Solving money problems with higher pay?

Most of us have the understanding that higher pay would solve almost any money problems we have. My readers would have to come to a rude awakening! 

First off, let's see how much of your basic salary goes to taxes and inflation. 

Inflation 5% per year (Official figures are around 2%)

Consumption tax 6%

Service tax 10%

Income tax 7-24%

Total tax per year: MINIMUM 28%

Staggering isn't it? ONE THIRD YOUR INCOME GONE~ POOF! 

So, the problem isn't with earning more, as you can understand, earning more puts you at a significant disadvantage as well...MORE TAXES! 

How then to reduce your expenses? Firstly, cut down your expenses in fancy eat-outs and even in franchise chains. that should cut your consumption tax and service tax expenditure. 

To fight inflation, you have to start protecting your income. No, not by saving your money. You should own PRECIOUS METALS. If inflation is 5% per year on a good year, your money in the bank (after returning 2% a year in interest) is reducing at a rate of 3% per year. In about 30 or so years, you money is gone..POOF~! Mind you, that's on a good year. 

You do your own maths: Eating out has been becoming more and more expensive! Even if the price doesn't change, the portion does! Now, what happens in the scenario that our subsidies are no longer sustainable? I bet inflation would soar wildly! We often forget that in Malaysia the subsidies are a blessing in disguise that actually keep our inflation level LOW! As oil prices SOAR thanks to global unrest, and unlimited money printing, inflation of 10 to 20% per year is just around the corner. Imagine your hard-earned savings gone...in just 5 years! 

So, dear friends...please be prepared!

Inflation in Malaysia

Inflation seems to be creeping, and catching with our daily expenses here in Malaysia.
Perhaps it ain't that bad since the Government is subsidizing most of our basic consumption like gasoline, and basic food necessities. But don't for a second think this might go on forever. The continuous printing of money by the U.S. Federal Reserve would only continue to lower the value of our currency back here in Malaysia.

Time to start protecting ourselves.

Malaysia Airlines (MAS)

MAS at the current price appears to be a good buy. Price has been sustainable at the RM1.00 level, with heavy collection spotted. Better financial results on the horizon perhaps?

Either way they should be set for take-off, as MAS has secured financing to purchase more aircraft with the help of the MOF. Comparing MAS versus AirAsia, I should say that MAS is still the better bet, as it has the official government "stamp of approval" and has little impediments when it comes to raising debt. Pension funds happily subscribed to its bonds, while I highly doubt that the Malaysian Government would bail-out AirAsia if it were to run into any troubles.

Reality is, airlines are a money-losing business. Profits? Sure! Just a mere shuffling around of numbers and figures. This business carries heavy debt, and thus the business is highly leveraged. You don't need me to tell you of the ill effects of high leverage in this type of business environment don't you?

Either way, my money's on MAS.

Property Market in Malaysia (1)

IMO Malaysian Property Mart is overvalued especially in around Klang valley. When you look at the median income vs property prices, many agree this is not sustainable. Further more, please have in mind that the high prices are only sustainable as long as financing is available for such high valued properties, and are dependent very much on buyers being able to service their loans. So, when you see an average property around Klang valley being priced around RM500,000 at least, and with an average median income of RM2,500, In my humble opinion, it is not sustainable. Even if you have to pay RM1,000 every month (RM12,000 a yr), 50 years of repayment is more like it if you take into account interests. Not surprised that banks are beginning to offer multi-generational loans that allow the son to take on payment after his parents pass on. Property prices have to come down at least half to make it even feasible for purchase. The question that you should ask is when will people start losing their jobs and not being able to service their loans? People spending the way they do today on cars, and houses, and even on entertainment, it is no surprise that they are living from paycheck to paycheck. Also not to forget, properties though many are freehold, if you dont keep up the payment to the bank, you're toasted.

Big companies are hiring lesser and lesser and if not for government spending into megabillion-ringgit projects, I highly doubt all these are sustainable. Bear in mind as well, that all these borrowing and spending on big projects would eventually come down upon the rakyat in terms of higher taxes in years to come.How long more can our natural resources sustain our spending binge?