Cashflow Management – Cashflow Management – the road to your financial freedomthe road to your financial freedom

About the speaker :• Graduated from the National University of Singapore in B. Arts and B.

Architecture in 1986, he joined the insurance industry in the same year.

• Lectured in TAR College between 1986 – 1990• Trainer/ moderator for MII between 1992 – 1998• Spoke and trained in various platforms in Malaysia including the

IARFC and in countries like Indonesia, Singapore and Sri Lanka.• Started designing corporate insurance in 1991 with clients including

Ajinomoto, Carrier, PWC, MAICSA and others• Qualifications include AAII, ACS, ALHC ( International Claims

Association ), AMTC, ChFC, CLU, RFP, RFC• As one of the founder member, he is currently the President of the

Malaysian Association of Chartered Financial Consultants• He is also a member of the Financial Advisor Guidelines Review committee of MFPC • He is one of the founder and director of Standard Financial Planner

Sdn Bhd, a financial planning company set up to assist the Malaysian public in financial planning

BackBack

Today’s presentation

This presentation serves as an initiation to the world of financial

planning

This presentation serves as an initiation to the world of financial

planning

Financial Planning areasFinancial Planning areas

Cashflow Management

Risk Planning Investment Planning Tax Planning Estate Planning

What is cashflow management?

It is the methodical analysis of the inflow and outflow of your cash ie income and expenses

It also involves the intelligent management of a ‘scarce’ resource to ensure your financial freedom

Why cashflow management?Why cashflow management?

Limited financial resources, multiple financial obligations

Planning for the future You have to retire

someday Inflation and rising costs

3 financial characters3 financial characters

Financial Indifference Financial Imprisonment Financial Intelligence

There are 3 ways to liveThere are 3 ways to live

Live beyond your means - cannot last

Live within your means - cannot retire

Live below your means - financial freedom

25 year old graduate with a rm 3,000 25 year old graduate with a rm 3,000 salary per monthsalary per month

Net take home after EPF & SOCSO is Net take home after EPF & SOCSO is

rm 2655rm 2655

A case study

FoodFood Rm 350Rm 350 Personal groomingPersonal grooming 200 200 Leisure/entertainmentLeisure/entertainment 200 200 Petrol/ transportPetrol/ transport 250 250 RentalRental 600 600 Phone billPhone bill 200 200 LoansLoans 400 400 InsuranceInsurance 100 100 FamilyFamily 250 250 Emergency fundEmergency fund 105 105 TotalTotal 2,655 2,655

Expenses

Budgeting your incomeBudgeting your income- Breakdown & prioritise- Breakdown & prioritise- Urgent & important vs - Urgent & important vs

important but important but not urgent not urgent Keeping recordsKeeping records

- track your expenses- track your expenses- written record is better- written record is better- cut back unneccessary - cut back unneccessary

expensesexpenses

Managing the cashflow

Pay yourself firstPay yourself first- save at least 10% for your future- save at least 10% for your future- magic of compounding interest- magic of compounding interest- read George Clason’s - read George Clason’s ‘The richest‘The richest man in Babylon’man in Babylon’- learn from seminars & games- learn from seminars & games

Don’t lend or borrow Don’t lend or borrow - you will lose a friend- you will lose a friend- you will lose sleep & concentration- you will lose sleep & concentration

Managing the cashflow

Manage your credit cardsManage your credit cards- pay your credit card bills - pay your credit card bills

promptlypromptly- use cards to keep account- use cards to keep account

Delay gratificationDelay gratification- resist temptations- resist temptations- ‘keeping up with the Jones’- ‘keeping up with the Jones’

Managing your cashflow

Keep different bank accountsKeep different bank accounts

- for expenses, savings, - for expenses, savings, investmentinvestment

Set deadlinesSet deadlines

- targets are important- targets are important

- turn it into a game- turn it into a game

Managing your cashflow

Managing your loans / creditsManaging your loans / credits- pay off high interest loans first- pay off high interest loans first- reorganise or refinance- reorganise or refinance- always pay something even if - always pay something even if

it is it is a small amount a small amount Discipline is the path to successDiscipline is the path to success

- sacrifice for the future- sacrifice for the future- it takes 21 days to build a - it takes 21 days to build a

habithabit

Managing your cashflow

The average EPF contributor has rm The average EPF contributor has rm 99,000 when he retires99,000 when he retires

Most retirees will live for between 20 Most retirees will live for between 20 and 25 yrsand 25 yrs

As we age, we will require more As we age, we will require more medical attentionmedical attention

As more and more are marrying and As more and more are marrying and having children later, children’s having children later, children’s support and education will reach into support and education will reach into retirement yrs.retirement yrs.

Be aware

Review your current Review your current financial situation financial situation ie income ie income & expenses& expenses

Note down your debts Note down your debts eg eg credit cardscredit cards

Start prioritisingStart prioritising Cut back where necessary Cut back where necessary

eg less 1cup of Starbucks coffee eg less 1cup of Starbucks coffee per weekper week

Make a committmentMake a committment

How to Start

Increase your knowledge Increase your knowledge eg eg learn about financial planninglearn about financial planning

Start investing Start investing (but not (but not speculating)speculating)

Monitor your progressMonitor your progress Reward yourself Reward yourself (but no (but no

splurging - that can come when splurging - that can come when you are financially well off! )you are financially well off! )

How to Start

A story to live by….

All Rights ReservedStandard Financial Planner Sdn Bhd

14th Floor Menara Safuan, No 80 Jalan Ampang, 50450 Kuala LumpurTel: 603.20266311 Fax: 603.20266310 email: admin@sfplanner.com URL: www.sfplanner.com

Prepared by Ruzi for BEP. Updated on 7th July 05

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