Financial Needs Personal Finance Blog

A mutual fund is a financial vehicle through which individuals may invest their money through collective investing. In other words, it means pooling the investments of many investors, individuals and institutions.

Investing in a mutual fund offers investors numerous advantages, including:

a. Professional management at a low cost

b. Safety through the spreading of risk (diversification)

c. Liquidity

d. Ease of transaction

e. Capital appreciation/income stream

The operation of a mutual fund may be best explained by outlining its similarities with the operation of a bank. Many individuals deposit money in the banks, for which they receive interest. These individuals expect complete liquidity where they are able to withdraw their deposits in cash at any time. The banks employ professional managers to look after the deposits, which are invested. These managers lend the deposits to other individuals requiring funds and a host of other profit generating facilities of the banks.

Similarly, mutual fund holders wish to put their money to generate higher returns. The goal of all investments is to make money work harder, either through producing income or growth. Mutual funds holders have liquidity because their units can be readily converted into cash at any time. By investing in mutual funds, it allows investor to engage professional fund management companies at a low cost. These management companies diversify the investible funds in many different securities and other approved channels to spread the risk.

The mutual fund is constituted through a document known as a Deed which brings together and binds the various parties to the deed:

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The trustee, who holds the assets of the trusts on behalf of the unitholders.
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The management company, who is the promoter of the scheme and provides investment and administrative expertise as well as markets units to the public.
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The unitholders who provide the funds for investment and expect to receive the benefits derived from the investment. The effect of dividing the beneficiaries' interest in the trust into units is that their interest is quantified into discrete portions.

Particular advantages of mutual funds over the pooled investments include:

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The provision of an independent trustee to hold the trust's assets on behalf of unitholders and to watch over their interests on an on-going basis.
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The deed and prospectus are scrutinised by government authorities, prior to an offer of units being made to the general public. The management companies and trustee are themselves approved by the regulators.
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A buy back provision or covenant in each deed which requires the management company to redeem an investor's units within a specified time limit at a price determined in accordance with the deed.
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Provisions in the deed under which the management company and trustee are in a fiduciary position in relation to the trust (i.e. they can only profit in ways laid down under the deed). The investor can determine in advance what costs and charges they will be required to pay to join and stay in the trust.

Strategic use for Mutual Fund Investment
a. Stay Calm and always seek for advisor.
b. Review and maintain a diversified investment portfolio.
c. Dollar Cost Averaging- Invest regularly with fixed amount in good and bad times.
d. Invest for Income
e. Never go in and out the market frequently. It will make you lose focus and you paid for extra upfront service charge.

In your mind, which type investment is the best?
Stock Market?
Property?
Forex?
Mutual Fund?
Bank Saving? or ......
For my opinion, the best investment is education. My education is not only mean go to primary school, secondary school and tertiary education to learn Science, Accounting, Business, Economic, Statistic and etc. Yes, it is important by yet our learning is just begin. All these we learn in Primary School, Secondary School and Tertiary Education is just an open door for us to success. The main point to drive us toward the success is our mindset.
2 types of education we should invest after graduate or before graduate from school, college or university --
1. Financial Education
2. Personal Development
This two types of the education, we hardly can learn from school, university or college. And it is the most important education to drive us toward financial freedom.
We should take full responsibility to our finance and our mindset. As said early, our success is control by our mindset. From Personal Development Education, it can help us to develop more positive mindset and more aggressively toward success. This two education cannot be finish and we will not graduate from these two education.
These two education we can learn from most successful people such as Robert Kiyosaki, John Gray, Brian Tracy or even our friend stay around us. At this IT world, we can learn anywhere and everywhere either from free to paid. Here is one of my recommendation to learn from others.

Think about it. What is your purpose and goal for saving. It is very important to make you keep on saving.
Then what is your route for saving.
To be success, we need to focus on our goal, not the obstacle along the way to achieve the goal. Do you select the right tools and method to achieve your go. In this outside world, there are a lot of method and even some short cut for us to achieve the goal. As long as it is within the rules and regulation of the games, country and etc, it may be the right tools for us to success and achieve the goal. The old guideline may become a history, shortcut way is always found and follow by success people however we need to willing to take some unseen risk. But also bare in mind, the old guideline also have the risk, the only different way of new and old is
a. Old Guideline risk is clear and define. [Bank Saving, Fixed Deposit]
b. New Guideline risk is unclear and unseen. However, as long as the risk is calculated, then we can choose this way.[Unit Trust, Stock]
The most important is we can achieve the goal.

Financial Education is a very important investment for us. It is life long benefit to us. We can be financially educated by reading financial book, learn from financial expert, financial advisor, surf internet to find information and so on. So, investment is very important to help us to let money work for us, and investment on financial education is the start point before we going to stock, mutual fund, property, forex, gold, business and etc. It is very important for us to build a stong foundation on managing our finance,

1. Set up an emergency funds -- All of us need to setup a emergency fund which is sufficient to meet our daily expenses for at least 3 to 12 months. This basic expenses include our daily cost for transportation, foods, rental, utilities and so on. Besides, it also may included our near future must spend money.

2. Planned for our dependent or commitment -- If we have dependent such as children, parent or wife whose depend on our income to survive, we must make sure we are financial plan to ensure sum of money to our dependent when something happen to us which lead to loss our income (i.e TPD). The mostly financial plan for this is through insurance coverage which may included medical cost in the event of critical illness. However, we must make sure the coverage is enough. It may also include insurance plan for your property and etc.

3. Saving or investment discipline -- We must saving or invest regularly no matter market is up or down, as an investor we cannot predict the market. By predicting market, it let you delay your action and finally may cost you lose of opportunity or even lost more money. Invest regularly mean you fit the amount you want to save or invest at the same period of time. The most important is save/invest before you spend.

Someone have to retire some day. But how many of us actually plan the financial need for retirement. Most of the people always think when they want to retire, how the wonderful life to be after retire. But again, how many people take realistic action to achieve it.
As our age going higher and higher, our need may also increase especially medical fees. Can we depend on our children after retire? It may add burden to our child actually. Some of the people need to come out to find more income to survive after reach the retirement age due to no fund. Do you want to be one of them? On statistic it may only about 5% of the people really achieve financial freedom at their retirement age. So, please reconsider and think again and again, properly plan for your retirement day and become the 5% group.
Wisely plan for your financial may give you more easily and early achieve financial freedom and then can retire and enjoy your life. Anyhow, always be bear in mind investment must not concern about money only, it also include your health. Do you heard about “prevent better than cure”? If you fall to illness, it may cost you more.
So, start today to plan for your financial and get advice from your financial planner, how much you need to save from today.

Welcome to my new created blog.
Here we are sharing some personal financial way and method in order to achieve our financial freedom.
Normally, our culture to achieve financial goal by:
1. Education
Study more with excellant result for us to get better job with good income.
2. Saving
We should have good saving habit.

It's that all enough for us to achieve financial freedom? Of course, there are method for us. How we are going for education? How we can get paid more? what is the saving method for us to get better return and overcome inflation.

This blog is going to share about these information.