8 Simple Ways to Save Money

Time has come to close aboi's financial year for 2009 end 31st May 2010. I spent my Saturday night together with my prized Dragon Well Tea from Hangzhou to get some wisdom and draft what would be my financial strategy for the next one year period. Wah need so serious meh? My question to you is, "Do you only plan to start when you are about to retire?" There's pretty nothing much to do when you are at 65 except waiting to die lor.

Let me explain a lil, above is a personal bugdet planned out considering all sources of income & all expense factors. Some are pretty straight forward except for family & friends (treat here'n'there, kai kai $$) while buffer savings (gifts, car service & impulse spending-i need to enjoy life also ma). So how do I achieve all these for the coming year? Well, below are my lucky 8 ways, might be applicable to you as well.


Use cash instead of credit card
Spending cash makes the spending more real, and with the advantage that you know when you are out of cash. This prevents you from over spending. I am going to use card for autopay billing and pump fuel only.


Pay investments & debts first
Pay them last and you will find that you have shortchange them most of the time. Once done, you have what is left for you to spend or indulge for the rest of the month.


Exercise at home or workplace
Some might disagree which is OK, mei wenti. I am going to spend time exercising in my workplace gym & running tracks around my home as I am devoting my workdays for other activities. This has cutback 2.5% expense into other areas :) How neat.


Lend and borrow
Exchange books with friends and family because we can share receipt for income tax declaration as the govt allows photocopies. I am cutting down book purchases by 75% and share a pool with friends for reading materials.


Stay Home
Going out makes you more likely to spend unnecessarily. It's hard to avoid spending when you are on the road. This means eating home cooked food whenever possible, if you 'pak-thor' cook together and spend time at home, watch series, play games, pick up a hobby or surf the net.


Small daily savings
Get a big piggy bank and deposit RM5 each day. I decided I could live without RM35/week without really feeling it - it's relatively small amount that one would barely notice, the implication is that I could save nearly RM2k a year without feeling anything! And RM2k is the amount I use to top up my balanced fund yearly.


Turn passion into income
Computer hardware has been my passion since college & over the last three years establishing contacts & reputation to build PCs for clients. Effort paying off with four digit income each year. Everyone has a passion, why not turn that into income. It could be photography, cross stitching, writing, online retail and etc. When you love to do it, it comes with no stress plus you earn.


Find happiness in life, not spending
Some might disagree, I know! but still OK, mei wenti. Most of the time, when you buy stuffs, you are happy for a day or two. Why? Because it makes you feel rich BUT not wealthy (cause you spend de le). Instead, learn to love life. Find joy in talking with people around you, in doing something you love, in exercise, in helping people, in re-educating yourself. There is no need to find it in spending alone.

If you have any other suggestions I do welcome your input so I might have a stimulus package in this budget. You can place your comments here or email me directly if you are paiseh at nick_allianz@hotmail.com

Undercovering Malaysian Budget

The Malaysian budget deficit has grown sharply over the years and has ballooned to an amount of ~RM400bil. A deficit is a situation known as in layman terms is borrowed money (and now owe) in order to spend more than your income. DEBT! The issue with Malaysia is that the deficit is not used for development expenditures but for burgeoning operating expenses.

In 2003, we spend RM75bil on operating expenditure vs RM40bil on net development expenditure. ~50% ratio.

In 2008, we spend RM150bil on operating expenditure vs RM42bil on net development expenditure. ~28% ratio.

We spend most of taxpayer's money on a few things by order:

• Subsidies: We subsidized almost everything; from oil, flour, sugar and etc.
• Emoluments: Salaries of civil workforce which is still growing. 10% of workforce is in civil services.
• Supplies/Services: For civil departments.
• Education: Around RM8k per student head (we have 6mil students) BUT why still got brain drain?
• Defence: Hur? Are we going to war with Singapore?

What has helped us to keep our budget deficit from overblowing is that Petronas is continually being squeezed dry, leaving themselves little for reinvestment.

In 2003, payments to federal govt is RM30bil. ~43% left for reinvestment.

In 2008, payments to federal govt is RM70bil. ~21% left for reinvestment.

Other oil majors around the world reinvest as much as 50% to 80%.

What happens when oil runs out in Malaysia? Oil is a depleting resource. It is gone once it gets pump out of the soil unlike timber, palm oil or rubber that can be replenished.

Some people fathom the fact that economics is a difficult subject, only befitting those who has expertise on it. Eyes bengkak (bruise) looking at charts and table BUT luckily this author Teh Chi-Chang has done most of the work for us via his book The Budget: How the Government is spending OUR money. I strongly recommend and urge you to read this book as a citizen or taxpayer in our nation. You can borrow the book from me, 1st come 1st serve basis OR even better, buy it and spread the love.

"The book addresses the fundamental questions of budget formulation, its components, sources of deficit, transparency, and the political economy of government expenditure in Malaysia in simple language backed with solid statistics."

Professor Rajah Rasiah

Dean, Faculty of Economics and Administration

University of Malaya

What can you do? Ever heard that power lies in the people not the government OR that the government should be afraid of the people not the other way around? Voting exist for the sole reason of not giving full authoritarian rule to the government, if not we would have been Africa holding AK-47s. Register yourself to vote and make a difference.

One vote nia ma what difference? If 100,000 people think like you how many votes are that? Think about that.

The second thing you can do is ask people to read my blog haha. I do blog for people who are willing to read & to re-educate themselves. Also so I don't have to keep repeating myself :-)

Early June Rantings

June 3, 2010: 41% of civil servants are corrupted

The news: Cuepacs is alleging that 418,200 or 41% of the 1.2 million civil servants were suspected to be involved in corruption last year. 

My 2cents: If you round them all up into cells, all the jails in Malaysia won't be able to fit them so we should go to our famous Padang Tembak and shoot them all as punishment. In China, capital punishment which is execution are applicable to economic crimes such as tax fraud & corruption. Now do you see why government funding in China really translates into growth.

Solution: Time for a total overhaul of our bloated civil service. Malaysia has the highest civil servants-to-population ratio in the Asia Pacific region. 4.68% of ours vs the closest; Indonesia at only 1.79%. Stop dumping unemployed graduates as civil servants as shown by the increase of size by 23.5% in the last six years. 

June 4, 2010: M'sia won't go bankrupt

The news: Malaysia will not go bankrupt in 2019 even if a subsidy totalling RM74bil a year is continued, said Deputy Finance Minister, Senator Datuk Dr Awang Adek Hussein.

My 2cents: Malaysia's current deficit of ~RM400bil is 56% of GDP while Greece's debt-to-GDP ratio was 113%. We are already halfway there and at the rate of deficit of RM50bil each year & assuming GDP growth of 5% we will say Hi to the Greeks in 2019. This debt-to-GDP ratio can be interpreted as "the number of years to pay off debt, if all of GDP is devoted to debt repayment". When you use all your economic output to service debt what else is there left for continued development? No money = bankrupt. How did you become a deputy in finance ministry I wonder.

Solution: Remove all subsidies over 3 years and let the Rakyat know how high the standards of living is in a globalized world. Stop being overprotective in order to increase productivity & overcome complacency.

June 4, 2010: Woman loses RM1.2mil through Internet

The news: A virtual friendship cost a 47-year-old housewife a very real RM1.2mil. The con man she had befriended on the Internet did not just wipe out her savings but also that of her mother, sister, niece and her husband’s funds for investments.

My 2cents: This is the largest single amount I have heard someone losing their money to a scam. Apart from scam such that, I'm sure many have heard of ponzi schemes like Red Island Cafe. They don't invest in quality of food and gave assurance that people will keep coming because they are members. Hur? You are eating food using vouchers at your own investment. How to earn money? Get more investors lor to cover up but in the end this is not sustainable & simply just crashed AND it was fast (within 6 months). Another more recent is the Gold Label "Bullshit", currently being investigated by BNM. Get 3-5% monthly interest while holding gold bar with rm13k min investment and buy back when mature. If an investment opportunity is by collecting deposits & investors are promised returns within a certain period of time they MUST be licensed. You can check the list from BNM. If NOT LISTED do not invest. 

Solution: Call this stupidity? No, it is pure greed. Greed is also part of the seven deadly sins and is referred to as an excessive desire of wealth in this case (there's power & status too). It is human nature to be greedy because our instinct tells us to be greedy in order to survive. Control yourself emotionally, do some research before investing your money to someone else & seek opinion of others especially those 5% people (rich people are minority). Biggest mistake is that people go ask those who are 95% (not-so-rich people the majority) for advice, chances are these people know nuts! And when you follow you become the 96% lor.