When the economy came down last year and many people lost their jobs, those with jobs stayed thankful and hopeful that they will not be laid off their jobs. And I believe many people during that time conserve cash like crazy so that they will have some savings should the worst hit them. So what have been your smart ways in conserving cash?

Some cut down their expenses and change their lifestyles a little. Instead of eating out 2 to 3 times a week, cutting it down to once a week can surprisingly save you a lot of money. Going out less also means some savings on transportation money which can include things like paying for toll charges, parking, not to mention fuel too.

Then some people also think a step ahead and quickly look out for the best rates to do balance transfers if they are owing in their credit card bills. This is a very smart thing to do even if you are not trying to conserve cash. It’s just smart to save on interests owing to the banks, anytime!

Some also try to refinance their homes because the banks have lowered their rates following the reduction in our central bank’s overnight policy rate. It’s a great advantage to do so even now so if you have not thought about doing it before, you might want to consider it now.

Many people have also stopped investing as a way to conserve cash and I don’t blame them. Who knows just what the market brings in those down times, so better hoard the cash then to watch the investment value go down the drains then. People preferred to put their cash into fixed deposits then, and I have to say that it’s one of the safest ways to get some form of returns versus nothing at all.

So what other smart ways have you been practising to conserve your cash? Are you still doing it now?

To read more personal finance and money related articles, visit Penny Sense.

What are some of your smart ways to conserve cash?

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Most of us are familiar with the theory of making our money work doubly hard for us while we actively seek more income. So the cycle continues with us making money, then using that income to invest so that it makes us more money.

Does it stop there for you? What about the income that’s generated from your investments? Do you spend them or do you re-invest them some more so that they too will make you the next level of income and the cycle goes on and on?

I didn’t give much thought about investing and reinvesting the earnings until I started reading a book called The Richest Man In Babylon.

This book came highly recommended by Jim Rohn.

It does make sense that we should consciously make the additional income from investments work doubly hard too. Only then will you be able to generate endless streams of income, which hopefully is somewhat passively earned too.

So what else did I learn from this best-selling book? Well I have yet to finish reading it but considering that I just started, I took away with me 3 ideas on how to manage money effectively.

1. Pay yourself first – put aside a fixed percentage of income for yourself regularly. This is not money to be spent as you wish though! This is money to be put to work positively for you.

2. Learn to live frugally so that your expenses are kept low – don’t spend unnecessarily! Not easy, I tell you. Especially for ladies!

3. Make all levels of your income work for you – don’t reap your fruits too early on. Keep harvesting more fruits first! I guess this is the same as to practise delayed gratification.

Although all 3 points mentioned above are nothing new and often repeated in many other books and seminars, it’s a good reinforcement. If every great guru is telling you to do such simple things as a means to achieve your financial goals, there must be some good reasons they are repeating it.

Also, as simple as it sounds, not many people are able to put them in practise in real life. Have you been able to do them all consistently and not missing a beat?

I will also write a review of this book once I’ve finished reading it. If you’re keen to find out if it’s worth the money and time to read this book, stay tuned to find out soon. Meanwhile, try out the 3 simple steps above and see if you succeed with ease.

To read more personal finance and money related articles, visit Penny Sense.

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If you were planning to be a financial service agent, which would you consider being?

• A unit trust agent
• An insurance agent
• A full-fledged financial planner managing investments to estate planning, etc
• Etc?

And which financial institution would be a company of your choice?

• Public Mutual
• CIMB Principal
• Prudential
• AIA
• Allianz
• Great Eastern
• ING
• Etc?

I’m just curious as to how people decide which type of financial agent they want to be and why.

If you have never considered being one, would you think about this option now? What are your perceptions of such agents anyway?

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I have always wondered how many of us actually engage the service of a financial planner to help us achieve our financial goals. Do you have one?

I’ve never had one although there was an insurance agent who did offer to extend his services as a financial planner instead of just being an insurance agent. But I declined.

The reason I declined the help of a financial planner’s service at that point in time was because I really had no idea what kind of financial objectives or results I wanted. Specific results, I mean.

I only know that I want to retire comfortably, have enough money to send my kiddo off to some good tertiary education, etc. But nothing in specific monetary terms. So I thought it’d be a waste of time to get a financial planner to look into my very vague plans.

Also, I know exactly what I was going to be told upon a financial health check, that I need a lot more savings as buffer and that I am not insuring enough.

But then again, many may tell me that since I do not know what I want and have so many fundamentals lacking, this is where the financial planner will come in useful.

Are financial planners really a big help? What do you think? If you have one, how has your financial planner help you so far in maintaining and growing your wealth?

Update: I just realised that The Novice wrote a post about how to choose the right financial adviser today. Good read!

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Everyone is asking what is a good investment to go into in today’s world of uncertainties. With the launch of the recent investment vehicles like the Sukuk Simpanan Rakyat and Amanah Saham Malaysia (ASM) which promise 5% annual returns, many Malaysians have rushed in to buy the units. They are indeed good investments in times when fixed deposits stand at 2% per annum, and at best 3% per annum on some promotional rates.

So if you have missed out on buying the Sukuk Simpanan Rakyat and Amanah Saham Malaysia units, what then do you plan to invest in so that you do not keep your cash idle?

I read the latest issue of Fundsupermart which has an interesting article that suggests 4 ways to invest to earn a steady stream of passive income. I find the 4 asset classes suggested to carry a good mix of risk appetite as a way to divest an investment portfolio. If you are more risk averse, you may want to choose what you regard as safer investment vehicles but if you are gamed for a little more risk, then go for it wisely.

Here are the four suggested asset classes put forth by the article in Fundsupermart which are relatively low risk in nature which will give you some reasonable returns and dividend over time.

1. Money market funds
2. Bond funds
3. REITs
4. High yield dividend stocks

Money market and bond funds are generally low risk investments as they place money in relatively safe debt instruments like commercial papers, treasury bills, fixed deposits, government and corporate bonds, etc. Returns on these investments won’t be very high as can be expected, since lower risk assets tend to offer lower returns. But when you average out the returns of all the instruments put together, you could potentially see better returns than the 2% fixed deposit rate.

REITs and equities are a little more volatile and hence more risky. But the idea is not to speculate on them to make your profit, but rather to reap steady payouts of good dividend and also on the growth of the stocks over the long term. The returns on them should be higher than the less aggressive funds above.

I think the suggested asset classes are quite sound. For someone like me who have no idea what to invest in right now, this seems like a good mix of a portfolio to get into. A note of caution for those who subscribe to the suggestions above, do exercise some caution when picking the funds or stocks to go into. Don’t just jump into the first money market fund of REITs you come across. Do a little bit of homework into each asset class to determine the rate of return and risk trade off that you are comfortable with.

What are you thoughts on the suggested asset classes above? Do you have more suggestions on what to invest in now?

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