Text of MONEY MANAGEMENT AND FINANCIAL PLANNING ASSOC. PROF. DR. NIK MAHERAN NIK MUHAMMAD (CFP, CITM, IBBM)...
MONEY MANAGEMENT AND FINANCIAL PLANNING ASSOC. PROF. DR. NIK
MAHERAN NIK MUHAMMAD (CFP, CITM, IBBM) Faculty Business Management
WHAT IS MONEY TO YOU? Social status? Opportunity? Security?
Accomplishment? Stress? Peace of mind?
MONEY MANAGEMENT What are your goal in life? How you should
pursue them? What type of account should you used? What are the
type implication? What should you be doing now in order to continue
supporting love ones after you are gone?
MONEY MANAGEMENT Strategic vision of your household financial
situation Goal Time frame Budgeting Keeping track of your spending
Build financial discipline
Money Management Saving Investing Spending Lifestyle Necessary
Contingency Protection Retirement Extra income ZAKAT TAX
FINANCIAL PLANNING financial planning is the process of meeting
your life goals through the proper management of your finances.
Life goals can include buying a home, saving for your child's
education or planning for retirement.
Financial Planning Process 1. Identifying and setting short,
intermediate and long- term goals. Ideally, each goal will have a
date and dollar amount attached to it. 2. Evaluating your current
situation cash flow analysis and calculating your net worth. You
need to honestly assess your current financial status, including
positives and negatives.
Financial Planning Processcon t 3. Review your insurance
coverage, including life, disability, home, auto, umbrella
liability and long-term care. 4.If you have children, develop a
college funding plan to help cover higher education expenses.
Financial Planning Processcon t 4.Review your current tax
situation to identify tax-saving opportunities and potential
deductions durable power of attorney are up-to-date and valid.
5.Develop a retirement funding plan that covers when you plan to
retire and how much you will need to support your retirement
Financial Planning Processcon t 6.Develop an overall investment
plan with proper investment portfolio that supports your goals,
while staying within your investment time horizon and risk
CASHFLOW PLANNING Spending pattern Budgeting Asset accumulation
Borrowings/liabilities Net worth
BUDGETING WORKSHEET Household spending Mortgage/rent Insurance
Transportation Groceries Food at work Work supplies Education
Phone/utilies Debt repayment Medical Clothing Hobies/leisure Books
Others Take home pay_____ Spending total______ Do you have EXTRA or
WHERE TO KEEP YOUR EXTRA MONEY?? Emergency saving account Do
your best to forget the account exist !! Interest earnings or
NET WORTH ASSETS Liquid Asset Lifestyle Asset Investment Asset
LIABILITIES Current Liability Non-current Liability IS YOUR ASSETS
MORE THAN LIABILITIES?????
BORROWINGS Good borrowings Borrowing to achieve some goals can
actually be smart investment in a household long term future
Bad/dangerous borrowings Youre using cash advance from one
credit card to make a minimum monthly payment on another credit
card You cant afford to make all of your minimum payments every
month Youre forced to skip payments on routine household expenses
in order to make you debt payment Your application for new credit
are rejected Creditors are calling you to arrange payment of
INVESTMENT PLANNING For education/career advancement For
retirement For protection For contingency For leisure
INVESTING INSIGHT Intension of seeing it grow overtime Property
Gold Unit trust Insurance Investment link Money market Bond
FINANCIAL PLANNING AND LIFE CYCLE STRATEGIES The amount of
money to be invested in various assets depends on: Your goals and
needs to buy a house, travel or retirement needs, education,
children etc. Your age at the time of investment this will decide
how much risk you can take. For instance, if you are young, you can
invest in relatively riskier investments Your income at the time of
investment if you earn more, you will have more money to invest.
The level of wealth will also influence the types investments you
FINANCIAL PLANNING AND LIFE CYCLE STRATEGIEScont Your
occupation if your job provides retirement plans, you may not want
to have a separate retirement plan Time horizon when do you want to
sell your assets? Liquidity how fast can you convert your assets
into cash? Tolerance for risk how much risk are you willing to take
RISK MANAGEMENT AND INSURANCE PLANNING Premature death life
insurance Health and disability Children education Property
RETIREMENT PLANNING How much income should you plan on needing
when you retire? A financial planning rule of thumb is to figure on
needing 70% to 80% of your pre- retirement income. That income is
the income you'll be earning at the time you retire, not the amount
you're earning now.
ESTATE PLANNING Will Hibah Wakaf/contribution to charitable
organization Trust and custodial account Naming and updating
CONCLUSION We need a LIFE BALANCE Monetary return Mentally
return Spiritual return
THANK YOU Open for discussion
ABOUT THE SPEAKER Assoc. Prof. Dr. Nik Maheran is a Certified
Financial Planner and Chartered Institute of Taxation Malaysia
Associate member. She is currently a lecturer at UiTM Kelantan
teaching financial planning, Investment analysis and various
finance subject. Prior to joining UiTM, she was a remisier at KLSE
and later joined Inland Revenue Board of Malaysia in 1995 as tax
assessment officer. She has conducted more than 50 training and
consultancies in the area of financial planning, investment
planning, Leadership, decision making and Image building for many
private and public organizations.