3 Ways To Minimize Financial Impact During This Difficult Time

By Rafiq Hidayat Mohd Ramli

The Covid-19 pandemic has left us feeling afraid and dreading what the future may bring. In this situation, certain financial steps should be taken to ensure the continuation of our way of life.

Originally, I was planning to write an article with regards to how to prepare for a Zombie Apocalypse  from a financial standpoint as that was a question that one of my clients had asked me during a financial plan presentation session in early February this year.

I did my research as this was a topic that was alien to me. I was surprised that there were several groups out there that have put a lot of thought into this area. However, as work started to pile up, I put aside writing the article, until the whole Covid-19 pandemic came about and disrupted our lives as we have known it.

So, instead of writing an article on the topic as originally planned, I plan to share with readers, what are the things that one should have prepared in case of emergencies such as the one we are currently going through right now here in Malaysia (and the whole world).

Before I start, I would like to state my biggest assumption while writing this article, is that the financial system will not collapse totally, which means you will still have access to your hard-earned funds or investments if you need to access them.

Now, let us take a look at some steps to minimize the financial impact we experience during this difficult time.

#1. Emergency Funding

The first thing that every single person or family needs to have ready (before the emergency) is their emergency funding. Different people have different definition of the amount that needs to be put aside, but I would recommend that you save at least 6 months of your monthly expenses or better still 6 months of your monthly gross income (under the assumption that this is higher than your expenses).

The higher the amount means more money needs to be put aside, however, when emergencies happen like the current pandemic, you would have access to a bigger pool of funds that would help you last longer compared to those that have not prepared their own emergencies funds.

Just a side note, your emergency funds should be stashed away safely in the highest dividend yielding account that will be reduced by any losses due to market condition e.g. ASB , Tabung Haji, Fixed Dividend, etc.

Another point to ponder, the funds should be liquid or at least near liquid, as you will need to be able to access it fast and easy in the case of the emergency.

For a business owner or entrepreneur, please separate your business emergency funds from your personal emergency funds. You should ensure that you have at least a few months of your operational expenditure for your business put aside in case you are ordered to close shop, similar to the current situation.

#2. Review your budget

Next step, is to review your budget. The more you can reduce your budget, means that the money that you have or will put aside in the first step would last longer. Look into cutting unneeded expenses e.g. wants from your list of expenditures as this might not be necessary if you’re focusing on your survival during the emergency.

Once you have finalized the review, please ensure that when the event actually happens, you stick to the budget that you have prepared and do not overspend because you’re panicking. Going over budget will put yourself at risk.

#3. Having protection

Do I need to focus on protection i.e insurance or takaful in order to prepare me or my family in the event of a pandemic? Having some protection will help, however, in this case your standard coverage will not help you currently, assuming that you don’t die or don’t succumb to the illness.

If you are hospitalized, then a hospital income benefit coverage will help especially for those who are business owners, and/or gig workers. For salary earners, if you do have the extra income, you could also take up a similar coverage, as it never hurts to be prepared.

If and when there are protection for loss of income (for companies or individuals) available in Malaysia e.g. similar to the Employment Insurance Scheme (EIS) under SOCSO, I would advise taking it up as soon as possible.

What about my investments?

First of all, your investments should be medium- to long-term in general. It is normal for changes in market conditions which will affect your portfolio in certain markets. However, if you have a well-designed portfolio with strategic asset allocation to weather different types of market conditions, then you should be prepared for most changes in the economy with the exception of total failure of the financial system.

What would I need to do with regards to my investments in the current situation? My advice to you would be as follows:

• Keep adding to your investments regularly, not lumpsum (we don’t really know where’s the bottom). You’ll reap the rewards on the way up if you believe long term the market will recover and be better in the long run. I am personally in this group as i believe there are a lot of good investment opportunities out there in the market.

• Do nothing and hold your positions. If you had done proper asset allocation, have your emergency funds stashed away, the current situation still wouldn’t impact you as bad if you didn’t have your emergency funds.

• Switch to lower your exposure. For those that are spooked and have a lower risk profile, this would be action that you would take. Just be mindful, that if you don’t switch back on the upswing, you might lose out in the long run.

• Realize your losses. Cut bait. If so, please take note, that maybe exposure to the market was never right for you in the first place.

Conclusion

While none of us would like to be in this situation in the first place, it never hurts to plan. Those who fail to plan, plans to fail. Take care everyone, and remember to stay at home, so that this period of uncertainty is not prolonged which will create more stress not just to our personal finances, but the finances of the country as a whole.

Do you have any preparation regarding your financial planning in this tough times? Share with us in the comments section below.

Taking Care of Our Mental Health During This Pandemic

By Nurul Khairiah Mohamed Yusof

Feeling anxious, fearful, and worried during Covid-19 pandemic? You might think that this won’t end but there is hope at the end of the tunnel.

With the Movement Control Order (MCO) due to the worsening Covid-19 situation affecting all Malaysians, the sudden and drastic changes to our daily constants can bring about many negative feelings such as confusion, frustration, dismay, resentment, anxiety, helplessness, and many others.

Aside from the inconveniences and interruptions to our lives due to the MCO, the need for social distancing can take a toll on us.

A recent study published in The Lancet even found that quarantine is linked with post-traumatic stress disorder (PTSD) symptoms, confusion and anger with some research suggesting these effects are long-lasting. 

As the effects of living in the time of a pandemic affects all of us in varying degrees, the best way to take control of our mental health is to be aware. Be aware that mental health can be affected. Be aware of the signs. And, be aware of what steps we can take to take charge of the situation before we spiral down into emotional gloom. 

Among the signs to be aware to look out for:

• Strong, over-powering feelings of fear and anxiety (e.g. over your health, family safety, income)

• Changes in sleep or eating patterns

• Worsening of chronic health problems

• Increased use of alcohol, tobacco, or abusing other substances

And now that you know the signs, what can you do to take care of your mental health? Let’s explore some of the simple yet effective measures we can all take.

#1. Take time to explore your feelings

Don’t judge or be embarrassed by your feelings.

Ask yourself questions like: How do I feel about this current situation? How is it affecting my actions and behaviors?

Realize that it’s okay to feel dread, sadness, failure, confusion, loneliness, or guilt. 

Write out how you feel and what you think is making you feel that way. Look at that list with a clear mind and evaluate whether are these things outside your control? If within your control, list out some steps you can take to help the situation. Do consider talking out your thoughts and plans with someone you trust acting as a sounding board, who can reassure you that you are on the right track or give you alternative suggestions. 

#2. Hold to your old routines (as much as possible)

The coronavirus may have transformed how we live our daily lives, but that doesn’t mean everything has to change. 

Stay close to your normal routine by keeping some structure from your pre-quarantine days. If working from home is new to you, for example, start your day the same way you would if you were heading into the office. Get dressed and get coffee (if it helps) to keep you focused on work.

During a period of constant change, having some sort of familiarity in your daily activities can make life feel more manageable. Studies have also found that our bodies tend to perform better when eating, sleeping and exercise patterns are set to a consistent schedule.

#3. Concentrate only on things you can control

With so much doubt in the air, it’s essential to accept that there’s not much you have control of. The most important thing you should be focusing on right now is assuring the safety of yourself and those around you.

That means:

•  Wash your hands often (use sanitizer with alcohol if you don’t have access to soap and water) 

•  Cover your mouth when you cough and your nose (with a tissue) when you sneeze

•  Avoid touching your face whenever possible

•  Avoid any non-essential travel

•  Leave face masks for medical professionals, caretakers, and individuals at higher risk of infection

•  Keep your immune system strong by maintaining a healthy diet, exercising, and getting an adequate amount of sleep

#4. Embrace the ambiguities and focus on the positive things

Stop obsessing over things like, What will happen next? Will the grocery shelves be restocked soon? How long will we be trapped in our homes? When will this all end?

Instead, focus on the positive and uplifting moments. For example, despite Italy being one of the worst affected countries by Covid-19, Italians were singing songs from their windows to boost morale. For in the darkest of nights, the stars shine the brightest.

Perhaps start thinking over things to be grateful for such as your safety, a roof over your head, or your friends? Or, think about what can you do to treat yourself better such as order in a meal or do something you find satisfying? Or, take it step further and think about what you can do for others, whether dropping friends a message, making cloth face masks, or donating to an organization that is helping those in need?

#5. Stay connected

Don’t detach yourself completely. According to studies, solitude can be as damaging to our health as smoking 15 cigarettes a day.

Keep in touch with friends, family, neighbours, and even your coworkers. Do it through phone calls, video calls, texting, email or any other form of digital communication. Ask how they’re doing and let them know how you’re doing. Offer support, love and encouragement.

As humans, we are wired to rely on social connections. Staying connected helps us manage stress and guards us against unhealthy coping mechanisms, like drinking and eating too much.

#6. Count your blessings

Gratefulness is a powerful tool. Be grateful for your health, body and friends and family. 

 Appreciate the people who are the frontline in this battle: From doctors and nurses to delivery workers and the folks bagging your groceries, these are the heroes who are knowingly placing themselves at risk to serve the society.

#7. Stay updated with solid resources

Stay informed about what’s happening through reliable sources, such as the Ministry of Health (MOH) and World Health Organization (WHO). But be sure to limit your media intake. 

Obsessing over the endless coronavirus coverage will, at some point, drive you (and anyone you live with) crazy. 

#8. Seek mental health advice

To adjust for social distancing, you can also get professional help. Consider services like TheHelpTalk which allow you to communicate with mental health professionals through the digital platform.

Take advantage of online resources and hotlines, too. The Befrienders is a non-profit organisation providing emotional support 24 hours a day, 7 days a week without any charge.

Malaysia Mental Health Association also provides support via their phone line (03-2780 6803) on any mental health issues with qualified mental health professionals providing psychological support services. Financial subsidies are also readily available to ensure that necessary therapy and support are given to anyone who needs it.

Conclusion

The bottom line is we should take care not only of our physical health, but our mental health which is important in the long run. Do what you need to do to stay healthy and let’s all do our part to adhere to government regulations and maintain social distancing to help flatten the curve for a brighter, promising future. Malaysia, boleh!

How are you coping with anxiety and stress during the MCO? Share with us in the comments section below.

Keep Learning To Achieve Your Goals

Syaida is the latest addition to Wealth Vantage Advisory (WVA) team as Advisors Development Manager

Syaida in the City of Adelaide, Australia during her visit on 27th October 2019

Nur Syaida Hamdan or better known as Syaida was born and bred in Subang Jaya. After receiving her education in various schools in Selangor and Pahang, Syaida as a JPA (Jabatan Perkhidmatan Awam) scholar, graduated with a degree in Business Economics and Finances from the University of Nottingham.

During her studies, Syaida develops a love for financial planning and decided to pursue a career in the financial industry. After completing her studies, she landed a job in a Australia financial consulting firm based in Mont Kiara, Kuala Lumpur. There, she assisted in managing the team of advisors while studying financial planning and eventually became a senior paraplanner.

Her experience introduced her to the world of professional financial planning and allowed her to gain familiarity with the process of helping clients plan their financial future and achieve their financial goals.

Experience in the financial advisory industry.

As a paraplanner, Syaida spent time communicating with advisors, constructing financial modelling, preparing cash flow projections as well as discussing possible financial solutions for clients.

One of her memorable experiences from those days was when she went through a financial report with Sentry (the Australian equivalent to Securities Commissions in Malaysia) without any changes and comments from them. It was an outstanding accomplishment at that time as a junior paraplanner new to the whole process. This experience made her feel motivated to learn more and to become better in her career.

Armed with over 2 years of experience in Australia’s financial planning in her resume, Syaida took a big step and decided to work in Malaysia financial planning industry to gain more knowledge and experience.

She now resides in Bandar Sunway, Petaling Jaya with her husband.

Travel for a new experience

Syaida (third from right) with her siblings at Hahndorf, German Town, Adelaide, Australia.

When she is not busy working with advisors, Syaida loves spending some of her time traveling to cities around the world, such as to London, Paris, Singapore, and Dubai.

Syaida and her husband enjoy taking coffee in a cute little café for every city they go and people-watching from there. Other than that, they also enjoy visiting local attractions and playing tourist. Spending time in any city for hours so that they can enjoy more of what the city offers brings great pleasure to them.

Once she even met world-famous footballer, Christiano Ronaldo while cruising down a river in Venice, Italy.

Aside overseas travel, Syaida and her husband also enjoy vacationing locally. To her, even familiar Kuala Lumpur has attractions that are not to be missed.

Travelling opened Syaida’s eyes to new cultures and appreciating the beauty of nature in other countries. She dreams of exploring more of the world with her husband by her side.

Why Wealth Vantage Advisory (WVA)

Having a fair share of knowledge and experience in Australia’s financial planning industry, Syaida is motivated to share her knowledge in the local industry.

She believes that in this way, she can contribute back to her country through the right platform while practicing her financial knowledge. After doing her own research, she concluded that WVA shares the same vision and mission with her which is to focus on holistic planning instead of product pushing.

To give a piece of better financial planning advice, an advisor should present his or her client with thorough financial health checks and plans that benefit them in the long run.

Based on this principle, she believes that WVA will be the best platform to provide her with a good working environment and exposure in the industry while optimizing her financial knowledge.

The importance of engaging with licenced financial planners

As a paraplanner and someone who works in the financial industry, Syaida stresses on the importance of meeting with a licenced financial planner who has the right qualifications to give you advice. Plus, they should know the financial industry better than anyone.

With their right knowledge and sets of skills, they can help one to achieve his or her goals and objectives. Seeking help from someone who isn’t qualified might just make one’s financial position worse and every decision that you make can bring you to the brink of destruction.

“I feel that we need to create awareness, especially in Malaysia, to educate people on the importance of financial planning as I highly believe that the right planning will make it easy to achieve one’s goals and objectives in both short and long terms,” said Syaida to MyPF recently.

Future plan in WVA

Syaida is optimistic than she can contribute to the systematic flow of working in this company. With her experience, she wants to help the company improves its operations and become the frontrunner of the financial planning field in Malaysia.

Last but not least, her main aim is to learn as much as possible about the financial industry in Malaysia. She is also willing to work together in achieving WVA objectives, vision and mission.

She believes in teamwork and to achieve the company’s mission, it is essential to contribute to each other’s ideas and striving to excellence and success.

Interested in exploring career opportunities with Wealth Vantage Advisory Sdn. Bhd. ? Learn about our career application