Tuesday, November 26, 2013

Your Measure of Wealth

Is guided by one thing and one thing only:

How much can you afford to save?

This question surfaced to me during a conversation with someone
fairly recently, and I realized I've been doing just that all this while
with whatever money I had left.

Some people would call it being stingy, being so guarded about
the cash you have all the time. But I don't think that's really the point.
If you can earn RM1200 and still save RM1000, that's a lot of savings,
wow, you should really be feeling proud of yourself.

But if you're earning RM10,000, but only saving RM2000, whatever
happened to your other RM8000?

Well, some of us want to live a certain lifestyle, so certain expenses
are always going to be there. It could be the petrol, the food we eat,
our premium gym membership, the house loan, car loan, rent, premium
luxuries, you name it. 

I mean, RM2000 is still a lot of money. So if you did use RM8000
for whatever it is, and you treat that RM2000 like how you did for
you RM1200, maybe it won't be so bad after all.

Also, here's a little something for those of you who are new to Fixed
Deposits. When there's an interest rate of lets say 5% per annum, note
and highlight the word annum meaning year. So if you're investing for
a tenure period no exceeding 12 months, you actually need to divide
the interest rate by 12 months, then multiply it by the number of actual
months you're tenuring it for.

So lets say you're depositing it for 3 months.

Then it's actually supposed to be 5%/12 x 3. That's your true
interest rate. If you invested RM5000, and your true interest rate
is 1.25% then your dividend received would be a total of RM62.50
after 3 months after your maturity period.

Some people still make the mistake of not dividing the months first,
so perhaps after reading this, you'll know that you need to.

Also, I've been made aware of a new form of risk. It's probably been
around for quite some time already with all the phishing scams happening
lately, but I had a brief conversation with my dad earlier, and I agreed
with his point of view.

Having too much money in one place is a risk. Same goes to having
too much physical cash with you and etc. I mean, my house has been
robbed twice, my dad was mugged in his taxi twice, some friends of
mine are survivors of snatch thefts, and one of them even lost RM5k
in one fell swoop.

Sometimes, it really doesn't matter how well-guarded you are with your
banking accounts and such. If somebody is really keen on siphoning the
living money out of you dry, I'm pretty sure there's nothing much you can
do to stop it besides moving all the money elsewhere.

I mean, isn't that the whole reason as to why we even diversify our assets
into other forms of tangible equities in the first place? Like stocks, bonds,
properties, investments, money markets and etc.

But let's also raise another issue since we're talking about this. What if
you already diversified all your assets, but they all ultimately still linked
to the same username and password across all accounts?

So if you're having multiple accounts in different banks, but if your
username and passwords/pin # are ultimately the same, you're just
asking for easy access by nasty perpetrators should they attack.

As much of a hassle as it may be, you really donwanna accumulate
RM500k within 30 years and put RM50k into 10 different accounts
just to know then when you got scammed with one account, that person
managed to hack all your other 9 accounts as well, because you kept
the same alias and security level with all your accounts.

With that being said, it'd be a pretty good idea to really have different
usernames and passwords for different accounts. Because if you aren't
doing that when you diversify, you're not making much of a point trying
to shield yourself from potential threats.

Well, unless if you're just using different banks for financial convenience
because its easier to pay certain merchants under that bank or etc and
you actually don't own much money in the first place.

So to speak, if your account is pretty much dry by default, then... by
all means, just continue doing whatever you're doing. Because even
if you got scammed, it's just a free few hundreds to thousands to that
asshole. It might just take a few minutes of the perpetrator's time to do
it, but hey, it's his loss for not looking for a bigger fish to fry in the first
place right?

Look at the bright side, at least you delayed the scamming of someone
much wealthier than you, even if it's just by a few mere minutes. You
may have lost a certain degree of your assets, but at least you did your
part of being a meatshield to the richer people out there haha. Hopefully
good karma will reimburse your wealth in other forms or something lol.

Oh, and one last thing. If you happen to be hitting a brickwall with your
so-called phrase for your Maybank2u account, you may try the example
given below just to make life a little more fun.

the username's fictional. But I really do know someone who uses
the phrase Dwayne Johnson Rocks lol. I suggested that as a passing
joke but he actually did it because he liked it so much XD


Now, today I'm grateful that:
1. I've learned a great deal of financial lingo now.
2. I can explain to someone better now because I actually understand the terms used while explaining.
3. Dwayne Johnson really does Rock. I mean, have you guys seen his transformation over the past few years?
4. My blog is doing better than it's ever did  a few years back.

26-11-2013 I'm Grateful 047

No comments: