Академический Документы
Профессиональный Документы
Культура Документы
NAME STUDENT ID
Chin Yan Bin B160241C
Tan Wei Shing B160101B
Tan Liu Fang B150105B
Yogeswary a/p Mohan B160007A
Pavitra Naaidu a.p. Radakrishnan B170106A
Verenika Jesica 9B160153C
Toh Shin Shyan B160219C
Seah Jia Ying B160192C
Liew Jin Rong B150186C
Wong Sung Yung B170032A
Loo Yi Chin B160186C
Sam Hou Jiun B170101A
Sonia Pang Rou Qi B160182C
Jasmin Chong Fung Ye B170019A
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Content
Title Page
1.0 Introduction 3
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1.0 Introduction
Generally, living effectively means, identifying who you want to be and what you want,
while managing the difficult thoughts and feelings that arise as you pursue those goals.
Nowadays, most of human having difficulties in dealing life is due to ineffective applicable
strategic in coping with stressful circumstances and often mislead decision. Many people
model learning skills of managing life by watching their idols. On the other hand, for those
who did not have such role models, or when life transitions exceed the limitations of existing
skills, some additional skills are often needed to avoid misinterpretations of life. Usually,
our habitual actions and ways of thinking outside of our awareness could led us to be stuck
While planning for personal finances or family finances, each individual would
consider the suitability to his or her needs of a range of banking products and insurance such
retirement plans, social security benefits, children and even income tax management. Based
on some researches, it is said that human beings do not always make rational financial
their life and to master management of life. Few dynamics steps can be applied for
monitoring and re-evaluating during financial planning; i) assessment (assess financial status
sheets and income statements, goal setting (having multiple goals is common, including a
mix of short- and long-term goals), plan creation (how to accomplish the goals of the
financial plan), execution (requires self-discipline and perseverance) and monitoring and
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2.0 Introduction
travel anywhere we want to go. However, public transportation in our country is still not
well developed. So, car becomes the mostly used vehicles in our daily lives. Here are some
important tips and reminders for car buyers to take note before getting a new car for
themselves.
With hundreds of types of car brands and thousands of models of car, choosing the right
car for yourself can be very tricky. There are a few important reminders for consideration
for people who wants to buy a car. Considering the most suitable car body, choosing whether
Once you have decided to buy a car, car buyer must identify their own wants and
should get a smaller car because size of the car would not affect her
life.
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People with disabilities, or elderly who have difficulties to walk
should get a vehicle which they can get in and out easily.
get a truck or a van to deliver stocks and able to carry heavy duty
With proper considerations, car buyers can proceed to another car buying procedure.
Setting your budget is important, considering not only the monthly payment of the
car, but also including the car maintenance cost, insurance fee, fuel, registration fee, bank
interests and road tax. Knowing how much you are going to pay for a new car Choosing the
more expensive and unaffordable car, the more you are going to put yourself in financial risk
Before buying a car, car dealers are always focus on the monthly payment but
neglected that there are still more payments are awaiting. Car dealers want car shoppers to
be convinced that it is easy to stretch the car payments out to ease the car shoppers and
encourage them to buy more cars. However, considering your own buying power is still
important as you are the one who is going to pay for the payments of your car. So, make sure
the car you are buying is the car that you love and you are able to afford.
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2.1.3 Decide Body Style
Once you have decided the type of car that will satisfy your need, you will have to
think about the body style of your car choice. For example:
Comfort
Capacity
Technologies
Besides the image options above, the number of body styles such as truck, sedans,
Sedan: A usual car bought by typical families for domestic use. Even children can sit in the
Truck: Truck is normally bought by contractor or construction site worker to carry heavy
families or rent by peoples who are going to vacations with a group of friends.
Smaller cars tend to cost lesser and consume lesser fuel compare to big cars. Decide
the body style that suits you the best and satisfy your needs.
Auto transmission cars users have increased tremendously throughout the past few
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Easy to drive. Auto transmission car are easier compare to manual
However, manual transmission car are still preferable by some groups of drivers.
There are definitely good and bad sides in both auto and manual transmission cars.
To know which type of car is more suitable for you, the best way is to try them out with a
test-drive session.
Now if you seem to found a car that is suitable for you, you will need to test it whether
appointment for a test drive. Bring along your partner or family member for their suggestions
During the test drive, try to drive various road types, from highway to bumpy hills.
This is to make sure the car itself can deal with various road conditions and gives you a fuller
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2.2 Should Buy A New Car or Used Car?
Our first decision should be whether to buy a new car or used car. Some buyer would
There are a lot of advantage for purchasing new car, with new car you can enjoy the
latest technology. In example, Android auto which it was designed by Google as a latest
safety feature for driver. It allows driver to use compatible android smartphone’s user
interface through the vehicle’s infotainment screen, driver also can use google send and
receive text messages, and navigation system by using google map. Driver assistance
technologies and advance safety features have made advancement in last several years, and
now we can get safety with tech, such as blind spot monitoring, autonomous emergency
braking and adaptive cruise control. Fuel efficiency has been improved in new models. Fuel
costs are a major part of a car’s total cost of ownership. We know that there is no damage
and scratches on new car, it has never been an accident and that is less chance for any faulty
recall. We don’t have to worry about the car’s previous owner neglected to car service or
reckless driving. New car also come with at least 3 years until 5 years warranty or coverage
in 36,000 miles and car owner does not need to worry about the repair bill during warranty
period.
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2.2.2 Disadvantages of New car
The disadvantages of new car are when buying a new we need to pay higher costs
than car price. Because its value is higher and we need to pay much more sales tax. The cost
of insurance premiums for new car also become expensive because it’s third party cover, fire
& theft cover to your car, and cover loss & damage to your car.
The Advantage of buying used cars is the original car owner will be absorbed the
costly depreciation that happen in first few years of ownership. However, it will allow
second owner to save up thousands ringgit or tens thousands ringgit on the cost of used car.
Since the value of the used car will be lower, buyer will also save on sales tax and insurance
premiums. if the buyer is on budget, it saves in total interest payments, as the loan amount
that buyer paying interest on will be lower, even if the interest rate is a bit higher.
The disadvantage of buying used cars is the buyer need to spend a bit of money on
hire a car mechanic to identify any operating issues with the car and see if there is any
evidence of crash or fire damage. If the age of used car is more than 3 years old to 5 years
old that means the car will not have any warranty coverage, so the buyer will pay huge repair
bill when the car is faulty. When the used car model is too old the owner may face the
problem when finding the car spare parts to repair the faulty car. Buyer would not able to
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2.2.5 Conclusion
By choosing a new car or used car, buyer need to know few questions before they
make decision. First, which it is buyer should think about what is the budget and which cars
buyer need. If buyer have limited budget on buying a car, buyer should consider purchase a
used car because the value of the used car will be lower and it also save on sales tax and
insurance premiums. Buyer that don’t have budget, they can consider purchase a new car
because the new car doesn’t have any damage and new car come with warranty. Second,
which it is what is the most important car features that buyer wish. If buyer desire about look
and feel of a car they might consider purchase a new car, for the buyer that didn’t desire
about look and feel of a car they might consider purchase a used car.
There are 2 types of cars with various brands available in Malaysia, which it is local
car and import car. In example, Perodua is the popular local brand in Malaysia. Toyota and
There have differences between local car and import car. In example, local and
import cars are Perodua Myvi, Perodua Bezza, Toyota Vios and Honda City. The Perodua
Myvi come with three edition which it is standard edition, Special edition and Advance
edition. The differences between standard edition with special edition and advance edition
is the engine and the design. The Standard edition come with 1.3cc engine, 5 speed manual
aerodynamic rear bumper, and the price for manual transmission in standard edition with
solid color is RM 40,862.16 and RM43,056.00 is for east Malaysia (Sabah & Sarawak),
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metallic color is RM41262.15 and RM 43,456.00 is for east Malaysia (Sabah & Sarawak).
Price for auto transmission in standard edition with solid color is RM 43,862.15 and
RM46,056.00 is for east Malaysia (Sabah & Sarawak), auto transmission with metallic color
is RM 44,262.15 and RM 46456.01 is for east Malaysia (Sabah & Sarawak). The Special
edition come with 1.5cc engine, 5 speed manual transmission or auto transmission, new front
bumper with fog lamps, and new rear bumper reflectors and diffuser, new projector
headlamps with guide light and new aerodynamic rear spoiler, new rear LED lamps,
Retractable side mirrors with turn signals(Electric), and chrome door handles and the price
for manual special edition with solid color is RM 49,968.50 and RM 52,161.90 is for east
Malaysia (Sabah & Sarawak), metallic color is RM 50,368.50 and RM 52,561.90 is for east
Malaysia (Sabah & Sarawak). Price for auto transmission in standard edition with solid color
is RM 52,968.50 and RM 55,161.90 is for east Malaysia (Sabah & Sarawak), auto
transmission with metallic color is RM53,368.50 and RM 55,561.90 is for east Malaysia
(Sabah & Sarawak). The differences of advance edition are the audio system with
multimedia navigation system and reverse camera, and the seat cover material is made from
Leather difference with special edition made form fabric and only available in auto
transmission. Price for standard auto transmission edition with solid color is RM 56,178.00
and RM 60,161.90 is for east Malaysia (Sabah & Sarawak), auto transmission with metallic
color is RM 56,578.00 and RM 60,561.90 is for east Malaysia (Sabah & Sarawak). Perodua
Myvi available in few color which it’s metallic color with Electric Blue, Cosmic Gold (For
1.3cc only), Ozzy Orange, Mystical Purple, Glittering Sliver. Solid color with Ivory white.
The Perodua Bezza have 3 edition which it’s standard edition, premium edition and
advance edition. The differences between standard edition, premium edition and advance
edition is the transmission, engine, and design and look. The standard edition come with
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1.0cc VVT-i engine, manual or auto transmission, without smart entry & push start / stop
button and without Eco Idle system (it’s a system that will automatic enter eco mode when
car stop). The premium edition come with 1.3cc VVT- i engine, manual or auto transmission,
with smart entry & push start / stop button, handphone slot & USB slot (rear console) and it
more performance than the standard edition since the engine is 1.3cc. The premium edition
come with 1.3cc Dual VVT- i engine, manual or auto transmission, with Eco Idle system
(it’s a system that will automatic enter eco mode when car stop), with smart entry & push
start / stop button, handphone slot & USB slot (rear console), Multimedia system with
navigation & 'Smart Link'(Link your Android smartphone to the multimedia system by using
USB cable), reverse camera and it more performance than the premium edition since the
engine is dual VVT-i engine. The price for manual transmission in standard edition with
solid color or metallic color is RM 37,300.00 and RM 39,500.00 is for east Malaysia (Sabah
& Sarawak), price for auto transmission with solid color or metallic color is RM 39,300.00
and RM 41,500.00 is for east Malaysia (Sabah & Sarawak). The price for manual
transmission in premium edition with solid color or metallic color is RM 42,800.00 and RM
45,000.00 is for east Malaysia (Sabah & Sarawak), price for auto transmission with solid
color or metallic color is RM44,800.00 00 and RM 47,000.00 is for east Malaysia (Sabah &
Sarawak). The price for advance edition with solid color and metallic color is RM 50,800.00
The Toyota Vios have 6 variants which it’s TRD Sportivo, GX, G, E, J. The
differences between TRD Sportivo, GX, G, E, J is transmission, body kit and features. All
the variant come with 1.5cc Dual VVT- i engine, SRS Airbags (Driver seat & Front seat),
reverse sensor auto transmission with Continuously Variable Transmission (CVT) with 7-
speed Sport Sequential Shiftmatic Mode except 1.5 J Manual transmission, LED Daytime
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Running Light, Retractable, with Turn Indicator except 1.5 J and steering wheel with audio
and mic button except variant E and J. The TRD Sportivo is special because it bundles with
exclusive Toyota Racing Development body kit and rims, 6 Way Audio system, DVD Player
with 6.8" Touch Screen, Tuner, MP3, Voice Recognition, AUX-Jack, USB, Bluetooth &
Reverse Camera with Guide Lines, TRD Sportivo Perforated Combination Leather seats and
Meter panel with sport Analouge. There are few differences between variants GX, G, and E
which its variant GX have a different front grille material compare with variants G and E,
and seats color also different come with Black and Saddle Tan. The price for Vios 1.5 TRD
Sportivo with auto transmission is RM 96,400.00, Vios 1.5 GX with auto transmission is
RM92, 800.00, Vios 1.5 G with auto transmission is RM89, 800.00, Vios 1.5 E with auto
transmission is RM 83,900.00, Vios 1.5 J with auto transmission is RM 79,800.00 and Vios
1.5 J with manual transmission is RM 76,500.00. There have few color available for Toyota
Vios which it’s Crimson Spark Red Metallic, Attitude Black, Medium Silver Metallic, Silver
The Honda City have 3 variants which it’s 1.5 S, 1.5 E and 1.5 V. All variants come
with Vehicle Stability assist VSA (When taking sharp corners, the VSA system stabilizes
the vehicle by reducing under or oversteer) 1.5cc i-VTEC engine, auto transmission with
Continuous Variable Transmission (CVT), 15” inch rim except variant V it come with 16”
inch rim, shark fin antenna, 4 ways audio system except variant V it come with 8 ways audio
system and 8 cup holders and rear foldable 60:40 seats. The special feature of variant V
which it’s LED front FOG light, 6 SRS airbags, LED Taillights, LED headlight with LED
day time running light and Ducktail spoiler with LED Brake Light and leather seats. Variant
V and E have Multi-Angle Reverse Camera. The price of the Honda City 1.5 S is RM
75,583.73, Honda City 1.5 E is RM 81,690.81 and Honda City 1.5 V is RM88, 897.89. There
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have few color available for Honda City which it’s Lunar Silver Metallic, Dark Ruby Red
Pearl, Teffeta White, Modern Steel Metallic and Crystal Black Pearl.
There are two ways to buy a car. You can either paid with cash or through loan financing
2.4.1 Cash
First of the ways is buy with cash, most of the people thinks that paying by cash
could save a lot of money because you no need to pay interest and finance fees. You also no
need to worry about miss payment of car loan which will incurred of penalty if have any late
payment. The car will belong to you when you fully paid, the advantage is you can sell the
car to other people whenever you want but if you get a car loan, the car is belonging to you
and the bank so you cannot sell the car before you fully paid the car loan.
Disadvantages is you must have such big amount of cash, with such a big amount of
cash you must be able to justify to income tax department if they question you. This money
Second method is pay through loan financing. A car loan is a method financing that
help people to purchase a car with paying back to bank or lending servicer in monthly
payment rather than pay the fully amount in one lump sum. Lender will help buyer settle the
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payment of car and the buyer will pay back to them with interest charges. Interest charges is
The advantages of car loan are you can choose a better car or your dream car. Because
if you want to pay with cash but you have limited budget so you will have limited choices.
You only can choose the car that maybe second hand or a cheaper new car. For example, if
the budget that the car you want to buy is RM10,000 you will only buy a second-hand car,
if you want to pay the full amount with cash but you can choose a better car or a new car if
you use this money as a down payment. Most of the lenders does not given 100% financing
margin because the bank will check your CCRIS and CTOS although your salary already
more than RM1,600 and your age already more than 23 years old but will give up to 90%,
but you as a buyer you must know that the more the down payment that you paid for the car,
you will have to lend lesser car loan so the interest rate that you should pay will also lesser.
Besides that, you can also save a lot of time on saving the money for buying a car, you would
not feel that it is a burden when you can pay in small amount monthly but not in big amount
in once. As my survey, it is also reasonable car loan which start from 2.5% of interest rate
especially from the car maker who willing to offer the lower interest rate to push their sales
which does not too burden for buyer and the payment for the instalment of the car loan can
Normally have two types of interest rate. It is fixed rate and variable rate. During the
fixed rate, the amount of interest that you had to paid is remain the same and your instalment
will remain unchanged in the period you pay to the lender. On the other hand, variable rate
is the amount of the interest rate and instalment will change due to the Base Lending Rate
(BLR) of the bank. Basically, we will usually use fixed rate in Malaysia. Different bank has
difference interest rate, so buyer first should gather information of the interest rate of the car
loan form different bank. Next, choose two of the bank that you satisfy and call the bank or
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search online to get future information. Then you compare the interest rate and choose the
The procedure when you apply for a car loan is first you should choose a car that you
want to buy and use the car loan calculator to determine how much interest rate and
instalment you must pay every month. Then you are required to prepared the document that
need example driving license from Malaysia, identity card, application (copy) and pay slip.
These documents will submit to the bank and they need 2-3 days to process. Then they will
call you for a simple interview, if you fulfil the basic requirement your application will be
approved. Lastly, the parties that involved should sign the agreement and the car will be
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Differences model of car, differences duration of time and amount of money that you
Lastly, in our common sense we will think that the interest rate of the car loan for
used car will be lower than new car but in reality, the interest rate of car loan for used car
are higher. It is because it is hard to estimate the value of used car because the longer you
use the car the quicker the value of the car depreciated. Although the car has been inspected
by the Puspokom, but the part of the car deteriorates over the year. Therefore, the bank forced
to in post higher interest rate. Next, used car borrowers have lower credit scores also causes
to higher interest rate. The bank must bear the risk that if the borrower unable to pay the
loan.
Every method has their benefit and harm, so you can depend on what type of car you
want, how many cash do your budget have and choose the most suitable method to pay.
Road tax is a tax that you must pay for your every vehicle on the road before you use
the public road and you should renew the road tax every year. When the first time you pay
the road tax for you motor vehicle, you must pay at Jabatan Pengangkutan Jalan Malaysia
(JPJ) but if you want to renew your road tax for the following year you can renew at the post
office. You should pay more road tax when your motor vehicle’s engine is larger.
Factors that affect amount of the road tax is type of the car, the car is using petrol or
diesel, engine capacity (cc) and the motor vehicle is use for domestic or commercial.
How to renew your road tax? First, you can go to the nearest JPJ office that close to
your house. Second, you should bring your insurance cover note and your car registration
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card. Third, you request for renew road tax at the counter. The road tax will be different that
based on which state that you live, your car engine capacity (cc) and your car are using petrol
or diesel. Lastly, you will get a new road tax sticker after your payment. Following is a guide
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Figure 2.4: Sarawak road tax price list
Road is the most dangerous place, we do not know when we will meet accident. Most
of the people think that it is waste of money to buy a car insurance but they are forced to buy
it because when you want to pay the road tax you have to show your insurance cover note.
In Malaysia, it is illegal when your car does not have car insurance, you might block by the
There are some important why you should buy car insurances. First, they will protect
you from the personal liability, when you meet an accident. They will help you to settle most
of the cost included medical fees and repair fee but the amount that you can claim back is
based on the type of insurance that you bought. The most horrible case is if you accidently
run into a house and cause damaged of the wall and door, you must pay a large amount of
repair cost. Can you afford such a big amount? It may cause you into bankruptcy when you
do not buy any car insurance. When accident happen and this involve third parties that you
should responsible to their medical fee and repair fee, insurance agency will help you to
settle most of the cost. Besides that, if you are hit the people who does not have insurance,
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There are three types of car insurance that you can choose, it is third party, third party
fire and theft and fully comprehensive cover. In Malaysia, third party car insurance is the
most basic level that required car owner to buy. Third party is the someone else who are
involved in the accident. It is unfair if you are the person who cause the accident and the
third party should bear the cost themselves. So, this third-party car insurance cover cost of
the damage of the third-party property, damage to the vehicle and injury. But you must pay
the damage cost of your vehicle and medical fee of yourself on your own. Normally this type
of insurance is suitable to the people who buy used car. This type of insurance is cheaper
because the cover is also very limited. Second type of the car insurance is third party, fire
and theft cover insurance. This type of insurance is similar with third party insurance but it
adds on two extra benefit is they will cover for your car, when your car is burnt or stolen.
The last is comprehensive cover insurance. This cover greatest level of cover for you, this
level covers all the benefit that given in third party and fire and theft insurance and added to
cover the damage of your own car although it was you cause the accident.
Car insurance might have many difference types, and price. So, you should find out
which type of insurances plan and which car Insurances Company that fit you budget and
needs. It is too late if you want to buy the car insurance when only the accidents happen on
you
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2.5.3 Registration Fee
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Figure 2.6: Registration fee
2.6 Conclusion
In conclusion, buying a car is not that easy. Think twice before purchasing a car
because it requires a big sum of money and no want wish to waste money to buy a car that
he/she don’t like. Various considerations need to be done and remember that buying a car
also mean that getting you into bank loans and responsibility. So, take your time to find and
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invest in the right car. We should choose the car based on our needs and our budget. What
types of car that you can affordable and suitable for you.
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2.7 Reference
1. John M. Vincent. (2016, December 30). New Cars Vs. Used Cars. Retrieved from U.S.
2. Bird, C. (2016, september 2). Buying a Car: Cash, Lease or Loan? Retrieved from
Car.com: https://www.cars.com/articles/buying-a-car-cash-lease-or-loan-
1420681041553/
3. Editorial, i. (2012, october 9). Car Insurance In Malaysia . Retrieved from The Different
car-insurance-in-malaysia
https://www.honda.com.my/model/pricing/city/1
https://www.honda.com.my/model/specifications/city
https://www.honda.com.my/model/styling/city
7. Montoya, R. (2016, July 21). edmunds. Retrieved from 10 Steps to Finding the Right
car-for-you.html
http://www.perodua.com.my/pricing/bezza
http://www.perodua.com.my/specification/bezza
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10. Perodua Myvi Pricing. (n.d.). Retrieved from Perodua:
http://www.perodua.com.my/pricing/myvi/
http://www.perodua.com.my/specification/myvi
12. Should you buy a new or used car? (2014, February 26). Retrieved from Free Malaysia
Today: http://www.freemalaysiatoday.com/category/leisure/2014/02/26/should-
you-buy-a-new-or-used-car/
13. Top 5 reasons why Car Insurance is so important. (n.d.). Retrieved from Top
Check.com.ng: https://topcheck.com.ng/car-insurance/articles/top-5-reasons-car-
insurance-is-important
2.6 Conclusion
Sam Hou Jiun 2.2 Should Buy A New Car Or Used Car?
Car?
A Car
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3.0 House
The house that we choose to purchase is at Taman Nusa Indah, located in Nusajaya. The
reason we make this house as our final decision is because the house location has bring
along a lots of convenience in our daily and minimize our time consuming, since it was
surrounding by grocery store, supermarket, petrol station, policlinic, hospital, and school.
The house is two storey terrace house and cost RM550, 000 with 4 bedrooms and 3
bathrooms, is suitable and fit perfectly for every members. Each family member is easily
finding their absolute private space when they needed. And we are able to set up a play
area inside a bedroom if we have planning for having children in the future; there had also
provide public playground area in residential area, and it is only open for who is the
resident. Besides that, the security system which provides us be at ease, since we all knew
we are living in a high-crime rate era. So, to having a comprehensive security system with
24/7 will be the prior when we are looking for a house, and this residential area had
fulfilled our requirement. They also provide night patrol service, and when we are away
from home they will take extra patrol to prevent our home will not be visit by “uninvited
guest”.
can have multiple choices about what school is the most suitable for our kids in future,
International School) until primary and secondary school. And nearby the residential area
there have three polyclinic (Medispring Family Polyclinic, Polyclinic My Family 24 Hours
and Klinik Mediviron) is nearby to us and only consume 10-15 minutes to reach. There is
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also a hospital (Columbia Hospital) providing surgery and the medical department, and
only be apart from our residential area about 10 minutes. The resident in Taman Nusa
Indah are also able to purchase their daily necessaries in nearby groceries store (especially
YSL Fresh Market, which had providing fresh vegetables and meat products everyday),
some of the store are even business for 24 hours, such as like 7-eleven.
If nearby grocery store were not provide some typical products that we want to buy,
there is two supermarkets and a mall is nearby to us and only consume 15 minutes to
driving there by using highway and it do not cost any money, which is Aeon mall, Bukit
Indah. Tesco, Bukit Indah. Giant supermarket, Taman Bestari. And we can spend our
leisure time over there too. Meanwhile if we needed to go downtown area, such as like
City Square and JBCC, Komtar it normally just need 20 minutes and only cost RM 2.30 for
tolls fee, people can also choose for not to cross to highway without paying any tolls fee
Talking about highway, we have to mention about the distance to travelled between
Taman Nusa Indah with Tuas, Singapore is only about 40 minutes when not occurs any
traffic jams. To living at this area, we believe that it will help us to saving a lot of time and
brings along with bunch of convenience of our future life, and we will be very satisfied on
this purchased.
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Figure 3.1: In this figure has shown the nearby area from Taman Nusa Indah.
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3.1 Home-Buying Process
house. As with buying a previously-owned home, you have to figure out your budget and
secure financing before you even begin house hunting. Get pre-approved by a bank or
mortgage lender. Decide how much money you want to invest in a new home. And don't
overlook the extras like property taxes, insurance, furniture, window treatments,
landscaping costs and maintenance that can drain your bank account. "It's absolutely
critical for new homeowners to know what they can afford based on their income, debt and
credit score," says Rosy Messina, vice president of sales and marketing for ICI Homes in
In contrast, because there is no previous homeowner, you don't have to deal with a
seller's emotional tie to the property, which typically influences the negotiating process.
Whether you're designing and building a custom home or buying a home that's built on
spec in a new subdivision, you'll only have to work with the builder. Here is some essential
process that we must carefully gone through while buying a newly construction house.
Before you start house-hunting, it’s a good idea to work out what you can afford to
spend on buying a house or a flat and your monthly mortgage payments. User can use the
Mortgage Affordability Calculator to work out how much you might be able to borrow.
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Buyers must consider how you’ll cope if your financial situation changes, or interest rates
rise, and be careful not to overstretch yourself. Remember, your savings will have to cover
not just the deposit, but expenses such as mortgage fees and Stamp Duty on properties. It
helps to know more about what to look for in a property to avoid costly mistakes.
It’s never too early for you to start thinking about arranging a mortgage as this can be time-
consuming. You can get a mortgage from an Independent Financial Adviser (IFA),
mortgage broker or lender. Once you’ve found a mortgage product you like, agree it as a
mortgage ‘in principle’. This tells you how much money the lender is likely to offer and
the interest rate you’ll pay. Also, you might have to pay a booking fee to reserve the
Before you apply for a mortgage, check your credit report for any errors and to get an idea
Nothing beats the feeling of being the first person to live in a newly-built home.
Everything is shiny and untouched. You can buy a brand-new home in one of three ways:
buying a house already built on spec; having a semicustom home built as part of a
development (you can choose from a set palette of finishes and upgrades); or having a
purely custom home designed and built to your specifications. But before you get caught
up in the sparkling new paint and granite countertops, evaluate your situation and see if
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Here are some questions to ask yourself, particularly if you fall within the first two
• New homes are typically far from the city centre; will you mind the commute?
• Are you willing to coax a new lawn into existence, and can you wait 20 years for
• New houses tend to be built right on top of each other. Do you mind the closeness
When buying in a new subdivision, consider working with a buyer's agent who knows the
area well, can set up home tours and walk you through the closing process. When
• Remember, the listing agent works for the builder, not for you. They're trying to hit
a quota, not help you make the right decision for you and your family.
• Many states regulate how agents deal with new subdivisions. If you have your own
agent, tell him up front that you're interested in looking at new homes. He must accompany
you on your first visit to any new subdivision; if he doesn't, the builder's sales rep will get
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• Drive around the neighbourhood and check out the amenities and the quality of the
homes.
• Go to model open houses, keep a journal and take photographs. Don't try to cover
• Check with the developer about potential homeowners' association (HOA) fees and
rules; some are incredibly expensive -- and strict. They may not allow storage sheds,
certain paint colours or finish materials, solar panels or even vegetable gardens. Be sure to
• Ask whether cable and Internet are readily available and from what companies;
your new house will be wired for cable but that does not mean the cable company offers
• Research the zoning laws for the neighbourhood, as they can change quickly.
• Visit the city planner's office to see what's in store for a particular location.
Whether you're buying a new home that's being built or building a new home from
the ground up, you can choose the builder you work with.
"The buyer is more educated today," says Rhonda Hoeft, area sales manager for
The Estridge Collection in Carmel, Ind. "It's amazing how much they know as opposed to
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five years ago. At least 80 percent of prospective buyers who walk into our sales office
In this uncertain economy, builders are feeling the pressure. To make certain you
choose a financially-sound builder, Sharon Hanby-Robie, real estate agent and American
Society of Interior Designers (ASID) in Lancaster, Pa., suggests, "Go to the courthouse to
see if a lien's been filed against the builder, then go to the construction site. Talk to
• Make sure there are no Better Business Bureau complaints on file against your
builder's company.
• Ask local real estate agents if the builder has a good reputation in the community.
• Visit your builder's previously constructed homes; ask the occupants whether the
Ask the builder about amenities and upgrades. Amenities are features that benefit the entire
community like a clubhouse, health and fitness centre or a gated entrance. Upgrades refer
to added features or items you pay extra for to enhance your home, like certain types of
flooring or appliances.
Get a feature sheet on the line of homes you're interested in and read them very
carefully, then compare feature to feature. Find out what comes with the base home price.
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If you don't understand exactly what the builder is offering, ask and take notes.
There are no dumb questions. Not knowing can cost you real money. Some things to keep
in mind:
• If the stove is included, visit the showroom to see the model. If you're offered the
basic stove and you're a gourmet cook, it makes sense to buy the upgrade.
• Make decisions on upgrades early in the process -- every change costs money.
• Have a good idea of what you need and want. They are two different things when it
comes to upgrades.
• Builders rake in the cash on upgrades because they can get parts and labour
relatively cheaply. The mark-up is huge, so investigate each option you're considering
seeing whether it would be cheaper to bid it out after you move in.
• Builders, in general, need to sell quickly to make a profit. If you're stuck haggling
over price, get them to throw in the upgrades you want at a reduced cost or for free -- it's a
Once you decide to buy a new home, make your sales contract contingent on a final home
inspection by a professional you hire. Never assume that because a home is newly
constructed, it isn't going to have defects. Municipal inspections for code violations are
home checked during each phase of building, when potential problems are easier to spot. If
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Protect yourself with warranties. All new homes come with an implied warranty
from the builder stipulating that any major defect of the structural integrity of the home
must be repaired. Ask for a builder's warranty for a period of time following move-in (a
year, for example) that covers any defects in craftsmanship. Preferably, this warranty
Home warranties vary in length, what they cover and typically run from one to 10
years; the manufacturer covers appliance warranties. Make sure any warranty you receive
explicitly states what is covered and what isn't, and what the limitations for damages are.
For extra peace of mind, have your real estate attorney look over the warranty to make sure
it's kosher.
Builders often have in-house mortgage lenders or ties to an outside lender. New
homebuyers can use the builder's lenders or find their own financing. Ask your agent for
information on special funding programs available for first-time buyers. Contact at least
"You are committing 30 years of your life to the process of homeownership," says
Messina. "Learn as much as possible about the mortgage process by reading everything
Kriss Lindblom did just that before he and his partner, Angela Diesner, closed on a
Pulte-built home in Maricopa, Ariz., last year. "I read every piece of paper they gave me,
every contract, disclaimer, declaration of covenants and restrictions, the bylaws of the
community association."
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Finally, if you're not comfortable with the legal process, get an attorney.
Remember, sign nothing until you fully understand the meaning of the words.
3.2 Resources
Before buying a house, we have to understand the process and have to relate knowledge to
collect the necessary resources to make sure the purchasing process would not be mistaken.
1) Meeting someone expert before decide which houses to buy, whether a new
2) Know the average price of house in Johor Bahru, house price should not exceed our
financial capacity.
3) Determine the type of home. Which are including the sizes of the house, the
4) How much we have to pay for house down payment and do we have enough money
6) Make an offer.
Now let’s take a closer look about above point, to meeting someone expert such as the
financial expert he/she can help the buyer to well analysis the buyer financial situation and
reduce the risk on this investment. Also, is the buyer is troubling on searching an idea type
of house, they can actually find an real estate agent to tell them what is the average price
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you are able to afford and the requirement for the house, such as the security system,
After reviewing for all the houses and considering, the buyer will possibility have
an idea which house they wanted to purchase. At this time, the buyer should begin to
prepare the necessary document for purchasing a house. Once you and the seller have
agreed on a purchase price, buyers will need to sign a standard document and pay the 2%
earnest deposit. Earnest money is a deposit made to a seller showing the buyers good faith
in a transaction. And then, they have to visit the bank for advisory loan if needed, the
interest charge by the bank will based on the latest Base Lending Rate(BLR), figure 3.3 is
the example of the current BLR rate on difference banks. Meanwhile, they also need to
In addition to this, buyers before have any decide should clearly knowing and
have a certainty which type of the house is more affordable. Even though we can loan
money from bank, but to exceed our financial capability will highly increase the risk on
Figure 3.3: the example of the current Base Lending Rate (BLR) 1
1
Information comes from https://www.iproperty.com.my/resources/how-to-buy-house-in-malaysia.aspx
37
The require document when local employees buying a house as shown in below:-
a person’s identity. Figure 3.4 is the example of the outlook of identity card.
Malaysia identity card called as MyKad, is a compulsory for every 12 years old and
above citizen. It on in-built computer chip and fingerprint biometric data as a proof
(Figure 3.4)
2. Property booking receipt, a proof to show bank manager you are the actual buyer to
buying a house.
3. Vendor sales and purchase agreement (copy version) or new sales and purchase
agreement. According to the situation whether the buyer is buy a new house or a
second-hand house.
4. Latest 3 months pay slip (for basic Salary) or latest 6 months pay slip (for basic +
38
(Figure 3.5)
5. Latest 3 months personal bank statement (for basic salary/latest 6 months pay slips
(for basic + commission earner) which show your salary credited as per pay slip.
39
6. Latest EA form, EA form is for people that have Employment income and is to
show how much salary, bonus, incentives that your company had gave you during
statement. It manages the compulsory savings plan and retirement planning for
workers in Malaysia.
8. Income tax statement, the latest form B/BE with payment receipt
acknowledgement.
9. Deposit statement, for example such as fixed deposit, ASB (Amanah Saham
Bumiputera) or Bonds (if any), to show whether you have the extra money to pay
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These 9 methods that we provided are for the person who is an employee of a company,
but if the person is self-employment the document that he has to prepare will be
difference.
3. Vendor sales and purchase agreement (copy version) or new sales and purchase
agreement.
4. The latest 6 months company bank statement, to showing that the company
5. The latest 6 months personal bank statement, it is the income evidence to prove
6. Deposit statement, for example such as fixed deposit, ASB (Amanah Saham
Bumiputera) or Bonds (if any), to show whether you have the extra money to
Besides that, the self-employment person has to show the business registration, for
who is holding Sdn Bhd Company had to prepare the document which involving Form
24 (return of allotment of shares, for who is holding the company shares) and Form 49
(Statement of Particulars, for who is the company director or manager). Then he/she also
had to prepare the latest Profit and Loss statement, the financial statement that shows
In additionally, the Company Profile to show what is the company product and
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12 months of company bank statement and the latest audited report of company. If
had any partnership, he/she had to prepare the Memorandum of Association document,
But for those who are working at foreign country or self-employment in foreign
country wanted to buy a house in locally, the document requirements will a lot difference
2. Working permit or Permanent Resident (PR) card with validity more than 6 months.
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6. Latest 3 months personal bank statement (to show salary credited as per pay slip)
8. Deposit statement, for example such as fixed deposit, ASB (Amanah Saham
2. Working permit or Permanent Resident (PR) card with validity more than 6
months.
5. Latest 6 months Company bank statement, to prove the company legally exists and
financial capacity.
acknowledgement.
9. The latest profit and loss statement, the financial statement that shows company
10. Deposit statement, for example such as fixed deposit, ASB (Amanah Saham
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So far, we had been showing for four differences types of document requirements
understand in each of the procedure, what documents we have to be prepared and stand
by for use and not become disoriented and lead to miss out any important document.
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3.3 References
1. Law, E. (2017). Property for sale. Iproperty.com.my. Retrieved 24 June 2017, from
https://www.iproperty.com.my/property/2-sty-terrace-link-house-gelang-patah-
5197824#bLVdHSZsOXHwQt8s.97.
2. How to Buy in New Construction. (2017). HGTV. Retrieved 24 June 2017, from
http://www.hgtv.com/design/real-estate/how-to-buy-in-new-construction.
https://www.moneyadviceservice.org.uk/en/articles/money-timeline-when-buying-
property-england-wales--n-ireland.
4. 10 Steps to Buying a House - Home Buying Process. (2015). Discover Home Loans
loans/articles/10-steps-to-buying-a-home.
malaysia.aspx .
6. Latest BLR, Interest Rates, & Base Rate. (2016). | Loanstreet. Retrieved 17 June
7. What documents required for home loan applications? | Property Malaysia. (2015).
http://www.chatpropertymalaysia.com/what-documents-required-for-home-loan-
applications/.
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Tan Wei Shing 3.1 Home-Buying Process
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4.0 Children
Having a baby is a big decision that requires couples to do some serious self-reflecting on
relationship aspect and consideration of financial cost that that they will be facing. A new
baby can be drastically alter family’s financial status. Nowadays, both spouses need to work
in order to balance the expenses which are high cost, and including costly baby gear and
possibly child care. Before stepping into this significant decision, both parents must expose
themselves financial studies regarding cost on having babies and the plan.
Parents needs to weigh financial costs against their children needs by calculating
the average cost of the possible expenses. Firstly, they should list all the expenses without
having children, that is, fixed expenses, such as the insurances, car service, house rental and
utilities. Next, they must list the discretionary expenses, such as, vacation, memberships,
credit cards, beauty treatment, frequent dry-cleaning and others. Thus, they have to omit all
the unnecessary budget in order to consider long-term financial plan. Besides, the effective
way is to track all the expenses for two months and do evaluation to improvise more savings.
excitement, being a parent and caring for a child can be an adventures affair however now
and again, it can be overpowering as you settle on choices about your child's upbringing that
might be very new. At the point when the pregnancy test returns positive, you've started an
existence modifying venture. As the child develops and changes through each phase of
pregnancy, you experience changes, as well: in your body, feelings, and way of life. You
acquired with data’s that could possibly answer your inquiries. There by, here are certain
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4.2 Pregnancy phase
A typical, full-term pregnancy is 40 weeks, and can go from 37-42 weeks. There are
divided into three semesters (trimesters). First trimester typically comprises of 12 weeks.
The first trimester is vital for the development of your baby such that often supplements
are consumed to ensure proper growth of organs as well as reducing the risk of miscarriage
which is very much significant during this period of time. Physical changes that are
encountered are bleeding, breast tenderness, fatigue, food cravings, frequent urination,
heartburn, mood swings, morning sickness and weight gain. The second trimester ranges
from week 12 to 18 which is regularly said to be the best time of pregnancy as the morning
sickness and fatigue which plagued during first trimester starts to fade away. This period of
time ultrasound would be done ensuring the growth and well-being of the baby as well as
the gender of the foetus could be determined. Physical changes that could occurs are
bleeding gum, backache, breast enlargement and etc. The third trimester ranges from week
28 up to the birth. During the third trimester, often mild contractions are experienced,
which is to prepare one’s uterus for the real labour process to come which are known as
During these medical check-ups one are required to have a pink coloured medical
card as shown in Figure 4.1 below. The purpose of this medical card is to write in all
details regarding the health of the foetus as well the mother. Below are the details that are
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vi. Doctor’s comment
vii. Etc.
Registration for the pink coloured card has its very own process and usually the
registration is done when the baby is about ten weeks but it’s said to be better earlier. Here
are the details of the process. Some private clinics may not provide the card unless required
by the patient.
Step 1: Handing in documents needed. Documents needed during the red card registrations
are as following:
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Step 2: Checking the last date of period to identify the how far along is the foetus.
Step 3: The date of the baby was conceived is written on the card. (The exact date of
Step 8: Breasts are checked to ensure if the mum could breastfeed the baby.
These check-up are often done monthly unless you are diagnosed with any medical
issues then you may be required to visit the facility every two weeks once. Frequency of
iii. Once a week from the ninth month of pregnancy until delivery.
iii. Pressure
iv. Weight
v. Baby growth
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Other tests comprises of:
i. Anti-tetanus injection
(ATT) injection is given once you are able to feel the movement of the baby. One month
later on the second dose injection is given. The subsequent pregnancy, only one dose of
injection is given.
Oral Glucose Tolerance Test to check for diabetes during the period of fifth and seventh
The dentist will check teeth and gums and provide advise on dental care during pregnancy.
improvement is normal as well as to detect any abnormalities. The cost of month to month
while private centres will ordinarily charge about RM200 for every arrangement depending
upon the facility. The fees are excluding the scanning charges for the private facility.
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Type of facility Fee
Government Free including scanning and supplements.
Usually 2d/3d scanning.
Private RM 200 - RM300
(The minimum value is considered)
Normal cases:
9 months check-up.
11 x 200 = RM 2200
Other cases (medical issues):
15 months check-up approximation.
15 x 200 = RM 3000
Additonal charges(supplements):
RM 100 – RM 150
Below is a table on charges applied for scanning and the prices are distinct depending on
http://ultrasoundscanmalaysia.com/packages0/)
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4.3 Delivery
There are two types of delivery of baby, normal and caesarean. For normal or vaginal in
Gleneagles the cost is approximately from RM5000 to RM7500 with deposit of RM 5000,
whereas caesarean is RM 8000 to RM 11,500, with RM 8000 deposit. And this packages
excludes any types of complications and cost may vary with types of room and other arising
medical conditions.
Meanwhile in Medical Centre Maternity the packages are more expensive. For
normal delivery is RM 5, 000 to RM 8, 000 and caesarean is RM 10,000 till RM12, 000. For
emergency caesarean delivery is RM12, 000 for single room (3 days 2 nights). Average total
cost for prenatal care throughout a typical pregnancy, including about 12 doctors’ visits,
On the other hand, in all KPJ specialist in Malaysia, deposit is needed upon
admission, and for normal delivery (RM2, 500) and for caesarean (RM5, 000). Usually, the
medical expenses for baby in the first year will be covered by health insurance which parents
sign in before delivery. For an example, in KPJ Ampang Puteri, three packages are being
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4.4 Post pregnancy
Often a new parent will undoubtedly have inquiries on everything from kicking to
breastfeeding, to washing and showering your child and changing their nappy. Here's a few
fundamental things to know having new child amid those depleting however brilliant early
weeks. Breastfeeding your new infant. First and foremost, it is rather important to breast feed
a child due to the nutrients that are contained in the mother’s milk. It is also essential to know
the ways of bathing your child as well as changing the diapers of the kid. Also, a new parent
are required to know how to soothe a crying baby, initially it may be hard but eventually
they would get the hang of it and it’s essential that one discovers on why the child might be
crying and how to alleviate them. Helping your infant to rest is another major skill that a
parent should acquire with. It is vital that the parents acknowledge the needs of the baby and
making a list would be beneficial. For instance, by preparing the correct formulated milk
powder, appropriate strollers, comfortable and breathable clothing plus hygienic napkins and
wet tissues for the use of the new-born. Besides, all the information above parents are also
required to prepare the baby needs such as medical check-ups, baby nursery, baby travel
items, baby feeding essentials, baby clothing, bathing and changing, baby toys, baby food as
irresistible maladies and it’s a child is entitled to get vaccinated. Most are prescribed across
the country; others are particularly suggested for babies in Sabah and Sarawak. The
immunizations are given to free in the government facilities where else private are
additionally charged and most likely you would be provided with record booklet or card that
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would be incorporated with extra immunizations. Vaccinations are not only for babies,
young kids are also given vaccination at a particular age. Here by, below is a table explaining
the costs and period of vaccinations. The cost below are of KPJ Ampang Specialist private
facility that have been obtained through a call up session, thus the cost may vary.
RM 19.50
Pneumococcal RM 237
(ONLY
AVAILABLE
IN PRIVATE)
Pertussis,Tetanus , 1 INJECTION)
Haemophilus
influenza type b
(Hib)
(DTaP/IPV/Hib)
Pertussis,Tetanus , 1 INJECTION)
Haemophilus
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influenza type b
(Hib)
(DTaP/IPV/Hib)
Pertussis,Tetanus , ONE
Haemophilus INJECTION) +
(Hib)
(DTaP/IPV/Hib) +
2nd Pneumococcal
and rubella
(MMR)
and rubella
(booster)
(MMR)
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18 month Diptheria, tetanus, 1 injection Free RM 175 (6 IN 1
pertussis INJECTION)
(whooping cough)
/ Haemophilus
influenza type b
(Hib)
(DTaP/IPV/Hib)
and rubella
(booster)
(MMR)
tetanus / polio
(before starting
school)
(DT/IPV)
tetanus / polio
(DT/IPV)
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13 years Human 1 injection( 2nd Free RM 180 per
+ RM 278 per
dose
package)
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4.4.2. Baby nursery
Babies will invest a large portion of their energy in the nursery, so guardians ought to do all
that they can to make it a sheltered place. This starts with selecting protected, stable child
furniture to prepare the baby nursery. Baby nursery is an optional part but there are few baby
items that are needed though. Here goes a list of items related to baby’s nursery plus the cost
which are obtained from lazada online store and lelong. The cost varies and merely are
average prices:
Items Cost for brand new Cost for used items Necessity
blankets
thermometer
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4.4.2. Baby travel items
Travelling with an infant can be a real handful especially for first time parents as well as
those far distance travel from home. In actuality, babies that travel doesn’t require to many
items and there are about few essentials regardless long or short distance travel and here
Items Cost for brand new Cost for used items Necessity
For breastfeeding moms there are several equipment must to have to lighten the feeding
process. Here’s a rundown of feeding supplies one would need for their infant.
Items Cost for brand new Cost for used items Necessity
equipment
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Baby bottles (at RM 10 per item - Must have
least 6-8)
breast pad
New born does not require as often they outgrow the clothing in just few weeks’ time and
extensive wardrobe but there are several basics to have on hand at home. Keeping it simple
Items Cost for brand new Cost for used items Necessity
(10 suits )
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Baby hand and foot RM 20 per pair of RM 15 per pair of
socks ( 6 pairs) both hand and foot both hand and foot
sock sock
accessory
4.4.5. Playtime
For the first few months baby loves things that they can look at and listen to. Here goes a list
of items:
Items Cost for brand new Cost for used items Necessity
Rattles RM 30 RM 23 Optional
There are few essential tools in the kitchen can make preparation and storage of baby food’s
Items Cost for brand new Cost for used items Necessity
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Pacifier RM 20 - Must have
Although nothing truly duplicates the breast milk, there are modern formula milk specifically
designed by scientist for the mom’s that can’t breast feed or chosen not to breast feed. There
are several things to consider when one is choosing the right formula milk for their infant.
These formulas are made to meet the baby’s nutritional needs. There are three types of
formula preparations:
i. Cow’s milk based formula ( are milk formulated to be the most similar to breast
feed milk)
ii. Hydrolysed protein formula (specially designed for babies with an allergy or
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Here’s a rough idea on approximation of baby’s formula milk of different brands in Malaysia
cost:
600g
Baby formulas have different prices depending on the different brands and stages. The earlier
the stage, (for new born) the more expensive the cost. As your child becomes older, the cost
of formula milk will reduce. Taking the above samples as an example, here a few steps of
calculation:
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The total cost of brands used as sample for 600g = RM 319.86
Average = Total cost of brands for 600g / Number of brands used as sample
A 600g formula week could last up to a week and half which gives us 1200g.
4.4.8. Confinement
Expectant parents should also take note of the confinement cost as Malaysians generally
practice confinement for at least 1 month up to 44 days where a confinement lady helps out.
There are several choices that a parent could decide on regarding confinement period:
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iii. Relations as confinement lady
Hiring a confinement lady RM 100 – RM 150 per day. Cooks for the mother.
stay.
law)
The Malaysian government is providing the following assistance and tax reliefs, to ease the
i. Back to school initiative for primary & secondary children – RM100 per child
ii. Child relief– RM1,000 per child (only for one of the parents)
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v. Skim Simpanan Pendidikan Malaysia (SSPN)savings – RM6,000 (for each
parent)
4.4.9. Childcare
Finding appropriate and economical child care for your child is often very much challenging.
There are different options available in different places and at different price points. Under
the Child Care Centre Act 1984 (Rev 2007) there are four (4) types of Child Care Centres in
It is to be noted that some parents could ask the help of their relatives or family related
members as well as non-family related members, friends to look after the child which we
usually referred to as nannies. Also some parents hire full time maid.
home
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Institution 10 or more children Can be operated by the private
sector, Non-Governmental
based organisations
offsite by businesses or
companies.
rural areas.
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A child rapidly develop physically, emotionally and mentally and during these period of
time, a substantial amount of care and guidance as well as a safe environment are
fundamental to make sure that one’s child gets a solid base to develop progressively. Thus,
there are several vital considerations that need to be taken into account choosing a Child
Unregistered Child Care Centres that do not meet the minimum standards under the Child
Care Centres Act 1984 (Rev 2007) and Local Authority which may pose a security risk to
your child.
Plan a surprise visit to the centre during its peak hours to observe the ratio of Care Provider
to child. Below is children ratio as per said under the Child Care Centre Act 1984 (Rev2007)
and Regulations:
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4. Qualification of the staffs
Make sure of that the child care staffs have gone through PERMATA Basic Child Care
The childcare centre should have a safe and convenient drop-off or pick-up point, under
Both indoors and outdoors should be safe for the child. Check if the drains are properly
closed, fences are sturdy and the playing area is free of holes or sharp objects as well as
make sure the furniture, toys and play equipment are safe to play with, with no sharp edges.
Guarantee the centre has an appropriate medicinal services and nutritional food. The centre’s
11. Are there cheerful collaborations and conscious correspondence amongst staff and
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Do guarantee that the centre has a cheerful, favourable learning condition where positive
It is certainly in the parents hand to where they choose to send their kid to be taken care of
while their off to work, be it to the childcare, or a nanny or hiring a full time maid. Below
Price
Childcare Beginning of the year or first time registration: Half day Full day
centre
( 2 to 4 years old) (8.30- (8.30-6.00)
12.30)
Registration fee: RM 50.00
RM 50.00
Uniform: RM 50.00
RM 50.00
Miscellaneous fee ( daily snacks, insurance RM 300.00
coverage, art craft material, stationary, RM 200.00
worksheets, lunch for full day) (1/2 a year)
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( 3 to 16 months)
Fee RM 1350 -
*minimum hours are usually set to three hours based on the individuals.
Maid Deposit about RM 10000 depending on the origin country of the maid and
could cost more.
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4.5 Planning ahead for the future
Nurturing a new-born does not stop there as the parents are still required to prepare the
even tertiary education. The parents should be well prepared be it by money wise or
information wise, so that the child has a secured future. Parents are required to be financially
stable to provide a better future for the child. Also, it’s advisable for one to have a saving
account, insurance registered particularly for the child’s studies and needs.
4.5.1 Education
Education can be said as the most important part of nurturing a child. It is also the
part that most of the parents invest and pay most attention on. As many people said,
children’s success in the future depends on how well the education they receive and engage.
Of course, to educate a child, it requires a lot of money and effort. Thus, parents have to well
In Malaysia, government has set the rules that parents are required to send their
children to kindergarten or they will be fined and punished. They want to ensure that our
children are at least receive the basic education. This has also shown that government is very
depends on the type of kindergarten. There are kindergartens that are famous and have many
franchise, the fee will be higher like RM600 to Rm800 per month, if compare to those
economy type, the fee will be in the range of RM200 to RM400 per month.
When children enter to primary school which is either public or private, the cost are
very much different. If it is public primary school, parents need to prepare like RM500 when
children started entering the school for uniform, stationery and so on and afterward, parents
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maybe need to prepare for like transportation fee if children are taking bus and also pocket
money, as for government school, children are borrowing textbooks from school and so
parents not need to buy. In contrast, if children enter to private school like international
school, the school fee varies to different school, but the fee is at least at RM1000 per month.
basically, parents not need to pay for the school fee except children are going for tuition.
Tuition fee varies from different tuition center as well, generally, it may cost RM50 per one
subject. But if children are enrolled to independent school or private school, in our country,
if it is Chinese independent school, the school fee is cost like RM1000 for three months, if
The most costly part definitely will be the tertiary study. It actually depends on the
subject and university or college that children choose. School fee may vary from RM20, 000
to RM 500,000. If children decide to further study as medicine in private university, the cost
will be at least RM 400,000, but in public university, the fee will be like RM3000 per
semester. Other than school fee, parents have to provide hostel fee if children are away from
home, and also money for food and transportation. It may cost RM1000 per month.
4.6 Saving up
With your child's arrival, parents will need to create financial tools to help provide for their
child's future. These are few tools that could parents for budgeting:
Life insurance (This is to assure that the child will have financial resources if parents
74
Health Insurance (If one serious accident or illness could deplete your savings and
put you in significant debt. Parents have to investigate their insurance options if you
don't already have any coverage, perhaps you should add budget to increase
Disability Insurance (As a parent you and/or your spouse should consider
getting disability insurance to replace income or salary lost if you are unable to work
permanently)
Flexible Spending Accounts (FSA) (This enables you to use pre-tax dollars to pay
for vital family budget items, like childcare and medical or healthcare expenses)
As for ongoing expenses as they have child, parents need to include cost of
childcare, diapering, feeding (milk, baby food), clothing, medicines, toiletries and nursery
After having children, most of the parents face difficulties in maintaining expenses
for their new born baby without applying loan in bank. Therefore, few steps can be followed
to avoid debt. Firstly, parents can shop at thrift stores. Here, instead of paying full price for
their clothing, parents could check out gently used and even new items at your local thrift
store, as babies grows fast. These types of stores will buy back items after your child has
outgrown them for cash or store credit. Yet, parents cautious about buying used items related
In addition, parents can use family for back-up day care instead of spending on
expensive childcare. Besides, parents don’t have to take a day off (possibly without pay)
when your child is sick, but could make arrangements for family or friends to help out with
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Moreover, the best way to save up is to borrow items from friends or family.
Parents could ask friends with young children if you could borrow items, particularly big-
ticket items they're not using, like a crib, high chair or rocking chair, which will reduce your
cost.
The utmost step is to downgrade lifestyle as by having a child it will change a lot of
things, including your financial priorities. Parents need to review new budget before you
adding up things to avoid lack of money in the future. Parents should consider closing the
gap by downgrading in a few key areas, especially entertainment, beauty purposes, maids,
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4.7 References
1) Your Financial Life. (2015). First-year out-of-pocket medical costs average $1,297
https://yourfinanciallife.bmoharris.com/articles/childs-first-year-medical-expenses-
550132/#.WUqP6uuGPIU.
http://www.hasil.gov.my/bt_goindex.php?bt_kump=5&bt_skum=1&bt_posi=3&bt
_unit=1&bt_sequ=1&bt_lgv=2.
visitors.php.
http://www.education.vic.gov.au/childhood/parents/kindergarten/Pages/fees.aspx
5) Balkish Rosly. (2014). How much is it to send a child to school?. [online] Free
from:http://www.freemalaysiatoday.com/category/money/2014/04/15/how-much-
is-it-to-send-a-child-to-school/
http://ultrasoundscanmalaysia.com/packages/
https://www.babycenter.com.my/a1049800/antenatal-care-at-government-clinicses
8) Lee, I. (2016, May 27). How Much Does It Cost To Have A Baby? Retrieved May
77
9) 2014, S. T. (n.d.). Pusat jagaan kanak-kanak (nurseri). Retrieved May 27, 2017, from
https://www.babycenter.com.my/a25010075/pusat-jagaan-kanak-kanak-nurseri
10) Tips for new parents - Pregnancy and baby guide. (n.d.). Retrieved May 27, 2017,
from http://www.nhs.uk/conditions/pregnancy-and-baby/pages/being-a-parent.aspx
11) Health & Pregnancy Guide. (n.d.). Retrieved May 27, 2017, from
http://www.webmd.com/baby/guide/default.htm
12) Childcare centres costing parents RM1000 over per child. (n.d.). Retrieved May 27,
2017, from
http://www.freemalaysiatoday.com/category/nation/2016/01/18/childcare-centres-
costing-parents-rm1000-over-per-child/
http://schoolmalaysia.com/resources/education_system.php
4.3 Delivery
4.6 Saving Up
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APPENDIX 1
79
5.0 Personal Finance
Personal finance is the process of planning for the spending, financing, and investing to
optimize financial situation of an individual. Personal financial plan is a plan that specifies
a person’s financial goals and describes the spending, financing, and investing plans that are
intended in order to achieve those goals. Financial decisions must be made carefully because
every spending decision will consist of opportunity cost. Opportunity cost is the cost of
giving up something in order to gain another thing. The components of a financial plan
include budgeting and tax planning, liquidity management, financing for large purchases,
protecting the asset and income (insurance planning), investing, and retirement & estate
planning.
The first step of personal financial planning is to do budget planning and tax planning.
Budget planning is the process of forecasting the future expenses and savings. Budget
planning allows one to anticipate whether he/ she is having cash surpluses or cash deficiency
for the month, in other words, to evaluate their current personal financial position. When one
is having cash surpluses in their budget, he/ she can invest the cash surpluses to maximize
their wealth. If it is cash deficiency, the person will have to learn to control his/ her expenses,
cutting down all those unnecessary expense to maintain positive cash flow. Tax planning is
the process of maximizing tax relief to reduce the amount of income tax that have to be paid
by a person. The amount of income tax that have to be paid is depends on the chargeable
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Chargeable Income Calculations (RM) Rate (%) Tax (RM)
Next ringgit ……
81
The table above is taken from the government website of Malaysia with the latest
data of income tax rate in assessment year 2016. The table above shows how the income tax
is calculated, and the income tax rate for every level of chargeable income.
OR
OR
Parent
3000 (Limited)
Limited 1,500 for only one mother
publications
10 Net saving in SSPN's scheme (with effect from year 6,000 (Limited)
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12 Interest expended to finance purchase of residential 10,000
paid.
Where:
AxB
where;
83
in the relevant year;
matriculation/preparatory courses).
84
and in Higher Education Institute that is accredited by
(SOCSO)
The table above shows the latest data of tax relief in assessment year 2016. Tax relief
is the amount of income that can be deducted from your chargeable income, and thus
reducing the tax. A significant amount of taxes can be saved if it is planned properly. Tax
relief helps to reduce the financial burden of a person, allowing him/ her to pay lesser tax.
The payment of income tax can be made by cash or cheque at the bank. Cash payment
is also accepted at POS Malaysia counter. Besides that, it can also be paid by internet banking,
payment through Automated Teller Machine (ATM), cheque deposit machine, and cash
deposit machine.
is the ability to access to funds to cover any short-term cash deficiencies. Liquidity
management involves two parts, which is money management and credit management.
Money management is about how much money to retain in liquid form and how to allocate
the funds among short-term investment. When doing the allocation of money to do
investment, a portion of money must be kept just in case something emergency happened
and cash is needed. It is not a smart choice to place all the money into illiquid investment
85
(stocks or bonds with a very long maturity) nor keeping all money in the liquidity form
(keeping the money at home or in the savings account). Credit management is how much
credit to obtain to support personal spending, and which sources of credit to use. Some of
the credit sources charged a slightly higher interest compare to the others. Therefore, it is
better to do some researches before choosing to finance yourself through credit. Besides that,
make sure you are having the ability to pay back the money to the creditor before you try to
spend every single money or else you might face trouble in paying the debts.
The third step is to financing for large purchases. The examples of large purchases
are like car and house. Loans are often needed when people purchasing car and house,
because no one will buy car and house with cash even if they own that much. When
managing for the loans, there are several factors that have to be considered. For example,
how much can you afford to borrow and pay? You must make sure that you will still have
balance for other expenses after you have paid for the loan. After that, you will have to
determine for the maturity of the loan. The shorter maturity comes with higher monthly
payment but lower total amount will be paid while the longer maturity comes with lower
monthly payment but higher total amount will be paid. The next thing is to select a loan with
a competitive interest rate. As we all know, the compete between banks are quite intense,
they will always come out with attractive rate to attract customers. Choose the bank that
offers you the best interest rate to minimize your own burden.
The forth step is to protect your personal asset and income. To protect the personal
asset and income, insurance planning is needed. Insurance planning is the process of
determining the types and amounts of insurance needed to protect your asset and income.
There are several types of insurance, for example, automobile insurance, home-owner
insurance, life insurance, medical insurance, general insurance & etc. Choosing the suitable
insurance plan that can provide sufficient coverage to you will do. Excessive amount of
86
insurance will cause you to suffer loss because you won’t be able to claim insurance from
investment is to maximize personal wealth. The moneys that are not needed for liquidity can
be used for investment. The examples of investment are stock, mutual funds, bond, real
estate & etc. All investments will have some level of risk subject to risk tolerance of an
individual. If an individual is risk adverse, he/ she should choose the investment with lower
risk but comes with lower return, while if an individual is a risk seeker, he/ she can choose
the investment with higher risk and comes with higher return. The most important thing
before you invest your money is to make sure that you have paid all your debts, and you will
The last step of financial planning is retirement planning and estate planning.
Retirement planning is the process of determining how much money should be set aside each
year for retirement and how those funds should be invested. Doing retirement planning
allows you to be financial independent even after you are retired, which means you won’t
have to rely on others to support your life. One of the example of retirement is to contribute
in SOCSO and EPF. Estate planning is the process of determining how your wealth will be
distributed before or upon your death. You have to leave a proper will before you dead in
order for your asset to be distributed to your family members as you wish. If you did not do
estate planning, your family members will have troublesome process and face difficulties in
claiming for your asset after your death. Therefore, estate planning is a must have if you do
not wish your family members to quarrel over how your asset should be distributed between
them. In a worse situation, they might bring the case to the court to fight for your assets and
belongings.
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5.2 SOCSO (Social Security Organization)2
SOCSO also known as PERKESO, was established in 1971 under the Ministry of
Malaysia3
There are two categories of SOCSO. The first category is Employment Injury
Scheme and Invalidity Pension Scheme which is applicable for employees aged
below 60
travelling in the course of employment. The Invalidity Scheme, on the other hand,
The company will pay 1.75% while the staff/workers’ will contribute 0.5% of their
wages for the Employment Injury Insurance Scheme and the Invalidity Pension
Scheme.
The second category is Employment Injury Scheme only and this opens for three
conditions: for employees above 60 years of age and still working, for employees
above 55 years of age when first registered and contributed to SOCSO and for an
Insured Person receiving Invalidity Pension who is still working and receiving wages
The objective of both schemes is to guarantee cash payment and benefits in kinds to
2
https://www.perkeso.gov.my/en/about-us/policy.html
3
What Is SOCSO (PERKESO)?" SOCSO | PERKESO. N.p., 23 Apr. 2013. Web. 22 June 2017.
88
SOCSO is able to provide free medical treatment, facility for physical or vocational
rehabilitation, and financial assistance to employees if we have loss our abilities due
incapacitated.
4. Medical Benefit
7. Dependent’s Benefit
8. Funeral Benefit
9. Education Benefit
1. Invalidity Pension
2. Invalidity Grant
4. Survivor’s Pension
5. Funeral Benefit
4
https://www.perkeso.gov.my/en/social-security-protection/benefits-under-the-schemes/employment-
injury-scheme.html
5
https://www.perkeso.gov.my/en/social-security-protection/benefits-under-the-schemes/invalidity-
scheme.html
89
7. Return to Work Programme
8. Education Benefit
Process- SOCSO
I. If we are employer or employee must be registered with SOCSO not later than 30
accordance with the business entity type as set out in the Attachment
With effective from 1 June 2016, any employee who is employed for wages
6
https://www.perkeso.gov.my/en/social-security-protection/employer-employee-eligibilty/employer-
employee-registration.html
90
III. The rates are based on the total sum of the monthly wages received by an employee.
Contribution on the first month when the employee commences employment. Types
All employees who have not attained 60 years of age are required to
contribute under the first category, except those who have attained 55
years of age and have made no prior contributions before they reach
55 years
contribute to SOCSO
receiving less than 1/3 of the average monthly wages before the
invalidity.
Under this Category, the contribution is paid by the employer for the
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IV. Contribution can be paid through 3 methods as follow:7
agents:
Maybank Berhad
b) Employers or us can also make the payment through Internet Banking, but
the employers need to be registered and have an account with the appointed
bank.
Employers must ensure the details on the cheque, money order, postal
order or bank draft are complete and fulfil the following criteria:
Keselamatan Sosial
Signed
7
https://www.perkeso.gov.my/en/social-security-protection/employer-employee-eligibilty/payment-of-
contribution.html
92
No changes or amendments, and Name, employer code,
VI. There will be some interest charged on late payment of contributions, and there are
notice.
II. Duplex notice- notice containing more than 4 records of contribution months
in 1 notice
VII. All three types of notices can be paid at SOCSO Offices. However, only simplex
Scenario A8
8
https://www.perkeso.gov.my/en/social-security-protection/employer-employee-eligibilty/rate-of-
contributions.html
93
Salary = RM 1,800
Allowances = RM 150
Total = RM 5,550
The EPF form to provide retirement benefits for members through management of
The EPF also provides a convenient framework for employers to meet their statutory
The members of EPF including the private and Non-Pensionable Public Sector
employees.
The Money collected by EPF will credited to member’s individual accounts in the
For employees who receive wages/salary of RM5,000 and below, the portion of
contributes 13%.
94
For employees who receive wages/salary exceeding RM5,000 the employee's
If the employer pays bonus to an employee who receives monthly wages of RM5,
000.00 and below and upon receiving the said bonus renders the wages received for
that month to exceed RM5, 000.00, the calculation of the employer contribution rate
shall be calculated at the rate of 13% (calculation by percentage), and the total
contribution which includes cents shall be rounded to the next ringgit. For example,
Calculation 1:
Bonus: RM 2456.89
A member's EPF savings consists of two accounts that vary by their share of savings
and withdrawal flexibilities. The first account, dubbed "Account I", stores 70% of
the members' monthly contribution, while the second account, dubbed "Account II",
stores 30%.
Account I restrict withdrawals to the moment the member reaches an age of 55 years,
9
http://www.kwsp.gov.my
95
member's first house, finances for education and medical expenses, investments, and
Investment Allocation
generate income.
There will be a minimum 2.5 Per cent Dividend annually paid guarantees by EPF.
The dividend rate declared by the EPF is subject to the returns from investments
Annual Dividends, on the one hand, are calculated based on the opening balance of
your savings as at 1 January of each year. Monthly Dividends credited into your
account, on the other hand, are based on the monthly contributions received.
Benefits
Retirement Benefit
Dividend
Tax Exemption
96
Process- EPF
I. As an employee, we are required to contribute to the EPF under the EPF laws.
employees;
Employee Withdrawal, and work with employers other than the federal or
in any service.
97
Figure 5.1: Form that Apply EPF
number and every member will be issued with only one membership number,
which also refer as the account number in EPF. If we having a new employer,
we need to inform our new employer of our membership number for the
balance in account, or
account, or
98
Savings have been transferred to the Registrar of Unclaimed Monies.
VI. We may have made our EPF payment through several payment methods:
I. Internet Banking
II. By Post
Malaysia
Public Bank
RHB Bank
Maybank
Postal order
Money Order
Cheques
Banker’s Cheques
99
Figure 5.2: EPF Payment Form
VII. We are also being encouraged to doing the nomination, which is the process
VIII. Our EPF savings are a mandatory savings which have been enforced to help
us during our retirement. This means that we may not withdraw our EPF
savings until we retire. The EPF has provided various withdrawal facilities
Withdrawal.
100
Pre-Retirement Withdrawal, on the one hand, allows us to withdraw
a certain amount from our savings before we reach the retirement age.
101
5.4 Resources
http://www.hasil.gov.my/bt_goindex.php?bt_kump=5&bt_skum=1&bt_posi=2&bt
_unit=5000&bt_sequ=11&bt_lgv=2.
https://www.perkeso.gov.my/en/about-us/policy.html.
June 2017.
4. Employment Injury Scheme Benefits. (n.d.). Retrieved June 26, 2017, from
https://www.perkeso.gov.my/en/social-security-protection/benefits-under-the-
schemes/employment-injury-scheme.html.
5. Invalidity Scheme Benefits - perkeso.gov.my. (n.d.). Retrieved March 26, 2017, from
https://www.bing.com/cr?IG=EFA8EE07BD8B4F1387FC35A0BE794784&CID=2
B603881F5E86D001647322CF4EE6CB1&rd=1&h=fy6jX2bClohVKbf4yR70Fky
XOdRQ42S2RwByQmmznAQ&v=1&r=https%3a%2f%2fwww.perkeso.gov.my%
2fen%2fsocial-security-protection%2fbenefits-under-the-schemes%2finvalidity-
scheme.html&p=DevEx,5062.1.
2017, from
https://www.bing.com/cr?IG=AB2077BA735543E0A4702FD04CF9DA3A&CID=
2EC053042AC06EEA066159A92BC66FE5&rd=1&h=HBq6JOf9pdmOuQzmYdf
OAHg7OhoQOS2OLZwcZpuznFI&v=1&r=https%3a%2f%2fwww.perkeso.gov.m
y%2fen%2fsocial-security-protection%2femployer-employee-
eligibilty%2femployer-employee-registration.html&p=DevEx,5061.1.
102
7. Contributions - perkeso.gov.my. (n.d.). Retrieved June 19, 2017, from
https://www.bing.com/cr?IG=532EA61550B7443D9EC4DA78BC69134F&CID=1
CBE1EAD7CAB63C9229C14007DAD62DE&rd=1&h=OiRzZrtBnKhXIz-
TMgFwm99pSIrBOyN7ji-
hwspKJf4&v=1&r=https%3a%2f%2fwww.perkeso.gov.my%2fen%2fsocial-
security-protection%2femployer-employee-
eligibilty%2fcontribution.html&p=DevEx,5061.1.
https://www.perkeso.gov.my/en/social-security-protection/employer-employee-
eligibilty/rate-of-contributions.html
9. EPF - EPF Member Registration - KWSP. (n.d.). Retrieved March 31, 2017, from
https://www.bing.com/cr?IG=2160579A5FCA4EECA3EC1A127F159A30&CID=
228ACA78F4876FA62E87C0D5F5816EF0&rd=1&h=WumbG_tWYjYfRyIPdEx
ABPAaYct12gEKvFEfsfl-
ZCc&v=1&r=https%3a%2f%2fwww.kwsp.gov.my%2fportal%2fen%2fmembers%
2fmember-responsibility%2fregistration%2fepf-member-
registration&p=DevEx,5063.1
10. EPF - EPF Counter & Payment Function - KWSP. (n.d.). Retrieved May 26, 2017,
from
http://www.bing.com/cr?IG=723AB84868E24B958435D5E65FD9E499&CID=35
6AB47F402D6D242398BED2412B6CB3&rd=1&h=32Tj_IQadidf6KcUa8krIG-
lAqzs9r9gmYCf2-
knPRA&v=1&r=http%3a%2f%2fwww.kwsp.gov.my%2fportal%2fen%2fweb%2fk
wsp%2femployers%2femployers-responsibility%2fcontribution%2fcontribution-
payment-method-by-employer%2fepf-counter-payment-function&p=DevEx,5034.1
103
11. (n.d.). Retrieved May 26, 2017, from https://help.payrollpanda.my/18570-app-
faq/204443-how-to-submit-the-epf-csv-file-through-i-akaun
12. EPF - EPF Member Registration - KWSP. (n.d.). Retrieved May 26, 2017, from
https://www.bing.com/cr?IG=4C1C6AED0643491C9B91D966836FE49C&CID=0
2EDA7BB04796C1438BFAD16057F6D8D&rd=1&h=WumbG_tWYjYfRyIPdEx
ABPAaYct12gEKvFEfsfl-
ZCc&v=1&r=https%3a%2f%2fwww.kwsp.gov.my%2fportal%2fen%2fmembers%
2fmember-responsibility%2fregistration%2fepf-member-
registration&p=DevEx,5063.1.
5.3 Epf
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6.0 Insurance Introduction
provides that the insurance company will cover some portion of policyholder’s a loss as long
Arround the world, accidents and disasters will occur everywhere. We can not budget
accidents and disasters happen, but we hope everything is protected. This is why we need to
buy insurance. If we are not buy insurance, it could leave you in financial ruin. We need
Insurance is a way of managing risks. When we buy insurance, we transfer the cost
of a potential loss to the insurance company in exchange for a fee, this is called premium.
Insurance can divide two main type of insurance. First one is life insurance; life
insurance is pays you as the policy holder or your beneficiaries a certain sum of money in
case of your death. Since the insurance coverage is more than a year, you must pay the
premium either every month, every three months or annually. Its main products include: life-
time policy insurance and endowment insurance. The second is general insurance, general
insurance is your protection from damages or losses excluded from the life insurance.
Coverage period is yearly so your payment is made on a single-basis only. Its main products
are: car insurance, fire insurance, personal accident insurance, medical/ health insurance and
travel insurance.
Life throws many unexpected things at all of us. While we usually can’t stop these thing
from occurring, but we can choice to give our lives of protect. Insurance is meant to give
105
6.1.2 Whole life insurance
Whole life insurance is contract with premiums that includes insurance and
any age if death or permanent total disability, policy holder will receive the insurance pay-
out. Whole life insurance coverage that provides yearly cash pay-outs whilst protecting
against death and total and permanent disability. This mean is the insurance component pays
a predetermined amount when the insured individual dies. Whole life insurance provides
policyholders with the ability to accumulate wealth as regular premium payments cover
insurance costs. This is most basic type of whole life insurance, also known as straight life
Different type of the life insurance fit different people. Whole life insurance is
indicated for individuals in variety of situations. These situations include the need to provide
dependent family members with funding after the head of a household dies; and to ensure
cash in instantly or quickly available to surviving family members. Also, whole life
Whole life insurance also can be guaranteed life-long coverage, growing cash value
About guaranteed life-long coverage, the first and most obvious advantage to whole
life insurance is that you have it for life guaranteed. Regardless of when you buy your
insurance or when you die, you have the life insurance necessary to be able to provide a
Next is growing cash value, whole life insurance policies are specifically designed
with a guaranteed growing cash value and this provides the second advantage. Once the cash
106
value is establishing within a policy the value can never decrease do to market performance.
This means that you can rest assured that your cash value will continue to increase in the
policy for every year that yours maintain it. This is much smarter financing arrangement then
The last advantage to whole life insurance is the death insurance. In addition to all
the benefits that you get while you are alive, you will leave a sum of money behind to your
beneficiaries when you pass away-tax free. Many generations have been able to utilize this
When you decided to insure whole life insurance, there are some tips give you
references. When you buy whole life insurance, you need to understand limited pay life and
single premium life different. You need to choose which type you want, identified the type
then you need take note of the yearly and monthly cost of your insurance, since many of
your quotes will be given both ways. Next, you can gather quotes and company information.
In additional, you need to compare with another company annual and monthly rates. When
you identified company, you can find the insurance company to insure and review the policy
Endowment insurance is to solve the labour loss of the labour capacity after the
withdrawal of the basic job after the establishment of social insurance system. The purpose
of endowment insurance is to protect the basic need of elderly and provide a stable and
Endowment insurance plan have some type, first is endowment assurance policy this
is a simple endowment plan that provides life cover and provision for old age. Sum assured
107
is payable on the death or on the maturity. Seconds is limited payment endowment policy,
about this plan you can choose the period of premium payment. For example, for a 30-year
term of the policy, you pay premium only for the first 15-year only, however, you continue
to receive benefits like bonuses and dividends for the next 15 years too. Last is double
endowment policy, about this policy, the amount of the sum assured is double if the person
Insurance endowment policies offer a few benefits. They can function as a low-risk
way to save. In additional, endowment policy gives benefits to the family members to get
the added features based on the design of the policy. Insurance endowment it’s risk free,
endowment life insurance policies do not have investment risk or interest life risk. When
you choose incredibly safe investment, they usually offer incredibly low returns. Not only
that, endowment insurance provides protection for old people’s lives exempt from the family
some worries, also reduce children to support the elderly. Also, endowment insurance can
conducive to social security, endowment insurance for the elder provide basic life security,
so that elder have some support, protect the basic life of older workers. This means that the
future life of the elderly after the old expectations, don’t have worries, from the social
mentality, people are more stable, this can conducive to social stability.
When you decide to insure endowment insurance, you need to understand how it
works. Besides that, you must understand make monthly or annual payments, part of your
monthly payment is used to buy life insurance. How much depends on your age, sex and
how long the endowment its. The rest of your payment is invested either on a with profits
basic or a linked basic. Next, you can gather quotes and company information. In additional,
you need to know insurance company compensate and reputation. When you identified
insurance company, you can find the insurance company to insure and review the policy
108
6.3 General Insurance
personal insurance covering health, travel, and accidents; and liability insurance covering
legal liabilities. This category of insurance virtually covers all forms of insurance except life.
The first one is motor insurance. It is insurance for cars, trucks, and other road
vehicles. Its main purpose is to provide financial security to prevent physical damage or
bodily injury caused by a collision of traffic accidents, and the possible liability. The specific
terms of the vehicle insurance vary according to the laws of each region. To a lesser extent,
motor insurance can also provide economic protection against theft of vehicles and may
cause damage to things other than traffic accidents. Motor insurance can be divided into
protection for the owners and the third parties, in addition to the same security benefits can
be obtained with the third-party policy, but also to protect the damage to owner's vehicle,
and extended to the theft of vehicles such as the claims interests of the accident. Another one
is third-party policy, is to provide protection for the owner of the vehicle is legally liable for
any injury or damage caused to a third-party life or property, by or arising out of the use of
the vehicle in a public place. This policy's premium is cheaper than the comprehensive policy
and in our country is stipulates that every car at least must insure the third-party policy and
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When you decided to insure motor insurance, there are some tips for you to
reference. First, you have to decide how much coverage you need and review your current
insurance policy. Take note of the yearly and monthly cost of your insurance, since many of
your quotes will be given both ways. Next, you can gather quotes and company information.
While you are researching companies, there are some annual and monthly rates for the
different types of coverage. Make sure to keep the coverage limits the same so you can make
comparisons for cost and coverage and have to understand insurance company's payment
policy. When you research is done, then you can find the insurance company to insure and
has two insurance covers bundled together, the third-party insurance and the own damages
cover. Some also come with a built-in personal accident cover. As the names suggest, the
'own damages' and 'personal accident' insurance components are to cover your losses i.e.
damage to your car or personal injuries, disability and death, respectively. While the above
two are optional covers, third-party insurance is compulsory for all vehicle owners as per the
Motor Vehicles Act. Your third-party insurance does not cover you and your motor vehicle.
It covers your legal liability for the damage you may cause to a third party only - bodily
injury, death, and damage to third party property while using your vehicle. In a third-party
insurance policy, the first party is the insured and the second party is the insurance company.
The third party here is any third person. Under your third-party insurance, a third party can
file a claim for compensation for injury, death, property damage caused by your car.
However, the amount you pay as third-party premium may differ according to the engine
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6.5 Travel Insurance
Travel insurance also is the part of general insurance. Most travelers spend a lot of
time and effort planning the perfect vacations, but they often overlook the importance of
getting a good travel insurance policy. Travel insurance is used to cover medical expenses,
travel cancellations, baggage loss, flight accidents and other losses during international or
domestic traveling. Travel insurance can usually be arranged during a scheduled trip to fully
cover the duration of the trip. Travelers are more vulnerable to illnesses and accidents when
they are traveling in a strange land, and there is no sure way to prevent unfortunate incidents
from taking place. Although travel insurance cannot help people avoid travel misfortunes,
but in the form of monetary compensation to provide comfort, which can be very useful in
certain situations.
Travel insurance provides a wide range of benefits for travelers. Firstly, it offers
financial recovery for medical expenses that are incurred because of accidents and illnesses.
In some countries, medical expenses are high, and those who are seriously injured may need
to pay tens of thousands of ringgits in medical expenses. With travel medical insurance,
travelers can get reimbursed medical expenses total that they spend. Another important
benefit of travel insurance is that it provides protection against trip cancellation and
interruption. When an emergency arises before or during a vacation, travelers may have to
cancel or shorten their travel time. Since they had paid for the holidays, they will lose a lot
of money. Travel insurance ensures that they will receive compensation for losses due to
cancellation or disruption of the itinerary. Additionally, those who have travel policy will
receive coverage for lost luggage or personal belongings. Most travel insurance companies
provide travel assistance and 24-hour emergency services to help their customers deal with
unfavorable conditions during their vacation. If you encounter an accident or loss your travel
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documents, you can seek assistance from the insurance company. The company will provide
the best advice or contact the local emergency service to help you solve your problem in the
shortest time possible. This kind of assistance is especially important if you travel to a
Personal accident insurance provides you and your family with financial support in
the event you suffer an injury, disability, or die from an accident. Although it like a life
insurance, personal accident insurance differs from life insurance in two ways. First one,
personal accident insurance is meant to cover death directly resulting from accidents, not
death from natural causes, while life insurance covers both. Another is, unlike other life
insurance policies that provide savings/investment benefits in addition to any death benefits,
Insurance company follow the same general principle when it comes to defining
“accident”- it’s an unforeseeable event that causes injury at the moment of its occurrence.
But if the “accident” was caused by a cumulative effect, it’s not considered an accident. For
example, if you routinely work to play golf and that pain in your elbow and Achilles hell
turns into a debilitating injury, it’s not considered “accident” by insurance, this is cumulative.
About accidental death, insurers specify that you must perish within a 12-month
period from the date of an accident for your dependents to receive the full insurance pay-out.
But insurance company will determine whether an accident was the ultimate cause of your
death. For example, if you accidentally fall and break your leg while trekking in Malaysia,
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but catch pneumonia while waiting for medical evacuation and die, your beneficiaries would
receive the death benefit pay-out. But, if you caught pneumonia from another patient while
recuperating at the hospital and died as a result – your beneficiaries wouldn’t receive the
an accident, you will receive lump sum payment. Insure define total disability as a condition
that prevents you from working any kind of job. Insurers consider the following as
permanent total disabilities: loss of sight in both eyes, loss of both hands and feet, loss of
Next is about partial permanent disability, insurers also provide benefits if you
complete/partially lose one of your limbs. But the amount you will receive is the only
percentage of the full sum you're insured. For example, if you lose your arm, you will receive
50%.
Last is extra accident death benefit. If you die because of an accident while on board
public transport as a fare paying passenger, your beneficiaries will receive twice the death
benefit.
Health insurance covers that cost of an insured individual’s medical and surgical
expenses. Everyone will occur accident or disease, when you occur accident or disease, you
will need medical care. When you need to do medical care, but you worry not enough money
or resources to pay for all the medical bills. To make human can reduce the burden and focus
on treatment, therefore human need buys health insurance. When human buy health
insurance, the policy holder can get various benefits in the hospital, reduce the personal
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medical burden. In this plan, the policy holder can get “medical insurance card”. In case if
illness or accident, the policyholder can use “medical insurance card” and stay in the hospital
without paying any cash. When the policy holder leaves the hospital, if the cost is exceeded,
Health insurance has some benefits. First is cashless hospitalization, the policy
holder can cashless hospitalization services. Therefore, the policy holder doesn’t need to
unduly worry about immediate cash requirements in case of any emergencies. Another one
is free health check-up; health insurance policies offer periodic health check-up to their
policy holders after every 4 or 5 claim-free years. Health insurance also includes life
threating critical illnesses, medical insurance policies provides a fixed lump sum payment
upon diagnosis and confirmation of certain critical illnesses like cancer, stroke, and paralysis.
Irrespective of the actual amount spent by the insured, the policy holder receives the lump
sum amount which can be used to fund rehabilitation, recuperation, lifestyle adjustment.
When you decide to insure health insurance, you need to know how it works for the
insurance company. Next, you can collect your insurance company information that you trust
and understand insurance company compensation. In addition, you also need to survey other
insurance company information compares with your insurance company that you choose.
When you identified insurance company, you can find the insurance company to insure and
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6.8 Conclusion
Insurance has become the most indispensable of this society because in this busy
and full of the unknown world, you don‘t know the accident and tomorrow which one will
come first, so we need insurance to reduce our loss to avoid secondary losses or damages. If
anything happens to you, the insurance will provide the best solution and compensation to
help you solve the losses that brought by the accident. Every insurance company presents its
best face while selling a plan but it is the Claim Settlement that really decides how good the
company really is. Therefore, you have to survey properly and choose the right company to
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6.9 Reference
1. Damian Tysdal, what are the benefits of travel insurance? September 1, 2010.
6.8 Conclusion
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7.0 Introduction of Investment
Investment is to apportion cash (or at times another asset, for example, time) in the desire of
In back, the advantage from speculation is known as an arrival. The arrival may
comprise of capital pick up or venture pay, including profits, intrigue, and rental pay and so
on, or a blend of the two. The anticipated financial return is the suitably marked down
estimation without bounds returns. The memorable return contains the genuine capital pick
up (or misfortune) or wage (or both) over some undefined time frame. Investment generally
results in acquiring an asset, also called an investment. If the asset is available at a price
Investors generally expect higher comes back from more hazardous speculations.
government securities, to those with higher hazard and higher expected proportionate reward,
for example, developing markets stock ventures. Speculators, especially fledglings, are
7.1 Stock
A stock is a short name of a share certificate and is a kind of securities issued by a joint stock
company to raise funds as a holding voucher and to obtain dividends and dividends for the
purpose of raising funds. Each share represents ownership of a basic unit for the enterprise.
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participating in significant corporate decisions, collecting dividends or sharing dividends.
The ownership of each company represented by each share in the same category is equal.
The size of the shareholding of the company owned by each shareholder depends on the
proportion of the total number of shares held by the company. Stocks are part of the capital
of a joint stock company and can be transferred, traded or pledged as a major long-term
credit tool for the capital market, but can not require the company to return its contribution.
The relationship between shareholders and the company is not a debt-to-debt relationship.
Shareholders are the owners of the company, with their limited share of the limited liability
Stock is the product of socialized production, has nearly 400 years of history. As a result of
human civilization, joint-stock and stock also apply to China's socialist market economy.
Enterprises can raise funds through the public to raise funds for production and operation.
The state can control the majority of equity way, with the same funds to control more
resources. Currently in Shanghai, Shenzhen Stock Exchange listed companies, the vast
Based on stocks, there are two different types of stock that investors can own. They have
The first is Common Stock. Ordinary shares are a kind of stock which changes with the profit
of the enterprise. It is the most common and basic share of the capital structure of the joint
stock company. It is the basic part of the capital of the joint venture enterprise. The basic
characteristic of common stock is that its investment income (dividend and dividend) is not
agreed upon at the time of purchase, but is determined afterwards according to the operating
results of the stock issuer. The company's operating performance is good, the proceeds of
ordinary shares on the high; the other hand, if the operating performance is poor, the
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proceeds of ordinary shares is low. Ordinary shares are the most important and basic shares
in the capital structure of the joint-stock companies and are the most risky shares, but the
(1) A shareholder holding a common share is entitled to a dividend but must be paid
after the company has paid dividends for the debt and preferred shares. Common
stock dividends are not fixed, generally depending on the amount of net profit of the
company. When the company has a good business, profits continue to increase when
the common stock can be more than the preferred shares dividends, dividend rate can
even more than 50%; but to catch up with the company's poor years, it may not even
(2) When the company is liquidated or closed due to liquidation, the ordinary
shareholders have the right to share the company's remaining assets, but the ordinary
property, the property for many hours, Can give up It can be seen that the common
shareholders and the fate of the company more closely related, honor and shame.
When the company gains profits, the average shareholder is the main beneficiaries;
and when the company losses, they are the main impaired.
(3) Ordinary shareholders generally have the right to speak and vote, that is, the right to
speak on major issues and vote. Ordinary shareholders holding a share will have a
vote, holding two shares will have two shares of the right to vote. Any ordinary
senior meeting date, but if you do not want to participate, you can also delegate
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(4) Ordinary shareholders generally have a pre-emptive right, that is, when the company
issued new ordinary shares, the existing shareholders have the right (may also be low)
to buy new shares in order to maintain its original percentage of corporate ownership
has 100 shares of common stock, and you have 100 shares, accounting for 1%, and
now the company decided to issue 10% of the common stock, that is, additional 1000
shares, then you have the right to lower than the market price of the purchase of
which 1 % Of the 10 shares in order to keep you holding the proportion of the same
stock.
When a new share is issued, a shareholder with a preferred share option may exercise its
preferred share option, subscribe for new shares, or sell or transfer its share options. Of
course, in the shareholders that the purchase of new shares unprofitable, and the transfer or
sale of the stock option is more difficult or profitable, it can also be granted priority stock
expired and invalid. When the Company provides the right to subscribe for shares, the
general date of the registration of the shares is stipulated, and the shareholders can only
subscribe for new shares if they can register and pay the shares before that date. Usually this
registration in the registration date of the purchase of shares, also known as the shareholding,
relative to the date of equity registration after the purchase of shares known as ex-rights
shares, that is, the stock is no longer associated with the sale of shares. So that the investment
in the purchase of shares after the date of equity registration is no longer accompanied by a
share option. In addition, in order to ensure the interests of ordinary shares, and some
companies also found that the rights of the company that is able to in a certain period of time
(such as the old shareholders), then the right to purchase shares of the investors (including
the old shareholders), then no right to purchase shares at low prices, (Or permanent) within
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a certain price to buy a certain number of ordinary shares of the certificate. The general
company's warrants are issued with stocks and bonds, which can attract more investors.
To conclude, by the common characteristics of the first two shares is not difficult to see that
the common stock dividends and the remaining assets may be ups and downs, so the general
shareholders bear the greatest risk. In this case, the ordinary shareholders of course, more
concerned about the company's operating conditions and development prospects, and the
latter two characteristics of ordinary shares just make this desire to become a reality that date
to provide and ensure that the general shareholders concerned about the company's operating
conditions and development prospects The means of power. It is also worth noting, however,
that when the investment unit and the preferred stock are issued to the general investor, the
company should make the investor feel that the ordinary shares have higher dividends than
the preferred shares. Otherwise, the ordinary shares are risky in terms of investment, And
can not be more than the preferred shares in the dividend, then who would like to buy
ordinary shares? General companies issue preferred shares, mainly to "insurance security"
type of investors for the release of the object, for those who are more "adventurous" investors,
ordinary shares are more attractive. In short, the issue of these two different nature of the
Next is the Preferred stock. Preference shares are "common stock" symmetry. Is issued by
the joint stock company in the distribution of dividends and surplus property than the
common shares of priority shares. The preferred stock is also a time-limited voucher, and
the preferred shareholder is generally unable to request a refund (a few redeemable preferred
shares) to the company at midway. The main features of the preferred stock are three: First,
the preferred stock usually pre-fixed dividend yield. Since the dividend yield of the preferred
shares is fixed in advance, the dividends of the preferred shares are generally not increased
or decreased according to the company's operating conditions, and generally can not
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participate in the dividends of the company, but the preferred shares can be paid before the
ordinary shares, the company, Dividend fixed, it does not affect the company's profit
distribution. Second, the right shares of the right to a small range. Preference shareholders
generally do not have the right to vote and be elected, the significant operation of the joint
stock company without the right to vote, but in some cases can enjoy the right to vote.
If the shareholders' meeting of the company needs to discuss the claim right related to the
preferred stock, that is, the claim amount of the preferred stock precedes the common stock,
and the second is to the creditor. The priority of the preferred stock is mainly expressed in
two aspects: (1) the dividend receives the priority. The order in which the stock company
dividends dividends is the preferred stock before the ordinary shares are in the post.
determined dividend rate as long as the shareholders' meeting decides to disburse dividends,
and even if there is a general decrease or no dividend, the preferred shares should also be
distributed as usual. (2) the priority of the remaining assets distribution. In the case of
dissolution or bankruptcy liquidation, the preferred stock has the priority of the distribution
of the remaining assets of the company, however, the priority assignment of the preferred
shares is after the creditor and before the ordinary shares. Only after repayment of the debts
of the company's creditors, the preferred shares have the right to allocate the remaining assets
when there is surplus assets. Only after the preference shares claim, the common stock is
There are many types of preferred shares, and in order to meet the needs of some investors
who wish to acquire certain preferential benefits, preferred stock has a variety of
stock means that in a business year, if the company's earnings are not sufficient to
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distribute the dividends, the shareholders of the preferred shares in the future have
the right to ask for the amount of dividends paid in previous years. For non-
cumulative preferred shares, although the profits earned by the company for the year
are prior to the right to share dividends on common shares, the shareholders of non-
distributed in accordance with the specified dividends Can not require the company
(2) Participation in preferred and non-participating preferred stock. When the enterprise
profits increase, in addition to enjoy the interest rate of the established rate, but also
stock is a common stock that allows the preferred stockholder to convert the Eugene
years.
preferred stock is a company that allows the issuance of such shares, and the
compensation. This right is often exercised when the company considers it possible
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to replace the preferred stock with lower dividends. On the contrary, is the
(5) There are three ways to withdraw the preferred stock: (1) premium way: the company
in the redemption of preferred stock, although the price in advance, but because it is
often inconvenient to investors, so the issuing company often in the preferred par
value Plus a "premium". (2) In the course of the issue of the preferred stock, the
Company proposes a portion of the funds from the proceeds to create a "sinking fund",
which is dedicated to the periodic redemption of a portion of the preferred shares. (3)
conversion: that preferred shares can be converted into common stock as required.
Although the convertible preferred stock itself constitutes a type of preference shares,
withdraw the preferred stock, but the initiative to recover the investors in the
1. Open an account
Stock in the account, that is investors in the brokerage for their own to open a stock
and funds to open the account, that the stock to facilitate the transaction.
Stock trading, although it is a money and goods two clear process, but because of the
implementation of paperless transactions, although the stock is the owner of the stock,
but does not occupy the stock in kind, all the stock are taken to record, and are in
so investors need to open a stock account as a "safe deposit box" for the stock in
order to accurately record the number of shares and the stock trading process. At the
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same time, the shareholders of the funds is not to buy the stock when the broker, sold
immediately after the mention, generally also stored in the brokerage office, so
facilitate the investors Access and custody. With the stock account and the capital
account, the stock transaction is much more convenient. When buying the stock, the
broker can be in accordance with the instructions of investors from the capital
account will be paid to the stock and other expenses to draw, and the stock will buy.
In the stock account; and when the stock is sold, the broker can according to the
corresponding instructions to its stock from the stock account "removed", the
and to carry identity cards and local banks through the passbook, according to the
provisions of the form, pay a certain fee after the recipient account card can be
received.
The shareholder code on the shareholder's account card is the only account for
investors to enter and sell stocks. In this account, it will accurately record the stock
out of the number and stock, it is the basis for stock trading for investors. When the
shareholders for the transfer of shares, custody and loss, to receive dividends and
placement rights or cash withdrawal procedures, the broker usually require investors
to produce shareholder account card. Shareholders' account cards are also required
to be issued when the investor is required to check the stock of the firm or the stock
After the shareholders' account card is run, the investor may select the broker to open
location or quality of service. In the brokerage firm, investors and securities firms to
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sign a stock agency trading contract, a clear stock agent in the process of buying and
selling both sides of the power, responsibility and obligations. The implementation
of the corresponding procedures, the broker will give investors a capital account,
which even opened a good financial account. If there is no stock in the shareholder's
shareholder's account, the investor also needs to deposit a certain amount of funds in
the capital account as a deposit for the future to buy the stock.
2. Commissioned
After the completion of the stock account and capital account, investors can enter the
formal stock trading. As the law provides that the general investors can not directly
carry out their own stock trading, investors all the stock trading must be carried out
In the commission process, investors must be presented to the broker ID card to prove
their identity, but also to produce a shareholder account card and fill out the dual
stock trading power of attorney. In the power of attorney, the investor must clearly
fill in the identity card number, shareholder code, fund account number, stock name
(or code) and the stock price and quantity of the sale, commission the deadline and
sign their name, and then submitted to the broker Office staff. When the shareholders
buy the stock, the manager will verify the financial situation within the investor's
capital account. If the funds in the account are insufficient, the broker will generally
refuse to accept the commission. When the investor sells the stock, the manager will
check the stock account Stock of stock. When all this is verified, the broker will
accept the commission of investors, will be sealed after the signing of a single
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Broker in the acceptance of the client's commission, that is, through the green
telephone and sent in the trading hall of the representative of the commonly known
as "red vest" contact, or directly through the advanced computer and communication
system, the client's commissioned the contents of the report and the stock exchange
the stock exchange system on the basis of time priority and price priority principle,
to meet the conditions of the commission to be traded, the process is to match the
transaction. After the stock is traded, the stock exchange will then return the
transaction records to the broker, the broker and then notify the investors in the
4. Confirm
If the commission of the shareholders in the commission period can not be traded,
the commission will automatically fail. If the stock is to buy a stock, the price quoted
is 10 ringgit, but the stock the day the lowest transaction price of 10.50 ringgit,
investors can not buy the stock, the stock market after the closing, the commission
will automatically fail. And when the shareholders of the commission after the
transaction, it is necessary to carry out and transfer. Which is the process of delivery
of goods in the stock exchange two clear process, that is, to buy the stock to pay the
funds, sell the stock to hand over the stock, and the stock and capital changes were
recorded in the stock account and capital account. Transfer refers to the investors to
buy stocks to change the name of the shareholders to change the procedures, the stock
is about to buy the original shareholder name into the buyer's own name.
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7.3 Bonds
Bonds is the government, financial institutions, business enterprises and other institutions
directly to the community to raise funds, to investors, promised to pay interest rates at a
certain interest rate and according to the terms of the repayment of the principal creditor's
rights and obligations. The nature of the bond is a certificate of the debt, with legal effect.
There is a creditor's debt relationship between the bond buyer and the issuer, the bond issuer
is the debtor (Debtors), the investor (or bondholder), the creditor. The most common bonds
Unlike bank credit, bonds are a direct debt relationship. Bank credit forms an indirect debt
relationship through depositors - banks, banks - lenders. Bonds in any form, most of the
market can be traded, and thus the formation of the bond market.
First, according to the issuance of different subjects can be divided into bonds, local
Treasury bonds are often used to make up for the national fiscal deficit, or for some costly
construction projects, as well as certain special economic policies and even to raise funds
for the war. As the national debt to the state's tax as a guarantee of debt service, so the risk
of small bonds, liquidity, interest rates lower than other bonds. From the point of view of the
bond, China's national debt can be divided into voucher-style bonds, bearer (physical) bonds
education, hospitals and sewage treatment systems and other local public facilities. Like the
central government issued bonds, local government bonds are generally the local
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government's tax capacity as a guarantee of debt service. However, some local government
bonds are issued for a particular project (or business) financing. And therefore not to local
government tax as a guarantee, but the borrower to operate the proceeds of the project as a
guarantee. For example, a local government to solve the local low-income housing
difficulties, the use of proceeds from the issuance of bonds to build a number of popular
"commercial housing", the resulting rental income for the repayment of the principal and
interest on bonds. Local government bonds are more secure and are considered to be a bond
of security behind treasury bonds. Moreover, the interest income we buy from local
government bonds is generally exempt from income tax, which is very attractive.
Banks, insurance companies, securities companies, trust and investment companies, asset
management companies and other financial institutions, the lack of funding sources, the
issuance of financial bonds can be more effective to solve the problem. Bonds are generally
not redeemable in advance of maturity and can only be transferred on the market, thus
ensuring the stability of the funds raised. Financial bonds are usually higher than other non-
financial institutions bonds, default risk is relatively small, with high security. Therefore, the
interest rate of financial bonds is usually lower than the average corporate bonds, but higher
than the risk of smaller treasury bonds and bank savings deposit rates. In addition, China
Corporate bonds are more common. As the business mainly to their own operating profit as
a guarantee of debt service. Therefore, the risk of corporate bonds and the business itself is
directly related to the situation. If the enterprise issued bonds, the operating conditions are
not good, continuous losses, may be unable to pay the principal and interest investors,
investors are facing the risk of loss. In this sense, corporate bonds are a more risky bond.
Therefore, when the issuance of bonds in the enterprise, the general bond business to conduct
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a rigorous qualification or require the issuance of corporate property mortgage to protect the
interests of investors. On the other hand, within a certain limit, the risk in the securities
market is positively related to the gains, and the high risk is accompanied by high returns.
Corporate bonds are generally higher than government bonds and local government bonds
Second, according to the different ways to pay can be divided into: discount bonds (zero
Discounted bonds (zero interest) is to say that if you subscribe for a 5-year discounted bond
with a face value of $ 100 at a price of $ 70, you will be able to pay $ 100 in cash after 5
years of maturity, Of which the difference of 30 yuan is the interest of the bond. The bond
is always discounted and you do not have to use the interest rate to calculate its interest
because the difference between its face value and the issue price (ie, the discount portion of
the bond) is the investment you should get when the bond is repaid income. Interest-bearing
bonds are issued at a low price, and interest is paid in installments. Interest is paid in
payments and bond numbers. You can cut the coupon from the bond and receive interest on
the coupon. The interest payment method of interest-bearing bonds should normally be paid
on a repayment period, such as paid once every six months or one year. At present, China
Third, whether the change in interest rates can be divided into: fixed-rate bonds and floating-
rate bonds.
Fixed-rate bonds do not take into account market changes, the cost of issuance and
investment income can be expected in advance, the uncertainty is small, but the bond issuer
and investors still have to bear the risk of market interest rate fluctuations, if the future
market interest rates decline, the issuer can Lower interest rates to issue new bonds, the
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original issue of bond costs is relatively high, while investors get higher relative to the
current market interest rates higher, the original issue of bond prices on the relative rise; the
other hand, if the future market interest rates rise , The cost of new bonds increased, the
original issue of bond costs is relatively low, while the investor's compensation is lower than
the purchase of new bonds, the original issue of bond prices on the relative decline.
Floating rate bonds, its coupon rate is the market interest rate or inflation rate changes and
the corresponding changes. In other words, the interest rate of floating rate bonds is usually
based on the market benchmark interest rate plus a certain interest rate difference (inflation
rate) to determine. Floating rate bonds are often medium and long-term bonds, it is also more
types, such as the provisions of the interest rate floating upper and lower floating rate bonds,
the provisions of the interest rate reaches the specified level can be automatically converted
into fixed-rate bonds, floating rate bonds, with options The floating rate bonds of the right,
and the fixed rate at the time of the repayment period and the mixed rate bonds with floating
interest rates for another period of time. As the interest rate of the bond fluctuates with the
market interest rate, the floating rate bond form can avoid any significant difference between
the actual rate of return and the market rate of return, so that the cost of the issuer and the
income of our investors are consistent with the midfield change trend The But the volatility
of the bond rate also makes the actual costs of the issuer and the actual earnings of the
Fourth, according to the length of the repayment period can be divided into: long-term bonds,
In general, the repayment period is more than 10 years for long-term bonds; repayment
period is less than 1 year for short-term bonds; term for one year or more and less than 10
years (including 10 years) for medium-term bonds. The duration of our national debt is the
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same as the above criteria. However, the maturity of corporate bonds in China is different
from the above criteria. China 's short - term corporate bonds repayment period within one
year, the repayment period of more than 1 year to 5 years for the medium - term corporate
bonds, the repayment period of more than 5 years for long - term corporate bonds.
Public and private placement here can be simply understood as public offering and private
distribution. Public offering of bonds, its issuers generally have a higher reputation, the issue
to be listed on the public offering, and allowed in the secondary market circulation transfer.
Private bond issuance procedures are simple, generally less than the securities regulatory
authorities to register, not publicly listed transactions, can not transfer the transfer, like our
Six, according to the nature of the guarantee can be divided into: unsecured bonds, secured
bonds.
Borrowing is a repayment guarantee as a prerequisite, this guarantee can not say no, just
write on the bond repayment date is not yet. Treasury bonds to the national tax as a
repayment guarantee, some corporate bonds due to corporate credit is good, willing to use
its operating efficiency repayment guarantee, these are bear the responsibility, do not use
for the secured bond class, the above are specified that there are those properties, to the
repayment period if the borrower mismanagement, you can come up with debt. There are
various forms of property used to do the guarantee, and if it is a secured bond, the secured
bond is called a mortgage bond; if it is secured by movable property or right, the bond is
called a pledge bond; Three of the property to guarantee the bond, naturally attributed to
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Convertible corporate bonds are those that convert the bonds of the company into shares of
the company, and both the nature of the bonds and the stock, and the bonds can be sold back
to the issuer. Some convertible bonds are subject to the terms of the sale, and the parties
agree that a certain price level is a convertible price for the conversion of the bonds into
shares. When the market price of the company's stock continues to be lower than the
conversion price and reaches a certain limit, the bond investor The bond may be sold to the
issuer on the agreed terms. In addition. The issuer of the convertible bond has the right to
forcibly redeem the bond. Some convertible bonds are issued with a mandatory redemption
clause, provided that in a certain period of time, if the company's stock market price is higher
than the convertible price reaches a certain rate and for some time, the issuer may be required
to force the redemption of bonds The Since convertible bonds are not entitled to options for
general bonds, the convertible bond interest rate is generally lower than the average
corporate bond rate, and the issuance of convertible bonds by companies helps to reduce
their financing costs. But convertible bonds under certain conditions can be converted into
Bonds are divided into off-site transactions, which are different for each transaction, such as
(1) buy bonds you can directly commissioned by the securities broker, the use of
securities account card declaration forward, buy bonds, the securities firm will print
your securities passbook, you can later sold with the securities passbook. (If you buy
a physical bond and need to be withdrawn, the broker will handle the coupon
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procedure and give it to you in accordance with the relevant custody business of the
bond.
(2) Selling a bond For a physical bond, you should give it to a securities clearing
company in your account or a centralized custody at all parts of the country before
you sell it. You may also entrust a brokerage agent, securities You will be able to
commission the broker to sell the bond you are holding when you have printed the
bond passbook for you by the billing notice of the clearing company. For book-based
bonds, you can subscribe to the issuer, and then commissioned by the custodian to
sell.
(1) repurchase transactions [sell bonds or buy back bonds] you and the buyer signed
an agreement to sell his bonds, take the other side of the funds to do other income
greater investment, you only need to pay a good interest rate to pay him interest , In
the agreement period to the agreed price of the bond to buy back.
(2) Reverse buyback [buy bond or sell back bond] You enter into an agreement with
the seller to buy his bond, the seller at a favorable interest rate to pay you interest,
you agreed in the agreement to the agreed price The bond is sold back to the other
party.
The interest rate of the repurchase agreement is that you and the other party are
negotiated on the basis of the repurchase period, the money market quotation and the
quality of the repurchased bond, and there is no direct relationship with the interest
rate of the bond itself. Therefore, the conditional bond transaction is A short-term
capital loans, in general, the repurchase transaction is to sell the spot to buy futures,
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When you estimate that the price of your bond at hand has a downward trend, you
are not sure that you will not want to transfer the bond right away, but you would
like to transfer the risk of the price to someone else; or if you estimate something
And some of the bond prices will rise, you want to buy, you are not sure that you do
not want to buy the bond immediately, but you really want to get this price may rise
gains, you can commissioned by the broker to you and (The standard futures
contract), in accordance with the provisions of the contract price, agreed to your
estimated price or price increase after the time, the two sides through the futures
exchange brokers negotiated the transaction conditions, Make it easy for you to meet
your intended purpose. Of course, the situation is the opposite of your estimate, you
can not wait until the delivery of the moment, you can expire any time before the
time to do two roughly equal amount, the opposite direction of the transaction to
hedge.
As you know, option trading is an option to trade, the two sides are buying and selling is
a right, that is, you and the other at the agreed price, at a certain time or a day, whether
to buy or sell Kind of bond, and a pre-contracted deal. Specifically, you and the
counterparty through the broker to sign an option to buy and sell the contract, the
provisions of the buyer for a certain period of time in the future, the right to the contract
price, the number of options to the seller to buy or sell a bond; The buyer to the option
seller to pay a certain option fee, to obtain a contract, then the buyer has the right to the
right time in accordance with market conditions, decide whether to implement the
contract, if the market price of its buy or sell bonds, The seller of the option may not
refuse to trade for any reason, if the market price is unfavorable to the buying or selling
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of the bond, he may waive the transaction to be invalidated, and his loss is the option to
buy the option. Cost, or transfer the option to a third party to pass on the risk. Futures
It should be pointed out that the actual trading of futures and options is more complicated
than the theoretical imagination, as if they both have long quasi-arbitrage, long hedge;
short quasi-arbitrage, short pure arbitrage, and portfolio investment and sets And so on.
But fortunately, we do not need to master it, because futures, options for each transaction
volume is very large, our average family or individual investors can not afford.
Investments are an incredible method for profiting develop for you. The scope of venture
alternatives are differed, various and each accompanied their own level of hazard. For the
most part the more prominent the hazard, the more prominent the development potential.
The hazard related with speedier development may not be's some tea and for the individuals
who might want to play it more secure, there are speculation alternatives that give direct
comes back to generally safe. Settled stores is one such speculation choice that falls into
banks which provides investors with a higher rate of interest than a regular savings account,
until the given maturity date. It may or may not require the creation of a separate account. It
is known as a term deposit or time deposit in Canada, Australia, New Zealand, and the US,
and as a bond in the United Kingdom and India. They are considered to be very safe
investments.
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7.7 Return of Fixed Deposit
FD is a guaranteed return on investment. For the example: MR.X want to apply for a whole
year FD with a minimum deposit of RM5, 000 at 3.80% per annum (p.a.). Below we show
how much you can earn from a short-term fixed deposit if you choose to deposit more:
5, 000 190
From the tables, we can realize that the interest is calculated daily but only paid out at
maturity and it is very much a hassle-free passive investment. But for a longer placement
period of more than 1 year, you will have the option to collect your interest earnings either
annually or monthly. In Malaysia, the longest placement period you can choose is 5 years.
At the chart above show us the calculation of interest rate for the annum fixed deposit.
Let’s go with the same example above, an FD with 3.80% p.a. interest for 6 months
Rate (EIR)
(0.038/12) x 6 = 1.90%
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RM5, 000× 1.90% = RM95
5, 000 95
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CASH WITHDRAW Not encourage. Can be done anytime, but
Conclusion: Numerous investment funds and settled store accounts on offer supplement each
other. One enables you to procure high premium (FD), and alternate gives access to money
This type of fixed deposits offer loan costs at each progression or time of the settled
store and the publicized financing cost is normally offered just at the last stride of
the store. Subsequently the powerful financing cost offered by the settled store is
dependably lower than that which is publicized. For example, a Bank offers a 6.88%
interest on a 6 month fixed deposit but when one views the disbursement of interest
it usually 3% for the first 2 months, 3.15% for the next 2 months, 3.24% for the fifth
month and 6.88% for the final month bring the effective interest offered to a mere
3.73%.
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Interest rate in Step-up FD
6.88%
7.00%
6.00%
5.00%
PERCENTAGE
3.00%
2.00%
1.00%
0.00%
Month 1-2 Month 3-4 Month 5 Month 6
MONTH
Here, your FD placement period is split and placed on a staircase. Think of each step
as a different month, with a different interest rate, each step gets higher as you climb.
In this case, the advertised rate usually is only available for the final month, or ‘step’
of the FD period. The Effective Interest Rate (EIR) will always be lower than the
advertised rate.
For the example: MR.Y want to apply for Step-up Fixed Deposit with minimum
deposit of RM5, 000. Bank boasts an interest of up to 6.88% interest p.a. for a 6-
(P.A) RM5000
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MONTH 6 6.88% RM344
Fixed deposits are often bundled with a savings account or a current account (CASA).
Such bundle offers may promote higher premiums however this package would
require the financial specialist to open a present record or a bank account and store a
rate of the sum put resources into the settled store. This prompts contributing a higher
sum and winning lower than the intrigue publicized. The sum you need to put into a
Current or Savings Account is normally a settled sum or a rate of the aggregate put
resources into the FD.A bundled FD rate might look attractive, but don’t forget that
the money you put into the CASA calculates interest at a lower interest rate. The more
you have to put into your CASA, the lower your EIR will be.
For the example: Bank B advertises an interest rate of 4.28% p.a. for their 6-
month FD, but you have to deposit 50% of your FD amount into a CASA as well. This
means that if you want to deposit RM10, 000 into the FD you've also got to deposit
RM5, 000 into a CASA bringing the total amount deposited to RM15, 000. You’ll still
earn the same amount in interest, but you need to deposit more money.
(P.A)
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INTEREST 214.00 12.50 226.50
EARN(RM)
7.9.1. Advantage
(i) Low risk. A term deposit ensures your money will earn interest at a fixed
rate, for a fixed term. There’s little to no chance of losing your money, so it’s
(ii) Low maintenance. When you secure your money away a fixed deposit,
there's not a lot you can do with it until the point that the term is up. So it
arrangement
(iii) No service or start-up fees. One of the best things about a term deposit
is that as long as you don’t withdraw early, it’s entirely fee free.
deposit is that the length of you don't pull back ahead of schedule, its
(v) Impulse spending control. Once your cash is in a fixed deposit, weighty
punishments apply for taking it out ahead of schedule, so it can really check
7.9.2. Disadvantage
(i) Your money isn’t accessible. The main fixed deposit decide is that once
your cash is bolted away, its hands off until the point that the term closes! On
the off chance that you have to pull back your cash from a term store early,
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you'll end up paying a punishment expense, in addition to your loan fee will
be diminished.
(ii) No extra deposits. You’ll need to make a lump-sum deposit when you
open your fixed deposit, and there's no alternative to add to your investment
funds as you go. This may be a bother for general savers, yet one approach to
(iii) Less flexibility. A fixed deposit is low risk, but the flip side is that it’s
not a very flexible savings option. Other products with comparable rates, such
(iv)No bonus interest. Your fixed interest rate may be secure, but on the
other hand, it means there’s no way to earn bonus interest on your term
(v) Rollover terms are often less competitive. In the event that you neglect
to profit after your fixed deposit develops, it could move over into another
term. This rollover term frequently accompanies an absolute bottom loan cost
appended, and you'll need to pay the early withdrawal punishment to receive
in return.
(i) You need to prepare the MyKad for identification, although there might
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(ii) The initial minimum deposit starts from RM1, 000 for a month or RM 5,
000 for 2 months and over and hence needs to be ready in the form of cash,
(iii) Fill in the application form along with required documents and submit at
the bank branch with the deposit account to open your FD account.
(iv) Once you sign up for the FD account, you will be given an issued
lose your certificate, there are provisions to have it re issued to you for some
extra charges.
(i) Visit the website, complete the Online Application Form and submit it.
(ii) Once the form is successfully submitted, you can access your filled-out
form by clicking on ‘Save as PDF’ or from the email sent to you by bank.
Upon submission, you will shortly get a call from a bank representative to
fix an appropriate time for your documents pickup. Alternatively, you may
(iii) Take a print of the filled-out application form sent to your email ID,
sign it, affix photographs and keep the KYC documents selected by you
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7.11 Reference
Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 197, 507. ISBN
0-13-063085-3.
2. P. (2016, October 10). Explain the trading procedure on a stock exchange. Retrieved
stock-exchange/9409.
3. P. (2016, October 10). Explain the trading procedure on a stock exchange. Retrieved
stock-exchange/9409.
https://finance.mapsofworld.com/investment.
Deposit
Account
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Cindy Kam Sin Yee 7.1 Stock
7.3 Bonds
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