Christopher Chong

For example, let’s assume an 8 per cent interest rate with a retirement age of 65. Interest is compounded annually.

If you were to save $1,000 a year from age 25 to 34 in a retirement account earning 8% a year, and never invest a penny more, your $10,000 investment would grow to $157,435 by age 65.

But if you don’t start saving until you’re 35 years old and then invest $1,000 a year for the next 30 years (that’s a total investment of $30,000), you’ll have only $122,346 by age 65.

A fixed deposit (FD) is a financial instrument provided by the bank, whereby you place your money in the bank for a fixed period, and the bank will pay you the fixed return upon maturity.

The FD can be placed with the bank from 1 month to 60 months, commonly people will make it either 1 month, 3 months, 6 month or 12 months.

Even though the interest rate is higher, if you can place your money with the bank for longer-term like 60 months, but not many people will do that. As the FD rate is fluctuated from time to time.

However, there are a few advantages that you can enjoy when you place your money in FD.

Low-risk: Unlike investing your fund in the stock market or equity funds, it is safe to place your money in FD and your returns are guaranteed.

Insured by PIDM: In the (very unlikely) event that your bank has failed, Perbadanan Insurance Deposit Malaysia (PIDM) will reimburse you with the money you have deposited with the bank, up to RM250,000.

Higher interest rates: Generally, FD gives you more interest than the savings account.

Liquidity: When you need your money for emergency purposes, you can withdraw your money at any time, although if you do that before maturity, you could lose part or all of your interest.

Here's the catch. If you perform premature withdrawal on your fixed deposit (FD) account. It is either they pay you nothing or they only pay you half the interest that you supposed to have it.

Therefore, please be cautious when you plan to place an FD with the bank, make sure you won't use that money for the period that you had to commit to the bank.

However, life is what happens to you while you're busy making other plans. Who knows, suddenly you receive a call from the Patek Philippe watch dealers and telling you that the model which you has been long waiting is finally here? Then you might need to withdraw your FD premature, and you need to forgo your interest.

Here's the solution for you.

Upon the death of a person, a member of his family or a person interested in his estate must take charge to administer and distribute his estate.

When a person passes away, his assets, such as his bank account, Shares, properties, cars are all frozen. No one can deal with them and things will be left in limbo.

If he left with a will, then they can apply to the High Court for what is called a grant of probate(GP), by which an executor to his estate will be appointed in accordance with the will. If he died intestate (left without a will), then they can apply for letters of administration (LA) and to be appointed as the administrator of his estate.

For my friends who are "Tiki" like me, there are 3 ways to obtaining the LA :

They can apply to the High Court. Of course, they need a lawyer, and the cost will be definitely higher compared to those who obtain the Grand of Probate.  The tricky part is the administration needs to be bond by two sureties.

They can apply to Public Trustee of Malaysia-Amanah Raya Berhad (ARB). But, this is for those cases where the estate consists of only movable assets and the value of the gross estate must not exceed RM2mil. No administration bond is required. For the Estate administration fee, you guys may refer to their website.

They may apply to the Estate Distribution Unit of the Department of the Director-General of Lands and Mines (JKPTG) or the Land Office where the deceased’s immovable property is located. This is done under the Small Estates (Distribution) Act 1955. However, the value of the gross estate must not exceed RM2mil. Secondly, the estate must be intestate (Die without a will). Lastly, the estate must consist wholly of immovable assets (e.g, land, house or apartment) or partially immovable assets in the name of the deceased within the jurisdiction of the land office.

If you are "Tiki"+ poor like me, you can opt for option 3. In my case, even I have a property, my gross assets are still less than RM2mil. This is a cheaper and faster way among these 3 choices. The SOP on how to apply the LA to JKPTG is stated clearly on their website. The checklist for application and form can be download from the site as well.

However, I can't see the fee to obtain the grant of LA on the website. But luckily I able to source this information from the news posted on Sep 2008. The fee stated as below:

Fees are payable for the grant of LA to be issued:

> RM10, if the value of the estate is between RM1 to RM1,000

> RM30, if the value of the estate is between RM1,001 to RM50,000

> 0.2% of the value of the estate, if it is more than RM50,000.

If the fee structure is still relevant, meaning they are really charging you at the very reasonable fee. Anyway, somehow I felt that this is just relevant to me only. I realized that all my friends are rich and famous except me. So, if you are rich and famous, and yet "Tiki" and don't want to write a will for yourself. Think again...

The legal fee to apply LA to the high court is much higher than the fee to apply GP to high court plus the fee to write a will. Besides, if you are rich & famous, most probably you need two sureties for your LA application.

Do you want to become the sureties/guarantor for someone else?

Meaning to say, if the administrator runaway with the money, then the sureties will be required to pay the lost amount to the rightful beneficiaries.

Sometimes, people really take a long time to get the sureties, or never. The application of LA might be just pending forever.

I’m not a member of the aristocracy. However, I always dream that my children will be one of them, and can claim that they are blue blood from the Chong family.

Unfortunately, wealth doesn’t come easily. To become a rich person, one must have the right mindset, however, the education system that I have gone through and my family bring up had pulled me down.

When I was in primary school, my parent used to tell me to study hard. Even when I have proceeded to secondary school, I was being told the same thing again. Since education was so important, I then continued my Form 6. However, I felt reluctant to pursue my studies. I strongly felt that whatever I have learnt in Form 6 have got nothing to do with my life. Yet my parent still sang the same song to me.

To them, I can have the world if I can graduate from university. We all know that’s not true.

To get closer to the money, I pursue my career in the bank after I graduated from the University. I was with the bank for 3 years. My job is to cross-selling Bank's products and services including housing loan, bancassurance and other investment products. Unfortunately, under the pressure of sales target, I became product pusher. I don’t like who a became, hence I left the bank.

After that I join insurance company and become Bancassurance Manager who provide training and also support the bank's sales team on insurance products and selling skills. A few years later, a weird thing happened, I felt like going back to school to study.

Being working in this financial industry are quite close to the money. Money goes thru my hand every day, but it doesn't belong to me. Therefore, I further my study on CFP course on the weekend to equip myself with new skills and knowledge.

It is a good decision that I further my study even after I accumulate 10 years of experience in the banking and insurance industry. Because I finally realized why Chinese always said: “Wealth and beauty can be gained through the diligent study”.

I think that this kind of courses should be included in school syllabus. With the new knowledge that I gained, now I can tell a few things about my financial portfolio:

1. My insurance coverage sufficient for my current financial position?

2. Keep track whether my money works hard enough for me? How much I need for my retirement?

3. If anything happened to me, then my loved one can inheritance my asset smoothly? Doesn’t have anything for distribution? Then how to create immediate wealth for the family?

4. Tax planning?

I may not be rich enough to classified as an upper-class person when I alive but I pretty sure when I pass away, my children will become an instant millionaire.