19 Apr Education in Australia
Apa itu kebahagiaan ?
Dimanakah Gross Happiness Index anda ?
Happiness bukan dari segi material tapi juga non-material – health, positive attitude, faith (iman dan kepercayaan), ilmu dan wealth. Happiness is about having a beautiful family, love and being able to pursue one’s passion. Happiness is about having wonderful children with promising future as adults. Happiness is not about having a lot, because many rich people don’t find happiness “Money does not buy long-lasting happiness” ?
Happiness is perhaps about having enough, sufficient and knowing there’s hope for a better future.
I met with a Mr H and Puan R today – both parents to 3 boys ages 5, 10 and 15. As with most parents, their professional career and business is about providing enough for the family and ensuring good education for their 3 boys. I applaud Mr H and Puan R for taking a step in the right direction. A good financial plan starts with acknowledging the need and being aware of how much education cost these days. They wanted their boys to each have enough to pursue an education in Australia which presently cost RM200,000 over 4 years. The fact that these cost are on the rise and that given enough time (3 to 5 years), the money is able to grow over time if investments are made as early possible. And that unit trust investment may be the solution in generating decent returns of 12% per year, at an acceptable level of risk and cost of investment of 3% to 5%.
As with most parents, juggling household expenses and savings can be quite challenging, especially for those living in big cities. A child easily needs RM1,000 a month for school expenses, tuition fees, hobbies, medical & vitamins, clothing’s etc. So they wanted a financial plan, and that’s exactly what I am happy to provide. In PMB there are tools – FP Adviser (Financial Planning software) and stand-alone software’s (in CD) for retirement and education cost planning. In addition there’s worksheets for those preferring to compute step-by-step, manually. I chose to punch figures into my financial calculator for answers and start drawing diagrams and time lines to aid understanding. Pn R, an accountant by qualification is able to appreciate the figure crunching process. Whilst Mr H, a businessman was more than happy to have his wife audit the figures and plan proposed.
Interested to see these figures ?
First, understand that RM100 monthly over 17 years has potential to grow to RM66,792 at 12% returns (and potentially RM171,639 if grow at 20% returns as with most PMB funds). Refer Table 1 in Sample Case [download here].
Now, come back to En H & Pn R case – for child age 5, the proposed plan is illustrated here [download here]. Where for child age 5, to achieve FUTURE VALUE of RM200,00 which is RM293,700 in 13 years from now (when child attain age 18) – parents have to invest a lumpsum of RM67,308 or monthly RM781 over 13 years. These figures sure looks affordable right ?
Hmmm… not ? If nak cheaper budget, the child kena study in our local universities. Average cost for 4 years is a mere RM20,000. So using same case study computation as above, parents to invest lump sum RM6,730 or monthly RM78 only. Boleh ? I am sure you love your kids, and am even sure RM78 invested in your child’s future is so berbaloi. And I am even more certain than our local universities do provide good higher learning education opportunities. So, start planning !
Peliknya kenapa anak-anak jadi mangsa when parents fail to plan for their children’s future. Kata sayang anak ? Investing in education is investing in future anak-anak and the well-being of keturunan sesebuah keluarga. The abolishment of PTPTN is not the answer ! Parents should be given more education to understand and be more savvy about investment and incorporate wise ways to budget for enough money. Jangan ambil mudah, lead your life BY DESIGN not BY DEFAULT.