Tuesday, 21 March 2017

How do I manage my Finance

Ever since I started to have my own stable income, I started to keep track of my expenses everyday every month, and I thought this was the way to manage my finance. It's quite a general way and lots of people are doing it to find out where their money went, and when not to spend too much as well.

But is this really the way to manage your finance in order to save up for your future?


Just so you know, with a fresh graduate salary while living in KL city centre with high monthly rental, I have to take LRT to work everyday and to buy cheap stuffs from Mr DIY. These explain why I am always so picky in what I eat and where I go in order not to overspend.

Unlike those who were born with a silver spoon in their mouth, where their family, relative or even someone close enough to sponsor them in their studies, marriage, vacation, house or just anything they need in life.

If you are having the same situation like me, then you will understand that I have to manage my own income to make sure I have enough money to achieve my financial goal and to stop this endless loop of rat race life and not being worried about my future and financial burden.



I know that my way of managing money is not enough to achieve my financial goals. That's why I approached Henry, the Licensed Financial Advisor (LFA) a.k.a Your Finance Doctor to seek for help to manage my money.

Profile
  • Henry Tan Choon Xin 
  • Certified Financial Planner (CFP®) 
  • Member of Financial Planning Association Malaysia (FPAM) 
  • Member of Association of Financial Advisor (AFA) 
  • Personal Finance Blogger of Your Finance Doctor
  • Current LFA at Financial Alliance Advisory (FAA)

Henry has 5 years experience in financial planning industries and speaks for various personal finance talks (i.e. Agillent Technologies, TopTrans, UTAR etc.)

His licenses include Capital Markets Srvices Representative's License (CMSRL) by Securities Commission Malaysia (SC) & Financial Advisor's Representative (FAR) by Bank Negara Malaysia (BNM), which you can verify it from respective websites of BNM and SC.

Who is Financial Advisor’s Representative?


A “Financial Adviser’s Representative” (FAR) means an individual, who performs any services relating to financial advisory business. Financial Advisor is restricted word under Section 139 of the Financial Services Act 2013 (FSA). No person shall in its name, description or title uses such word, unless such person is approved under this Act to carry on financial advisory business.

Any person who contravenes this section commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding 8 years or to a fine not exceeding RM25,000,000 or to both.

You can expect Integrity, Objective Advice & Competence from licensed financial advisors (LFA). Henry has taken 2 years of CFP course to get official licenses from BNM and SC, and guess what, the total number of FAR approved by BNM as at 31 October 2016 is only 568 in Malaysia, which is still in infant stage for Malaysia!

What's the difference between licensed financial advisor & agents?


Unlike agent that represents one particular company, a licensed financial advisor represents me. Please note that I'm not judging insurance agent this occupation, just trying to differentiate their motive. To become a licensed financial advisor, they actually need to complete the certification of CFP or RFP to apply for licenses, then BNM and SC will check thoroughly and approve.

What about agents? Nope, they don't need any certification (CFP/RFP) or even approval from BNM and SC to be an agent. Anyone with SPM cert can just sit for PCEIA and CEILLI exams under LIAM/PIAM and eventually become insurance agent.


Why do you need Financial Advisor rather than agent?


I believe most of you came across this situation where some of these agents don't really care on how you want to manage your money. They just want you to buy what their companies sell and earn commissions from you, and that's it. End of story. (Note that I said "Some", not all.)

Agents can be your finance murderer. If you really think that those financial products that they sell you are purely helping you to earn a lot in the future, you're too naive and please go and see Henry. LOL. If you're like me who's having a tight budget in even paying your own PTPTN debt, you might just get worse without a proper plan.

Yes, investment and insurance are important in your life, but ask yourself,

Is my financial condition good enough to handle it? 

Do I save enough for my emergency fund?

What are my priorities?

Are getting investments or insurances my life goals? 

What am I trying to accomplish now?

I know, LFA provides all financial services ranging from financial plan, investment, insurance and even will writing as well, but instead of pushing you to close the sales, they will suggest the best move for you based on your current financial situation, and give recommendations for you to implement according to your own personalized financial plan.

From a professional LFA, you're able to get the most suitable advice in order to achieve your financial goals. Unlike the simple “fact find” from agents, LFA will carry out a detailed ‘fact find’ where they ask you about your current financial circumstances, your goals and not just quantitative information but also qualitative information. From there, then they will tailor made a personalized financial plan and recommend financial products that are suitable for you.

After all, it's all about making more right financial decision!

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As for my experience with him so far, he does financial planning by knowing my overall financial situation and even asking how happy am I with my current financial status, what is important to me in my life, and even calculated the risk percentage that is most suitable for me in investment through a small quiz and so on.

Not gonna lie but I've learned SO MUCH about money, investment and finance shytz from him after meeting him for only twice! My first 2 experience meeting him were very informative.

Throughout the years Henry did a lot of reading and gained a lot of practical experience in the field so that he can be professional in his field and help others to achieve their financial goals. You will know when someone is really interested in something and will try their best to learn more. This is why I trusted him and willing to let him to do the planning for me.


So now, back to my main title, how do I manage my finance?

The first question that has to come in your mind is "What are your financial goals?". According to my financial goals that I provide to Henry, the analysis result from my own financial plan shows that with my current financial situation, it's actually very hard for me to achieve them in a short period of time, in fact, it is a wake-up call for me as I never thought if I would ever make it or not.

The only way for me as a beginner with low surplus, is to reduce my expenses as much as I could and increase my income (by earning more side income since my company doesn't give increment that often).

I know it sounded like typical way to increase surplus that everyone knows how to do, but how many of you actually take action on it. Imagine if you have yet to save up enough emergency fund of at least 3 to 6 months of expenses, and you're directly starting to do investment or insurance plan, you might just jeopardize your financial future.


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I hope from this post, you will understand the difference between professional licensed financial advisor and agents, and the importance of making the right financial decision!

I know that there are a lot of people out there who's suffering from money problems. But don't worry, Henry, Your Finance Doctor is here to solve your financial problems! Hire your finance doctor today!



Henry Tan

Till then! Thanks for reading till the end!
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