1. Last
night, I decided to invite my personal Think Tank to discuss and come out with
viable solutions for the issue of bankruptcy. It is a known fact to all
Malaysia, regardless age, income and social groups, that we have an alarming
rate of bankruptcy among Malaysian in particular the Youth.
2. Yes,
I forgot to share your with you that I have a group of talents for this campaign. They are my
closest friends, confidants and advisers. They hail from many sectors and
industries, such as Oil & Gas, Financial Institutions, Power and Utilities,
Human Resource Practitioner, Airline & Aviation, Government & Public
Policy, Telecommunication, Automotive and even Student Leader.
3. Our
discussion last night, aimed to find out the root cause of this problem. According
to the survey conducted by The Consumer Research and Resource Centre (CCRC) on
the financial behavior of 1000 Malaysians aged 18-35 living in urban area, they
found out that 50% of young Malaysians are in “serious debt” (debt payments
amount 30% or more of their Gross Income). They study also shows that they pay
and average of RM 932 on housing loans, RM 619 on car loans, RM 199 on study
loans and RM 391 on insurance payments. In total, they pay over RM 2,100 per
month.
4. 65%
of them earn less than RM 3,000 per month and the usage of credit cards every
month is on average of RM 702. In addition to the data, my Think Tank
highlighted that the Nielsen’s global survey found that less than 50% of
Malaysian settle their credit card bills in full every month. The finding also
shows that compared to other Asian nations, Taiwan at 89% and Japan at 87%, we
the Malaysian have the habit of prolonging the debt payment and seems like less
care of the interest charges.
5. One
of my friends, highlighted that the Malaysia’s preference to long term loan is
high compared to our neighbors like Indonesia. In Indonesia, standard car loans
period is 5 years, whereas we settle at 9 years.
6. Despite
all the data provided, we also must acknowledge that we are very much different
than our ASEAN peers. We have to look at our Income growth per capita and also
the state’s economic conditions. Is our economy robust and growing so that jobs
could be created and price of goods & services manageable?
7. We
don’t want to ponder into the area of macroeconomic too much. I believe most
will find lots of headache if we put lots of stock in discussing the
macroeconomic, with all the terms and tools. Therefore let us go for the
PRACTICALITY of the issue. Shall we?
8. In
the heated discussion, we conclude that one must be discipline when it comes to
personal finance. It is a logical and accepted way of thinking that we spend
only what are needed by ourselves and family. I understand the dilemma of the
Youth such as Peer Pressure, Family Expectations and a Lust for Luxury. Once I faced
the dilemma heads on. The pressure to provide the best for our family risen
exponentially when we decided to get married and obviously the expectation of
in-laws also needs to be counted.
9. I
think, it is the time we focus on educating and exposing our Youth on personal
finance. I know, Youth especially the Bumiputera, have low appreciation of
finance knowledge. I met many friends of mine, who thinks taking debt, be it personal
or credit card, is a norm and notion like “Gali Lubang Besar (Baru), Tutup
Lubang Lama” is like a mantra. They don’t know what is compound interest and
good payback scheme and in the end will be sucked deep into debt like a
quicksand.
10. We
must advocate INVESTING and SAVINGS as a norm among the Youth in Malaysia. We
must expose to our Youth the benefits they can enjoy if they put more attention
in savings. In our local financial system scene, we have many investment
opportunities and instruments. Most of the investment banks and firms already
rolled out Syariah-Compliant products. Not to mention, our nation’s traditional
investment tools like Tabung Haji and ASB. However, try your best not to use
Debt to finance your ASB. When you look at it, even PNB announced for 8-9%
return, you probably ended up with just a little above the inflation rates of
3.5% return. So invest and save wisely.
11. I
saw from the weekly newspaper, The Edge Malaysia, an advertisement of 2014, The
Edge Kuala Lumpur rat race, a charity awareness corporate run, where you will
see CEOs of top corporate Malaysian firms and their staffs, run to promote
healthy lifestyle and raise funds the The Edge Education Foundation, aimed to
promote financial literacy and improve the command of English among Malaysian.
Hopefully capital raised will be properly distributed to the target groups.
12. As
for the Youth or Malaysian, who are actually in bankruptcy status or having
financial problems, please make use of the Agensi Kaunseling dan Pengurusan
Kredit (AKPK)( http://www.akpk.org.my/) to the max. Do not be shy or ashamed of your
situation. Debt is good to increase value of your life, however, uncontrolled
debt taking, bad discipline in managing it, it will slowly ruin your life and
your family. We can’t run away from debt, honestly. But we can prudently manage
it and slowly change our lifestyle into a responsible one.
INVEST and SAVE.
BE DISCIPLINE in YOUR PERSONAL FINANCE
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