CHAPTER 8

ENTREPRENEUR AND PERSONAL FINANCIAL PLANNING

NEED FOR PERSONAL FINANCIAL PLANNING

Financial planning is the long term process in managing finance to achieve goals and dreams and negotiating financial barriers that arise along the stage of life It involves budgeting, saving and spending money from time to time Financial planning is a long term process not a one time product

Steps In Financial Planning

Assessing Own Financial Situation Setting Goals Creating A Financial Plan

Implementing The Plan

Monitoring And Reassessing

Benefits Of Financial Planning

By having own financial planning, one be able; 1. Have more control on financial affairs.. 2. Better personal relationships with people around us 3. Achieve financial freedom 4. Be more effective in obtaining, protecting financial resources throughout our lifetime

Life Stages And Financial Planning

Each stage of our life presents different investment opportunities and challenges Stages; baby, infant, teenager, single, adult, married, working, retired; all phases have different priorities, responsibilities and financial goals As our needs change, our financial priorities will adjust to meet our varied needs at different point of our life

POWER OF MONEY
Money is power, freedom, a cushion, the root of all evil, the sum of blessings Gaining personal knowledge is important because financial knowledge empowers us to make good decisions with our money When setting financial goals, we must consider our priorities Goals must be specific and stated in periods

 Periods of goals 1. Short term goals ; less than 1 year 2. Medium term goal ; between 1 3 years 3. Long term goal ; more than 3 years There are many uncertainties in life to be faced When setting goal, include saving for emergency fund

Assets And Liabilities

We need to identify what we own and what we owe, how much money left. 2 personal financial statements helpful; 1. Balance sheet 2. Cash flow statement It helps in; 1. Provide information about current financial position; income and expenditure

2. Measure in meeting short-medium-long term financial goals 3. Maintain information about financial activities 4. Providing data use for tax purposes or loan application

Knowing Own Net Worth

Net Worth = Total Assets Total Liabilities

Positive net worth; we own more than we owe (healthy financial position) Negative net worth; we owe more than we own (financial trouble, bankrupt)

THE BASICS OF BUDGETTING

Budgeting help in; 1. Live within our monthly income 2. Keep aside money or savings 3. Reach financial goals 4. Prepare for financial emergencies 5. Develop good financial management habits

 Our cash flow statement tells us what we received and spent in terms of cash over a period of time
Total Cash Received Total Cash Outflow = Cash Surplus/Cash Deficit

LIVING WITHIN MEANS

We are said to living within means if we able to pay the things we need without trapped in more debts Can be achieved by; 1. Knowing our needs and wants 2. Spending wisely 3. Delaying gratification

EARLY SIGN OF FINANCIAL TROUBLE

We must able to realize whether we are in financial trouble or not If it happen to you, contact your bank and workout for adjusted repayment plan to suit our cash flow

GETTING OUT OF FINANCIAL TROUBLE

The Credit Bureau Of Bank Negara Malaysia maintains credit information on borrowers in its Central Credit Reference Information System Financial institutions have various criteria to assess the credit worthiness of potential borrowers Financial institution will take legal proceedings against borrower for example selling the asset through public auction

 In certain cases, financial institution will file a bankruptcy order if debt amount is more than RM 30000. Question 1. What are the things that we are legally barred from doing?

CHAPTER 9
ACHIEVING ENTREPRENEURS PERSONAL FINANCIAL DREAMS

ENTREPRENEUR WEALTH BUILDING

Ways To Build Wealth

Saving Habit Investment Goals Investment Risk And Return Diversify Investment

Increasing Net Worth

TYPE OF INVESTMENT
Cash And Fixed Interest Investments Real Estate Investment Trust ( REIT)

Property

Shares

Bonds

Unit Trust Funds

PLANNING FOR UNCERTAINTIES

Need For Protection/Insurance Is a means of giving a financial buffer or protection in case something happens to you, family and your belongings

Types Of Insurance Life Insurance General Insurance

Whole Life Term Life Endowment Investment Linked Medical And Health Mortgage Reducing Term Motor

House
Travel Personal Belonging

Types Of Takaful
Family Takaful General Takaful

Individual Family

Home Takaful
Retirement Annuity Motor Takaful

Investment Linked
Personal Accident Medical And Health

MANAGING DEBT: BORROWING

Loans And Credits When we want to take a loan or use credit card, certain questions must be asked Never borrow money from loan shark

Types of loan

Personal loan

Housing loan

Car loan

TYPE OF CARD
Credit card Charge card Prepaid card

Debit card

What are the tips when using credit card?

Repayment And Default

A good paymaster is one who pays his or her monthly loan repayments on time and in the amount required according to the terms and conditions of the loan agreement Defaulting on loan payments and failing to settle credit card debt can have terrible consequences What are the signs showing we are in financial difficulty?

Group Assignment
1. What exactly balance sheet statement and cash flow statement reports? KAIZER 2. What are the things that we are legally barred from doing if we are blacklisted or bankruptcy? X-F 3. What are the tips when using credit card? GREEN ENTREPRENEUR 4. What are the signs showing we are in financial difficulty? DRI-FIT

5. What are the differences between insurance and takaful? PRODIGY 6. What is Real Estate Investment Trust (REIT)? YO PEACE FAMILY 7. What is Credit card, Debit card, Prepaid card and Charge card? NAZRULS 8. Money is power, freedom, a cushion, the root of all evil, the sum of blessings. Discuss. GAJAH

9. What is delaying gratification. Discuss with example. ESUK 10.What the things that we need to consider when preparing budget? MIU MIU 11.What are the purpose of insurance? KM TURBO 12.What is emergency fund? Discuss with example. USAHA 1