Monthly Archives: September 2007

Save your money in Fixed Deposits / Certificate of Deposits

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Posted by pakdi on September 17, 2007 – 4:54 pm
Filed under Personal Finance


Savings is essential in financial planning. It is a first step before you move further to investment planning. There are plenty of places where you can put your savings in. Traditional savings account, fixed deposit or certificate of deposit, money market funds or even in below your pillow. If you want some return in with protection, you might want to save your money in the fixed deposit account (FD) / certificate of deposits (CD).

FD / CD is a special type of deposit account with a bank that typically offers a higher interest rate than a regular savings account. It is an investment account with protection because they are insured (mostly) like a savings account by the federal government agency.

When you buy FD / CD, you invest a fixed sum of money for a period of time - 6 months, 12 months, 15 months, 30 months and even 60 months. In exchange, the issuing bank pays you an interest at regular intervals.

This means that if you put $ 5000 in a regular savings account, you get almost nothing. However, if you put $ 5000 for 12 months in FD / CD, you may get your money back later plus an extra interest, 3% for example. Thus, you will make more money.

Piggy bank is enough for you?

But, the downside is if you redeem your FD / CD before it matures , you will pay penalty and also gain nothing. So, before you put your money in this type of account, you have to make sure that in any particular period before the account matured, you still have an extra money to cover your expenses and also for emergency purposes.

This type of savings account scheme may not only issued by a bank, but also by any financial institutions. Their broker or agent sometimes will call or mail you and offers a savings plan. And for the next post, I’ll give you questions to be asked to the agent / bank to make sure you are buying the right and safe savings plan.

For the meantime, you may like to watch another video on debt trap here:

The Debt Trap - One in every 60 U.S. households filed for bankruptcy in 2005. It’s likely someone in your family, a neighbor down the block or a co-worker in your office is in bankruptcy court. It’s not just an American problem either. Scotland has had a 33% rise in people losing there homes. For every $100 an Australian earns, they owe $130. What about you?

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Get Out of Debt

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Posted by pakdi on September 16, 2007 – 2:25 pm
Filed under Debt Management

Funny sketch. Don’t buy any stuff if you don’t have any money ;)

WPvideo 1.10

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9 Ways to Avoid Yourself from Debt

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Posted by pakdi on September 14, 2007 – 1:06 pm
Filed under Debt Management, Personal Finance


You should always differentiate between good debt and bad debt. A good debt will help your life and bad debt could make you life miserable. Read on to learn further 9 ways to avoid youreslf from debt trap.

1. Don’t sweep your debts problem under the carpet

You must learn how to manage your debt properly. You shouldn’t ignore your debt problem. There are always ways to get out from debt trap. But you must learn. You should get a professional advice. Don’t forget the debt because the debtor won’t forget you.

2. Don’t live far above you means

A smart things to do is live within your means. You may look ordinary, but it is better than you have a big debt problem that you can’t handle. A life is great when the is no creditors calling, creditors letter which disturbing you life isn’t it?

3. Don’t spend too big in a special ocassion

Anniversary, birthday, festivals always make you spend your money very fast. Learn to plan your expenditure properly. Avoid making last minute shopping which could always lead you to make improper financial decision. Special ocassions celebration do not always mean to spend lavishly, but be simple and thankful.

4. Don’t be influenced by advertisement and salesperson

Aware of excessive advertisement and salesperson. They were both professionals in their job. Don’t make decision after the advertisement or after any sales presentation. Think properly. Be informed. Don’t rush. There will be always better car to be produced next year.

5. Control your credit card usage

Credit card is the best way for banks to create money from the thin air. The interest imposed is too high but you need only to pay minimum payment. That’s the bank purpose to make you give them your hard earned money every month. Don’t pay everything by using credit card. Learn how to use the borrowed money properly.

6. Don’t buy on hire purchase if you could afford lump sump payment

Hire purchase payment basically means you have no money to pay cash. Thus, plan your budget properly. Save your money as much as you can. You earn more money by saving more but you pay more money to debtor if you buy on hire purchase.

7. Buy a house when you can’t afford to pay installment

Though a bank may approve the loan, but they never know your money management. Thus, don’t buy a house first if you have a deficit budget. Rent a house could be a better choice until you become really affordable.

8. Don’t become a guarantor

Think properly before you become a guarantor for any people. If the borrower fails to pay off the debt, by default you should pay all his debt. You may inherit all his debt.

9. Don’t gamble

Why visit casion when you know the odds of winning will always with the casino? You’re making a financial mistake when you think that by buying lottery, go to casino could always make you a millionaire.

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Don’t buy insurance policy if …

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Posted by pakdi on September 11, 2007 – 1:41 pm
Filed under Insurance

People always misunderstood between investment and also insurance. The existence of investment-linked policy made the situation more confusing. Here are some guides for you, that you should not buy an insurance policy if …


1. You’re forced by an agent / salesperson

The salesperson or the insurance agent could be your friend. Don’t buy a policy for the sake to please him. Or you don’t want to be disturbed everyday. Remember, all salesperson have their sales quota to be fulfilled. Most of the time they are not giving a professional advice, but they are only preaching their sales pitch and take an advantages upon you. Sad but true.

2. You think insurance is an investment

Don’t buy an insurance as a mean of investment. In other words, you want a return / profits from the policy you have bought. The objective of an insurance is for protection. If you want profits, learn stock market investing or real estate investing.

3. You’re safe forever

Insurance company is not protected by the government. They are doing business. They are making profits and losses. You should always look for a good insurance company that having a good records for a long time.

4. You can’t afford to pay insurance premium

The higher protection you want from the insurance company, the higher premium you have to pay every year. Find a policy that is affordable to you. You should be noted that you may lose your savings forever if you stop pay the premiums to the insurace company. Read the term carefully.

5. You already have enough protection

There are people who are over insured. Don’t get conned by the agent that always make you scared for the worst situation. If the agent is sincere enough, he won’t ask you to buy more policy if he has profesionally analysed your situation. You must be able to say no.

My advice, protect your hard-earned money. You should always be an informed individuals. Control your own financial destiny.

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7 things to consider before you buy health insurance

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Posted by pakdi on September 10, 2007 – 1:48 pm
Filed under Insurance


You should not buy any insurance without examine further what the benefits that you will get from the insurance company. Let 2,3 insurance agents from different insurance companies come to you and compare all their insurance products and select the best for you.

Thus, you must buy your insurance policy carefully, read the insurance policy thoroughly and understand the coverage offered. Here are some items that you should look for a medical insurance policy:

1. Limits

You should know what is the limit that you’re entitled to claim, and also annual claim limit. There certain medical procedures such as surgery and anesthesia that would make an insurance company to make a maximum limit.

2. Exclusion

Know what is the exclusion clause in your insurance policy.

3. Pre-existing conditions

You should insure yourself when you’re healthy. Most health & medical insurance company do not cover any pre-existing illness.

4. Renewal period

Could you renew your insurance every year? What is the maximum age which you’re allowed to renew the policy?

5. Is there any co-insurance & deductible?

Co-insurance means that you have to share the total medical cost incurred with the insurance company. Deductible means that you have to pay a certain minimal amount of the medical cost and the remaining will be paid by the insurance company.

6. The claim process?

What is the procedure to make a claim?

7. Cost of the insurance

First, you must ensure that the benefits are sufficient to meet your needs. Next, check whether you can afford the premium.

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