Unlike what some people might say, money is not the root of all evil.
Money is actually one of the most useful tools we have for making our lives worthwhile if we know how to use it properly.
But what kind of smart and wise things can you do with the money?
GoBear Malaysia presents some ideas and principles about money which you can customise to suit your lifestyle.
1. Where possible, use money to make money
Due to factors like currency depreciation and inflation, money loses its value over time.
Therefore, unless your money is earning enough interest, dividend or other returns to overcome these factors, over the years your savings actually decreases in real terms.
So always consider how you’re using your money; are you investing it, or are you simply spending it?
A great idea is to make sure that if you’re spending a lot of money on something, it should be something that will help you earn more money in return.
2. High returns require high risk
What idea might you have about how you can invest your money? Putting your money into a savings account or a fixed deposit is the safest option (guaranteed by PIDM), but also the ones that give you the lowest return.
Unit trusts and mutual funds give better returns, but can also fluctuate in value, although they are still reasonably safe, depending on your risk appetite.
Investing directly in stocks and other financial markets can net you very good returns, but if you’re not careful, you can also make great losses.
Investing in a start-up can be wildly lucrative… or wipe you out completely.
The mix of where you put your money depends on your individual circumstances; how much time you have to ‘jaga’ your investments, how much risk you’re willing to put up with, how much money you can afford to lose in a risky venture.
3. Make your money work harder
We have a number of blog articles devoted to showing you how you can save money (this one, for instance), and by doing this, you’re making your ringgit stretch that much further.
There are other ideas to make your money work harder. Don’t fall for the false economy, for instance – sometimes, it’s better to spend more money upfront, because whatever you buy will last longer and be cheaper in the long run.
Paying off a car loan? Consider using your car in a service like Uber or Grab.
Applying for a personal loan? If possible, put some of that money (if you’re not using it) into an investment that will generate higher returns than the loan’s effective interest rate.
Have a fixed broadband Internet connection? Use it for a side business and claim part of it off your taxes.
4. Not just about you
At the end of the day, though, you can’t take your money with you. And there are deserving people out there who genuinely need help. Giving money to charity (or your local church/temple/zakat) is never bad and can even be considered a good investment.