3.0 Ways to Achieve Financial Goals 3.0.1 Part-Time Job
Since we are having negative value for net worth, we can do some part time job while we are still studying in Utar. There are a number of restaurants, Cafe, and some other shops around Kampar area are recruiting part-time workers. That is a good opportunity for us to apply for a part-time job there. Besides, we can become a tuition teacher who guides primary and/or secondary school students in their studies. By becoming a tuition teacher, we can contribute our knowledge to this society at the same time gaining experiences as well as extra income. In order to become tuition teacher, we can apply for it in Kampar’s tuition centre. Not only that, we can utilize our skills in musical instruments and open music class to those who are interested. Many students who pursuing their studies in Kampar think that Kampar is a small town which lack of entertainment centre and some of them might not have idea on how to spend their free time in a beneficiary way. Regarding this, music class might attractive to some of them.
By doing part-time job, we will have a more stable cash flow. By having stable cash flow, it takes lesser time for us to pay off our debts and reduce our financial stress after we graduate from Utar. (Greaves, n.d.). Moreover, we will get the network opportunities if we do some part-time job. Part-time job enables us to develop network connections. We can meet a reference, great friend, connection or even obtain full-time job after we graduate from Utar if we able to perform well when we are still a part-time worker. (Greaves, n.d.). Apart from that, we may enjoy employee benefits by committing ourselves as a part-time worker. Even if we are not eligible for full health benefits, we might obtain the privilege of perks or staff discounts. Other staff benefits include food, discounted tickets, merchandise and etc. (Greaves, n.d.). Different working place offers different staff benefits. We can also do some research regarding the staff benefits offered by different shops or companies before we apply for a part-time job position. In addition, we will be able to gain more working experience by having part-time job. As many of the employers concern about our working experience before we get employed, the working experience as part-time worker enable us to stay higher chance to get a full-time job after we graduate. Special cally, it has been proven that practical skills, communication skills, team building skills and customer care can be developed through taking on part-time job (Lucas and Lammont, 1998). Watts and Pickering (2000) found that part time job leads to improvement in personal transferable skills, employability, and increase in dence level.
3.0.2 Scholarship and PTPTN Repayment Exemption
Since we can obtain scholarship or even exempt from PTPTN loan repayment if our academic result meets the required level, we should study smart all the time in order to achieve excellent result. If we able to exempt from PTPTN, we can achieve our financial goal in a shorter time. To become a first class honour, we should study hard, but more important is study smart. A well-organized time management is needed. We should have a schedule that suitable to us and follow it all the time. As a university student, self-learning is important. However, in some cases, we need to be assisted or guided by our lecturers or tutors. Not to feel ashamed to ask questions is a key point to gain more knowledge. To become a first class honour, one must do what others not willing to do. It’s not just about spending time in studies, healthy life style need to be developed. Scholarship is a very good source of financial support since we are using others’ money and we don’t need to use our savings in some of the expenses. Other than using the funds to pay tuition fees, we can also utilize the funds in other expenses, such as paying rental fees, buying foods and purchasing books. By having scholarship or exemption of PTPTN repayment, our resume will be more outstanding. When our academic achievement has been recognized, we stay a high chance to be shortlisted for interview session. It’s not easy to obtain a satisfying job, however, if we have plenty of qualifications and achievements, it will be much easier for us to get our dream job.
3.0.3 Employee Provident Fund (EPF)
In Malaysia, Employee Provident Fund (EPF) is a compulsory savings scheme. In Malay term, EPF is known as KWSP or Kumpulan Wang Simpanan Pekerja. Every wage earner in Malaysia who has reached the age of sixteen and obtain a job under contract must register and own the Employee Provident Fund account. Since all companies are legally required to offer workplace insurance as well as monthly retirement fund contribution to their full-time staffs, EPF is a significant criterion that needs to be considered when we are offered a job. We should contribute to the Employee Provident Fund (EPF) before starting our first job. Conventionally, employers are responsible for their staffs’ EPF registration but at the present time new applicants are required to register the account individually. To prevent unnecessary hassle, the EPF account should be registered before our new job starts. EPF provides some benefits to its member, including retirement benefit, incapacitation and death benefits, dividend, and tax exemption. It is a significant tool for our retirement planning. EPF ensures a favourable growth in our money due to the tax free interest as well as the maturity.
In long term, the accumulated funds help us to achieve our retirement goal. In addition, EPF able to help us to fulfil other goals or provide financing for us in case we are in need of funds urgently. EPF delivers benefit for patients who are going to have major surgical operation in hospital. The benefit also applicable to those who suffering from the following diseases: paralysis, TB, cancer, leprosy, heart ailment, or mental derangement. Patients are allowed to withdraw six times of their wages or the entire contribution made till date, whichever is less. The funds are applicable for treatment of the EPF member or his/her family member. In addition, EPF provides many other benefits. To those who are physically handicapped due to natural disasters, they can make use of the funds to purchase equipment. EPF member can also have a facility of putting forward family members to obtain funds after he/she demise. EPF holder needs to mindful that withdrawing EPF after changing job is legal only whilst he/she is jobless for two months or above. (Solanki, 2012) Apart from that, EPF member can withdraw funds from the EPF account for construction of house, maintenance or repair service or for repayment of housing loan. For all the benefits mentioned, organization has specified some conditions that need to be followed. If the EPF member given a housing loan and hope to repay, then he/she can make use of up to thirty-six months salary from his/her EPF balance in case the EPF member has completed the service for ten years.
Likewise, EPF members are allowed to withdraw up to twelve months salary (only once) if their existing house is subjected to maintenance or repairing. For this five years of service (ten years for repairing) should have completed.The number of years of services decreases to five years if EPF member hope to purchase or build anew plot or house. The EPF holder can withdraw up to thirty-six months wages (twenty-four months for plot) but it can only be withdrawn once. It is very nice that the house can be in the name of the EPF member’s spouse or in joint-ownership. (Solanki, 2012) Moreover, EPF can also help us to achieve other goals, such as marriage, financial needs for education for ourselves, any sibling or child. If we have to assemble funds for any of the goals stated above, we can withdraw funds from our EPF account up to fifty percent of our contribution. In addition to this, we can enjoy this benefit up to three times in our life. (Solanki, 2012) Furthermore, insurance benefit can be obtained through EPF. In accordance with Employee Deposit Linked Insurance (EDLI) scheme, any institution that do not provide group insurance scheme for their employees has to contribute .5% of monthly basic pay as premium for the life insurance cover. Presently, the amount of insurance cover is higher of the two: twenty times the average salary of the past twelve months or the full amount in the PF account up to forty percent of the balance amount. For those who are working in small enterprises, the funds are more than enough for them to support the family survival.
3.0.4 Fixed Deposit
Fixed deposit also known as term deposit or time deposit. It is a safety approach to gain more interest or return. That is because the principal and interest accrued is protected by PIDM. Normally, the tenure of the fixed deposit is ranging from 1month to 60 months. Depositors who place their funds in this account cannot withdraw it within the tenure. If not, the bank will impose the penalty on the depositors which will lead the depositors to loss the interest earned (Banks, n.d.). According to the information provided by Maybank and Public Bank, depositors is required to place a minimum of RM 5000 for 1-month fixed deposit. For the tenure that is 2-months and above, minimum of RM 1000 in fixed deposit account is required. There are plenty of benefits by placing money into the fixed deposit account. First of all, the interest rate earn on this account will be higher than a normal saving account. The interest rate will be higher when the tenure is getting longer. According to the Maybank Fixed Deposit Account, their interest range is from 3% up to 3.5% per annum. While the interest rate of a saving account only offer about 2.1%. Another way to get higher interest rate return is to open a joint venture account with parents (or transfer funds to their account) who are at least 49 years old and above. Then, apply for the fixed deposit account trough this joint venture account (or their account). This is because banks will provide higher interest rate for those senior savers. So, we may get a larger amount of interest earn. Besides that, fixed deposit account is completely risk free because our funds are protected from interest rate fluctuation, the interest earn is fixed on a certain rate when we are entering into this account (Gilani, n.d.). So, it is a safer investment and easy to set up compare to stocks, mutual funds or property. According to Mkumar, the fixed deposit account can be pledge and get a loan at lower interest rate. That is because the banks belief the depositor who has strong base of investment. So, they are easier to get a loan with lower interest rate. This may help us to reduce the interest rate payment in the future when we apply for a hire purchase or a housing loan.
3.0.5 Setting Up an Online Business
Nowadays, it is very easy for a person to set up an online business. Many students and housewife are selling products through social media, for example, Facebook, We Chat and Line. The products that are selling online normally included clothes, shoes, bags, purse, jewellery, and baby accessories. Before setting up an online business, we need to find the suppliers that can give us good quality products with reasonable price. When we are selling the products with good quality at reasonable price, our customer base definitely will become larger. The main benefit of online business is it can save our money and time (Mior111, 2008). An online business just needs to start by having a laptop or pad with internet access. We can share the photo of the product along with its characteristics trough social media easily. We can promote our product by clicking on the laptop and no need to distribute the flyer or brochure door to door. Advertising the products online not just cost and time effective, it allow us to reach more customer in different geographical area (Henderson, n.d.). Besides, the working time of online business is flexible (Mior111, 2008). We can manage our business after class or during break, at the campus, hostel or cafe. We can work at anytime and anyplace with internet access. We do not need to rent a stall to sell our product. So, online business is more suitable for a student than having a stall. Moreover, we may earn more than a part timer, if we manage our business very well. The money that we earn not just depends on the cost of the product, but also depends on how much effort we putting on it. The more effort we put, the more we may earn. According to an example in the Facebooker, as a success online business person, she may earn more than thousand per month. While a part timer salary is about RM 400 per month in Kampar area. So, this is a better way if we do not want to work as a part timer.
3.0.6 Invest in Bond or Stock
Bond According to Investopedia and Investor Words, bond or debt is an investment that the investor loan their money to the company or government for a fixed period of time and in return with a fixed interest rate. The interest payment also called coupon payment, usually paid in semi-annually. The participants in bond market included company, municipality, state, local and foreign government. These participants may use this bond to finance their activities as well as their projects. There are varieties of bonds available, such as corporate bond, municipal bond, Treasury bond, note, and bill. The maturity of a bond is depending on the type of bond. Normally, corporate and municipal bond will have 3-10 years maturity, while Treasury bill will have 90-days maturity. Basically, invest in bond will be safer than invest in shares. This is because bond will pay a fixed return every six months while share only pay dividend when the company make a profit. Besides, bondholder has the right to claim their money back prior to shareholder when bankruptcy happens (Sifma, n.d.). So, the principal of the bondholder is safe. But before investing in the bond, we must examine that the bond is not junk bond, because this bond will make us to loss money instead of earning profit (Investopedia Staff, n.d.). Moreover, invest in bond is better than just saving the money in a saving account. Bond will give a higher interest return than a saving account. So, it is better for us to allocate some of our money into the bond when the money is not being use in that period of time. Without posing too much risk, it will gain a high return compare to save in the bank (Investopedia Staff, n.d.). ii) Stock The holder of stock or equity is representing an ownership to the company.
They have the right to claim on the assets and profits of the company. We can either choose to invest in common stock or preferred stock. Preferred stockholder has the priority to claim on the assets and profits, but has no voting right. While common stock has the right to vote at the meeting. Common shareholder will claim after the preferred shareholder when the company going bankrupt (Investopedia, n.d.). Normally they claim nothing because all the assets or money are claimed by bondholders and creditors (Learning Bonds, n.d.). Stock does not promise about the returns, it is solely depend on the growth of the company and the stock price (Investopedia Staff, n.d.). If the company make a loss during that period, common shareholder may not receive any dividend. But if the company performing very well, shareholder may gain a lot of bonus or dividend compare to invest in bond (Learning Bonds, n.d.). The bonus can in term of cash or free shares (Holyguy, 2011). So, the best way to gain more profit to achieve our financial goals, we should invest in both bond and stock market. This is because we can diversify our investment by allocating some to bond market to ensure a fixed return while allocating some to share market to gain a higher return (Investopedia Staff, n.d.). Diversification helps us to spread all the risk by investing in different market. Hence, we are not just focus on a single investment (Learning Market, n.d.). So, anything happen, we may not loss all the money.
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