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COURSE TITLE : Learning Skills

SEMESTER & : 2017 B
INSTRUCTOR : Lee Shiau Yun

Topic: Life Management


Chin Yan Bin B160241C
Tan Wei Shing B160101B
Tan Liu Fang B150105B
Yogeswary a/p Mohan B160007A
Pavitra Naaidu a.p. Radakrishnan B170106A
Verenika Jesica 9B160153C
Toh Shin Shyan B160219C
Seah Jia Ying B160192C
Liew Jin Rong B150186C
Wong Sung Yung B170032A
Loo Yi Chin B160186C
Sam Hou Jiun B170101A
Sonia Pang Rou Qi B160182C
Jasmin Chong Fung Ye B170019A

Cindy Kam Sin Yee B160051A

Title Page

1.0 Introduction 3

2.0 Car 4-25

3.0 House 26-46

4.0 Children 47-79

5.0 Personal Finance 80-104

6.0 Insurance 105-116

7.0 Investment 117-146

1.0 Introduction

Generally, living effectively means, identifying who you want to be and what you want,

while managing the difficult thoughts and feelings that arise as you pursue those goals.

Nowadays, most of human having difficulties in dealing life is due to ineffective applicable

strategic in coping with stressful circumstances and often mislead decision. Many people

model learning skills of managing life by watching their idols. On the other hand, for those

who did not have such role models, or when life transitions exceed the limitations of existing

skills, some additional skills are often needed to avoid misinterpretations of life. Usually,

our habitual actions and ways of thinking outside of our awareness could led us to be stuck

especially on making financial diagnosis.

While planning for personal finances or family finances, each individual would

consider the suitability to his or her needs of a range of banking products and insurance such

as life insurance, health insurance, disability insurance, products or participation and

retirement plans, social security benefits, children and even income tax management. Based

on some researches, it is said that human beings do not always make rational financial

decisions. Thus, to be educated in this aspect, personal finance education is should be

emphasized to help an individual or a family to make rational financial decisions throughout

their life and to master management of life. Few dynamics steps can be applied for

monitoring and re-evaluating during financial planning; i) assessment (assess financial status

by compiling simplified versions of financial statements including balance

sheets and income statements, goal setting (having multiple goals is common, including a

mix of short- and long-term goals), plan creation (how to accomplish the goals of the

financial plan), execution (requires self-discipline and perseverance) and monitoring and

reassessment (for evaluation purpose on plan).

2.0 Introduction

Nowadays, transportation is very important to our lives as we need transportation to

travel anywhere we want to go. However, public transportation in our country is still not

well developed. So, car becomes the mostly used vehicles in our daily lives. Here are some

important tips and reminders for car buyers to take note before getting a new car for


2.1 How to choose a car?

With hundreds of types of car brands and thousands of models of car, choosing the right

car for yourself can be very tricky. There are a few important reminders for consideration

for people who wants to buy a car. Considering the most suitable car body, choosing whether

you should choose.

2.1.1 Access your need

Once you have decided to buy a car, car buyer must identify their own wants and

needs. For example:

 A single woman with no plan to have children or getting married, she

should get a smaller car because size of the car would not affect her


 A married man with a family members and children should get a

bigger and roomy car to be able to fetch a number of people.

 People with disabilities, or elderly who have difficulties to walk

should get a vehicle which they can get in and out easily.

 People who are doing business or work as a contractor, they should

get a truck or a van to deliver stocks and able to carry heavy duty

loads and constructions materials.

With proper considerations, car buyers can proceed to another car buying procedure.

2.1.2 Set your budget

Setting your budget is important, considering not only the monthly payment of the

car, but also including the car maintenance cost, insurance fee, fuel, registration fee, bank

interests and road tax. Knowing how much you are going to pay for a new car Choosing the

more expensive and unaffordable car, the more you are going to put yourself in financial risk

and limit yourself to achieve financial freedom.

Before buying a car, car dealers are always focus on the monthly payment but

neglected that there are still more payments are awaiting. Car dealers want car shoppers to

be convinced that it is easy to stretch the car payments out to ease the car shoppers and

encourage them to buy more cars. However, considering your own buying power is still

important as you are the one who is going to pay for the payments of your car. So, make sure

the car you are buying is the car that you love and you are able to afford.

2.1.3 Decide Body Style

Once you have decided the type of car that will satisfy your need, you will have to

think about the body style of your car choice. For example:

 Colour of the car

 Comfort

 Capacity

 Technologies

 Design of the car

Besides the image options above, the number of body styles such as truck, sedans,

convertible, sports car, SUV/Crossover and etc.

Sedan: A usual car bought by typical families for domestic use. Even children can sit in the

back seat comfortably and baby seats can be installed ideally

Truck: Truck is normally bought by contractor or construction site worker to carry heavy

duty construction materials.

Minivan: A vehicle that is able to accommodate 6 to 8 persons. Normally chosen by big

families or rent by peoples who are going to vacations with a group of friends.

Smaller cars tend to cost lesser and consume lesser fuel compare to big cars. Decide

the body style that suits you the best and satisfy your needs.

2.1.4 Auto or Manual

Auto transmission cars users have increased tremendously throughout the past few

years. There are some benefits of automatic transmission cars:

 Easy to drive. Auto transmission car are easier compare to manual

transmission cars when it comes to traffic jams, parking, driving on

hilly and bumpy roads.

 Reduce to risk of engine stalling. Stalling of auto transmissions car

will only occur if there is a mechanical problem in the vehicle.

However, manual transmission car are still preferable by some groups of drivers.

Manual transmission cars are still favoured by many drivers as:

 More affordable compare to auto transmission cars. Manual

transmission cars are always cheaper than auto transmission cars.

 Better fuel efficiency. Manual transmission cars tend to consume

lesser fuel compare to auto transmission cars.

There are definitely good and bad sides in both auto and manual transmission cars.

To know which type of car is more suitable for you, the best way is to try them out with a

test-drive session.

2.1.5 Test Drive

Now if you seem to found a car that is suitable for you, you will need to test it whether

if it is up to your expectations. Call a car dealer or visit a car showroom to make an

appointment for a test drive. Bring along your partner or family member for their suggestions

and ask whether they like the car or not.

During the test drive, try to drive various road types, from highway to bumpy hills.

This is to make sure the car itself can deal with various road conditions and gives you a fuller

assessment of the way the car handles.

2.2 Should Buy A New Car or Used Car?

Our first decision should be whether to buy a new car or used car. Some buyer would

rather find new car and never consider used car.

2.2.1 Advantages of New Car

There are a lot of advantage for purchasing new car, with new car you can enjoy the

latest technology. In example, Android auto which it was designed by Google as a latest

safety feature for driver. It allows driver to use compatible android smartphone’s user

interface through the vehicle’s infotainment screen, driver also can use google send and

receive text messages, and navigation system by using google map. Driver assistance

technologies and advance safety features have made advancement in last several years, and

now we can get safety with tech, such as blind spot monitoring, autonomous emergency

braking and adaptive cruise control. Fuel efficiency has been improved in new models. Fuel

costs are a major part of a car’s total cost of ownership. We know that there is no damage

and scratches on new car, it has never been an accident and that is less chance for any faulty

recall. We don’t have to worry about the car’s previous owner neglected to car service or

reckless driving. New car also come with at least 3 years until 5 years warranty or coverage

in 36,000 miles and car owner does not need to worry about the repair bill during warranty


2.2.2 Disadvantages of New car

The disadvantages of new car are when buying a new we need to pay higher costs

than car price. Because its value is higher and we need to pay much more sales tax. The cost

of insurance premiums for new car also become expensive because it’s third party cover, fire

& theft cover to your car, and cover loss & damage to your car.

2.2.3 Advantages of Used Car

The Advantage of buying used cars is the original car owner will be absorbed the

costly depreciation that happen in first few years of ownership. However, it will allow

second owner to save up thousands ringgit or tens thousands ringgit on the cost of used car.

Since the value of the used car will be lower, buyer will also save on sales tax and insurance

premiums. if the buyer is on budget, it saves in total interest payments, as the loan amount

that buyer paying interest on will be lower, even if the interest rate is a bit higher.

2.2.4 Disadvantages of Used Car

The disadvantage of buying used cars is the buyer need to spend a bit of money on

hire a car mechanic to identify any operating issues with the car and see if there is any

evidence of crash or fire damage. If the age of used car is more than 3 years old to 5 years

old that means the car will not have any warranty coverage, so the buyer will pay huge repair

bill when the car is faulty. When the used car model is too old the owner may face the

problem when finding the car spare parts to repair the faulty car. Buyer would not able to

pick about car features or color as the buyer wish.

2.2.5 Conclusion

By choosing a new car or used car, buyer need to know few questions before they

make decision. First, which it is buyer should think about what is the budget and which cars

buyer need. If buyer have limited budget on buying a car, buyer should consider purchase a

used car because the value of the used car will be lower and it also save on sales tax and

insurance premiums. Buyer that don’t have budget, they can consider purchase a new car

because the new car doesn’t have any damage and new car come with warranty. Second,

which it is what is the most important car features that buyer wish. If buyer desire about look

and feel of a car they might consider purchase a new car, for the buyer that didn’t desire

about look and feel of a car they might consider purchase a used car.

2.3 Should Buy a Local Car or Import Car?

There are 2 types of cars with various brands available in Malaysia, which it is local

car and import car. In example, Perodua is the popular local brand in Malaysia. Toyota and

Honda is the popular import brand in Malaysia.

There have differences between local car and import car. In example, local and

import cars are Perodua Myvi, Perodua Bezza, Toyota Vios and Honda City. The Perodua

Myvi come with three edition which it is standard edition, Special edition and Advance

edition. The differences between standard edition with special edition and advance edition

is the engine and the design. The Standard edition come with 1.3cc engine, 5 speed manual

transmission or auto transmission, aerodynamic front bumper with chrome grille,

aerodynamic rear bumper, and the price for manual transmission in standard edition with

solid color is RM 40,862.16 and RM43,056.00 is for east Malaysia (Sabah & Sarawak),

metallic color is RM41262.15 and RM 43,456.00 is for east Malaysia (Sabah & Sarawak).

Price for auto transmission in standard edition with solid color is RM 43,862.15 and

RM46,056.00 is for east Malaysia (Sabah & Sarawak), auto transmission with metallic color

is RM 44,262.15 and RM 46456.01 is for east Malaysia (Sabah & Sarawak). The Special

edition come with 1.5cc engine, 5 speed manual transmission or auto transmission, new front

bumper with fog lamps, and new rear bumper reflectors and diffuser, new projector

headlamps with guide light and new aerodynamic rear spoiler, new rear LED lamps,

Retractable side mirrors with turn signals(Electric), and chrome door handles and the price

for manual special edition with solid color is RM 49,968.50 and RM 52,161.90 is for east

Malaysia (Sabah & Sarawak), metallic color is RM 50,368.50 and RM 52,561.90 is for east

Malaysia (Sabah & Sarawak). Price for auto transmission in standard edition with solid color

is RM 52,968.50 and RM 55,161.90 is for east Malaysia (Sabah & Sarawak), auto

transmission with metallic color is RM53,368.50 and RM 55,561.90 is for east Malaysia

(Sabah & Sarawak). The differences of advance edition are the audio system with

multimedia navigation system and reverse camera, and the seat cover material is made from

Leather difference with special edition made form fabric and only available in auto

transmission. Price for standard auto transmission edition with solid color is RM 56,178.00

and RM 60,161.90 is for east Malaysia (Sabah & Sarawak), auto transmission with metallic

color is RM 56,578.00 and RM 60,561.90 is for east Malaysia (Sabah & Sarawak). Perodua

Myvi available in few color which it’s metallic color with Electric Blue, Cosmic Gold (For

1.3cc only), Ozzy Orange, Mystical Purple, Glittering Sliver. Solid color with Ivory white.

The Perodua Bezza have 3 edition which it’s standard edition, premium edition and

advance edition. The differences between standard edition, premium edition and advance

edition is the transmission, engine, and design and look. The standard edition come with

1.0cc VVT-i engine, manual or auto transmission, without smart entry & push start / stop

button and without Eco Idle system (it’s a system that will automatic enter eco mode when

car stop). The premium edition come with 1.3cc VVT- i engine, manual or auto transmission,

with smart entry & push start / stop button, handphone slot & USB slot (rear console) and it

more performance than the standard edition since the engine is 1.3cc. The premium edition

come with 1.3cc Dual VVT- i engine, manual or auto transmission, with Eco Idle system

(it’s a system that will automatic enter eco mode when car stop), with smart entry & push

start / stop button, handphone slot & USB slot (rear console), Multimedia system with

navigation & 'Smart Link'(Link your Android smartphone to the multimedia system by using

USB cable), reverse camera and it more performance than the premium edition since the

engine is dual VVT-i engine. The price for manual transmission in standard edition with

solid color or metallic color is RM 37,300.00 and RM 39,500.00 is for east Malaysia (Sabah

& Sarawak), price for auto transmission with solid color or metallic color is RM 39,300.00

and RM 41,500.00 is for east Malaysia (Sabah & Sarawak). The price for manual

transmission in premium edition with solid color or metallic color is RM 42,800.00 and RM

45,000.00 is for east Malaysia (Sabah & Sarawak), price for auto transmission with solid

color or metallic color is RM44,800.00 00 and RM 47,000.00 is for east Malaysia (Sabah &

Sarawak). The price for advance edition with solid color and metallic color is RM 50,800.00

and RM 53,000.00 is for east Malaysia (Sabah & Sarawak).

The Toyota Vios have 6 variants which it’s TRD Sportivo, GX, G, E, J. The

differences between TRD Sportivo, GX, G, E, J is transmission, body kit and features. All

the variant come with 1.5cc Dual VVT- i engine, SRS Airbags (Driver seat & Front seat),

reverse sensor auto transmission with Continuously Variable Transmission (CVT) with 7-

speed Sport Sequential Shiftmatic Mode except 1.5 J Manual transmission, LED Daytime

Running Light, Retractable, with Turn Indicator except 1.5 J and steering wheel with audio

and mic button except variant E and J. The TRD Sportivo is special because it bundles with

exclusive Toyota Racing Development body kit and rims, 6 Way Audio system, DVD Player

with 6.8" Touch Screen, Tuner, MP3, Voice Recognition, AUX-Jack, USB, Bluetooth &

Reverse Camera with Guide Lines, TRD Sportivo Perforated Combination Leather seats and

Meter panel with sport Analouge. There are few differences between variants GX, G, and E

which its variant GX have a different front grille material compare with variants G and E,

and seats color also different come with Black and Saddle Tan. The price for Vios 1.5 TRD

Sportivo with auto transmission is RM 96,400.00, Vios 1.5 GX with auto transmission is

RM92, 800.00, Vios 1.5 G with auto transmission is RM89, 800.00, Vios 1.5 E with auto

transmission is RM 83,900.00, Vios 1.5 J with auto transmission is RM 79,800.00 and Vios

1.5 J with manual transmission is RM 76,500.00. There have few color available for Toyota

Vios which it’s Crimson Spark Red Metallic, Attitude Black, Medium Silver Metallic, Silver

Metallic, Super White II and White Pearl CS.

The Honda City have 3 variants which it’s 1.5 S, 1.5 E and 1.5 V. All variants come

with Vehicle Stability assist VSA (When taking sharp corners, the VSA system stabilizes

the vehicle by reducing under or oversteer) 1.5cc i-VTEC engine, auto transmission with

Continuous Variable Transmission (CVT), 15” inch rim except variant V it come with 16”

inch rim, shark fin antenna, 4 ways audio system except variant V it come with 8 ways audio

system and 8 cup holders and rear foldable 60:40 seats. The special feature of variant V

which it’s LED front FOG light, 6 SRS airbags, LED Taillights, LED headlight with LED

day time running light and Ducktail spoiler with LED Brake Light and leather seats. Variant

V and E have Multi-Angle Reverse Camera. The price of the Honda City 1.5 S is RM

75,583.73, Honda City 1.5 E is RM 81,690.81 and Honda City 1.5 V is RM88, 897.89. There

have few color available for Honda City which it’s Lunar Silver Metallic, Dark Ruby Red

Pearl, Teffeta White, Modern Steel Metallic and Crystal Black Pearl.

2.4 Ways to Buy a Car?

There are two ways to buy a car. You can either paid with cash or through loan financing

also called as car loan.

2.4.1 Cash

First of the ways is buy with cash, most of the people thinks that paying by cash

could save a lot of money because you no need to pay interest and finance fees. You also no

need to worry about miss payment of car loan which will incurred of penalty if have any late

payment. The car will belong to you when you fully paid, the advantage is you can sell the

car to other people whenever you want but if you get a car loan, the car is belonging to you

and the bank so you cannot sell the car before you fully paid the car loan.

Disadvantages is you must have such big amount of cash, with such a big amount of

cash you must be able to justify to income tax department if they question you. This money

might generate bigger return if you invest in some other thing.

2.4.2 Loan financing

Second method is pay through loan financing. A car loan is a method financing that

help people to purchase a car with paying back to bank or lending servicer in monthly

payment rather than pay the fully amount in one lump sum. Lender will help buyer settle the

payment of car and the buyer will pay back to them with interest charges. Interest charges is

the profit that the lenders earn.

The advantages of car loan are you can choose a better car or your dream car. Because

if you want to pay with cash but you have limited budget so you will have limited choices.

You only can choose the car that maybe second hand or a cheaper new car. For example, if

the budget that the car you want to buy is RM10,000 you will only buy a second-hand car,

if you want to pay the full amount with cash but you can choose a better car or a new car if

you use this money as a down payment. Most of the lenders does not given 100% financing

margin because the bank will check your CCRIS and CTOS although your salary already

more than RM1,600 and your age already more than 23 years old but will give up to 90%,

but you as a buyer you must know that the more the down payment that you paid for the car,

you will have to lend lesser car loan so the interest rate that you should pay will also lesser.

Besides that, you can also save a lot of time on saving the money for buying a car, you would

not feel that it is a burden when you can pay in small amount monthly but not in big amount

in once. As my survey, it is also reasonable car loan which start from 2.5% of interest rate

especially from the car maker who willing to offer the lower interest rate to push their sales

which does not too burden for buyer and the payment for the instalment of the car loan can

long to 9 years which buyer have enough time to pay back.

Normally have two types of interest rate. It is fixed rate and variable rate. During the

fixed rate, the amount of interest that you had to paid is remain the same and your instalment

will remain unchanged in the period you pay to the lender. On the other hand, variable rate

is the amount of the interest rate and instalment will change due to the Base Lending Rate

(BLR) of the bank. Basically, we will usually use fixed rate in Malaysia. Different bank has

difference interest rate, so buyer first should gather information of the interest rate of the car

loan form different bank. Next, choose two of the bank that you satisfy and call the bank or

search online to get future information. Then you compare the interest rate and choose the

most tailor to your needs.

The procedure when you apply for a car loan is first you should choose a car that you

want to buy and use the car loan calculator to determine how much interest rate and

instalment you must pay every month. Then you are required to prepared the document that

need example driving license from Malaysia, identity card, application (copy) and pay slip.

These documents will submit to the bank and they need 2-3 days to process. Then they will

call you for a simple interview, if you fulfil the basic requirement your application will be

approved. Lastly, the parties that involved should sign the agreement and the car will be

registered and sent to you when the agreement is signed.

Bank Car Loan Interest Rates:

Figure 2.1 : Car loan interest rate

Differences model of car, differences duration of time and amount of money that you

loan will affect the interest rate.

Lastly, in our common sense we will think that the interest rate of the car loan for

used car will be lower than new car but in reality, the interest rate of car loan for used car

are higher. It is because it is hard to estimate the value of used car because the longer you

use the car the quicker the value of the car depreciated. Although the car has been inspected

by the Puspokom, but the part of the car deteriorates over the year. Therefore, the bank forced

to in post higher interest rate. Next, used car borrowers have lower credit scores also causes

to higher interest rate. The bank must bear the risk that if the borrower unable to pay the


Every method has their benefit and harm, so you can depend on what type of car you

want, how many cash do your budget have and choose the most suitable method to pay.

2.5 Things That Compulsory When Buying a Car

2.5.1 ROAD TAX

Road tax is a tax that you must pay for your every vehicle on the road before you use

the public road and you should renew the road tax every year. When the first time you pay

the road tax for you motor vehicle, you must pay at Jabatan Pengangkutan Jalan Malaysia

(JPJ) but if you want to renew your road tax for the following year you can renew at the post

office. You should pay more road tax when your motor vehicle’s engine is larger.

Factors that affect amount of the road tax is type of the car, the car is using petrol or

diesel, engine capacity (cc) and the motor vehicle is use for domestic or commercial.

How to renew your road tax? First, you can go to the nearest JPJ office that close to

your house. Second, you should bring your insurance cover note and your car registration

card. Third, you request for renew road tax at the counter. The road tax will be different that

based on which state that you live, your car engine capacity (cc) and your car are using petrol

or diesel. Lastly, you will get a new road tax sticker after your payment. Following is a guide

line to help you to know the price of road tax.

Figure 2.2: Road tax price list

Figure 2.3: Sabah road tax price list

Figure 2.4: Sarawak road tax price list

2.5.2 Car insurance

Road is the most dangerous place, we do not know when we will meet accident. Most

of the people think that it is waste of money to buy a car insurance but they are forced to buy

it because when you want to pay the road tax you have to show your insurance cover note.

In Malaysia, it is illegal when your car does not have car insurance, you might block by the

traffic police and may be fined.

There are some important why you should buy car insurances. First, they will protect

you from the personal liability, when you meet an accident. They will help you to settle most

of the cost included medical fees and repair fee but the amount that you can claim back is

based on the type of insurance that you bought. The most horrible case is if you accidently

run into a house and cause damaged of the wall and door, you must pay a large amount of

repair cost. Can you afford such a big amount? It may cause you into bankruptcy when you

do not buy any car insurance. When accident happen and this involve third parties that you

should responsible to their medical fee and repair fee, insurance agency will help you to

settle most of the cost. Besides that, if you are hit the people who does not have insurance,

your own insurances agency will settle your cost.

There are three types of car insurance that you can choose, it is third party, third party

fire and theft and fully comprehensive cover. In Malaysia, third party car insurance is the

most basic level that required car owner to buy. Third party is the someone else who are

involved in the accident. It is unfair if you are the person who cause the accident and the

third party should bear the cost themselves. So, this third-party car insurance cover cost of

the damage of the third-party property, damage to the vehicle and injury. But you must pay

the damage cost of your vehicle and medical fee of yourself on your own. Normally this type

of insurance is suitable to the people who buy used car. This type of insurance is cheaper

because the cover is also very limited. Second type of the car insurance is third party, fire

and theft cover insurance. This type of insurance is similar with third party insurance but it

adds on two extra benefit is they will cover for your car, when your car is burnt or stolen.

The last is comprehensive cover insurance. This cover greatest level of cover for you, this

level covers all the benefit that given in third party and fire and theft insurance and added to

cover the damage of your own car although it was you cause the accident.

Figure 2.5: Insurance coverage

Car insurance might have many difference types, and price. So, you should find out

which type of insurances plan and which car Insurances Company that fit you budget and

needs. It is too late if you want to buy the car insurance when only the accidents happen on


2.5.3 Registration Fee

Figure 2.6: Registration fee

2.6 Conclusion

In conclusion, buying a car is not that easy. Think twice before purchasing a car

because it requires a big sum of money and no want wish to waste money to buy a car that

he/she don’t like. Various considerations need to be done and remember that buying a car

also mean that getting you into bank loans and responsibility. So, take your time to find and

invest in the right car. We should choose the car based on our needs and our budget. What

types of car that you can affordable and suitable for you.

2.7 Reference

1. John M. Vincent. (2016, December 30). New Cars Vs. Used Cars. Retrieved from U.S.

News & World Report: https://cars.usnews.com/cars-trucks/new-cars-vs-used-cars

bbazaar.my. (n.d.). Retrieved from Car Loan: https://www.bbazaar.my/car-loan.html

2. Bird, C. (2016, september 2). Buying a Car: Cash, Lease or Loan? Retrieved from

Car.com: https://www.cars.com/articles/buying-a-car-cash-lease-or-loan-


3. Editorial, i. (2012, october 9). Car Insurance In Malaysia . Retrieved from The Different

Types Of Motor Insurance: https://www.imoney.my/articles/the-different-types-of-


4. Honda City Pricing. (n.d.). Retrieved from Honda:


5. Honda City Specification. (n.d.). Retrieved from Honda:


6. Honda City Styling. (n.d.). Retrieved from Honda:


7. Montoya, R. (2016, July 21). edmunds. Retrieved from 10 Steps to Finding the Right

Car for You: https://www.edmunds.com/car-buying/10-steps-to-finding-the-right-


8. Perodua Bezza Pricing. (n.d.). Retrieved from Perodua:


9. Perodua Bezza Specification. (n.d.). Retrieved from Perodua:


10. Perodua Myvi Pricing. (n.d.). Retrieved from Perodua:


11. Perodua Myvi Specification. (n.d.). Retrieved from Perodua:


12. Should you buy a new or used car? (2014, February 26). Retrieved from Free Malaysia

Today: http://www.freemalaysiatoday.com/category/leisure/2014/02/26/should-


13. Top 5 reasons why Car Insurance is so important. (n.d.). Retrieved from Top

Check.com.ng: https://topcheck.com.ng/car-insurance/articles/top-5-reasons-car-


14. Toyota Vios. (n.d.). Retrieved from Toyota: https://toyota.com.my/vehicles/car/vios


Loo Yi Chin 2.0 Introduction

2.1 How To Choose Car

2.6 Conclusion

Sam Hou Jiun 2.2 Should Buy A New Car Or Used Car?

2.3 Should Buy A Local Car Or Import


Sonia Pang Rou Qi 2.4 Ways To Buy A Car?

2.5 Things That Compulsory When Buying

A Car

3.0 House

The house that we choose to purchase is at Taman Nusa Indah, located in Nusajaya. The

reason we make this house as our final decision is because the house location has bring

along a lots of convenience in our daily and minimize our time consuming, since it was

surrounding by grocery store, supermarket, petrol station, policlinic, hospital, and school.

The residential area has providing comprehensive security system 24/7.

The house is two storey terrace house and cost RM550, 000 with 4 bedrooms and 3

bathrooms, is suitable and fit perfectly for every members. Each family member is easily

finding their absolute private space when they needed. And we are able to set up a play

area inside a bedroom if we have planning for having children in the future; there had also

provide public playground area in residential area, and it is only open for who is the

resident. Besides that, the security system which provides us be at ease, since we all knew

we are living in a high-crime rate era. So, to having a comprehensive security system with

24/7 will be the prior when we are looking for a house, and this residential area had

fulfilled our requirement. They also provide night patrol service, and when we are away

from home they will take extra patrol to prevent our home will not be visit by “uninvited


As we had mentioned before, the residential is surrounding by convenience and we

can have multiple choices about what school is the most suitable for our kids in future,

from pre-school education (including one international pre-school – Real Kids

International School) until primary and secondary school. And nearby the residential area

there have three polyclinic (Medispring Family Polyclinic, Polyclinic My Family 24 Hours

and Klinik Mediviron) is nearby to us and only consume 10-15 minutes to reach. There is

also a hospital (Columbia Hospital) providing surgery and the medical department, and

only be apart from our residential area about 10 minutes. The resident in Taman Nusa

Indah are also able to purchase their daily necessaries in nearby groceries store (especially

YSL Fresh Market, which had providing fresh vegetables and meat products everyday),

some of the store are even business for 24 hours, such as like 7-eleven.

If nearby grocery store were not provide some typical products that we want to buy,

there is two supermarkets and a mall is nearby to us and only consume 15 minutes to

driving there by using highway and it do not cost any money, which is Aeon mall, Bukit

Indah. Tesco, Bukit Indah. Giant supermarket, Taman Bestari. And we can spend our

leisure time over there too. Meanwhile if we needed to go downtown area, such as like

City Square and JBCC, Komtar it normally just need 20 minutes and only cost RM 2.30 for

tolls fee, people can also choose for not to cross to highway without paying any tolls fee

but the time will a bit longer than this.

Talking about highway, we have to mention about the distance to travelled between

Taman Nusa Indah with Tuas, Singapore is only about 40 minutes when not occurs any

traffic jams. To living at this area, we believe that it will help us to saving a lot of time and

brings along with bunch of convenience of our future life, and we will be very satisfied on

this purchased.

Figure 3.1: In this figure has shown the nearby area from Taman Nusa Indah.

Figure 3.2: The outlook of the house.

3.1 Home-Buying Process

Buying a newly construction home is a bit different from buying a previously-owned

home. There is some additional process occur if we were buying a previously-owned

house. As with buying a previously-owned home, you have to figure out your budget and

secure financing before you even begin house hunting. Get pre-approved by a bank or

mortgage lender. Decide how much money you want to invest in a new home. And don't

overlook the extras like property taxes, insurance, furniture, window treatments,

landscaping costs and maintenance that can drain your bank account. "It's absolutely

critical for new homeowners to know what they can afford based on their income, debt and

credit score," says Rosy Messina, vice president of sales and marketing for ICI Homes in

Daytona Beach, Fla.

In contrast, because there is no previous homeowner, you don't have to deal with a

seller's emotional tie to the property, which typically influences the negotiating process.

Whether you're designing and building a custom home or buying a home that's built on

spec in a new subdivision, you'll only have to work with the builder. Here is some essential

process that we must carefully gone through while buying a newly construction house.

Step 1 – Find a property you can afford

Before you start house-hunting, it’s a good idea to work out what you can afford to

spend on buying a house or a flat and your monthly mortgage payments. User can use the

Mortgage Affordability Calculator to work out how much you might be able to borrow.

Think about costs:

Buyers must consider how you’ll cope if your financial situation changes, or interest rates

rise, and be careful not to overstretch yourself. Remember, your savings will have to cover

not just the deposit, but expenses such as mortgage fees and Stamp Duty on properties. It

helps to know more about what to look for in a property to avoid costly mistakes.

Choosing the right mortgage:

It’s never too early for you to start thinking about arranging a mortgage as this can be time-

consuming. You can get a mortgage from an Independent Financial Adviser (IFA),

mortgage broker or lender. Once you’ve found a mortgage product you like, agree it as a

mortgage ‘in principle’. This tells you how much money the lender is likely to offer and

the interest rate you’ll pay. Also, you might have to pay a booking fee to reserve the

mortgage product you want.

Check your credit report:

Before you apply for a mortgage, check your credit report for any errors and to get an idea

of your score. Lenders will look at it when considering your application.

Step 2: Weigh the Pros and Cons

Nothing beats the feeling of being the first person to live in a newly-built home.

Everything is shiny and untouched. You can buy a brand-new home in one of three ways:

buying a house already built on spec; having a semicustom home built as part of a

development (you can choose from a set palette of finishes and upgrades); or having a

purely custom home designed and built to your specifications. But before you get caught

up in the sparkling new paint and granite countertops, evaluate your situation and see if

new construction fits your lifestyle.

Here are some questions to ask yourself, particularly if you fall within the first two

methods of new-home buying:

• New homes are typically far from the city centre; will you mind the commute?

• Are you willing to coax a new lawn into existence, and can you wait 20 years for

sapling trees to mature?

• Will the cookie-cutter nature of new subdivisions drive you bonkers?

• New houses tend to be built right on top of each other. Do you mind the closeness

and potential lack of privacy?

Step 3: Research Neighbourhoods and Builders

When buying in a new subdivision, consider working with a buyer's agent who knows the

area well, can set up home tours and walk you through the closing process. When

researching real estate agents:

• Remember, the listing agent works for the builder, not for you. They're trying to hit

a quota, not help you make the right decision for you and your family.

• Many states regulate how agents deal with new subdivisions. If you have your own

agent, tell him up front that you're interested in looking at new homes. He must accompany

you on your first visit to any new subdivision; if he doesn't, the builder's sales rep will get

the full commission if you buy a home there.

When researching neighbourhoods:

• Look online for listings for new home construction.

• Drive around the neighbourhood and check out the amenities and the quality of the


• Walk the community. Ask homeowners about their experience.

• Go to model open houses, keep a journal and take photographs. Don't try to cover

every model house in the area in one day.

• Check with the developer about potential homeowners' association (HOA) fees and

rules; some are incredibly expensive -- and strict. They may not allow storage sheds,

certain paint colours or finish materials, solar panels or even vegetable gardens. Be sure to

find out if the HOA can assess penalties for infractions.

• Ask whether cable and Internet are readily available and from what companies;

your new house will be wired for cable but that does not mean the cable company offers

service to your neighbourhood.

• If the development is still under construction, you'll be dodging giant contractor

trucks and facing jackhammering at 7 a.m. for a while.

• Research the zoning laws for the neighbourhood, as they can change quickly.

• Visit the city planner's office to see what's in store for a particular location.

• Ask your agent about plans for the area.

Whether you're buying a new home that's being built or building a new home from

the ground up, you can choose the builder you work with.

"The buyer is more educated today," says Rhonda Hoeft, area sales manager for

The Estridge Collection in Carmel, Ind. "It's amazing how much they know as opposed to

five years ago. At least 80 percent of prospective buyers who walk into our sales office

have researched our homes and the builder."

In this uncertain economy, builders are feeling the pressure. To make certain you

choose a financially-sound builder, Sharon Hanby-Robie, real estate agent and American

Society of Interior Designers (ASID) in Lancaster, Pa., suggests, "Go to the courthouse to

see if a lien's been filed against the builder, then go to the construction site. Talk to

subcontractors to see if they're being paid."

When researching builders:

• Make sure there are no Better Business Bureau complaints on file against your

builder's company.

• Ask local real estate agents if the builder has a good reputation in the community.

• Visit your builder's previously constructed homes; ask the occupants whether the

craftsmanship has stood up to time, use and weather.

Step 4: Know What's Standard and What's Extra

Ask the builder about amenities and upgrades. Amenities are features that benefit the entire

community like a clubhouse, health and fitness centre or a gated entrance. Upgrades refer

to added features or items you pay extra for to enhance your home, like certain types of

flooring or appliances.

Get a feature sheet on the line of homes you're interested in and read them very

carefully, then compare feature to feature. Find out what comes with the base home price.

If you don't understand exactly what the builder is offering, ask and take notes.

There are no dumb questions. Not knowing can cost you real money. Some things to keep

in mind:

• If the stove is included, visit the showroom to see the model. If you're offered the

basic stove and you're a gourmet cook, it makes sense to buy the upgrade.

• Make decisions on upgrades early in the process -- every change costs money.

• Have a good idea of what you need and want. They are two different things when it

comes to upgrades.

• Builders rake in the cash on upgrades because they can get parts and labour

relatively cheaply. The mark-up is huge, so investigate each option you're considering

seeing whether it would be cheaper to bid it out after you move in.

• Builders, in general, need to sell quickly to make a profit. If you're stuck haggling

over price, get them to throw in the upgrades you want at a reduced cost or for free -- it's a

way to get more value that's appealing to both sides.

Step 5: Get an Inspection and Home Warranty

Once you decide to buy a new home, make your sales contract contingent on a final home

inspection by a professional you hire. Never assume that because a home is newly

constructed, it isn't going to have defects. Municipal inspections for code violations are

nowhere near as thorough as an independent professional inspection. If possible, have the

home checked during each phase of building, when potential problems are easier to spot. If

the builder objects to this, consider it a red flag.

Protect yourself with warranties. All new homes come with an implied warranty

from the builder stipulating that any major defect of the structural integrity of the home

must be repaired. Ask for a builder's warranty for a period of time following move-in (a

year, for example) that covers any defects in craftsmanship. Preferably, this warranty

should be backed by insurance.

Home warranties vary in length, what they cover and typically run from one to 10

years; the manufacturer covers appliance warranties. Make sure any warranty you receive

explicitly states what is covered and what isn't, and what the limitations for damages are.

For extra peace of mind, have your real estate attorney look over the warranty to make sure

it's kosher.

Step 6: Close the Deal

Builders often have in-house mortgage lenders or ties to an outside lender. New

homebuyers can use the builder's lenders or find their own financing. Ask your agent for

information on special funding programs available for first-time buyers. Contact at least

two lenders and compare terms, fees, rates and points.

"You are committing 30 years of your life to the process of homeownership," says

Messina. "Learn as much as possible about the mortgage process by reading everything

you can find."

Kriss Lindblom did just that before he and his partner, Angela Diesner, closed on a

Pulte-built home in Maricopa, Ariz., last year. "I read every piece of paper they gave me,

every contract, disclaimer, declaration of covenants and restrictions, the bylaws of the

community association."

Finally, if you're not comfortable with the legal process, get an attorney.

Remember, sign nothing until you fully understand the meaning of the words.

3.2 Resources

Before buying a house, we have to understand the process and have to relate knowledge to

collect the necessary resources to make sure the purchasing process would not be mistaken.

The resources that we needed are:-

1) Meeting someone expert before decide which houses to buy, whether a new

construct house or a second-hand house.

2) Know the average price of house in Johor Bahru, house price should not exceed our

financial capacity.

3) Determine the type of home. Which are including the sizes of the house, the

environment, neighborhood and neighbors?

4) How much we have to pay for house down payment and do we have enough money

to pay? The amount should not over the budget.

5) Home loan interest rates.

6) Make an offer.

7) Get a bank loan.

Now let’s take a closer look about above point, to meeting someone expert such as the

financial expert he/she can help the buyer to well analysis the buyer financial situation and

reduce the risk on this investment. Also, is the buyer is troubling on searching an idea type

of house, they can actually find an real estate agent to tell them what is the average price

you are able to afford and the requirement for the house, such as the security system,

neighborhood environment, locate nearby downtown and so on.

After reviewing for all the houses and considering, the buyer will possibility have

an idea which house they wanted to purchase. At this time, the buyer should begin to

prepare the necessary document for purchasing a house. Once you and the seller have

agreed on a purchase price, buyers will need to sign a standard document and pay the 2%

earnest deposit. Earnest money is a deposit made to a seller showing the buyers good faith

in a transaction. And then, they have to visit the bank for advisory loan if needed, the

interest charge by the bank will based on the latest Base Lending Rate(BLR), figure 3.3 is

the example of the current BLR rate on difference banks. Meanwhile, they also need to

look for a lawyer for advisory the lawyer letter.

In addition to this, buyers before have any decide should clearly knowing and

have a certainty which type of the house is more affordable. Even though we can loan

money from bank, but to exceed our financial capability will highly increase the risk on

bankruptcy due to unable to pay the monthly payment.

Figure 3.3: the example of the current Base Lending Rate (BLR) 1

Information comes from https://www.iproperty.com.my/resources/how-to-buy-house-in-malaysia.aspx

The require document when local employees buying a house as shown in below:-

1. Identity card in photocopied version. Identity card is an identity document to prove

a person’s identity. Figure 3.4 is the example of the outlook of identity card.

Malaysia identity card called as MyKad, is a compulsory for every 12 years old and

above citizen. It on in-built computer chip and fingerprint biometric data as a proof

and validation tools for citizens.

(Figure 3.4)

2. Property booking receipt, a proof to show bank manager you are the actual buyer to

buying a house.

3. Vendor sales and purchase agreement (copy version) or new sales and purchase

agreement. According to the situation whether the buyer is buy a new house or a

second-hand house.

4. Latest 3 months pay slip (for basic Salary) or latest 6 months pay slip (for basic +

commission earner). As shown in figure 3.5.

(Figure 3.5)

5. Latest 3 months personal bank statement (for basic salary/latest 6 months pay slips

(for basic + commission earner) which show your salary credited as per pay slip.

The example of personal bank statement is show in figure 3.6.

(Figure 3.6: The example of personal bank statement.)

6. Latest EA form, EA form is for people that have Employment income and is to

show how much salary, bonus, incentives that your company had gave you during

the year. The example is shown in figure 3.7.

(Figure 3.7 the example of EA form.)

7. Latest KWSP( Kumpulan Wang Simpanan Pekerja / Employees’ Provident Fund)

statement. It manages the compulsory savings plan and retirement planning for

workers in Malaysia.

8. Income tax statement, the latest form B/BE with payment receipt


9. Deposit statement, for example such as fixed deposit, ASB (Amanah Saham

Bumiputera) or Bonds (if any), to show whether you have the extra money to pay

when facing emergency financial issues.

These 9 methods that we provided are for the person who is an employee of a company,

but if the person is self-employment the document that he has to prepare will be


Self-employment document are require as below:-

1. Identification card in photocopied version.

2. Property booking receipt

3. Vendor sales and purchase agreement (copy version) or new sales and purchase


4. The latest 6 months company bank statement, to showing that the company

business is legally existence and the business is still running.

5. The latest 6 months personal bank statement, it is the income evidence to prove

the person has capability to purchase a house.

6. Deposit statement, for example such as fixed deposit, ASB (Amanah Saham

Bumiputera) or Bonds (if any), to show whether you have the extra money to

pay when facing emergency financial issues.

Besides that, the self-employment person has to show the business registration, for

who is holding Sdn Bhd Company had to prepare the document which involving Form

24 (return of allotment of shares, for who is holding the company shares) and Form 49

(Statement of Particulars, for who is the company director or manager). Then he/she also

had to prepare the latest Profit and Loss statement, the financial statement that shows

company revenue, cost and expenses in specific period.

In additionally, the Company Profile to show what is the company product and

service is available, and Form 9, a certificate of incorporation of private company. Also,

12 months of company bank statement and the latest audited report of company. If

had any partnership, he/she had to prepare the Memorandum of Association document,

is a legal document prepared in the formation and registration process of a limited

liability company to define its relationship with shareholders.

But for those who are working at foreign country or self-employment in foreign

country wanted to buy a house in locally, the document requirements will a lot difference

than locally, the methods are shown as below:-

1. Identification card photocopied version.

2. Working permit or Permanent Resident (PR) card with validity more than 6 months.

As shown in figure 3.8 and 3.9.

(Figure 3.8: Example of permanent resident card in Singapore)

(Figure 3.9: Example of work permit card in Singapore)

3. Property booking receipt.

4. Sales and Purchase Agreement photocopied version.

5. Latest 3 months pay slip.

6. Latest 3 months personal bank statement (to show salary credited as per pay slip)

7. Employment letter to prove you are actually in working at that company.

8. Deposit statement, for example such as fixed deposit, ASB (Amanah Saham

Bumiputera) or Bonds (if any).

On the other hand if the person is self-employment in foreign country the

document require are shown as below:-

1. Identification card in photocopied version.

2. Working permit or Permanent Resident (PR) card with validity more than 6


3. Property booking receipt

4. Sales and purchase agreement in photocopied version.

5. Latest 6 months Company bank statement, to prove the company legally exists and

the business are still running regularly.

6. Latest 6 months Personal bank statement, to show the capability of personal

financial capacity.

7. Preferably 2 years income tax declaration form with payment receipt


8. Business registration to show ownership of the company.

9. The latest profit and loss statement, the financial statement that shows company

revenue, cost and expenses in specific period.

10. Deposit statement, for example such as fixed deposit, ASB (Amanah Saham

Bumiputera) or Bonds (if any).

So far, we had been showing for four differences types of document requirements

for different people in different position. As a buyer, we have the responsibilities to

understand in each of the procedure, what documents we have to be prepared and stand

by for use and not become disoriented and lead to miss out any important document.

3.3 References

1. Law, E. (2017). Property for sale. Iproperty.com.my. Retrieved 24 June 2017, from



2. How to Buy in New Construction. (2017). HGTV. Retrieved 24 June 2017, from


3. Home-buying process – steps to buying a new house or flat. (2016).

Moneyadviceservice.org.uk. Retrieved 24 June 2017, from



4. 10 Steps to Buying a House - Home Buying Process. (2015). Discover Home Loans

Blog. Retrieved 24 June 2017, from https://www.discover.com/home-


5. How to Buy a House in Malaysia?. (2016). Iproperty.com.my. Retrieved 24 June

2017, from https://www.iproperty.com.my/resources/how-to-buy-house-in-

malaysia.aspx .

6. Latest BLR, Interest Rates, & Base Rate. (2016). | Loanstreet. Retrieved 17 June

2017, from https://loanstreet.com.my/latest-base-rate-blr-interest-rates.

7. What documents required for home loan applications? | Property Malaysia. (2015).

Chatpropertymalaysia.com. Retrieved 17 June 2017, from




Verenika Jessica 3.0 House

Tan Wei Shing 3.1 Home-Buying Process

Tan Liu Fang 3.2 Resources

4.0 Children

4.1 Child Introduction

Having a baby is a big decision that requires couples to do some serious self-reflecting on

relationship aspect and consideration of financial cost that that they will be facing. A new

baby can be drastically alter family’s financial status. Nowadays, both spouses need to work

in order to balance the expenses which are high cost, and including costly baby gear and

possibly child care. Before stepping into this significant decision, both parents must expose

themselves financial studies regarding cost on having babies and the plan.

Parents needs to weigh financial costs against their children needs by calculating

the average cost of the possible expenses. Firstly, they should list all the expenses without

having children, that is, fixed expenses, such as the insurances, car service, house rental and

utilities. Next, they must list the discretionary expenses, such as, vacation, memberships,

credit cards, beauty treatment, frequent dry-cleaning and others. Thus, they have to omit all

the unnecessary budget in order to consider long-term financial plan. Besides, the effective

way is to track all the expenses for two months and do evaluation to improvise more savings.

Having a baby can be an overwhelming situation besides joy. Despite of the

excitement, being a parent and caring for a child can be an adventures affair however now

and again, it can be overpowering as you settle on choices about your child's upbringing that

might be very new. At the point when the pregnancy test returns positive, you've started an

existence modifying venture. As the child develops and changes through each phase of

pregnancy, you experience changes, as well: in your body, feelings, and way of life. You

acquired with data’s that could possibly answer your inquiries. There by, here are certain

things that a couple should know before having a baby.

4.2 Pregnancy phase

A typical, full-term pregnancy is 40 weeks, and can go from 37-42 weeks. There are

divided into three semesters (trimesters). First trimester typically comprises of 12 weeks.

The first trimester is vital for the development of your baby such that often supplements

are consumed to ensure proper growth of organs as well as reducing the risk of miscarriage

which is very much significant during this period of time. Physical changes that are

encountered are bleeding, breast tenderness, fatigue, food cravings, frequent urination,

heartburn, mood swings, morning sickness and weight gain. The second trimester ranges

from week 12 to 18 which is regularly said to be the best time of pregnancy as the morning

sickness and fatigue which plagued during first trimester starts to fade away. This period of

time ultrasound would be done ensuring the growth and well-being of the baby as well as

the gender of the foetus could be determined. Physical changes that could occurs are

bleeding gum, backache, breast enlargement and etc. The third trimester ranges from week

28 up to the birth. During the third trimester, often mild contractions are experienced,

which is to prepare one’s uterus for the real labour process to come which are known as

Braxton Hicks contractions.

During these medical check-ups one are required to have a pink coloured medical

card as shown in Figure 4.1 below. The purpose of this medical card is to write in all

details regarding the health of the foetus as well the mother. Below are the details that are

provided in the medical card:

i. Weight of the mother

ii. Size of the foetus

iii. Blood test result

iv. Urine test result

v. Pregnancy complications of the mother

vi. Doctor’s comment

vii. Etc.

Figure 4.1: Medical Card

Registration for the pink coloured card has its very own process and usually the

registration is done when the baby is about ten weeks but it’s said to be better earlier. Here

are the details of the process. Some private clinics may not provide the card unless required

by the patient.

Step 1: Handing in documents needed. Documents needed during the red card registrations

are as following:

i. Identity Card(IC) both parents

ii. Marriage Certificate

iii. Passport size photo

Step 2: Checking the last date of period to identify the how far along is the foetus.

Step 3: The date of the baby was conceived is written on the card. (The exact date of

ovulation occurred). Estimated due date is determined.

Step 4: All relevant details are filled in the card.

Step 5: Pressure is checked.

Step 6: Weight is checked.

Step 7: Urine test.

Step 8: Breasts are checked to ensure if the mum could breastfeed the baby.

These check-up are often done monthly unless you are diagnosed with any medical

issues then you may be required to visit the facility every two weeks once. Frequency of

regula check-ups are as below:

i. Once a month till the seventh month of pregnancy.

ii. Once every two weeks the eighth month of pregnancy.

iii. Once a week from the ninth month of pregnancy until delivery.

Monthly medical check-ups comprises of:

i. Blood test taken for checking rhesus factor and infections

ii. Urine test

iii. Pressure

iv. Weight

v. Baby growth

vi. Baby movement

vii. Listening to the baby's heartbeat

viii. Checking for swollen arms or legs or face

Other tests comprises of:

i. Anti-tetanus injection

(ATT) injection is given once you are able to feel the movement of the baby. One month

later on the second dose injection is given. The subsequent pregnancy, only one dose of

injection is given.

ii. Oral Glucose Tolerance Test (OGTT)

Oral Glucose Tolerance Test to check for diabetes during the period of fifth and seventh

month of pregnancy. Fast overnight is required before undergoing a blood test.

iii. Maternity dental checkup

The dentist will check teeth and gums and provide advise on dental care during pregnancy.

Going for month to month check-up is essential to guarantee the child's

improvement is normal as well as to detect any abnormalities. The cost of month to month

check-up varies depending whether you go to a government doctor's facility or private

healing centre. A pre-natal month to month check-up at an administration facility is free

while private centres will ordinarily charge about RM200 for every arrangement depending

upon the facility. The fees are excluding the scanning charges for the private facility.

Below is a table explaining the fee:

Type of facility Fee
Government Free including scanning and supplements.
Usually 2d/3d scanning.
Private RM 200 - RM300
(The minimum value is considered)
Normal cases:
9 months check-up.
11 x 200 = RM 2200
Other cases (medical issues):
15 months check-up approximation.
15 x 200 = RM 3000
Additonal charges(supplements):
RM 100 – RM 150

(Table 4.1: Monthly check-up fee comparison)

Below is a table on charges applied for scanning and the prices are distinct depending on

the private facility which could be sum up to RM 120 per scan:

Scan Price Gestation Age (Pregnancy Scan)

Early Pregnancy Scan RM 60 6 – 13 Weeks

Dating Scan RM 60 6 – 13 Weeks

Viability Scan RM 60 6 – 13 Weeks

Sexing/Gender Scan RM 60 16 – 42 Weeks

Anomaly Scan RM 150 18 – 24 Weeks

Foetal Wellbeing/Growth Scan RM 100 24 – 42 Weeks

Presentation Scan RM 60 36 – 42 Weeks

3D/4D Scan RM 120 24 – 32 Weeks

(Table 4.2: Scanning fee of Ultrasound Scan Malaysia. Retrieved from


4.3 Delivery

There are two types of delivery of baby, normal and caesarean. For normal or vaginal in

Gleneagles the cost is approximately from RM5000 to RM7500 with deposit of RM 5000,

whereas caesarean is RM 8000 to RM 11,500, with RM 8000 deposit. And this packages

excludes any types of complications and cost may vary with types of room and other arising

medical conditions.

Meanwhile in Medical Centre Maternity the packages are more expensive. For

normal delivery is RM 5, 000 to RM 8, 000 and caesarean is RM 10,000 till RM12, 000. For

emergency caesarean delivery is RM12, 000 for single room (3 days 2 nights). Average total

cost for prenatal care throughout a typical pregnancy, including about 12 doctors’ visits,

routine blood tests, urinalysis and at least one ultrasound.

On the other hand, in all KPJ specialist in Malaysia, deposit is needed upon

admission, and for normal delivery (RM2, 500) and for caesarean (RM5, 000). Usually, the

medical expenses for baby in the first year will be covered by health insurance which parents

sign in before delivery. For an example, in KPJ Ampang Puteri, three packages are being

offered for normal delivery (3 days 2 nights): (Appendix 1)

Packages Prices (RM)

Maternity 1 (4 bedded) 2,050

Maternity 2 (2 bedded) 2,350

Maternity 3 (Single room) 2,650

4.4 Post pregnancy

Often a new parent will undoubtedly have inquiries on everything from kicking to

breastfeeding, to washing and showering your child and changing their nappy. Here's a few

fundamental things to know having new child amid those depleting however brilliant early

weeks. Breastfeeding your new infant. First and foremost, it is rather important to breast feed

a child due to the nutrients that are contained in the mother’s milk. It is also essential to know

the ways of bathing your child as well as changing the diapers of the kid. Also, a new parent

are required to know how to soothe a crying baby, initially it may be hard but eventually

they would get the hang of it and it’s essential that one discovers on why the child might be

crying and how to alleviate them. Helping your infant to rest is another major skill that a

parent should acquire with. It is vital that the parents acknowledge the needs of the baby and

making a list would be beneficial. For instance, by preparing the correct formulated milk

powder, appropriate strollers, comfortable and breathable clothing plus hygienic napkins and

wet tissues for the use of the new-born. Besides, all the information above parents are also

required to prepare the baby needs such as medical check-ups, baby nursery, baby travel

items, baby feeding essentials, baby clothing, bathing and changing, baby toys, baby food as

well as confinement, tax relief and child care.

4.4.1. Medical check-up

The National Immunization Program gives routine youth immunisations to different

irresistible maladies and it’s a child is entitled to get vaccinated. Most are prescribed across

the country; others are particularly suggested for babies in Sabah and Sarawak. The

immunizations are given to free in the government facilities where else private are

additionally charged and most likely you would be provided with record booklet or card that

would be incorporated with extra immunizations. Vaccinations are not only for babies,

young kids are also given vaccination at a particular age. Here by, below is a table explaining

the costs and period of vaccinations. The cost below are of KPJ Ampang Specialist private

facility that have been obtained through a call up session, thus the cost may vary.

AGE Immunisation Injection Government Private facility

offered times facility fee fee

At Birth BCG + Hepatitis B 1 injection Free RM 42.50 +

RM 19.50

1 month Hepatitis B + 1 injection Free RM 19.50 +

Pneumococcal RM 237




2 month Diphtheria, 1 injection Free RM 175 ( 6 IN

Pertussis,Tetanus , 1 INJECTION)


influenza type b



3 month Diphtheria, 1 injection Free RM 175 ( 6 IN

Pertussis,Tetanus , 1 INJECTION)


influenza type b



5 month Diphtheria, 1 injection Free RM 175 (6 IN

Pertussis,Tetanus , ONE

Haemophilus INJECTION) +

influenza type b RM 280


(DTaP/IPV/Hib) +

2nd Pneumococcal

6 month Hepatitis B 1 injection Free RM 19.50

9 month Measles, mumps 1 injection Free RM 37.50

and rubella


1 year Measles, mumps 1 injection Free RM 37.50

and rubella



18 month Diptheria, tetanus, 1 injection Free RM 175 (6 IN 1

pertussis INJECTION)

(whooping cough)

/ Haemophilus

influenza type b



6-7 years Measles, mumps 1 injection Free RM 37.50

and rubella



7 years Diphtheria & 1 injection Free RM 85

tetanus / polio

(before starting



12 years Diphtheria & 1 injection Free RM 85

tetanus / polio


13 years Human 1 injection( 2nd Free RM 180 per

papillomavirus dose one dose ( for

(given if parents month later women born

agree) and the 3rd 1989,1988 and

(HPV) dose six earlier in

months later) LPPKN clinics)

+ RM 278 per


15 years Tetanus booster 1 injection Free RM 65 (whole


(The table above is done based on Figure 4.3.)

(Figure 4.3 retrieved from KKM official website)

4.4.2. Baby nursery

Babies will invest a large portion of their energy in the nursery, so guardians ought to do all

that they can to make it a sheltered place. This starts with selecting protected, stable child

furniture to prepare the baby nursery. Baby nursery is an optional part but there are few baby

items that are needed though. Here goes a list of items related to baby’s nursery plus the cost

which are obtained from lazada online store and lelong. The cost varies and merely are

average prices:

Items Cost for brand new Cost for used items Necessity

Baby swing RM 90 RM 60 Must have

Baby cot RM 50 RM 30 Must have

Moses basket RM 150 RM 70 Must have

Bedding and RM 79 + RM 15 RM 50 + RM 10 Must have


Sleeping bags RM 45 RM 30 Must have

Room RM 30 - Must have


Night light RM 35 - Optional

Baby monitor RM 78 RM 52 Optional

Changing table RM 179 RM 150 Optional

4.4.2. Baby travel items

Travelling with an infant can be a real handful especially for first time parents as well as

those far distance travel from home. In actuality, babies that travel doesn’t require to many

items and there are about few essentials regardless long or short distance travel and here

goes a list of the items:

Items Cost for brand new Cost for used items Necessity

Car seat RM 99 RM 70 Must have

Pram RM 399 RM 250 Must have

Travel cot RM 140 RM 99 Must have

Baby carrier RM 79 RM 61 Must have

Changing bag RM 50 RM 20 Must have

4.4.3. Feeding items

For breastfeeding moms there are several equipment must to have to lighten the feeding

process. Here’s a rundown of feeding supplies one would need for their infant.

Items Cost for brand new Cost for used items Necessity

Breast pump RM 65 RM 53 Must have

High chair RM 63 RM 30 Must have

Weaning RM 30 RM 15 Must have


Nursing pillow RM 120 RM 80 Must have

Baby bottles (at RM 10 per item - Must have

least 6-8)

Bootle sterilizer RM 120 RM 65 Optional

Nursing bra & RM 25 - Optional

breast pad

Muslin cloth & bibs RM 50 RM 20 Must Have

4.4.4. Baby clothing, bathing and changing

New born does not require as often they outgrow the clothing in just few weeks’ time and

extensive wardrobe but there are several basics to have on hand at home. Keeping it simple

would be a wise thing to do. Here goes the list:

Items Cost for brand new Cost for used items Necessity

Essential clothing RM 300 RM 180 Must have

(10 suits )

Disposable nappies RM 35 - Must have

Reusable nappies RM 20 - Must have

Nappy bin RM 20 RM 15 Must have

Baby bath RM 100 - Must have

Baby towels RM 20 RM 65 Optional

Bath thermometer RM 20 RM 15 Optional

Baby hand and foot RM 20 per pair of RM 15 per pair of

socks ( 6 pairs) both hand and foot both hand and foot

sock sock

Grooming RM 50 - Must Have


4.4.5. Playtime

For the first few months baby loves things that they can look at and listen to. Here goes a list

of items:

Items Cost for brand new Cost for used items Necessity

Baby rocker RM 200 RM 100 Optional

Rattles RM 30 RM 23 Optional

Play mat RM 57 RM 30 Must have

4.4.6. Baby food utensils

There are few essential tools in the kitchen can make preparation and storage of baby food’s

easier. Below is the list :

Items Cost for brand new Cost for used items Necessity

Feeding spoon set RM 37 RM 23 Optional

Sippy cup RM 30 RM 10 Optional

Pacifier RM 20 - Must have

4.4.7. Baby formula

Although nothing truly duplicates the breast milk, there are modern formula milk specifically

designed by scientist for the mom’s that can’t breast feed or chosen not to breast feed. There

are several things to consider when one is choosing the right formula milk for their infant.

These formulas are made to meet the baby’s nutritional needs. There are three types of

formula preparations:

i. Ready to feed ( Most expensive)

ii. Liquid concentrate (Moderate)

iii. Powder (Most economic)

There are several types of formula milk:

i. Cow’s milk based formula ( are milk formulated to be the most similar to breast

feed milk)

ii. Hydrolysed protein formula (specially designed for babies with an allergy or

intolerance to cow's milk)

iii. Soya based formula ( made out of soya beans)

Here’s a rough idea on approximation of baby’s formula milk of different brands in Malaysia


Formula Brand Price per Price per Price

package 100g per


Enfalac A+ (900g) RM 80.00 RM 8.88 RM 53.28

Dumex Mamex Cherish (1600g) RM 65.20 RM 4.08 RM 24.48

S-26 SMA gold (600g) RM 77.69 RM 12.95 RM 77.69

Frisolac(600g) RM 63.00 RM 10.50 RM 63.00

Dumex Dupro(400g) RM 28.90 RM 7.23 RM 43.38

Anmum Infacare(600g) RM 58.00 RM 9.60 RM 58.00

Baby formulas have different prices depending on the different brands and stages. The earlier

the stage, (for new born) the more expensive the cost. As your child becomes older, the cost

of formula milk will reduce. Taking the above samples as an example, here a few steps of


The total cost of brands used as sample for 600g = RM 319.86

Number of brands used as sample = 6

Average = Total cost of brands for 600g / Number of brands used as sample

The average total cost of these formulas for 600g = RM 53.31.

A 600g formula week could last up to a week and half which gives us 1200g.

Per month average cost of the formula milk = 2 x RM 53.31= RM 106.61.

4.4.8. Confinement

Expectant parents should also take note of the confinement cost as Malaysians generally

practice confinement for at least 1 month up to 44 days where a confinement lady helps out.

The confinement lady does following things:

i. Will provide confinement food.

ii. Provide post-delivery massages

iii. Bathe the baby during the confinement days.

There are several choices that a parent could decide on regarding confinement period:

i. Staying in confinement centre

ii. Hiring a confinement lady

iii. Relations as confinement lady

Type Cost Details

Staying in confinement RM 2500- RM 3000 Five meals are provided. A

centre local baby sitter is hired to

look after the baby.

Hiring a confinement lady RM 100 – RM 150 per day. Cooks for the mother.

Bathes the baby. Usually

Considering 30 days:
they don’t do house chores.

30 x RM 100 = RM 3,000 Needs to provide a place to


Relations as confinement Free of charge Does everything that’s for

lady (mother or mother in the baby and the mom.


4.4.9. Tax Relief

The Malaysian government is providing the following assistance and tax reliefs, to ease the

financial burden of Malaysian parents :

i. Back to school initiative for primary & secondary children – RM100 per child

(for low to middle income families only)

ii. Child relief– RM1,000 per child (only for one of the parents)

iii. 1Malaysia Book Voucher (BB1M)– RM200 per child

iv. Child education insurance– RM3,000 per parent

v. Skim Simpanan Pendidikan Malaysia (SSPN)savings – RM6,000 (for each


4.4.9. Childcare

Finding appropriate and economical child care for your child is often very much challenging.

There are different options available in different places and at different price points. Under

the Child Care Centre Act 1984 (Rev 2007) there are four (4) types of Child Care Centres in

Malaysia that cater to specific needs which are as followings:

i. Home-based Child Care Centres

ii. Institution-based Child Care Centres

iii. Workplace Child Care Centres

iv. Community-based Child Care Centres

It is to be noted that some parents could ask the help of their relatives or family related

members as well as non-family related members, friends to look after the child which we

usually referred to as nannies. Also some parents hire full time maid.

Type of childcare Quantity Location

Home-based 4 to 9 children Conducted in privately owned


Institution 10 or more children Can be operated by the private

sector, Non-Governmental

Organisations (NGOs) or faith

based organisations

Workplace 10 or more children Can be at the workplace or

offsite by businesses or


Community-based 10 or more children Established at the initiative of

the community to benefit low-

income families in urban and

rural areas.

A child rapidly develop physically, emotionally and mentally and during these period of

time, a substantial amount of care and guidance as well as a safe environment are

fundamental to make sure that one’s child gets a solid base to develop progressively. Thus,

there are several vital considerations that need to be taken into account choosing a Child

Care Centre for your infant or child which are as follow:

1. Check if the childcare is registered.

Unregistered Child Care Centres that do not meet the minimum standards under the Child

Care Centres Act 1984 (Rev 2007) and Local Authority which may pose a security risk to

your child.

2. Check if the childcare is spacious enough

This is to ensure that the childcare centre is not overcrowded.

3. Numbers of childcare provider available

Plan a surprise visit to the centre during its peak hours to observe the ratio of Care Provider

to child. Below is children ratio as per said under the Child Care Centre Act 1984 (Rev2007)

and Regulations:

 1 Care Provider : 3 infants under 1 year.

 1 Care Provider : 5 Children ages 1 - 2 years.

 1 Care Provider : 10 children ages 3 - 4 years.

4. Qualification of the staffs

Make sure of that the child care staffs have gone through PERMATA Basic Child Care

Course accredited by the Department of Social Welfare.

5. Safety and convenience of the childcare

The childcare centre should have a safe and convenient drop-off or pick-up point, under

constant and strict supervision of providers.

6. Safety and secureness for environment

Both indoors and outdoors should be safe for the child. Check if the drains are properly

closed, fences are sturdy and the playing area is free of holes or sharp objects as well as

make sure the furniture, toys and play equipment are safe to play with, with no sharp edges.

7. Curriculum and Best Practices are set up

Guarantee the centre has an appropriate medicinal services and nutritional food. The centre’s

educational modules ought to be based on the norms of the PERMATA Curriculum.

11. Are there cheerful collaborations and conscious correspondence amongst staff and

among the kids at the centre?

Do guarantee that the centre has a cheerful, favourable learning condition where positive

cooperation’s and correspondence are sustained.

It is certainly in the parents hand to where they choose to send their kid to be taken care of

while their off to work, be it to the childcare, or a nanny or hiring a full time maid. Below

are the rough details of how much it would cost:


Childcare Beginning of the year or first time registration: Half day Full day
( 2 to 4 years old) (8.30- (8.30-6.00)
Registration fee: RM 50.00
RM 50.00
Uniform: RM 50.00
RM 50.00
Miscellaneous fee ( daily snacks, insurance RM 300.00
coverage, art craft material, stationary, RM 200.00
worksheets, lunch for full day) (1/2 a year)

A month advanced fees RM 350.00

RM 350.00
Current month fees RM 350.00
RM 350.00
Grand total for first month RM 1460
RM 1010
Subsequent month RM 700
RM 350

( 3 to 16 months)

Fee RM 1350 -

( 4 years and above)

Fee RM 650 RM 1000

Nannies Cost are based on per hour.

*rates are for maximum 2 children.

*additional child costs RM 10 per child.

*minimum hours are usually set to three hours based on the individuals.

During the day is ( 7 a.m. to 6 p.m.) = RM 30 / hour

During the night ( 6 p.m. to 12 a.m.) = RM 40/ hour

During the mid-night ( 12 a.m. to 7 a.m.) = RM 50/hour

Maid Deposit about RM 10000 depending on the origin country of the maid and
could cost more.

Monthly payment = RM 700 and above

4.5 Planning ahead for the future

Nurturing a new-born does not stop there as the parents are still required to prepare the

fundamental needs of a child’s education, be it kindergarten, primary or secondary school or

even tertiary education. The parents should be well prepared be it by money wise or

information wise, so that the child has a secured future. Parents are required to be financially

stable to provide a better future for the child. Also, it’s advisable for one to have a saving

account, insurance registered particularly for the child’s studies and needs.

4.5.1 Education

Education can be said as the most important part of nurturing a child. It is also the

part that most of the parents invest and pay most attention on. As many people said,

children’s success in the future depends on how well the education they receive and engage.

Of course, to educate a child, it requires a lot of money and effort. Thus, parents have to well

plan the education of children before the delivery of baby.

In Malaysia, government has set the rules that parents are required to send their

children to kindergarten or they will be fined and punished. They want to ensure that our

children are at least receive the basic education. This has also shown that government is very

emphasized on education as well. The fee of sending children to kindergarten is basically

depends on the type of kindergarten. There are kindergartens that are famous and have many

franchise, the fee will be higher like RM600 to Rm800 per month, if compare to those

economy type, the fee will be in the range of RM200 to RM400 per month.

When children enter to primary school which is either public or private, the cost are

very much different. If it is public primary school, parents need to prepare like RM500 when

children started entering the school for uniform, stationery and so on and afterward, parents

maybe need to prepare for like transportation fee if children are taking bus and also pocket

money, as for government school, children are borrowing textbooks from school and so

parents not need to buy. In contrast, if children enter to private school like international

school, the school fee varies to different school, but the fee is at least at RM1000 per month.

When children stepping into secondary school, if it is government secondary school,

basically, parents not need to pay for the school fee except children are going for tuition.

Tuition fee varies from different tuition center as well, generally, it may cost RM50 per one

subject. But if children are enrolled to independent school or private school, in our country,

if it is Chinese independent school, the school fee is cost like RM1000 for three months, if

private school, it may be RM1000 per month.

The most costly part definitely will be the tertiary study. It actually depends on the

subject and university or college that children choose. School fee may vary from RM20, 000

to RM 500,000. If children decide to further study as medicine in private university, the cost

will be at least RM 400,000, but in public university, the fee will be like RM3000 per

semester. Other than school fee, parents have to provide hostel fee if children are away from

home, and also money for food and transportation. It may cost RM1000 per month.

4.6 Saving up

With your child's arrival, parents will need to create financial tools to help provide for their

child's future. These are few tools that could parents for budgeting:

 Education saving tools (pre-school, primary, secondary and tertiary)

 Life insurance (This is to assure that the child will have financial resources if parents

and/or the spouse were to die unexpectedly)

 Health Insurance (If one serious accident or illness could deplete your savings and

put you in significant debt. Parents have to investigate their insurance options if you

don't already have any coverage, perhaps you should add budget to increase

monthly premium to add your child to your policy)

 Disability Insurance (As a parent you and/or your spouse should consider

getting disability insurance to replace income or salary lost if you are unable to work


 Flexible Spending Accounts (FSA) (This enables you to use pre-tax dollars to pay

for vital family budget items, like childcare and medical or healthcare expenses)

As for ongoing expenses as they have child, parents need to include cost of

childcare, diapering, feeding (milk, baby food), clothing, medicines, toiletries and nursery

(crib, baby monitor) in the financial plan for a year.

After having children, most of the parents face difficulties in maintaining expenses

for their new born baby without applying loan in bank. Therefore, few steps can be followed

to avoid debt. Firstly, parents can shop at thrift stores. Here, instead of paying full price for

their clothing, parents could check out gently used and even new items at your local thrift

store, as babies grows fast. These types of stores will buy back items after your child has

outgrown them for cash or store credit. Yet, parents cautious about buying used items related

for child's safety, such as a crib or car seat.

In addition, parents can use family for back-up day care instead of spending on

expensive childcare. Besides, parents don’t have to take a day off (possibly without pay)

when your child is sick, but could make arrangements for family or friends to help out with

emergency back-up day care.

Moreover, the best way to save up is to borrow items from friends or family.

Parents could ask friends with young children if you could borrow items, particularly big-

ticket items they're not using, like a crib, high chair or rocking chair, which will reduce your


The utmost step is to downgrade lifestyle as by having a child it will change a lot of

things, including your financial priorities. Parents need to review new budget before you

adding up things to avoid lack of money in the future. Parents should consider closing the

gap by downgrading in a few key areas, especially entertainment, beauty purposes, maids,

plan for an affordable car and house monthly expenses.

4.7 References

1) Your Financial Life. (2015). First-year out-of-pocket medical costs average $1,297

for kids: What you need to know. Retrieved from



2) (n.d.). Retrived from



3) KPJ Johor Specialist. Retrieved from. http://www.kpjjohor.com/patient-


4) Anonymous. (2017). Kindergarten Fees. [online] Available at:


5) Balkish Rosly. (2014). How much is it to send a child to school?. [online] Free

Malaysia Today. Retrieved



6) Packages. (n.d.). Retrieved June 20, 2017, from


7) Approved by the BabyCenter Malaysia Medical Advisory Board. (n.d.). Antenatal

care at government clinics. Retrieved May 27, 2017, from


8) Lee, I. (2016, May 27). How Much Does It Cost To Have A Baby? Retrieved May

27, 2017, from https://www.imoney.my/articles/cost-to-have-a-baby

9) 2014, S. T. (n.d.). Pusat jagaan kanak-kanak (nurseri). Retrieved May 27, 2017, from


10) Tips for new parents - Pregnancy and baby guide. (n.d.). Retrieved May 27, 2017,

from http://www.nhs.uk/conditions/pregnancy-and-baby/pages/being-a-parent.aspx

11) Health & Pregnancy Guide. (n.d.). Retrieved May 27, 2017, from


12) Childcare centres costing parents RM1000 over per child. (n.d.). Retrieved May 27,

2017, from



13) Services, W. E. (n.d.). Retrieved May 27, 2017, from



Yogeswary A/P Mohan 1.0 Introduction

4.1 Child Introduction

4.3 Delivery

4.6 Saving Up

Pavitra Naaidu A.P. Radakrishnan 4.2 4.2 Pregnancy Phase

4.4 Post Pregnancy

Jasmin Chong Fung Ye 4.5 Planning Ahead For The Future


Figure 1: KPJ Ampang Puteri Maternity Packages

Figure 2: KPJ Maternity Packages for Normal Delivery

5.0 Personal Finance

5.1 Information & Process

Personal finance is the process of planning for the spending, financing, and investing to

optimize financial situation of an individual. Personal financial plan is a plan that specifies

a person’s financial goals and describes the spending, financing, and investing plans that are

intended in order to achieve those goals. Financial decisions must be made carefully because

every spending decision will consist of opportunity cost. Opportunity cost is the cost of

giving up something in order to gain another thing. The components of a financial plan

include budgeting and tax planning, liquidity management, financing for large purchases,

protecting the asset and income (insurance planning), investing, and retirement & estate


The first step of personal financial planning is to do budget planning and tax planning.

Budget planning is the process of forecasting the future expenses and savings. Budget

planning allows one to anticipate whether he/ she is having cash surpluses or cash deficiency

for the month, in other words, to evaluate their current personal financial position. When one

is having cash surpluses in their budget, he/ she can invest the cash surpluses to maximize

their wealth. If it is cash deficiency, the person will have to learn to control his/ her expenses,

cutting down all those unnecessary expense to maintain positive cash flow. Tax planning is

the process of maximizing tax relief to reduce the amount of income tax that have to be paid

by a person. The amount of income tax that have to be paid is depends on the chargeable

income of the person.

Chargeable Income Calculations (RM) Rate (%) Tax (RM)

0-5,000 On the First 2,500 0 0

5,001-20,000 On the First 5,000 1 0

Next 15,000 150

20,001-35,000 On the First 20,000 5 150

Next 15,000 750

35,001-50,000 On the First 35,000 10 900

Next 15,000 1,500

50,001-70,000 On the First 50,000 16 2,400

Next 20,000 3,200

70,001-100,000 On the First 70,000 21 5,600

Next 30,000 6,300

100,001-250,000 On the First 100,000 24 11,900

Next 150,000 36,000

250,000-400,000 On the First 250,000 24.5 47,900

Next 150,000 36,750

400,001-600,000 On the First 400,000 25 84,650

Next 200,000 50,000

600,001-1,000,000 On the First 600,000 26 134,650

Next 400,000 104,000

1,000,000 and above On the First 1,000,000 28 238,650

Next ringgit ……

The table above is taken from the government website of Malaysia with the latest

data of income tax rate in assessment year 2016. The table above shows how the income tax

is calculated, and the income tax rate for every level of chargeable income.

No. Individual Relief Types Amount (RM)

1 Self and Dependent 9,000

2 Medical expenses for parents 5,000 (Limited)


3000 (Limited)
Limited 1,500 for only one mother

Limited 1,500 for only one father

3 Basic supporting equipment 6,000 (Limited)

4 Disabled Individual 6,000

5 Education Fees (Individual) 7,000 (Limited)

6 Medical expenses for serious diseases 6,000 (Limited)

7 Complete medical examination 500 (Limited)

8 Purchase of books, journals, magazines and 1,000 (Limited)


9 Purchase of personal computer (once in every 3 years) 3,000 (Limited)

10 Net saving in SSPN's scheme (with effect from year 6,000 (Limited)

assessment 2012 until year assessment 2017)

11 Purchase of sport equipment for sport activities 300 (Limited)

12 Interest expended to finance purchase of residential 10,000

property. Relief of up to RM10,000 a year for three (Limited)

consecutive years from the first year the interest is


Subject to the following conditions:

(i) the taxpayer is a Malaysian citizen and a resident;

(ii) limited to one residential unit;

(iii) the sale and purchase agreement is signed between

10th March 2009

and 31st December 2010; and

(iv) the residential property is not rented out.


(a) 2 or more individuals are eligible to claim relief for

the same property; and

(b) total interest expended by those individuals

exceeds the allowable amount for that year. Each

individual is allowed an amount of relief for each year

based on the following formula:



A = total interest allowable in the relevant year;

B = total interest expended by the relevant individual

in the relevant year;

C = total interest expended by all the individuals.

13 Husband/Wife/Alimony Payments 4,000 (Limited)

14 Disable Wife/Husband 3,500

15 Ordinary Child relief 2,000

16 Each unmarried child of 18 years and above who is 2,000

receiving full-time education ("A-Level", certificate,

matriculation or preparatory courses).

17 Each unmarried child of 18 years and above that: 8,000

(i) receiving further education in Malaysia in respect

of an award of diploma or higher (excluding

matriculation/preparatory courses).

(ii) receiving further education outside Malaysia in

respect of an award of degree or its equivalent

(including Master or Doctorate).

(iii) the instruction and educational establishment shall

be approved by the relevant government authority.

18 Disabled child 6,000

Additional exemption of RM8,000 disable child age

18 years old and above, not married and pursuing

diplomas or above qualification in Malaysia @

bachelor degree or above outside Malaysia in program

and in Higher Education Institute that is accredited by

related Government authorities

19 Life insurance and EPF 6,000 (Limited)

20 Deferred Annuity and Private Retirement Scheme 3,000 (Limited)

(PRS) - with effect from year assessment 2012 until

year assessment 2021

21 Insurance premium for education or medical benefit 3,000 (Limited)

22 Contribution to the Social Security Organization 250 (Limited)


The table above shows the latest data of tax relief in assessment year 2016. Tax relief

is the amount of income that can be deducted from your chargeable income, and thus

reducing the tax. A significant amount of taxes can be saved if it is planned properly. Tax

relief helps to reduce the financial burden of a person, allowing him/ her to pay lesser tax.

The payment of income tax can be made by cash or cheque at the bank. Cash payment

is also accepted at POS Malaysia counter. Besides that, it can also be paid by internet banking,

payment through Automated Teller Machine (ATM), cheque deposit machine, and cash

deposit machine.

The second step of personal financial planning is to liquidity management. Liquidity

is the ability to access to funds to cover any short-term cash deficiencies. Liquidity

management involves two parts, which is money management and credit management.

Money management is about how much money to retain in liquid form and how to allocate

the funds among short-term investment. When doing the allocation of money to do

investment, a portion of money must be kept just in case something emergency happened

and cash is needed. It is not a smart choice to place all the money into illiquid investment

(stocks or bonds with a very long maturity) nor keeping all money in the liquidity form

(keeping the money at home or in the savings account). Credit management is how much

credit to obtain to support personal spending, and which sources of credit to use. Some of

the credit sources charged a slightly higher interest compare to the others. Therefore, it is

better to do some researches before choosing to finance yourself through credit. Besides that,

make sure you are having the ability to pay back the money to the creditor before you try to

spend every single money or else you might face trouble in paying the debts.

The third step is to financing for large purchases. The examples of large purchases

are like car and house. Loans are often needed when people purchasing car and house,

because no one will buy car and house with cash even if they own that much. When

managing for the loans, there are several factors that have to be considered. For example,

how much can you afford to borrow and pay? You must make sure that you will still have

balance for other expenses after you have paid for the loan. After that, you will have to

determine for the maturity of the loan. The shorter maturity comes with higher monthly

payment but lower total amount will be paid while the longer maturity comes with lower

monthly payment but higher total amount will be paid. The next thing is to select a loan with

a competitive interest rate. As we all know, the compete between banks are quite intense,

they will always come out with attractive rate to attract customers. Choose the bank that

offers you the best interest rate to minimize your own burden.

The forth step is to protect your personal asset and income. To protect the personal

asset and income, insurance planning is needed. Insurance planning is the process of

determining the types and amounts of insurance needed to protect your asset and income.

There are several types of insurance, for example, automobile insurance, home-owner

insurance, life insurance, medical insurance, general insurance & etc. Choosing the suitable

insurance plan that can provide sufficient coverage to you will do. Excessive amount of

insurance will cause you to suffer loss because you won’t be able to claim insurance from

multiple insurance company for the same thing.

Fifth step of personal financial planning is to do investment. The purpose of doing

investment is to maximize personal wealth. The moneys that are not needed for liquidity can

be used for investment. The examples of investment are stock, mutual funds, bond, real

estate & etc. All investments will have some level of risk subject to risk tolerance of an

individual. If an individual is risk adverse, he/ she should choose the investment with lower

risk but comes with lower return, while if an individual is a risk seeker, he/ she can choose

the investment with higher risk and comes with higher return. The most important thing

before you invest your money is to make sure that you have paid all your debts, and you will

still have sufficient money for other expenses.

The last step of financial planning is retirement planning and estate planning.

Retirement planning is the process of determining how much money should be set aside each

year for retirement and how those funds should be invested. Doing retirement planning

allows you to be financial independent even after you are retired, which means you won’t

have to rely on others to support your life. One of the example of retirement is to contribute

in SOCSO and EPF. Estate planning is the process of determining how your wealth will be

distributed before or upon your death. You have to leave a proper will before you dead in

order for your asset to be distributed to your family members as you wish. If you did not do

estate planning, your family members will have troublesome process and face difficulties in

claiming for your asset after your death. Therefore, estate planning is a must have if you do

not wish your family members to quarrel over how your asset should be distributed between

them. In a worse situation, they might bring the case to the court to fight for your assets and


5.2 SOCSO (Social Security Organization)2

 SOCSO also known as PERKESO, was established in 1971 under the Ministry of

Human Resources to provide security protection to all employees/ workers in


 There are two categories of SOCSO. The first category is Employment Injury

Scheme and Invalidity Pension Scheme which is applicable for employees aged

below 60

 The Employment Injury Scheme provides protection for employees against

contingencies, including occupational disease and accidents that occur while

travelling in the course of employment. The Invalidity Scheme, on the other hand,

provides 24 hours’ coverage against invalidity or death due to any cause.

 The company will pay 1.75% while the staff/workers’ will contribute 0.5% of their

wages for the Employment Injury Insurance Scheme and the Invalidity Pension


 The second category is Employment Injury Scheme only and this opens for three

conditions: for employees above 60 years of age and still working, for employees

above 55 years of age when first registered and contributed to SOCSO and for an

Insured Person receiving Invalidity Pension who is still working and receiving wages

which is less than1/3 of the average monthly wage before invalidity

 The objective of both schemes is to guarantee cash payment and benefits in kinds to

employees and their dependants in the event of a contingency.

What Is SOCSO (PERKESO)?" SOCSO | PERKESO. N.p., 23 Apr. 2013. Web. 22 June 2017.

 SOCSO is able to provide free medical treatment, facility for physical or vocational

rehabilitation, and financial assistance to employees if we have loss our abilities due

to accidents or diseases that have reduced our abilities to work or rendered us


Benefit Under Employment Injury Scheme4

1. Permanent Disablement Benefit

2. Constance Attendance Allowance

3. Temporary Disablement Benefit

4. Medical Benefit

5. Facilities for Physical or Vocational Rehabilitation

6. Return to Work Programme

7. Dependent’s Benefit

8. Funeral Benefit

9. Education Benefit

Invalidity Scheme Benefits5

1. Invalidity Pension

2. Invalidity Grant

3. Constance Attendance Allowance

4. Survivor’s Pension

5. Funeral Benefit

6. Facilities for Physical or Vocational Rehabilitation and Dialysis


7. Return to Work Programme

8. Education Benefit

Process- SOCSO

I. If we are employer or employee must be registered with SOCSO not later than 30

days on which the Act becomes applicable to the industry.

II. We can register through 2 ways as follows:6

 SOCSO Counters-Registration at the counters can be done by our employer

or us as employer/ employer’s representative. Supporting documents from

relevant agencies must be submitted together.

 Malaysia Corporate Identity (MyCoID)- Registered employers through

MyCoID are required to submit their registration forms together with

supporting documents to SOCSO if they meet the eligibility requirement

under the Act.

 Employers are required to attach the supporting registration documents in

accordance with the business entity type as set out in the Attachment

 With effective from 1 June 2016, any employee who is employed for wages

under a contract of service or apprenticeship with an employer is compulsory

to be registered and contributed to SOCSO and the maximum rate of

contribution is based on monthly wages or salary of RM4,000.00. Notice of

Election is no longer applicable from the date

this Act applies.


III. The rates are based on the total sum of the monthly wages received by an employee.

Contribution on the first month when the employee commences employment. Types

and categories for contribution:

a) First Category (Employment Injury and Invalidity Schemes)

 All employees who have not attained 60 years of age are required to

contribute under the first category, except those who have attained 55

years of age and have made no prior contributions before they reach

55 years

 The rates of contribution under this category comprise of 1.75%

employer’s share and 0.5% employee’s monthly wages.

b) Second Category (Employment Injury Scheme)

 For employees 60 years old and above and still working

 For employees above 55 years old when he first registers and

contribute to SOCSO

 Insured Person receiving Invalidity Pension and still working and

receiving less than 1/3 of the average monthly wages before the


 Under this Category, the contribution is paid by the employer for the

Employment Injury Scheme.

 The rate of contribution under this category is only 1.25% of the

employee’s monthly wages solely borne by the employer.

IV. Contribution can be paid through 3 methods as follow:7

a) Payment through collection agents, following are the authorized collection


 Maybank Berhad

 RHB Bank Berhad

 Public Bank Berhad

 Pos Malaysia (For Sabah and Sarawak only)

b) Employers or us can also make the payment through Internet Banking, but

the employers need to be registered and have an account with the appointed


c) Payment can also be made at SOCSO Offices

 SOCSO offices will only accept payment via cheque/money

order/postal order/bank draft. No cash payments are allowed.

 Employers must ensure the details on the cheque, money order, postal

order or bank draft are complete and fulfil the following criteria:

 Current date or within the validity period

 Payment is addressed to Ketua Eksekutif PERKESO / Ketua

Pengarah PERKESO/ SOCSO /PERKESO / Kumpulan Wang

Keselamatan Sosial

 Signed

 Total amount on the cheque must be correspond with the total

amount on specified forms.


 No changes or amendments, and Name, employer code,

telephone number, contribution month, contribution month

notice/ reference number of the office to Compound Notice

must be noted down at the back of the cheque, money order,

postal order or bank draft.

V. Contributions payable for any month shall be paid within 15 days

VI. There will be some interest charged on late payment of contributions, and there are

3 types of notices received by employers, as following:

I. Simplex notice- notice containing 1 to 4 records of contribution months in 1


II. Duplex notice- notice containing more than 4 records of contribution months

in 1 notice

III. Late Contribution Interest Payment Notice

VII. All three types of notices can be paid at SOCSO Offices. However, only simplex

notice for 1 month contribution can be paid at appointed bank, as following:

 Public Bank Berhad, or

 RHB Bank Berhad

VIII. The rate of contribution for example:

Scenario A8


Salary = RM 1,800

Allowances = RM 150

Annual Bonus = RM 3,600

Total = RM 5,550

Total for SOSCO Contribution = RM 1,950 (Annual Bonus is excluded as it is not

considered as SOCSO Wages)

Amount payable by Employer = RM 34.15

Amount payable by Employee = RM 9.75

Total payable amount for SOCSO Contributions = RM 43.90

5.3 EPF (Employee’s Provident Fund)

 The EPF form to provide retirement benefits for members through management of

their savings in an efficient and reliable manner.

 The EPF also provides a convenient framework for employers to meet their statutory

and moral obligations to their employees.

 The members of EPF including the private and Non-Pensionable Public Sector


Mandatory Contribution (How many percent to be collected)

 The Money collected by EPF will credited to member’s individual accounts in the

EPF. The amount is calculated based on the monthly wages of an employee.

 For employees who receive wages/salary of RM5,000 and below, the portion of

employee's contribution is 11% of their monthly salary while the employer

contributes 13%.

 For employees who receive wages/salary exceeding RM5,000 the employee's

contribution of 11% remains, while the employer's contribution is 12%.

 If the employer pays bonus to an employee who receives monthly wages of RM5,

000.00 and below and upon receiving the said bonus renders the wages received for

that month to exceed RM5, 000.00, the calculation of the employer contribution rate

shall be calculated at the rate of 13% (calculation by percentage), and the total

contribution which includes cents shall be rounded to the next ringgit. For example,

Calculation 1:

Basic Salary: RM 3000

Bonus: RM 2456.89

EPF Wages: RM 3000 + RM 2456.89 = RM 5456.89

EPF Employer Contribution: RM 5456.89 x 13% = RM709.40

EPF Employee Contribution: RM 5456.89 x 11% = RM600.269

 A member's EPF savings consists of two accounts that vary by their share of savings

and withdrawal flexibilities. The first account, dubbed "Account I", stores 70% of

the members' monthly contribution, while the second account, dubbed "Account II",

stores 30%.

 Account I restrict withdrawals to the moment the member reaches an age of 55 years,

is incapacitated, leaves the country or passes away. Withdrawal of savings from

Account II however, is permitted for down payments or loan settlements for a


member's first house, finances for education and medical expenses, investments, and

the time when the member reaches 50 years of age

Investment Allocation

 The money collected was invested in a number of approved financial instruments to

generate income.

 Those investment including Malaysian Government Securities, Money Market

Instruments, Loans & Bonds, Equity and Property.

Dividends (How Many Percent Returned)

 There will be a minimum 2.5 Per cent Dividend annually paid guarantees by EPF.

 The dividend rate declared by the EPF is subject to the returns from investments

made in the approved instruments.

 Annual Dividends, on the one hand, are calculated based on the opening balance of

your savings as at 1 January of each year. Monthly Dividends credited into your

account, on the other hand, are based on the monthly contributions received.


 Retirement Benefit

 Dividend

 Simpanan Shariah Dividend

 Incapacitation and Death Benefits

 Incapacitation Benefit (Incapacitation Withdrawal)

 Death Benefit (Death Withdrawal)

 Tax Exemption

Process- EPF

I. As an employee, we are required to contribute to the EPF under the EPF laws.

This is to ensure that we have some financial security in the form of

retirement savings when we retire or we you are no longer employed.

II. Malaysian Citizens who liable to contribute are those:

 Directors who receive a salary or wage:

 Full-time, part-time, temporary, moonlighting and probationary


 Employees up to the age of 75 years;

 Employees who have withdrawn their savings under Pensionable

Employee Withdrawal, and work with employers other than the federal or

state governments, or any statutory bodies or local authorities;

 Employees who have previously made a full withdrawal under

Incapacitation Withdrawal and have since recovered and are re-employed

in any service.

III. We may register as a member through several methods, which including

automatic registration, registration at the counter, registration through mail,

registration through Employer i-Akaun and also Register through Kiosk.

Figure 5.1: Form that Apply EPF

IV. After we registered as a member, we will have received an EPF membership

number and every member will be issued with only one membership number,

which also refer as the account number in EPF. If we having a new employer,

we need to inform our new employer of our membership number for the

purpose of contribution payment.

V. Our EPF membership will be cease upon few conditions:

 No new contribution after member reached 75 years old with zero

balance in account, or

 Has made Leaving the Country Withdrawal with zero balance in

account, or

 Account status is Death Withdrawal with zero balance in account, or

 Savings have been transferred to the Registrar of Unclaimed Monies.

VI. We may have made our EPF payment through several payment methods:

I. Internet Banking

II. By Post

 NO 32A, Dataran Wangsa

Wangsa Melati 53300

Kuala Lumpur, Wilayah Persekutuan


III. Bank Counter

 Public Bank

 RHB Bank

 Maybank

 Bank Simpanan Nasional

IV. EPF office

 Cash (before 3 PM and limited to RM5,000)

 Postal order

 Money Order

 Cheques

 Banker’s Cheques

Figure 5.2: EPF Payment Form

VII. We are also being encouraged to doing the nomination, which is the process

of naming an individual(s) as a nominee/administrator to receive/administer

his/her EPF savings upon the member's death.

VIII. Our EPF savings are a mandatory savings which have been enforced to help

us during our retirement. This means that we may not withdraw our EPF

savings until we retire. The EPF has provided various withdrawal facilities

for us which can be divided into Pre-Retirement Withdrawal and Retirement


 Pre-Retirement Withdrawal, on the one hand, allows us to withdraw

a certain amount from our savings before we reach the retirement age.

This is to help us make the necessary preparations for our retirement.

 Retirement Withdrawal, on the other hand, allows us to withdraw all

of our savings upon reaching our retirement age.

5.4 Resources

1. (n.d.). Retrieved June 20, 2017, from



2. Policy. (n.d.). Retrieved April 26, 2017, from


3. What Is SOCSO (PERKESO)?" SOCSO | PERKESO. N.p., 23 Apr. 2013. Web. 22

June 2017.

4. Employment Injury Scheme Benefits. (n.d.). Retrieved June 26, 2017, from



5. Invalidity Scheme Benefits - perkeso.gov.my. (n.d.). Retrieved March 26, 2017, from






6. Employer & Employee Registration - perkeso.gov.my. (n.d.). Retrieved May 20,

2017, from






7. Contributions - perkeso.gov.my. (n.d.). Retrieved June 19, 2017, from







8. Rate Of Contributions. (n.d.). Retrieved April 6, 2017, from



9. EPF - EPF Member Registration - KWSP. (n.d.). Retrieved March 31, 2017, from







10. EPF - EPF Counter & Payment Function - KWSP. (n.d.). Retrieved May 26, 2017,








11. (n.d.). Retrieved May 26, 2017, from https://help.payrollpanda.my/18570-app-


12. EPF - EPF Member Registration - KWSP. (n.d.). Retrieved May 26, 2017, from








Chin Yan Bin 5.1 Information & Process

Wong Sung Yung 5.2 Socso

5.3 Epf

6.0 Insurance Introduction

Insurance is a contract between an individual and insurance company. This contract

provides that the insurance company will cover some portion of policyholder’s a loss as long

as the policyholder meets certain conditions stipulated in the insurance contract.

Arround the world, accidents and disasters will occur everywhere. We can not budget

accidents and disasters happen, but we hope everything is protected. This is why we need to

buy insurance. If we are not buy insurance, it could leave you in financial ruin. We need

insurance to protect we life and ability to earn income.

Insurance is a way of managing risks. When we buy insurance, we transfer the cost

of a potential loss to the insurance company in exchange for a fee, this is called premium.

Insurance can divide two main type of insurance. First one is life insurance; life

insurance is pays you as the policy holder or your beneficiaries a certain sum of money in

case of your death. Since the insurance coverage is more than a year, you must pay the

premium either every month, every three months or annually. Its main products include: life-

time policy insurance and endowment insurance. The second is general insurance, general

insurance is your protection from damages or losses excluded from the life insurance.

Coverage period is yearly so your payment is made on a single-basis only. Its main products

are: car insurance, fire insurance, personal accident insurance, medical/ health insurance and

travel insurance.

6.1 Life insurance

Life throws many unexpected things at all of us. While we usually can’t stop these thing

from occurring, but we can choice to give our lives of protect. Insurance is meant to give

us some measure of protect, at least financially, should a disaster happen.

6.1.2 Whole life insurance

Whole life insurance is contract with premiums that includes insurance and

investment components. Whole life insurance is providing lifetime protection insurance, in

any age if death or permanent total disability, policy holder will receive the insurance pay-

out. Whole life insurance coverage that provides yearly cash pay-outs whilst protecting

against death and total and permanent disability. This mean is the insurance component pays

a predetermined amount when the insured individual dies. Whole life insurance provides

policyholders with the ability to accumulate wealth as regular premium payments cover

insurance costs. This is most basic type of whole life insurance, also known as straight life

traditional or permanent whole life insurance.

Different type of the life insurance fit different people. Whole life insurance is

indicated for individuals in variety of situations. These situations include the need to provide

dependent family members with funding after the head of a household dies; and to ensure

cash in instantly or quickly available to surviving family members. Also, whole life

insurance offers coverage for the entire life of the policyholder.

Whole life insurance also can be guaranteed life-long coverage, growing cash value

and death benefits.

About guaranteed life-long coverage, the first and most obvious advantage to whole

life insurance is that you have it for life guaranteed. Regardless of when you buy your

insurance or when you die, you have the life insurance necessary to be able to provide a

death benefit to your family.

Next is growing cash value, whole life insurance policies are specifically designed

with a guaranteed growing cash value and this provides the second advantage. Once the cash

value is establishing within a policy the value can never decrease do to market performance.

This means that you can rest assured that your cash value will continue to increase in the

policy for every year that yours maintain it. This is much smarter financing arrangement then

the traditional approach.

The last advantage to whole life insurance is the death insurance. In addition to all

the benefits that you get while you are alive, you will leave a sum of money behind to your

beneficiaries when you pass away-tax free. Many generations have been able to utilize this

to grow their wealth and protect it.

When you decided to insure whole life insurance, there are some tips give you

references. When you buy whole life insurance, you need to understand limited pay life and

single premium life different. You need to choose which type you want, identified the type

then you need take note of the yearly and monthly cost of your insurance, since many of

your quotes will be given both ways. Next, you can gather quotes and company information.

In additional, you need to compare with another company annual and monthly rates. When

you identified company, you can find the insurance company to insure and review the policy

carefully before you sign.

6.2 Endowment insurance

Endowment insurance is to solve the labour loss of the labour capacity after the

withdrawal of the basic job after the establishment of social insurance system. The purpose

of endowment insurance is to protect the basic need of elderly and provide a stable and

reliable source of life.

Endowment insurance plan have some type, first is endowment assurance policy this

is a simple endowment plan that provides life cover and provision for old age. Sum assured

is payable on the death or on the maturity. Seconds is limited payment endowment policy,

about this plan you can choose the period of premium payment. For example, for a 30-year

term of the policy, you pay premium only for the first 15-year only, however, you continue

to receive benefits like bonuses and dividends for the next 15 years too. Last is double

endowment policy, about this policy, the amount of the sum assured is double if the person

survives the term of the policy.

Insurance endowment policies offer a few benefits. They can function as a low-risk

way to save. In additional, endowment policy gives benefits to the family members to get

the added features based on the design of the policy. Insurance endowment it’s risk free,

endowment life insurance policies do not have investment risk or interest life risk. When

you choose incredibly safe investment, they usually offer incredibly low returns. Not only

that, endowment insurance provides protection for old people’s lives exempt from the family

some worries, also reduce children to support the elderly. Also, endowment insurance can

conducive to social security, endowment insurance for the elder provide basic life security,

so that elder have some support, protect the basic life of older workers. This means that the

future life of the elderly after the old expectations, don’t have worries, from the social

mentality, people are more stable, this can conducive to social stability.

When you decide to insure endowment insurance, you need to understand how it

works. Besides that, you must understand make monthly or annual payments, part of your

monthly payment is used to buy life insurance. How much depends on your age, sex and

how long the endowment its. The rest of your payment is invested either on a with profits

basic or a linked basic. Next, you can gather quotes and company information. In additional,

you need to know insurance company compensate and reputation. When you identified

insurance company, you can find the insurance company to insure and review the policy

carefully before you sign.

6.3 General Insurance

General insurance covers insurance of property against fire, burglary, theft;

personal insurance covering health, travel, and accidents; and liability insurance covering

legal liabilities. This category of insurance virtually covers all forms of insurance except life.

General insurance can be categorized into following.

6.4 Motor Insurance

The first one is motor insurance. It is insurance for cars, trucks, and other road

vehicles. Its main purpose is to provide financial security to prevent physical damage or

bodily injury caused by a collision of traffic accidents, and the possible liability. The specific

terms of the vehicle insurance vary according to the laws of each region. To a lesser extent,

motor insurance can also provide economic protection against theft of vehicles and may

cause damage to things other than traffic accidents. Motor insurance can be divided into

comprehensive policy and third-party policy. A comprehensive policy is to provide

protection for the owners and the third parties, in addition to the same security benefits can

be obtained with the third-party policy, but also to protect the damage to owner's vehicle,

and extended to the theft of vehicles such as the claims interests of the accident. Another one

is third-party policy, is to provide protection for the owner of the vehicle is legally liable for

any injury or damage caused to a third-party life or property, by or arising out of the use of

the vehicle in a public place. This policy's premium is cheaper than the comprehensive policy

and in our country is stipulates that every car at least must insure the third-party policy and

needs to be renewed every year.

When you decided to insure motor insurance, there are some tips for you to

reference. First, you have to decide how much coverage you need and review your current

insurance policy. Take note of the yearly and monthly cost of your insurance, since many of

your quotes will be given both ways. Next, you can gather quotes and company information.

While you are researching companies, there are some annual and monthly rates for the

different types of coverage. Make sure to keep the coverage limits the same so you can make

comparisons for cost and coverage and have to understand insurance company's payment

policy. When you research is done, then you can find the insurance company to insure and

review the policy carefully before you sign.

When getting into an accident, a comprehensive motor insurance policy typically

has two insurance covers bundled together, the third-party insurance and the own damages

cover. Some also come with a built-in personal accident cover. As the names suggest, the

'own damages' and 'personal accident' insurance components are to cover your losses i.e.

damage to your car or personal injuries, disability and death, respectively. While the above

two are optional covers, third-party insurance is compulsory for all vehicle owners as per the

Motor Vehicles Act. Your third-party insurance does not cover you and your motor vehicle.

It covers your legal liability for the damage you may cause to a third party only - bodily

injury, death, and damage to third party property while using your vehicle. In a third-party

insurance policy, the first party is the insured and the second party is the insurance company.

The third party here is any third person. Under your third-party insurance, a third party can

file a claim for compensation for injury, death, property damage caused by your car.

However, the amount you pay as third-party premium may differ according to the engine

capacity of your car.

6.5 Travel Insurance

Travel insurance also is the part of general insurance. Most travelers spend a lot of

time and effort planning the perfect vacations, but they often overlook the importance of

getting a good travel insurance policy. Travel insurance is used to cover medical expenses,

travel cancellations, baggage loss, flight accidents and other losses during international or

domestic traveling. Travel insurance can usually be arranged during a scheduled trip to fully

cover the duration of the trip. Travelers are more vulnerable to illnesses and accidents when

they are traveling in a strange land, and there is no sure way to prevent unfortunate incidents

from taking place. Although travel insurance cannot help people avoid travel misfortunes,

but in the form of monetary compensation to provide comfort, which can be very useful in

certain situations.

Travel insurance provides a wide range of benefits for travelers. Firstly, it offers

financial recovery for medical expenses that are incurred because of accidents and illnesses.

In some countries, medical expenses are high, and those who are seriously injured may need

to pay tens of thousands of ringgits in medical expenses. With travel medical insurance,

travelers can get reimbursed medical expenses total that they spend. Another important

benefit of travel insurance is that it provides protection against trip cancellation and

interruption. When an emergency arises before or during a vacation, travelers may have to

cancel or shorten their travel time. Since they had paid for the holidays, they will lose a lot

of money. Travel insurance ensures that they will receive compensation for losses due to

cancellation or disruption of the itinerary. Additionally, those who have travel policy will

receive coverage for lost luggage or personal belongings. Most travel insurance companies

provide travel assistance and 24-hour emergency services to help their customers deal with

unfavorable conditions during their vacation. If you encounter an accident or loss your travel

documents, you can seek assistance from the insurance company. The company will provide

the best advice or contact the local emergency service to help you solve your problem in the

shortest time possible. This kind of assistance is especially important if you travel to a

country where the locals do not speak your language.

6.6 Personal accident insurance

Personal accident insurance provides you and your family with financial support in

the event you suffer an injury, disability, or die from an accident. Although it like a life

insurance, personal accident insurance differs from life insurance in two ways. First one,

personal accident insurance is meant to cover death directly resulting from accidents, not

death from natural causes, while life insurance covers both. Another is, unlike other life

insurance policies that provide savings/investment benefits in addition to any death benefits,

personal accident insurance offers no such benefits.

Insurance company follow the same general principle when it comes to defining

“accident”- it’s an unforeseeable event that causes injury at the moment of its occurrence.

But if the “accident” was caused by a cumulative effect, it’s not considered an accident. For

example, if you routinely work to play golf and that pain in your elbow and Achilles hell

turns into a debilitating injury, it’s not considered “accident” by insurance, this is cumulative.

Incidents of personal accident insurance inclusion accidental death, permanent total

disability, particular permanent disability and extra accident death benefit.

About accidental death, insurers specify that you must perish within a 12-month

period from the date of an accident for your dependents to receive the full insurance pay-out.

But insurance company will determine whether an accident was the ultimate cause of your

death. For example, if you accidentally fall and break your leg while trekking in Malaysia,

but catch pneumonia while waiting for medical evacuation and die, your beneficiaries would

receive the death benefit pay-out. But, if you caught pneumonia from another patient while

recuperating at the hospital and died as a result – your beneficiaries wouldn’t receive the

death benefit pay-out.

About permanent total disability, if you become permanently disabled because of

an accident, you will receive lump sum payment. Insure define total disability as a condition

that prevents you from working any kind of job. Insurers consider the following as

permanent total disabilities: loss of sight in both eyes, loss of both hands and feet, loss of

both hearing and speech.

Next is about partial permanent disability, insurers also provide benefits if you

complete/partially lose one of your limbs. But the amount you will receive is the only

percentage of the full sum you're insured. For example, if you lose your arm, you will receive


Last is extra accident death benefit. If you die because of an accident while on board

public transport as a fare paying passenger, your beneficiaries will receive twice the death


6.7 Health insurance

Health insurance covers that cost of an insured individual’s medical and surgical

expenses. Everyone will occur accident or disease, when you occur accident or disease, you

will need medical care. When you need to do medical care, but you worry not enough money

or resources to pay for all the medical bills. To make human can reduce the burden and focus

on treatment, therefore human need buys health insurance. When human buy health

insurance, the policy holder can get various benefits in the hospital, reduce the personal

medical burden. In this plan, the policy holder can get “medical insurance card”. In case if

illness or accident, the policyholder can use “medical insurance card” and stay in the hospital

without paying any cash. When the policy holder leaves the hospital, if the cost is exceeded,

the policy holder will only pay the overrun expenses.

Health insurance has some benefits. First is cashless hospitalization, the policy

holder can cashless hospitalization services. Therefore, the policy holder doesn’t need to

unduly worry about immediate cash requirements in case of any emergencies. Another one

is free health check-up; health insurance policies offer periodic health check-up to their

policy holders after every 4 or 5 claim-free years. Health insurance also includes life

threating critical illnesses, medical insurance policies provides a fixed lump sum payment

upon diagnosis and confirmation of certain critical illnesses like cancer, stroke, and paralysis.

Irrespective of the actual amount spent by the insured, the policy holder receives the lump

sum amount which can be used to fund rehabilitation, recuperation, lifestyle adjustment.

Health insurance protects your life and your finances.

When you decide to insure health insurance, you need to know how it works for the

insurance company. Next, you can collect your insurance company information that you trust

and understand insurance company compensation. In addition, you also need to survey other

insurance company information compares with your insurance company that you choose.

When you identified insurance company, you can find the insurance company to insure and

review the policy carefully before your sign.

6.8 Conclusion

Insurance has become the most indispensable of this society because in this busy

and full of the unknown world, you don‘t know the accident and tomorrow which one will

come first, so we need insurance to reduce our loss to avoid secondary losses or damages. If

anything happens to you, the insurance will provide the best solution and compensation to

help you solve the losses that brought by the accident. Every insurance company presents its

best face while selling a plan but it is the Claim Settlement that really decides how good the

company really is. Therefore, you have to survey properly and choose the right company to

avoid these situations.

6.9 Reference

1. Damian Tysdal, what are the benefits of travel insurance? September 1, 2010.

2. Policy Bazzar, general insurance, May 09, 2017

3. Alex Glenn, how to buy car insurance, March 16, 2016

4. Chandralekha Mukerji, Claiming compensation under third-party motor insurance,

September 21, 2015


Toh Shin Shyan 6.0 Introduction

6.1 Life Insurance

6.2 Endowment Insurance

6.6 Personal Accident Insurance

6.7 Health Insurance

Seah Jia Ying 6.3 General Insurance

6.4 Motor Insurance

6.5 Travel Insurance

6.8 Conclusion

7.0 Introduction of Investment

Investment is to apportion cash (or at times another asset, for example, time) in the desire of

some advantage later on.

In back, the advantage from speculation is known as an arrival. The arrival may

comprise of capital pick up or venture pay, including profits, intrigue, and rental pay and so

on, or a blend of the two. The anticipated financial return is the suitably marked down

estimation without bounds returns. The memorable return contains the genuine capital pick

up (or misfortune) or wage (or both) over some undefined time frame. Investment generally

results in acquiring an asset, also called an investment. If the asset is available at a price

worth investing, it is normally expected either to generate income, or to appreciate in value,

so that it can be sold at a higher price (or both).

Investors generally expect higher comes back from more hazardous speculations.

Budgetary resources go from okay, low-return speculations, for example, high-review

government securities, to those with higher hazard and higher expected proportionate reward,

for example, developing markets stock ventures. Speculators, especially fledglings, are

frequently encouraged to receive a venture system and differentiate their portfolio.

Broadening has the factual impact of lessening general hazard.

7.1 Stock

A stock is a short name of a share certificate and is a kind of securities issued by a joint stock

company to raise funds as a holding voucher and to obtain dividends and dividends for the

purpose of raising funds. Each share represents ownership of a basic unit for the enterprise.

This ownership is an integrated right, such as attending a general meeting, voting,

participating in significant corporate decisions, collecting dividends or sharing dividends.

The ownership of each company represented by each share in the same category is equal.

The size of the shareholding of the company owned by each shareholder depends on the

proportion of the total number of shares held by the company. Stocks are part of the capital

of a joint stock company and can be transferred, traded or pledged as a major long-term

credit tool for the capital market, but can not require the company to return its contribution.

The relationship between shareholders and the company is not a debt-to-debt relationship.

Shareholders are the owners of the company, with their limited share of the limited liability

of the company, bear the risk and share the benefits.

Stock is the product of socialized production, has nearly 400 years of history. As a result of

human civilization, joint-stock and stock also apply to China's socialist market economy.

Enterprises can raise funds through the public to raise funds for production and operation.

The state can control the majority of equity way, with the same funds to control more

resources. Currently in Shanghai, Shenzhen Stock Exchange listed companies, the vast

majority of state holding companies.

Different Types of Stocks and Stock Classifications

Based on stocks, there are two different types of stock that investors can own. They have

different ownership rights and different privileges.

The first is Common Stock. Ordinary shares are a kind of stock which changes with the profit

of the enterprise. It is the most common and basic share of the capital structure of the joint

stock company. It is the basic part of the capital of the joint venture enterprise. The basic

characteristic of common stock is that its investment income (dividend and dividend) is not

agreed upon at the time of purchase, but is determined afterwards according to the operating

results of the stock issuer. The company's operating performance is good, the proceeds of

ordinary shares on the high; the other hand, if the operating performance is poor, the

proceeds of ordinary shares is low. Ordinary shares are the most important and basic shares

in the capital structure of the joint-stock companies and are the most risky shares, but the

most basic and common one of the stocks.

Generally, the characteristics of common stock can be summarized as follows:

(1) A shareholder holding a common share is entitled to a dividend but must be paid

after the company has paid dividends for the debt and preferred shares. Common

stock dividends are not fixed, generally depending on the amount of net profit of the

company. When the company has a good business, profits continue to increase when

the common stock can be more than the preferred shares dividends, dividend rate can

even more than 50%; but to catch up with the company's poor years, it may not even

a penny, or even Even the also lost.

(2) When the company is liquidated or closed due to liquidation, the ordinary

shareholders have the right to share the company's remaining assets, but the ordinary

shareholders must be in the company's creditors, preferred shareholders to share the

property, the property for many hours, Can give up It can be seen that the common

shareholders and the fate of the company more closely related, honor and shame.

When the company gains profits, the average shareholder is the main beneficiaries;

and when the company losses, they are the main impaired.

(3) Ordinary shareholders generally have the right to speak and vote, that is, the right to

speak on major issues and vote. Ordinary shareholders holding a share will have a

vote, holding two shares will have two shares of the right to vote. Any ordinary

shareholder is eligible to participate in the annual meeting of the company's most

senior meeting date, but if you do not want to participate, you can also delegate

agents to exercise their voting rights.

(4) Ordinary shareholders generally have a pre-emptive right, that is, when the company

issued new ordinary shares, the existing shareholders have the right (may also be low)

to buy new shares in order to maintain its original percentage of corporate ownership

unchanged, so as to maintain Its interest in the company. For example, if a company

has 100 shares of common stock, and you have 100 shares, accounting for 1%, and

now the company decided to issue 10% of the common stock, that is, additional 1000

shares, then you have the right to lower than the market price of the purchase of

which 1 % Of the 10 shares in order to keep you holding the proportion of the same


When a new share is issued, a shareholder with a preferred share option may exercise its

preferred share option, subscribe for new shares, or sell or transfer its share options. Of

course, in the shareholders that the purchase of new shares unprofitable, and the transfer or

sale of the stock option is more difficult or profitable, it can also be granted priority stock

expired and invalid. When the Company provides the right to subscribe for shares, the

general date of the registration of the shares is stipulated, and the shareholders can only

subscribe for new shares if they can register and pay the shares before that date. Usually this

registration in the registration date of the purchase of shares, also known as the shareholding,

relative to the date of equity registration after the purchase of shares known as ex-rights

shares, that is, the stock is no longer associated with the sale of shares. So that the investment

in the purchase of shares after the date of equity registration is no longer accompanied by a

share option. In addition, in order to ensure the interests of ordinary shares, and some

companies also found that the rights of the company that is able to in a certain period of time

(such as the old shareholders), then the right to purchase shares of the investors (including

the old shareholders), then no right to purchase shares at low prices, (Or permanent) within

a certain price to buy a certain number of ordinary shares of the certificate. The general

company's warrants are issued with stocks and bonds, which can attract more investors.

To conclude, by the common characteristics of the first two shares is not difficult to see that

the common stock dividends and the remaining assets may be ups and downs, so the general

shareholders bear the greatest risk. In this case, the ordinary shareholders of course, more

concerned about the company's operating conditions and development prospects, and the

latter two characteristics of ordinary shares just make this desire to become a reality that date

to provide and ensure that the general shareholders concerned about the company's operating

conditions and development prospects The means of power. It is also worth noting, however,

that when the investment unit and the preferred stock are issued to the general investor, the

company should make the investor feel that the ordinary shares have higher dividends than

the preferred shares. Otherwise, the ordinary shares are risky in terms of investment, And

can not be more than the preferred shares in the dividend, then who would like to buy

ordinary shares? General companies issue preferred shares, mainly to "insurance security"

type of investors for the release of the object, for those who are more "adventurous" investors,

ordinary shares are more attractive. In short, the issue of these two different nature of the

stock, the purpose is to attract more interest in different capital.

Next is the Preferred stock. Preference shares are "common stock" symmetry. Is issued by

the joint stock company in the distribution of dividends and surplus property than the

common shares of priority shares. The preferred stock is also a time-limited voucher, and

the preferred shareholder is generally unable to request a refund (a few redeemable preferred

shares) to the company at midway. The main features of the preferred stock are three: First,

the preferred stock usually pre-fixed dividend yield. Since the dividend yield of the preferred

shares is fixed in advance, the dividends of the preferred shares are generally not increased

or decreased according to the company's operating conditions, and generally can not

participate in the dividends of the company, but the preferred shares can be paid before the

ordinary shares, the company, Dividend fixed, it does not affect the company's profit

distribution. Second, the right shares of the right to a small range. Preference shareholders

generally do not have the right to vote and be elected, the significant operation of the joint

stock company without the right to vote, but in some cases can enjoy the right to vote.

If the shareholders' meeting of the company needs to discuss the claim right related to the

preferred stock, that is, the claim amount of the preferred stock precedes the common stock,

and the second is to the creditor. The priority of the preferred stock is mainly expressed in

two aspects: (1) the dividend receives the priority. The order in which the stock company

dividends dividends is the preferred stock before the ordinary shares are in the post.

Shareholders, regardless of their earnings, will be able to receive dividends at a pre-

determined dividend rate as long as the shareholders' meeting decides to disburse dividends,

and even if there is a general decrease or no dividend, the preferred shares should also be

distributed as usual. (2) the priority of the remaining assets distribution. In the case of

dissolution or bankruptcy liquidation, the preferred stock has the priority of the distribution

of the remaining assets of the company, however, the priority assignment of the preferred

shares is after the creditor and before the ordinary shares. Only after repayment of the debts

of the company's creditors, the preferred shares have the right to allocate the remaining assets

when there is surplus assets. Only after the preference shares claim, the common stock is

involved in the distribution.

There are many types of preferred shares, and in order to meet the needs of some investors

who wish to acquire certain preferential benefits, preferred stock has a variety of

classification methods. The main categories are the following:

(1) Accumulated preferred and non-cumulative preferred stock. Cumulative preferred

stock means that in a business year, if the company's earnings are not sufficient to

distribute the dividends, the shareholders of the preferred shares in the future have

the right to ask for the amount of dividends paid in previous years. For non-

cumulative preferred shares, although the profits earned by the company for the year

are prior to the right to share dividends on common shares, the shareholders of non-

cumulative preferred shares, if the company's earnings are not sufficient to be

distributed in accordance with the specified dividends Can not require the company

to be reissued in subsequent years. In general, for investors, the cumulative preferred

stock has a greater advantage than non-cumulative preferred stock.

(2) Participation in preferred and non-participating preferred stock. When the enterprise

profits increase, in addition to enjoy the interest rate of the established rate, but also

with ordinary shares to participate in the distribution of preferred shares of profit,

known as the "participation in preferred stock." In addition to the established

dividend, no longer participate in the distribution of preferred shares of profits,

known as the "non-participating preferred stock." In general, participation in

preferred stock is more favorable to investors than non-participating preferred stock.

(3) Convertible preferred and non-convertible preferred stock. A convertible preferred

stock is a common stock that allows the preferred stockholder to convert the Eugene

Unit into a certain amount under certain conditions. Otherwise, it is non-convertible

preferred stock. Convertible preferred stock is an increasingly popular stock in recent


(4) Repayment of preferred and non-recoverable preferred shares. Reimbursable

preferred stock is a company that allows the issuance of such shares, and the

preferred stock is withdrawn at the original price plus a certain amount of

compensation. This right is often exercised when the company considers it possible

to replace the preferred stock with lower dividends. On the contrary, is the

irrevocable preferred stock.

(5) There are three ways to withdraw the preferred stock: (1) premium way: the company

in the redemption of preferred stock, although the price in advance, but because it is

often inconvenient to investors, so the issuing company often in the preferred par

value Plus a "premium". (2) In the course of the issue of the preferred stock, the

Company proposes a portion of the funds from the proceeds to create a "sinking fund",

which is dedicated to the periodic redemption of a portion of the preferred shares. (3)

conversion: that preferred shares can be converted into common stock as required.

Although the convertible preferred stock itself constitutes a type of preference shares,

but in the foreign investment community, it is often seen as a way to actually

withdraw the preferred stock, but the initiative to recover the investors in the

company , It is very beneficial for investors to do so when the market price of

common stock rises.

7.2 The procedure Of buying Stock:

1. Open an account

Stock in the account, that is investors in the brokerage for their own to open a stock

and funds to open the account, that the stock to facilitate the transaction.

Stock trading, although it is a money and goods two clear process, but because of the

implementation of paperless transactions, although the stock is the owner of the stock,

but does not occupy the stock in kind, all the stock are taken to record, and are in

accordance with the provisions Managed by a securities registry or brokerage firm,

so investors need to open a stock account as a "safe deposit box" for the stock in

order to accurately record the number of shares and the stock trading process. At the

same time, the shareholders of the funds is not to buy the stock when the broker, sold

immediately after the mention, generally also stored in the brokerage office, so

investors also need to commission a brokerage office to open a capital account to

facilitate the investors Access and custody. With the stock account and the capital

account, the stock transaction is much more convenient. When buying the stock, the

broker can be in accordance with the instructions of investors from the capital

account will be paid to the stock and other expenses to draw, and the stock will buy.

In the stock account; and when the stock is sold, the broker can according to the

corresponding instructions to its stock from the stock account "removed", the

receivables will be deposited in the funds account.

Shareholders to open a stock account, usually to the securities registration company,

and to carry identity cards and local banks through the passbook, according to the

provisions of the form, pay a certain fee after the recipient account card can be


The shareholder code on the shareholder's account card is the only account for

investors to enter and sell stocks. In this account, it will accurately record the stock

out of the number and stock, it is the basis for stock trading for investors. When the

shareholders for the transfer of shares, custody and loss, to receive dividends and

placement rights or cash withdrawal procedures, the broker usually require investors

to produce shareholder account card. Shareholders' account cards are also required

to be issued when the investor is required to check the stock of the firm or the stock

transaction records in the account.

After the shareholders' account card is run, the investor may select the broker to open

the capital account according to the corresponding conditions such as geographical

location or quality of service. In the brokerage firm, investors and securities firms to

sign a stock agency trading contract, a clear stock agent in the process of buying and

selling both sides of the power, responsibility and obligations. The implementation

of the corresponding procedures, the broker will give investors a capital account,

which even opened a good financial account. If there is no stock in the shareholder's

shareholder's account, the investor also needs to deposit a certain amount of funds in

the capital account as a deposit for the future to buy the stock.

2. Commissioned

After the completion of the stock account and capital account, investors can enter the

formal stock trading. As the law provides that the general investors can not directly

carry out their own stock trading, investors all the stock trading must be carried out

by the broker, this is the commission.

In the commission process, investors must be presented to the broker ID card to prove

their identity, but also to produce a shareholder account card and fill out the dual

stock trading power of attorney. In the power of attorney, the investor must clearly

fill in the identity card number, shareholder code, fund account number, stock name

(or code) and the stock price and quantity of the sale, commission the deadline and

sign their name, and then submitted to the broker Office staff. When the shareholders

buy the stock, the manager will verify the financial situation within the investor's

capital account. If the funds in the account are insufficient, the broker will generally

refuse to accept the commission. When the investor sells the stock, the manager will

check the stock account Stock of stock. When all this is verified, the broker will

accept the commission of investors, will be sealed after the signing of a single

commissioned by the shareholders to pay as a basis for confirmation or inquiry.

3. Match the transaction

Broker in the acceptance of the client's commission, that is, through the green

telephone and sent in the trading hall of the representative of the commonly known

as "red vest" contact, or directly through the advanced computer and communication

system, the client's commissioned the contents of the report and the stock exchange

Automatic matching system to participate in the collective price or continuous price,

the stock exchange system on the basis of time priority and price priority principle,

to meet the conditions of the commission to be traded, the process is to match the

transaction. After the stock is traded, the stock exchange will then return the

transaction records to the broker, the broker and then notify the investors in the

designated trading day to confirm.

4. Confirm

If the commission of the shareholders in the commission period can not be traded,

the commission will automatically fail. If the stock is to buy a stock, the price quoted

is 10 ringgit, but the stock the day the lowest transaction price of 10.50 ringgit,

investors can not buy the stock, the stock market after the closing, the commission

will automatically fail. And when the shareholders of the commission after the

transaction, it is necessary to carry out and transfer. Which is the process of delivery

of goods in the stock exchange two clear process, that is, to buy the stock to pay the

funds, sell the stock to hand over the stock, and the stock and capital changes were

recorded in the stock account and capital account. Transfer refers to the investors to

buy stocks to change the name of the shareholders to change the procedures, the stock

is about to buy the original shareholder name into the buyer's own name.

7.3 Bonds

Bonds is the government, financial institutions, business enterprises and other institutions

directly to the community to raise funds, to investors, promised to pay interest rates at a

certain interest rate and according to the terms of the repayment of the principal creditor's

rights and obligations. The nature of the bond is a certificate of the debt, with legal effect.

There is a creditor's debt relationship between the bond buyer and the issuer, the bond issuer

is the debtor (Debtors), the investor (or bondholder), the creditor. The most common bonds

are fixed-rate bonds, floating-rate bonds and zero-coupon bonds.

Unlike bank credit, bonds are a direct debt relationship. Bank credit forms an indirect debt

relationship through depositors - banks, banks - lenders. Bonds in any form, most of the

market can be traded, and thus the formation of the bond market.

7.4 Types Of Bonds

The following descriptions are the type of bonds:

First, according to the issuance of different subjects can be divided into bonds, local

government bonds, financial bonds, corporate bonds.

Treasury bonds are often used to make up for the national fiscal deficit, or for some costly

construction projects, as well as certain special economic policies and even to raise funds

for the war. As the national debt to the state's tax as a guarantee of debt service, so the risk

of small bonds, liquidity, interest rates lower than other bonds. From the point of view of the

bond, China's national debt can be divided into voucher-style bonds, bearer (physical) bonds

and book-entry bonds.

Local government borrowing, generally used for transportation, communications, housing,

education, hospitals and sewage treatment systems and other local public facilities. Like the

central government issued bonds, local government bonds are generally the local

government's tax capacity as a guarantee of debt service. However, some local government

bonds are issued for a particular project (or business) financing. And therefore not to local

government tax as a guarantee, but the borrower to operate the proceeds of the project as a

guarantee. For example, a local government to solve the local low-income housing

difficulties, the use of proceeds from the issuance of bonds to build a number of popular

"commercial housing", the resulting rental income for the repayment of the principal and

interest on bonds. Local government bonds are more secure and are considered to be a bond

of security behind treasury bonds. Moreover, the interest income we buy from local

government bonds is generally exempt from income tax, which is very attractive.

Banks, insurance companies, securities companies, trust and investment companies, asset

management companies and other financial institutions, the lack of funding sources, the

issuance of financial bonds can be more effective to solve the problem. Bonds are generally

not redeemable in advance of maturity and can only be transferred on the market, thus

ensuring the stability of the funds raised. Financial bonds are usually higher than other non-

financial institutions bonds, default risk is relatively small, with high security. Therefore, the

interest rate of financial bonds is usually lower than the average corporate bonds, but higher

than the risk of smaller treasury bonds and bank savings deposit rates. In addition, China

also issued policy financial bonds and special financial bonds.

Corporate bonds are more common. As the business mainly to their own operating profit as

a guarantee of debt service. Therefore, the risk of corporate bonds and the business itself is

directly related to the situation. If the enterprise issued bonds, the operating conditions are

not good, continuous losses, may be unable to pay the principal and interest investors,

investors are facing the risk of loss. In this sense, corporate bonds are a more risky bond.

Therefore, when the issuance of bonds in the enterprise, the general bond business to conduct

a rigorous qualification or require the issuance of corporate property mortgage to protect the

interests of investors. On the other hand, within a certain limit, the risk in the securities

market is positively related to the gains, and the high risk is accompanied by high returns.

Corporate bonds are generally higher than government bonds and local government bonds

due to their greater risk.

Second, according to the different ways to pay can be divided into: discount bonds (zero

interest rate bonds) and interest-bearing debt.

Discounted bonds (zero interest) is to say that if you subscribe for a 5-year discounted bond

with a face value of $ 100 at a price of $ 70, you will be able to pay $ 100 in cash after 5

years of maturity, Of which the difference of 30 yuan is the interest of the bond. The bond

is always discounted and you do not have to use the interest rate to calculate its interest

because the difference between its face value and the issue price (ie, the discount portion of

the bond) is the investment you should get when the bond is repaid income. Interest-bearing

bonds are issued at a low price, and interest is paid in installments. Interest is paid in

installments, coupons on coupons, interest on interest on coupons, duration of interest

payments and bond numbers. You can cut the coupon from the bond and receive interest on

the coupon. The interest payment method of interest-bearing bonds should normally be paid

on a repayment period, such as paid once every six months or one year. At present, China

has rarely adopted this form.

Third, whether the change in interest rates can be divided into: fixed-rate bonds and floating-

rate bonds.

Fixed-rate bonds do not take into account market changes, the cost of issuance and

investment income can be expected in advance, the uncertainty is small, but the bond issuer

and investors still have to bear the risk of market interest rate fluctuations, if the future

market interest rates decline, the issuer can Lower interest rates to issue new bonds, the

original issue of bond costs is relatively high, while investors get higher relative to the

current market interest rates higher, the original issue of bond prices on the relative rise; the

other hand, if the future market interest rates rise , The cost of new bonds increased, the

original issue of bond costs is relatively low, while the investor's compensation is lower than

the purchase of new bonds, the original issue of bond prices on the relative decline.

Floating rate bonds, its coupon rate is the market interest rate or inflation rate changes and

the corresponding changes. In other words, the interest rate of floating rate bonds is usually

based on the market benchmark interest rate plus a certain interest rate difference (inflation

rate) to determine. Floating rate bonds are often medium and long-term bonds, it is also more

types, such as the provisions of the interest rate floating upper and lower floating rate bonds,

the provisions of the interest rate reaches the specified level can be automatically converted

into fixed-rate bonds, floating rate bonds, with options The floating rate bonds of the right,

and the fixed rate at the time of the repayment period and the mixed rate bonds with floating

interest rates for another period of time. As the interest rate of the bond fluctuates with the

market interest rate, the floating rate bond form can avoid any significant difference between

the actual rate of return and the market rate of return, so that the cost of the issuer and the

income of our investors are consistent with the midfield change trend The But the volatility

of the bond rate also makes the actual costs of the issuer and the actual earnings of the

investors in advance with great uncertainty, resulting in higher risk.

Fourth, according to the length of the repayment period can be divided into: long-term bonds,

medium-term bonds, short-term bonds.

In general, the repayment period is more than 10 years for long-term bonds; repayment

period is less than 1 year for short-term bonds; term for one year or more and less than 10

years (including 10 years) for medium-term bonds. The duration of our national debt is the

same as the above criteria. However, the maturity of corporate bonds in China is different

from the above criteria. China 's short - term corporate bonds repayment period within one

year, the repayment period of more than 1 year to 5 years for the medium - term corporate

bonds, the repayment period of more than 5 years for long - term corporate bonds.

Fifth, by way of recruiting: public offering of bonds, private bonds.

Public and private placement here can be simply understood as public offering and private

distribution. Public offering of bonds, its issuers generally have a higher reputation, the issue

to be listed on the public offering, and allowed in the secondary market circulation transfer.

Private bond issuance procedures are simple, generally less than the securities regulatory

authorities to register, not publicly listed transactions, can not transfer the transfer, like our

mutual borrowing between the kind of "brother " transactions.

Six, according to the nature of the guarantee can be divided into: unsecured bonds, secured


Borrowing is a repayment guarantee as a prerequisite, this guarantee can not say no, just

write on the bond repayment date is not yet. Treasury bonds to the national tax as a

repayment guarantee, some corporate bonds due to corporate credit is good, willing to use

its operating efficiency repayment guarantee, these are bear the responsibility, do not use

other forms of property to do repayment guarantee , It is attributable to unsecured bonds. As

for the secured bond class, the above are specified that there are those properties, to the

repayment period if the borrower mismanagement, you can come up with debt. There are

various forms of property used to do the guarantee, and if it is a secured bond, the secured

bond is called a mortgage bond; if it is secured by movable property or right, the bond is

called a pledge bond; Three of the property to guarantee the bond, naturally attributed to

guarantee the bond class.

Seven, special types of bonds: convertible corporate bonds.

Convertible corporate bonds are those that convert the bonds of the company into shares of

the company, and both the nature of the bonds and the stock, and the bonds can be sold back

to the issuer. Some convertible bonds are subject to the terms of the sale, and the parties

agree that a certain price level is a convertible price for the conversion of the bonds into

shares. When the market price of the company's stock continues to be lower than the

conversion price and reaches a certain limit, the bond investor The bond may be sold to the

issuer on the agreed terms. In addition. The issuer of the convertible bond has the right to

forcibly redeem the bond. Some convertible bonds are issued with a mandatory redemption

clause, provided that in a certain period of time, if the company's stock market price is higher

than the convertible price reaches a certain rate and for some time, the issuer may be required

to force the redemption of bonds The Since convertible bonds are not entitled to options for

general bonds, the convertible bond interest rate is generally lower than the average

corporate bond rate, and the issuance of convertible bonds by companies helps to reduce

their financing costs. But convertible bonds under certain conditions can be converted into

company stock, which will affect the company's ownership.

7.5 How to buy bonds

Bonds are divided into off-site transactions, which are different for each transaction, such as

spot transactions, repo transactions, futures trading and options trading.

 Bond spot transactions

(1) buy bonds you can directly commissioned by the securities broker, the use of

securities account card declaration forward, buy bonds, the securities firm will print

your securities passbook, you can later sold with the securities passbook. (If you buy

a physical bond and need to be withdrawn, the broker will handle the coupon

procedure and give it to you in accordance with the relevant custody business of the


(2) Selling a bond For a physical bond, you should give it to a securities clearing

company in your account or a centralized custody at all parts of the country before

you sell it. You may also entrust a brokerage agent, securities You will be able to

commission the broker to sell the bond you are holding when you have printed the

bond passbook for you by the billing notice of the clearing company. For book-based

bonds, you can subscribe to the issuer, and then commissioned by the custodian to


 Bond repurchase transactions

(1) repurchase transactions [sell bonds or buy back bonds] you and the buyer signed

an agreement to sell his bonds, take the other side of the funds to do other income

greater investment, you only need to pay a good interest rate to pay him interest , In

the agreement period to the agreed price of the bond to buy back.

(2) Reverse buyback [buy bond or sell back bond] You enter into an agreement with

the seller to buy his bond, the seller at a favorable interest rate to pay you interest,

you agreed in the agreement to the agreed price The bond is sold back to the other


The interest rate of the repurchase agreement is that you and the other party are

negotiated on the basis of the repurchase period, the money market quotation and the

quality of the repurchased bond, and there is no direct relationship with the interest

rate of the bond itself. Therefore, the conditional bond transaction is A short-term

capital loans, in general, the repurchase transaction is to sell the spot to buy futures,

reverse buyback is to buy the spot to sell futures.

 Bond futures trading

When you estimate that the price of your bond at hand has a downward trend, you

are not sure that you will not want to transfer the bond right away, but you would

like to transfer the risk of the price to someone else; or if you estimate something

And some of the bond prices will rise, you want to buy, you are not sure that you do

not want to buy the bond immediately, but you really want to get this price may rise

gains, you can commissioned by the broker to you and (The standard futures

contract), in accordance with the provisions of the contract price, agreed to your

estimated price or price increase after the time, the two sides through the futures

exchange brokers negotiated the transaction conditions, Make it easy for you to meet

your intended purpose. Of course, the situation is the opposite of your estimate, you

can not wait until the delivery of the moment, you can expire any time before the

time to do two roughly equal amount, the opposite direction of the transaction to


 Bond option trading

As you know, option trading is an option to trade, the two sides are buying and selling is

a right, that is, you and the other at the agreed price, at a certain time or a day, whether

to buy or sell Kind of bond, and a pre-contracted deal. Specifically, you and the

counterparty through the broker to sign an option to buy and sell the contract, the

provisions of the buyer for a certain period of time in the future, the right to the contract

price, the number of options to the seller to buy or sell a bond; The buyer to the option

seller to pay a certain option fee, to obtain a contract, then the buyer has the right to the

right time in accordance with market conditions, decide whether to implement the

contract, if the market price of its buy or sell bonds, The seller of the option may not

refuse to trade for any reason, if the market price is unfavorable to the buying or selling

of the bond, he may waive the transaction to be invalidated, and his loss is the option to

buy the option. Cost, or transfer the option to a third party to pass on the risk. Futures

trading has three options, options and options.

It should be pointed out that the actual trading of futures and options is more complicated

than the theoretical imagination, as if they both have long quasi-arbitrage, long hedge;

short quasi-arbitrage, short pure arbitrage, and portfolio investment and sets And so on.

But fortunately, we do not need to master it, because futures, options for each transaction

volume is very large, our average family or individual investors can not afford.

7.6 Fixed Deposit

Investments are an incredible method for profiting develop for you. The scope of venture

alternatives are differed, various and each accompanied their own level of hazard. For the

most part the more prominent the hazard, the more prominent the development potential.

The hazard related with speedier development may not be's some tea and for the individuals

who might want to play it more secure, there are speculation alternatives that give direct

comes back to generally safe. Settled stores is one such speculation choice that falls into

direct development fragment. A fixed deposit (FD) is a financial instrument provided by

banks which provides investors with a higher rate of interest than a regular savings account,

until the given maturity date. It may or may not require the creation of a separate account. It

is known as a term deposit or time deposit in Canada, Australia, New Zealand, and the US,

and as a bond in the United Kingdom and India. They are considered to be very safe


7.7 Return of Fixed Deposit

FD is a guaranteed return on investment. For the example: MR.X want to apply for a whole

year FD with a minimum deposit of RM5, 000 at 3.80% per annum (p.a.). Below we show

how much you can earn from a short-term fixed deposit if you choose to deposit more:



5, 000 190

20, 000 760

50, 000 1900

From the tables, we can realize that the interest is calculated daily but only paid out at

maturity and it is very much a hassle-free passive investment. But for a longer placement

period of more than 1 year, you will have the option to collect your interest earnings either

annually or monthly. In Malaysia, the longest placement period you can choose is 5 years.

At the chart above show us the calculation of interest rate for the annum fixed deposit.

How is the calculation for the 6 month FD?

Let’s go with the same example above, an FD with 3.80% p.a. interest for 6 months

and investment of RM5, 000.

1. (Yearly Interest Rate/12 Months) x Placement Period In months = Effective Interest

Rate (EIR)

(0.038/12) x 6 = 1.90%

2. Principal Investment x EIR = Total Interest Earnings

RM5, 000× 1.90% = RM95

So that, the tables will be:



5, 000 95

20, 000 380

50, 000 950

Difference between FD and saving account


REASON TO APPLY To earn high interest on Used for incomes saving

large sums of cash and cashless spending

INTEREST RATE Higher interest rate Lower interest rate

PLACEMENT PERIOD Fixed period. Principal and Continuous nature. Free to

interest paid out at maturity close account anytime

MINIMUM DEPOSIT Higher deposit of at least Deposit can be as low as RM

RM1, 000 or RM5, 000 20

FREQUENCY Amount deposited only Can be done any number of

OF DEPOSITS once. However, can be times. No restrictions

renewed with fresh funds

CASH WITHDRAW Not encourage. Can be done anytime, but

Will terminate account and subject to withdrawal limit

lose out on interest earnings

Conclusion: Numerous investment funds and settled store accounts on offer supplement each

other. One enables you to procure high premium (FD), and alternate gives access to money

to ordinary costs and here and now crises (Savings Account)

7.8 Type of Fixed Deposit

7.8.1 Step-up Fixed Deposit

This type of fixed deposits offer loan costs at each progression or time of the settled

store and the publicized financing cost is normally offered just at the last stride of

the store. Subsequently the powerful financing cost offered by the settled store is

dependably lower than that which is publicized. For example, a Bank offers a 6.88%

interest on a 6 month fixed deposit but when one views the disbursement of interest

it usually 3% for the first 2 months, 3.15% for the next 2 months, 3.24% for the fifth

month and 6.88% for the final month bring the effective interest offered to a mere


Interest rate in Step-up FD

4.00% 3.00% 3.15% 3.24%

Month 1-2 Month 3-4 Month 5 Month 6

Interest rate in Step-up FD

Here, your FD placement period is split and placed on a staircase. Think of each step

as a different month, with a different interest rate, each step gets higher as you climb.

In this case, the advertised rate usually is only available for the final month, or ‘step’

of the FD period. The Effective Interest Rate (EIR) will always be lower than the

advertised rate.

For the example: MR.Y want to apply for Step-up Fixed Deposit with minimum

deposit of RM5, 000. Bank boasts an interest of up to 6.88% interest p.a. for a 6-

month Fixed Deposit but a closer look show at below tables.


(P.A) RM5000

MONTH 1-2 3.00% RM150

MONTH 3-4 3.15% RM157.50

MONTH 5 3.24% RM162

MONTH 6 6.88% RM344

TOTAL 3.73% RM186.83

7.8.2.Fixed Deposit with CASA Bundling

Fixed deposits are often bundled with a savings account or a current account (CASA).

Such bundle offers may promote higher premiums however this package would

require the financial specialist to open a present record or a bank account and store a

rate of the sum put resources into the settled store. This prompts contributing a higher

sum and winning lower than the intrigue publicized. The sum you need to put into a

Current or Savings Account is normally a settled sum or a rate of the aggregate put

resources into the FD.A bundled FD rate might look attractive, but don’t forget that

the money you put into the CASA calculates interest at a lower interest rate. The more

you have to put into your CASA, the lower your EIR will be.

For the example: Bank B advertises an interest rate of 4.28% p.a. for their 6-

month FD, but you have to deposit 50% of your FD amount into a CASA as well. This

means that if you want to deposit RM10, 000 into the FD you've also got to deposit

RM5, 000 into a CASA bringing the total amount deposited to RM15, 000. You’ll still

earn the same amount in interest, but you need to deposit more money.

Tables to show Fixed Deposit with CASA Bundling


INITIAL DEPOSIT RM10, 000 RM5, 000 RM15, 000

INTEREST RATE 4.28% 0.5% 4.78%


INTEREST 214.00 12.50 226.50


7.9 Advantage and Disadvantage of Fixed Deposit

7.9.1. Advantage

(i) Low risk. A term deposit ensures your money will earn interest at a fixed

rate, for a fixed term. There’s little to no chance of losing your money, so it’s

a good option for cautious savers.

(ii) Low maintenance. When you secure your money away a fixed deposit,

there's not a lot you can do with it until the point that the term is up. So it

makes for an extraordinary out of the picture, therefore irrelevant sparing


(iii) No service or start-up fees. One of the best things about a term deposit

is that as long as you don’t withdraw early, it’s entirely fee free.

(iv)Protected from slumps in the market. A best aspect regarding a fixed

deposit is that the length of you don't pull back ahead of schedule, its

altogether charge free.

(v) Impulse spending control. Once your cash is in a fixed deposit, weighty

punishments apply for taking it out ahead of schedule, so it can really check

awful ways of managing money.

7.9.2. Disadvantage

(i) Your money isn’t accessible. The main fixed deposit decide is that once

your cash is bolted away, its hands off until the point that the term closes! On

the off chance that you have to pull back your cash from a term store early,

you'll end up paying a punishment expense, in addition to your loan fee will

be diminished.

(ii) No extra deposits. You’ll need to make a lump-sum deposit when you

open your fixed deposit, and there's no alternative to add to your investment

funds as you go. This may be a bother for general savers, yet one approach to

battle it is by having different term stores with amazed development dates.

(iii) Less flexibility. A fixed deposit is low risk, but the flip side is that it’s

not a very flexible savings option. Other products with comparable rates, such

as high interest savings accounts, offer much more in terms of flexible

features and options.

(iv)No bonus interest. Your fixed interest rate may be secure, but on the

other hand, it means there’s no way to earn bonus interest on your term

deposit, like there is with a savings account.

(v) Rollover terms are often less competitive. In the event that you neglect

to profit after your fixed deposit develops, it could move over into another

term. This rollover term frequently accompanies an absolute bottom loan cost

appended, and you'll need to pay the early withdrawal punishment to receive

in return.

7.10 How to open a fixed deposit account

7.10.1. By using offline method

(i) You need to prepare the MyKad for identification, although there might

be further documents necessary for the application based on the bank’s

discretion such as proof of salary or income.

(ii) The initial minimum deposit starts from RM1, 000 for a month or RM 5,

000 for 2 months and over and hence needs to be ready in the form of cash,

direct cash transfer, or cheque for the new FD account.

(iii) Fill in the application form along with required documents and submit at

the bank branch with the deposit account to open your FD account.

(iv) Once you sign up for the FD account, you will be given an issued

certificate or statement of proof for the FD account. Store it carefully. If you

lose your certificate, there are provisions to have it re issued to you for some

extra charges.

(v)The certificate will have the following details:

(a) Principal Amount of deposit

(b) Placement Period

(c) Agreed interest Rate

(d) Date of Maturity

7.10.2. By using online method

(i) Visit the website, complete the Online Application Form and submit it.

(ii) Once the form is successfully submitted, you can access your filled-out

form by clicking on ‘Save as PDF’ or from the email sent to you by bank.

Upon submission, you will shortly get a call from a bank representative to

fix an appropriate time for your documents pickup. Alternatively, you may

submit the complete set of documents at your nearest branch.

(iii) Take a print of the filled-out application form sent to your email ID,

sign it, affix photographs and keep the KYC documents selected by you

(while filling the form online) ready for pickup.

(iv)Deposit the above documents with CTS compliant cheque.

7.11 Reference

1. O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in action.

Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 197, 507. ISBN


2. P. (2016, October 10). Explain the trading procedure on a stock exchange. Retrieved

June 20, 2017, from http://ask.learncbse.in/t/explain-the-trading-procedure-on-a-


3. P. (2016, October 10). Explain the trading procedure on a stock exchange. Retrieved

May 6, 2017, from http://ask.learncbse.in/t/explain-the-trading-procedure-on-a-


4. What is Investment? (n.d.). Retrieved April 26, 2017, from



Liew Jin Rong 7.0 Introduction

7.6 Fixed Deposit

7.7 Return Of Fixed Deposit

7.9 Type Of Fixed Deposit

7.9 Advantage And Disadvantage Of Fixed


7.10 How To Open A Fixed Deposit


Cindy Kam Sin Yee 7.1 Stock

7.2 The Procedure Of Buying Stock:

7.3 Bonds

7.4 Types Of Bonds

7.5 How To Buy Bonds