2020 is a few days away & we are approaching closer to 2020, I was thinking on what can we all do to have better financial planning in 2020? I had a thought of seeking other personal finance & investment experts for their advise. So I started to text most of my personal finance & investment bloggers & experts contact to seek their opinion to share with BBM readers.
The good thing is, all of them responded & they have shared their advise on what can you do to have a better financial planning in 2020. It is good to have input from different bloggers & experts as each of their view may be different but it may be helpful to all of us. Hope you enjoy!
Ing Hong – The Stockmonger, Blogger
On finances, live within your means and focus on expanding your means. Personally, I think it’s not enough to just be frugal and save. Because there is only so much you can save. On the other hand, there is no limit to how much you can earn. Some ways to increase your earnings are getting a raise from your job, starting a side hustle, invest etc. The idea here is simple. Spend less than you earn and focus on increasing your earnings.
On investing, I believe that everyone should start as soon as possible. The time is always right to start learning even if the circumstance isn’t. If you don’t have money to invest yet, then invest the time to learn how, so that you know what to do when you have money in the future. It’s better to be ready when you don’t have an opportunity than to have an opportunity and not be ready. A good place to start investing is REIT (Real Estate Investment Trust).
Leigh – Dividend Magic, Blogger
Year 2020 should see some buying opportunities in the stock market. Saving money and investing go hand in hand and I’ve got my war chest at the ready.
I’ve been looking to rebalance my portfolio – the Freedom Fund by adding more dividend paying stocks. Those of you who have underperforming stocks, please don’t make the mistake of holding on to them for old time’s sake.
Onwards and upwards!
Stev Yong – My Personal Finances, CEO
Set goals and focus! Personal finance is a journey and the start of a new year is always a good time to mentally restart. Start off doing a quick check to make sure your various financial numbers are in order: emergency savings, savings/investments percentage, debt ratio, etc. Make adjustments or at least have a plan towards making the necessary adjustments this year. Set your budget for the year ahead allocating towards your investments & other goals. Allocate your investments and make sure that you’re sufficiently diversified and stick to your personalised investment plan. Don’t be too caught up in market movements and sensational headlines. Avoid greed and knee-jerk reactions. Your overall all-weather asset allocation portfolio is more important to withstand whatever market conditions lie ahead. Wishing you strong sails and wise navigation towards 2020.
Suraya – Ringgit Oh Ringgit, Blogger
In the context of underemployment and low median salary (RM2308, according to the Salaries & Wages Survey Report Malaysia 2018), I’ll just say this – you can’t frugal your way out of poverty. While we demand government and the private sector to improve job quality and quantity, we also have no choice but to figure out ways to increase our salary and income in any way possible.
Wong Wai Ken – StashAway, Country Manager
Year 2020 may be challenging for investors because of volatility from major events like the US Presidential election and the Brexit deadline. Recession fears are on everyone’s minds and your biggest call would be to remain invested or to keep cash. Here are my views and some tips on how to have a portfolio that can weather a global recession.
- Firstly, cashing out too early and missing out on market gains before the drop is as bad as losing money during the bear market. Remember that Bull markets don’t age, so it’s not a “sure thing” that after 10 years of a bull run, markets will go into a bear market territory.
- It doesn’t mean you shouldn’t be invested during a recession, as you can still get modest gains from bonds, REITS, gold and defensive equities (eg: staples and healthcare).
- As bear markets last anywhere between 18-36 months, you’ll never know when the upswing would be, and you’d miss out on benefiting from the “V-shape” recovery.
For your portfolio to be able to withstand a recession it needs to have the following traits:
- Diversification: research shows that diversified portfolios lose less money in a bear market, which mean that they perform well in the long term. So don’t forget protective assets like bonds and gold.
- Dynamic: Your asset allocation has to change to suit the economic environment. When in a recession, change your asset allocation to be more protective. When the economy has recovered switch your portfolio to growth assets. Holding on for dear life is not an investment strategy.
- Long term focus: If you’ve set your sights on a long term investment goal (eg: retirement or kids education) stay disciplined, even if you experience mild losses and the quality of the underlying investment hasn’t changed. Stay invested in the market, and don’t try and time your entry and exits in the short term.
Jason Koeh – MQ Consultancy
Malaysian challenge in escalating financial literacy with National Strategy for Financial Literacy 2019-2023
The Bank Negara Malaysia’s Financial Capability and Inclusion Demand Side Survey 2018 (FCI Survey 2018) reveals that the current state of financial literacy of Malaysians has room for improvement. The FCI Survey 2018 highlighted several concerns among Malaysians in the following areas: –
• Level of financial knowledge
• Saving and budgeting
• Readiness for unexpected life events; and
• Planning for retirement
One of the priorities in National Financial Literacy Strategic, is to inculcate positive behavior among targeted groups.
The goal is to address financial vulnerabilities in selected segments or groups within the society, the initiative would cultivate behavioral change that promotes healthy financial habits as the desired Outcomes.
• Empower these targeted groups to make informed and responsible financial decisions.
• Enable them to be resilient, adaptable and be financially prepared for various life events.
This strategic priority will focus efforts on vulnerable segments of the society. Target groups include housewives, self-employed and young graduates who are entering the workforce, as this is a period when our youth should learn how to manage an income. Developing long-term financial attitudes and positive behavioral change requires consistent intervention over a period of time. Action plans include providing information and education for these targeted groups.
Yes, indeed great collaboration of members of the public, private and public bodies in promoting and creating awareness.
Malaysian, the world does not owe us a living, we can not live by the begging bowl; it is time to wake up altogether.
What is my view on a better financial planning for 2020?
We have to plan in advance. What I always practice towards the end of the year is to use my projected income for 2020 to plan ahead. If you have no idea on how to set a projected income, you may use your 2019 income to plan as well.
You may break it down to estimated amount that you plan to save & invest for 2020 as the main goal & from there, start to look into other expenses such as family, daily expenses, loans, debts, holiday & other expenses. List it all down & you may able to get an overall picture on how your 2020 overall financial will be like.
I hope you guys enjoyed this & I would like to say thank you again to the contributor for taking some time to share your view with us. I truly appreciate your time & effort.