CASHFLOW FOR THE YEAR ENDING 30/4/2008 Roshan Rohana Total
Inflow Monthly Yearly Yearly
Salary 10,000 120,000 120,000 Business income 10,000 10,000 Tax 1,533 18,390 18,390 EPF 1,100 13,200 13,200 Total inflow 7,368 88,410 10,000 98,410 Outflow Groceries 1,000 12,000 12,000 Utilities 350 4,200 4,200 Miscellaneous 500 6,000 6,000 Vacation 2,000 2,000 Eating Out 500 6,000 6,000 Car insurance 1,500 1,500 Car maintenance 2,000 2,000 Petrol 250 3,000 3,000 Golf fees, etc 200 2,400 2,400 Books 800 800 Clothing 4,000 4,000 Charitable donations 500 500 Julianas preschool 400 4,800 4,800 Credit card: Personal expenses 1,300 15,600 15,600 Credit card: Wife expenses 700 8,400 8,400 Car HP 1,000 12,000 12,000 House mortgage 926 11,112 11,112 Zakat fitrah 26 Total outflow 7,126 96,338 0 96,338 Net cashflow 242 -7,928 10,000 2,072 NET WORTH STATEMENT AS AT 30/4/2008 Roshan Rohana Total CURRENT ASSETS Cash at hand -7,928 10,000 2,072 Wadiah (joint) 35,000 35,000 70,000 Gold jewelry 6,000 6,000 Tabung Haji 300 5,000 5,300 Due from company 8,000 0 8,000 Maybank stock 16,800 16,800 KPJ Healthcare stock 3,100 3,100 Tradewinds stock 6,600 6,600 Guocoland stock 3,000 3,000 PHEIM Asia Ex-Japan unit trust fund 5,000 5,000 Phillip Master First Ethical unit trust fund 2,000 0 2,000 TOTAL CURRENT ASSETS 71,872 56,000 127,872 LONG TERM ASSETS EPF 250,000 30,000 280,000 House 175,000 175,000 350,000 Family car 42,000 42,000 TOTAL LONG TERM ASSETS 467,000 205,000 672,000 TOTAL ASSETS 538,872 261,000 799,872 CURRENT LIABILITIES Credit card 10,000 0 10,000 TOTAL CURRENT LIABILITIES 10,000 0 10,000 LONG TERM LIABILITIES House - Conventional 103,108 0 103,108 Family car - Islamic HP 48,000 48,000 TOTAL LONG TERM LIABILITIES 151,108 0 151,108 TOTAL LIABILITIES 161,108 0 161,108 NET WORTH 377,764 261,000 638,764 RATIO ANALYSIS & RECOMMENDATIONS LIQUIDITY RATIOS CURRENT ASSET/NETWORTH RATIO 20.02% CURRENT ASSETS/NETWORTH CURRENT RATIO 3.86 CURRENT ASSETS/CURRENT LIABILITIES SURVIVAL RATIO 10.22 LIQUID ASSETS/TAKE HOME PAY EMERGENCY RATIO 10.57 LIQUID ASSETS/MONTHLY EXPENSES *Assume Gold and Investments are not liquid GEARING RATIOS SOLVENCY RATIO 79.86% NETWORTH/TOTAL ASSETS DEBT TO ASSET RATIO 20.14% TOTAL DEBTS/TOTAL ASSETS DEBT SERVICE RATIO 47.87% TOTAL INTEREST BEARING DEBT/TOTAL INCOME NON-MORTGAGE DEBTS/TOTAL INCOME RATIO 36.58% NON-MORTGAGE DEBTS/TOTAL INCOME ANALYSIS LIQUIDITY RATIOS CURRENT ASSET/NETWORTH RATIO Networth is made up of 19.80% current assets. The rest are fixed assest and deferred assets. Quite favorable as nearly one fifth of networth is made up by cash or near cash. CURRENT RATIO The ability to pay current liabilities is 3.81 times, which is quite favorable. Meaning, by liquidating current assets, they can settle current liabilities by more than three times. The rule of thumb is more than 1 time. SURVIVAL RATIO Liquid assets can cover up to 10.07 times take home salary. In case of emergency, they can still survive with their current lifestyle for 10 months. The rule of thumb is 12 months. Need improvement. EMERGENCY RATIO Liquid assets can cover up to 10.57 times monthly expenses. In case of emergency, they can settle their bills and expenditure of 10.57 months. The rule of thumb is 12 months. GEARING RATIOS SOLVENCY RATIO 79.81% of assets are debt-free. This is due to the increased value in property. DEBT TO ASSET RATIO Only 20.19% of assets are financed by debt, of which 13% is housing loan. DEBT SERVICE RATIO Out of total income (take home salary), 41.05% is used to pay interest bearing debt. Quite high. Rule of thumb is 30%. NON-MORTGAGE DEBTS/TOTAL INCOME RATIO Out of total income (take home salary), 31.37% is used to pay non-mortgage debt. Quite high and need protection. RECOMMENDATIONS: 1. REDUCE EXPENDITURE TO IMPROVE CASHFLOW E.G. DINING OUT, CLOTHING 2. OBTAIN COMPANY CREDIT CARD TO AVOID UNNECCESSARY INTEREST CHARGE 3. IF POSSIBLE, DO NOT USE CREDIT CARD FOR PERSONAL AS THE COST IS THE HIGHEST. IT ALSO ENCOURAGES LAVISH SPENDING 4. IF STILL NEEDED, CHANGE CREDIT CARD TO SHARIAH CREDIT CARD TO AVOID COMPOUNDING INTEREST ON *CL includes the current portion of LTL TOTAL INTEREST BEARING DEBT/TOTAL INCOME NON-MORTGAGE DEBTS/TOTAL INCOME Networth is made up of 19.80% current assets. The rest are fixed assest and deferred assets. Quite favorable as nearly one fifth of networth is made up by cash or near cash. The ability to pay current liabilities is 3.81 times, which is quite favorable. Meaning, by liquidating current assets, they can settle current liabilities by more than three times. Liquid assets can cover up to 10.07 times take home salary. In case of emergency, they can still survive with their current lifestyle for 10 months. The rule of thumb is 12 months. Need improvement. Liquid assets can cover up to 10.57 times monthly expenses. In case of emergency, they can settle their bills and expenditure of 10.57 months. The rule of thumb is 12 months. 79.81% of assets are debt-free. This is due to the increased value in property. Only 20.19% of assets are financed by debt, of which 13% is housing loan. Out of total income (take home salary), 41.05% is used to pay interest bearing debt. Quite high. Out of total income (take home salary), 31.37% is used to pay non-mortgage debt. Quite high and need 3. IF POSSIBLE, DO NOT USE CREDIT CARD FOR PERSONAL AS THE COST IS THE HIGHEST. IT ALSO ENCOURAGES 4. IF STILL NEEDED, CHANGE CREDIT CARD TO SHARIAH CREDIT CARD TO AVOID COMPOUNDING INTEREST ON CASHFLOW AND NETWORTH STATEMENT AFTER RECOMMENDATION CASHFLOW FOR THE YEAR ENDING 30/4/2008 Roshan Rohana Total Inflow Monthly Yearly Yearly Salary 10,000 120,000 120,000 Business income 10,000 10,000 Tax 1,015 12,175 0 12,175 EPF 1,100 13,200 0 13,200 Total inflow 7,885 94,625 10,000 104,625 Outflow Groceries 800 9,600 9,600 Utilities 350 4,200 4,200 Miscellaneous 500 6,000 6,000 Vacation 2,000 2,000 Eating Out 200 2,400 2,400 Car insurance 1,500 1,500 Car maintenance 2,000 2,000 Petrol 250 3,000 3,000 Golf fees, etc 200 2,400 2,400 Books 800 800 Clothing 3,000 3,000 Charitable donations 500 500 Julianas preschool 400 4,800 4,800 Credit card: Personal expenses 0 0 0 Credit card: Wife expenses 0 0 0 Personal allowance 1,000 12,000 12,000 Wife allowance 500 6,000 6,000 Car HP 1,000 12,000 12,000 House mortgage 568 6,822 6,822 Zakat fitrah 26 26 Zakat on income 0 2,538 425 2,963 Zakat on savings 1,788 875 2,663 Total outflow 5,768 69,573 1,300 70,873 Net cashflow 2,117 25,052 8,700 33,752 NET WORTH STATEMENT AS AT 30/4/2008 Roshan Rohana Total CURRENT ASSETS Cash at hand 25,052 8,700 33,752 Wadiah (joint) 5,000 5,000 10,000 Gold jewelry 6,000 6,000 Tabung Haji 20,300 35,000 55,300 Due from company 8,000 0 8,000 Maybank stock 16,800 16,800 KPJ Healthcare stock 3,100 3,100 Tradewinds stock 6,600 6,600 Guocoland stock 3,000 3,000 PHEIM Asia Ex-Japan unit trust fund 5,000 5,000 Phillip Master First Ethical unit trust fund 2,000 0 2,000 TOTAL CURRENT ASSETS 94,852 54,700 149,552 LONG TERM ASSETS EPF 220,000 30,000 250,000 House 175,000 175,000 350,000 Family car 42,000 42,000 TOTAL LONG TERM ASSETS 437,000 205,000 642,000 TOTAL ASSETS 531,852 259,700 791,552 CURRENT LIABILITIES Credit card 0 0 0 TOTAL CURRENT LIABILITIES 0 0 0 LONG TERM LIABILITIES House - Islamic Financing 73,108 0 73,108 Family car - Islamic HP 48,000 48,000 TOTAL LONG TERM LIABILITIES 121,108 0 121,108 TOTAL LIABILITIES 121,108 0 121,108 NET WORTH 410,744 259,700 670,444 RECOMMENDATIONS: 1. REDUCE EXPENDITURE TO IMPROVE CASHFLOW E.G. DINING OUT, CLOTHING REDUCE EATING OUT FROM 500 PM TO 200 PM REDUCE CLOTHING FROM 4000 PA TO 3000 PA REDUCE GROCERIES FROM 1000 PM TO 800 PM 2. OBTAIN COMPANY CREDIT CARD TO AVOID UNNECCESSARY INTEREST CHARGE 3. IF POSSIBLE, DO NOT USE CREDIT CARD FOR PERSONAL AS THE COST IS THE HIGHEST. IT ALSO ENCOURAGES LAVISH SPENDING USE CURRENT ACCOUNT SAVINGS TO PAY OFF CREDIT CARD OF 10K PROVIDE PERSONAL ALLOWANCE FOR ROSHAN 1000 PM AND ROHANA 500PM 4. IF STILL NEEDED, CHANGE CREDIT CARD TO SHARIAH CREDIT CARD TO AVOID COMPOUNDING INTEREST ON THE OUTSTANDING BALANCE 5. REFINANCE HOUSING LOAN USING ISLAMIC FINANCING TO AVOID RIBA. IT IS ALSO BECAUSE OF CURRENT RATE IS CHEAPER. OR ASK FOR LOWER RATE. 6. WITHDRAW EPF TO REDUCE HOUSING LOAN AS THE FORMER IS EARNING LESS THAN THE INTEREST COST OF HOUSING LOAN. HOWEVER, THE CLIENT MUST BE ADVISED TO INVEST ELSEWHERE FOR RETIREMENT 7. BUY ANOTHER PROPERTY FOR INVESTMENT AS IT CAN INCREASE IN VALUE AND PROVIDE RENTAL INCOME. 8. REDUCE EXPOSURE IN STOCK MARKET FOR LOWER RISK INVESTMENT SELL OFF NON-SHARIAH STOCKS AND BUY A LANDED PROPERTY INSTEAD 9. ROHANA SHOULD ACTIVELY COMPOSING FOR MORE INCOME. IF POSSIBLE NASYID SONG. 10.ASK FOR INCREASE IN EPF CONTRIBUTION FROM EMPLOYER, INSTEAD OF SALARY INCREMENT, TO PROVIDE FOR MORE RETIREMENT SAVINGS 11.LEAVE ONLY MINIMUM AMOUNT IN CURRENT ACCOUNT. INVEST THE MONEY IN PROFIT GENERATING INSTRUMENT WITHDRAW CURRENT ACCOUNT, INVEST IN TABUNG HAJI FOR THE TIME BEING 12.PAY ZAKAT ON INCOME & SAVINGS TO REDUCE INCOME TAX EFFECTS FROM RECOMMENDATIONS: 1. ROSHAN HAS POSITIVE ANNUAL CASHFLOW, AN IMPROVEMENT FROM THE NEGATIVE 2. ROSHAN'S NETWORTH IMPROVED NEW HOUSING LOAN PV 73,108 I 6% N 204 PMT $568.46 3. IF POSSIBLE, DO NOT USE CREDIT CARD FOR PERSONAL AS THE COST IS THE HIGHEST. IT ALSO ENCOURAGES 4. IF STILL NEEDED, CHANGE CREDIT CARD TO SHARIAH CREDIT CARD TO AVOID COMPOUNDING INTEREST ON 5. REFINANCE HOUSING LOAN USING ISLAMIC FINANCING TO AVOID RIBA. IT IS ALSO BECAUSE OF CURRENT RATE 6. WITHDRAW EPF TO REDUCE HOUSING LOAN AS THE FORMER IS EARNING LESS THAN THE INTEREST COST OF 26,800 7. BUY ANOTHER PROPERTY FOR INVESTMENT AS IT CAN INCREASE IN VALUE AND PROVIDE RENTAL INCOME. 10.ASK FOR INCREASE IN EPF CONTRIBUTION FROM EMPLOYER, INSTEAD OF SALARY INCREMENT, TO PROVIDE 11.LEAVE ONLY MINIMUM AMOUNT IN CURRENT ACCOUNT. INVEST THE MONEY IN PROFIT GENERATING INSTRUMENT PROTECTION PLANNING MONTHLY CASHFLOW Inflow RM salary 10,000 Business income Tax 1,420 EPF 1,100 Total inflow 7,480 Outflow Roshan dies Disabled Groceries 1,000 12,000 12,000 Utilities 350 4,200 4,200 Miscellaneous 500 6,000 6,000 Eating Out 500 Petrol 250 3,000 3,000 Golf fees, etc 200 Julianas preschool 400 4,800 4,800 Wife's personal expenses 700 Car HP 1,000 12,000 12,000 House mortgage 926 11,112 Total outflow 5,826 42,000 53,112 Net cashflow 1,654 Total net cashflow 19,848 Yearly outflow Vacation 2000 Car insurance 1500 1,500 1,500 Car maintenance 2000 2,000 2,000 Books 800 800 800 Clothing 4000 2,000 2,000 Charitable donations 500 Zakat fitrah 26 20 20 24,000 personal maintenance Total yearly outflow 10826 48,320 83,432 Yearly net casfflow 9,022 Capital needed to sustain family
Average amount needed per year 48,320 83,432 Principal Intact Method = Amount needed/Adjusted Rare of Return Adjusted Rate of Return = (((1+Rate of Return)/(1+ Rate of Inflation))-1)*100 Rate of Return 6.00% 6.00% Rate of Inflation 4.00% 4.00% Adjusted Rate of Return 1.92% 1.92% Therefore, Principal Intact Amount = 2,512,614 4,338,438 Scenario
Principal Liquidation Amount PMT 48,320 83,432 I (adjusted rate of return) 1.92% 1.92% n 10 15 PV $435,786.07 $1,078,228.52
Perancangan Pelaburan Pelaburan Awal RM 1,000 RM 5,000 RM 10,000 RM 10,000 Pelaburan Bulanan RM 200 RM 500 RM 500 RM 700 Tempoh (tahun) 25 25 25 25 Jumlah dilaburkan RM 61,000 RM 155,000 RM 160,000 RM 220,000 Keuntungan Dijangkakan 10% 10% 10% 10% Nilai matang pelaburan RM 279,635.01 RM 729,229.9 RM 789,514.62 RM 1,057,092.69 Perancangan Perlindungan Takaful Sumbangan Bulanan RM 100 RM 150 RM 200 RM 300 Umur Peserta 25 25 25 25 Tempoh (tahun) 25 25 25 25 Perlindungan Asas RM 100, 096 RM 150,266 RM 200,242 RM 303,069 Pampasan Kemalangan RM 10,000 RM 15,000 RM 20,000 RM 30,000 Penyakit Kritikal RM 10,000 RM 15,000 RM 20,000 RM 30,000 Manfaat Hospital RM 50 RM 70 RM 100 RM 150 Nilai Matang RM 34,180 RM 51,312 RM 68,377 RM 102,979 Perancangan Pendidikan Anak rujuk kepada Pelan 3 dalam 1 Pendidikan Anak Perancangan Wasiat/Pembahagian Harta/Hibah Kos penyediaan dokumen wasiat dalam RM 150 ke RM1,000 dan di bayar sekali sahaja. Caj hibah bergantung kepada nilai harta yang hendak dihibahkan.