Wednesday, August 30, 2006
posted by PolicyLink at 12:38 PM |

Tuesday, August 22, 2006

1) Introduction

2) The Beginning
Employee Provident Fund (EPF)
Calculation of Savings Interest Rate

3) Chapter 1
Introduction to Insurance
Introduction to Unit Trusts (Mutual Funds)
Comparison of stocks and unit trusts
Asset Allocation

4) Chapter 2
Calculation of Hire purchase loan
Housing Loan
Credit Cards

5) Chapter 3
Life Guard with withdrawals
Life Guard Education Plan

6) Chapter 4
Will and trust

7) Conclusion

8) Note of Appreciation

posted by PolicyLink at 12:57 PM |

The hustling and bustling of the city life has become part and parcel of our daily lives. Love it or hate it, the undeniable truth is that we are ALL sucked into the rat race. The sadder reality is that a majority of us are unhappy and uncontented with our lives.

Why are we unsatisfied?

Maybe we think that our boss is under-paying us; maybe it is because we envy our neighbours who goes for overseas vacation every year, or maybe its because we have insufficient funds to support ourselves.
All in all, the general reason is that we are unhappy with our financial status.

Thus came forth the spawning of various get-rich schemes, promising large gains with minimal effort. Such schemes brought wealth to unscrupulous masterminds , but left innocent people a poorer lot. These money-eating schemes still exist, and the cycle continues.

So how do we secure the financial life we desire?

The answer is PLANNING.

We all have to make proper planning for our future. We would have to plan from the very beginning till the very end.
How much money do we intend to have?
How can we build up that amount?
When will we need the money?
What happens if I pass away leaving my loved ones behind?
Sounds hard? Not to worry, all of us are by now experienced planners.
"But I'm not a planner!" you may say. Well, let me show you some examples.

In our lives, we make many plans. From the moment we wake up, we will automatically plan our next move,
“Should I brush my teeth?”
“What should I have for breakfast?”
“What should I wear to work?” and the list goes on.
This comes to show that no matter how small the task is, we all plan.

Thus, is it not obvious that we should all have a proper planning for our future; not only financially, but also health-wise. It is extremely important for everyone to realize that by planning properly (either by your own or with the help of a professional), we can all lead a happy and fulfilling life.

‘He who every morning plans the transaction of the day and follows out that plan, carries a thread that will guide him through the maze of the most busy life. But where no plan is laid, where the disposal of time is surrendered merely to the chance of incidence, chaos will soon reign. '
Victor Hugo (1802 - 1885)

Here, we would like to bring forward the idea of proper life planning. Hopefully it will bring many benefits to each and every reader. In this fictional story, our lead character is Nick. This story revolves around of the life of Nick and how LifeGuard helped his lifetime planning.

Also involved in this story are the people he meets throughout his stages in life. Here is a brief introduction on the characters in this story.

· Lisa - Nick’s girlfriend, who later on became his wife. She too purchased Life Guard after marrying Nick. After their marriage they were blessed with two wonderful kids: Brandon and Stephanie.

· Greg – Nick’s best friend who introduced him to Life Guard.

· Fred - Nick’s uncle who is a bachelor in his 40s; and is planning to get an annuity.

· Kirk - A friend of Nick who initially didn’t plan for his future. But, after Nick’s countless advice, he got Life Guard himself too.

· Elizabeth - A lawyer in town who specializes in will-writing and trust establishment.

posted by PolicyLink at 12:54 PM |

The Beginning - Employee Provident Fund (EPF)
Time and tide waits for no man.

That is the classic saying with I love most. Its unbelievable how time flies especially when you are studying. One moment I graduated from my secondary school, and the next I have graduated from my degree at the age of 21 years old.
Oh, I have not introduced myself. Where were my manners?
My apologies to you. My name is Nick and I'm about to tell you my story.

Now, after graduating, I was exhilarated to enter the working world as soon as possible. The very first step is my interview.
I had expected the interview to be a tough one as I was applying for the position of Personal Financial Executive. But my worries proved wrong as I was furnished from head to toe for my interview by my parents. In my parents eyes, I will always be the 6-year old kid who needed their care. Armed with the "special briefing" by my parents, the interview seemed easy. I was required to take an exam with objective answers, which so happened to be my forte.
Thanks to my parents help, I was asked to start work immediately and was given a paid training in personal finance.
However, moving into the working society was not easy as it seems. Things were pretty hectic: datelines to be met, superior pressure, and dreadful working hours were all part and parcel of my working life now. Many fresh graduates like me complain about their first job and have thoughts of turning back to their education life, when life was still simple, but I did not. Life in university was like a blissful haven but I had grown up, and it was time to be independent. Although it was tiring, I knew it was a good start.
Days passed by and at the end of the month, I finally got my first paycheck!
I was proud of myself as I have finally earned my own living. Although RM2000 is quite a large amount, it was not much for me as I had to pay off everything by myself. Fortunately, my parents are there to provide shelter for me, and that is where I managed to save up some money.

Cash management has always been a difficult issue for me. I could never resist from shopping, from shoes to accessories. I am a fashionable man. I loved to impress others, which was why I never stop updating my wardrobe. After working for a month, I learnt that money is hard to earn, while spending money is as easy as saying your abc.
After much thought, I concluded that we do not have much time on this earth to earn enough money to sustain the luxurious lifestyle that we have ever dreamed off. So, I promised myself to find a way to fulfill my desires in future.

While working, I came to know of the Employee Provident Fund, EPF.
How did I find about this?
This was because I was startled when I noticed that a portion of my pay is deducted by EPF which caused me to tighten the budget for my expenses and savings.
EPF is a fund where every employee contributes their 9% of their earnings into the fund. Besides that, the employer would also have to pay 11% extra of your earnings into the fund as a responsibility for employee welfare. Money accumulated in the EPF fund is monitored by the government and is intended for the usage of each individual after they retire. Knowing that brought a great relieve to me as I now know that I will have a means of supporting myself after my retirement.

(Illustration of EPF calculation)

In the EPF scheme, like mentioned before, the employee would have to contribute about 9% from their salary and the employer will subsidized the other 11% which makes up 20%!

Through simple calculations we can calculate Nick's EPF fund value. This can be done by multiplying 20% to Nick's annual income, and then accumulate the figure.
After Nick's first year at work,
EPF fund = RM 2000 x 12months x 20%
= RM 4800
Let's say during the second year Nick's pay increased to RM 2060 a month
EPF fund = (RM4800 x 6%) + (RM 2060 x 12months x 20%)
= RM 5088 + RM 9744
= RM 14832
*notice that the accumulated EPF fund from the 1st year is multiplied by 6%?
This is because the EPF fund will be invested by the government to increase the size of your fund, and the yearly interest gained is around 6%*
If Nick does not withdrawal money from his EPF account before 55years old, he will have a staggering amount of RM1 million! (we have taken into account that Nick's income will increase yearly)

Looking into that, I opened my first bank account with solely my name. That’s another achievement for me! I came across that saving interest rates were really low back in those days (Only about 1-2% per annum). Then, there was another type of savings known as fixed deposit, which offers 3-4% of interest every year. Sounds good, looks nice but I was not eligible because there is minimum requirement of amount to save and for a certain time period. Unfortunately, I did not have that much of money to save at that moment and I did not want to freeze all my funds in an account where I cannot use it.

posted by PolicyLink at 12:47 PM |

The Beginning - Savings Interest
(Illustration of savings interest calculation)
During those days in my education, I have learned some calculations on the savings interest. I found out that it would be beneficial for me to save even a little in the saving account to earn the interest.

Savings Interest
There are three types of interest which are simple interest, discounted interest and compound interest.

(1) Simple interest is the interest paid at the end of the contract. It is the interest paid on a principal amount for a time only. The formula is stated as

I = P x r x t

I = total interest earned,
P = the principal amount,
r = the interest rate, and
t = the number of years.

For instance, let’s say $4500 principal invested in a bond fund with 5% interest for 5 years. The total interest earned will be:
I = RM4500 x 5% x 5
= RM1125

(2) Discounted interest is the one time fee paid at the beginning of a contract. It is typically minus out from the loan. The discounted amount can be calculated using this formula:

D = P x r

D = the discounted amount,
P = the principal sum, and
r = the discounted rate.

Example, if a person took a study loan worth $10,000 and has a discounted rate of 10%, then the discounted amount will be:
D = $10000 x 10%
= $1000

(3) Compound interest is the interest fee calculated through a series of payment made at regular intervals. The savings one puts in the bank either in the current account, savings account or the fixed deposits are examples of tool using compounded interest. The formula is

C = P x (1 + i)ⁿ

C = total cash amount,
P = principal,
i = interest in decimals, and
n = number of year(s)

For example, if a man is calculating the compound interest of his $2000 in his savings account with 2% interest rate, his balance will be like this:

Balance at Year 1
= $2000 x (1+0.02) = $2040.00

Balance at Year 2
= $2000 x (1+0.02)² = $2080.80

Balance at Year 3
= $2000 x (1+0.02)³ = $2122.42

Balance at Year 4
= $2000 x (1+0.02)4 = $2164.86

From the calculations above, we can see that the initial balance of RM2000 keeps growing throughout the years although no additional savings have been made.

Now, instead of RM2000, let us imagine a larger amount with an extra zero behind every value to become an initial savings of RM20, 000. At the end of the 4th year, you will have RM 21, 648.60. Isn't it amazing?

During one of my off days from work I made an appointment with one of my best friend during my university years, Greg. He started off as a low-profiled financial planner, yet now he is one of most sought after man in this profession. He shared a lot with me on life planning for personal finance, where he told me that many people are not aware of their own finances and were unable to project their own financial future. Things get worst when their financial goals are achieved not by personal capability but through credit. Eventually, such people will end up living their lives under credits and loans, repaying for the rest of their life.

I was also told of the large percentage of people who are unable to sustain their lifestyle after retirement because of the insufficient funds in their retirement account. Some may even need to continue working throughout their entire life. I was devastated. I told him my thoughts of relying solely on EPF because I had thought it was enough.

However, he told me “No, you can’t!” I was speechless. Although the amount in EPF is a large amount, many people have withdrawn some of their EPF funds before their retirement for personal purposes such as education of their children, investments and ecetra. Thus the fund left will not be enough.

Plus, there is inflation. People in this world live with inflation. As time goes by, the living costs increases. What cost only 10cents now, might end up double or maybe even triple the price in the future. Therefore, there is no way that this fund will solely be sufficient to help me make it to the end of the rat race.

Eventually, our conversation became rather serious and he shared with me about LifeGuard. It is a service provided by his company in helping people to manage their savings and investments and even advising people on financial planning in matters pertaining to insurance, investment, financial goals and many more.

Why do I need LifeGuard? Can't I handle my own finances?

"I only have two simple questions to ask you," said Greg.

"Do you have the time to monitor them?
Do you have the knowledge needed to increase your funds?"
Stumped by the two questions, I sadly shook my head.
"Not to worry, that's the main reason we came up with LifeGuard; to help individuals like you! I wanted something flexible which can cater to the people's need without burning a hole in their pockets. The charges for LifeGuard is minimal and very affordable."

Somehow, I was convinced by those words and at that very moment I was given a plan to see of
how my financial life would be and how it goes. It starts with the age of 22…

“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Charles Dickens(1812 - 1870)

posted by PolicyLink at 12:39 PM |

Chapter 1- Introduction to Insurance
When Greg introduced me to Life Guard, he informed me that some of my monthly payment for Life Guard will be used to pay my insurance premium.

“Insurance?”, I thought. I was rather skeptical about getting insurance because all this while I had assumed that insurance are only for those who fear of death or have tons of liabilities to cover.

Do I really need insurance?

“Of course,” said Greg.

(Illustration of insurance)

Insurance is a type of service provided to the public. The general idea is that a large number of people pool in their money to insurance companies in the form of premiums. This large sum of money can be drawn by insurance buyers who suffer losses or face health problems to ease their burden during time of needs.

Insurance have come a long way since its introduction. Now, insurance touches almost every aspect of our lives. For example, when we purchase a car, we are required to buy motor insurance under the law. When we apply for housing loans, the bank will only approve it if the house has a fire insurance policy. All in all, there are two main types of insurance;
a) general insurance
b) life insurance

General insurance
It deals with non-life insurance where it may include insuring automobiles or even insuring business. Some examples are
a) Motor insurance
b) House owner/householder Insurance
c) Personal Accident Insurance
d) Travel Insurance

Life insurance
It covers the life of a person in every single aspect from their income protection to their general health wellbeing. When a life insurance policy is purchased, there is a contact between the insurance holder and the insurance company. Premium will be paid by the insurance holder for a period of time and in return, the insurance company will pay a sum of money upon the demise of the insurance holder. (It is advised for an interested individual to read the fine print of the contract and understand the limits or exclusion clauses)

The basic types of policies available in market are:

· Term life insurance
This offers insurance protection for a limited period only. The money will only be paid only when the policy holder passes away or if he/she suffers total and permanent disability during the term of the policy. Nothing is paid if the life assured survives the term. An example is the Mortgage Reducing Term Assurance which covers for the cost of the house purchased i.e. the balance of the housing loan will be fully settled by the insurance company in the event of death or permanent disability of the purchaser.

· Reducing term insurance
It offers a policy where the sum assured decreases each year and finally to a zero at the end of the term. This type of term insurance is useful when the life assured need the protection most at the earlier years of the policy. It can also be used as a means of protecting a mortgage or loan.

· Whole life insurance
This offers life-long protection for the policy holder, and premiums are paid throughout your life. The money, including any bonuses, will be paid when the holder passes away, or if he/she suffers total and permanent disability.

· Endowment insurance
This is a combination of protection and savings. The money will be paid at the end of a specific period upon the holder’s demise, or when he/she suffers total and permanent disability. If the holder is still living after the policy matures, he/she will get the money, otherwise, the money will be given to the holder’s nominee.

· Investment-Linked Insurance
The premium paid is used to buy a life insurance protection and units in a selected fund. The benefits paid to the holder or to his/her nominee will depend on the price of the units at the time the holder surrender the policy or when the policy holder passes away.

· Medical and Health Insurance
It is a policy designed to cover the cost of private medical treatment, such as the cost of hospitalization and healthcare services when the policy holder is diagnosed with covered illnesses or have had an accident.

Looking into the life insurance section, every young individual should carry with them a life insurance covering at least death. With today’s world being so common of critical illnesses, it is also advisable to include a rider that consist of critical illness coverage. Medical plans and personal accidents are optional. More to add, purchasing a life insurance at a young age may give a benefit of a lower premium charge for the rest of the years covered in the policy proposed. All in all, it is an added benefit for the young generation to know of insurance and how to utilize it to cover themselves and their dependants.

Calculation of insurance at age 22:
My decision:
1) get a critical illness of RM50k which costs me around RM200.50 /year, and
2) get a decreasing term of RM100k cost me around RM170/year

When I started work as age of 22;
My coverage should be as follow:
1) Income replacement : My yearly income x the years of working till retirement
=24k x 33 years

This is the amount I should cover, let see how much the premium is; whether I can afford it or not. Greg told me that my premium is only RM160/month.
"Wow, it's quite cheap!" I exclaimed, "Are you sure it's enough?"
Greg answered,"Well, of course its enough. Let me share with you something.
It is a rule of thumb that the premium paid should not to exceed 10-15% of your monthly income, so since RM160 is only 8% of your RM2k monthly income, you'll have all the coverage thru your working life!"

2) Liabilities or debts: so far no debt as this moment, so it is not necessary for me.
If it is any, the formula should be cover the entire debt according to the period , decreasing term insurance recommended.
Example, if you have a house loan of RM150, 000 which is to be paid off in 20 years, it would be best if you have a decreasing term insurance covering RM150, 000 for 20 years.
This is to ensure if anything happens to you during the 20 years, your family would not carry the burden of paying off the loan.

After hearing Greg’s explanation, I decided to follow his advice to get a reducing term insurance. If anything happens to me, at least the insurance will cover for my expenses and I need not burden myself or my parents.

posted by PolicyLink at 12:31 PM |

Chapter 1 - Introduction to Unit Trust
As I have said earlier on, not only does my LifeGuard provide me with an insurance plan, it also provides me with an investment plan! Greg told me that LifeGuard will invest a portion of my money in mutual fund (or unit trusts) fund.
“So, what is unit trust?” I asked Greg.

(Introduction of mutual fund (or unit trust) investment)

Mutual fund investment is a form of investment service presented to the public in helping them invest into the market with professional help. In every funding company, it is rather usual for them to propose their own funds to be invested by the public. These funds will be purchased in the form of units by the public or investors. The money pooled from these funds, will then be invested into the share market (stocks), bonds or other securities, which are selected professionally by fund managers. Since the amount of money invested is large, a unit trust fund has access to investment opportunities that are normally unavailable to individual investors.

But, is it safe? Will the fund manager “eat up” my investments?

Not to worry, each unit trust fund available has to abide to a regulatory framework which is shown in the picture below.

*Please click on the diagram for a clearer picture*

In detail, all the unit trust funds available have to follow the principal laws and guidelines available; the Securities Commission Act 1993, the Securities Industry Act 1983 and the trust deed. Independent trustee will monitor the investment transaction of the funding company to ensure the management company complies with the deed.

You can make money from a unit trust by a dividend payout (or distributions). This happens when fund gains income through their investments in stocks, bonds and securities. When this happens, investors can choose either to receive a check for the dividends or to reinvest the earnings and get more shares.

What are the types of unit trust available?

In Malaysia, there are generally 4 types of unit trust.

Equity Funds
This is the most common type of unit trust available in Malaysia. The major portion of its assets (investments) is held in equities which is the stock market, while some in securities, bonds and cash. Thus, the performance of equity funds is closely linked to the performance of the market. Over the long term, equity funds usually give out higher returns but with higher volatility.

Balanced or Diversified Funds
A balanced fund usually holds shares, bonds, cash and property. Thus, they are relatively more diversified compared to other types of unit trust available. Depending on the investors risk appetite, the composition of the asset classes vary. For instance, an investor who can take high risk may invest in a balanced product that has a higher component of growth assets (property and equities), while a low risk investor will prefer a mix of more defensive or safe assets such as bonds and cash.

Bond Funds
A bond fund is the least volatile. Most of its assets go to defensive assets such as bonds and cash. In simple terms, when you buy bonds from a company, you are actually lending money to the company. When the bond matures, the company will return you the money with interest rates. So, they are generally less risky, but also have less return.

Property Funds (or also known as Real Estate Investment Trust)
This is a relatively new fund in Malaysia, and is slightly different from the other funds. For one, the initial investment for this fund is higher than the rest. Instead of putting their assets in stocks and bonds, REITs place money in property, such as retail and commercial office properties. Returns from this fund are gained through rental income or any capital appreciation of the property.

Most of the time, the funds allocate their assets according to the proportion:

Equity funds : 80% in stocks, 20% in bonds and cash

Balanced funds : 50% in stocks, 50% in bonds and cash

Bond funds : 20% in stocks, 80% in bonds and cash

(This is only a rough estimation, detailed asset allocation percentage can be found in the prospectus of each fund)

However, he strongly recommends that each investor should access their personal risk profile. By doing so, each investor can determine their personal investment portfolio.

How do I determine my personal risk profile?

Before a potential investor invests, it would be advisable for him/her to determine their risk profile. By doing so, it would be easier to know which type of funds to buy. All you have to do is ask yourself some simple questions and give them marks according to the following scale.

If you strongly agree (5m) agree (4m) Neutral (3m) Disagree (2m) Strongly Disagree (1m)
· I do not need a regular stream of investment income.
· I am concerned about the effects of inflation on my expenses.
· I can tolerate fluctuations in the short-term value of my investments in return for the potential long-terms gains.
· My attitude towards risks is care-free; I don’t worry too much when I take risks.
· I am willing to forgo a guaranteed return for the opportunity to earn a potentially higher return.
· I am comfortable holding on to an investment even though it drops in value.
· Knowing that stocks have tendency to be volatile and could result in losses, I am willing to take on risks associated with stocks to earn a potentially higher return.
· I consider myself knowledgeable about the potential risks and rewards associated with investing in stocks.
· I am comfortable with an investment that will take 10 years to provide the returns I expect.
Answer the questions objectively. Put the marks by the side and total them up.

If you get less than 25 marks, you have a conservative portfolio.

The estimated return for this portfolio is 3-6%
This may be suitable for you if you
· can accept only little risk/volatility and prefer stability in investments
· Are cautious investors & are more concerned about having a regular stream of income.
· Have 3 years or more to achieve your investment goals.
By adopting a conservative portfolio, you can gain a regular stream of income and fewer fluctuations in investment value.
If you get 25-40marks, you have a moderate portfolio.
The estimated return for this portfolio is 5-8%
This may be suitable for you if you
· Are willing and able to accept a moderate level of risk/volatility
· Want some potential hedge against inflation
· Have 4 years or more to achieve your investment goals
If you get more than 40marks, you have an aggressive Portfolio.
The estimated return for this portfolio is 7-12%.

This may be suitable for you if you
· Expect high returns from your investments
· Are comfortable with sharp short-term volatility in the value of your investments
· Desire returns that far exceed inflation
· Have 5 years or more to achieve your investment goals
What kinds of risks are present?

It should be kept in mind at all times that every investment has their own risks; so does unit trusts. Thus it is best for every investor to understand the types of risk they will be facing when investing in unit trusts.

Types of risks

Ø Market Risk. As we all know, the market fluctuates all the time. Thus, the stocks of a company will be affected. This will indirectly affect the price of the unit trust fund too.

Ø Inflation Risk. When inflation rates move faster than your earnings from your investments, you will be under the risk of buying fewer units instead of more. This also applies on your bank savings. When inflation rates are higher than saving rates, your money is actually losing its value.

Ø Credit Risk. As many unit trust funds invest in bonds, there is a credit risk. Will the company which the fund lent their money too (this is done by purchasing bonds) be able to return and repay the interest when the bond matures? Is the company stable?
Ø Interest Rate Risk. This is usually associated with the performance of a fixed-income investment in relation to interest rates, where your investment will be affected by interest rate changes.

Ø Currency Fluctuations. As the value of ringgit increases, the value of overseas investment will decline.

Ø Political Turmoil. Events in the political arena, both local and abroad, can influence the investment industry.

Does the unit trust company charge any fees?

Yes. There are fees and charges depending on the individual fund. Overall, management companies are allowed to charge 3 types of fees:

Initial service charge
This is the front-end-fee incurred by the investor when he/she purchases a fund unit. This is represented by the difference between the NAV (Net Asset Value) and the Selling Price of a unit. The service charge is done by adding a certain percentage to the NAV of a fund unit.

Selling price = NAV + Service charge

Repurchase Fees
This is a back-end redemption fee charged (not all funds charge this) whenever a unit holder sells his units back to Manager. It is represented by the difference between the NAV and the repurchase price of a unit (the buying price as stated in papers).

Management Expenses
This includes the fees for portfolio management, the manager’s fees, trustee and custody fees, audit fees, administrative charges like printing of annual reports, distribution cheques, postage and other services provided. These fees are paid out of the fund’s asset.

NAV = Asset – Liability
Total fund units

Now that I’m interested, how do I get started?

Initially, a lump sum of cash is needed to purchase unit trusts. The standard initial investments for most funds are a minimum of RM1000, while subsequent investments are a minimum of RM100. However, this strictly depends on the fund company. (Again, it is greatly recommended for investors to read the prospectus for details before investing.)

When an investor purchases unit trusts, the entering price can be obtained from the daily newspapers as the selling price.

posted by PolicyLink at 12:10 PM |

Chapter 1- Comparison of Stocks & Unit Trust
Now that I know a little about unit trusts, I was tempted to join the bandwagon. But then I suddenly thought about another form of investment; the stock market. Once during my lunch break, I overheard a couple of my colleagues talking about the stocks they bought and the large amount of money that they have gained. That time the market was blooming and shares are increasing. 1st board, 2nd board, composite indices and even MESDAQ were all climbing up the share market; making great turnovers and profit sharing. So, I asked Greg,

Should I invest in stocks?

“Well, I wouldn’t encourage you in invest in stocks Nick,” was his reply.

He told me that not everyone should venture into the share market. Many enter the market by luck, hoping to make it big. But, the fluctuations in the share market are unbearable for tiny investors like me. This is because in the investment industry, no one plays by chance; they play with skills. Adding on, he explained how Life Guard had actually done my part of investment for me and that I need not risk myself with another investment.

During the booming market, my funds in Life Guard will be switched to the equity market to reap greater returns. When the market is going down, my funds will be diverted to investments with lower risks such as bonds, which in turn will give higher return due to the rise in interest rates. There is nothing to worry about as there will be professionals looking out for every Life Guard holder, steering their portfolios in the correct direction.

Also, Life Guard will send me an annual report on the performance of my investments every year. If I want to make any changes in the investments, such as switching funds in my Life Guard, all I had to do is contact Greg, and sign a form for the procedure to be carried out.

(Illustration on comparison of stocks and mutual funds)

For a small investor, only a few stocks can be purchased due to the limited money pooled in.
But through Unit Trust, a wider range of investments can be made (not only stocks, but also in bonds and securities). This is because of the large amount of money pooled in from investors.
Stocks are relatively liquid, but there are times when it is hard to sell off especially when the market is not performing well.

Unit trusts are highly liquid. Transactions can be done during office hours and does not depend on the market situation.

Professional Fund Management
Investors themselves monitor the growth of their stocks.
Professionals with training and experience make investment decisions for unit trust holders.
Wholesale Investment Costs & Access to Investments
As buying stocks are usually small investments, the individual investor faces higher fees and charges/brokerage per investment. Thus it is harder to gain desirable returns.
However in Unit Trust, fund managers invest in larger sums, so the transaction fees are more favorable. Not only that, they are able to get wholesale yields and invest in products which are not obtainable by individual investors. An example is the Malaysia Government Security market, because each transaction runs to millions of ringgit.
Volatility of Price
Prices of stocks are very volatile. They depend on the market conditions and follow the law of "demand and supply" because they are usually close-ended (no new units can be issued after their release). This means if the demand for a particular stock is high, the price will increase. But when the market is bad, the demand for stocks decreases and thus the price falls.
Unit trusts are mostly open-ended units. This means new units can be issued for the fund when there is demand. Thus, unit trusts do not follow the demand and supply law. (property unit trusts are an exception)

posted by PolicyLink at 11:57 AM |

Chapter 1 - Asset Allocation
Illustration of Asset Allocation
According to Greg, an investor should allocate their investments according to their age group. This is the asset allocation which he thinks is ideal for everyone.

During this young age, Greg strongly suggests individuals to invest more in equity. This is because during this period, investors have to start building up their investments when they can take the most risk.

As you get older, investments in equity should be reduced while savings would be slightly higher as there will be loans to pay off.

When you are 41-50 years old, equity should be reduced more to minimize the influence of the market on your investments. This will indirectly strengthen your investments, and guarantee you a better future value of your investments.

By the time you hit 50, you have to save more for your retirement and reduce your total money spent on investments. Keep investments in Equity funds to the least so reduce your risks. But still we have to keep a small amount in equity as to make some money with the market. Investments in bonds and REITs are still continued as they are rather safe.

After hearing Greg’s detailed explanation on investing, I gave a great sigh of relief. I was at ease knowing that I have made the right choice by leaving my financial life in the hands of Life Guard. If I had not heard about Life Guard from Greg, I would have most probably jumped in the stock market; like an ant attracted to sugar, and get burnt from the heat of the market.

Also, I was more than delighted to find out that Life Guard gives a guarantee that my capital will be achieved in less than 10 years time! Also, my investments will break even by the 5th year. All this is accounted for along with the premium I paid for my insurance coverage. It was just so well done that it took care of my financial lifetime that I worry no more because I had my coverage and have my investment growing. I can’t help but to smile at the thought of how simple investing is with Life Guard.

“Everything should be made as simple as possible, but not one bit simpler.”
Albert Einstein (1879 - 1955)

posted by PolicyLink at 11:47 AM |

Chapter 2 - Hire Purhase Loan
A few years have gone by, and I was switched into another department. Now, I am working in the Business Development Department as an Assistant Director. It was a double switch in my life, as my entire career had just turned 360 degrees. I considered my first promotion rather impressive because I managed to see my life moving on, up to another level.

At this point of my life, I thought of acquiring an asset for myself. I saw friends getting their cars from their parents and roaming with it with pride. But I was different. I wanted to stand on my own two feet and buy a car using my own hard earned money; not using money from my parents.

Another reason is because of the change in my working location. I could not rely on the public transport anymore as my office was in a new part of town. So, I started browsing through brochures and flyers regarding cars on sale. While browsing, I saw an advertisement for the latest BMV ******, sleek and stylish. I was attracted to its promotion for a low interest rate and rather affordable down payment. At first I had wanted to call up a dealer immediately as the monthly installments were within my income range. All I had to do was to cut down my expenses, but my conscious got the better of me. I knew that if any mishaps happened after I bought such an expensive car, not only would all my savings be depleted, I would have to work multiple jobs just to return the loans, and later on I would have to resort to eating nothing. It was a terrifying thought so I decided to settle down with a national car, the Proton Waja.

The economy was blooming at the time after the severe drawback from the previous years and the interest rates for loans were fairly low. Thus, I decided to use my own savings to pay for the deposit of RM10, 000 and rely on a hire purchase loan of RM50, 000 with an interest of 3% to pay for the remaining amount.

(Illustration of hire purchase loan calculation)

In a hire purchase loan, one has to take two things into consideration when finding the monthly payment,
a) the payment for the interest, and
b) the payment for the principal sum.

The calculation is as follows:

The monthly principal payment = Principal sum
12 x t
Where t is the number of years for the loan and 12 represents 12 months in a year.

The monthly interest payment = Principal sum x i
Where i is interest rate.

The sum of both month interest payment and the monthly principal payment is the total monthly payment for the loan.
Monthly payment = Monthly principal payment + monthly interest payment

For the above illustration, we know that the loan of RM50,000 has 3%. Let’s say I took up the loan for 7 years (the tenure). SO,

The monthly principal sum = 50,000
12 x 7
= RM 595.24

The monthly interest payment = 50,000 x 0.03
= RM 125

The total monthly payment = RM 595.24 + RM 125
= RM 720.24

Although many say that a car is an asset, I know that purchasing a car will increase my liability. Thereby, my expenses have plunged higher because of the petrol and toll cost. Nevertheless, I am not worried because when my salary increased, I increased my investment in Life Guard too; proportionate to the increment that I had gained. By that, I know eventually I would have saved enough for my future because I have two secured funds with me, Life Guard and EPF.

posted by PolicyLink at 11:39 AM |

Chapter 2 - Housing Loan

Time flies, and the next thing I know, I am turning 30 soon. By that time, I have been with my beloved one, Lisa for more than 5 years. (That is how old my car is.) As all couples end up in holy matrimony, we decided to get married. For me, it would have been another leap of faith if I would not have prepared for this day, but fortunately I have my savings with me and Life Guard there to support me. When I met her, I also convinced her to get her own Life Guard, and it was good that she could then see of how Life Guard have actually prepared my financial life.

Besides that, I had another surprise. I was promoted because my ex-director resigned. He was given an opportunity elsewhere. That is how life goes; when someone moves out, someone else shifts in. So, I became the next director in Business Development for my company; bigger bonus, bigger office, and of course, more authority. I was glad that luck gave me such an opportunity to climb up the corporate ladder in such a short time. But, even if I was not promoted, I would still have a lovely wedding with my loved one, thanks to Life Guard.

I redeemed RM10, 000 from my Life Guard account and used some of my savings for my wedding. (The illustration for the Life Guard with withdrawal is shown in the following chapter) Our wedding was fantastic! We had own wedding in green pastures and filled with the flowers of the earth. Lisa was a broadcast journalist and was rather new in the industry. However, my wedding was across the streets as even the newspaper owned by her company gave her a congratulatory message in the newspaper. We were nearly as famous as superstars. Well, but most of all I am contented with is to have such a wonderful wife, because she is the one that is now sitting right next to me.

After our marriage, we spent our honeymoon in Bali Island. It did not cost us much because of Lisa’s immeasurable contacts and also because of my promotion. Then, life resumed and we started to plan for our family. Both of us knew from the very beginning that planning is very important. It is the key to a good life.

Not long after my marriage, I became a father. My first born child was a handsome boy named Brandon. I was thrilled that I finally have a son, someone whom I could now nurture to become my next descendant. Although having a child increased my expenses (all the milk and powder, diapers, and baby utensils), I managed to pull through. A year later, I had my second child, the baby angel of mine, Stephanie. Lisa and I had wonderful moments since the birth of these two children within the past two years. Then, it was time for another transition; we have to move to a bigger house, my own house.

Lisa and I scouted in many places, looking for a house suitable for our family and affordable because it was a flourishing period for the real estates. We have no choice but to search from cities to towns to look for our dream house. Finally, we came across Highlander’s Cove where they have double storey terrace worth about RM230, 000. To purchase this house, we had to accumulate some money for the deposit. So, we decided to fork out RM15, 000 from each of our Life Guard account. We did not even have to think of where to get the money; we just turned to Life Guard. It was that simple.

(Illustration of housing loan)

Housing Loan
There are three types of loan which are yearly rest, monthly rest and daily rest. In yearly rest, interest is incurred yearly. In monthly rest, interest is incurred monthly.

Yearly rest

The formula to calculate the future value of a loan is given as

FV = PV(1+i)ⁿ

Where FV is future value, PV is present value, i is interest in decimal and n is the number of years the loan is for.

With RM230000 house, the loan taken will be $200,000($230000-$30000). Let’s say the tenure is 20. If the interest rate is at 6%, by paying through monthly installments the future value(FV) of the total amount paid will be
N=240 (20 x12)
FV = $200,000(1+(0.06/12)240
= $662040.89

The monthly payment (PMT) can be calculated using this formula.
PMT = i x FV
[(1+i)ⁿ -1]

= 0.06/12 x$662040.89
[ (1 + 0.06/12) 240-1]
= $1432.86

If you can still remember, (monthly) payment= principal + interest paid
From the diagram below, we can tell that during the earlier stages of payment, we were actually paying more interest than our principal.

posted by PolicyLink at 11:28 AM |

Chapter 2 - Credit Cards
With my large expenditure, I was always tempted to swap my credit card especially when my kids pestered me to buy them toys. But I knew from experience that swapping cards is rather risky. I have seen many people who have fallen prey to credit cards. They pay only the minimum requirement and thus end up with a large amount of debt.

Credit cards are a mess if you do not know how to manage them. I usually use cash when I do my shopping. My one and only credit card is used in helping me liquidate funds at times and especially investing on time. Most of the time, I will pay off my credits as soon as the statement arrives. This is because the interest rates for credit cards are really high. That is why I can never understand how people who spend using credit cards sustain that measure of outstanding bills every month when they are only able to foot the interest charges and never get their credits fully paid up.

(Illustration of credit card charges)

Credit cards usually go on a yearly rest interest rate. This is likewise to what I have gone through for my other loans. However, credit cards interest rates are very high; some up to 10-12% a year!

Here are some calculations that would scare you if you realize how you are actually spending on credit.

Example :
Credit limit = RM20,000
Interest rate = 12%
1st month spending = RM1,000

2nd month payment = RM1,000*(12%/12)
= RM1,010

However, you are usually allowed to pay the interest only to sustain your credits (i.e. RM 10)

So, lets say you only pay the interest and keep spending RM1, 000 a month on credit for a year.

Credit limit balance = RM20,000-RM12,000= RM8,000
Interest rate = 12%
Total payment = RM12,120
Total interest paid in a year = 1st month interest + 2nd month i +… month interest
= RM10+RM20+RM30…+RM120
= RM670

(Notice how the amount of monthly interest paid increases?)
But let us not forget about the RM 12,000 which has NOT been paid for. If this continues for the following year, the interest paid monthly will keep on increasing as you have not cleared your loans. When this happens, not many people will be able cover their credit used and are only able to pay for interest charged. Thus, they are left with debt.

However, there is a way to prevent this. Most banks do not charge interest, provided you pay all your debts within a period of one month. Therefore, use your credit card wisely as I did for mine.

Credit cards are not “credit” cards; they are “DEBT” cards!

Never spend your money before you have it.”Thomas Jefferson (1743 - 1826)

posted by PolicyLink at 11:22 AM |

Chapter 3 - LifeGuard with Withdrawal
(Illustration of Life Guard with withdrawal)
The Life Guard plan, allows its holder to withdraw the money they have pooled in to be used for marriage, buying houses and other purposes. Here is a table showing Nick’s withdrawal of RM10, 000 for his wedding and the interested he earned with Life Guard.

posted by PolicyLink at 11:08 AM |

Chapter 3 - LifeGuard Education Plan
After being with Life Guard for almost 10years, I have become its biggest fan. Not only did Life Guard help me with my marriage expenses, it also eased the financing of my house. From that moment onwards, I knew that I must open two new accounts for my little ones to ensure that they will have a good and protected future with Life Guard. The very next morning, I called Greg to arrange for an appointment to make a plan for both Brandon and Stephanie. Greg was very helpful even though he already has earned his passive income through his hard work in managing LifeGuard for his clientele of 1,000 people.

(Illustration of Life Guard Education plan)
To first calculate for my children’s education, we would go back to using the calculation of the present value, future value, interest rate, payment and the number of years.

Therefore, by looking at the economy now, assuming that the inflation rate is at 3% for education services, a degree program would cost about RM80, 000. So, for Brandon and Stephanie who are at the age of 3 and 2, it would take about 16 years from now to need that sum of money for their tertiary education.

PV = 80,000
i = 3%
n = 16
FV = PV(1+i)ⁿ
= 80,000(1+3)16
= 128,376.52

This would be the sum needed in the future for my children’s education, each one of them. Therefore, by using the same method of calculation as stated above, I can get the amount I need to save yearly.

PMT = i x FV[(1+i)ⁿ -1]

This is the education plan which Greg had done for my daughter, Stephanie. Since I was satisfied with the plan, I obliged to it. After setting up some funds for my children, I continued investing and saving for them regularly. By doing so, I have ensured that my children will have a good education fund to sustain their cost of studies in future.

Life has been encouraging because Lisa’s popularity in the broadcasting industry has grown tremendously where she now has her own news reporting show weekly, GetNews. In the meantime, I managed to secure my Master’s Degree in Financial Management from Brown University when I was 33 sponsored by my company. Even then, I came back with more responsibility when I was appointed to be the Appointed CFO (Chief Financial Officer). Many changes occurred in that company and I felt that I could not bear with the politics happening in the company. So, I decided to move on to a financial consultancy firm as a Senior Financial Consultant. I continuously upgraded myself in my profession where I finally earned myself a professional qualification as a Certified Financial Consultant in the United States.

My life with a new family is truly a blessing because much had changed since then when I started to see where my life went to with the path molded with financial planning and understanding what circumstances that I will face and choices in life to take. My chapter of life in my thirties continues…

Whoso neglects learning in his youth,Loses the past and is dead for the future.”Euripides (484 BC - 406 BC), Phrixus

posted by PolicyLink at 11:00 AM |

Chapter 4 - Annuity
As I embraced my 30s, my two kids are beginning to grow up. Lisa told me before that she would love to quit her job because it is tough for her to cope up with her job and the family. It is stressful for her when she always had to rush home to take care of the children. I understand her feelings. I was planning to help the family to adjust towards this shift in life where the income of the family would not suffer too big of reduction because of the quitting of her job. So, eventually when I was 37 and she was 35, she quitted her job and opted for a job as a part time journalist for a local newspaper. It was better when she had more time to spend at home because her work was home-based.

My job as a consultant was all good. I was dealing with some Fortune 500 companies; helping them manage certain financial planning for their companies. The education funds for my kids are moving smoothly towards achieving their goals. Even then, there was nothing much to worry about my financial life because much of it has been planned by my Life Guard.

One Saturday evening, my uncle, Fred who is a bachelor in his 40s, made a visit to my place telling me about his plans of getting an annuity. However, in our country, there would be no provision for annuity services. Therefore, I recommended him to Life Guard as a service for annuity. It can provide him with an insurance coverage in case of any misfortunes. Not only that, he can also enjoy the annuity and he is also given an investment opportunity; both local and overseas, to gain enough funds to generate his annuity. He was delighted to hear that, and instantly made an appointment with Greg.

The following is the plan Greg made for him.
(Illustration of annuity for Fred)

With this plan, he only needs to put in a lump sum of RM201, 000 at the age of 50. Then he can choose to withdraw his money with a choice of perpetuity or annuity.

If he chooses to take his money using perpetuity, he can take RM7,200 a year, and his fund value will keep on increasing till his death as shown in the 2nd diagram.

If he opts for annuity, he is able to withdraw a yearly annuity of RM 11, 400 until the age of 83.

My uncle, Fred, was absolutely delighted and immediately agreed to the plan.

posted by PolicyLink at 10:48 AM |

Chapter 4 - Post-Retirement
As life goes on, I am finally hitting my 40s. My mornings seemed much more tedious than before; with the thick beard and moustache. Flashing back those days when I was young, I can’t help but agree with Lisa that I look much handsome now. Currently, I am one of the regional directors and am supervising the companies under my financial consultancy in the South East Asia region. As the salary increases, the work load increases too. Happy I may be but I spend less time with my family as I have more obligations to fulfill because I am also part of the Corporate Financial Consultancy Association.

One day, a mail came to me from the EPF. It was rather usual to see the envelope twice a year. I opened it up and read the contents. My funds are really huge to my expectation. I was impressed of how all my hard earned money has actually grown to a good sum of money sufficient for my own usage. I also received my annual Life Guard report. I was happy to know that both of my funds are doing very well. If everything continues to be well managed, I will eventually be a millionaire! With my assets such as my house, my cars, my investment funds and my retirement funds, I could see a worry-free future for myself. Lisa was also glad that she did the right choice of taking up Life Guard. This is because since the day she stopped working and opted for part time, her EPF funds were insufficient to support her retirement funds. Fortunately, with Life Guard, she can retire gracefully too.

As I am nearing my 50s soon, questions started to appear in my mind.
“How am I going to manage my life when I retire?”
“How could I manage family expenses?”
“Will I have enough savings to last me till 80 years old?”
I thought it over and drafted the estimation of my expenses and that how my annuity would adjust accordingly. Thankfully I do not need to worry for my children because their Life Guard has taken care of their financial life on behalf of me.

(Illustration of expenses estimation for post-retirement)
Well, as I come to this age, I have to think like Uncle Fred. He is now enjoying his life with the annuity that he is receiving, and yet earning interest all along. Isn’t that amazing?

Well, for me, I have to plan for my family too; the usual household expenses have to be sustained. Therefore, I presume that I may need of 50% of my current salary to sustain the household expenses with my wife not working at all and not having any form of annuity. Instead, I ensure her that the annuity I am going to obtain will suffice for the both of us. Therefore, here are some calculations that I made to accommodate to our needs.

Current salary = RM10,000
Annuity desired, PMT = RM5,000
Number of years, n = Until age of 80= 25 years
Future Value = 0 (depleting capital) (Perpetuity)
Interest rate = 5.5%

The calculation is once again done using the basic FV, PV, PMT, i and n. Here is an illustration,

PV = (FV + PMT x (((1 + i) n) - 1) / i) / (1 + i) n

In order to obtain the PV now, the insert all the other variables in it and you will obtain your present value required.

According to the Life Guard plan, I would only require almost a million ringgit to obtain my annuity of RM5,000 a month from age 55 till age 80.

No doubt the amount needed to be put is quite a lump sum, but with both Lisa's and my Life Guard plan, we are able to pour in this lump sum of money to get the desired retirement life we want.

Terrifying it may seem, but in 15 years time, the funds (my one million ringgit) that I have accumulated may only be able to sustain my current lifestyle, all due to the inflation of the country. The value of money will drop year by year, due to inflation and eventually, according to the projection, the value of money will be of at least 1/10 of the money that I have. So, what millionaire do I call myself?

I could not imagine what would happen to those who did not account for all this financial constraint in his financial life. This reminded of a friend of whom I knew few years’ back, Kirk. He did not really care about tomorrow, all his savings are only sufficient for today, the present. So, I told myself that I must enlighten him about inflation and how he can plan for a better financial status in the future. Again and again I presented to him how to mitigate the inflation risk by investing with the professional monitoring and management of Life Guard. “This will surely help you in your future, Kirk!” It was after 5 years when he finally realized the importance of my advice, and met me to discuss his plans for his future. He then opened a Life Guard too. By that time, the inflation had jacked up to about 6% per annum.

"Telling everyone that the future is near and planning is important was an easy task,
but telling yourself of how you should manage your funds is a leap of effort."

posted by PolicyLink at 10:27 AM |

Chapter 4 - Will and Trust
When I turned 45, my health deteriorated. Although I was still strong and energetic, but when compared to my younger days, I was so much weaker. With all my wealth now, I told Lisa that we have all that we need in future. Many things that had been planned for are already accomplished. It is time to write a will.

A will would help me to secure my children with the proper distribution of all my assets and also help me to handle my liabilities if any misfortune events fall upon me. Greg and I had discussed about this many of times and agreed that we should find someone to help us on this. We soon met Elizabeth, a lawyer in town who specialize in will writing and trust establishment. She was a nice lady whom we actually gained a lot of insight about will and trust. I truly did not know about the in depth difference of a will and a trust. I was actually advised to ponder upon forming a trust rather than writing a will.

(Illustration of will and trust)

What is a will?
A will is a declaration by a person (testator) on matters that he or she wishes to do with their property at the time of their death. It is important to know that without a will, a person’s property will be divided to their living spouse, parents, and children (if they are still alive) according to the law. Thus, sometimes the distribution might not be what you had in mind.
Here are some basic characteristics of a will:
1) a will takes effect only when the testator dies
2) Must in written form; either handwritten, typewritten, or printed. The will must bear the testator’s signature or thumbprint, the date, and the signing has to be witnessed by two people. Each of the witness must then sign the will with the presence of the testator and one another.
3) A will can be revoked if
a. The testator gets married (unless he stated his future spouse’s name in the will informing about the marriage).
b. A new will is made. (the later will always supersedes other earlier wills)
c. Execution in writing. (the testator can declare in writing his intention to revoke his will, this can be done with the same procedure as writing a will)
4) Does not involve distribution of property only. A testator can list down his wishes for burial or cremation, and also the donation of organs. A final note to your loved ones can also be added. Not only that, a testator can appoint an executor; a person who will be handle your affairs according to your will after your death. A guardian can also be named in the will. A guardian will take care of your children’s affair (only if they are minors).
Are there different types of wills?
Yes, there are different types of wills present.
1) Individual Will – this is the common type of will made by the public
2) Joint Will – a will made when two or more persons state their last wishes in one document.
3) Mutual Will – A will made by two or more persons following an agreement.
4) Living Will (not recognized by Malaysian Law)
Why should I write a will?
– To complete your financial planning picture
– Unlock frozen assets in a shorter period
– Provide a peace of mind
To complete your financial planning picture
In this story, Nick has already begun his financial planning; he owns a car, a house, a couple of unit trusts, a savings account, and also an insurance plan. (EPF will be distributed to his living kin according to the law, a will does not account for EPF) With a will, he can finally close his chapter in financial planning. All his assets will be in safe hands and his family will not face any problems after his death.
Unlock frozen assets in a shorter time
Did you know that when a person passes away, his bank account(s) will be frozen? If this happens, his family members might undergo difficulties in their daily life, especially if the deceased is the sole breadwinner of his family. With a will, these frozen assets can be unlocked within a shorter time frame compared to the long and tedious path when one dies without a will.
Peace of Mind
As we all know, death comes to everyone; all that matters is when we pass away. Since life is full of unpredictable happenings, it is best to make a plan for the future of your family and those you love after you have passed away. With a will, the testator can have a peace of mind knowing that his or her assets are taken care of even after his or her death.
What are trusts? Are they the same as Wills?
Trusts are almost similar to wills in terms of benefits. But, it has much more benefits than a will.
First of all, the person who established the Trust is called a Grantor (or Settlor, or Trustor). A trustee is someone who is in-charge of the assets in the Trust. (This can be a Bank or an estate planning attorney or a trusted relative or friend). These assets will be invested or managed for the benefit of one or more beneficiaries. A Grantor can be the trustee or the beneficiary. But if the grantor is both a trustee and the beneficiary, there must be more than one beneficiary.
To make it easier to understand, let us imagine the Trust as a cargo ship. The grantor is like a merchant who puts his assets in the ship to be sent to many different ports, which are the beneficiaries. The person, who is in-charge of the ship, is the trustee. On board the ship, the assets will be protected and sometimes invested to increase the asset value before it reaches a port. Can you get the picture now?

After an enlightening session with Elizabeth, I realized that trusts are more suitable for people with a large estate. Since my assets are not that large, I decided to settle down with a will.
Now that my final chapter in financial planning is complete, I can sit back and enjoy my life.
“I have enjoyed greatly the second blooming... suddenly you find - at the age of 50, say - that a whole new life has opened before you. “
Agatha Christie (1890 - 1976)

posted by PolicyLink at 10:11 AM |

The Final Chapter - Conclusion
55 years old is the age that everyone is so eager to avoid. It is the time where we finally have to retire from our career.

“Am I prepared to sit at home everyday?

Am I going to get used to a work-free life?

Am I ready?”

Those were the questions that flooded my mind.

Brandon is a smart boy; he is entering junior year by the end of this month majoring in Actuarial Science with concentration in investment. While Stephanie, my dearest angel, she followed her mother’s steps and is involved in the field of communication and public relation. Now she is doing her practical in a local television station. Who knows, maybe one day she will be a star. It truly amazing to see my life pass by like a gust of wind, and now, I am 50. My wife is still as beautiful as the good old days, and is always my one and only true love. I am getting a little tired of working and retirement seems tempting to me. There is nothing more than the thought of spending more time with my wife in the house that we now call our sweet home. I can not wait to enjoy the days to come without worries or fear.

The Life Guard for me and Lisa are preparing our retirement stage now according to our plans. The market is still fluctuating day by day, but our funds are as peaceful as the flow of the river. I never felt so secured before because I know that there is someone professional, servicing me all the time. At times, I wonder who is that person who walked with me throughout my lifetime. Whenever I get the chance, I will always ask Greg, who could that be? Who is he/she? I really wish to know, because I would like to thank him personally for all the goodness that he had brought into my life.

My father passed away few weeks back. It was rather sad but I was contented to see how peaceful he left us because he made it out of the rat race, and he was successful. I am standing there too, looking at some of my peers who are still in the rat race, I really wished I could turn back time and convinced them of how Life Guard have changed my life to who I am today.

Now, I am retired. I am 65. Amazing? Well, I still do some dancing and aerobic in my daily routine to ensure that my energy and stamina is still maintained. But who can maintain their health so well that it never deteriorates. I cannot. But one thing I did, I maintained my income. I am still getting my salary every month. You asked me how? Ask my Life Guard. It was there and then that I worry no more.

Currently, Brandon is an investment actuary in one of the leading investment company in the world. He has made me proud. As for my beloved daughter, Stephanie, she is now a director for a TV station which has network in more than 10 countries throughout the region. It is a good start and surely a good race to run. My wife? Oh, the times that we have shared can never be enough with me. Each moment spent with her, is magical in my life. I could never miss her out because she is now such a good baker. I get to enjoy perfect delicacies fresh from the oven everyday. It’s her new hobby. That’s retirement. Free from worries, enjoying a stress-free life and doing things that you enjoy doing. I truly appreciate all that I have been through, with my Life Guard.


posted by PolicyLink at 10:05 AM |

Note Of Appreciation
Here, we would like say a special thank you to first and foremost, our mentor, Karen Lee, who is a Pension/Portfolio strategist, Chartered Financial Consultant and a Registered Financial Planner. She has given us the knowledge and guidance throughout the completion of this entire book. It was truly an amazing experience to be able to work with her and to have the priceless chance to broaden our knowledge in the financial industry.

To know of a certain truth is relevant, but to know of how to apply it with skill is definitely requires a good mentor. Knowing that a lifetime financial planning is important in everyone’s life, it is of great thanks to her that we are able to produce of this piece of work to the public in order to show the public of how important financial planning is to everyone. Many thanks again for her materials and support given, not to mention her ongoing tutoring on our mistakes and misunderstandings. Again, we would like to wish a big thank you to Karen.

Besides this, we would also like to thank our fellow friends who have been able to contribute to us through our surveys and interviews to gain more information to accommodate for the completion of this book. Although the process of creating this book has taken only short period of time, but a experience that we gained through the process will definitely carry us a long way.

Lastly, we would like to show our appreciation to out group members, Sean, Tanvi, Wendy, Daniel and others who have given us a helping hand and cooperation in completing this book. Without this teamwork, the success of this book would not be realized.

Once again, thanks to all that have contributed to this book and we hope that it would bring of a positive awareness to the public and society.

A goal without a plan is just a wish.”Antoine de Saint-Exupery (1900 - 1944)

***All the tables and graphs can be obtained by email us.

The Interns who prepared this documents are from Taylor College, Inti College, Monash University, UITM, UNITAR and they are majoring in Actuarial Science, Accounting and Finance and have undergo a comprehensive Personal Finance course lectured by Ms Karen Lee, MBA(Finance)

Anyone who is interested in joining a course on "The Mathematics you'll need to know to prepare your financial life!" , please email Ms Karen Lee at to make arrangements.
posted by PolicyLink at 10:00 AM |