EDITION
  • English
  • 中文
  • Bahasa
  • eCommerce
Thursday, October 5, 2023
uLearnMoney Subscription Events
No Result
View All Result
Money Compass

EDITIONS:

Media and partner organizations:

cmc bmc ulearnmoney mylife mcm asncommerce mcm
  • HOME
  • NEWS
    • Global Market News
    • Local Market News
    • Corporate News
    • PLC News
  • SPECIAL FEATURE
  • COMPASS
    • Financial
    • Investment
    • Start Up
    • Capital
    • Infographics & Quotes
  • MONEY TUBE
  • LIFESTYLE
  • PR NEWSWIRE
Subscription Newsletter
Money Compass
  • HOME
  • NEWS
    • Global Market News
    • Local Market News
    • Corporate News
    • PLC News
  • SPECIAL FEATURE
  • COMPASS
    • Financial
    • Investment
    • Start Up
    • Capital
    • Infographics & Quotes
  • MONEY TUBE
  • LIFESTYLE
  • PR NEWSWIRE
No Result
View All Result
中文 Bahasa eCommerce
Money Compass

Early Planning for a Better Financial Future as a Millennial

by moneycompass
February 26, 2020
in Financial Compass
millennials - millennial
Share on FacebookShare on WhatsApp

With their current status of having minimum financial burden, Generation Y (Gen-Y) or better known as millennials should take a serious look at managing their finances with a properly planned blueprint to ensure a better financial future.

Most millennials, however, tend to be lacking in self-discipline to commit to a monthly savings plan. Some of them frequently max-out their credit cards due to reckless overspending.

Realize this, the ghost of bad spending habits will haunt millennials in the long run. The seeds planted today will result in fruits, or the lack of them, in the future. The reckless actions committed today will surely cost the quality of life down the road.

CASE STUDY

“Adam, aged 29, works as a Graphic Designer at a commercial company. He is entitled to a RM4,000 monthly salary and a RM10,000 yearly bonus. He is insured with basic whole life, medical and personal accident insurances. Adam also earns extra RM25,000 annually through his part-time assignments and has RM10,000 in his savings account. He spends a lot on his hobbies of travelling and outdoor sports. Adam wishes to get married in five years’ time, planning to save RM200,000 for a wedding ceremony, house purchase and renovation, and more.”

As Adam, a millennial, aspires to accumulate RM200,000 for his future family, he will have to plan his wealth distribution properly. There are two aspects he needs to focus on when planning for investment and insurance – they are keeping track of expenses with a habit of managing them well, and making smart investment decisions, including getting well-insured.

Cutting down on unnecessary expenses

Singles tend to have reckless spending habits, which directly affect the plan to save and accumulate wealth. Adam can start by:

a) Cutting down unnecessary expenditures, such as ones on socializing and hobbies.

b)  Compiling a saving-spending table to keep track of his daily expenses in order to acculturate a healthy saving habit.

c)  Reducing credit card usage, which is always the culprit to overspending. It is rather tempting for credit card users to go on a spending spree without realizing the actual amount spent, leading to repayment burden on the overdue interests charged.

Planning wealth management according to needs

Adam juggles a full-time day job and a part-time, plus he loves to travel and do outdoor activities. Hence, he should be well insured with a personal accident policy for better protection. Under the above-mentioned circumstances, Adam can plan for a stable wealth planning products, such as multiple protection insurance policies, which covers death, accident and permanent disability.

What are some of the details for Adam to focus on when choosing the right wealth planning product?

1.APPROPRIATE PREMIUM RAT

The concept of protection and insurance is common among Malaysians. Coupled with the ambition to multiply their wealth, investment-linked life insurance has become popular. Those who invest without proper research usually pay an unreasonable premium, which can be as high as 40% of their personal annual income or more. They always end up terminating their insurance policies when they are incapable of paying the premium, which brings destructive financial loss.

2. POLICY COVERAGE

The core purpose to purchase an insurance policy is for protection, which can be categorized into personal risk and property protections. From an individual’s perspective, personal risk protection should be the priority, such as found in personal accident insurance, whole life insurance, and chronic disease insurance.

3. REASONABLE INSURANCE COMBINATION

It is common to customize combinations in the insured items when purchasing personal insurance policy. For example, one can couple a whole life insurance with personal accident insurance and chronic disease insurance for complete protection. Proper planning of insured items can prevent redundancy in insuring.

As an example, Adam who travels a lot should purchase a personal accident insurance specifically to avoid repeatedly spending on travel accident insurances. By killing two birds with one stone, he can avoid unnecessary spending and also insure himself for any accident happening in other circumstances aside from travelling.

Participating in endowment insurance is another good option for millennials with strong spending desires to commit themselves to a compulsory savings plan. Under the notion of the expected rise in interest rates, participating insurance policies can manage to, partly, overcome the risk of rising interest rates. However, insurance serves mainly as a protection, in cases of accidents, which should never be more than 10% of an individual’s annual income.

Aside from participating insurance, other insurance policies do not seem to have an increasing value ability, which may attract millennials, who have stronger immunity towards risk with more time and opportunity to invest. Hence, investing in bonds, stocks and mutual funds is another option to help multiply millennials’ wealth for a better financial future.

4. FULL UNDERSTANDING OF THE TERMS AND CONDITIONS

Before any decision is made to purchase an insurance policy, the liability and liability exemptions are two main items that should never be overlooked.

Questions such as insurers’ disclaimer of liabilities, premium payments, receivable benefits and special terms imposed should be posed to the life insurance agents, especially when there is ambiguity.

Most insurance products from different companies serve a similar basic purpose, with minor differences in payment, protection coverage and claims. For chronic disease protection, for example, some insurance companies offer up to 10 types of diseases with coverage for whole life while others terminate at the age of 70. The premium for this slight difference may just be a few ringgits apart and hence, it is always advisable to compare the products from different insurers.

Takeaway

Purchasing a policy may seem simple, but it requires intense research to ensure solid protection. In short, understanding the needs, choosing the priorities, studying the terms and making smart comparisons for the perfect combination, are the basics to purchasing an insurance policy.

Millennials should always aim for the best financial future and try their hardest to achieve satisfactory results. They should have the feeling of responsibility towards their own financial future and knowing the importance of financial planning early on in their young adulthood will serve their future selves and family well in the long run.

 

Edited by: Farah Faisal

This article was first published on 8 January 2018.

 

Read more: How to Build Multiple Sources of Income

Tags: financial futurefinancial planninginsuranceMillennial's
Share22SendShareSendTweetShare
Previous Post

CleverTap Names Julie Simon Vice President of Marketing for Asia-Pacific Region

Next Post

Huawei Atlas 900 AI Cluster Wins the GSMA GLOMO Tech of the Future Award

Related Posts

7 Easy Ways to Save Money for a House Deposit
Financial Compass

7 Easy Ways to Save Money for a House Deposit

07 Nov 2022
Renminbi, Chinese Yuan, US Dollar, Currency,
Financial Compass

Can a Weaker Renminbi Rescue the World from an Inflation Crisis?

23 Sep 2022
recession,
Financial Compass

Why Recession Looms For The Developed World

06 Sep 2022

Discussion about this post

MOST POPULAR

  • Diversity Thrives, Inclusion Prevails: HR Asia Best Companies to Work for in Asia Thailand 2023 Honors 73 Champions of an Inclusive Workforce

    0 shares
    Share 0 Tweet 0
  • Osman Ershad Faiz Recognised In The 2023 Heroes Role Model Top 20 Lists

    0 shares
    Share 0 Tweet 0
  • EN+ Silk Series EV Charger Wins MUSE Design Awards 2022

    0 shares
    Share 0 Tweet 0
  • Hong Leong Bank, Hong Leong Islamic Bank and Cagamas Berhad Conclude RM300 Million Green Assets Transaction

    0 shares
    Share 0 Tweet 0
  • BizLink enhances its robotic portfolio in dresspack systems

    0 shares
    Share 0 Tweet 0

MEMBERSHIP SUBSCRIPTION

Subscribe Now

Sign Up for Our Free Newsletters

Stay up-to-date with the latest personal wealth-related articles, breaking financial market news, and more.

Follow us on Social Media

News
Special Feature
Compass
Money Tube
Smart Lifestyle
Corporate Profile
Advertise
Subscriptions
Career
Contact Us
eLearning
Events
Privacy Policy
Terms of Use
Strategic Partners

Copyright © . Money Compass. All Rights Reserved.

Design and Development by Ant Internet Sdn Bhd

No Result
View All Result
  • HOME
  • NEWS
    • Global Market News
    • Local Market News
    • Corporate News
    • PLC News
  • SPECIAL FEATURE
  • COMPASS
    • Financial
    • Investment
    • Start Up
    • Capital
    • Infographics & Quotes
  • MONEY TUBE
  • LIFESTYLE
  • PR NEWSWIRE

© 2020 Money Compass

Career

SUBSCRIBE FREE NEWSLETTER