Financial planning begin with a goal, then set a pathway to achieve it, that seem simple, however, if you put in practical it does not easy. What are the consideration? How to overcome? Want to know more? Check it out by yourself....

1. Step by step financial planning – Part 1
Loh Boon How
Financial Planner

2. What is a goal and how long of a goal?
• Goals – what is the most important thing to
accomplish.
• Term of accomplishment
1. Short term (within a year) – home
appliances
2. Long term (across a few years) – children
education & retirement planning.
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3. A preparation of financial planning
• An estimation of 3 – 6 months of net income
(after deduction of statutory contribution
and government taxes),
• An adequate insurance coverage (Personal
accident and medical insurance),
• Allocate of a specific amounts of investment
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4. Rule 72
A) How long it will take (double your income)
Formula = 72 / interest rate
Giving 6%
72 / 6 = 12 years, therefore require 12 years
to double your income.
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5. Rule 72
B) What is the interest rate (double your
income)
Formula = 72 / year required
Giving 9 years
72 / 9 = 8%, therefore require 8% to double
your income.
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6. Does age matter?
Age
band
Objective Portfolio
investment
20 – 40 Growth of financial
resource
20% - in bond
80% - in equity
40 – 50 20 / 20 rule – working
about 20 years and having
20 years more to go before
retirement
40% - in bond
60% - in equity
50 – 60 Growth is less importance
and risk less acceptable
50% - in bond
50% - in equity
< 60 Safety and maximum of
current interest
60% - in bond
40% - in equity
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7. What characteristic of investment
Characteristic Description
Security The ability to preserve of your original
capital
Return The earning power on your investment
Liquidity The ease of converting into cash
Convenience The time and energy you are willing to
expand on your investment
Tax Depending your tax bracket, the investment
that are tax free
Personal
circumstances
Income, health, circumstance and tolerate
risk
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8. How to overcome the investment risk?
Risk Description
Inflation The investment return should outpace of
long term effect of inflation
Interest risk The interest rate and bond price is always
opposite
Taxation Tax exempt investment such as private
retirement fund (PRS), life insurance
Procrastination Start early of your younger age, never wait
until too late
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9. Conclusion
• Financial goal is everything, that is what you
are going to accomplish
• The goal will determine when you are going
to achieve, how would you achieve and how
much risk that you are undertaking,
• Without the proper goal the financial
planning become meaningless,
• Therefore revise your goal from time to time
to avoid bias from your original goal.
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10. Thank you
B. H. Loh & Associates
Address :
No. 1-3-15, Goldhill Complex,
Tingkat Paya Terubong 1,
11060 Penang.
H/P No. : 016-4893382
Email : bhlohass@gmail.com
Web-site / facebook : bhloh.com.my
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