from high to conservative, which one you choose is depend on your risk tolerance profile and your investment horizon, or maybe you can make a diversification in your investment portfolio, by the way, forget about the Myth of High Risk High Return, if High Risk = High Return which mean "No Risk".

Some Common Investment Vehicles: (for your reference only)

1. Stock/Share Market (Moderate to High Risk)

2. Property (Moderate to High Risk - Not liquidity enough)

3. Unit Trust (Conservative to Moderate Risk, note: some Closed End Funds are Capital Guaranteed)

4. High Yield Saving Plans (Conservative Risk)

HAVE YOURSELF BE INSURED, this is very important to have at least a Medical Insurance and Personal Accident Insurance, because no matter how good your financial planning is, if without the risk management, your planning can be ruined and your money can be vanished in an unfortunate incident, thus, you must set aside a minimum 10% of your annual income to purchase an insurance policy, because this is the wise way to transfer your medical risk and loss income risk to insurer instead you bear it yourself, compare to the actual cost, the premium is become insignificantly small, and you can have your hard earn money to seek better opportunity with peace of mind, should you have budget the protection should be extended to further completion.

Last, not only our financial healthy, we also need a healthy life and body, no need to bother so much about the increased fuel price, we just need to look forward and plan whatever under our control then will be good enough. Should you have any personal opinion want to share with me, you may write in to me at Cuscare.STHgroup@gmail.com . Your feed back and sharing is most welcome.