Start planning your MONEY like this!

Summary

This video provides a comprehensive guide to financial planning, focusing on essential concepts like building an emergency fund, securing medical insurance, and preparing for income replacement in case of unexpected events. The speaker outlines a structured approach to wealth accumulation, from low-risk savings accounts to higher-risk investments like stocks, real estate, and cryptocurrency. The final stage, wealth distribution, highlights the importance of legacy planning and writing a will. This video serves as an informative resource for individuals at various stages of their financial journey, from fresh graduates to seasoned professionals.

Takeaways

• 😀 Binance has been banned in Malaysia, but regulated platforms like Luno and Tokenized are available with slightly higher fees.
• 😀 An emergency fund of at least 1,000-2,000 Ringgit is essential for managing small, unexpected expenses such as car repairs or emergencies.
• 😀 Medical emergencies require preparation, and having medical insurance is a better option than saving large amounts of money for medical costs.
• 😀 Critical illness insurance can provide financial support if you are unable to work due to serious health issues, such as cancer.
• 😀 It's crucial to save up at least three to six months of expenses to cover income loss in case of an emergency or job loss.
• 😀 For those unable to work due to illness, saving up to three years of expenses is ideal, but critical illness insurance can ease this burden.
• 😀 Wealth accumulation begins with understanding your financial goals and risk tolerance. Knowing your objective helps shape your investment strategy.
• 😀 There are various investment options with different risk levels, including savings accounts, fixed deposits, stocks, bonds, and real estate.
• 😀 Stocks can offer two types of returns: dividends (profit sharing) and capital gains (increase in stock value).
• 😀 Wealth distribution (or legacy planning) ensures your assets are passed on to your family or chosen beneficiaries after your death, with a will being an essential tool.
• 😀 Regularly review your financial plan, including insurance coverage, emergency funds, and investments, to ensure they align with your goals and current situation.

Q & A

Why is it important to have an emergency fund?

An emergency fund is essential because it helps you manage unexpected situations like a tire puncture, urgent medical expenses, or unexpected work-related costs. It ensures that you don't have to go into debt for these small emergencies.

How much should I set aside for an emergency fund?

You should aim to have at least 1,000 to 2,000 ringgit in your emergency fund to cover common, day-to-day emergencies. This amount can vary depending on your individual needs.

What is the difference between emergency funds and medical insurance?

An emergency fund is for covering day-to-day unexpected expenses, while medical insurance is specifically designed to cover medical treatment and hospital bills, which could be much larger amounts. Both are necessary but serve different purposes.

What should I do if I can’t afford medical insurance?

If you can’t afford medical insurance, consider working for a company that provides it as a benefit. This way, your medical expenses will be covered without you having to pay out-of-pocket.

How much should I save for income replacement in case I lose my job?

It’s recommended to save at least three to six months of living expenses. This will provide financial stability while you search for another job or adjust to your new financial situation.

Why is critical illness insurance important?

Critical illness insurance provides a lump sum payment if you are diagnosed with a serious illness, like cancer. This can help you cover living expenses and medical bills while you focus on recovery without worrying about financial strain.

What is the wealth accumulation phase in financial planning?

The wealth accumulation phase is when you focus on building your wealth through various investment tools. This includes understanding your financial objectives, risk appetite, and choosing appropriate investment vehicles, such as stocks, bonds, and real estate.

How do I determine my risk appetite for investments?

Your risk appetite is determined by how much risk you’re willing to take with your money. If you're risk-averse, you may prefer safer investments like savings accounts or bonds. If you're willing to take on more risk, you might invest in stocks or real estate.

What are the most common types of investments in the wealth accumulation phase?

Common investment types include savings accounts, fixed deposits, money market funds, bonds, stocks (equities), real estate, derivatives, and cryptocurrency. Each has different risk levels and potential returns.

How can I ensure my wealth is distributed according to my wishes?

To ensure your wealth is distributed according to your wishes, you should write a will. Without a will, the distribution of your assets could be delayed and complicated, potentially taking over two years. A will ensures that your family or designated beneficiaries receive your assets promptly.