How did I become “Financially Secured”?

Hey Boon is here. In this post, I would like to share about how did I become “Financially Secured”? A lot of people always think that I spend money without thinking, or I am rich enough to be unconcerned about money. However, it is not true at all. The reason why I am willing to spend money is simply because I have always made myself financially secured for at least few months in the future at least. As long as I have the discipline to keep awareness on my financial state, there is no need to worry about my money any longer.

i. Financial Management

There are two major parts in my own financial management:
– Transactions Tracking
– Partitions/Allocations

First, the transactions tracking. Like Janice, I have always tracked down my own income and expenses. Currently, I am using “Money Manager” app to track down my daily expenses and excel to track down my monthly/yearly expenses. Below is some examples for your reference:

Then, when I receive my basic salary every month end, I will divide my salary into certain amounts (in percentages) and allocate the percentages of money for different expenses (including savings). By combining both of these methods in financial management, I am able to save up quite a bit of money. And this, plays a major part in becoming financially secured.

ii. Time Value & Money Value

People always mistakenly think they save more money if they spend less, which I disagreed a lot. This is what I always do – buying goods & services based on comparing the worth of time and worth of money. Let’s take an example here, buying a smartphone. A lot of people always look for the features they want, be it camera, processing power, batteries etc. However, the most important aspect to consider is the quality of the smartphone. It can give you the best camera, processing power, functionalities, but it does not worth the value if it can only last for one year. Here is a sample calculation between a “short-term” smartphone and a “long-term” one:
1st (year) x RM 3000 = RM 3000
2nd (year) x RM 3000 = RM 3000
3rd (year) x RM 3000 = RM 3000
Total spent = RM 9000

1st (year) x RM 6000 = RM 6000
2nd (year) x RM 0 = RM 0
3rd (year) x RM 0 = RM 0
Total spent = RM 6000

(Of course it does not apply if you are someone who keep chasing for the latest trend of goods)

iii. Investment & Returns

As commonly known, money investment. Right now I am currently investing in stocks, P2P lending, PRS and FD. As you can tell by the bank statement every month, the money only grows 0.x% if we just keep the money in the bank. It only increases when our salary come in. So why not invest some of the money? So that it can grow in 5%, 10% or even 20% annually. Certainly, the money investment has it’s own risk, that the growth will become negative instead of positive. Then why should we do that? Why not we just leave the money as it is? Before I get to the point, let me get to the second form of investment first.

Besides the commonly known “money-investment”, what I want to talk about is our daily life. Wouldn’t you agree that whatever we are doing daily is a type of investment? It is either in the form of money, time or any other. Instead of doing things mindlessly, always consider what are the returns and whether it is worth the investments or not. For example, watching TV. We invested our time in watching TV but it does not give us a good returns because there are little values we can gain from watching TV, especially dramas.

So now back to the point of investment risks. No matter what forms of investments, risks are always there. Imagine, in a 9-5 job, you are still bearing the risk of not being appreciated even though you have invested 8 hours every weekday for the company. What do we do then? we change to other jobs that give better returns. The same goes to the money-investment. If stocks is not suitable for you , then change to something more suitable. When there are investments, there are returns.

iv. Health

Last but not least, our own health. I am still struggling to get this right to reduce the expenses I need to use for maintaining a good health. Right now I am 24 years old, but I am already suffering from High Bad Cholesterol, High Uric Acid, Potential Thyroid issue & Mild Kidney Dysfunction. And, I am sure that I am suffering from more health issues which I have not gotten any medical examination yet. In order to get these issues right, I need to spend money to monitor my health issues, medicines & consultations fees. Even worse, I need to spend a lot more money if I ever need to stay in hospital. To total up all these, the estimates will be around RM1000+ (depends on the hospital/clinic), where I can avoid all these by maintaining a healthy lifestyle, which probably just need few ten to hundred ringgits.

Conclusion is…

These are just some ways to secure ourselves financially. Do remember that no matter what you do, it is not one-time off, we need to be aware of our own finance constantly. Otherwise, we will still be living a life, that scared of not having enough money. Also, financially secured does not mean rich. Having different range of wealth, it just means the affordability increase. Nevertheless, we still need to implement methods to secure our own finances. Otherwise, we will be broke in no time.

β€œ Save to invest, don’t save to save.”

Oscar Auliq-Ice
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