easicircle
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In a research, it reveals that the average Malaysian lose about 1.5 million during their lifetime. Basically there are two common mistakes that could cost you millions. This loss probably was because of bad money decisions made by the majority of Malaysians nowadays due to their hard-earned money.
Mistake #1: Paying too much on insurance premiums
Life insurance can be an important part of having a financial plan especially when you have financial dependents. Basically insurance is actually one of the first things that needs to be handled and chose.
Let’s consider these two life insurance products for 35-years old: term insurance for RM500,000 will cost RM1,625 per annum. Compare to a whole life policy will cost RM14,225 per annum. Which one should you get?
Very few people have an actual need for whole life insurance and your money can typically be used much more effectively. However, if you buy term insurance instead of a whole life policy, you will save RM12,600 per annum which can be used for other investment to diversify your investment. The return that you get at an 8% on your investment over 20 years and you will get RM576,600.
It is just the way how you spend your money wise for insurance policy. However by spending the same amount on a whole life policy, assuming you receive the entire premium paid RM14,225 for 20 years. You will only get RM284,500 at the end of the day. A whopping RM292,100 loss. That is a large amount of money in fact you can use to invest in various characteristic so you can reduce their overall risk while increasing their potential for greater long-term results.
Mistake #2: Not optimising the returns on savings
A fixed deposit (FD) is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. Most of Malaysians prefer to invest in fixed deposits. For example, by putting RM1,000 every month (360,000 total investment) in a fixed deposit account for 20 years, at an average of 3% interest per annum, will get you a total return RM329,122.75.
It is essential to diversify your investment to avoid risking everything that is put in one basket. If the basket falls, you will have no more eggs. In fact, too many people make the mistake by putting all their eggs in one basket when it comes to saving especially for retirement. So let says your next 20 years of unit trust or even ASB at an average rate of return 8% per annum you would get RM592,947.22.
So let says your next 20 years of unit trust or even ASB at an average rate of return of 8% per annum then you would get RM592,947.22. Even smarter investors would invest assets that counter react each other in the same economic and market conditions.
Survey of a past course of events or period of time shown that keeping the money in Fixed Deposit would have caused you to lose RM263,824.47. Obviously the outcome is even worse for those who leave their money droop in a savings account, which only sees a 1% to 2% per annum.
Mistake #1: Paying too much on insurance premiums
Life insurance can be an important part of having a financial plan especially when you have financial dependents. Basically insurance is actually one of the first things that needs to be handled and chose.
Let’s consider these two life insurance products for 35-years old: term insurance for RM500,000 will cost RM1,625 per annum. Compare to a whole life policy will cost RM14,225 per annum. Which one should you get?
Very few people have an actual need for whole life insurance and your money can typically be used much more effectively. However, if you buy term insurance instead of a whole life policy, you will save RM12,600 per annum which can be used for other investment to diversify your investment. The return that you get at an 8% on your investment over 20 years and you will get RM576,600.
It is just the way how you spend your money wise for insurance policy. However by spending the same amount on a whole life policy, assuming you receive the entire premium paid RM14,225 for 20 years. You will only get RM284,500 at the end of the day. A whopping RM292,100 loss. That is a large amount of money in fact you can use to invest in various characteristic so you can reduce their overall risk while increasing their potential for greater long-term results.
Mistake #2: Not optimising the returns on savings
A fixed deposit (FD) is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. Most of Malaysians prefer to invest in fixed deposits. For example, by putting RM1,000 every month (360,000 total investment) in a fixed deposit account for 20 years, at an average of 3% interest per annum, will get you a total return RM329,122.75.
It is essential to diversify your investment to avoid risking everything that is put in one basket. If the basket falls, you will have no more eggs. In fact, too many people make the mistake by putting all their eggs in one basket when it comes to saving especially for retirement. So let says your next 20 years of unit trust or even ASB at an average rate of return 8% per annum you would get RM592,947.22.
So let says your next 20 years of unit trust or even ASB at an average rate of return of 8% per annum then you would get RM592,947.22. Even smarter investors would invest assets that counter react each other in the same economic and market conditions.
Survey of a past course of events or period of time shown that keeping the money in Fixed Deposit would have caused you to lose RM263,824.47. Obviously the outcome is even worse for those who leave their money droop in a savings account, which only sees a 1% to 2% per annum.
