Finally, a post on personal finance. First, watch the following clip. Make sure you concentrate from minute 1:10
Amused? Embarrassed? Ticked off? Terasa pedasnya? Whatever your response is, we all cannot deny the fact that loans & credit terms have become quite synonym with Malays. We have so many of these 'hutangs' and more are created almost every day. We have hutang kain, hutang carpet, personal loans, car loans, housing loan, business loans, educational loans, PTPTN, pajak gadai, credit cards, 0% installment, eazipay, retail store credit and sooo many more (ball keeps rolling & rolling & rolling..)
It frightens me on how easy it is nowadays to get a credit card (Maybank practically posts it to you without you knowing), personal loan (no need guarantor maaaa) & store credits (remember Courts Mammoths RM1 only promo?). Heck, a friend of mine even get frequent calls from banks offering personal loans up to RM40K! No filling-up of application forms, no salary statement needed, no epf statement, nothing, nil, zip. He just says the magic word and lo and behold a cheque magically arrives at his doorstep (maybe has something to do with him earning more than RM100k permonth).
Me & my wife, we strongly believe that
Study Loan
Tertiary studies are becoming more & more expensive today, especially since financial institutions have become commercial, a place to earn profit rather than a place of study. Mine was more than RM80K for four years in MMU. Though expensive as it is I've realized that going to college/university is very important, not because of the in-class education but rather the knowledge you learn outside of class. My advice, start & save now when your child's still young. There are many savings, investment & takaful plans specific for this need. Better still, make sure your children do well in their school and they might get a scholarship! As for yourself, you shouldn't be adding debts to your family by applying loans to go for post graduate or doctorate studies. Since you should already be working by now, go pay for them yourselves! (Personally I don't see any reason to continue my studies, as Masters & PHD are losing their value in the new age, save for a few selected areas & field).
First Car
I've noticed that it has been sort of a 'trend' nowadays that you should get a car ASAP once you start working no matter how much money you make (gaji kecik = keta kecik, gaji besar = keta besar sikit) even if the car costs half of your salary! I know that some of you need it to impress your parents (unlike others who simply wants to impress their 'orang kampung' or 'anak ketua kampung') but this is something that takes time. When I worked at Brickfields I took the Komuter everyday because that was what i could afford with my RM1,100 permonth allowances. When ever I had to go offsite for a meeting, I will hitch a ride with Pn Nemy or with one of my colleagues. Later on I realized this was a burden to them, so I swallowed my pride and borrowed my father's JER 4954, a Peroda Rusa GX 1.6 Manual (those days MPVs were not yet famous, so driving a van aka family car was so uncool :p). I wonder if we have photos of that Rusa. Certainly brings a lot of memories.
House
Between a car & a house, which should you buy first? My answer would definitely be the latter. Houses have sustained the test of time since the medieval ages and have always been a source of income for the rich due to the increase in value & potential rental income. Applying a loan for a house is A OK since it is considered a good debt (return > expense).
Kahwin
Tertiary studies are becoming more & more expensive today, especially since financial institutions have become commercial, a place to earn profit rather than a place of study. Mine was more than RM80K for four years in MMU. Though expensive as it is I've realized that going to college/university is very important, not because of the in-class education but rather the knowledge you learn outside of class. My advice, start & save now when your child's still young. There are many savings, investment & takaful plans specific for this need. Better still, make sure your children do well in their school and they might get a scholarship! As for yourself, you shouldn't be adding debts to your family by applying loans to go for post graduate or doctorate studies. Since you should already be working by now, go pay for them yourselves! (Personally I don't see any reason to continue my studies, as Masters & PHD are losing their value in the new age, save for a few selected areas & field).
First Car
I've noticed that it has been sort of a 'trend' nowadays that you should get a car ASAP once you start working no matter how much money you make (gaji kecik = keta kecik, gaji besar = keta besar sikit) even if the car costs half of your salary! I know that some of you need it to impress your parents (unlike others who simply wants to impress their 'orang kampung' or 'anak ketua kampung') but this is something that takes time. When I worked at Brickfields I took the Komuter everyday because that was what i could afford with my RM1,100 permonth allowances. When ever I had to go offsite for a meeting, I will hitch a ride with Pn Nemy or with one of my colleagues. Later on I realized this was a burden to them, so I swallowed my pride and borrowed my father's JER 4954, a Peroda Rusa GX 1.6 Manual (those days MPVs were not yet famous, so driving a van aka family car was so uncool :p). I wonder if we have photos of that Rusa. Certainly brings a lot of memories.
House
Between a car & a house, which should you buy first? My answer would definitely be the latter. Houses have sustained the test of time since the medieval ages and have always been a source of income for the rich due to the increase in value & potential rental income. Applying a loan for a house is A OK since it is considered a good debt (return > expense).
Kahwin
Do you really want to start your new journey with debts around your waist ? Marriage itself is a myriad of trials and trust me, you don't want financial issues to be part of it. If you need to apply for a personal loan for the dowry, than you simply are not "qualified" to get married. If you have enough money, only that you need the loan for a Grandeur reception event, then by all means go ahead (NOT). No need for me to elaborate here as too many Ustaz's & Ustazah's have discussed in depth on this issue.
Furniture, Flat Screen TV, HI-FI set, Massage Chair, etc
Furniture, Flat Screen TV, HI-FI set, Massage Chair, etc
No no no no no definitely no no. These are all luxuries that can definitely wait. If you have sights for something that you fancy, start putting away a reasonable amount of money every month. Settle for something below your means, even though if it means you have to bear the inconveniences. This includes sleeping on a mattress on the floor for over a year because you couldn't afford a bedroom set, hand-washing your own clothes because the decade old semi-auto washing machine that you borrowed from your mom keep ruining your clothes and even watching movies on a TV set that keep changing colors or sometimes decides to become mute for no apparent reason.Challenging? Yes, but well worth it.
Business
Contrary to popular practice, it is not advisable to apply a loan to start a business. You should only apply a loan to EXPAND your business. Too many businesses have I personally seen flop due to the unprepared owner who ends up making ends meet just to pay back the loan. Since the money is "easily" gained, a lot of them take it for granted and lavishly spend thousands of RM for renovation & other stuffs which are not vital for the business. Start small with your own capital and you will be more cautious and better appreciate the money.
Hutang Menurut Islam
I'm no expert in this field, but here's a link to an article taken from Zaharuddin.net which discusses on this issue.
Recommendation:
Read Robert Kiyosaki's Rich Dad Poor Dad on understanding good debts & bad debts, among other things. This was one of the first books that I've read on business/personal finance. (there are of course other books that better explains this issue, it's just that I don' know of any :D)
Read Robert Kiyosaki's Rich Dad Poor Dad on understanding good debts & bad debts, among other things. This was one of the first books that I've read on business/personal finance. (there are of course other books that better explains this issue, it's just that I don' know of any :D)
Robert Kiyosaki's "Rich Dad Poor Dad"
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