The Number 1 thing you HAVE TO do and MUST do is to setup an automatic system saving a portion of your income into a seperate account.
Any money you receive is an income, no matter active or passive; no matter if you work for it or not. You should even treat pocket money like Ang Pao as an income, housewife should keep some household expense aside for personal finance purpose etc. as describe in an old post. Review the early post about income here and a controversial discussion about income with reference to Rich Dad Poor Dad.
This is not a normal personal finance post asking you to save first and use later. The focus is on Automatic Saving System and This is the CRITICAL turning point whether you will make it or NOT !
Understanding this concept doesn't count, excusing you don't have a job now also doesn't count. You are already saving some money in some mutual funds manually or you are already buying golds also doesn't count. Nothing else count unless you already have it setup.
Finance consultants who are still asking you to make finance goals, asking you to be more discipline etc. all are less important from praticality perspective. Because history has proven all those people are still failing to become finance independant despite all the goals they set and discipline they tried to improve.
On the other hand, people who started without any goals nor any discipline, do not understand mutual fund, property, gold nor stocks investment; but setup such an automated saving system immediately increasing their chance to reach finance independance by 80% !!
5 comments:
Hi,
Indeed, your comment is valid. It's difficult for me to maintain discipline to put FD/Mutual Fund manual.
However, i find that Maybank2u charge RM2 for every transaction made by standing instruction. My idea was to transfer certain amount to another account monthly, but the charge seems too much. And i find myself cant have the discipline to do it manually.
I am a bit reluctant for mutual fund in times like this. Do you have any suggestion for "Automatic" system? Let's say monthly savings around RM 2000.
Thanks.
Anonymous cant comment on your In-tech blog, therefore, here it is:
Please share your comments on:
http://en.wikipedia.org/wiki/Technological_singularity
cheekong, thanks for your comment and a very good point indeed.
I uses Public Bank with all the SI free but I think that is more like an exception than standard practice. There was once they wanted to charge me for that but I negotiate with them for waiver.
You can try to negotiate with bank opening a New account with a promise not to withdraw more than 12 times, no ATM card etc. and one FREE standing instruction, able to change twice in a year only. Most bank should be able to accept it because you are keeping more untouch money with them and they like this kind of deal.
Else quite a lot of existing senior and kids accounts are already operating like above ( limited withdrawal etc ) which will allow one free SI etc.
hope this helps.
anony, thkx for letting me know, now the tech blog can rec anonymous comment too.
Michael,
This is a good idea. I think I should go to bank to seek out the possiblitly. If Maybank do not want to offer me such stuff, then may be i could change my saving account and salary into public bank, if they r willing to offer me such thing.
i heard cimb is quite good too, international banks like hsbc and s&c
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