money management and financial planning assoc. prof. dr. nik maheran nik muhammad (cfp, citm, ibbm)...
TRANSCRIPT
MONEY MANAGEMENTAND
FINANCIAL PLANNING
ASSOC. PROF. DR. NIK MAHERAN NIK MUHAMMAD (CFP, CITM, IBBM)
Faculty Business Management
UiTM Kelantan
WHAT IS MONEY TO YOU? Social status? Opportunity? Security? Accomplishment? Stress? Peace of mind?
MONEY MANAGEMENT What are your goal in life? How you should pursue them? What type of account should you used? What are the type implication? What should you be doing now in order to
continue supporting love ones after you are gone?
MONEY MANAGEMENT Strategic vision of your household
financial situation Goal Time frame Budgeting
Keeping track of your spending Build financial discipline
Money Management
Saving InvestingInvestingSpending
LifestyleNecessary
Contingency Protection
RetirementRetirement Extra incomeExtra income
ZAKATTAX
FINANCIAL PLANNING
financial planning is the process of meeting your life goals through the proper management of your finances.
Life goals can include buying a home, saving for your child's education or planning for retirement.
Financial Planning Process1. Identifying and setting short, intermediate and long-
term goals. Ideally, each goal will have a date and dollar amount attached to it.
2. Evaluating your current situation – cash flow analysis and calculating your net worth. You need to honestly assess your current financial status, including positives and negatives.
Financial Planning Process…cont
3. Review your insurance coverage, including life, disability, home, auto, umbrella liability and long-term care.
4. If you have children, develop a college funding plan to help cover higher education expenses.
Financial Planning Process…cont4. Review your current tax situation to identify
tax-saving opportunities and potential deductions durable power of attorney are up-to-date and valid.
5. Develop a retirement funding plan that covers when you plan to retire and how much you will need to support your retirement lifestyle.
Financial Planning Process…cont
6. Develop an overall investment plan with proper investment portfolio that supports your goals, while staying within your investment time horizon and risk tolerance.
CASHFLOW PLANNING Spending pattern Budgeting
Asset accumulation Borrowings/liabilities Net worth
BUDGETING WORKSHEET Household spending
Mortgage/rent Insurance Transportation Groceries Food at work Work supplies Education Phone/utilies Debt repayment Medical Clothing Hobies/leisure Books Others
Take home pay_____
Spending total______ Do you have EXTRA or
DISAVING??
WHERE TO KEEP YOUR EXTRA MONEY??
Emergency saving account Do your best to forget the account exist !!
Interest earnings or investment earning??
NET WORTHASSETS Liquid Asset Lifestyle Asset Investment Asset
LIABILITIES Current Liability Non-current Liability
IS YOUR ASSETS MORE THAN LIABILITIES?????
BORROWINGS Good borrowings
Borrowing to achieve some goals can actually be smart investment in a household long term future
Bad/dangerous borrowings You’re using cash advance from one credit card to make a minimum
monthly payment on another credit card
You can’t afford to make all of your minimum payments every month
You’re forced to skip payments on routine household expenses in order to make you debt payment
Your application for new credit are rejected
Creditors are calling you to arrange payment of outstanding bills.
INVESTMENT PLANNING For education/career advancement For retirement For protection For contingency For leisure spending/extra income
INVESTING INSIGHT Intension of seeing it ‘grow’ overtime
Property Gold Unit trust Insurance Investment link Money market Bond Stock
FINANCIAL PLANNING AND LIFE CYCLE STRATEGIESThe amount of money to be invested in various assets depends on:
Your goals and needs – to buy a house, travel or retirement needs, education, children etc.
Your age at the time of investment – this will decide how much risk you can take. For instance, if you are young, you can invest in relatively riskier investments
Your income at the time of investment – if you earn more, you will have more money to invest. The level of wealth will also influence the types investments you can hold
FINANCIAL PLANNING AND LIFE CYCLE STRATEGIES…cont Your occupation – if your job provides retirement plans,
you may not want to have a separate retirement plan
Time horizon – when do you want to sell your assets?
Liquidity – how fast can you convert your assets into cash?
Tolerance for risk – how much risk are you willing to take?
RISK MANAGEMENT AND INSURANCE PLANNING
Premature death – life insurance Health and disability Children education Property insurance Retirement
TAX PLANNING Minimizing your tax payment prudently
Join/separate assessment Relief Rebate Zakat/fitrah
RETIREMENT PLANNING
How much income should you plan on needing when you retire? A financial planning rule of thumb is to figure on needing 70% to 80% of your pre-retirement income. That income is the income you'll be earning at the time you retire, not the amount you're earning now.
ESTATE PLANNING Will Hibah Wakaf/contribution to charitable
organization Trust and custodial account Naming and updating beneficiaries
CONCLUSION We need a LIFE BALANCE
Monetary return Mentally return Spiritual return
THANK YOU
Open for discussion
ABOUT THE SPEAKERAssoc. Prof. Dr. Nik Maheran is a Certified FinancialPlanner and Chartered Institute of Taxation Malaysia Associate member. She is currently a lecturer at UiTMKelantan teaching financial planning, Investment analysisand various finance subject. Prior to joining UiTM, she was a remisier at KLSE and later joined Inland Revenue Boardof Malaysia in 1995 as tax assessment officer.
She has conducted more than 50 training and consultancies in the area of financial planning, investment planning, Leadership, decision making and Image building for many private and public organizations.